Law Midterm
4 elements of a valid contract
1. agreement (offer and acceptance) 2. consideration (bargained-for exchange, not gratuitous or moral obligation) 3. contractual capacity 4. legality
defenses to enforcement of K under common law
1. genuineness of assent (not by fraud, duress, mistake) 2. form (in form required by law)
consideration's 2 requirements
1. legally sufficient value/detriment (no prior duty, not refraining from legal right, but can be unequal bc allowed to make bad deals) 2. bargained-for exchange (not a gift)
Offers under the common law 3 required elements:
1. serious intent to be bound 2. terms are reasonably certain or definite 3. communication of the offer to offeree
statute of frauds: contracts for the sale of goods over $______ is not enforceable unless there is a ________ sufficient to indicate that a K has been made and ______ by the party against whom enforcements is sought exceptions: --__________ manufactured goods not suitable for resale and seller has substantially _______ -- _______ by a party -- ______ has been made or goods have been _______ if the parties are 2 ______, then a written _____ from either party is deemed to satisfy the statute of frauds, even if not ______ by the receiving party. if the memo is not _____ to within ___ days of receipt, the oral agreement memorialized in the memo is binding.
500 writing signed specially started admissions payment received merchants memo acknowledged objected 10
objective theory under common law
INTENT is key element in contract formation, but is defined by what you SAID and DID (not what you were thinking), as well as the CIRCUMSTANCES around formation of K. Judged by reasonable person standard.
BETWEEN _______, if within a reasonable time a writing in _____ of the K is received and the party receiving has reason to _____ its contents, it ______ the requirements of a writing against such party UNLESS written notice of objection is given within _____ days after its received
MERCHANTS confirmation know satisfies 10
articles 2 does ____ apply to transactions in real estate, services, patents and copyrights
NOT
3 types of material breaches: 1) ________ repudiation 2) _______ non-performance when it is due 3) __________ non-performance
anticipatory total substantial
counteroffers under the common law and what rule dictates that
any material changes, additions, deletions are considered counteroffers because of the MIRROR IMAGE RULE (acceptance must match offer exactly)
exceptions to the perfect tender rule: 1) "unless otherwise ______" parties may explicitly or implicitly agree to something ____ _____ perfect tender rule 2) ______ faith must act in commercially _______ manner, meaning rejecting all parts may not be 3) defect in manner of _______ if nonconformity is in the manner of delivery, than buyer can only reject shipment if ______ loss or _____ occurs
agreed less than good reasonable delivery material delay
Article 1 general provisions apply to _____ UCC the 4 key definitions are _____ faith, signed, person and writing.
all good
Definition of a contract
a promise the breach of which the law gives a remedy, or the performance of which the law recognizes as a duty. can be enforced in court.
Under UCC, a written confirmation sent within reasonable time is an _____ even though it states terms _____ to or _____ from those offered or agreed upon UNLESS acceptance is expressly made _______ upon assent to the additional terms
acceptance additional different conditional
additional provisions affecting remedies : --exclusive remedies = an agreed-on remedy is in ____ to the UCC ones unless ______ agree that it is exclusive of all others --consequential damages can be ______ or ______ as long as the limitation is not ______ --the statute of limitations of pursuing action for a breach is within ____ years
addition expressly limited excluded unconscionable 4
special risk of loss rules = --sales on __________l: buyer is typically taking the goods for ______ or ______ use and if not up to expectations the buyer has the right to _____ the goods. In this case the ______ retains both title and risk of loss during approval period. --sale or _________: the buyer's main goal is to _______. in this case, ______ assume both title and ROL during "return period."
approval personal household return seller return resell buyer
some materially alternating clauses = warranty limitations, ________ point is to avoid clauses that would result in _____ or _______ to other party
arbitration hardship surprise
bilateral v unilateral under common law
bilateral = promise for a promise unilateral = promise for an act
implied warranties = --merchantability: if it is in the ________ of selling the product goods must be reasonably fit for the _____ ______ for which the goods are used and at least _____ grade quality and adequately ______ and labeled. if food, treated as sale of good when to be ______ on or off premises. must be fit to eat based on ______ _______. --fitness: implied warranty of fitness for a ______ ______ arises when a seller knows both: the particular ____ the buyer needs goods for the buyer is relying on their _____ and judgement to select suitable goods --course of dealing/usage of trade: warranties implied from ____ dealings or trade _____ where both parties have knowledge of well-recognizes trade custom and courts assume they _____ for that custom to apply
business ordinary purposes medium packaged consumed consumer expectations particular purpose purpose skills prior customs intended
Under battle of the forms, _____ by both parties that recognizes the existence of a K is sufficient to establish a K for sale even without ______ in this case, the terms of the particular contract consist of those terms on which they ______, along with any ___________ terms incorporated by the UCC
conduct writing agree supplementary
express warranties = --statements that create express warranties: goods _______ to any affirmation of fact or promise, a _________ of them, or a s______ or model shown to buyer --statements of _______ or value : only statements of f_____ are express warranties unless art dealer (?) --basis of the bargain: ____ need to use formal words, only necessary that buyer ________ the warranty is the basis of the bargain
conform description sample opinion fact no believes
additional performance provisions: --duty of _____ means if one party isn't _______, the other party has right to _____ performance and hold the first party in _____ --assurance of performance = _______ _______ is repudiation of the contract obligations _____ they come due but must be _________, meaning clear statements of refusal to perform if a party doesn't clearly repudiate, but by statement or conduct gives the other party reason to _____, then that party can demand in writing that the other side provide ______ of performance consistent with K within ____ days (ex = ____ seller, ____ short buyer)
cooperation cooperating suspend breach anticipatory repudiation before unequivocal worry assurances 30 waffling cash
buyer's and seller's insolvency = if the seller delivers goods on ____ to an insolvent buyer, then the seller has the right to reclaim those goods within ____ days. Seller's claim ______ the claims of buyer's other creditors. Seller can also ____ goods in transit. If the goods are identified and the buyer has paid at ____ _____ of the contract price for the goods, then the buyer, by ________g the balance of the contract price, has, consistent with his special property right arising from identification, the right to ______ the goods. in fact, the buyer's right to the goods ________ that of the seller's other creditors.
credit 10 supersedes stop least part tendering claim supersedes
perfect tender rule = --if nothing in the K is said about what quality of goods are conforming, then UCC ______ kicks in --what is delivered must in ____ respect _____ to the contract --if not all conforming, then the buyer may: 1) _____ the goods 2) ______ the entire shipment 3) ______ part and _____ part
default every conform accept reject accept reject
WHEN TITLE PASSES: general rule = title passes to buyer at time and place the seller performs by _____ the goods common-carrier contracts = --shipment (origin) contracts: seller gets good to _____ --destination contract: seller t______ for delivery delivery w/o movement of goods (3rd party warehouse) = if title doc required: when and where doc is _________ to buyer if title doc not required: if goods identified, when sales _________ was made. if not identified, then when identification _______ or when warehouseman acknowledges buyer's right to goods ANY OTHER MEANS OF DELIVERY (seller to buyer or buyer picks up from seller): if merchant = upon actual receipt of goods by buyer if non merchant = upon tender of delivery
delivery carrier tenders delivered contract occurs
identification takes place when the specific goods are ______ as the subject matter of the K to have identified goods = they must be in ______ and identified to the ________ (if not specified, identification happens at the time of the ____ if goods exist and are designated) future goods: --unborn young = identification takes place at time animals are _______ --crops to be harvested within 12 months = identification at time crops are ______, or otherwise when crops begin to ______ --other future goods = when seller ships, marks, or otherwise _____ the goods as those which the K refers
designated existence contract contract conceived planted grow designates
destruction of identified goods = an event may totally ______ the goods through no ____ of either party ____ risk passes to the buyer, ______ the parties from performance if the goods are partially destroyed, the buyer can ____ them and either treat contract as ____ or ____ the damaged goods with a _____ deduction
destroy fault before excusing inspect void accept price
product liability UCC vs TORT LAW: -- UCC = applies to product _____ cases --Tort law = applies when there is personal _____ or property _______
disappointment injury damage
warranty disclaimers and limitations of liability = -- can ____ all oral express by including in the _____ contract. it must be clear and _______ and called to the buyer's ________ -- implied warranties can be disclaimed when K says "___ ___" or "with all ____" but to be safe, specifically say merchantability and in writing for fitness but don't have to exactly say fitness --no implied warranty for defects that can be ______ if reasonably evident --lack of _____ power, take it or ___ it, and buyer's failure to ______ or ____ of a warranty disclaimer will be ________
disclaim written conspicuous attention as is faults seen bargaining leave understand know relevant
why do we need contract law? 4 reasons
ensures promises are kept defines excuses society will accept for breaking promise defines types of promises that cannot be enforced business world could not function without contract law
the parol ______ rule means that _____ representations made prior to the K formation may NOT be admitted in court to ______ terms. exceptions: -- to prove fraud, duress or lack of ______ -- to prove and oral ______ to performance --to explain ________ terms the UCC allows the K to be explained or supplemented by course of _______, course of _______, and usage of _______
evidence oral change assent condition ambiguous dealing performance trade
parties must ______ agree to destination Ks. terms that indicate destination Ks = FOB ________, FOB b_____, FOB b_____ ______, ex _____, no arrival, no _____
explicitly destination buyer buyer's city ship sale
what is the order of the terms of a contract?
express terms, course of performance, course of dealing, usage of trade
_______ offers are offers by a merchant to buy or sell goods in a ______ writing, giving assurance that it will be held _____, is ____ revocable, for no more than ________, during the time stated but in no event more than ____ months
firm signed open not consideration three
_____ of contract means parties may agree to vary the effect of the provisions in the UCC except for: obligation of _____ faith _____ence _________ness ______e as otherwise stated in the UCC
freedom good diligence reasonableness care
______ fillers are implied terms that courts will "______ into" in a K if terms not expressly agreed on. "Unless otherwise _____" explains why these are often also called "______ terms." place for delivery = seller's place of ______ or ________ open price = _____ price at time of delivery open shipping arrangements = _____ has right to arrange open assortment = _____ has the right to arrange
gap read agreed default business or residence reasonable/market seller buyer
a merchant is someone who deals in goods of a ______, or by holds himself out as having ______ or ______ peculiar to the goods involved in the transaction.
kind knowledge skill
a good faith purchaser is a buyer without ______ of the circumstance that would make an ordinary person _____ about the validity of the seller's title to the goods normally, the original owner _____ recover goods from a good faith purchaser
knowledge inquire cannot
warranties of title = -- _____ title seller represents that they have good and valid title to the goods, but they do ___. buyer can ____ for breach of warranty --no _____s buyers are unaware of _______ against the goods (like _____ interests) and if creditor repossesses the goods, buyer can recover from ____ for breach of warranty --no _____________s seller warrants that product are free from copyright, TM, patent claims. buyer gets ____. buyer must ____ seller and seller can ____ suit or ___ for buyer to
good not sue liens encumbrances security seller infringements sued notify defend pay
unconscionability means the effect of the K is _______ or ______. only one party _____ or has no _____ for breach. Courts can: -- ______ to enforce --enforce ______ minus unconscionable part --______the unconscionable term to avoid unconscionable result
harsh oppressive benefits remedy refuse remainder limit
duty to mitigate damages = -- duty to mitigate is an ____ duty but may also be expressly ______ in your contract --OR may decide to include a ______ _____ provision that sets forth ________ damages that would be owed in the event of a breach -- this ______ an duty to mitigate as long as they are reasonable and actual damages would be ______ to prove
implied excluded liquidated damages specific overrides difficult
commercial impracticability = seller's performance excused if 1) an event renders performance ______ or commercially impracticable 2) seller could ___ have reasonably f________ the event at contract formation
impossible not foreseen
seller's and buyer's remedies: SELLER = buyer's _____ _____ damages ______ damages _______ damages _____ for the K price BUYER = seller's _____ _____ damages ______ damages _______ damages _____ for the goods
insolvency liquidated resale market action insolvency liquidated cover market action
the obligations of a buyer in a K are: ________, a________, and p_________
inspection acceptance payment
4 basic exceptions to the perfect tender rule: -- ______ contracts -- right to ______ --commercial _______ --________ of identified goods
installment cure impracticability destruction
an ______ clause means terms of a contract as ______ represents final written expression of K terms, either complete or _______. if complete, ____ outside evidence. if partial, then collateral evidence ____ be used it is a _______ term in the K that is a c_______ representation of the parties' agreement
integration written partial no may separate complete
offer and acceptance: --unless otherwise unambiguously indicated by the language and circumstances, an offer to make a K shall be construed as ______ ________ in any manner and any medium reasonable. --an ______ or other offer to buy goods for prompt or current shipment shall be construed as _____ ____ either by prompt ________ to ____, prompt _____ _____ of goods (either _______ or ____________ goods)
inviting acceptance order inviting acceptance promise ship current shipment conforming nonconforming
buyer's right to inspection: --buyer must be able to ___ over goods and see if they conform, and if they do not, he may properly _____ and refuse to ____. 2 exceptions: 1) the delivery is to be made _____ on ______ 2) payment is to be made against ______ of title (payment does ____ constitute acceptance and does ___ lose the right to inspect and reject later)
look reject pay cash on delivery documents not not
buyer's right to market damages = if a buyer doesn't cover or tries but fails, then they can recover based on what formula? when is the market price measured? buyer's right to action for the goods = buyer has right to recover the goods if: 1) goods are ______ or 2) the goods have been _____ and the buyer has made reasonable efforts to ____ but fails if the goods don't exist or the seller has sold them to someone else, then the buyer _____t claim them
market price - contract price + incidental damages + consequential damages at time of breach and place of delivery unique identified cover cannot
entrustment rule = owner entrusts goods to a _____ who deals in goods of that _____, giving the merchant the power to _____ all rights to the buyer in the ordinary course of business (BOCB). (unless the person who entrusts to the merchant has void title) a BOCB = buys in ____ faith without _____ of the violation, and buys from a ______ in the business of selling that good in customary practices the only recourse of the original owner is against the ______
merchant kind transfer good knowledge merchant merchant
Between _______, such terms become part of the contract, unless: --the offer expressly _____ acceptance to the terms of the offer --they _____ alter it or --notification of the ________ to them has already been given within a reasonable time after notice is received
merchants limits materially objection
an agreement _______ the contract under the UCC needs ____ consideration to be binding, which overrules the common law's "pre-existing _____" rule
modifying no duty
basis of the bargain: do _____ have to use "guarantee" or "warrant" to establish express warranties. but must be sufficiently _____ to lead a buyer to believe that goods will conform to the statements. simple opinions or "________" are _____ express warranties. but statements of fact ______. basis of the bargain does ____ necessarily mean that the buyer must ____ on the seller's words or actions, just that a _______ _____ would assume that the goods would conform.
not definite puffery not are not rely reasonable person
installment contracts = a breach of installment is _____ a breach of the entire contract unless it s________ i_______ the value of the whole contract the buyer may reject any installment which is nonconforming if it _______ ______ the value of that installment and cannot be ______ (unless seller gives adequate assurance of its _____, then must accept)
not substantially impairs substantially impairs cured cure
anticipatory repudiation occurs when a party communicates intention to ____ _____ when it is due. Nonbreaching party may _____ performance and treat as ______ _______ and pursue a remedy, or _____ a reasonable time. However, a repudiation may be _________! unless nonbreaching party has materially _____ their position.
not perform suspend material breach wait retracted changed
irrevocable offer under common law
option contract detrimental reliance (promissory estoppel)
rights of buyer's for nonconforming goods = REJECTION = allowed to reject if seller fails to make a _____ _____, as long as within a ______ time. After rejection, cannot act as the _____ of the goods and must ______ them in care until seller can remove them. If buyer is a _____, then they have ______ duty to follow reasonable _______ for disposing or rejecting (if goods are ______, then buyer must try to sell for the buyer if merchant). if seller fails to send instructions, buyer can ______ seller for holding services. REVOCATION = normally acceptance of goods is commercially ______. however, buyers can revoke acceptance if: 1) buyer discovers defect that ______ _______ the value of the goods, but only if they could not have found this upon ______ 2) the buyer has accepted the goods upon reasonable _____ that the seller would ______, but seller fails to do so. REVOCATION OF ACCEPTANCE IS ______EFFECTIVE UNTIL ________ IS GIVEN TO THE SELLER within a ________ time.
perfect tender reasonable owner hold merchant special instructions perishable charge final substantially impairs inspection belief cure not notice reasonable
warranties, like revocations, are _____-______ remedies.
post-acceptance
4 things that are not consideration
pre-existing duty moral consideration past consideration nominal consideration
"_______ purpose" test for ______ transactions means that if the ______ purpose of the whole transaction is the sale of goods, the UCC applies to the _____ transaction.
predominant hybrid predominant whole
BATTLE OF THE FORMS NONMERCHANTS = additional terms are just ______ and not binding MERCHANTS = usually additional terms are part of the contract unless expressly _____ acceptance to terms, ______ alter it, or give ______ in reasonable time CONDUCT, NO CONTRACT = terms they ______ in writing, with supplementary UCC terms
proposals limit materially objection agree
express warranties arise only if a buyer can ____ them, but the _____ ______ rule may limit their ability to prove. get express warranties into the contract.
prove parol evidence
Under the UCC, if the _____ is undetermined, generally no K is formed. However, 2 exceptions: -- _______ Ks where buyer agrees to buy all of what he need s of certain product from the seller --_______ Ks where the seller agrees to sell all of his production of a specific product to the buyer these are ____ enforceable under the common law but are enforceable under the _____ but must be in _____ faith
quantity requirement output not UCC good
seller's right to resale damages = -- if a buyer breaches, and the seller reasonably resells the goods, the seller may _____ damages based on what formula? --one exception is when a seller has _____ resale potential of their inventory, the seller is entitled to recover its ____ _____ under the K. seller's right to market damages = what is the formula here? when is market price measured? seller's right to action for the K price = the seller may specially enforce a K in 2 cases: 1) to the extent the buyer has ______ the goods 2) if the seller has made ______ ______ to resell identified goods and ______
recover contract price - resale price + incidental damages endless lost profit contract price - market price + incidental damages - expenses saved in consequences of breach at time and place of delivery accepted reasonable efforts failed
usage of trade is any method of dealing having _____ of observance in that trade as to justify an ______ it will be observed in that transaction course of dealing is a sequence of _____ in _______ transactions between the parties that establishes a common basis of understanding course of performance means there are ______ occasions for performance by a party, and with the opportunity to ______, they still accept the performance without objection
regularity expectation conduct previous repeated object
ROL rules when a party breaches: --if tender of delivery is nonconforming = ROL remains with the _____ until cure or acceptance --if buyer rightfully revokes acceptance = ROL is on the _____ to any extent in the _______ _______ --if the buyer repudiates/breaches before ROL passes to them = ROL is on the ______ to the extent of any deficiency in the ______ ________
seller seller buyer's insurance buyer seller's insurance
the code favors _______ contracts. (default) terms that indicate these are = _____, FOB _____ point, FOB s______, FOB s_____ _____, F____, C____ or ___&____, C___D
shipment FOB shipping seller seller's city FAS COD C&F CIF
buyer's right to cover damages: if after a seller breaches, the buyer purchases reasonably ______ goods, then what is the formula for damages? incidental damages include any commercially _____ charges arising from inspection, receipt, ________, storage or covering teh goods. consequential damages = any additional _______ because of the seller's breach that the seller could have reasonably ________ their possibility at the time of contract (like ____ ____)
substitute cover price - contract price + incidental damages + consequential damages reasonable transportation expenses foreseen lost wales
General contract formation under UCC: -- a contract for goods may be made in any manner _____ to show agreement, including _______ by both parties that recognizes existence of a contract (like series of _____ or PO and ______), and even if the moment of its making is ________, or if _______ are left open
sufficient conduct emails invoice undetermined terms
void vs. voidable title: VOID = by ______! buyer unknowingly purchases good from someone who is _____ the owner. thief has void title, and if sold, the buyer acquires ___ title and owner ____ recover goods. VOIDABLE = if goods are acquired by ______, deceiving his _____, paying a check that was later ______, promising to pay but ______. transferee has ____ title, and the later buyer is a good faith purchaser and acquires ____ title, and the original owner ______ recover goods.
theft not no can fraud identity dishonored not voidable good cannot
right to cure = a seller can cure if 1) there is still _____ left in the contract 2) if not time left, if the seller reasonably _____ that the buyer would ______ the tender
time believed accept
obligations of the seller are to make _____ ______ of _________ goods
timely delivery conforming
"sale" is the passing of ____ from the seller to the buyer for a ______. "goods" means all things that are ______ and ________, including ____ young and things attached to _______.
title price moveable tangible unborn realty
There are 3 types of warranties: _____, _____ and _____.
title, express and implied
natural gas K, title and risk of loss: normally K specifics _____ point
transfer
4 types of contracts under common law
valid K void K voidable K unenforceable K
acceptance under the common law
voluntary act by the offeree definite and communicated wording is important silence not acceptance in most cases
buyer's acceptance: buyer can accept by _____, ____ or _____. words = tells the seller that the goods _____ or they will ____ them silence = buyer fails to _____ after a reasonable opportunity to inspect action = buyer does something ______ with the seller's ownership (like ____ the goods or _____ them to someone else) may accept any ________ _____ and reject the rest
words, silence, or action conform keep reject inconsistent uses sells commercial unit
