FSP Contracts

  1. What are the requirements for a valid K?
    • (1) offer
    • (2) acceptance
    • (3) consideration
    • (4) legal capacity
    • (5) legal objective
  2. What are the 2 requirements for an offer?
    • (1) outward manifestation
    • (2) power of acceptance
  3. What is the general rule regarding offers and auctions?
    auctioneer is inviting offers and bids are the offers UNLESS auction is w/o reserve
  4. An offer can be revoked in what 4 ways?
    • lapse of time
    • death or incapacity of either party
    • revocation by OFR
    • rejection by OFE
  5. When is an OFR free to revoke an offer?
    at any time for any reason prior to acceptance if effectively communicated
  6. What is the Functional Equivalents Rule?
    If offer made by ad or other general notification then power of acceptance terminated when notice of revocation communicated in the same or equivalent manner and no better means of notification is reasonably available
  7. What are the 2 ways to prevent revocation of an offer?
    • option K
    • firm offer
  8. What are the 3 elements for an enforceable option K?
    • offer
    • subsidiary promise to keep offer open
    • valid mechanism for securing enforcement
  9. What is required for an option K to be valid in NC?
    express promise or agreement to remain open for specified period of time + consideration
  10. What are the requirements for a firm offer?
    • b/t merchants
    • signed writing
    • expressly states by its terms that it will be held open
    • doesn't require consideration
  11. What is an offer to enter a unilateral K seeking in return?
  12. Under a unilateral K when does the OFR become bound?
    • when OFE completes performance
    • modern rule - once OFE begins performance, an option K is created and OFR may not revoke
  13. What is the OFR looking for in a bilateral K?
  14. What are the 2 general requirements to constitute effective acceptance?
    • mirror image rule - mirror the terms of the offer
    • must be communicated to OFR
  15. What is the result of an acceptance containing any changes, additions, or subtractions from the terms in the offer?
    constitutes a counteroffer thereby rejecting the offer and making a new one
  16. When can OFE silence constitute acceptance?
    • (1) OFE takes benefit knowing OFR intention
    • (2) OFE has given OFR reason to believe silence = acceptance
    • (3) previous dealings or other circumstances reasonable that OFE should notify OFR if doesn't intend to accept
  17. Under the UCC additional terms become part of the K b/t merchants unless what?
    • (1) offer expressly limits acceptance to the terms of the offer
    • (2) OFR objects w/in reasonable time
    • (3) materially alters the K
  18. How are additional and different terms treated in consumer X under the UCC?
    as mere proposals for addition to the K
  19. How does the UCC treat different terms b/t merchants?
    • majority - employs the knockout rule
    • minority - mere proposals for alteration that OFR is free to accept or reject
  20. What are the different forms consideration can take?
    • return promise to do something
    • return promise to refrain from doing something
    • actual doing of some act
    • refraining from doing some act
  21. What are the 2 basic elements of consideration?
    • (1) legal detriment
    • (2) bargained-for exchange
  22. How does NC view a seal?
    • substitute for consideration
    • presumptive proof of consideration that can be rebutted by C&C
    • not defense to claim of lack of consideration in equitable action
    • UCC sales K - no effect, doesn't substitute for consideration
  23. What is meant by insufficient consideration?
    promise not supported by consideration or legally insufficient
  24. What is failure of consideration?
    • breach
    • hasn't performed in accordance with his promise
  25. What is an illusory promise?
    • promise to perform that leaves performance to the discretion of the promising party
    • doesn't constitute consideration
  26. Does a condition on a gratuitous promise satisfy the consideration requirement?
  27. 4 requirements for promissory estoppel?
    • promise
    • foreseeable reliance
    • actual reliance
    • injustice w/o enforcement
  28. What are the requirements for enforceability under SoF?
    writing signed by the party against whom enforcement is sought
  29. What are the six categories of agreement governed by SoF
    • marriage
    • year performance
    • land sale K
    • executor
    • guarantee
    • sale of goods > $500
  30. What types of agreements does the NC SoF cover?
    • sales of goods > $500
    • leases in excess of 3 years
    • transfers of real property
  31. What other types of agreements, other than those covered by NC SoF, require a writing to be enforceable?
    • surety
    • restrictions on employment
    • reaffirmation of debt after SoL or bankruptcy
    • commercial loan commitment > $50K
    • payment of excessive interest rates
    • securities
    • SH voting trusts
    • sale of business opportunity
    • entertainment K
    • guarantees from health care providers
    • assignment of EE wages
  32. Writing isn't required in NC for what kinds of K?
    • trust in land
    • employing real estate brokers
    • consideration of marriage
    • can't be performed w/in 1 year
  33. What must be included in the writing to satisfy the SoF?
    • identity of parties
    • nature and subject matter of the K
    • essential terms of the unperformed promises in the agreement
  34. What is the merchant's confirmation exception to the UCC SoF?
    signed written confirmation sent by one party to the other will defeat a claim by receiving party as well as by the sending party unless certain conditions are met
  35. What are the exceptions to the UCC SoF?
    • part performance
    • merchant confirmation
    • specially manufactured goods
    • admission in court or other similar proceeding
  36. What are the PER exceptions?
    • fraud
    • mistake
    • illegality
    • duress
    • partial integration
    • conditions precedent
  37. What are the S obligations under the UCC in carrier and non-carrier cases?
    • carrier - put the goods in the possession of a carrier and make appropriate arrangements for shipment to B
    • non-carrier - obligation to tender delivery
  38. What is S obligation in a destination K?
    tender goods at particular destination
  39. What are B obligations under UCC?
    • B tender of payment condition to S duty to tender & complete delivery
    • right to inspect goods
  40. When does RoL shift to B in carrier cases?
    when S has delivered goods to carrier, made appropriate K for shipment, and seasonably notified B
  41. When does RoL shift to B in non-carrier cases?
    • S/M - B takes possession
    • S/nonM - S tenders the goods
  42. What is the preexisting duty rule?
    POR can't provide consideration where that consideration is a duty the POR is already obligated to perform
  43. What is the effect of breach on RoL if S breaches by making NC tender?
    remains on S until cure or acceptance
  44. What is the effect of breach on RoL if B rightfully revokes acceptance?
    B may treat RoL as having been on the S from the beginning (deficiency of insurance coverage)
  45. What is the effect of breach on RoL if B breaches before the RoL passes to the B?
    S may treat the RoL as resting on the B for a commercially reasonable time (deficiency of insurance coverage)
  46. Is consideration required to support a modification of K?
    • UCC - no
    • non-UCC - yes
  47. What is the effect of a K modification in NC?
    production of a new agreement which must contain all essential elements of a K
  48. What are the possible excuses to performance of K?
    • mistake
    • impossibility
    • impracticability
    • frustration of purpose
    • mutual rescission
    • accord and satisfaction
  49. What is a promissory condition?
    performance conditioned on occurrence of the promised performance by the other party
  50. What is a pure condition?
    K performance conditioned on occurence of events beyond control of either party
  51. Where a party's performance under the K is subject to an express condition, what does the failure of that condition do?
    discharges the party's obligation to perform
  52. When will a conditioned be excused?
    • waiver
    • BF conduct by beneficiary of condition
  53. If there is a material breach, what does that do to the obligations and rights of the aggreived party?
    • free to walk away from his own obligations
    • sue the breaching party for damages
  54. What is the result if the party has rendered substantial performance of the condition regarding obligations/rights of aggreived party?
    doesn't discharge performance obligations
  55. To what kind of K does the doctrine of substantial performance apply?
    • K for services
    • construction K
  56. What is the perfect tender rule under UCC?
    every K term is treated as an express condition that must be enforced exactly...any deviation constitutes a breach
  57. What are the B options if S fails to make perfect tender under UCC?
    • accept the goods
    • reject the goods
    • accept part and reject part
    • must pay for what he accepts and seek damages for S imperfect tender
  58. What are the defenses to breach of K?
    • incapacity
    • misrepresentation
    • public policy
  59. What are the remedies available for breach of K?
    • expectation interest
    • restitutionary interest
    • specific performance
    • negative injunctions
    • liquidated damages
    • mental anguish (NC)
  60. What are expectation damages?
    put the aggrieved party where he would be if the other party had fully and properly performed the K
  61. What are reliance damages?
    amount expended by party to perform the K
  62. What are restitutionary damages?
    value of the benefits conferred on breaching party by aggrieved party during the course of conduct are recoverable
  63. What are negative injunctions?
    orders prohibiting breaching party from taking particular action
  64. What are the considerations in NC for validity of CNC?
    • reasonableness of geographic scope
    • duration
    • valuable consideration
    • nec to protect legitimate interests
    • doesn't interfere with public interest
  65. What is the 3 prong test for determining whether caluse in particular K is a valid liquidation clause?
    • intention
    • reasonable in relation to anticipated harm
    • reasonable in relation to losses that actually occurred
  66. In NC, when can mental anguish be recovered in breach of K action?
    • K not concerned with trade or commerce
    • benefits not pecuniary
    • related to dignity, mental concern, or solitude or sensibilities
  67. When do an intended beneficiaries right vest under the K?
    • brings suit on the matter
    • changes her position in justifiable reliance
    • manifests assent at request of either party
    • under express term of the K provide for such vesting
  68. When is a right not assignable?
    would materially alter the risks to or obligations of the other party to the K
  69. What does NC require for novation?
    • previous valid agreement
    • agreement of all parties
    • extinguishment of old K
    • validity of new K
    • - parties' intent governs
  70. What are the exceptions to general rule that all obligations can be delegated?
    • performance is personal
    • OR
    • K prohibits it (fully enforceable)
  71. What is required to make an effective assignment?
    • (1) manifest an intention to make a present transfer
    • (2) w/o further action by owner or obligor
  72. Does a delegation relieve the delegator from his obligations under the K?
  73. What are the liabilities of delegatee?
    liable to delegator and obligee for nonperformance
  74. What is an assignment>?
    transfer of a right to receive a performance under a K
  75. What is a delegation?
    3P agrees to satisfy a performance obligation owed by one of the parties to K
Card Set
FSP Contracts
bar points contracts