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Contracts MBE Kaplan

Bar Exam

QuestionAnswer
3 Elements to Create a Common Law Option Contract 1. An offer 2. A subsidiary Promise to keep the offer open 3. A valid mechanism for enforcing the subsidiary promise
3 Elements to Create a UCC Firm Offer 1. An offer to buy or sell is made by a merchant 2. the offer is made in writing signed by the merchant 3. the offer expressly states by its terms that it will be held open
Where there is a false recital of consideration (option k), the majority rule is: the recital of consideration is a rebuttable presumption that the k is supported by consideration.
Define "Sale" A transaction in which a seller transfers title of goods to a buyer
Legal Requirements of An Offer 1. an outward manifestation 2. A signal that acceptance will conclude the deal
4 ways to terminate an Offer 1. Death or Mental Incapacity 2. Lapse 3. Revocation by Offeror 4. Revocation by Offeree
(Offer): What are the 2 steps to determine if there's an outward manifestation? 1. oral, written, or actual conduct 2. subjective intent should be considered only if it should be reasonably apparent to the other party
2 situations that are not offers 1. Preliminary Negotations- give and take that occurs during bargaining 2. Invitation for an Offer- closing in a deal, but want the other party to commit first
Define the American Advertising Rule Ads & Catalogues, etc. are not offers, but are instead invitations for offers.
Are Rewards offers? Yes, they are treated as offers to perform a task for a reward. (unilateral k)
Are auctions offers? No, the GR is that the auctioneer is inviting offers.
Define "auction without reserve" where the auctioneer is making an offer to sell to the highest bidder
Effect of Death or Mental Incapacity on an Offer it terminates the power of acceptance
When does an offer lapse? Either 1) at the time stated in the offer OR 2) if no time is stated then after a reasonable time has passed. Know the 2 factors to whether a reasonable time has passed
2 factors to determine whether a reasonable time has passed after an offer? 1. subject matter & market conditions 2. degree of urgency and means of transmission
Face to Face Conversation Rule An offer made in a face to face conversation lapses at the end of the conversation UNLESS the offer states otherwise.
Exception to the Face to Face Conversation Rule If the offer states otherwise
Rule for Revocation by Offeror: Offer made to 1 offeree An offeror may revoke an offer at any time and for any reason IF 2 requirements are met 1) Communication & 2) Timing
Rule for Revocation by Offeror: 1 Offeree Define the timing requirement it must be revoked before the offer is accepted
Rule for Revocation by Offeror: 1 Offeree Timing- When can an offeror for a unilateral k revoke? before the offeree begins performance (note: this is different from mere preparations)
Rule for Revocation by Offeror: 1 Offeree Define the communication Requirement (Direct) Can be communicated directly or indirectly. Direct- offeror directly tells offeree of his intent to withdraw
Rule for Revocation by Offeror: 1 Offeree Define the communication Requirement (Indirect) Indirectly: 1) Offeror takes some action that is inconsistent with intention to go thru with the offer & 2)offeree learns about such action from a reliable source
Rule for Revocation by Offeror: 1 Offeree Define the 2 ways to communicate revocation 1) directly or 2) indirectly
Revocation by Offeror- Rule to apply to Multiple Offerees Functional Equivalents Rule
Define the Functional Equivalents Rule The offeror may revoke by communicating the revocation in a functionally equivalent manner as the offer was made.
Exception #1 to the Functional Equivalents Rule If there is a better means of communicating the revocation that is reasonably available, those means must be used.
Does an offeree have to be aware of revocation? Yes- if the offer was made to a single offer No- if the offer was made to multiple offers and offeror complies with the functional equivalents rule
Name 3 ways in which an offeree can refuse to accept an offer 1) Outright Rejection 2) Rejection via Counteroffer 3) Rejection via Non Conforming Acceptance
Rejection via Counteroffer- Exception to the Rule A mere inquiry about an offeror's willingness to negotiate is not a counteroffer and does not terminate the power of acceptance
Define the ways in which the offeree's power of acceptance can be terminated 1) Death or Mental Incapacity 2) Lapse 3) Revocation by Offeror 4) Revocation by Offeree
2 Requirements to Accept an Offer (CL) 1. acceptance must mirror the terms of the offer 2. Acceptance must be communicated to the offeror.
How to properly communicate acceptance to an offeror (CL) If the offer stipulates a particular means of communication, then that is the required means of acceptance. If an offer is silent about the means of communication, the offeree is free to use any reasonable means of transmission.
If an offer stipulates a particular means of communicating acceptance (CL): then that becomes the required means of acceptance
If an offer is silent about the means of communicating acceptance (CL): the offeree is free to use any reasonable means of transmission
What is a reasonable means of transmission of an offer's acceptance where the offer is silent about the means of communication? Unless the circumstances indicate otherwise, a means of transmission is reasonable if: 1) same means as offeror; 2) means customarily used in similar transactions; 3) equivalent in speed and reliability to offeror's means
Exceptions to the Communication Requirement of Acceptance (CL) 1) acceptance by silence; 2) unilateral k; 3) mailbox rule
The mailbox rule does not apply if: 1) the offer states otherwise or 2) to option k's, which are only effective upon receipt of offer.
The general rule about acceptance by silence Silence does not communicate acceptance of an offer
Exceptions to the GR- Acceptance by Silence Exception 1: Takes the Benefit Where offeree takes the benefit of offeror's services with reasonable opportunity to reject them and reason to know compensation was expected
Exceptions to the GR- Acceptance by Silence Exception 2: Reason to Understand where offeror has given offeree reason to understand that acceptance by silence is acceptable
Exceptions to the GR- Acceptance by Silence Exception 3: Previous Dealings/Other circumstances where because of previous dealings or other circumstances, it is reasonable that the offeree should notify the offeror that he does not intend to accept
How to accept a Unilateral Contract: Accept by Performance. Don't have to communicate acceptance prior to performance unless offer provides otherwise.
Mailbox Rule Acceptance by Mail (or similar transmission) is effective upon dispatch. (even if lost in mail as long as it's properly sent)
If an offeree mails acceptance and changes his mind by sending a rejection what happens? the first communication that the offeror receives is effective
Can a construction subcontractor revoke his bid? No, if- the general contractor uses the bid to formulate his own. (creates reliance on bid [not acceptance of offer] . Promissory Estoppel prevents SC from revoking his bid.
Effect of a Firm Offer (UCC) it becomes irrevocable for the period of time stated in the offer, or if not time is specified, then for a reasonable time.
Under the UCC, a seller can accept a buyer's offer to purchase goods for prompt or current shipment in 3 ways 1) promise to ship goods in conformity with offer 2) prompt or current shipment of goods in conformity with offer 3) accept by shipping non conforming goods
If the seller accepts buyer's offer to purchase goods for prompt or current shipment by shipping nonconforming goods, the seller is accepting the offer but also breaching the contract
If the seller accepts buyer's offer to purchase goods for prompt or current shipment by shipping non conforming goods as an accommodation: the shipment is a counteroffer.
Additional Terms in the writings that constitute a contract between merchants: automatically become a part of the contract. w/ 3 exceptions
3 Exceptions to the GR for additional terms in the writings that constitute a contract between merchants 1) if the offer expressly limits acceptance to its own terms 2) if the offeror objects to the additional terms within a reasonable time 3) if the additional terms would materially alter the contract
Different Terms in the writings that form a k between merchants (majority and minority rule) Majority Rule: the different terms are knocked out and omitted from the contract. Minority Rule: they are treated as mere proposals for addition
Additional Terms in written confirmations in a k between merchants: automatically become a part of the contract with 2 exceptions
Additional Terms in written confirmations in a k between merchants: 2 exceptions to the GR 1) if the add'tl terms materially alter the contract OR 2) if the receiving party objects within a reasonable time
Different terms in written confirmations between merchants: different terms are mere proposals for addition. IF they are conflicting terms, then the knockout rule applies.
Additional Terms that are in the party's writings in a k between merchant and a consumer: are treated as mere proposals for addition that are no part of the contract unless the offeror expressly agrees to them
Different terms that are in the party's writings in a k between a merchant and consumer: are treated as mere proposals for addition that are no part of the contract unless the offeror expressly agrees to them.
Additional terms in written confirmations of a k between merchant and consumer: are treated as mere proposals for addition that are no part of the contract unless the offeror expressly agrees to them
Different terms in written confirmations of a k between a merchant and consumer: are treated as mere proposals for addition that are no part of the contract unless the offeror expressly agrees to them
Battle of the Forms Rules- Exception even if a K exists by battle of forms rules, there is no k if offeree makes his acceptance conditional on offeror's consent to the terms. offeror must expressly consent in order for k to be formed.
Synonyms for No Consideration (5) lack of consideration, not supported by consideration, insufficient consideration, want of consideration
Define Inadequate Consideration where someone claims they were not paid adequate consideration
Define failure of consideration a party's failure to perform in accordance with his promise, i.e. breach
Consideration: General Rule A promise is unenforceable unless it is supported by consideration. Consideration is defined as a bargained for exchange.
Define Consideration A bargained for exchange.
General Rule: Past Consideration Is not proper consideration unless to is a written promise to pay past debt or debt discharged in bankruptcy
Exception to the Past Consideration Rule Material Benefit: if the promisor received (i.e. not a 3rd party) a past material benefit and makes a promise in recognition of that benefit then there is consideration.
Define an Illusory Promise A promise to perform that leaves the promisor's performance up to the discretion of the promisee.
Define a Gratuitous Promise A promise to make a gift, which is not legally enforceable unless the gift is executed by 1) an intent to give a gift and 2) actionable or symbolic delivery.
Condition on a Promise v. Condition on a Gratuitous Promise- 3 factors to consider 1)language of the parties, 2) context; 3)benefit to the promisor
If a party claims that there is inadequate consideration: a court will not police the fairness of the transaction. Have to use the doctrine of unconscionability as a remedy.
Doctrine of Promissory Estoppel If a promisee relies to his detriment on a gratuitous promise, he may still be able to enforce it if he shows 1) a promise; 2) foreseeable reliance; 3) actual reliance; and 4) injustice without enforcement.
Requirements of the Statute of Frauds (CL) There must be 1) a writing & 2) signed by the party against whom enforcement is sought
What will satisfy the writing requirement of the Statute of Frauds (CL)? the writing must be 1) a memo of the agreement. The memo can be made before/during/after k formation. 2) it must contain a) the identity of the parties; 2) nature and subject matter of the k; and 3) essential terms of the agreement
Special Rules SOF (CL): Land must have an informal description of the land or address
Special Rules SOF (CL): Signature any symbol/mark made with intent to authenticate. (practical note: includes typed, initials, or letterhead)
Special Rules SOF (CL): Multiple Documents signed documents must incorporate unsigned documents by reference w/ 1 exception (tacking documents)
Special Rules SOF (CL) multiple documents- describe the exception (tacking) 3 requirements for tacking: 1) 1 signed writing unambiguously stating contractual relationship; 2) signed and unsigned documents clearly refer to the same subject; 3) clear and convincing evidence of acquiescence to unsigned documents other party
Partial Performance can satisfy the SOF (CL) in 3 subject areas 1) land contracts; 2) 1 year contract; 3) sale of goods contracts (UCC)
Partial Performance Rule SOF (CL): Land Contracts to satsify SOF by partial performance must show 2 of these 3 conditions are met: 1) payment of all/part of purchase price or 2) making substantial improvements to property
Partial Performance Rule SOF (CL): 1 Year Contracts if an oral k not to be completed within 1 year is fully performed within 1 year it is enforceable.
Partial Performance Rule SOF (UCC) Sale of Goods UCC SOF may be satisfied by partial performance of a sale of goods k.
the UCC SOF Is satisfied in 5 ways 1. a signed writing 2. the merchant's confirmation 3. in court admission 4. partial performance 5. the problem of specially manufactured goods
UCC SOF- Signed Writing requirements 1) writing (note- email counts); 2) signed by party (symbol adopted with intent to authenticate); 3) sufficient to show that a contract has been made; 4) containing a quantity term [ 2/ 2 exceptions]
UCC SOF- Signed Writing requirements: 2 exceptions to quantity term 1) where language provides an unambiguous basis for measuring quantity & 2) out put or requirements k's
UCC SOF- explain what a merchant's confirmation is where merchant's make an oral k and 1 merchant sends the other a written confirmation of the agreement as long as 5 requirements are met
UCC SOF- Merchant's Confirmation 5 Requirements 1)merchant fails to object within 10 days of receipt; 2) confirmation must be signed and have a quantity term; 3) writing must be in confirmation of the k; 4) sent within a reasonable time of formation; 5) based on a real agreement b/w parties
UCC SOF- In court admission rule where a party admits in court that a contract was made, the contract is enforceable to the quantity admitted.
UCC SOF- Partial Performance Rule there is an enforceable k where 1) payment has been made and accepted for the goods or 2) the goods have been shipped note if k is divisible- k only enforceable to the amount that has been shipped/paid for
UCC SOF- Specially Manufactured Goods k is enforceable, despite SOF, for specially manuf goods if 1) the buyer can't resell goods in ordinary course of business & 2) manufacturer detrimentally relied before buyer withdrew
Warranty of Title (UCC) implied warranty of good title to goods and rightful transfer of them.
Warranty of Merchantability (UCC) implied warranty that goods are fit for their intended purpose
Warranty of Fitness for a Particular Purpose (UCC) applies where seller has good reason to know goods' purpose and buyer is relying on the seller's knowledge
Missing Terms that the UCC fills in Price, time, and services= reasonable time (for price- reasonable price at time of delivery) delivery Place= seller's place
GR for ambiguities in a Contract Objective meaning controls unless 1) a party has reason to know of the other' party's subjective meaning or 2) both parties have the same subjective understanding.
When can we look at trade usage, course of dealing, and course of performance to interpret a k's ambiguities: admissible to fill in gaps and resolve ambiguities, but it's not admissible to contradict express terms in the k.
Which is more important in interpreting ambiguities? - course of performance or trade usage? course of performance
When is parol evidence admissible? if the k is 1) a written agreement& 2) parties intend it to be the full agreement- no oral evidence is admissible to add or subtract from the parties' obligations. it can be used to interpret/ explain any terms/ambiguities or to prove fraud/duress/mistake
The parol evidence rule does not apply to: subsequent agreements entered into after the execution of the written contract
Risk of Loss- Destination K buyer assumes risk of loss after delivery to destination specified in k
Risk of Loss- Shipment K buyer assumes risk of loss after delivery to carrier
Risk of Loss- Non- Carrier- seller is a merchant risk of loss passes to buyer only when goods are physically in buyer's possession
Risk of Loss- Non Carrier- Seller is not a merchant buyer has risk of loss at time of delivery
Rule to Modify a Contract Performance (CL)- Increased Compensation modify to increase compensation is unenforceable because there's no consideration. 2 exceptions 1) if parties agree to a different performance or 2) performance rendered is substantially more burdensome than reasonably anticipated
Rule to Modify a Contract Performance (CL) Decreased Compensation it's an unenforceable modification because there's no consideration.
Rule to Modify a Contract Performance (UCC) an agreement to modify a contract for the sale of goods is OK with or without consideration so long as the modification is made in good faith.
If one party is mistaken his performance is excused if: the other party knew or had reason to know of the mistake or there's been a serious error (unless there's negligence or reliance on error)
2 requirements: Impossibility of Performance 1) objective impossibility & 2) circumstance not know at k's formation
Impracticability of Performance: 2 requirements 1) circumstances causing impracticability are unforeseen& 2) burden of performance would be far beyond either party's expectations
Frustration of Purpose: 3 Requirements 1) principal purpose in entering k is frustrated; 2) the frustration is substantial; 3) the purpose that is frustrated must have been a basic assumption of the k
Rescission where both parties to a contract are mid performance and they excuse each other's performance.
Accord and Satisfaction a party promises to accept substitute performance
Anticipatory Repudiation where a party either definitively states that it will breach the k or voluntarily makes itself unable to perform the k
Anticipatory Repudiation- Effect it breaches the k
Adequate Assurance (for sale of goods) if a party reasonably suspects the other can't/won't perform it may make a demand of adequate assurance in writing.
Additional Requirement for Adequate Assurance for the Sale of Goods must be in writing
Once a party to a sale of goods k asks for adequate assurance- 1) he may suspend performance where reasonable. 2) The other party has 30 days to respond.
A party fails to provide adequate assurance for a sale of goods k if he does not respond within 30 days or does not respond in a way to provide adequate assurance
An anticipatory repudiation may occur in 2 ways 1) party states it will breach k/ voluntarily stops itself from performing; 2) party fails to provide adequate assurance
An anticipatory repudiation can be retracted until-- 1) the other party acts in reliance 2) the other party signals that it accepts repudiation; 3)the other party sues
Define Promissory Condition (CL) where performance is conditioned on the occurrence of the promised performance by the other party
Define a Pure Condition (CL) where performance is conditioned on circumstances out of control of either party
Failure of an express condition--(CL) discharges a party's obligation to perform UNLESS the party waives by performing regardless; the party acts in bad faith to prevent the condition; or a court excuses the condition because it's small and will cause a big loss if performance is required
implied condition (CL) one that is not expressly stated in the contract
If an implied condition of a contract is not fulfilled- (CL) a court will have to determine if it constitutes a material breach or a substantial performance.
Perfect Tender Rule (UCC) every contract term is an express condition and failure to conform is therefore a breach
Options for a Buyer who receives nonconforming goods (UCC) 1) reject goods; 2) accept goods; 3) accept/reject goods in part
Requirements for a Buyer to Reject Nonconforming goods (UCC) must reject within a reasonable time after delivery and notify seller. (failure to properly reject= acceptance)
If a Buyer does not properly reject nonconforming goods he has accepted them
If a buyer properly rejects nonconforming goods he can bring an action against seller unless seller gives seasonable notice of his intent to cure.
A seller can cure by 1) giving seasonable notice of his intent to cure; and 2) making conformed delivery within the time specified in the k OR if he reasonably believes buyer will accept delivery and makes delivery within a reasonable time
A buyer can accept non conforming goods by once he's had a reasonable opportunity to inspect, telling the seller that the goods conformed; taking goods regardless; failing to make an effective rejection; any other actions inconsistent with seller's ownership
Effect of buyer's acceptance of nonconforming goods He must pay for them, although he can seek damages for nonconformity
If a buyer accepts or rejects part of the goods he can only do so in commercial units
an entire installment k is breached by delivery of nonconforming goods IF the nonconforming delivery substantially impairs the whole contract
if a nonconforming shipment of goods in installment only substantially impairs the particular installment the buyer can reject the installment, but can't cancel the k
if a nonconforming shipment of goods in installment doesnt substantially impair the installment or the entire k the buyer must give the seller a reasonable opportunity to cure
General Rule for Contracts with minors they are voidable at the minor's option, regardless of minor's emancipation.
Minority Rule- A minor can't avoid a contract if he is married/emancipated or misrepresented his age
If a minor avoid a contract- he must return any goods in his possession, although he doesnt have to compensate for wear and tear. If the contract was for necessaries, he must pay value for goods/services rendered.
When can a minor ratify a contract (minority rule only)? by expressly/impliedly affirming the k after becoming 18
Define Mental Incompetence 1) where a person cannot understand in a reasonable manner the nature and consequences of the contract OR 2) he can't act reasonably in relation to the k and the other party has reason to know of his condition
Result of Mental Incompetence previous adjudication- contract is void; no previous adjudication- k is voidable by incompetent
If a mentally incompetent person later becomes competent he can expressly/impliedly ratify the contract
if a k is voided because of mental incompetence if incompetent person received a benefit under the k, he must make the other party whole buy paying for the reasonable value of goods/services received
4 Elements of Fraudulent Misrepresentation 1) misrepresentation; 2) state of mind; 3) materiality of misrepresentation; 4) reasonable reliance on misrepresentation
Define misrepresentation an assertion that is inconsistent with facts
opinions cannot be misrepresentations unless they are from a professional
State of mind requirement for fraudulent misrepresentation D knew statement was false or knew that he didn't know whether it was true & intended to mislead or knew that there was a substantial likelihood (knowledge and intent/purpose
for a fraudulent misrepresentation to be material, it must be objective- likely to induce a reasonable person to enter into the k or subjective- D knew it would likely induce P
2 types of non fraudulent misrepresentation 1) negligent misrepresentation & 2) innocent misrepresentation
4 elements of negligent misrepresentation 1) misrepresentation; 2) materiality of misrepresentation; 3) reasonable reliance on misrepresentation; 4 negligent state of mind (i.e. D would have known if he exercised reasonable care)
Define fraudulent nondisclosure where the defendant is silent when there is a duty to disclose
3 elements of fraudulent nondisclosure 1) nondisclosure was material to the contract; 2) reasonable reliance on disclosure; 3) duty of disclosure and a failure to fulfill it
3 elements to duress 1) threat 2) wrongful in nature; 3) no reasonable choice but to succumb
2 elements of undue influence 1) unfair persuasion; 2) other party is vulnerable to persuasion
2 elements of unconscionability 1) procedural unconscionablity- 1 party has no bargaining power & 2) substantive unconscionably- k unreasonably favors one party
Part/ or an entire K may be void for public policy in 4 contexts 1) subject is prohbiited by law; 2) contract is formed for the purpose of committing a crime; 3)performance of k would be a tort; 4) k performance would violate state values
Goal of Expectation Damags put a party in a position he would be had the k been fully performed
formula for expectation damages the loss of value of performance - payments received/money saved
Expectation Damages cannot be awarded in 4 situations 1) if cost of performance greatly exceeds market value; 2) if expectation damages can't be calculated with reasonable certainty; 3) if damages are unforeseeable; 4) if damages can be mitigated
goal of reliance damages to restore P to a position he was in prior to the k
formula for reliance damages Expenditures made in preparation of/ actual performance - losses that would have happened even if there was full performance
restitutionary damages are only available for partial performance
formula for restitutionary damages P can get either the reasonable value of benefit conferred or the extent to which property value increased due to P's performance
2 prong test to consider for enforceability of Liquidated Damages 1)did the parties intend the clause to be compensation for breach or a penalty? &2) was the clause reasonable in relation to the anticipated harm at the time of contracting?
Extra Prong in test for enforceability of liquidated damages (minority courts) was the clause reasonable in relation to the harm/ losses that actually occurred?
Seller's Remedies- if goods have been delivered and accepted seller can get k price to extent that goods are delivered/accepted
Seller's Remedies- if goods were wrongfully rejected or repudiated If seller resold goods- gets difference b/w k price and resale price if seller didnt resell- difference b/w k price and market price
Buyer's Remedies- if buyer covered difference bewteen k price & cover price
Buyer's Remedies- If buyer did not cover difference between k price and market price at time of breach
regardless of securing cover, a buyer can seek what damages: incidental damages & consequentail damages (both damages will be reduced by costs avoided b/c of the breach)
Rule for Negative Injunction- Employee- Mid-term where an employee is under a k for a specific period of time and breaches the k by departing mid employment, the employe can seek a negative injunction to prevent employee from competing of the employee's services are unique or extraordinary
A non-compete clause is not necessary in a contract when an employer is seeking a negative injunction and the employee departed mid term
Where an employee is seeking to prohibit post employment competition and there is an express non compete clause in the contract court will consider the k valid if 1) there is sufficient business justification for enforcing hte restraint & 2) the scope of the clause is both reasonable in duration and geographic reach
Generally a court will award what damages for promissory estoppel? expectation damages or reliance damages
GR for emergency benefits conferred by a healthcare professional if a healthcare professional provides emergency services to a pt who is unable to consent, he can recover restitution damages
GR for benefits conferred by mistake if a person mistakenly confers benefits on another, he ma recover damages in restitution, but a court will taken into account the blameworthiness of the error, whether the recipient could prevent the error, and whether recipient availed himself of benefit
Define a third party beneficiary someone who is supposed to receive a benefit from the performance of a k but is not a party to the k himself
Define a creditor beneficiary when a promisee seeks performance from a promisor that will satisfy an obligation to a 3rd party
Define a donee beneficiary when a promisee seeks a performance from a promisor to make a gift of that performance to a 3rd party
Intended beneficiaries of an agreement can sue 1)promisor if there's a preexising obligation between them ;2) breaching promisee
Enforcement rights of incidental beneficiaries none
Defenses available to Promisor against promisee apply to 3rd parties
If a promisor breaches a k and the performance was intended to benefit a donee beneficiary the promisee cant obtain damages unless he already reimbursed 3rd party, but he can try to get specific performance
To make an effective assignment of a right to receive a performance under a k you must do 2 thing 1) manifest an intention; 2) make a present transfer of the existing right (and the right must be assignable)
what rights are not assignable? 1) an assignment that would materially alter the risks/obligations to the other party 2) where obligor has a personal interest in rendering performance to obligee ; 3) one that would violate law/ policy ;4 ) when an assignment is prohibited by k
In what situation can an assignment be revoked? if it's gratuitous (and not an executed gift)
an assignment can't be revoked if: it's for value
Rights after assignment- assignee gets the same rights as the assignor, but is also subject to the same defenses
Rights of an assignee against assignor implied warranty that assignor won't defeat the value of assignment & doesn't know of anything that would. & the rights actually exists and is subject to no limitations
Define a delegation of duties when a third party agrees to satisfy a performance obligation owed by one of the parties to a contract
The GR is that once an offeree begins performance of a unilateral k, an option k is created that prevents the offeror from revoking. IN ILLINOIS: In IL ,a unilateral contract may be accepted by part performance.
Illinois Consideration Rule consideration consists of some detriment to the offeror, some benefit to the offeree, or some bargained for exchange between them.
In Illinois the Merchant's Confirmation does not satsify the SOF if nothing in the confirmation indicates that the parties reached an agreement
Illinois specific SOF Rule: Lease of Personal Property Leases of personal property: are not enforceable unless 1) the total payments to be made are less than $1000 & 2) a writing signed by person against whom enforcement is sought and it must contain sufficient info (describe goods leased and the lease terms
Illinois 4 Corners Rule to K interpretation In Illinois, the courts follow the four corners rule, which requires that a written agreement is presumed to express the parties intention and no extrinsic evidence can be used to change the agreement, unless there is an ambiguity.
Illinois Rule: Material Mistake of Fact if there is a material mistake of fact by one of the parties, there is no k because there was no mutual assent to the agreement. The k may be rescinded.
Illinois Rule: Unilateral Mistake a mistake by both parties that justifies rescission occurs when as the result of mistake and not negligence, the written k varies from the subject matter or terms intended by 1 party.
In IL if a minor misreprented his age in entering into a k he is estopped from invoking the infancy defense.
Elements to Illinois' Impracticability Rule 1) not reasonably foreseeable & 2) value of counterperformance is nearly/totally destroyed
Created by: srslaw87