mbe contracts Flashcards

Question

types of conditions

Answer 1

* precedent * subsequent * concurrent 1. express 2. implied

Answer 2

happens before day of k/performance requires PLAINTIFF to prove that the event occured to prevail

Answer 3

happens after k/performance requires DEFENDANT TO PROVE vent occured to avoid liability

Answer 4

happens at time of k

Answer 5

* remove requirement, no longer have to meet terms of condition * **waiver**= after a condition has failed to occur, party to whom condition designed to benefit may choose to ignore non-occurence and continue performing (BUT where BOTH parties fail to perform when performance due, contractual obligations DISCHARGED FOR BOTH, NO K) * **wrongful interference:** party wrongfully interferes/prevents conditions occurence (party may have duty to fulfill a condition under good faith and fair dealing); the condition will be excsued, no longer need that condition for the party's peformance to become due (buyer was supposed to secure a mortgage in 30 days, does nothing in those 30 days, can be sued for specific performance) * **estoppel:** party indicates condition will not be enforced and other party reasonably and detrimentally relied on belief condition is waived * **disproportionate** forfeiture: party substantially performed and will be significantly harmed is condition enforced ## Footnote waiver: party who waived may reinstate the condition if (i) the waiving party communicates a retraction of the waiver before the condition is due to occur, and (ii) the other party has not already suffered detrimental reliance. before condition is due: (ex: insurance company requires notice within 30 days of accident, agent waived condition 3 weeks after accident, company tries to reinstate after the fourth week does not count, but would if before 30 days)

Answer 6

This binds you to terms IN contract and NOT in contract Contracting parties are typically bound only by the explicit terms of the contract. However, an implied duty of good faith and fair dealing is imposed on each party in the performance and enforcement of any contract. Good faith means honesty in fact and the observance of reasonable commercial standards of fair dealing.

Answer 7

EXISTING contract term --> other party DOES NOT EXPECT that term to be there ---> not bound unless it was shown to them explicitly (in long contract netflix makes you agree, there is term they can make a tv show based off of you, cant enforce this unless they explicitly showed it to you :D) According to the principle of reasonable expectations, parties should not be bound by terms that they would not expect to find in a contract unless those terms were called to their attention. But since there is no term in the lease that allows the owner to enter the home with a prospective lessee, this principle is irrelevant here.

Answer 8

the duty to use best efforts requires all parties to use their best efforts to carry out the intent of the contract to prevent it from being illusory when the scope of a party's performance is omitted or unclear follow the TERMS of the contract, this does not apply to term that DOES NOT EXIST IN CONTRACT

Answer 9

* substitute for consideration * one person makes promise to other party, other party detrimentally relied on promise, party making promise estopped from denying promise (Can be held to promise, this happens when you dont have a k) * detrimental reliance= you're doing something you would not have ordinarily done but for the promise * often used in construction industry, unjust for subcontractor to revoke bid after inducing justifiable reliance in the general contractor, but general contractor is not bound to accept it * BUT the subcontractor bid is irrevocably for a reasonable period of time, so if the subcontractor revokes before that period of time and the contractor still accepts, there IS a contract, and you would get expectation damages * a party that reasonably and detrimentally relies on another party's promise may recover the costs of relying on that promise—*but not* the value of the promise itself. ## Footnote The remedy may be limited or adjusted as justice requires. Generally, this results in the award of reliance damages rather than expectation damages.

Answer 10

* want to be discharged from obligation to perform * legally, not objectively impossible * not only can i not do it, nobody can * performance is now illegal, another option * house blown away into tornado, can no longer use it

Answer 11

* due to unforeseen circumstances, performance possible, but now unfair/impracticable (usually very expensive) * cost rising, in economy price fluctuation foreseeable. but price rise so much you would not have entered into k in first place * allocate risks between the parties, based on what the court thinks parties would have done if they had planned for the contingency that is currently making performance impracticable * impracticability will not be available where event in question suffciently foreshadowed so as to be fairly viewed as party of risks seller assumed when entering contract

Answer 12

*unilateral*= when one party mistaken, its not defense to performance unless other party knew of mistake *mutual*= both parties mistaken about basic term of k, mistake is defense. * this is not a defense if the court determines the party asserting mistake ashould bear the risk of mistake (like excavator entering into k and then finding issue after excavating)

Answer 13

* legal= money * liquidated damages

Answer 14

* expectation: put non-breaching party in a position had the contract been performed; you sue when someone breaches

Answer 15

* another form of remedy, ie money * predetermine the amount of damage at time you enter k in the event of breach * if you wait until breach, too difficult to calculate * valid and enforceable, **as long as they are reasonable and not acting like penalty/punishment** * generally 10% or less of value of k is reasonable; the higher you go from this, the more it seems like punishment * usually see this in down payment/deposit or late fines/penalties for later deliveries/performance

Answer 16

For contracts for the sale of goods, a defaulting buyer is entitled to a refund of any payments made on the contract **less** damages provable by the seller and **either**: 1. actual damages (expectation damages): the amount to which the seller is entitled by virtue of an enforceable liquidated-damages provision (lost profits if the seller is a lost-volume seller) plus any incidental damages (shipping/transportation costs) *or* 2. statutory damages: a penalty of “20 percent of the value of the total performance for which the buyer is obligated under the contract, or $500, whichever is smaller.” **note**: an injured seller is not limited to the $500 statutory offset when the seller's actual damages exceed that amount (use #1 actual damages instead) For example where a contract between the boat owner and a sail maker did not contain a liquidated damages clause, the boat owner is entitled to a refund of his $750 deposit less the smaller of $500 or 20 percent of the price of the sail ($1,500), which is $300. The boat owner, therefore, is entitled to recover $450 ($750 - $300) of his deposit

Answer 17

no adequate remedy at law

Answer 18

* specific performance * injunction * recission

Answer 19

* someone has to perform= k is unique (LAND ALWAYS CONSIDERED UNIQUE)

Answer 20

* stop someone from performing, to prevent irreperable harm

Answer 21

* to go back and put the parties in a position PRIOR to the k being entered into * court grants recission when there is no meeting of the minds (we were on the wrong page) * two main causes of action 1. mistake 2. misrepresentation (if non-disclosure is fradulent/material, k is voidable for misrepresentation, even if seller himself did not give the representation, it could inspector the seller hired)

Answer 22

* change existing material term in k * can be oral/written * BUT IF THE MODIFICATION IS $500 OR MORE FOR A GOOD THEN IT MUST SATISFY SOF AND BE IN WRITING, UNLESS ITS A SPECIALLY MADE GOOD (CANNOT BE SUITABLE FOR OTHERS IN ORDINARY COURSE OF SELLER'S BUSINESS) * modification is binding if fair and equitable in view of circumstances not anticipated by partied when k made * COMMON LAW (services/land)= additional consideration needed; without consideration, no valid modification UNLESS IT RESTS ON CIRCUMSTANCES NOT ANTICIPATED WHEN K MADE AND ITS FAIR AND EQUITABLE IN LIGHT OF CIRCUMSTANCES * UCC (Sale of goods)= no consideration needed, only GOOD FAITH **VVVVVVVVVVVVVVV** UNDER COMMON LAW, NOM clause enforceable only if modification is in writing under statute of frauds UCC: * All parties are merchants – NOM clause always enforceable * 1 or more party is nonmerchant – NOM clause in merchant's form must be separately signed by nonmerchant(s) to be enforceable Under the UCC, contract clauses that require modifications to be in writing (i.e., no-oral-modification clauses) are generally enforceable if included in a written and signed contract (as seen here). As a result, any attempt by the parties to modify the contract orally in violation of a no-oral-modification clause is unenforceable. * A NOM clause can be waived by the parties through words or conduct, and the waiver cannot be retracted if a party has materially changed its position in reasonable reliance on the waiver. (like where parties agreed to later delivery date, and party delivers on that date- there is material reliance)

Answer 23

seller delivered something the buyer didnt want; doesnt have to be broken, bad, or defective-- it can be fine, just not what you wanted if buyer receives non-conforming product **on the day you're supposed to get the goods**, the seller has breached but the buyer may : 1. you MAY reject (hold buyer in breach) 2. MAY accept in part 3. Reject in part (up to the buyer, make decision in timely fashion) if you accept/reject in whole or in part then the buyer MUST pay for accepted goods MINUS any damages **but** where there is prompt shipment of non-conforming goods *and* the seller seasonably notifies buyer and offers them as an accomodation IT IS NOT AN ACCEPTANCE FROM THE SELLER BUT, *if* the buyer chooses to accept that accomodation or reject offer, * if they accept,*that* action is considered a counter-offer to purchase the goods as they are (seller did not breach here)

Answer 24

* as long as seller can prove that they can fix it the buyer MUST give seller opportunity to do so (right/opportunity to cure) * as long as they can give you the right goods ON THE CONTRACT DAY OF DELIVERY!

Answer 25

* if non-conforming goods on day you're supposed to receive, but seller has reasonable belief you would accept them anyways, seller has to be given opportunity to cure, as long as he can do it in reasonable amount of time

Answer 26

* in series of deliveries, one non-conforming installment is not a material break of entire k * **unless** that one installment substantially impairs the value of the whole contract * then it is total breach

Answer 27

* prior to k day one party **unequivocally** (absolute) refuses to perform * you can hold person who AR in total breach immediately or wait and see if they will perform on day of k anyways * you can demand assurances * Under the UCC, which governs contracts for the sale of goods a demand for assurances must be made in writing and a reasonable time within which to give adequate assurances is limited to 30 days. * Once a proper demand for assurances is given, the insecure party may suspend performance until adequate assurances are received. ## Footnote similar to rule, but answer choice may say something like: if party repudiated and non-repudiating party is facing a substantial affect of the value of the performance, the non-repudiating party may resort to any appropriate remedy for breach (coin hoarder sold rare coin to collector who promised to also find another coin for her and then he refuses)

Answer 28

* you can demand assurances if the other person does not unequivocally refuse, but they make you nervous about being able to make the deal * if you respond to demand in reasonable amount of time, then they have to wait * if you dont respond in reasonable time, held in breach

Answer 29

sale of goods

Answer 30

personal services/land

Answer 31

when a transaction involves both sale of goods and rendering of services, look to main purpose of entire transaction **exception**: for divisible contracts, when the payment of goods can be easily separated from the payment for services

Answer 32

A contract is divisible if: * the parties' duties can be broken down into at least two corresponding pairs of performances and * those pairs of performances can fairly be regarded as agreed (ie, bargained-for) equivalents. * breaching party can still recover for work he did on one part of k, even though he did not do the other part of k builder agrees to do one bathroom for 30k, the other bathroom for 25k, does the first one and then leaves. breached but still gets 30k since its divisible k.

Answer 33

1. mutual assent (offer and acceptance) 2. consideration 3. no valid defenses

Answer 34

* look to see contract formation under objecitve theory, not subjective theory * as interpreted by a reasonable person * can be **express**, like a contract * can be **implied** in fact: conduct indicates assent/agreement

Answer 35

* contract must have essential terms or else there is no contract, but missing terms for nonessential items can be filled in by gap fillers * when nonessential item missing, court will SUPPLY A REASONABLE TERM UNDER CIRCUMSTANCES * time (Reasonable), place for delivery (seller's place of business), time for payment (when buyer receives goods), the assortment of goods (reasonable cboice of the buyer), and price * UCC can **NOT** fill in gap for quantity or subject matter * * exception: requirement or output contracts, no quantity required. | vagueness is not the same as missing terms.

Answer 36

* no duration, rebuttable presumption it is at will * permanent employment is also at will unless there is proven contrary intention

Answer 37

* return promise is requested * commencement of performance of bilateral contract= promise to render compelte performance

Answer 38

* when offer proposes offeree may accept by performing an act, rather than return promise * for acceptance to be effective, offeree must give seasonable notice of acceptance to offeror if the offeree has reason to know that the offeror will not learn of the acceptance without notice

Answer 39

* offers must be distinguished from invitations to deal * ads generally considered invitations to receive offers from public, unless associated with a stated reward

Answer 40

* person who regularly deals in the types of goods involved in the transaction **or** * by occupation, holds themselves out as having knowledge/skill peculiar to the practices/goods invovled in transaction **or** * any businessperson when the transaction is of a commercial nature

Answer 41

* if offer is for unilateral contract (asking for performance), offeror cannot revoke the offer once the offeree has begun performance * offeree will have reasonable amount of time to complete performance, but cannot be required to complete performance * contract formed when performance is complete

Answer 42

* terminated offer may be revived by the offeror

Answer 43

* silence isnt acceptance unless offer states it will be **or** 1. offeree has reason to believe offer could be accepted by silence, and he was silent with intent to accept offer by silence; **or** 2. because of previous dealings/patterns of behavior, reasonable to believe offeree must notify offeror if offeree intends not to accept

Answer 44

Under UCC, a seller can accept an offer by shipping or promising to ship the ordered goods. Acceptance by shipment is effective immediately and creates a contract with terms identifical to those of offer. Once created, the contract cannot be modified unless both parties agree to modification. If either party breaches, the other party can recover consequential damages (lost profits)

Answer 45

* **minority rule:** contract exists under the terms of the acceptance (which include addiitonal terms) unless 1. both parties merchants 2. the terms materially alter the agreement 2. offer expressly limits the terms 3. offeror objects to new terms within a reasonable time after notice of new terms received * **majority rule:** knock out rule. different terms in offer and acceptance nullify and UCC fills gap. THERE IS STILL A CONTRACT AND A DUTY TO PERFORM UNDER THE ORIGINAL CONTRACT TERMS. * **acceptance based on conduct:** parties fail to make k but act like there is k, onyl terms that both writings agree on become part of k and all other terms supplied by UCC

Answer 46

* a party to a k agrees to accept a performance from the other party that differs from the performance that was promised in the existing contract, in satisfaction of the other party's existing duty * **accord of debt:** when party accepts lesser amount in satisfaction of its monetary claim, consideration for acceptance of lesser amount where: 1. other party honestly disputes claim **or** 2. agrees to forego an asserted defenses **or** 2. payment is of different type than called for under original k (like car instead of money)

Answer 47

* performance of accord agreement; it will discharge both the original k and the accord k * if accord breached by party who has promised a different performance, the non-breaching party can sue on original k **or** under the accord agreement

Answer 48

*** NOT LEGALLY BINDING ** * essentially pledges nothing because it is vague/because promisor can choose whether to honor it

Answer 49

* requirement contract: buyer agrees to buy all that he will require of a product from the other party * output contract: seller agrees to sell all she manufactures of a product to the buyer

Answer 50

1. **promise to pay a debt barred by statute of limitations or bankruptcy**: new promise to pay debt enforceable without any new consideration 2. **promise to perform a voidable duty:** new promise to perform duty that is voidable is enforceable despite absence of consideration, provided new promise is not voidable (15 yo ratifies k when reaching age of majority) 3. **promise to pay benefits received:** when party performs unrequested service of material benefit for another party, performing party can enforce promise of payment after service rendered; does not apply if performing party rendered service without expectation of payment

Answer 51

* nondisclosure is affirmative conduct to conceal a fact, it is the same as asserting a fact does not exist * fraud in factum: fraudulent misrepresentation prevents party from knowing character/essential terms of transaction. k is void. * fraud in inducement: fradulent misrepresentation induce another to enter into k. voidable by affected party.

Answer 52

* improper threat depriving party of meaningful choice * if threat of physical harm: void * if threat of breach of good faith and fair dealing: voidable

Answer 53

voidable by the incapacitated party * infancy (under 18) * mental illness * individual under guardianship

Answer 54

When a contract is made by an infant, it is voidable by the infant but not by the other party. This means that the infant may either disaffirm (void) the contract and avoid any liability under it or choose to hold the adult party to the contract. An exception to the infancy rule exists when the contract is based on necessities. When necessities are furnished to the infant, the infant must pay for them, but the recovery by the person furnishing the necessities is limited to the reasonable value of the services or goods (not the agreed upon price).

Answer 55

When a contract is made by an infant, it is voidable by the infant but not by the other party. This means that the infant may either disaffirm (void) the contract and avoid any liability under it or choose to hold the adult party to the contract. An exception to the infancy rule exists when the contract is based on necessities. When necessities are furnished to the infant, the infant must pay for them, but the recovery by the person furnishing the necessities is limited to the reasonable value of the services or goods (not the agreed upon price).

Answer 56

* person's assent to an offer is inferred solely from the person's conduct ## Footnote example: b joins group walking through tour in downtown. b knows group paid for tour. tour guide can charge b.

Answer 57

when plaintiff confers benefit on a defendant and plaintiff has reasonable expectation of compensation, allowing the defendant to retain benefit without compensating plaintiff would be unjust (UNJUST ENRICHMENT) Such situations occur when: 1. the plaintiff has conferred a "measurable benefit" on the defendant 2. the plaintiff acted without gratuitous intent; and 3. it would be unfair to let the defendant retain the benefit because either the defendant had an opportunity to decline the benefit but knowingly accepted it, or the plaintiff had a reasonable excuse for not giving the defendant such opportunity, usually because of an emergency.

Answer 58

**express warranty:** any promise, affirmation, description, sample part of basis of bargain is express warranty, *unless merely* seller's opinion of value of goods. can be made subsequent to contract for sale. **implied warranty of merchantability:** implied whenever seller is merchant. goods must fit for their ordinary purpose. **implied warranty of fitness for a particular purpose:** implied whenever seller has reason to know buyer has particular use for goods and buyer relying on seller's skill to select the goods. seller does not need to be a merchant

Answer 59

* implied warranty: oral/in writing (if in writing must be conspicuous) * implied warranty of fitness for a particular purpose: make disclaimer in writing and conspicuous * both implied warranties: "as is" language, buyer's inspection of goods, and course of dealing/performance/trade usage

Answer 60

* unexpected event arises that destroys one party's purpose in entering into the k, even if performance of k is not rendered impossible * occurence need not be unforeseeable, just unexpected ## Footnote A contracts with B to rent B’s apartment for one day to get a prime view of a marathon run that will occur on that day. A agrees to pay a price that is far more than the typical rental value of the apartment. The marathon run is canceled because of a terrorist threat. A may be excused from performance under the doctrine of frustration of purpose because her essential purpose in renting the apartment has been frustrated, and the event that arose was not her fault and was completely unexpected.

Answer 61

Under the UCC, a buyer of goods obtains an insurable interest in the goods as soon as the goods are identified to the contract. Identification can be made at any time by the parties' explicit agreement. In the absence of such an agreement, identification occurs: * for goods already existing and identified (parties would have to identify them, like point them out and say i want those) = when the contract is made or * for goods that are not already existing and identified (ie, future goods)= at the earliest of when the goods are shipped, marked, or otherwise designated by the seller.

Answer 62

* Under the UCC, the risk of loss in the absence of a breach generally passes to the buyer when the buyer receives the goods. IF THE BUYER IS IN BREACH, then the risk of loss passes to the buyer to the extent of any deficiency in the seller's insurance coverage. **VVVVVVVVVVVVVVVVVVV** But if the contract requires the seller to deliver the goods through a third-party carrier (e.g., a national delivery service), the risk of loss passes to the buyer at different times depending on whether the contract is a: * **shipment contract** – a contract that does not require delivery at a particular location, in which case the risk of loss passes to the buyer when the goods are delivered to the carrier and a proper contract for their shipment is made or * **destination contract** – a contract that requires delivery at a particular location, in which case the risk of loss passes to the buyer when the goods are delivered at the named location.

Answer 63

* **Primary** (expectation measure): Place nonbreaching party in same position as if contract **had been** performed. Expectation measure includes: 1. Expectation damages: damages that arise naturally and obviously from the breach (see chart) 2. Incidental damages: type of loss anyone would incur from a breach, commercially reasonable expenses incurred by the non-breaching party in UCC Ks (e.g., costs of inspecting, returning, storing, reselling goods) 3. Consequential damages: losses unique/special to this plaintiff * **fallback** (reliance measure): When expectation measure too speculative, place nonbreaching party in same position as if **no contract** had been formed. Reliance measure includes: 1. Reliance damages: foreseeable expenses that the nonbreaching party incurred in reasonable reliance on the promise that the other party would perform (out of pocket expenses) 2. Liquidated damages (stated in k upon breach, can not be punitive like 10x contract price) 3. Restitution: give the plaintiff amount equal to economic benefit that plaintiff occurred ## Footnote Although the nonbreaching party can pursue reliance damages in lieu of **expectation damages**, the nonbreaching party cannot recover both for the same breach. Although a party may be liable for **consequential damages** of the other party to a contract where those damages are foreseeable, a party may eliminate that liability through an agreement with the other party.

Answer 64

* a party to k must avoid/mitigate damages to extent possible * if you do not, it reduces the damages recoverable by non breaching party

Answer 65

* sometimes seller cannot be made whole through resale at contract ffg * entitled to lost profits ## Footnote S, a high-volume maker of personal computers, contracts to sell 100 computers to B for $100,000 (the list price). B subsequently repudiates the contract, and S resells the computers to another customer. S can recover its lost profit (the list price of $100,000 minus its manufacturing cost), as well as any incidental damages from B.

Answer 66

A buyer who enters a contract for the sale of land expects to receive the property (worth its fair market value) in exchange for the contract price. * If the seller breaches by refusing to sell, the buyer can recover for loss of bargain (ie, lost expectation), which amounts to the property's fair market value on the date of the breach minus the contract price.

Answer 67

* Both parties are merchants * One party sends written & signed confirmation * Recipient has reason to know contents * No written objection within 10 days * Enforceable against both parties for quantity confirmed * Recipient's signature not required

Answer 68

* indication that goods are for buyer * Goods are specially manufactured & not sellable in ordinary course of business * Seller substantially began manufacturing or committed to procurement * Enforceable against both parties * No writing required

Answer 69

* One party admits to contract in pleadings or court * Enforceable against that party for quantity admitted * No writing required

Answer 70

* Payment was made & accepted OR goods were delivered & accepted * Enforceable against both parties for quantity paid for/delivered * No writing required

Answer 71

Under the UCC, the entrustment of goods by the owner to someone who sells goods of that kind (i.e., a merchant) gives the merchant the power to convey good title. Good title can be conveyed to a buyer in the ordinary course of business—i.e., someone who buys goods: 1. in good faith 2. without knowledge that the sale violates the owner's rights to the goods and 3. from a merchant in the business of selling goods of that kind.

Answer 72

* Damages awarded to restore to claimant the value of whatever benefit was conferred upon recipient * Prevent unjust enrichment * Reasonable value of work performed or services rendered (ie, cost of recipient obtaining comparable performance) * If applicable, extent to which recipient's property has increased in value or recipient's other interests have been advanced ## Footnote Although expectancy damages normally are awarded in a breach-of-contract action, restitutionary damages are permitted in cases where the nonbreaching party has partially performed a below-market-price contract. Otherwise, the breaching party would profit from its breach. Consequently, the non-breaching party may recover the benefit conferred upon the breaching party as measured by the amount the breaching party would have had to pay to secure the same performance as that rendered by the non-breaching party. so if non-breaching party offered to pave a parking lot at a discounted k price of 220k, breaching party unjustifiably breached k, regular cost of paving is 225k, nonbreaching can get 225k

Answer 73

rarely available, but if used it would be to punish fraud/acts of bad faith/violation of fiduciary duty

Answer 74

if no damages alleged or proved (no substantial loss), nominal damages $1

Answer 75

generally not recoverable by succesful litigant in k unless parties agree otherwise, or law authorizes it

Answer 76

* settling a legal claim can be sufficient consideration, but only if: 1. plaintiff has a good faith belief in the validity of the claim; **or** 2. there is a reason to doubt the validity of the claim due to uncertain law even if later on, found to be no actual valid claim, this agreement is still valid

Answer 77

1. misunderstanding 2. fraud/ misrepresentation/ nondisclosure 3. incapacity 3. mistake 5. duress 6. unconscionability 6. illegality

Answer 78

* arises when each part attaches a different meaning to the same words * no contract (void) * must show: 1. the parties use a material term that is open to two or more reasonable interpretations 2. each side attaches a different meaning to the term; and 3. neither party knows, or should know, of the confusion

Answer 79

**voidable**, adversely affected party can rescind false assertions, concealment, or misstatements about a material fact before K formation or performance must show 1. the misrepresentation was fraudulent (ie, made knowingly or recklessly with intent to induce the other party's assent to the contract) **OR** material (ie, likely to induce a reasonable person's assent) 2. the misrepresentation induced assent to the contract and 3. the adversely affected party justifiably relied on the misrepresentation. ## Footnote woman was frauded in buying car with low odometer reading, then she sold it to friend who bought it and liked the low odometer reading, friend could rescind even though woman sold it to her did not know because it was material and met the other elements

Answer 80

Liability for misrepresentation generally arises when a defendant actively misrepresents a material fact. However, **nondisclosure** of a material fact will also subject a defendant to liability **if the defendant had a duty** to disclose it. This duty arises when the defendant is engaged in a business transaction with a plaintiff who is: * in a fiduciary relationship with the defendant * likely to be misled by the defendant's prior statements or * mistaken about a basic fact of the transaction that the defendant is aware of and can reasonably be expected to disclose.

Answer 81

* unenforceable * but a k entered in furtherance of an illegal act (that is not itself illegal) is enforceable

Answer 82

* ultimate k defense * available if the contract involves some element of unfair surprise * **procedural unconscionability**: defect in the bargaining process itself like hidden term or absence of meaningful choice * **substantive**: a rip off in some term of the k

Answer 83

* created by language in k * must be strictly satisfied unless condition is somehow exused * for satisfaction condition it can be objective or subjective, but can not be done in bad faith

Answer 84

* dying does not normally excuse liability on a k that has been made * ask if there is something special about person perfoming on the k, such that it makes no sense to continue if they die

Answer 85

* if the paying party breaches in a partially completed building k , the paid does not continue working on the job, this ruins mitigation because it runs up the charges * adjust the recovery to take into acocunt the fact builder did not need to finish job * expectation damages= contract price - amount already paid - amount that would be needed to finish the job ## Footnote k price is 100 billion, i paid you 30 billion then repudiate. you expected to build tower for 85 billion but spent only 45 billion. 100b-30b-40b= 30b *Although expectancy damages normally are awarded in a breach-of-contract action, restitutionary damages are permitted in cases where the nonbreaching party has partially performed a below-market-price contract. Otherwise, the breaching party would profit from its breach.*

Answer 86

* the normal measure of expectation damages is cost to finish job * sometimes cost to complete damages will drastically overcompensate plaintiff * dimunition= how much lower is market value of what you fot vs what you wanted * breaching party normally must have acted innocently and unintentionally for DMV damages

Answer 87

* arises when an unpaid seller tries to reclaim goods that were sold on credit when the buyer is insolvent * must show 1. buyer is insolvent at time of receipt of the goods 2. seller must demand return of goods within 10 days of receipt (or within reasonable time if the buyer misrepresented his solvency to the seller in writing within 3 mos before delivery) AND 3. the buyer still has the goods

Answer 88

when parties orally agree on deal, they may reduce agremeent to writing when writing incorrectly reflects oral agreement made, either party may seek reformation from court this is re-writing so that the document correctly reflects oral agreement they made originally reformation is **not** a remedy for an underlying disagreement about the deal itself that results in document reflecting only the understanding of one party, that would be mutual mistake (no k)

Answer 89

*goods in lots* Each lot of goods is sold in separate sale *type of auction* **Reserve** (default type) – auctioneer may withdraw goods prior to completion of sale **No-reserve** (special announcement required) – goods cannot be withdrawn after auctioneer calls for bids unless no bid is received within reasonable time In either type of auction, a bidder has the right to retract (i.e., withdraw) a bid until the auctioneer announces the completion of the sale (e.g., at the fall of the auctioneer's hammer). However, the bidder's retraction will not revive any prior bids. That is because the auctioneer's acknowledgment of a subsequent bid acts as a rejection of a prior bid. **VVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVV** *when seller bids* Winning bidder can avoid sale, or pay price of last good-faith bid, if auctioneer: * knowingly accepts bid by or on behalf of seller or * procures seller's bid to drive up price of goods *Exceptions* – seller can bid: * at forced sale or * if seller gives notice reserving right to bid **VVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVV** *completion of sale* When auctioneer announces end of sale (eg, by fall of hammer) If bid is made contemporaneously with end-of-sale announcement, auctioneer has discretion to continue bidding

mbe contracts Flashcards

(114 cards)