Contracts

Question 1

Contract Formation: Requirements

Answer 1

Offer: manifestation of intent to enter a contract.

Acceptance: Manifestation of assent to contract.

Consideration: A legal detriment or a bargain for exchange (promise to perform/forbear).

Question 2

Offer

Answer 2

A manifestation of intent to offer. 3 requirements:

1. Intent
2. Essential Terms
3. Communication to Offeree

Essential Terms of an Offer
1. Identification of Offeree (exceptions: first come first serve; rewards)

2. Price term
   - UCC/CL: Court will fill in a reasonable price term (as long as it was not vague)
   - MI CL: Missing price term defeats contract formation.
3. Quantity
   - Necessary for UCC contract, but an input/output can be used. Amount sold must be in good faith and not unreasonably disproportionate from past amounts/expectations.

Question 3

Offer: Is it terminated?

Answer 3

An offer can be terminated 4 ways:

1. Lapse: offers lapse after a reasonable time (face-to-face lapses after convo).
2. Rejection: once rejected, any acceptance is a counteroffer. (Exception: option K).
3. Revocation: You can usually revoke any time before acceptance. Exceptions:

A. Firm Offer: merchant’s offer for the sale of goods, in a signed writing, gives assurance it will be held open. This will be held open for the stated time or a reasonable time not exceeding three months (not automatically 3 months).

B. Option K: Promise to keep an offer open in exchange for consideration.

C. Performance Begins on Unilateral K

D. Substantial Reasonably Foreseeable Reliance on K: usually bidding with GC and SCs.

4. Death or Incapacity of Party (even if other did not know. Exceptions:

A. Option K
B. Performance Begins on Unilateral K

Question 4

Acceptance: How do you accept?

Answer 4

Manifestation of assent to the contract.
- Effective upon placement in mail (unless option K or acceptance and rejection both sent).

Offeror is the master of the offer and can mandate any method of acceptance. If it is unclear, it will be treated as a suggestion, and buyer can accept in any reasonable manner.

Question 5

Acceptance: Common Law

Answer 5

1. Mirror Image Rule: acceptance must be a mirror image of the offer, otherwise it is a counteroffer.
2. Last Shot Rule: if parties continue like there was a valid contract, the party whose terms were last sent will govern the contract.

Question 6

Acceptance: UCC

Answer 6

A seasonable expression of acceptance with additional/different terms is valid acceptance unless acceptance is made conditional on assent to the additional/different terms.

If so, it is a counteroffer. If parties continued like there was a contract, the like-terms will govern and the court will use gap fillers for the rest.

If it is not made conditional on assent:

Additional Terms: incorporated into contract if it is a contract between merchants, unless:

1. Offeror’s offer was conditional on its terms;
2. It materially alters the contract (i.e., liability); OR
3. The offeror objects within a reasonable time.

If one of these 3 exists, the terms are not incorporated, and are treated like proposals that can be accepted/rejected.

Different Terms: Knockout Rule

• Majority (+MI): Similar terms govern; gap fillers for rest
• Minority: Treats just like additional

Question 7

Consideration: Generally

Answer 7

Consideration: A legal detriment or a bargain for exchange (promise to perform/forbear).

Question 8

Consideration: Gratuitous Promise

Answer 8

Promises to make a gift are not consideration.

Question 9

Consideration: Illusory Promise

Answer 9

A promise completely within the control of the promisor are not consideration.

However, a contract based on satisfaction is NOT illusory.
- These just need to be executed in good faith

Question 10

Consideration: Moral Obligations

Answer 10

Does not constitute consideration.

Exception: Material Benefit (narrow)
If there is an emergency, the promisor receives a material benefit, and the promisee’s act was not a gift.

Question 11

Consideration: Past Consideration

Answer 11

Nothing is inducing the promise, so it is not consideration.

Question 12

Consideration: Inadequate Consideration

Answer 12

Courts generally do not care about the adequacy of the consideration, unless it is so gross as to shock the conscience of the court. Ex:

• Sham consideration ($1, usually never paid)
• Token consideration (completely without value)

Question 13

Consideration: Pre-Existing Legal Duty

Answer 13

Ex: I promise to do your landscaping for $2,000. You feel like I might not finish. You offer me an extra $500 to finish on time. I finish. I try to sue you for the extra $500, but you say it was a pre-existing legal duty:

Performing a pre-existing legal duty is not consideration because you already had the duty to perform that act. However, there are some exceptions:

1. Changed Duty: if you change your duty even slightly, you can enforce it.
2. Claim Release: as long as the claim is valid or there is a good faith belief it is valid.
3. Unforeseen Difficulty: if contract becomes impracticable.
4. UCC Contract: only requires good faith
5. Time-Barred Debt: written promise to pay a debt barred by SOL is enforceable w/o consideration (up to the writing)
6. Extra Person Involved: pre-existing duty owed to third person
7. Releasing a Pre-Existing Debt: good faith payment in full of a disputed debt will enforce the promise to release the debt.

Question 14

Promissory Estoppel

Answer 14

This exists when there is no contract formed.

Requires:

1. A promise
2. Foreseeable and justifiable reliance
3. Enforcement is necessary to avoid injustice.

Damages: reliance damages

Question 15

How do you interpret the terms of a contract?

Answer 15

1) Express terms govern over all else
2) Course of performance: how parties have acted previously re: the same transaction
3) Course of dealing: how same parties have acted in previous contracts with each other
4) Trade usage: what is the custom in the trade

Question 16

Parol Evidence Rule

Answer 16

Applies when one party is trying to add a term from a prior or contemporaneous negotiation to a final (integrated) written agreement.

Complete Integration: parties intended the agreement to be final as to all of the terms of their agreement.

• Merger clauses: evidence of complete integration in CL; but conclusive in MI CL and UCC.
• PER will BAR the evidence

Partial Integration: parties intended the terms in the writing to be final, but the agreement does not contain all of the terms of the agreement.
- PER will not bar additional consistent terms

Question 17

When does Parol Evidence Rule not apply?

Answer 17

1. Forming a Defense: trying to prove contract was never formed
   - Ex: mistake, duress, etc.
2. Failure of a CP: to prove the contract would not have been effective (NOT for a CS).
3. Naturally Omitted Terms: additional agreements relating to the subject matter that would not be expected to be included.

Question 18

Warranties & Remedies

Answer 18

1. Express: facts/promises relating to the goods or any model/sample that are part of the basis of bargain.
   - Can be by conduct
   - Not mere puffing
   - Express terms cannot be disclaimed.
2. Implied Warranty of Title: seller warrants that they have title.
   - Disclaimed with specific language
3. Implied Warranty of Merchantability: Merchant who deals in goods of the kind automatically warrants that the goods are fit for their ordinary purpose.
4. Implied Warranty of Fitness for a Particular Purpose: seller has reason to know why the buyer is buying the goods, buyer relies on the seller to pick suitable goods, and the buyer does, in fact, rely on the seller.

IWM and IWFPP are disclaimed by:

• Express language
• Selling ‘as is’
• Through prior dealings
• If seller demands buyer inspect the goods, buyer does not, and the defects are those that would have been caught during inspection.

Limitation of Remedies:
Enforceable unless it is unconscionable or the remedies fail of their essential purpose.
- Unconscionable if they limit consequential damages for personal injury.

Question 19

Performance Obligations: Carrier Contracts

Answer 19

The risk of loss depends on whether it is a shipment or destination contract.

Shipment Contract: seller’s obligation is to deliver the goods to the third-party shipper. The seller must:

1. Deliver the goods to the carrier;
2. Make appropriate arrangements for shipping; and
3. Notify the buyer of shipment and tender any documents necessary to allow buyer to take possession.

If seller does this, he is not liable for damages in transit. This is the DEFAULT; also, if it says FOB Seller’s Place of Business.

Destination Contract: seller’s obligation is to deliver the goods to the specific destination. Only the case if contract says:

• FOB Buyer; or
• Ex Ship

Question 20

Performance: Non-Carrier Contracts

Answer 20

The risk of loss usually remains on the seller until the goods are either: (1) Accepted by the buyer; or (2) cured by the seller.

Even if the buyer revokes acceptance, the risk of loss remains on the seller.

Question 21

Conditions

Answer 21

If a condition is unsatisfied, the party is no longer obligated to perform. However, you cannot purposely put something in the way of a condition to prevent it from happening.

Condition Precedent: condition must occur for duty to arise in other party. If duties cannot be performed at same time, performance precedes payment.

Condition Subsequent: Condition will cut off an already existing duty to perform

Question 22

Common Law: Level of Performance

Answer 22

One must substantially perform. Once there is substantial performance, the other party must perform.

Minor breach: other party must still perform but can withhold damages or sue for breach.

Major breach: other party is excused from performing.

How to tell if breach is major/minor?
- Assess level of completion; willful/negligence; hardship of fixing it; adequacy of damages; benefit received by plaintiff; etc.

Exact performance is only required if there is an express condition that requires it.
- These are disfavored unless strong language is used (like a satisfactory condition).

Question 23

UCC: Level of Performance

Answer 23

Perfect Tender Rule: If goods fail to conform in any way, buyer has 3 options:

1. Reject all goods
2. Accept all goods
3. Accept as many units as he wants and reject the rest.

Rejection
Must occur before acceptance. He rejects if he gives timely notice to seller.
If he does not state reasons for rejection, he cannot later rely on them if:
1. Seller could have cured the defects; or
2. If seller requested a writing of defects and buyer failed to provide it (b/w merchants)

Acceptance
Buyer indicates they conform; keeps them despite a nonconformity; does any act inconsistent with the seller’s ownership.

Right to Cure
Seller still has a right to cure if:
1. There is time to perform on the K; or
2. Seller reasonably believed the nonconformity would be acceptable

Question 24

UCC: Revoking Acceptance

Answer 24

If buyer accepts goods, he usually cannot reject them. However, he can when:

1. Nonconformity substantially impairs the value
2. He accepted because either: He had a reasonable belief the nonconformity would be cured; or he did not discover the nonconformity because it was difficult to discover (or because of seller’s assurances);
3. He revokes w/i reasonable time after he discovers or should have discovered it;
4. He revokes before any substantial change in condition of the goods not caused by their own defect.

He must hold the goods with reasonable care and permit the seller to remove them.

Question 25

Exceptions to Perfect Tender Rule

Answer 25

Installment Contracts follow the substantial impairment rule: Rejecting an Installment: Buyer can reject installment when nonconformity substantially impairs the value of that installment, and cannot be cured Rejecting the entire contract: Only if nonconformity substantially impairs the value of the whole contract. Buyer must seasonably notify seller of cancellation.

Question 26

Divisible Contracts (Special Rule)

Answer 26

A divisible contract is one that is: 1. Apportionable; and 2. Parties would have contracted for each part separately A party that performs one or more parts of a divisible contract can collect payment for those parts even if he did not complete his duties.

Question 27

Excusing Conditions: Ways

Answer 27

If one of these exists, the other party will be excused from performing: 1. Breach: if one party does not perform (or materially breaches), the other party is excused. 2. Waiver of Condition 3. Prospective Inability to Perform 4. Anticipatory Repudiation

Question 28

Excusing Conditions: Waiver

Answer 28

A party benefitted by a condition can waive it. Two types: A. Estoppel Waiver: party relies on a statement from the person whom the condition benefits before it occurs. B. Election Waiver: statement from the person who the condition benefits after it occurs.

Question 29

Excusing Conditions: Prospective Inability to Perform

Answer 29

When a party has reasonable grounds for insecurity that the other party will not perform (doubts). UCC: Party can demand, in writing, adequate assurances. He can suspend until he gets assurances. If he does not get assurances within 30 days, he can treat it as repudiated.

Question 30

Excusing Conditions: Anticipatory Repudiation

Answer 30

There is a clear manifestation by one party that: A. They will not perform B. And the statement is made before their performance is due. The party who repudiates can retract it unless the other party cancels the contract, relies on repudiation, or tells them their repudiation was final. Other party can: 1. Sue immediately (unless they fully performed, in which case they must wait). 2. Suspend performance and wait to sue 3. Treat contract as discharged 4. Urge the other party to perform

Question 31

Discharging Duties: Methods

Answer 31

If one of these arise, the duties are discharged. 1. Performance: once you perform, your duty is discharged 2. CS: once it happens, your duty is discharged 3. Agreement 4. Changed Circumstances

Question 32

Discharging Duties: Agreement

Answer 32

Agreement to change/modify the contract. A. Novation: all parties agree to substitute a party B. Modification (CL requires consideration; UCC requires good faith. In MI CL, a signed writing is enough to modify). - 'No oral modification clause': NOT enforceable at common law; enforceable at UCC but it might trigger a waiver issue if the other party relies on the oral modification. C. A&S: Accord is a new agreement to accept different performance, and satisfaction is completion of it. The original agreement and accord are satisfied upon performance of the accord. If accord is not satisfied, non-breaching party can sue for breach of original agreement or the accord. D. Recession: parties cancel duties under contract. - If one party already performed, it requires new consideration or reliance E. Release: must be in writing and supported by consideration or reliance.

Question 33

Impossibility and Frustration of Purpose

Answer 33

These are ways to DISCHARGE DUTIES due to changed circumstances. A. Impossibility/Impracticability 1. An event occurs to make performance impossible 2. After the contract was made 3. That was not reasonably foreseeable at the time of the contract 4. The non-occurrence of which was a basic assumption of the parties 5. Neither party is at fault or bears the risk. (UCC: Be careful with risk of loss). B. Frustration of Purpose 1. The primary purpose of the K 2. Known by both parties at the time of contracting 3. Is substantially frustrated 4. By an unforeseeable event 5. After the contract was entered into

Question 34

What kinds of defenses can you form for contracts?

Answer 34

1. Enforcement 2. Capacity 3. Formation

Question 35

Defenses to Enforcing a Contract

Answer 35

1. Statute of Frauds | 2. Unconscionability

Question 36

Statute of Frauds

Answer 36

This is a defense to enforcing a contract. A contract can generally be in writing or oral, but some contracts fall into the Statute of Frauds. 1. Land 2. Surety 3. One year 4. Marriage 5. Executor 6. UCC contracts > $500 ($1,000 in MI) 7. Special rule re: modifications 8: MI Rule

Question 37

SoF: Land Contracts

Answer 37

Anything that creates an interest in land must be in writing. * Part performance exception

Question 38

SoF: Surety

Answer 38

A promise to pay the debt of another if that person does not pay it. Exception: Primary Benefit If the primary benefit of agreeing is a pecuniary benefit to the person saying they will pay it, it does not fall within the SoF.

Question 39

SoF: One year

Answer 39

A contract that is impossible to perform in less than one year from the date of the contract falls within the SoF. If performance is possible within one year, it will not fall under the SoF. Examples that fall w/i SoF: - K for an event that will be in > 1 year - Promises explicitly longer than one year (ex: four-year contract). A lifetime contract is not within the SoF because the person could die within one year.

Question 40

SoF: Marriage

Answer 40

Promises made in consideration of marriage must be in a signed writing. - Does not include the promise to marry

Question 41

SoF: Executor

Answer 41

Executor's promise to pay an obligation of the estate from their own funds falls within the SoF.

Question 42

SoF: Special Rule re: Modifications

Answer 42

A contract may not be within the SoF, but when it is modified, is within the SoF. Be careful. Same with vice-versa.

Question 43

SoF: Michigan's Rule

Answer 43

Promises or agreements re: medical care or treatment are within the SoF in Michigan

Question 44

SoF: UCC Contracts

Answer 44

All UCC contracts $500 or more ($1,000 in MI) must be in a signed writing. If the writing incorrectly states a quantity term, the contract is enforceable up to the writing. Exceptions: 1. Confirmatory Memorandum Rule 2. Specially Manufactured Goods 3. Judicial Admission 4. Part Performance

Question 45

Confirmatory Memorandum Rule

Answer 45

This is an exception to the UCC Contracts being in the SoF. Here: 1. Both parties are merchants 2. One sends a writing claiming there is a contract within a reasonable time 3. The writing is signed by that merchant and states a quantity term 4. The other merchant has reason to know of its contents but fails to object in writing within 10 days of receiving the writing If this happens, the confirmatory memo binds both merchants.

Question 46

Specially Manufactured Goods

Answer 46

This is an exception to the UCC Contracts being in the SoF. 1. Goods are specially manufactured for the buyer 2. Goods are not suitable for sale to others in the ordinary course of seller's business 3. Seller has substantially begun manufacturing/making commitments for their purchase (if circumstances indicate the goods were for the buyer). Ex: seller specially makes jerseys for the buyer (assuming K fell within the SoF price range).

Question 47

Judicial Admission

Answer 47

This is an exception to the UCC Contracts being in the SoF. If you admit in a pleading or in court that there is a contract, the K is enforceable up to the amount of your admission.

Question 48

Part Performance

Answer 48

This is an exception to the UCC Contracts being in the SoF. If a party paid/accepted part of the contract, it is enforceable up to that amount. Exception: If the contract is not divisible Under Part Performance, you should be able to enforce the contract up to that part. But since a car is not divisible, the exception does not apply. - Ex: you put a downpayment on a car. It's supposed to be in a signed writing, but is not.

Question 49

How is the SoF satisfied?

Answer 49

1. Material terms: you can use multiple writings to piece it together - UCC contracts require stated quantities 2. Signature: by party to be charged (can be letterhead, initials, typed, etc.)

Question 50

Unconscionability

Answer 50

This is a defense to contract enforcement. Two requirements: 1. Procedural unconscionability: unfair bargaining process (ex: unknown terms); and 2. Substantive unconscionability: grossly unfair terms (ex: unfair risk-shifting). Judge has discretion (can just void portion if he wants)

Question 51

Lack of Capacity Defenses

Answer 51

1. Legal Incapacity: someone under 18 (if unmarried), incompetent person, or intoxicated person. - These people have the right to disaffirm the contract (get out of the K). 2. Duress: party threatens your finances, property, wellbeing, life, etc. 3. Undue Influence: person in position of trust, dominance, or authority unfairly persuades someone to enter a contract against their interests. These are all voidable.

Question 52

What happens if a minor enters into a contract?

Answer 52

The minor must disaffirm before or shortly after turning 18, otherwise it may become ratified. A minor must simply return what they have in its current condition (even if it is stolen or destroyed). Exception: If it is a 'necessary' (question of fact), they are only liable for the reasonable value of the item (not the K price).

Question 53

Contract: Defenses to Formation

Answer 53

1. Mistakes/Misunderstandings - Mutual mistake - Unilateral mistake - Mutual misunderstanding 2. Fraud/Misrepresentations - Fraud in the inducement - Fraud in the factum - Innocent misrepresentation 3. Illegality/Public Policy - Illegal subject matter - Illegal purpose - Illegal provision - Licensing Statute violation - Public Policy

Question 54

Mutual Mistake

Answer 54

Defense: Lack of Contract Formation Voidable Contract (does not apply if you are mistaken to monetary worth of something). 1. Both parties are mistaken 2. As to basic assumption of fact 3. That materially affects the exchange 4. Party seeking to void does not bear the risk

Question 55

Unilateral Mistake

Answer 55

Defense: Lack of Contract Formation Voidable 1. One party is mistaken about a fact and 2. The other party knows or has reason to know

Question 56

Mutual Misunderstanding

Answer 56

Defense: Lack of Contract Formation Void 1. Both parties have a different understanding of a material term that is open to at least two reasonable interpretations 2. Neither party has reason to know of the ascribed meaning of the other

Question 57

Fraud in the Inducment

Answer 57

Defense: Lack of Contract Formation Voidable 1. A fraudulent misrepresentation; and 2. Reliance

Question 58

Fraud in the Factum

Answer 58

Defense: Lack of Contract Formation Void If one party did not know they were signing a contract, it is void.

Question 59

Innocent Misrepresentation

Answer 59

Defense: Lack of Contract Formation Voidable 1. A non-fraudulent misrepresentation 2. Justifiable reliance

Question 60

Illegal Subject Matter

Answer 60

Defense: Lack of Contract Formation Void The contract contains illegal subject matter

Question 61

Illegal Purpose

Answer 61

Defense: Lack of Contract Formation Voidable 1. Party who did not have illegal purpose can void it if they did not know of the purpose; or 2. If they knew, but did not participate and the crime does not involve serious moral turpitude Ex: selling car that will be used to transport drugs

Question 62

Illegal Provision

Answer 62

Defense: Lack of Contract Formation Voidable If there is an illegal provision, the court will strike the provision if: 1. There is different subject matter in the contract; and 2. Consideration can be apportioned to a different provision.

Question 63

Public Policy

Answer 63

Defense: Lack of Contract Formation Void A contract that limits liability for reckless or intentional harm is unenforceable. - You can limit for negligence unless it offends public policy (i.e., hospital waiver).

Question 64

Common Law Damages

Answer 64

Expectation damages + Incidental Damages + Consequential damages (-) Expenses saved

Question 65

Incidental Damages & Consequential Damages

Answer 65

Incidental: those related to avoiding the loss (i.e., replacement). - UCC: these must relate to the goods Consequential: damages that are foreseeable when contract is made. - UCC: Only available to buyer

Question 66

Buyer's Remedies (UCC)

Answer 66

Buyer has Goods Value of goods in K (-) what you got (+) ID (+) CD Seller has Goods: Difference between: 1. Replacement price and contract price; or 2. MV when buyer learns of breach and K price (+) ID (+) CD (-) ES

Question 67

Seller's Remedies (UCC)

Answer 67

Buyer has Goods Contract price Seller has Goods Difference between: 1. K price and resale price; or 2. K price and MV at time and place of tender (+) ID (-) ES If Seller is Lost Volume (unlimited supply) Lost profits + ID

Question 68

Remedies: Land Contract

Answer 68

1. Specific performance; or | 2. Damages (MV - Contract Price)

Question 69

Remedies: Employment Contract

Answer 69

Employer breaches: employee gets K price but must mitigate by accepting similar job. Employee breach: employer gets costs of replacing employee

Question 70

Liquidated Damages

Answer 70

Parties state in K what their damages will be. This is enforceable if: 1. Damages are difficult to estimate at time of contract; and 2. It's a reasonable forecast of possible damages

Question 71

Restitution

Answer 71

Plaintiff recovers value of the benefit conferred. This is available when: 1. K is breached 2. K is unenforceable and other party will be unjustly enriched 3. There is no K (i.e., implied by law)

Question 72

Builders: Remedies

Answer 72

Breach by Owner 1. Breach before construction: lost profits 2. During construction: profits plus costs 3. After construction: contract price plus interest Breach by builder Owner can collect the cost to get job completed by someone else (Above K price) plus reasonable compensation for delay If builder is just late in performing, damages are the losses owner incurred

Question 73

Third Party Beneficiaries: Everything

Answer 73

This is one A contracts with B to perform for C. - Promisor: performs for TPB - Promisee: contracts with promisor - TPB: performance is owed to In order to sue on the contract, the TPB must have been an intended beneficiary, and his rights must have vested. 1) Is the TPB intended or incidental? 4 factors: A) Is the TPB expressly designated in the contract? B) Does the TPB have rights under the contract? C) Is performance owed directly to the TPB? D) What is the relationship b/w the TPB and Promisor? 2) If intended, did the TPB's rights vest? 3 ways (ABC): A) TPB assents to the promise B) TPB brings a lawsuit C) TPB changes his position in reliance on the promise In Michigan, the TPB's rights vest once the promise becomes binding on the Promisor. If the TPB is unknown or unborn, his rights vest when he becomes known or is born. Who can the TPB sue? A) Promisor (as can the promisee) B) Promisee (if he is a TPB creditor, meaning the promise was to discharge an obligation to the TPB).

Question 74

Delegation of Duties: Everything

Answer 74

A delegates a duty, owed to C, to B. - Delegator: A - Delegatee: B - Obligee: B Note: when one assigns a contract, they assign the rights and delegate the duties. Can you delegate the duty? Generally, yes. Unless: 1) Other party has a substantial interest in having the delegator perform; or A) Contract involves special skill/judgment the other party cannot do; or B) There is a special trust relationship b/w Delegator and Obligee. 2) The contract prohibits either delegation or assignments. Who can the Obligee sue? - Delegator (always, unless there is novation) - Delegatee (if he got consideration from Delegator)

Question 75

Assignment: Everything

Answer 75

A assigns rights to C, for a duty that is owed by B. - Assignor: A - Assginee: C - Obligor: B Can an assignor assign their rights? Yes, but there are two exceptions: 1. It substantially changes obligor's duties or increases their burden/risk; or 2. There is a no assignments clause, and either: A. It says assignment will render the K void; or B. Assignee has notice of the clause What is required to assign rights? 1. You must adequately describe the rights assigned; and 2. You must have a present intent to transfer the rights. How do you revoke an assignment? (next slide) Can assignor and obligor modify the contract? Yes, until assignee has notice of the assignment. Who can assignee sue? - Obligor - Assignor (if assignment was for value and they breach/revoke their contract with the obligor).

Question 76

Revoking an Assignment

Answer 76

You can revoke a gratuitous assignment (no consideration) unless: 1. Obligor already performed 2. Assignee relied in a foreseeable way (i.e., bought something) 3. Delivery of a token chose (i.e., symbolic, like a stock certificate) 4. It is assignment of an intangible claim (i.e., right to sue) How do you revoke the assignment? If no consideration is given, the following will revoke the assignment: 1. Assignor dies/declares bankruptcy 2. Assignor himself performs 3. Assignor makes a subsequent assignment to someone else 4. Assignee is notified of the revocation