3)Rights of good faith purchaser in entrustment
final element of a contract
|Types of Conditions||
|Third party beneficiary - UCC applicable:||
|Offer v. Preliminary Negotiations/Invitations to receive offers||
Preliminary negotiations/invitations to receive offers are generally NOT OFFERS
What is a requirements contract?What is an output contract?
business or person who deals regularly in the sale of goods or who has specialized knowledge of goods
not generally offers to sell, offers to begin negotiations UNLESS:- specific terms: if it contains a particular number then it probably is specific enough to be an offer- words of commitment: these suggest an offer
performance is still to be completed
a + os = aos
a + los
A clause prohibiting assignment of "the contract" will be construed as barring only delegation of the assignor's duties. A clause prohibiting assignment of contractual rights generally doesn't bar assignment, but merely gives the obligor the right to sue for damages. However, if the contract provides that attempts to assign will be void, the parties can bar assignment. Also, if the assignee has notice of the nonassignment clause, an assignment will be ineffective.
|Definition of a contract?||
A legally enforceable agreement.
If contract 2-207 1
Analysis will go to 2-207 2
AND if merchants: a,b,c
If not contract (counter offer) under 2-207 1
Analysis will go to 2-207 3
○ All elements agreed remain
○ All elements disagreed on are replaced by UCC
Many people believe that the news is baised in favor of ____ point of view.
Offer & AcceptanceThe same bargain at the same time"A meeting of the minds"
|Notice of acceptance may either be verbal or?||
In some instances, a seller who fails to make a perfect tender will be given a second chance, an option for curing.
Note that every seller does not have the opportunity to “cure” and that the buyer cannot compel the seller to cure
1)Seller's reasonable ground to believe would be “ok”: in very limited situations, a seller has an option of curing even after the contract delivery date. The statutory test is whether the seller has reasonable grounds for believing that improper tender would be acceptable, perhaps with a money allowance. Look for information in the question about PRIOR DEALS between that buyer and seller with such an allowance
2)Time for performance has not yet expired
|Parol Evidence Rule||
Evidence of prior or contemporaneous negotiations and agreements that contradict, modify, or vary contractual terms is inadmissible if the written contract is intended as a complete and final expression of the parties. A "merger clause" (recital that the contract is complete on its face) strengthens the presumption that the written document is final.
Exceptions - Evidence of the following is admissible:
(1) formation defects;
(2) existence of a condition precedent to a contract;
(3) parties' intent regarding ambiguous terms;
(4) consideration problems;
(5) prior valid agreement which (as by mistake) is incorrectly reflected in the writing;
(6) collateral agreement if it does not contradict or vary the main contract and if it is not so closely connected as to be part of the main contract; and
(7) subsequent modification.
- Mistake re: basic assumption upon which contract made
- Has material adverse effect on agreed-upon exchange
- Adversely affected party did not assume risk (party knows assumption is doubtful)
- Mistakes in value not generally a good defense bc presumes parties assume risk.
|Acceptance: Mailbox Rule?||
1. all communications OTHER THAN ACCEPTANCE are effective only when received.2. acceptance is GENERALLY effective when mailed.3. if offeree sends a REJECTION and then an acceptance the first to arrive is effective4. you can't use the mailbox rule to meet an option deadline.
|Contract is Void||
Adjudicated Mentally Insane, Fraud in the Execution/Factum, Physical Duress
the place that goods are required to be delivered
|Common Law Contract Law||
In most jurisdictions, contract law is not codified, and thus the primary source of general contract law is caselaw
|At equity the remedy of _________________is appropriate if the subject matter of the contract is _________________and__________________||
specific performance; unique; damages
|Mailbox Rule R2C 63||
1)Bilateral K: acceptance is effective when dispatched (deposited in mailbox- post marked midnight same day)
2) Option K: not operative until received by offeror
- this is a default rule and can be changed by the terms of the itself, "the offeror is master of the offer."
|Requirements for Effective Delegation||
Delegator must manifest a present intention to make a delegation. There are no special formalities to be complied with. It may be written or oral.
If sale induced by fraud, S can rescind sale and recover goods.
Exception if defrauding buyer then sells to GFP for value.
|Options are irrevocable.||
What is the UCC Firm Offer Rule?
A condition that, if it occurs, will bring something else to an end; an event the existence of which, by agreement of the parties, discharges a duty of performance that has arisen.
|Anticipatory repudiation - UCC applicable:||
2-609 - right to adequate assurances2-610 - anticipatory repudiation2-611 - retraction
|R2C 39 Counter-offer||
counter-offer is an offer made by an offeree to his offeror relating to the same matter as the original offer and proposing a substituted bargain differing from the original offer
2) an offeree's POA is terminated by his making of a counter-offer, unless the offeror has manifested a contrary intention or unless the counter-offer manifests a contrary intention of the offeree
|Limitation of Remedies in K||
Does not eliminate warranty, simply limits or sets recovery for any breach of warranty
1)Possible to limit remedies even for express warranties
2)General test is unconscionability
3)Prima facie unconscionable if breach of warranty on consumer goods causes personal injury
|Who may accept?||
The person to whom the offer was addressed has the power of acceptance, as does a member of the class to whom the offer was addressed. Although right to accept most contracts cannot be assigned, option contracts supported by consideration can be assigned to a "new" offeree.
|Timeliness of performance||
Not a material breach if perform w/in r/able time of date stated in k unless nature of K makes timely performance essential
|Vocabulary of parol evidence:1. integration2. partial integration3. complete integration4. merger clause5. parol evidence6. reformation||
1. integration - WRITTEN agreement that court finds is the FINAL agreement, triggers the parol evidence rule2. partial integration - WRITTEN and FINAL, but NOT COMPLETE(usually wrong answer)3. complete integration - WRITTEN and FINAL and COMPLETE (usually wrong answer)4. merger clause - k clause such as 'this is the complete and final agreement'; is pursuasive but not conclusive5. parol evidence - words of a party (or parties) before integration; oral or written6. reformation - equitable action to modify written k to reflect actual agreement
|Communication of Revocation||
An offer may be revoked by any words that communicate to the offeree that the offeror no longer intends to be bound. An offer is also revoked by action that is inconsistent with the intent to be bound once the offeree learns of such inconsistent action
Lefkowitz (fur coats)
Advertisement Exception #2- Offer
1st come, 1st served (convert as to offer)
|A written promise to satisfy an obligation for which there is legal defense||
Is enforceable without consideration (consideration substitute)
|Modification by Parties' Agreement||
- Binding w/o consideration if in GF
- Writing prohibiting oral modifcation is valid/binding (unless detrimental reliance)
- Waiver of condition by words, conduct. No consideration req'd except in installment Ks. Beneficiary of waived condition may insist on strict compliance in future w/notice
|what is expressed warranty||
a spoken or written promise by the seller while bargaining
|(primarily) sales of goods||
How to determine whether UCC Art. 2 applies?
|If offeror has not indicated when the offer lapses, when does it laps||
end of a reasonable time
|Implied warranty for fitness for a particular purposes||
1. buyer has particular purpose
2. buyer is relying on seller to select suitable goods
3. seller has reason to know of purpose and reliance
Warranty: goods fit for particular purpose
|Identification of Goods||
- B has i nterest in goods under K once they are ID'd.
- Specific, ascertained, and existing goods, ID'd at time of K
- Crops to be harvested w/in 12 months and unborn animals, ID'd when planted or conceived
- Other goods - ID'd when shipped, marked, or otherwise designated by S
|1. beneficiary can recover from promisor2. promisee can recover from promisor3. beneficiary can't recover from promisee -- EXCEPT a creditor beneficiary can recover from promisee on pre-existing debt||
What defenses can a promisor being sued by a 3rd party beneficiary raise?
|Third Element of a Valid Contract||
This means that each side must be clear as to the essential details, rights, and obligations of the contract. Putting the deal down on paper prior to signing it goes A LONG way to avoid future misunderstandings and disputes. Meeting of the minds sometimes can be expressed by words spoken or gestures made or can be inferred from the surrounding circumstances.
|If the Offeree starts to Perform (Acceptance)||
Start of performance is acceptance of an offer to enter into a bilateral contract but is not acceptance of an offer to enter into a unilateral contract
1)Bilateral: Offer is open as method of acceptance so start of performance is acceptance (treated as an implied promise)
2)Unilateral: Offers require “performance” for acceptance. (Performance means completion of performance. Start of performance is not an acceptance)
|Void, voidable, and unenforceable Kd||
Void = w/o any legal effect from the beginning
Voidable = a party may elect to void or ratify
Unenforceable = Otherwise valid K but a defense extraneous to formation exists
|1. Performance or2. a Writing or3. a Judicial Admission||
When does performance satisfy the SOF?
|third party beneficiarywho result of collateral agreement||
person who is not a party to a contract but has legal rights to enforce the contract or share in proceeds because the contract was made for the third party's benefit.
S and B enter into an agreement that provides that B will buy S’s house for $100,000 if it is appraised at $100,000.
Is there a contract?
If the house is only appraised at $75,000, does B have to buy the house?
If the house is only appraised at $75,0
No duty to buy house
No recovery of damages for breach of K
|When is a revocation sent through the mail effective?||
Offer is not terminated until received by the offeree.
|*only apply on bar exam if you are told to||
Measure of monetary damages for breach of contract - protection of restitution interest?
|When do you apply UCC Article 2A?||
Lease of goods. (Will not be on essay exams.)