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PRE Contracts

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QuestionAnswer
Contracts analysis 1. Identify subject matter of contract, a. Common law b. UCC 2.
Contract formation In order to accept an offer, must know of offer to begin with (before the fact)
Unilateral contract In order to perform a unilateral contract, you MUST perform Reward offers (most common) An offer of reward to public is an offer to enter into a unilateral contact Cannot accept reward, unless know of the reward before
Termination of an offer 1. Revocation by offeror prior to acceptance, 2. Offeree rejects the offer, 3. Offeree makes a counter-offer (counter-offer = new offer), 4. Lapse of times with service Ks and stock options
Mailbox Rule Acceptance is effective upon moment put in mailbox), NOT receipt If offer is revoked before acceptance then acceptance cannot occur This rule does NOT apply if mis-addressed, instead effective once received by offeror Acceptance is valid even if
Revocation 1. Valid option? 2. Reliable information offer is revoked?
Contracts- Option continued... Common law- valid option must be supported by consideration UCC 2205- Offer by merchant in assigned writing which by its terms gives assurance it will be held open is irrevocable during time stated (if time not stated, period may not exceed 90 days)
Sale of goods contracts Quantity must be present in sale of goods contract Exception: No quantity required when- 1. Requirements contract- Quantity measured by buyers good faith needs 2. Outputs contract- Seller agrees to sell its output
Contracts- Option Promise to keep offer open for a period of time Two options- 1. Common law, 2. UCC 2205 For acceptance to occur with an option, in order to validly accept an offer the acceptance must be in offeror's hands within the option period
Consideration Bargain for exchange Common law- Past consideration/moral obligation is NOT consideration
Defenses to formation- Statute of Frauds Certain contracts must be in writing in order to be enforceable What types? MY LEGS 1. Marriage, 2. Term of years, 3. Land sale contracts, 4. Executory contracts, 5. Goods of $500 dollars or more, 6. Surity agreements (promise to pay debt of ano
Illusory contracts Present when no consideration on both sides Giving up something you have the legal right to do is consideration
Contract with minor Contract with minor has the power to affirm the contract
Battle of the Forms- UCC 2207 Only applies is BOTH parties are merchants 1. If offeree accepts the offer, and at same time makes material alteration to offer, contract under terms of original offer,
Common law acceptance Common law- mere image rule (acceptance is mere image of the rule)
Battle of the Forms- UCC 2207 continued... 2. If offeree makes acceptance conditional upon consent of additional term, then no contract, 3. If acceptance with non-material change, that non-material change is incorporated into the contract, unless offeror objects within a reasonable period of ti
Material change v. Non-material change Material change- One that substantially effects the economic risks or benefits or changes usual remedy for breach of contract
Promissory estoppel (detrimental reliance) Substitute for consideration
Defense to formation- Mistake Parties are mistaken about terms of contract Two types- 1. Mutual, and 2. Unilateral mistake
Defense of formation- Mistake Mutual Both parties mutually mistaken about contract terms Grounds for recission if goes to "heart" of the agreement
Defense of formation- Mistake Unilateral One party's mistake will not prevent formation If non-mistaken parties knows or has reason to know of other parties mistake then cannot take advantage of mistaken party benefiting from the bargain
Modification to contract terms- Common law In order to have valid modification it must be supported by new consideration
Modification to contract terms- UCC Good faith modifications are allowed regardless of consideration
Defense of formation- Statute of Frauds 10 day written confirmation exception Both parties must be merchants If one party within a reasonable time, after an oral agreement has been reached sends a written confirmation to other party it binds the sender If recipient does not object within 10 days the recipient is bound to cont
Perfect tender rule UCC- Shipment of goods Seller must deliver perfect tender of the goods to buyer
Perfect tender rule- Violation When seller violates, buyer has options- 1. Accept the goods and pay contract price, 2. Timely reject goods and sue for damages, 3. Accept any commercial units and reject the rest
Perfect tender rule- Notice of accommodation If non-confirming goods are sent with notice of accommodation by seller, it is counter-offer Buyer can accept or reject, but CANNOT file suit
UCC- Buyer standard remedy Non-breaching party must mitigate damages Substitute goods for another buyer Recover damages between contract price and cover price Cover price - contract price = buyers standard remedy
Third party beneficiary mentioned in contract Issue: Have the third parties beneficiary rights vested? If vested, cannot cancel or modify unless third party consents to cancel or modify A third party cannot assert a claim to a contract they are not a party to
Third party beneficiary mentioned in contract- Vested rights 1. When third party learns of contract and assent to it, 2. When third party learns of contract and reasonably relies on it, 3. When third party sues to enforce the deal
Parole evidence rule Prevent introduction of evidence to contracts that explains a contract is completely and totally integrated Exceptions- 1. Condition precedent to contract: Evidence that contract subject to condition precedent is always allowed to explain that contrac
Anticipatory repudiation (breach)of contract If told not going to perform, non-breaching party has right to terminate contract and engage in third party to complete Non-breaching party entitled to sue breaching party for any loss No duty by non-breaching to inform breaching party of new contra
Adequate assurances "Expression of doubt" NOT clear statement of intent not to perform (anticipatory repudiation) Unclear whether performance- 1. Wait until date of performance, or 2. At time receive notification, make a demand for adequate assurances Cannot sue at t
Excuses to performance 1. Objective impossibility(nobody at any time can perform the contract), 2. Acts of god
Assignments and delegations All contracts are assignable and delegable, except unique personal service contracts & long term requirement contracts In writing or orally Can be for value or gratuitous -Gratuitous revocable unless relied to determent of assignment -Value irrevo
Novation New contract substituting out one of the contracting parties for a new party
Breaching parties remedy Non-breaching party suing and recovering foreseeable and compensatory damages Breaching party who sues is entitled to reasonable value of services provided, minus the non-breaching parties damages
Remedy for non-breaching party Place non-breaching party in position they would have been in if the contract would have been performed perfecting
UCC- Seller standard of remedy Contract price - resale price = seller standard of remedy
UCC- Loss volume or profits doctrine Only applies to volume sellers (unlimited amount in stock or readily available items in stock) Determine what profit would be minus amount paid upfront, goes back to seller
Created by: dmoore147 on 2012-05-22



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