Contracts Schmitz OUTLINE - Fall 05 - Andra

Contracts Schmitz OUTLINE - Fall 05 - Andra - Andra...

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Andra Zeppelin- Contracts Outline- Schmitz- Fall 2005 DOES UCC Apply? (adopted in all states except LA) a. sale of goods (movables @ time of K) b. predominant purpose of K (goods or services) If YES Apply UCC, and complete rules w/ common law If NO common law applies. PART ONE- K Section 1- K Formation- Consideration, Offer, Acceptance Consideration- R 2- 71 (2)-inducement and (3) act or forbearance K “Bargain for exchange” (act or forbearance) Consideration – Bargain + Benefit to promissor OR Detriment to promisee Performance sought by promissor in exchange for his promise and given in exchange for that promise. INDUCEMENT is between promise and performance. Act, forbearance, creation, modification, or destruction of a legal relation. Hammer. Performance may be given to the promissor or to some other person. Good faith can be enough obligation to provide consideration. No Mutuality No Consideration: -Illusory Promise- performance must be made in exchange of benefit- Hayes would have retired either way. - No consideration if only one party promises to perform - An unrestricted cancellation for one party shows lack of mutuality no cons. - Mutuality exists when parties have the INTENT to perform. (Infer intent from…) - Requirements K- one party agrees to supply as much as the other needs and the other agrees to purchase exclusively from that party- good faith is cons./ UCC 2-306 in exclusive promise to deal, both must perform obligations in good faith/ req. K can be implied. Gratuitous promises are not enforceable- Cash v. Benward If benefit will be conferred whether performance happens or not no consideration Ricketts v. Scothorn (grandpa gave $ whether she quit or not) Hammer v. Sidway - nephew forbore smoking in reliance of uncle’s promise. Forbearance + inducement. What the harm or benefit is does NOT matter. Cash v. Benward - no inducement- secretary offered a “social nicety”- but case could be decided different if inducement came from a third party (insurance comp- commission) GRATUITOUS PROMISE. Kirksey v. Kirksey - promise of brother-in-law was a gift no consideration no K. Owner did NOT benefit. Hill v . Chuborn - Hill applied for insurance but was not notified of cancellation. Consideration was received- Hill sent check and gave company chance to solicit bids. Newberger v. Rifkind - offer of stock option- consideration is continued employment- trying to cash stock options, employee continues employment relying on the stock options. S UBSTITUTES for Consideration Moral obligation - R 2- 86 – read it!- IF promissor received material benefit. Webb v. McGowin - Moral obl. is sufficient consideration to support a subsequent promise to pay where the promissor has received a material benefit. Material benefit + promise to pay. Consideration is M.O+ benefit. BUT
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This note was uploaded on 02/12/2008 for the course LAW 5121 taught by Professor Staff during the Fall '06 term at Colorado.

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Contracts Schmitz OUTLINE - Fall 05 - Andra - Andra...

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