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Contracts

Barbri Review

QuestionAnswer
Seven general issues (Armadillos from Texas play rap, eating tacos) 1. Applicable law, 2. Formation of contracts, 3. Terms of contract, 4. Performance, 5. Remedies for unexcused nonperformance, 6. Excuse of nonperformance, 7. Third-party problems
Vocabulary- Unilateral contract Results from an offer that expressly requires performance as the only possible method of acceptance
Vocabulary- Bilateral contract All other offers. usually offer is silent as the method of acceptance
Vocabulary- Bilateral contract unless- 1. Reward, prize, contest, 2. Offer expressly requires performance for acceptance
Vocabulary- Quasi-Contract Equitable remedy; Not contract law; Result unfair, unjust, inequitable= Quasi
Applicable law You are responsible for part of- 1. Common law of contracts (largely case law), and 2. UCC law of sales (largely statutory)
Applicable law- Common law Do common law, unless fact pattern that is primarily a sale of goods (Article 2)
Applicable law- Article 2 of the UCC Applies to ocntracts that are primarily for SALES OF GOODS; Factors- 1. Type of transaction- sale, 2. Subject matter of transaction- goods
Applicable law- Hypothetical; Real estate: Common law, C contracts to buy a house. Article 2 apply? Land, or building attached to land; Not sales of goods so no article 2
Applicable law- Hypothetical; Service contract: Common law, C contracts with E to wash his car. Article 2 apply? Not a sale contract, rather service contract so no Article 2
Applicable law- Hypothetical; Sale of goods: UCC 2, C contracts to buy E's Cadillac for $400. Article 2 apply? Yes, buying goods and selling goods always Article 2
Applicable law- Mixed deals; General rule All or nothing for Article to apply or not apply; Look to the more important part of the deal
Applicable law- Mixed deals; Exceptions If contract divides payment, then apply UCC to sale of good part and common law to the rest; Divides payment= divide price for goods and services therefore if dispute over sale of goods apply Article 2
Applicable law- No revised article 2 No responsibility on MBE or state portion
Applicable law- Article 2A of the UCC Article 2A applies to leases of goods. On MBE not leases of land or building on test
Formation of a contract (heavily tested)- Definition of contract K is an agreement that is legally enforceable; Look- 1. Agreement, 2. Determine whether agreement is legally enforceable
Formation of a contract- Overview of agreement process on bar Watch for info. about- 1. Initial communication (offer, and 2. What happens after the initial communication (termination of offer), and 3. Who responds and how she responds (acceptance)
Formation of a contract- Is initial communication an offer?; General test: Manifestation of commitment An offer is a manifestation of an intention of one person to contract- words or conduct showing commitment by one person; Basic test: Whether reasonable person in position of the offeree would believe that her assent creates a K
Formation of a contract- Is initial communication an offer?; Specific problems to watch for: Content, Missing price term a. Missing price term in sales of contract, i. Sale of real estate-CL-price and description required, if not then no offer, ii. Sale of goods-Art.2-no price requirement so can have an offer
Formation of a contract- Is initial communication an offer?; Specific problems to watch for: Content, Vagueness/ambiguity b. Vague or ambiguous material terms not an offer under either common law or UCC, i. Test: Appropriate, fair, reasonable [price]= NO offer
Formation of a contract- Is initial communication an offer?; Specific problems to watch for: Content, Requirement/Out-put Ks c. Requirement contracts/output contracts, i. K for the sale of goods can state quantity of goods to be delivered under K in terms of buyer's requirements or seller's output; Key: All, only, Exclusively, solely= valid
Formation of a contract- Is initial communication an offer?; Specific problems to watch for: Content, Requirement/Out-put Ks requirements A. Not vague or ambiguous, valid; B. Buyer can increase requirements if in line with prior demands. NO UNREASONABLY DISPROPORTIONATE limitation on increases (compare with prior demand)
Formation of a contract- Is initial communication an offer?; Context: General rule An advertisement or price quotations is not an offer
Formation of a contract- Is initial communication an offer?; Context: Exceptions 1. Advertisement can be unilateral if in nature of reward, 2. Advertisement can be an offer it specifies quantity and expressly indicates who can accept, 3. Price quotation can be offer if sent in response to inquiry
Formation of a contract- Was the offer terminated? Methods 1. Lapse of time, 2. Death of party prior to acceptance, 3. Words or conduct of offeror, 4. Words or conduct of the offeree
Formation of a contract- Was the offer terminated? Methods: Lapse of time Time state or reasonable time; Reasonable time= look to circumstances
Formation of a contract- Was the offer terminated? Methods: Death of party PRIOR TO ACCEPTANCE G/R: Death or incapacity of either party after the offer, but before acceptance, terminates offer; Exception: Irrevocable offers (cannot be revoked)
Formation of a contract- Was the offer terminated? Methods: Words or conduct of offeror, How an offer is revoked Offeree's- 1. Unambiguous statement, and 2. Unambiguous conduct
Formation of a contract- Was the offer terminated? Methods: Words or conduct of offeror, How an offer is revoked, Unambiguous statement Later unambiguous statement by offeror to offeree of unwillingness or inability to contract
Formation of a contract- Was the offer terminated? Methods: Words or conduct of offeror, How an offer is revoked, Unambiguous conduct Later unambiguous conduct by offeror indicating an unwillingness or inability to contract that offeree is AWARE OF
Formation of a contract- Was the offer terminated? Methods: Words or conduct of offeror, Vocabulary Irrevocable= not possible; Revocable= Possibility; Revoked= Actuality (generally freely revoked by the offeror)
Formation of a contract- Was the offer terminated? Methods: Words or conduct of offeror, Offer cannot be revoked- Option An offer cannot be revoked if offeror not only made offer but- 1. Promised to not revoke (promised to keep offer "open"), AND 2. Promise is supported by PAYMENT or other consideration ("option"); After time of option, offer becomes irrecovable NOT revo
Formation of a contract- Was the offer terminated? Methods: Words or conduct of offeror, Offer cannot be revoked- UCC "Firm Offer Rule" An offer cannot be revoked for up to three months if- 1. Offer to buy or sell goods, 2. Signed, written promises to keep the offer open, and 3. Party is a merchant (Merchant is GENERALLY person in business)
Formation of a contract- Was the offer terminated? Methods: Words or conduct of offeror, How an offer is revoked, Unambiguous conduct- Multiple offers Making multiple offers does NOT constitute revocation
Formation of a contract- Was the offer terminated? Methods: Words or conduct of offeror, Offer cannot be revoked- Reliance An offer cannot be revoked if there has been- 1. Reliance that is, 2. Reasonably foreseeable, and 3. Detrimental; Bar= usually construction contract fact pattern; Mere preparation could be enough for reliance
Formation of a contract- Was the offer terminated? Methods: Words or conduct of offeror, Offer cannot be revoked- Unilateral contract The start of performance pursuant to an offer to enter into a unilateral contract makes that offer irrevocable for a reasonable time to complete performance ("offer" & "only by")- 1. Performance (Y), 2. Mere preparation (N not enough to make irrevocabl
Formation of a contract- Was the offer terminated? Methods: Words or conduct of offeror, Rejection- Direct Exact words stating rejection
Formation of a contract- Was the offer terminated? Methods: Words or conduct of offeror, Rejection- Indirect 1. Counteroffer, 2. Conditional acceptance, 3. Additional terms
Formation of a contract- Was the offer terminated? Methods: Words or conduct of offeror, Rejection- Indirect, Counteroffer Terminates offer and creates new offer; Counter offer made = no express contract unless counteroffer has itself been accepted; Distinguished from bargaining
Formation of a contract- Was the offer terminated? Methods: Words or conduct of offeror, Rejection- Indirect, Counteroffer option exception Counteroffers do not terminate options
Formation of a contract- Was the offer terminated? Methods: Words or conduct of offeror, Rejection- Indirect, Counteroffer v. bargaining Counteroffer= legal effect terminating offer; Bargaining= no legal effect so not terminating offer; Look for- Question for bargain
Formation of a contract- Was the offer terminated? Methods: Words or conduct of offeror, Rejection- Indirect, Conditional acceptance Terminates offer; Look for- Response to an offer with word "accept" followed by "if" "only if" "provided" "so long as" "but" or "on conditional that"
Formation of a contract- Was the offer terminated? Methods: Words or conduct of offeror, Rejection- Indirect, Conditional acceptance under common law Rejects and becomes a counteroffer that can be accepted by conduct
Formation of a contract- Was the offer terminated? Methods: Words or conduct of offeror, Rejection- Indirect, Conditional acceptance under UCC Rejects
Formation of a contract- Was the offer terminated? Methods: Words or conduct of offeror, Rejection- Indirect, Additional terms under common law Mirror image rule- A response to an offer that adds new terms is treated like a counteroffer rather than an acceptance
Formation of a contract- Was the offer terminated? Methods: Words or conduct of offeror, Rejection- Indirect, Seasonable expression of acceptance under UCC Article 2 (2-207)- A fact pattern in which there is- 1. Offer to buy or sell goods, and 2. A response with additional or different terms raises two separate questions- i. Contract? ii. Additional term?
Formation of a contract- Was the offer terminated? Methods: Words or conduct of offeror, Rejection- Indirect, Seasonable expression of acceptance under UCC "Is there a contract" A response to an offer that adds additional or different terms, but does not make new terms a condition of acceptance, is generally treated as an acceptance; Merchants= irrelevant
Formation of a contract- Was the offer terminated? Methods: Words or conduct of offeror, Rejection- Indirect, Seasonable expression of acceptance under UCC "Is additional term a part of the contract?" Additional term is part of the contract only if- 1. Both parties are merchants, AND 2. Additional term is not "material" (fact question so no bar), AND 3. Additional term is not objected to by original offeror
Formation of contracts- Acceptance of an offer Look at the offer for info. about how the offer was accepted and who accepted
Formation of contracts- Acceptance of an offer- Method of acceptance; Offeror's control of acceptance Pfferor can control method of acceptance, Time distance acceptance is effective, or Whether the offeree must give notice that it has accepted by performance
Formation of contracts- Acceptance of an offer- Method of acceptance; Method of acceptance is silent Time of acceptance or notice of acceptance is silent
Formation of contracts- Acceptance of an offer- Method of acceptance; Method of acceptance is silent: Fact patterns, Offeree starts to perform Three characteristics- 1. Verbal offer, 2. No words in response, and 3. START of performance
Formation of contracts- Acceptance of an offer- Method of acceptance; Method of acceptance is silent: Fact patterns, Offeree starts to perform G/R Start of performance is acceptance; Starting to perform is treated as an implied promise to perform and so there is a bilateral contract
Formation of contracts- Acceptance of an offer- Method of acceptance; Method of acceptance is silent: Fact patterns, Offeree starts to perform exception Start of performance is not acceptance of unilateral contract offers; Completion of performance is required; Start of performance implied promise to perform; Unilateral= no acceptance by promise; Acceptance= Performance only if completetion
Formation of contracts- Unilateral contracts- Part performance Ask- 1. Effect of offeror? (Cannot revoke), 2. Effect on offeree? (No obligation)
Formation of contracts- Acceptance of an offer- Method of acceptance; Method of acceptance is silent: Fact patterns, Distance and delay in communications Offeror and offeree are at different places and there are delays in receipt of communication
Formation of contracts- Acceptance of an offer- Method of acceptance; Method of acceptance is silent: Fact patterns, Distance and delay in communications- Rule 1 and 2 1. All communications OTHER THAN ACCEPTANCE are effective ONLY WHEN RECIEVED, 2. Acceptance is GENERALLY effective WHEN MAILED (mailbox rule),
Formation of contracts- Acceptance of an offer- Method of acceptance; Method of acceptance is silent: Fact patterns, Distance and delay in communications- Rule 3 and 4 3. Rejection is mailed before an acceptance is mailed, then neither is effective until received, 4. Cannot use mailbox rule to meet an option deadline
Formation of contracts- Acceptance of an offer- Method of acceptance; Method of acceptance is silent: Fact patterns, Seller of goods sends the "wrong" goods G/R Acceptance and breach
Formation of contracts- Acceptance of an offer- Method of acceptance; Method of acceptance is silent: Fact patterns, Seller of goods sends the "wrong" goods accommodation exception I.e., explanation; Counteroffer and no breach
Formation of contracts- Acceptance of an offer- Method of acceptance; Person who accepts An offer can be accepted only by- 1. Person who knows about offer at the times she accepts, 2. Who is person to whom it was made;
Formation of contracts- Formation of contracts- Acceptance of an offer- Method of acceptance; Person who accepts: Rewards and knowing of offer Person who knows about offer at the times she accepts so must know of rewards
Formation of contracts- Acceptance of an offer- Method of acceptance; Person who accepts: Non-assignability of offers Offers cannot be assigned
Formation of contracts- Acceptance of an offer- Method of acceptance; Person who accepts: Assignability of options Options can be assigned unless option otherwise provides
Formation of contracts- Second view/overview- Legal reasons for not enforcing agreement; 1 through 4 Contract more than agreement; 1. Lack of consideration or a consideration substitute for promise at issue, 2. Lack of capacity of person who made promise, 3. Statute of frauds, 4. Existing law prohibits performance,
Formation of contracts- Second view/overview- Legal reasons for not enforcing agreement; 4 through 11 5. Public policy, 6. Misrepresentations, 7. Nondisclosure, 8. Duress, 9. Unconscionability, 10. Ambiguity, and 11. Mistakes at time of agreement as to materiel facts affect agreement
Formation of contracts- Lack of consideration OR consideration substitute- What is consideration?; Bargained-for legal detriment 1. Identify promise breaker, 2. Ask whether that person asked for something in return for her promise, 3. Look at the person who is trying to enforce promise, and ask what requested legal detriment person sustained
Formation of contracts- Lack of consideration OR consideration substitute- What is consideration? NO issue as to consideration in most commercial agreements; Article 2 of UCC has further reduced the practical significance of consideration in modification
Formation of contracts- Lack of consideration OR consideration substitute- "What are possible consideration issues? "Bargained for" Asked for by the promisor IN EXCHANGE for her promises; Consideration fact patterns have people doing stuff that they were asked to do
Formation of contracts- Lack of consideration OR consideration substitute- "What are possible consideration issues?; Legal detriment ...
Formation of contracts- Lack of consideration OR consideration substitute- "What are the most likely consideration issues?; "Past consideration" G/R: Not consideration (cannot bargain to do something already done); Exception: Expressly requested by promisor and expectation of payment by promise
Formation of contracts- Lack of consideration OR consideration substitute- "What are the most likely consideration issues?; "Pre-existing contractual or statutory duty rule" under common law Doign what you are already legally obligated to do is NOT new consideration for new promise; New consideration is required for contract modification
Formation of contracts- Lack of consideration OR consideration substitute- "What are possible consideration issues?; Promise as consideration exception Promise to sale, unless change mind is NOT consideration; Never choose answer with "illusory promise"
Formation of contracts- Lack of consideration OR consideration substitute- "What are possible consideration issues?; Adequacy of consideration Amount of consideration is not relevant in contract law
Formation of contracts- Lack of consideration OR consideration substitute- "What are possible consideration issues?; Promise as consideration Yes allowed
Formation of contracts- Lack of consideration OR consideration substitute- "What are the most likely consideration issues?; "Pre-existing contractual or statutory duty rule" under common law exceptions 1. Addition to or change in performance, 2. Unforeseen difficulty so severe as to excuse performance, 3. Third-party promise to pay
Formation of contracts- Lack of consideration OR consideration substitute- "What are the most likely consideration issues?; "Pre-existing contractual or statutory duty rule" under UCC Article 2- Does not have pre-existing legal duty rule; So, new consideration is not required to modify a sale of goods contract; Good faith is test for changes to an existing sale of goods contract
Formation of contracts- Lack of consideration OR consideration substitute- "What are the most likely consideration issues?; Part payment as consideration for release I.e., promise to forgive balance of debt; Key- Whether debt is due and undisputed?; If debt is due and undisputed, then part payment is NOT consideration for release
Formation of contracts- Lack of consideration OR consideration substitute- "What are the most likely consideration issues?; Part payment as consideration for release: Due and undisputed Time to pay, and no disagreement about amount of debt and existence
Formation of contracts- Lack of consideration OR consideration substitute- "What are the most likely consideration issues?; Part payment as consideration for release: Not yet due (or disputed) ...
Formation of contracts- Lack of consideration OR consideration substitute- "What are consideration substitutes?" Promise legally enforceable even though there is not consideration if consideration substitutes- 1. Written promise to satisfy obligation for which there is legal defense is enforceable w/o consideration, or 2. Promissory estoppel, or 3. Seals
Formation of contracts- Lack of consideration OR consideration substitute- "What are consideration substitutes?"; Promissory estoppel Elements- 1. Promise, 2. Reliance that is reasonable, detrimental, and foreseeable, and 3. Enforcement necessary to avoid injustice; Comparison of consideration and promissory estoppels (PE substitutes for consideration so look to consideration FIRST)
Formation of contracts- D promissor's lack of capacity- "Who lacks capacity to contract?" 1. Infant (under 18), 2. Mental incompetents (lacks of ability o understand), 3. Intoxicated persons if other party has reason to know; These are defenses for Ds, NOT Ps
Formation of contracts- D promissor's lack of capacity- "Who lacks capacity to contract?"; Consequences of incapacity: Disaffirm Right to disaffirm by person without capacity; K not void, just RIGHT to disaffirm
Formation of contracts- D promissor's lack of capacity- "Who lacks capacity to contract?"; Consequences of incapacity: Implied affirmation Implied affirmation by retaining benefits after gaining capacity (ratification); Agreement without capacity + gained capacity (turns 18) + gained benefits of K then capacity to K
Formation of contracts- D promissor's lack of capacity- "Who lacks capacity to contract?"; Consequences of incapacity: Quasi-contract liability for necessaries Person who does not have capacity is legally obligated to pay for things that are necessary such as food, clothing, medical care, or shelter, but liability based on quasi-contract law, not contract law; NEVER K liabilty by person who still lacks capacity
Formation of contracts- Statute of Frauds defenses (most important, most frequent issue)- Proof Designated to prevent fraudulent claims; Proof to satisfy- 1. Performance, 2. Or writing signed by person who is asserting there was no such agreement
Formation of contracts- Statute of Frauds defenses If claim withing SOF then requirement of "special proof" (performance or writing) must be satisfied to get to trial
Formation of contracts- Statute of Frauds defenses- Contracts within SOF; Suretyship Promises to answer for debts of another, not merely promise to pay but rather a promise to pay if someone else does NOT; Look for- 1. Guarantee (if P did not pay), 2. Main purpose exception
Formation of contracts- Statute of Frauds defenses- Contracts within SOF; Suretyship: Main purpose exception If main purpose of obligation allegedly guaranteed was to benefit the guarantor, then not even guarantee is within SOF
Formation of contracts- Statute of Frauds defenses- Contracts within SOF; No capability to perform within year from time of K (bar favorite) 1. Specific time period, more than year (key: completion of performance)- SoF applies, 2. Specific time, more than year from date of K- SoF applies, 3. Task- SoF does NOT apply (NEVER SoF problem), 4. Life- SoF does not apply (NEVER SoF problem
Formation of contracts- Statute of Frauds defenses- Contracts within SOF; Transfers of interest in real estate (with exception for leases of year or less) Transfer of real estate statute of frauds; NO transfer of ownership JUST interest; Leases= NO SoF if lease one year or less
Formation of contracts- Statute of Frauds defenses- Contracts within SOF; Sale of goods for $500 or more Key: $500 or more (no less)
Formation of contracts- Statute of Frauds defenses- "How is SoF satisfied?" SoF applicable then requirements must be met (satisfied) in order for agreement to be enforceable; If not satisfied then SoF defenses; If SoF defenses asserted and established, no legally enforceable agreement (no K liability)
Formation of contracts- Statute of Frauds defenses- "How is SoF satisfied?"; Performance SoF satisfied by performance; 5 rules for satisfaction vary depending on- 1. Performance and transfer of real estate, 2. Performance and services contracts, 3. Part performance and sale of goods contracts
Formation of contracts- Statute of Frauds defenses- "How is SoF satisfied?"; Performance: Performance and transfer of real estate Part performance satisfies in transfer of real estate if (2 out of 3)- 1. Improvements to land, 2. Payment, and 3. Possession
Formation of contracts- Statute of Frauds defenses- "How is SoF satisfied?"; Performance: Performance and services contracts 1. Full performance by either party satisfies SoF, or 2. Part performance of service K does not satisfy SoF
Formation of contracts- Statute of Frauds defenses- "How is SoF satisfied?"; Performance: Part performance and sale of goods contract 1. Seller's part performance- Ordinary goods, and 2. Seller's part performance- Specially manufactured goods
Formation of contracts- Statute of Frauds defenses- "How is SoF satisfied?"; Performance: Part performance and sale of goods contract, Ordinary goods Part performance of a K for sale of goods satisfies SoF, but only TO EXTENT OF PART PERFORMANCE; Look- If question is about delivered goods or undelivered goods (part performance satisfies SoF if about delivered/undelivered goods)
Formation of contracts- Statute of Frauds defenses- "How is SoF satisfied?"; Performance: Part performance and sale of goods contract, Specially manufactured goods If K for sale of goods to be specially manufactured, then SoF is satisfied as soon as seller makes a "SUBSTANTIAL BEGINNING"; Seller done enough work so clear she is working on specially manufactured goods(custom made)
Formation of contracts- Statute of Frauds defenses- "How is SoF satisfied?"; Writing The requirement can also be satisfied by writing; 1. Not every writing, 2. Can be satisfied without writing
Formation of contracts- Statute of Frauds defenses- "How is SoF satisfied?"; Writing: SoF other than Article 2 All material terms test: 1. Contents of writing(s) (who & what), 2. Who signed writing (by D, person sued); Writing satisfies SoF, NO defense if writing signed only by D (person asserting SoF defense); Assume other party did not sign, if told just o
Formation of contracts- Statute of Frauds defenses- "How is SoF satisfied?"; Writing: Article 2 SoF Writing must simply indicate that there is a contract for the sale of goods and contain the QUANTITY TERM (how many); No need for price in writing
Formation of contracts- Statute of Frauds defenses- "How is SoF satisfied?"; Judicial admission If D asserting SoF defense admits in pleading or testimony entered into agreement with P, purpose of SoF (protect against fraudulent claim of agreement) fulfilled and SoF satisfied so NO SoF defense
Formation of contracts- Statute of Frauds defenses- "How is SoF satisfied?"; Estoppel Some cases hold that P's reliance on D's oral promise can estop D from asserting SoF defense; No majority rule SO NO MBE
Formation of contracts- SoF for other than defense to enforcement of agreement- Written proof of authorization to enter into contract for someone else Issue: When do RULES OF LAW REQUIRE person have written authorization to contract for someone else; Only if contract be signed is within SoF; Equal dignity= law requires be written proof of authority to act for someone else when K within SoF
Formation of contracts- SoF for other than defense to enforcement of agreement- Written proof of contract modification No LEGAL rquirement of written evidence of alleged modification; Whether needed- 1. Look at deal with alleged change, 2. Determine whether deal with alleged change would be within SoF; If within SoF, then modification must be in writing
Formation of contracts- SoF for other than defense to enforcement of agreement- Contract provision requiring written modification under common law Contract provisions requiring that all modifications be in writing are not effective (ignore K language)
Formation of contracts- SoF for other than defense to enforcement of agreement- Contract provision requiring written modification under UCC Contract provisions requiring written modification are effective unless waived
Formation of contracts- Illegality- Illegal subject matter If subject matter illegal, the agreement is not enforceable
Formation of contracts- Illegality- Illegal purpose If subject matter is legal, agreement is enforceable if P DID NOT HAVE REASON TO KNOW of D's illegal purpose
Formation of contracts- Public Policy Cts can refuse to enforce an agreement; Look for- EXCULPATORY AGREEMENT that 1. Exempts intentional or reckless conduct from liability, or 2. Covenant not to compete without REASONABLE need or REAONABLE time and place limits
Formation of contracts- Misrepresentation Look for- 1. Statement of "fact" before K, 2. By one of contracting parties or agent, 3. False, 4. Induces K; Limited to situation where person wants out of agreement (not enforceable), NOT seeking damages; Honest or innocent misrepresentation= bad
Formation of contracts- Non-Disclosure Person making a K has not duty to disclose what she knows; Wrongdoing requirement for non-disclosure; Look for- 1. Fiduciary like relationship, or 2. Concealment; If concealment WILL BE relief
Formation of contracts- Duress or undue influence- Physical duress I.e., did it because threatened by someone going to shoot
Formation of contracts- Duress or undue influence- Economic duress Elements- 1. Improper threat- Bad guy (improper threat usu. threat to breach existing K), 2. No reasonable alternative- Vulnerable guy
Formation of contracts- Duress or undue influence- Undue influence Look for- 1. Special relationship between parties, and 2. Improper persuasion of the weaker by the stronger
Formation of contracts- Unconscionability- Procedural and substantive 1. Now part of K law, 2. Empowers ct to refuse to enforce all or part of agreement; Two basic tests- 1. Unfair surprise (Procedural) and oppresive terms (Substantive) are, 2. Tested as of the time the agreement was made, 3. By the ct.
Formation of contracts- Mistake of fact existing at time of contract 1. Mutual, material mistakes of existing fact, 2. Unilateral mistake of material fact
Formation of contracts- Mistake of fact existing at time of contract- Mutual, material mistakes of existing fact Reluctance to conclude NO K because mistake on bar; Look to substance of the agreement
Formation of contracts- Mistake of fact existing at time of contract- Unilateral mistake of material fact Ct. reluctant to allow party to avoid K for mistake made by one one party; Will be relief for situations in which the other party had reason to know of mistake (palpable mistake)
Formation of contracts- Ambiguity in words of agreement; (NOT on bar, unless "Raffles" or one person does know two meanings) No K if- 1. Parties use material term that is open to at least two reasonable interpretations, and 2. Each party attaches different meaning to term, and 3. Neither party knows or has reason to know term is open to at least two reasonable interpretatio
Terms of contracts- Words in written contract In actual writing
Terms of contracts- Words of parties not in written contract and the parol evidence rule Trigger facts- 1. Final written contract, 2. Earlier words of one or both parties
Terms of contracts- Words of parties not in written contract and the parol evidence rule; Parole evidence rule: Policy Underlying premise is that final written version of deal is more reliable than anything said or written earlier
Terms of contracts- Words of parties not in written contract and the parol evidence rule; Parol evidence rule: Bar exam Like evidence rule in sense that- 1. Issue is whether evidence is admissible, and 2. Admissibility often depends on the purpose for which evidence is to be introduced
Terms of contracts- Words of parties not in written contract and the parol evidence rule; Parole evidence rule: Vocabulary 1. Integration, 2. Partial integration, 3. Complete integration, 4. Merger clause, 5. Parole evidence
Terms of contracts- Words of parties not in written contract and the parol evidence rule; Parole evidence rule: Vocabulary, Integration Written agreement that ct finds is final agreement, triggers parol evidence rule
Terms of contracts- Words of parties not in written contract and the parol evidence rule; Parole evidence rule: Vocabulary, Partial integration Written and final, but not complete; Whenever see this term= On MBE rule of thumb it is WRONG answer because unnecessary qualifier
Terms of contracts- Words of parties not in written contract and the parol evidence rule; Parole evidence rule: Vocabulary, Complete integration written and final and complete; Whenever see this term= On MBE rule of thumb it is WRONG answer because unnecessary qualifier
Terms of contracts- Words of parties not in written contract and the parol evidence rule; Parole evidence rule: Vocabulary, Merger clause Contract clause such as "this is complete and final agreement"; Persuasive but NOT conclusive
Terms of contracts- Words of parties not in written contract and the parol evidence rule; Parole evidence rule: Vocabulary, Parol evidence 1. Words of party(ies), 2. Before integration (before agreement was put in written form), 3. Oral or written
Terms of contracts- Words of parties not in written contract and the parol evidence rule; Parole evidence rule: Fact patterns, Changing/unchanging terms in written deal Evidence of EARLIER agreements is not admissible for purpose of contradicting terms in written K; Regardless whether partial or complete integration
Terms of contracts- Words of parties not in written contract and the parol evidence rule; Parole evidence rule: Fact patterns, Mistake in integration (i.e., clerical mistake) Ct may, however, consider evidence of such terms for that limited purpose of determining whether there was a mistake in integration (i.e., mistake in reducing agreement to writing); Always asking if evidence is admissible ("be admitted")
Terms of contracts- Words of parties not in written contract and the parol evidence rule; Parole evidence rule: Fact patterns, Defenses (i.e., getting out of written deal) Regardless whether writing complete/partial integration, parol evidence rule does NOT prevent ct admitting evidence of earlier words for limited purpose determining whether defense to enforcement of agreement, such as misrepresentation, fraud, duress
Terms of contracts- Words of parties not in written contract and the parol evidence rule; Parole evidence rule: Fact patterns, Ambiguity (i.e., explaining term in written deal) Regardless wehther complete or partial integration, parol evidence rule does NOT prevent ct form admitting evidence of earlier agreement to resolve ambiguities in written contract
Terms of contracts- Words of parties not in written contract and the parol evidence rule; Parole evidence rule: Fact patterns, Adding to written deal Parol evidence rule prevents ct from admitting evidence of ealier agreement as source of consistent, additional terms unless ct. finds- 1. Written agreement was only partial integration, or 2. Additional terms would ordinarily be in separate agreement
Terms of contracts- Conduct Conduct can also be source of contract terms; Can be important
Terms of contracts- Conduct; Form of conduct: Course of performance Same people, same K; S contracts to sell 1,000 chicks a month to B for 12 mos. First three shipments are boiling hens, and B does not complain
Terms of contracts- Conduct; Form of conduct: Course of dealing Same people, different but similar contract; S contracts to sell 1,000 chickens a month to B for 12 mos. Under prior chicken contracts, S send B boiling hens, and B complains.
Terms of contracts- Conduct; Form of conduct: Custom and usage Different but similar people, different but similar contract; S contracts to sell 1,000 chickens a month to B for 12 mos. It is customary in chicken industry to use word "chicken" when deal covers chickens up to 6 pounds including boiling hens
Terms of contracts- UCC for terms in sales of goods contracts ("default" terms); Delivery obligations of seller of goods if delivery by common carrier Agreement as to place of delivery by common carrier, then question is- What does seller have to do to complete its delivery obligations
Terms of contracts- UCC for terms in sales of goods contracts ("default" terms); Delivery obligations of seller of goods if delivery by common carrier: Shipment K K is shipment K meaning seller complete its DELIVERY OBLIGATIONS when it- 1. Gets goods to common carrier, 2. Makes reasonable arrangements for delivery, and 3. Notifies buyer; Completed BEFORE delivery actually completed
Terms of contracts- UCC for terms in sales of goods contracts ("default" terms); Delivery obligations of seller of goods if delivery by common carrier: Destination K Seller does not complete its delivery obligation until goods arrive at destination
Terms of contracts- UCC for terms in sales of goods contracts ("default" terms); Delivery obligations of seller of goods if delivery by common carrier: Shipment K v. Destination K Most Ks with delivery obligations are shipment Ks. Look for FOB (free on board-city) as source for determining whether shipment or destination K; FOB + seller's city= shipment, FOB + other city (not sellers)= destination
Terms of contracts- UCC for terms in sales of goods contracts ("default" terms); Risk of loss: Problem 1. After K has been formed, but before buyer receives goods, 2. Goods are damaged or destroyed, and 3. Neither buyer nor seller is to blame
Terms of contracts- UCC for terms in sales of goods contracts ("default" terms); Risk of loss: Consequences Buyer risk of loss= has to pay full K price for lost or damaged goods; Seller risk of loss= no obligation on buyer and possible liability on seller for nondelivery
Terms of contracts- UCC for terms in sales of goods contracts ("default" terms); Risk of loss: Rules (none involve title), Agreement Agreement of parties controls
Terms of contracts- UCC for terms in sales of goods contracts ("default" terms); Risk of loss: Rules, Breach Breaching party is liable for any uninsured loss even though breach is unrelated to problem
Terms of contracts- UCC for terms in sales of goods contracts ("default" terms); Risk of loss: Rules, Common carrier delivery Risk of loss shifts from seller to buyer at the time the seller completes its delivery obligations
Terms of contracts- UCC for terms in sales of goods contracts ("default" terms); Risk of loss: Rules, "Catch-all" Determining factor whether seller is a merchant (buyer irrelevant); Risk of loss shifts from 1. Merchant (seller) to buyer on the buyer's "receipt" (physical possession) of goods, and 2. Non-merchant to seller when "tenders" (making goods available) good
Terms of contracts- UCC for terms in sales of goods contracts ("default" terms); Warranties of quality Sale of goods + goods received by buyer + buyer unhappy with quality
Terms of contracts- UCC for terms in sales of goods contracts ("default" terms); Warranties of quality: Express 1. Words that promise, describe or state fact (not an opinion of salespersons), or 2. Look for sample or model; Example: "Top quality" is an opinion
Terms of contracts- UCC for terms in sales of goods contracts ("default" terms); Warranties of quality: Implied warranty of merchantability When any person buys any goods form any merchant, a term is automatically added to the contract by operation of law (goods are fit for ordinary purpose for which such goods are used)
Terms of contracts- UCC for terms in sales of goods contracts ("default" terms); Warranties of quality: Implied warranty of merchantability, Triggering facts Seller is merchant which here means IT DEALS IN GOOD OF THAT KIND
Terms of contracts- UCC for terms in sales of goods contracts ("default" terms); Warranties of quality: Implied warranty of merchantability, Warranty Goods are fit for ordinary purposes
Terms of contracts- UCC for terms in sales of goods contracts ("default" terms); Warranties of quality: Implied warranty of fitness for a particular purpose, Triggering facts Buyer has PARTICULAR PURPOSE; Buyer is relying on seller to select suitable goods; Seller has reason to know of purpose and reliance
Terms of contracts- UCC for terms in sales of goods contracts ("default" terms); Warranties of quality: Implied warranty of fitness for a particular purpose, Warranty Goods fit for particular purpose
Terms of contracts- UCC for terms in sales of goods contracts ("default" terms); Limitations on warranty liability: Statute of limitations 4 yr SOL and generally starts running on possible warranty actions when "tender of delivery is made" NOT when buyer learns that product is defective
Terms of contracts- UCC for terms in sales of goods contracts ("default" terms); Limitations on warranty liability: Privity P did not buy goods from D, there is possible privity issue (suing D in which he did NOT K with); Division among state- state material will explain
Terms of contracts- UCC for terms in sales of goods contracts ("default" terms); Limitations on warranty liability: Buyer's examination of goods Look for- buyer examined goods; No implied warranties as to defect which would be OBVIOUS on examination
Terms of contracts- UCC for terms in sales of goods contracts ("default" terms); Limitations on warranty liability: Disclaimer "There are no warranties"
Terms of contracts- UCC for terms in sales of goods contracts ("default" terms); Limitations on warranty liability: Disclaimer, Expressed warranties Generally cannot be disclaimed
Terms of contracts- UCC for terms in sales of goods contracts ("default" terms); Limitations on warranty liability: Disclaimer, Implied warranties of merchantability and fitness Disclaimed by- 1. Conspicuous language of disclaimer, mentioning merchantability (not on bar), or 2. "As is" or "with all faults" (not express remedies, but implied warranties disappear)
Terms of contracts- UCC for terms in sales of goods contracts ("default" terms); Limitations on warranty liability: Limitations on remedies Does not eliminate warranties, limits/sets recovery for warranty breach- a. Possible to limit remedies for express warranties, b. General test: unconscionability, c. Prima facie unconscionable if breach of warranty on consumer goods cause personal inj
Performance of article 2 contracts- Perfect tender 1. Only applies to sales of goods, 2. Does not mean seller's performance must be perfect, rather goods and delivery must conform to K terms, 3. Seller generally gives buyer option of rejection of delivered goods, so long as buyer acts in good faith
Performance of article 2 contracts- Rejection of goods 1. Distinguish rejection of offer from goods, 2. If seller does not meet perfect tender standard, buyer option to retain and sue (damages) OR reject, 3. Rejection alter. limit- cure, installment K, & acceptance, 4. Buyer reasonable care of rejected goo
Performance of article 2 contracts- Cure Seller who fails to make perfect tender will be given a "second chance", an option of curing; Note: Seller does NOT always have opportunity to "cure", and that buyer cannot compel seller to cure
Performance of article 2 contracts- Cure; "Reasonable grounds" Seller's reasonable ground to believe would be acceptable, perhaps with money allowance; Seller option of curing even after K delivery date; Look for info. about prior deals between buyer/seller
Performance of article 2 contracts- Cure; Time limitation Time for performance has not yet expired
Performance of article 2 contracts- Installment Ks Requires or authorizes- 1. Delivery of goods in separate lots, 2. To be separately accepted; Buyer has right to reject an installment only where there is substantial impairment in installment that cannot be cured
Performance of article 2 contracts- Installment Ks; Differences Difference between- 1. Entering into an installment sales K provided for multiple deliveries and acceptance, and 2. Buying something on credit and paying for it in monthly installments
Performance of article 2 contracts- Acceptance of goods; Importance of acceptance If buyer accept goods, cannot later reject
Performance of article 2 contracts- Acceptance of goods; Payment and acceptance Payment without opportunity for inspection is not acceptance
Performance of article 2 contracts- Acceptance of goods; Failing to reject Rejection must be timely; Failure to object after buyer had reasonable time to reject is acceptance
Performance of article 2 contracts- Acceptance of goods; Retention as acceptance Effect of buyers keeping goods is implied acceptance (i.e., 30 days); Look for- Buyer's keeping the goods without objection; More specifically look for fact pattern that states when buyer first received goods and when buyer first complained to seller
Performance of article 2 contracts- Revocation of acceptance of goods; Effect of revocation of acceptance Same as rejection of goods- Buyer returns the goods and seller returns payment made; Remember- if buyer accepts canNOT reject later; Buyer can effect a cancellation of K by revoking acceptance of goods
Performance of article 2 contracts- Revocation of acceptance of goods; Requirements for revocation of acceptance 1. Nonconformity substantially impairs value of goods, and 2. Excusable ignorance of grounds for revocation or reasonbly reliance on seller's assurance of satisfaction, and 3. Revocation within reasonable time after discovery of nonconformity
Remedies for an unexcused nonperformance- Non-monetary remedies (in rem); Specific performance/injunction Equitable remedy; Look for adequacy of remedy at law or unclean hands, or other parties' equities; Almost NEVER the right answer; On essay- Do NOT conclude this
Remedies for an unexcused nonperformance- Non-monetary remedies (in rem); Specific performance/injunction: Contract for sale of real estate Specific performance is generally YES; But, money not substitute for land so if sale to third party, then NO specific performance
Remedies for an unexcused nonperformance- Non-monetary remedies (in rem); Specific performance/injunction: Contract for sale of goods Unique goods- Antiques, art, custom-made or other appropriate circumstances; Specific performance is ALLOWED
Remedies for an unexcused nonperformance- Non-monetary remedies (in rem); Specific performance/injunction: Contract for services No (NEVER) specific performance, possible injunctive relief
Remedies for an unexcused nonperformance- Non-monetary remedies (in rem); Seller's reclamation from an insolvent buyer of goods Get goods back- 1. Buyer must have been insolvent at time received goods, and 2. Seller demands return of goods within 10 days of receipt (begin from time of receipt of goods), and 3. Buyer still has goods at time of demand
Remedies for an unexcused nonperformance- Non-monetary remedies (in rem); Buyer's recovery of identified, paid for goods from seller who becomes insolvent within 10 days Buyer must show seller was solvent when buyer made payments, but seller since has become insolvent
Remedies for an unexcused nonperformance- Money damages for breach of K; General concept: Policy Compensate P, not punish D; Purpose of money damages in WY is to COMPENSATE P. WY's many money damages rules compensate P protecting her EXPECTATION INTEREST
Remedies for an unexcused nonperformance- Money damages for breach of K; General concept: Vocabulary, Expectation People who contract expect that they other person will NOT breach; Expectation damages protect that expectation
Remedies for an unexcused nonperformance- Money damages for breach of K; General concept: Vocabulary, Incidental ...
Remedies for an unexcused nonperformance- Money damages for breach of K; General concept: Vocabulary, Consequential ...
Remedies for an unexcused nonperformance- Money damages for breach of K; General concept: Vocabulary, Avoidable ...
Remedies for an unexcused nonperformance- Money damages for breach of K; General concept: Vocabulary, Certainty ...
Remedies for an unexcused nonperformance- Money damages for breach of K; General concept: Vocabulary, Reliance ...
Remedies for an unexcused nonperformance- Money damages for breach of K; General concept: Vocabulary, Liquidated ...
Remedies for an unexcused nonperformance- Money damages for breach of K; General concept: Measure of damages, Protection of expectation (general approach) 1. Look to facts for dollar value of performance without breach, 2. Look to facts for dollar value of performance without breach, 3. Compare the two to determine the amount of damages
Remedies for an unexcused nonperformance- Money damages for breach of K; General concept: Measure of damages, Damages rule for sales of goods Article 2, part 7: Policy- Put the innocent party where it would have been had K been peformed; 3 relevant facts- 1. Who breached, 2. Who has goods, 3. Was there "later" replacement deal
Remedies for an unexcused nonperformance- Money damages for breach of K; General concept: Measure of damages, Damages rule for sales of goods- Damages for seller's breach: Seller breaches, buyer keeps goods [(fair market value if perfect - fair market value as delivered) OR (costs of repair)]
Remedies for an unexcused nonperformance- Money damages for breach of K; General concept: Measure of damages, Damages rule for sales of goods- Damages for seller's breach: Seller breaches, seller has goods [(market price at time of discovery of breach - contract price) OR (reasonable replacement price - contract price)]; Whichever is greater (higher)
Remedies for an unexcused nonperformance- Money damages for breach of K; General concept: Measure of damages, Damages rule for sales of goods- Damages for seller's breach: Buyer breaches, buyer keeps goods (contract price)
Remedies for an unexcused nonperformance- Money damages for breach of K; General concept: Measure of damages, Damages rule for sales of goods- Damages for seller's breach: Buyer breaches, seller has goods [Contract price - resale unless seller cannot resell in which case the seller can recover the K price and in some situations provable lost profits; Lost profit for lost volume seller= "regular inventory", not $0 and not K price, but provable loss profit
Remedies for an unexcused nonperformance- Money damages for breach of K; General concept: Additions and limitations, Plus INCIDENTAL damages Cost incurred in dealing with breach such as costs of storing rejected goods in a sale of goods or finding a replacement in a services contract; ALWAYS recoverable
Remedies for an unexcused nonperformance- Money damages for breach of K; General concept: Additions and limitations, Plus foreseeable CONSEQUENTIAL (special) damages Does NOT mean all damages caused as consequence of breach; Kind of loss special to P; Limited to damages arises from P's SPECIAL circumstances and recovery is limited to situations in which D REASON TO KNOW special circumstances at time of K
Remedies for an unexcused nonperformance- Money damages for breach of K; General concept: Additions and limitations, Less AVOIDABLE damages No recovery for damages that could have avoided without undue burden on P; Burdens of pleading and proof on D; (Breached contract price - turned down contract price)
Remedies for an unexcused nonperformance- Money damages for breach of K; General concept: Additions and limitations, Less damages that cannot establish with reasonable certainty Look for fact pattern involving service K and P engaged in NEW BUSINESS or a new business activity (if so NO); Consider reliance recovery as an alternative to expectation; Expectation damages not proved by necessary certainty, permit recovery on quasi-K
Remedies for an unexcused nonperformance- Money damages for breach of K; General concept: Contract provisions regarding damages (i.e., liquidated damages) Look- K provision fixing amount of damage; Issue: validity; Whether provision too high (penalty) creating liquidated damages invalid; Test- 1. Damages difficult to forecast at time K made, and 2. Provision REASONABLE FORECAST; Set number= presume inva
Excuse of non-performance of contract because of something that happened after contract was made- Overview Look for info in fact pattern about- 1. Non-performance of K, and 2. Something happen after contract
Excuse of non-performance of contract because of something that happened after contract was made- Excuse of performance because of other guys's non-performance E.g., P Ks to paint O's house on Saturday for $1000. P does not paint house. Obviously, O does not pay P. O is excused from performing (paying) b/c P's non-performance
Excuse of non-performance of contract because of something that happened after contract was made- Excuse of performance because of the other guy's saying it is NOT going to perform (anticipatory repudiation); Unambiguous Anticipatory repudiation is unambiguous statement or conduct- 1. That the repudiating part will not perform, 2. Made prior to the time that performance was due
Excuse of non-performance of contract because of something that happened after contract was made- Excuse of performance because of the other guy's saying it is NOT going to perform (anticipatory repudiation); Excuse Anticipatory repudiation by one party excuses the other party's duty to performance
Excuse of non-performance of contract because of something that happened after contract was made- Excuse of performance because of the other guy's saying it is NOT going to perform (anticipatory repudiation); Time of recovery Anticipatory repudiation generally gives rise to an immediate claim for damages (sue immediately) for breaches unless claimant has ready finished her performance
Excuse of non-performance of contract because of something that happened after contract was made- Excuse of performance because of the other guy's saying it is NOT going to perform (anticipatory repudiation); Retraction of anticipatory repudiation Can be withdrawn (retracted) so long as there has not been material change by the other party; If repudiation is timely retracted, duty to perform is reimposed but performance can be delayed until adequate assurance is provided
Excuse of non-performance of contract because of something that happened after contract was made- Excuse because of insecurity about whether the other guy is going to perform Indicates party will not perform; "Reasonable grounds for insecurity" then other party can, in writing demand adequate assurance and if it is "commercially reasonable"
Excuse of non-performance of contract because of something that happened after contract was made- Excuse because of insecurity about whether the other guy is going to perform requirements Look for- 1. Reasonable grounds for insecurity, 2. Written demand for adequate assurance, and 3. Commercially reasonable to stop performance
Excuse of non-performance of contract because of something that happened after contract was made- Excuse because of improper performance; Article 2 and perfect tender rule
Excuse of non-performance of contract because of something that happened after contract was made- Excuse because of improper performance; Common law and material breach rule 1. Damages recovered for any breach; 2. Only material breach by one guy excuses other guy from performing K goverened by common law; 3. Whether breach material is fact question (NOT on bar); 4. There is substantial performance then breach not material
Excuse of non-performance of contract because of something that happened after contract was made- Excuse because of improper performance; Common law and material breach rule: Material breach b/c quality of performance Material breach= did the job, but NOT in the way contracted to; "Major screw up" (not minor)
Excuse of non-performance of contract because of something that happened after contract was made- Excuse because of improper performance; Common law and material breach rule: Material breach b/c quantity (amount) of performance Less than half of work done in K= material breach; Therefore, no K liability since excused; However, quasi-K obligation if sought equitable remedy
Excuse of non-performance of contract because of something that happened after contract was made- Excuse because of improper performance; Common law and material breach rule: Divisible contract corollary (divisible K exception) K law recovery for substantial performance of divisible part even though there has been material breach of entire K; Look- Whether price is states as a lump sum or on a per performance basis
Excuse of non-performance of contract because of something that happened after contract was made- Excuse because of non-performance of an express condition 1. What is an express condition, 2. How can you identify an express condition, 3. How can you express condition be satisfied, 4. How can an express condition be excused
Excuse of non-performance of contract because of something that happened after contract was made- Excuse because of non-performance of an express condition; What is an express condition and how can express condition be identified? 1. Language in contract, 2. Limits obligations created by other K language, 3. Triggering words- if, only if, provided that, so long as, subject to, in event that, unless, when, until, on condition that
Excuse of non-performance of contract because of something that happened after contract was made- Excuse because of non-performance of an express condition; What is standard for determining whether an express condition has occurred?, General rule I.e., Been satisfied; Strict compliance is required for "satisfaction" of a condition
Excuse of non-performance of contract because of something that happened after contract was made- Excuse because of non-performance of an express condition; What is standard for determining whether an express condition has occurred?, Exception Condition of personal satisfaction of one of parties; Honest and good faith dissatisfaction; Ask- Whether a reasonable person would be satisfied?
Excuse of non-performance of contract because of something that happened after contract was made- Excuse because of non-performance of express condition; How can express condition be eliminated so non-occurrence does not affect performance obligation? Waiver- Identify person who benefits from or protected by express condition; Look for- statement by person giving up benefits & protection of express condition
Excuse of non-performance of contract because of something that happened after contract was made- Excuse because of non-performance of express condition; How can express condition be eliminated so non-occurrence does not affect performance obligation? 1. Waiver, and 2. Prevention; Condition precedent: conditions that excuse performance until and unless they occur
Excuse of non-performance of contract because of something that happened after contract was made- Excuse because of non-performance of express condition; How can express condition be eliminated so non-occurrence does not affect performance obligation? Prevention- look for person protected by express condition hindering or preventing occurrence of express condition
Excuse of non-performance of contract because of something that happened after contract was made- Excuse because of non-performance of express condition; What is difference b/w condition precedent and conditions subsequent?, Different facts Conditions subsequent occurs subsequent to start of performance and excuse performance when occur
Excuse of non-performance of contract because of something that happened after contract was made- Excuse because of non-performance of express condition; What is difference b/w condition precedent and conditions subsequent?, Same law Conditions subsequent do not create new performance obligations but instead merely limit performance obligations otherwise created
Excuse of non-performance of contract because of something that happened after contract was made- Excuse by reason of a later contract; Rescission (cancellation) Key- whether performance is still remaining from each of the K parties (executory)
Excuse of non-performance of contract because of something that happened after contract was made- Excuse by reason of a later contract; Accord and satisfaction (substituted performance) Know- 1. What an accord is and what is satisfaction is, and 2. Effect of making accord, and 3. Effect of getting no satisfaction
Excuse of non-performance of contract because of something that happened after contract was made- Excuse by reason of a later contract; Accord and satisfaction (substituted performance): "Accord" and "Satisfaction" Agreement by the parties to an already existing obligation to accept different performance in satisfaction of existing obligation; Agreement includes- "if" and "then"
Excuse of non-performance of contract because of something that happened after contract was made- Excuse by reason of a later contract; Accord and satisfaction (substituted performance): Effect of "accord" and "satisfaction" In the new agreement (accord) is performed (satisfaction), then performance of original obligation is excused
Excuse of non-performance of contract because of something that happened after contract was made- Excuse by reason of a later contract; Accord and satisfaction (substituted performance): Accord not performed If accord is not performed, then other party can recover on either the original obligation or the accord
Excuse of non-performance of contract because of something that happened after contract was made- Excuse by reason of a later contract; Modification (substituted agreement) An agreement by parties to an existing obligation to accept a different agreement in satisfaction of existing obligation; Mere making of substitute agreement= excused
Excuse of non-performance of contract because of something that happened after contract was made- Excuse by reason of a later contract; Novation Know- 1. What novation is, 2. Who is liable after novation, 3. What the factual and legal difference b/w a novation and a delegation are
Excuse of non-performance of contract because of something that happened after contract was made- Excuse by reason of a later contract; Novation: What? An agreement between BOTH parties to an existing K to substitution of new party (i.e., same performance, different party)
Excuse of non-performance of contract because of something that happened after contract was made- Excuse by reason of a later contract; Novation: Who is liable? Novation excuses contracted for performance of party who is substituted for or replaced
Excuse of non-performance of contract because of something that happened after contract was made- Excuse by reason of a later contract; Novation: How is delegation different? Novation= agreement of BOTH parties to original K, and excuses person replaced form any liability for non-performance; Delegation= does not require agreement of both parties and does not excuse
Excuse of non-performance of contract because of something that happened after contract was made- Excuse of performance by reason of later, unanticipated event Understand- 1. Which party is arguing performance is excused (person specific), 2. What her performance is, 3. Whether post-K affected ABILITY to perform, not just cost of performance
Excuse of non-performance of contract because of something that happened after contract was made- Excuse of performance by reason of later, unanticipated event; Damage or destruction of subject matter of K: Common law Follow three steps and once past 1 and 2 look to ABILITY!!!
Excuse of non-performance of contract because of something that happened after contract was made- Excuse of performance by reason of later, unanticipated event; Damage or destruction of subject matter of K: Article 2 If sale of goods do risk of loss first
Excuse of non-performance of contract because of something that happened after contract was made- Excuse of performance by reason of later, unanticipated event; Damage or destruction of subject matter of K: Article 2, Risk of loss on buyer If risk of loss on buyer, then buyer pays; Too easy for bar
Excuse of non-performance of contract because of something that happened after contract was made- Excuse of performance by reason of later, unanticipated event; Damage or destruction of subject matter of K: Article 2, Risk of loss on seller If risk of loss on seller, then buyer does not pay; Whether buyer can recover damages from seller depends on facts; Can ability to perform happen? If not, then excused. If so, then responsible for increase in price or to fulfill K terms
Excuse of non-performance of contract because of something that happened after contract was made- Excuse of performance by reason of later, unanticipated event; Death AFTER contract: General effect Death does NOT make a person's contract obligation disappear
Excuse of non-performance of contract because of something that happened after contract was made- Excuse of performance by reason of later, unanticipated event; Death AFTER contract: Exception Death of party to K who is "special" person excuses performance; Unique= one of a kind
Excuse of non-performance of contract because of something that happened after contract was made- Excuse of performance by reason of later, unanticipated event; Subsequent law or regulation 1. Later law makes performance of contract illegal then excuse by impossibility (legal impossibility), 2. Later law makes mutually understood purpose of K illegal then excuse by frustration of purpose
Third-party problems- A person trying to enforce a K she did NOT make; Third-party beneficiary Do- 1. Identify problem as third-party beneficiary, 2. Use vocabulary of law, 3. Deal with efforts to cancel or modify, 4. Figure out who can sue, 5. Assert any available defense
Third-party problems- A person trying to enforce a K she did NOT make; Third-party beneficiary: Identifying third- party beneficiary Look for two parties contracting with common intent of benefit to third party; Example: life insurance scenario
Third-party problems- A person trying to enforce a K she did NOT make; Third-party beneficiary: Knowing Vocabulary, Third-party beneficiary Not a party to contract, able to enforce others made for her benefit
Third-party problems- A person trying to enforce a K she did NOT make; Third-party beneficiary: Knowing Vocabulary, Promisor Look for person who is making promise that benefits the third party
Third-party problems- A person trying to enforce a K she did NOT make; Third-party beneficiary: Knowing Vocabulary, Promisee Look for person who obtains the promise that benefits the third party
Third-party problems- A person trying to enforce a K she did NOT make; Third-party beneficiary: Knowing Vocabulary, Intended/incidental Only intended beneficiaries have K law rights (on bar intended beneficiaries always named in the contract); Intent of two parties to K determines whether intended or incidental
Third-party problems- A person trying to enforce a K she did NOT make; Third-party beneficiary: Knowing Vocabulary, Creditor/donee Intended beneficiaries are either donee or creditors, usually donnes; Look- whether third-party beneficiary was creditor of promisee before K
Third-party problems- A person trying to enforce a K she did NOT make; Third-party beneficiary: Deal with efforts to cancel or modify Test- Whether third party KNOWS OF and has RELIED on or assented as requested; If so, her rights have vested and contract cannot be canceled or modified without her consent unless K otherwise provided
Third-party problems- A person trying to enforce a K she did NOT make; Third-party beneficiary: Who can sue whom? 1. Beneficiary can recover from promisor, 2. Promisee can recover from promisor, 3. G/R: Beneficiary cannot recover from promisee, 4. Limited exception: Creditor benef. can recover from promisee BUT ONLY on pre-existing debt; Benef/promisee NOT recove
Third-party problems- A person trying to enforce a K she did NOT make; Third-party beneficiary: Defenses If third-party beneficiary sues promisor, promisor can assert any defense he would have had if sued by promisee
Third-party problems- A person trying to enforce a K she did NOT make; Assignment of rights Know- 1. What an assignment of K is, 2. Vocabulary, 3. Limitations, 4. Requirements, 5. Rights of assignee, and 6. How to deal with multiple assignments
Third-party problems- A person trying to enforce a K she did NOT make; Assignment of rights: What? Transfer of rights UNDER K; Steps- 1. K between only 2 parties, 2. One party later transfers rights under K to third party; See difference between assignment and third-party beneficiary
Third-party problems- A person trying to enforce a K she did NOT make; Assignment of rights: Vocabulary, Assignor Party to K who later transfers rights under K to another
Third-party problems- A person trying to enforce a K she did NOT make; Assignment of rights: Vocabulary, Assignee Not a party to K; Able to enforce K because of assignment
Third-party problems- A person trying to enforce a K she did NOT make; Assignment of rights: Vocabulary, Obligor Other party to K
Third-party problems- A person trying to enforce a K she did NOT make; Assignment of rights: Limitations on assignment, If K provision regarding assignment Determine whether K- 1. Prohibits assignment (most likely on bar), or 2. Invalidates assignments
Third-party problems- A person trying to enforce a K she did NOT make; Assignment of rights: Limitations on assignment, If K provision regarding assignment- Prohibition Language of prohibition takes away right to assign, but not power to assign, which means assignor liable for breach, but assignee does NOT know prohibition can still enforce assignment
Third-party problems- A person trying to enforce a K she did NOT make; Assignment of rights: Limitations on assignment, If K provision regarding assignment- Invalidation Language of invalidation takes away both the right to assign and power to assign so there is a breach by assignor and no rights to assignee
Third-party problems- A person trying to enforce a K she did NOT make; Assignment of rights: Limitations on assignment, If nothing in fact pattern about K language regarding assignability Even if K does not in any way limit right to assign, common law bars assignment that substantially changes duties of obligor
Third-party problems- A person trying to enforce a K she did NOT make; Assignment of rights: Limitations on assignment, If nothing in fact pattern about K language regarding assignability- Assignment of right to payment NEVER substantial change
Third-party problems- A person trying to enforce a K she did NOT make; Assignment of rights: Limitations on assignment, If nothing in fact pattern about K language regarding assignability- Assignment of right to K performance other than right to paymen Usually substantially change on bar
Third-party problems- A person trying to enforce a K she did NOT make; Assignment of rights: Requirements for assignment G/R: Consideration is NOT required, but gratuitous assignment can be revoked; W/o considerations= fragile because can be revoked
Third-party problems- A person trying to enforce a K she did NOT make; Assignment of rights: Who can sue?, Assignee Can recover from obligor
Third-party problems- A person trying to enforce a K she did NOT make; Assignment of rights: Who can sue?, Assignor For consideration CAN NEVER recover from obligor; 1. An assignment is a transfer of rights, 2. After assignment, assignor has no more K rights, 3. Assignment for consideration CANNOT be revoked
Third-party problems- A person trying to enforce a K she did NOT make; Assignment of rights: Who can sue?, Obligor Same defenses against assignee as it would have against assignor
Third-party problems- A person trying to enforce a K she did NOT make; Assignment of rights: Who can sue?, Payment by obligor to assignor Effective until obligor knows of assignment; Modification agreement b/w obligor and assignor are effective if obligor did not know of assignment
Third-party problems- A person trying to enforce a K she did NOT make; Assignment of rights: Who can sue?, Implied warranties of assignor in assignment for consideration Assignment for consideration, a-or warrants- 1. Right assigned exists, 2. Right assigned not subject to then existing defense by obligor, 3. Assignor do nothing after assignment to impair value of assignment; Assignor not warrant what obligor does aft
Third-party problems- A person trying to enforce a K she did NOT make; Assignment of rights: Multiple assignments, All gratuitous assignments G/R: Last assignee generally wins
Third-party problems- A person trying to enforce a K she did NOT make; Assignment of rights: Multiple assignments, For consideration- G/R First assignee for consideration wins
Third-party problems- A person trying to enforce a K she did NOT make; Assignment of rights: Multiple assignments, For consideration- Limited exception (four horseman rule) Subsequent assignee takes priority over earlier assignee for value only if she both- 1. Does not know of earlier assignment, and 2. Is first to obtain- a. Payment, b. Judgment, c. Novaiton, or d. Indicia of ownership; First to notify is irrelevant
Third-party problems- Disputes arising from person's performing a K she did NOT make; Delegation duties Know- 1. What delegation is, 2. Relationship of assignment and delegation, 3. Which duties delegable, 4. What are consequences of delegation
Third-party problems- Disputes arising from person's performing a K she did NOT make; Delegation duties: What delegation is? Party to K transferring work under K to third party
Third-party problems- Disputes arising from person's performing a K she did NOT make; Delegation duties: Relationship of assignment and delegation A K creates both rights and duties; Assignment= transfer by party to K of his rights or benefits under K to third party who was not party to K; Delegation= transfer by party to K of his duties or burdens under K to third party who was not party to K
Third-party problems- Disputes arising from person's performing a K she did NOT make; Delegation duties: Which duties are delegable? Delegations permitted unless- 1. K prohibits delegations or prohibits assignments, OR 2. "Personal services K" that calls for VERY SPECIAL skills
Third-party problems- Disputes arising from person's performing a K she did NOT make; Delegation duties: Non-performance by delegate What if, after delegation, third-party delegates does not perform? 1. Delegating party ALWAYS remains liable, and 2. Delegatee liable only if she receives consideration from delegating party
WY- What is a K; Types of Ks: Implied in fact Employee handbook may constitute an implied K if it manifest intention to create expectation that employment will not terminated except for case or will be for specified term
WY- Consideration; Elements of consideration: Legal value, Second restatement Legal benefit and legal detriment theories; Follow 2nd Rest. departing from use of benefit/detriment test; Cts look to whether something was bargained for and given (promised) in exchange
WY- Consideration; Elements of consideration: Legal value, Pre-existing legal duty If additional provisions of an agreement, such as a release or exclupatory clause, were contemplated in parties' original understanding, even if they were not set out in detail, no new consideration required to support provision
WY- Consideration; Promissory estoppel or detrimental reliance Applies in employment K situations; Employee bring action for breach even if no consideration if- 1. Existence of clear/definite agreement, 2. Proof party urging doctrine acted to detriment in reasonable reliance, 3. Equities support enforcement of ag
WY- Requirement that no defenses exists; Defenses based on lack of capacity: Duress K voidable; Economic duress if- 1. Involuntarily accept terms of another, 2. Circumstances permit no reasonable alternative so agree w/terms or face serious financial hardhsip, 3. Circumstances b/c coercive acts of other; 4. Victim of wrongful act
WY- Requirement that no defenses exists; Defenses to enforcement: Statute of frauds, Promissory estoppel Invoke equitable principles to avoid injustice; Equitable doctrine of promissory estoppel can defeat operation of SoF
WY- Determining terms of the K; Parol evidence rule: Supplementing, explaining, or contradicting terms, Extrinsic evidence outside scope Evidence used to establish- 1) Separate and distinct K, 2) Condition precedent, 3) Fraud, 4) Mistake, or 5) Repudiation- are admissible to vary terms of completely integrated writing
WY- Determining terms of the K; Modification of K terms: Writing If agrmt required comply w/SoF, material modification of agrmtt must conform to Statute; WY exception: Parties changed position by performing oral modification would be inequitable to permit other party put forth claim/defense in orig. agrmt as unmodifie
WY- Breach; When does breach occur? Recognizes commercial K cases a cause of action for breach of implied covenant of good faith and fair dealing based on K theory
WY- Remedies; Statute of limitations SOL for K is 10 yrs after cause of action accrues for any K in writing, and 8 yrs for K that is not in writing, whether express or implied
Created by: dmoore147