Card Set Information

2012-07-17 03:25:48

Show Answers:

  1. There are four ways to terminate a contract:
    • 1. Lapse of time (time stated or reasonable)
    • 2. Death of party prior to acceptance
    • 3. Revocation (statement or conduct of offeror)
    • "4. Rejection (words or conduct of offeree: counter, conditional accept, addt'l terms if not goods )"
  2. Bailment
    • Formed when bailee takes CUSTODY of chattel with INTENT to serve as bailee
    • "Presumed to be bailee of items typically found in chattel (e.g., valuables in glove compartment of car)"
    • Valet parking with keys surrendered = bailment
    • Self-park = not a bailment
  3. Liability of Bailee
    • "Sole benefit of bailor (e.g., a gratis repair) = liable only for gross negilgence"
    • "Sole benefit of bailee (e.g., borrowing chattel from friend) = liable for slight negligence"
    • Mutual benefit = ordinary care
    • *Modern trend is to always apply ordinary care*
    • "Unauthorized use = strictly liableMisdelivered chattel (e.g., to someone who fraudulently claims) = strictly liable unless forged claim check"
  4. There are 5 ways to satisfy the Statute of Frauds
    • "1. Performance (full for anything, part only with goods to extent of part)"
    • 2. Substantial beginning on custom goods
    • "3. Part performance of real estate transfer (any two of payment, improvement, possession)"
    • "4. Writing (CL who and what, UCC quantity, must also be signed by person asserting SoF defense)"
    • 5. Admission by part that K exists
    • "*between two merchants, must deny K at time if one merchant sends notice with quantity term that claims K exists"
  5. Risk of Loss Rules
    • 1. Agreement controls
    • 2. Breaching party is liable for uninsured loss even if breach unrelated to shipment (e.g., ship nonconforming goods, loss on seller)"
    • 3. Delivery by common carrier other than seller - Passes at time seller completes delivery obligation (reaches FOB point)
    • 4. No agreement, no breach, no delivery by carrier: Merchant seller = buyer's receipt, Non-merchant seller = tender
  6. Requirements for liquidated damages clause
    • 1. Damages hard to forecast at time K made
    • 2. Provision is a reasonable forecast
  7. Permanent Injunction
    • I put five bucks down
    • "Inadequate legal remedy (replevin, ejectment, money)"
    • Property right/protectable interest
    • Feasibility of enforcement (supervision difficult with mandatory)
    • "Balance of hardships (more hardship than benefit, skip if D willful)"
    • "Defenses (unclean hands, laches, impossibility, free speech)"
  8. Rescission
    • "1. Grounds (formation problem, mutual mistake on material fact, unilateral mistake if other party knows or should know)"
    • "2. Defense (unclean hands, laches) negligence not a good defense"
  9. Reformation
    • 1. Valid contract (contrast with rescission)
    • "2. Grounds (mutual mistake, unilateral if actually knows, misrepresentation)"
    • "3. Defenses (unclean hands, laches) non-defenses include negligence, SoF, parol)"
    • not allowed if adversely affects BFP
  10. Define a contract:
    A contract is a promise or set of promises the breach of which is given a remedy by law or the performance of which the law recognizes as a duty. 
  11. What is required to create a contract? 
    Mutual assent between the parties 

    Consideration or some substitute for consideration 
  12. What are the three consideration to determine if a communcation was an offer?
    Was there a promise?

    Was there certainty and definiteness in the essential terms?

    Was there a communication of the above to the offeree
  13. Ano ffer must identify the offeree or a class to which she belongs. Contracts also require that there be definiteness in the terms. Real estate and contracts for good require special definiteness considerations.
    Real estate transactions require the price and a description of the land to be valid. 

    Contracts for good only require the quantity
  14. Is price required for an offer to be valid?
    As long as the parties intended to make a contract and there is a reasonably certain basis for giving a remedy this  will not stop a contract from being formed. 

    The price will be under article 2 the reasonable price at the time of delievery
  15. What are the 4 situations that limit an offeror's power to revoke?
    • 1.Option with consideration 
    • 2.Merchants firm offer: offers to sell in signed writing giving assurances to hold open
    • 3. Detrimental Reliance
    • 4. Part Performance of True Unilateral Contract Offers 
  16. In an acceptance for the sale of goods do additional or different terms automatically constitute a rejection? 
    No, in fact it will still constitute acceptance unless acceptance is expressly made conditional on the assent to the additional  or different terms. If the acceptance was made expressly conditional on the acceptance of the new terms it will be treated as a rejection. 
  17. There are four situations in which an acceptance is not made at the moment of dispatch. 
    If the offer stipulates that it is not effective till recieved 

    An option contract is inovolved

    The  offeree sends a rejection and then sends acceptance, whichever arrives first will be effective

    The offeree sends an acceptance and then a rejection, and the rejection arrives first and the offeror detrimentally relies on it.  
  18. What is an exception to the requirment that past consideration not constitute a bargained for exchange?
    When a past obligation is unenforceable becasue of a tehcnical defense, that obligation will be enforecable if a new promise is made in writing or is partially performed. 
  19. Preexisting duty is not consideration. However under the UCC a good faith agreement modifying a contract needs no consideration to be binding. There are also 5 common law situtaions that do not require new  consideration:
    new or existing consideration is promised 

    The promise is to ratify a voidable obligation

    The preexisting duty is owed to a thrid person rather than to the promisor

    There is an honest dispute as to the duty

    There are unforeseen circumstances sufficient to discharge a party 
  20. What is promissory estoppel?
    Injustice can be avoided if a 

    A promise that the promisor reasonably expects to induce reliance

    of a definite and substantial character

    does in fact induce reliance  
  21. What is a mutual mistake such that it would be sufficient to overcome mutual assent:
    The mistake concerns a basic assumption 

    The mistake has a material effect on the agreed upon exchange

    The party seeking avoidance did not assume the risk
  22. What types of agreements are covered under the statute of frauds? MYLEGS 
    • 1. Executor or administrator promises personally to pay estate debts 
    • 2. Suriey  
    • 3. Marraige 
    • 4. Land
    • 5. (more thant) Year
    • 6. Goods priced at 500 or more

  23. When two parties put their agreement to writing as the final intergration of their bargain any other expressions written or oral made prior to the writing or oral expressions made contemporaneous to the writing will be inadmissible to vary the terms of the writing. What type of evidence is outside the scope of the parol evidence rule?
    Attacking validity


    Showing true consideration

    • Collateral agreements and naturally omitted terms
    • (does not conflict and would ordinaly have been included in the document)

    If a party alleges facts that entitle him to reform the agreement
  24. Cobin and williston tests for the parol evidence rule and integration
    Cobin: wide open 

    Williston: tight  
  25. Article 2 approach to parol evidence:
    consistent additional terms may be added to an integration unless there awas a merger clause also a contracts terms may be supplemented by:

    course of dealing

    usage of trade

    course of performance  
  26. Battle of the forms under the UCC. 

    Contracts between merchant and nonmerchant?

    Contracts between merchants?
             Additional Term
             Different Term  
    Term of offer govern

    Additional terms usually accepted as long as they do not materially alter

    Split authority on different terms (some follow knockout rule) 
  27. what is the difference between a material and minor breach of contract?
    If the breach is minor, the party is still obligated to perform but can seek damages. If the breach is material the party's obligations are discharged. A minor breach and an anticipatory repudiation is a material breech.