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MBE Contracts
| Question | Answer |
|---|---|
| Ways in which an offer can terminate | 1. Revocation by the offeror prior to acceptance 2. Offeree rejects offer 3. When the offeree makes a counteroffer Lapse of time (service K's and stock options) |
| Public offer | G/R on public offer is an offer of reward is an offer to enter into a unilateral contract, and if made to the public generally, it may be accepted by anyone to whom it becomes known. |
| Mailbox Rule | only applies to acceptances - Acceptance is effective upon dispatch not receipt. |
| Option | An option is a promise to keep an offer open for a period of time. CL: in order to have a valid option it must be supported by consideration UCC: only applies to merchant offerors- Firm offer rule |
| Firm Offer Rule | offer by a merchant in a signed writing which by its terms gives assurance that it will be held open is irrevocable during the time stated. If no time is stated then the period of irrevocability may not exceed 90 days |
| G/R must have quantity in the K | Exception - Requirements contract- quantity measured by buyer's good faith needs - Outputs contract. No set quantity just whatever the seller's output is to be. |
| Option acceptance | For acceptance to occur with an option, acceptance must be in offeror's hands within the option period |
| Statute of Frauds: certain K's must be in writing in order to be enforceable. | Marriage Y term of years L land sale E executive contracts G goods over 500 dollars S surety agreements (promise to answer for the debt of another. |
| Acceptance | Common law: acceptance had to be a mirror image |
| UCC 207 battle of forms acceptance, applies if both parties are merchants | - If the offeree accepts the offer and at the same time makes a material alteration or adds an additional term, we have a contract under the terms of the ORIGINAL OFFER |
| UCC 207 battle of forms acceptance, applies if both parties are merchants CONTINUED | - IF there is an acceptance with a non material change, that non material change is incorporated into K. Unless the offeror objects within a reasonable period of time. |
| Material Change | Material Change: substantially effects the economic risks or benefits, or changes the usual remedy for breach of contract. |
| Mutual Mistake | when both parties are mutually mistaken about the contract terms : if that mistake goes to the heart of the agreement you have grounds for rescission - Unilateral Mistake: It will NOT prevent K formation |
| Unilateral Mistake | Will NOT prevent K formation. One party is mistaken about the formation of the K ○ If non mistaken party knows or has reason to know of other party's mistake, they will not be allowed to take advantage of the mistake and snap up the benefit of the barg |
| Modification | CL: valid modification must be supported by new consideration UCC: allow for good faith modifications, regardless of g/f considerations. Both parties must be merchants. |
| 3 options after a perfect tender violation | 1. accept goods and pay contract price. 2. Buyer can timely reject goods and sue for damages 3. Accept any commercial units and reject the rest. |
| Nonconforming goods | If nonconforming good are sent along with a notice of accommodation will be considered a counteroffer and cannot sue. |
| Buyer's Standard Remedy | Cover price minus contract price equals buyer's standard remedy. |
| The rights of the third party beneficiary do not vest until: | 1. It manifests assent in a manner invited or required by the parties 2. It learns of the contract and detrimentally rely on it or It brings a lawsuit to enforce its rights |
| Until a 3rd party's rights have vested, a modification of the contract can take place without the consent of the third party. | 3rd party rights |
| Parol Evidence Rules | prevents the introduction of evidence that explains a k that is considered to be completely and totally integrated. |
| Exception to Parol Evidence Condition Precedent: | evidence that performance of K was subject to a condition precedent is always admissible to explain that K |
| Anticipatory Breach/Repudiation | Awards right to terminate contract and engage someone else to do the work, and able to sue the breaching party for damages for its loss. Once committed, non breaching party is under no duty to inform breaching party that they are covering. |
| Adequate assurances | - An expression of doubt as to one's ability to perform under the contract without being an outright refusal. This will not be an anticipatory repudiation, but a prospective inability to form. |
| If there is anticipatory repudiation then the non breaching party can: | 1. Sue for damages 2. Contract with a third party or 3. Do nothing. |
| Excuses to performance | When no one can perform the contract at any time. Impracticability: Acts of God- force majur. |
| All contracts are assignable and delegable | Exception: Unique personal service contracts and long term requirement contracts |
| Can assignments be oral or written | yes! |
| Can assignments be gratuitous or for value | yes! Can be for value or can be gratuitous, but are generally regarded as being revocable. Assignments for value irrevocable |
| Novation | only use when substituting in a new party |
| Key to breach and remedies | place the nonbreaching party in the position she would have been in had the contract been performed perfectly. |
| Option: promise to keep an offer open for a period of time | CL: must be supported by consideration UCC: 2-205 Offer by merchant in a signed writing which by its terms gives assurance that it will be held open is irrevocable during the time stated AND if no time is stated, the period of irrevocability may not ex |
| Modification | CL: requires new consideration UCC: doesn't care if there is new consideration supporting modification, allows for good faith modification. |
| Statute of Frauds required for what amount? | $500 |
| Parol evidence only applies to | agreements to agreements made prior to or during the contracting period. Not subsequent. |
| Accord and Satisfaction | an accord is a new agreement, the satisfaction is when that new agreement is performed. - Always a good faith component |
| Installment K: characterized by multiple payments or multiple deliveries at fixed times. | Rule for breach: UCC 2-612(2): the buyer may reject any non conforming installment ONLY if it substantially impairs the value of that installment and can't be cured. |
| Contracts for goods for $500 or more must be evidenced by a writing to be enforceable. There are three exceptions to this rule: | 1. Specifically manufactured goods unsuitable for resale in the seller's regular course of business 2. Contracts admitted in court Contracts partially accepted (enforceable to the extent of the acceptance. |
| Specially Manufactured Goods Exception to the UCC's statute of frauds- must prove 3 elements | 1. The goods must be specially manufactured for the buyer 2. The seller must have started work on the goods The goods are not sellable in the ordinary course of business |
| All contracts are assignable, are K's are delegable except: | Unique personal service K's and long term requirement K's |
| Novation | only works when two parties to a contract, agreeing to allow one party to get out of contract and substitute another party in their place with the exact same terms. It basically creates a new agreement with different people. |
| 3rd Party beneficiaries | Vesting: for a 3rd parties' rights to vest Must 1. Learn and assent to K 2. Learn and rely on K 3. Sue to enforce the K Just knowing of the contract is not enough for vesting to occur. |
| New construction risk of loss | - Destruction of a newly constructed building without fault of either party, usually act of got etc., the contractor/builder bears the risk of loss. Existing structure, the landowner bears the risk of loss. |
| Seller's standard remedy under the UCC | Contract price minus the resale price equals the seller's standard remedy. |
| increased price or cost is never a reason for no performance | if farmer's crop is completely destroyed- maybe consider |
Created by:
staciaberry
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