1. UCC
    Applies to the sale of goods, goods are movable items identified at the time of contracting.
  2. Merchants
    • Those who regularly deal in the terms for sale or holds themselves out as experts in the field
    • *merchants have a duty of honesty and confirming to reasonable commercial standards.
  3. Offer
    • Outward manifestation of present contractual intent definite and certain terms communicated to the offeree
    • *At common law the terms are quantity, time, identity of the parties, price and subject matter
    • *Under UCC, the required term is quantity
  4. Option Contract
    Held open for a certain period of time, must have consideration
  5. Merchants firm offer
    An offer by a merchant signed in writing to keep open for the stated time of reasonable time, not to exceed 3 months
  6. Acceptance
    • At common law, unequivocal assent to the terms of an offer
    • Under UCC, the acceptance can contain additional or different terms provided it is a definite and seasonal expression of acceptance
    • *prompt shipment constitute an acceptance.
  7. 2-207 Acceptance-Additional Terms
    • Additional terms in an acceptance will apply between merchants unless:
    • 1. The original offer conditions acceptance on the terms of the offer only
    • 2. The offeror object to new or additional terms with in a reasonable time
    • 3. Terms materially change the original offer
  8. Consideration
    Exists when there is a bargained for exchange of promises, incurs legal detriment
  9. Promissory Estoppel (substitute for consideration)
    • Offer is made, reasonable reliance by offeree, offeror changed his position, offeror will be barred from raising lack of consideration as a defense
    • “Foreseeable detrimental reliance”
  10. Statue of Frauds
    • The statue of frauds states that all contracts for (M.R.D.O.G.) mush be in writing (Marriage, Real Property, Debt of Another, One Year, Goods $500+)
    • Exceptions (S.P.M.F.R) sufficient memo, part performance, main purpose, full performance by one party and receipt of goods
    • UCC-Sufficient Memo/Written Confirmation
    • UCC provides that if a merchant send a written confirmation of a contract to another, the other merchant is bound and is held to have signed unless he objects within 10 days following receipt of the confirmation.
  11. Parol Evidence Rule
    When parties have entered into a written agreement, fully integrated, the court will not allow extrinsic evidence to contradict the terms of the agreement unless an exception found
  12. Parol Evidence Exceptions
    Lack of consideration/ fraud/ Duress/ mistake/ ambigutity/ establish collateral agreements/ establish subsequent agreements/ separate consideration/ existence of condition precedent to legal effectiveness of written agreement
  13. Rights Third Party Beneficiary
    may not be modified or discharged after the beneficiary’s rights vest. The beneficiary’s rights will vest if she relies on the promise or manifest assent to the promise at the request of the promisor or promisee.
  14. Third Party Beneficiary Approach
    Define:a third party beneficiary contract is one wherein performance by the promisor will benefit a third party/Privity/Intent to Benefit/Classification/vesting (notice and assent)/defenses
  15. Perfect Tender Rule-UCC
    When a delivery under a contract for the sale of goods fail to conform in any respect to the contract, the buyer has the right to reject the delivery. The seller, however, must be given an opportunity to cure the defective deliver if the time for performance has not yet expired.
  16. Oral Condition Precedent
    Oral statement made prior to the signing of the contract that something will or will not be done prior to the contract going into effect
  17. Misrepresentation
    False statement of material fact to induce reliance, makes contract voidable by innocent party
  18. Mistake
    • Mutual=no contract
    • Unilateral (recision)
    • Offeree doesn’t know=contract
    • If offeree knows=no contract
  19. Mistake-Scrivener’s Error
    Where parties make an oral agreement which, when reduce to a writing, is mistranscribed, the aggrieved party is entitles to reformation so that the writing corresponds to the oral agreement.
  20. Assignment
    • (rights)
    • Act by one of the contracting parties transferring a right to a third party after the contract has been formed
  21. Delegation
    • (duties)
    • Act by one of the contracting parties transferring a duty to a 3rd party after the contact has been formed
  22. Assignment/Delegation Approach
    • Define/privity exception/right assignable/valid present assignment/ effect of valid assignment/defenses
  23. Condition
    A condition is an event or act the happening of which creates or extinguishes an absolute duty to perform
  24. Condition Precedent
    A conditioning event must occur before inorder to create an absolute duty to perform
  25. Condition concurrent
    • (during)
    • Mutually dependent performances must be rendered simultaneously
  26. Condition Subsequent
    • (after)
    • Occurrence of a condition extinguishes a previously absolute duty to perform
  27. Satisfied Conditions
    Complete Performance, substantial performance or divisibility: a contract with may be separated
  28. Conditions Excused
    • (Swap Dive)
    • Substantial Performance, Waiver, Anticipatory Repudiation, Prevention, Divisibility, Impossibility of performance, voluntary disablement (anticipatory rep through conduct), estoppel
  29. Conditions Discharged
    • Impossibility of performance/modification/frustration of purposes/Occurrence of condition subsequent/ Rescission/ Substituted Contract/ Accord and satisfaction/ notation/ defenses to formations/ Impracticability
  30. Waiver
    • Voluntary relinquishment of right
    • Ex: acceptance of defective performance
  31. Anticipatory Repudiation
    • Language or conduct indicating unwillingness to perform a legal duty before that duty is due.
    • If no party had performed=sue now
    • If one party has fully performed, must wait until time of performance to sue.
  32. Voluntary Disablement
    Anticipatory repudiation through conduct.
  33. Impossibility of performance
    Impossible to perform by anyone, unforeseeable at the time of contracting
  34. Modification
    • At common law, change in the terms of the original contract requiring mutual assent and consideration
    • Under the ucc, no consideration needed, only good faith
  35. Frustration of purpose
    Due to unforeseeable event value of the contract (by both parties) is totally destroyed
  36. Substitution contract
    • Second separate contract that alters first contract
    • *requires new consideration or detrimental reliance
  37. Accord and Satisfaction
    • Accord-executory agreement intended to compromise an existing obligation
    • Satisfaction-performance of the accord
  38. Impracticability
    Event renders performance commercially impossible (10 times rule)
  39. Breach
    • Unjustified failure to perform an absolute duty
    • Major: Essence of the bargain, excuses injured party counter performance and allows rights to damages
    • Minor: requires continued performance by injured party and a suit for damages for defective performance
  40. Rescind
    to cancel a contract, putting the parties back to the position as if the contract had not existed.
  41. Rescission
    • Mutual agreement to terminate contract
    • *look for unilateral mistake
  42. Specific performance
    • Equitable remedy that forces other party to perform
    • *cant be for work (slavery)
  43. Gerneral Damages
    • “benefit of the bargain rule”
    • Plantiff’s expected interest in the contract
  44. Special Damages
    • “lost profits”
    • Hadley v. Baxendale, Those damages that are foreseeable at time of contract and a probable result of the breach of those that naturally flow from the breach.
    • *foreseeable, reasonably certain, unaviodable
  45. Liquidated damages
    Provisions in contracts which set the amount of damages in advance in event of breach if actual damages would be difficult to ascertain must be tailored to the circumstances of the contract.
  46. Reliance Damages
    General and special unavailable, p may seek out of pocket damages
  47. Restitution
    Put parties in the position if contract had never been formed. D return to P any benefit D has received, used to prevent unjust enrichment
  48. Ambiguity
    • Terms of offer open to multiple interpretations
    • 1. both parties have reason to know of ambiguity=no contract
    • 2.neither party knew= no contract
    • 3. 1 party knows/had reason to know, the law will favor an interpretation according to the uniformed party
  49. Quasi-Contract Action
    • Breach party can recover the reasonable value of a benefit conferred onto the non-breaking party if
    • 1) P has conferred a benefit on D
    • 2) P had a reasonable expectation of being paid
    • 3) Benefits were conferred at the request of the D
    • 4) 4) D would be unjustly enriched if it retained the benefits without compensation
  50. Valid Contract
    • Mutual assent (offer and acceptance)
    • Consideration (bargained for legal detriment) or a substitute; and
    • No defenses to formation
  51. Misrepresentation
    → voidable K. Look for false assertion of facts or concealment of facts that induces the K. No requirement of fraud.
  52. Duress
    (physical or economic) → voidable K. Look for “bad guy” – improper threat and “vulnerable guy” – no reasonable alternative.
  53. Absence of Consideration
    if promises exchanged at the formation stage lack elements of bargain or legal detriment → no K exists
  54. Illegality
    • 1. Illegal subject matter → K is void;
    • 2. Legal subject matter, but illegal purpose → K is enforceable only by the person who did not know of the illegal purpose.
  55. Buyers remedies prior to accptance
    • a. cancel
    • b. recover k price paid and
    • -cover by purchasing substitute goods and receive damages for the difference between the cost of to cover and K price plus General and Special Damages
    • -Recover damages difference market price and K price
    • c. specific performance/replevin
  56. Buyers remedies after acceptance
    • a. B pays for contract price less damages for defective goods
    • b. B notify seller of deduction in K price. Measure of damages is the difference between the value of goods accepted and the value if conformed to K plus General and Special Damages.
  57. Sellers remedies prior to acceptance
    • a. Cancel K
    • b. Withhold delivery
    • c. Stop goods in transit
    • D. resell and recover damages
  58. Sellers Remedies after acceptance
    • A. Action for price plus special damages for goods accepted by buyer
    • B. Reclamation of goods used if buyer is insolvent.
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