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WRITTEN REQUIREMENTS

1.Identification of parties 2. Subject matter of the agreement3. Consideration exchanged 4. All relevant contractual terms• Quantity of goods sold is required; buyer/seller, price, method of payment not necessary 5. Signature(s)• At least of party against whom action is sought• Can be enforceable against one side but not the other• "Signature" given considerable leewayNo specific requirements for the form of the actual "writing"• Can be pieced together across multiple documents

Voidable title when buyer

Buyer deceived seller regarding buyer's identity• Buyer wrote bad check• Buyer committed criminal fraud in securing goods• Buyer and seller agreed title would not transfer until later time• Buyer is a minor

INSPECTION, PAYMENT, AND ACCEPTANCE

Buyers/lessees are generally obligated to accept and pay for conforming goods in accordance with contract

determines the obligations of sellers/lessors and buyers/lessees?

Customs Rules outlined by the Uniform Commercial Code Terms the parties outline in agreements

Which is not a factor that enters into the finding of undue influence?

Did the dominant party make a profit from the contract?

Federal statutes govern the formation of sales and lease contracts.

False

EQUITABLE REMEDIES (COURT-ORDERED ACTION) FOR BREACH OF CONTRACT

Injunction,Reformation,Quasi-contract

STATUTE OF FRAUDS

M ARRIAGE Y EAR L AND E XECUTOR G OODS > $500 S URETYSHIP / SECONDARY

Duty to Mitigate Damages

Obligation on nonbreaching party (plaintiff) to use reasonable efforts to minimize damage resulting from defendant's breach of contract.•Failure to mitigate may result in loss of damage or award or substantial reduction of award by a court

Legal Remedies for Breach of Contract

Punitive damages Nominal damage Liquidated damages

categories that the UCC divides items that can be bought and sold into?

Realty Services Goods

UCC allows for specific performance remedy if either

The goods are unique, or• There is no adequate remedy at law

When is lack of perfect tender fatal to a contract?

When it is commercially practical to perfectly tender You Answered When it is possible to perfectly tender When the nonconformity impairs the value of the goods

llusory Promise

a promise to do something else without accepting the offer

Good title

acquired from someone who already owns the goods free and clear

Good title

acquired from someone who has rightful ownership

Mutual rescission

both parties agree to discharge each other from their contract.

Simple delivery

buyer and seller contract, buyer gets goods at time of sale or sometime later by seller's delivery

Common-carrier delivery

buyer and seller contract, seller then places goods with common carrier who is responsible for delivering the goods

Merchants

buyers or sellers who:

Preexisting Duty

cannot use consideration that is something a party is already obligated to do or has already been contracted to perform

Types of Performance

complete performance and substantial performance

Express condition:

condition explicitly stated in contract (usually preceded by words such as "if," "provided that," or "when").

Implied condition:

condition not explicitly stated, but inferred from nature and language of contract.

Formation in general:

contracts for sale or lease of goods may be made in any manner sufficient to show agreement

Contract for necessaries

contracts that supply minor with basic necessities of life (i.e., food, clothing, shelter, and basic medical services).

Punitive damages:

damages designed to punish defendant and deter people from engaging in similar behavior in the future

Compensatory damages

damages designed to put plaintiff in position he or she would have been in had contract been fully performed

Concurrent conditions:

each party's performance conditioned on simultaneous performance of the other

Consequential (special) damages:

foreseeable damages that result from special facts and circumstances arising outside contract itself

Condition subsequent:

future event that terminates obligations of parties when it occurs

Unliquidated debt:

good faith dispute as to whether money is owed or amount of money owed If debt is liquidated, partial payment of debt does not effect remaining debt balance

Monetary damages:

include compensatory, punitive, nominal, and liquidated damages

article 2(a):

leases

Void title

not true title,purchase of stolen goods

Injunction

order forcing person to do something or prohibiting from doing something (usually a prohibition against certain actions

If debt is liquidated

partial payment of debt does not effect remaining debt balance

Accord and satisfaction

parties agree one party will perform duty differently from performance specified in original agreement. After new duty performed, party's duty under original contract is discharged

Lessee

person who acquires right to possession and use of goods under lease

Lessor:

person who transfers right to possession and use of goods under lease

Types of Conditions

precedent, subsequent, concurrent, express, implied

Restitution

return of any property transferred under contract

Article 2:

sales

Destination contract

seller bears risk of loss until seller delivers goods to stipulated destination.• Contract must specify this term in order for it to apply

Rescission

termination of contract

title

the legal right of ownership

Shipment contract

title transfers to buyer at time and place of shipment; buyer bears risk of loss while goods in transit• This is the assumed contractual relationship unless otherwise specified

Lease:

transfer of right to possession and use of goods for a specified term, in return for consideration

Specific performance:

usually requires seller or lessor to deliver particular goods identified in the contract

Complete performance:

when all aspects of parties' duties under contract are carried out perfectly.

Implied ratification:

when former minor takes action after reaching age of majority consistent with intent to ratify contract.

Which is the correct combination of factors that courts look at when interpreting a sales or lease contract?

(1) express terms, (2) course of performance, (3) course of dealing, and (4) usage of trade

Legal Remedies for Breach of Contract

- Monetary damages - Compensatory damages - Consequential (special) damages - Nominal damages - Liquidated damages

ways to discharge by mutual agreement?

Accord and satisfaction Novation Substituted contract

Article 9 of the UCC governs what topic?

Secured transactions

DISCHARGE BY OPERATION OF LAW

-Alteration of Contract -Bankruptcy -Tolling of Statute of Limitations -Impossibility of Performance -Commercial Impracticability -Frustration of Purpose

Categories of Title

-good title -void title -voidable title

Discharge by Mutual Agreement

-mutual rescission -substituted contract -accord and satisfaction -novation

Evidence outside a written contract (parol evidence) is admissible if:

Additional terms consistent with contract terms.• Evidence helps interpret agreement, including:• Course of performance.• Course of dealings.• Usage of trade

UCC ARTICLE 2(A)

Applies to contracts for the lease of goods.

Nominal damages:

Award to prove legal injury but no damages caused.

Substantial performance:

Completion of nearly all terms of agreement. Honest effort to complete all terms. No willful departure from terms of agreement.

Merchant buyers or sellers who:

Deal in goods of the kind involved in contract.• By occupation, represent themselves as having knowledge and skill unique to goods involved in transaction.• Employ a merchant as a broker, agent, or other intermediary.• Merchants are held to a higher standard than nonmerchants under the UCC.

Commercial Impracticability Doctrine

Delay in delivery or non-delivery may not, in court's discretion, constitute breach if performance made impracticable because contingency has occurred that was not contemplated when parties reached agreement

Which is not a method of discharging a contract?

Discharge by unilateral decision

THINGS TO CONSIDER BEFORE FILING SUIT

Likelihood of success.•Desire/need to maintain ongoing relationship with potential defendant.•Possibility of getting better/faster resolution through alternative dispute resolution (ADR).•Cost of litigation/ADR compared to value of likely remedy.

Material Breach

Occurs when one party unjustifiably fails to substantially perform their obligations under the contract•Material breach discharges the non-breaching party's right to perform under the contract

Offer and acceptance:

Offers valid even if terms left open.• Mirror-image rule does not apply.

ELEMENTS TO RECOGNIZE QUASI-CONTRACTUAL RECOVER

Plaintiff conferred benefit on defendant.•Plaintiff reasonably expected to be compensated for benefit conferred on defendant.•Defendant would be unjustly enriched from receiving benefit without compensating plaintiff.

Interpretation under U C C of terms left open

Price: reasonable price supplied at time of delivery.• Payment: due when buyer receives goods.• Delivery: seller's place of business.• Time for performance: must be performed within reasonable time.• Duration of contract: termination allowed in good faith upon reasonable notification.• Quantity: courts generally have no basis for determining a remedy

EQUITABLE REMEDIES (COURT-ORDERED ACTION) FOR BREACH OF CONTRACT

Rescission,Restitution,Specific performance

Which is an equitable remedy?

Specific performance

Perfect Tender Rule

States if goods or tender of delivery fail in any respect to conform to contract, buyer/lessee has right to:• Accept the goods• Reject entire shipment, or• Accept part and reject part

Types of Sales Contracts

Title transfers to buyer when contract executed (which may be before goods are transferred).• Risk of loss transfers to buyer when buyer takes possession.• Buyer has insurable interest upon receiving title.

Reformation:

contract rewritten to reflect parties' actual agreement

Quasi-contract

contract-like obligation imposed on party to prevent unjust enrichment

Liquidated damages:

damages for breach of contract specified in the contract itself (either as fixed amount or as formula for determining money due)

Liquidated Damages

damages specified in contract before breach occurs• General rule: parties free to negotiate, as part of contract, a liquidated damages clause to predetermine resolution in the event of breach• Courts will enforce liquidated damages clause, provided it is reasonable and not punitive

EXCEPTIONS TO PERFECT TENDER RULE

industry norms• Past dealings between parties• Agreement between parties• Seller's/lessor's right to cure (especially before performance deadline is met)• Excuse from performance when identified goods destroyed through no fault of parties• Commercial impracticability

Note that perfect tender rule

is imposed by the UCC; common law only required "substantial performance" and not perfect tender

Voidable title:

occurs in certain situations where contract between original parties would be void, but goods have already been sold to a third party• In a voidable title transfer, the seller retains right to cancel the contract and reclaim the goods even after the transaction has taken place up until the goods have been resold to a bona fide purchaser for value

Specific performance

order requiring breaching party to fulfill contract obligations; usually awarded only when monetary damages inadequate and subject matter of contract unique (example: contract for sale of real estate).

Novation

original parties and a third party agree that the third party will replace an original party and the original party will be discharged.

PARENTAL LIABILITY FOR MINORS' CONTRACTS, NECESSARIES, AND TORTS

parents not liable for contracts entered into by their minor children, except contracts for necessaries parents not liable for torts committed by their minor children, except failure to properly supervise child, causing others unreasonable risk of harm

Substituted contract

parties agree to substitute new contract in place of original contract.

Anticipatory Repudiation

party decides, before the actual time of performance, not to complete contract obligations.•Often occurs when market conditions change and one party realizes it will be unprofitable to fulfill contract. Can occur either through express indication of intent or action inconsistent with intent to fulfill contract when performance due.•Once contract anticipatorily repudiated, nonbreaching party discharged from obligations under contract and can sue immediately for breach of contract.

Void title

when someone acquires possession of stolen goods

EXCEPTIONS TO MINOR'S RIGHT TO DISAFFIRM CONTRACT

-contract for necessaries -ratification -express ratification -implied ratification

Written Requirements

1. PARTIES IDENTIFIED 2. SUBJECT MATTER 3. CONSIDERATION 4. RELEVANT TERMS 5. SIGNATURE(S)

Required elements of an offer:

1.Manifestation of offeror's intent to be bound 2.Reasonably definite contractual terms 3.Communication of the offer to the offeree or an authorized agent

What is legal assent?

A promise to buy or sell that the courts will require that the parties obey

Which is not a condition under which courts will find nondisclosure as having the same legal effect as an actual false assertion?

A relationship of trust does not exist between the parties to the contract

Contracts violating state or federal statutes:

Agreements to commit a crime or tort. Licensing statutes Usury: loan offered at an interest rate exceeding the legal maximum. Gambling. Sabbath laws.

What is the holding of Adrian Lopez v. Kmart Corporation?

Although Plaintiff entered into a valid arbitration agreement with Kmart, he exercised his statutory right of disaffirmance, thereby rescinding the contract

What is a mistake of fact?

An erroneous belief about the facts of the contract at the time the contract is concluded

Which is NOT a remedy for breach of contract by the seller or lessor?

Burn the products

No specific requirements for the form of the actual "writing"

Can be pieced together across multiple documents Can be physical writing or electronic

countries that the book lists as one that has found that the award of punitive damages is not available in breach of contract cases?

China The United States England

illegal contract

Contract is void if illegal subject matter or for being illegal to perform. A contract need not be in violation of a statute to be illegal. Agreements against generally accepted public policy also illegal and unenforceable

Which is not an exception carved out by the UCC to the statute of fraud's writing requirement?

Contracts for sales of securities

marriage slide

Contracts made in consideration of marriage Mutual promise to marry doesn't count (no consideration) Prenuptial agreements Engagement gone bad

Which of the following is incorrect regarding unilateral mistakes?

Courts are hesitant to interfere when one of the parties has a correct understanding of the material facts of the agreement, so a unilateral contract generally voids a contract

What are compensatory damages?

Damages designed to put the plaintiff in the position he would have been in had the contract been fully performed

methods of discharging a contract?

Discharge by performance Discharge by operation of law Discharge by material breach

Which is not a way to discharge by mutual agreement?

Discharge by unilateral rescission

Which is not a question that helps determine whether a buyer or seller is a merchant under UCC Article 2?

Does a buyer or seller of this kind usually qualify as a merchant?

Liquidated damages are damages identified after the breach occurs.

False

Partial Payment of Debt

First, need to know if debt is liquidated or unliquidated• Liquidated debt: no dispute as to amount of money owed

Rules Regarding Intoxication

General Rule: Contracts made by intoxicated persons are voidable If intoxication merely causes person to exercise poor judgment, contract not voidable unless other party unfairly capitalized on the impaired judgment When intoxicated person becomes sober, contract can be ratified or disaffirmed; however, courts will liberally interpret behavior that seems likes ratification once intoxicated person becomes sober

Goods of $500 or more

Goods worth over $500• Value set by contract terms; not intrinsic value of the goods Key word is GOODS (not services or intangibles)

What is not a type of misrepresentation listed in the book?

Guilty misrepresentation

questions that helps determine whether a buyer or seller is a merchant under UCC Article 2?

Has the buyer or seller in question employed a merchant as a broker, an agent, or some other intermediary? Does the buyer or seller in question, by occupation, hold himself out as having knowledge and skill unique to the practices or goods involved in the transaction? Does the buyer or seller in question deal in goods of the kind involved in the sales contract? Correct!

misrepresentation types

Innocent misrepresentation Negligent misrepresentation Fraudulent misrepresentation

factor that enters into the finding of undue influence?

Is the contract unreasonable because it overwhelmingly benefits the dominant party? Was the non-dominant party isolated from other advisers at the time of the agreement? Was the dominant party rushing the other party to consent?

unilateral mistakes

It is a mistake that is a result of an error by one party about a material fact,Courts are hesitant to interfere when one of the parties has a correct understanding of the material facts of the agreement, so a unilateral contract generally does not void a contract,On rare occasions, rescission is permitted for unilateral mistakes

Which is not a country that the book lists as one that has found that the award of punitive damages is not available in breach of contract cases?

Mexico

Individuals who have limited capacity to contract:

Minors Those suffering from mental deficiency that renders them incapable of understanding the nature and obligations of contracts Those who are intoxicated

Examples of Consideration

Money in exchange for property/service/promise to do or not do something (see Hammer v. Sidway)• Promise in exchange for a promise

What is one of the differences between objective and subjective impossibility?

Objective impossibility means it is in fact not possible to lawfully carry out one's contractual obligations; subjective impossibility means it would be very difficult to carry out the contract

duress

Occurs when one party is forced into an agreement by a wrongful act of another. is not legal assent, as coercion interferes with contracting party's free will.

Which is not a condition that must be met for promissory estoppel to be applied?

One party made a mistake about a material fact, and the other party did not know or have reason to know about the mistake

Which of the following would not permit a court to invalidate a contract on grounds of unilateral mistake?

One party made a mistake about a material fact, and the other party did not know or have reason to know about the mistake

Which of the following would trigger a successful request for recission on grounds of duress?

One party threatens physical harm or extortion to gain consent to a contract

Situations Involving Duress

One party threatens physical harm or extortion to gain consent to contract. (Threats)

Which is not a difference between the UCC and the CISG?

Only the UCC covers offers, acceptances, and other contract topics

Undue Influence

Persuasive efforts of dominant party, who uses special relationship to interfere with other's free choice of terms. Any relationship involving one party's unusual degree of trust in another may give rise to undue influence.

Not an Offer

Preliminary negotiations - "would you consider" Advertisements (unless they are "clear, definite, and explicit" see Lefkowitz v. Great Minneapolis Surplus Store) Auctions - default is "with reserve" means purpose is to solicit offers; if "without reserve" then offer is already extended and purpose is to solicit acceptances

Upon inspection, if goods are non-conforming, then the buyer may:

Reject goods subject to cure Just accept nonconforming goods and adjust the contract accordingly Reject goods and cancel the contract if a condition such as time being of the essence is present

Which is not something that determines the obligations of sellers/lessors and buyers/lessees?

Rules outlined by the Uniform Partnership Act

Which is not a category that the UCC divides items that can be bought and sold into?

Securities

Which is a remedy available for breach of contract by the buyer or lessee after the delivery of goods?

Sue to reclaim goods and then sue for difference between resale and contracted for prices

What does the UCC require for modified sales or lease contracts?

That the modifications be made in good faith

differences between the UCC and the CISG?

The CISG does not require that contracts be in writing The CISG requirements related to the statute of frauds are more lenient than those under the UCC Only the UCC applies to consumer contracts for the sale of goods

Which is not an element that a plaintiff must prove to justify recovery under a quantum meruit theory?

The activity in which the individual engages has been restricted by a statute

elements that a plaintiff must prove to justify recovery under a quantum meruit theory?

The defendant would be unjustly enriched from receiving the benefit without compensating the plaintiff for it The plaintiff conferred a benefit on the defendant The plaintiff has reasonably expected to be compensated for the benefit conferred on the defendant

Which is something you should consider before filing a lawsuit?

The likelihood of success The desire or need to maintain an ongoing relationship with the potential defendant The cost of litigation or some form of ADR as compared to the value of the likely remedy

Which of the following is a false statement regarding acceptance under the UCC?

The mirror image rule applies to acceptances under the UCC

conditions that must be met for promissory estoppel to be applied?

The other party does reasonably rely on the promise The only way to avoid injustice is to enforce the promise One party makes a promise and either knows or should know that the other party will reasonably rely on it

What is a condition subsequent?

The party has a duty to perform until a future event occurs that discharges the party from the obligation

What is restitution?

The return of any property given up under the contract

According to the book, which is a complete list of the main situations in which a court finds a contract is objectively impossible to fulfill?

The subject matter is destroyed, one of the parties whose personal services are required dies or becomes incapacitated, or the law changes, rendering performance of the contract illegal

condition under which courts will find nondisclosure as having the same legal effect as an actual false assertion?

There is failure to correct assertions of fact that are no longer true The nondisclosure involves a dangerous defect A statute requires disclosure

Individuals Having No Capacity to Contract

Those adjudicated insane Those adjudicated habitually intoxicated Those with appointed legal guardians

The right to cure is nearly always applicable to nonconforming goods.

True

the following is a true statement regarding acceptance under the UCC?

Under the UCC, an acceptance may be made by any reasonable means of communication Under the UCC, additional terms are permitted in contracts for the sale or lease of goods Under the UCC, an acceptance is effective when dispatched

Termination of the Offer

Valid offers can be terminated before acceptance in the following circumstances 1.Revocation by the offeror (unless option contract exists to set deadline for offer's expiration - note, option contract requires all contractual elements including consideration) 2.Rejection by the offeree 3.Counteroffer - note, this operates as both a rejection of offer AND an extension of a new offer 4.Death/incapacity of the offeror before acceptance 5.Illegality/destruction of material occurring before acceptance 6.Lapse of time - either specified in the offer or assumed lapses after "reasonable" amount of time

When is lack of perfect tender not fatal to a contract?

When a cure can be effected by the seller

exceptions carved out by the UCC to the statute of fraud's writing requirement?

When parties admit that a sales or lease contract was made Partial performance of contract has been made Contracts for sales of specifically manufactured goods

Ratification:

acceptance of terms of contract (entered into as a minor) after reaching age of majority

UCC does not require

as definite of terms included in offer as common law; UCC only requires quantity of goods sold and can use "gap fillers" to make up for unspecified terms in contracts

Consideration =

bargained for exchange" and means anything of value Mutual exchange of consideration is required in every contract

As a general rule, any contract entered into by a minor is voidable by the party the minor is entering into the contract with until the minor reaches the age of majority or a reasonable time thereafter.

false

Past Consideration

if consideration has already been exchanged, it cannot be the basis for a contract; past consideration can be modified to extend a valid contract

Not Consideration

illusory promises, preexisting duties, past consideration

Disaffirmance to exercise

minor need only demonstrate, through words or actions, intent to rescind contract Minor must return any consideration received (if still in minor's possession/control), regardless of its condition.• Even if consideration damaged/destroyed, other party has no recourse against minor.• Rules designed to discourage competent parties from entering into contracts with minors

Disaffirmance:

minors' right, until reasonable time after reaching age of majority, to disaffirm/void their contracts. To exercise right, minor need only demonstrate, through words or actions, intent to rescind contract Minor must return any consideration received (if still in minor's possession/control), regardless of its condition.• Even if consideration damaged/destroyed, other party has no recourse against minor.• Rules designed to discourage competent parties from entering into contracts with minors

Condition precedent:

particular event that must occur for a party's duty to arise.

If debt is unliquidated

parties can enter into an accord and satisfaction.This means the parties can agree to have a set payment amount satisfy the entire debt

Merchants will be held to a higher standard of behavior under the UCC than will nonmerchants.

true

Specific performance usually requires that the seller or lessor deliver the particular goods identified in the contract.

true

Express ratification:

when, after reaching age of majority, individual states (either orally or in writing) intent to be bound by contract entered into while a minor