EXAM 2 BLAW 3540 - MIZZOU

Specific Performance Remedy

(specific enforcement): court order requiring breaching party to fulfill contract obligations; usually awarded only when monetary damages inadequate and subject matter of contract is unique; generally not awarded in a contract for services

NOT an Offer

-inquiry -preliminary negotiation -advertisements - Auctions

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

2 sources of contract law

1. Common Law 2. Sources of the Uniform Commercial Code (UCC)

Year

1. Contact terms prevent possible complete performance in less 12 months must be in writing. 2. Impossibility (not unlikeliness) is required 3. Life term is outside s/f because YOLO

Marriage

1. Contracts made in consideration before marriage 2. Mutual promise to marry doesn't count (no consideration) 3. Prenuptial agreements

Land

1. Contracts related to an interest in land (and fixtures) 2. Fixtures include anything attached to the land a. Trees, buildings, in- ground pools 3. Within: real property, conveyances, lease, mortgages] 4. Outside: Crop harvest, profit - sharing on real property, boundary disputes

Executor

1. Executor of an estate promises to personally pay debt belonging to the estate 2. Regular estate debts paid or promised by the estate are outside s/f 3. Narrow provision and not commonly used

Goods >$500

1. Goods worth over $500 2. Value set by contract terms, not intrinsic value of the goods 3. Key word is GOODS (not services or intangibles)

Written Requirements

1. Identification of parties 2. Subject matter of the agreement 3. Consideration exchanged 4. All relevant contractual terms 5. Signature(s)

Offer requirements

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 i. Intent determined by objective, reasonable person standard ii. 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

Suretyship/ Secondary Obligor

1. Party outside an agreement promises to fulfill the obligations of an original party to an agreement 2. "Answer for the debt of another" Ex: Co- sign on a lease

Unenforceable

A contract is unenforceable when some law prohibits the court from enforcing an otherwise valid contract.

Void

A contract is void when either its object is illegal or it has some defect so serious that it is not actually a contract

Voidable

A contract is voidable if one or both of the parties has the ability to withdraw from the contract or to enforce it.

Legal Assent

A promise to buy or sell that the courts will require that the parties obey. · Without assent, contract may be voidable by any non-assenting party · Voidable contract may be rescinded (canceled) by any non-assenting party · Major obstacles to legal assent: mistake, misrepresentation, undue influence, duress, and unconscionability

Good Title

Acquired from someone who already owns the goods "free and clear;"can only be acquired from someone who has legal right of ownership

Evidence outside a written contract may admissible if:

Additional terms are consistent with the contractual terms The additional helps interpret the contractual agreement, including: Course of performance Course of dealings Usage of trade

Common Law

All other contracts are also governed by the common law.

UCC Article 2

Applies if the Sale of Goods is the Predominant Purpose of the Contract

Article 2(A) Leases

Applies to Contract for the lease of goods

Article 2: Sales

Applies to contracts for the sale of movable, tangible goods

Warranties

Assurance by one party that the other party can rely on its representations of fact expressed while contracting.

Contract Cancellation

Canceling the contract is the remedy of last resort from the U C C' s perspective. UCC seeks to maintain commercial transactions and provides remedies to keep contract in force, even when one party has breached

Mixed Goods and Services Contracts

Contracts that include both goods and services

Liquidated Damages

Damages specified in contract before breach occurs 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 clauses, provided they are reasonable and not punitive

Anticipatory Repudiation

Definition: party decides, before the actual time of performance, not to complete contract obligations • May occur if 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

Rules of Consideration

For a promise to be enforced legally, there must be consideration. Exception: Promissory estoppel occurs when one party makes a promise knowing the other party will rely on it, the other party does rely on it, and the only way to avoid injustice is to enforce the promise even though it is not supported by consideration. The court seldom considers adequacy of consideration. Past consideration is no consideration at all.

goal of Contract Remedies

Fulfill expectations and intentions of parties to agreement; give them "benefit of the bargain" negotiated

MY LEGS

Marriage Year Land Executor Goods Suretyship

UCC Article 2 : Merchants

Merchants - Buyers or sellers who: 1. Deal in goods of the kind involved in Contract 2. By Occupation, represent themselves as having knowledge and skill unique to goods involved in transaction 3. Employ a merchant as a broker, agent, or other intermediary Merchants are hold to a high standard of performance than nonmerchants under the UCC

Substituted goods

Must demonstrate good faith, pay a reasonable sum for the substitute, act without delay, and purchase reasonable substitutes

Duty to Mitigate Damages

Obligation on non-breaching party (plaintiff) to use reasonable efforts to minimize damage resulting from defendant's breach of contract

Duress

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

Offer

One party extends a contractual offer to another party

Implied Contract

Parties conduct indicates contract has been created. Benefit conferred on defendant Plaintiff reasonably expected to be paid for their benefit conferred Defendant had an opportunity to reject the benefit but chose not to

Quasi - Contract

Parties conduct indicates it would be unfair not to impose contractual obligation to prevent unjust enrichment. Benefit is conferred on defendant. Defendant has full knowledge of benefit is receiving. Defendant retains benefits and would be unjustly enriched without binding other parties.

The Basic UCC Performance Obligation

Sellers and lessors are obligated to transfer and deliver conforming goods Buyers and lessees are obligated to accept and pay for conforming goods in accordance with terms of contract "Good faith" required in performance and enforcement of every contract

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 Accept part and reject part

Substantial Performance

Substantial performance discharges a party's responsibilities under the contract, but a court may require compensation for any loss in value by failure to completely perform the contract

The UCC

The Uniform Commercial Code, in Article 2, Contract Law governs contracts for the sale of goods.

Agreement

all parties to a contract must agree to be bound to the same terms

Implied Warranty

automatically (by operation of law) applied to contract

Mutual Recission

both parties agree to discharge each other from their contract

Common - Carrier Delivery

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

Simple Delivery

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

Express Condition

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

Implied Condition

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

Reformation Remedy

contract gets rewritten to reflect parties' actual agreement

Quantity

courts generally have no basis for determining a remedy. This term generally MUST be specified in the contract

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

Payment

due when buyer receives goods

Concurrent Condition

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

Mental ability to understand rights and obligations

established by contract with presumptive ability to understand how to comply with terms of the agreement

Express Warranty

explicitly state in the Contract

When a written Contract Exists

extra evidence is generally not allowed to help prove the terms of the contract

Breach

failure to honor a contract or contract term

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

NOT Consideration

illusory promises, preexisting duties, past consideration

Monetary Damages

include compensatory, punitive, nominal, and liquidated damages

valid Contract

is one that contains all the legal elements of a contract (agreement, consideration, contractual capacity, and legal object).

Time for Performance

must be performed within reasonable time

Liquidated Debt

no dispute as to amount of money owed

Void Title

not true title; no right of ownership whatsoever

Voidable Title

occurs in certain situations where contract between original parties would be void, but goods have already been sold to a third party

Parol Evidence

oral/verbal evidence or non-contractual evidence used to attempt to prove, explain, or determine the obligations of a written contract

Injunction

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

Novation

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

Condition Precendent

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

Accord and Satisfaction

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

Substituted Contract

parties agree to substitute new contract in place of original contract

Sales

passing of title from seller to buyer for a price

Lessee

person who acquires right to possession and use of goods under

Lessor

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

Bilateral Contract

promise for a promise

Price

reasonable price supplied at time of delivery

Unilateral Contract

requires a performance in order to form a contract.

Restitution Remedy

return of any property transferred under contract

Destination Contract

seller bears risk of loss until the goods are delivered to the stipulated destination

Delivery

seller's place of business

Resale

sellers/lessors allowed to sell the goods to another buyer or dispose of goods when buyer is in breach and goods not delivered

Nominal Damages

small award (typically only $1 or $5) intended to signify that although no actual damages resulted from defendant's breach of contract, plaintiff was still wronged by defendant

Goods

tangible things that can be moved (for example, automobiles, furniture, electronics)

Duration of Contract

termination allowed in good faith upon reasonable notification

Rescission Remedy

termination of contract

Express Contact

terms are clearly defined and established either orally or in writing

Mirror-Image

the common-law principle that the acceptance of a contract offer must be positive, unconditional, and clear, and must not change the terms of the offer.

Title

the legal right of ownership

Acceptance

the receiving party accepts the contractual offer extended to them

Shipment Contract

title transfers to buyer at time and place of shipment; buyer bears risk of loss whole goods in transit

Lease

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

Money Damages

usually recovery of purchase price or lease payments due; sometimes lost profit

Specific Performance

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

A contract to commit an illegal act is

void

Complete Performance

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

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

Rules of Minor's Contractual Power of Disaffirmance

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