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SELECT TOPICS - Contracts

Terms in this set (35)

Contracts Mental Checklist (10)?
WFDDTCCBER
WFDDTCCBER
1) What law applies?
2) Formation
3) Defenses to formation
4) Defenses to enforcement
5) Third Party Benef./Assignees
6) Construction - Parol Evidence?
7) Conditions
8) Breach
9) Excuses/Discharge
10) Remedies
Contracts - Formation Checklist (6)
ORACRC
ORACRC
1) Offer
2) Revocation
3) Acceptance
4) Counter Offer/Conditional Acceptance
5) Rejection
6) Consideration
Sub Element - Offer (3)
PEC
PEC
1) Promise, undertaking, or commitment to enter into a K (INTENT)
2) Essential terms are certain and definite enough for a court to enforce them.
3) Communicated to the offer'ee
Sub Element - Revocation
TDRR
TDRR
Terminates the power of acceptance.
Direct and indirect revocation
Revocation @ Will
Revocation Sub Element - Revocation @ Will is NOT allowed when:
Consideration given by O'ee

Merchant's firm offer-limited to three months (UCC)

Detrimental reliance
Contracts - Defenses to Formation (5)
EMFII
EMFII
1) Exists at the time of formation
2) Mistake
3) Fraud
4) Illegality
5) Incapacity
Contracts - Def.s to Enforcement (2)
1) Statute of Frauds (SoF)
2) Unconscionable K
Def.s to Enforcement Sub Element - SoF (4)
Contracts must be in writing IF:
1) A promise to pay the debt of another
2) Any interest in Land (deeds, leases, easements, deeds of trust, etc)
3) K cannot be performed within 1 year (date is more than 1 year out)
4) Sale of goods of $500 or more (UCC)
SoF Exceptions (3)
1) Admission
2) Full performance if K is for goods/services

3) If K 4 real property, then any 2of3:
a) performance by payment (whole or part),
b) Possession
c) Making valuable improvements
Contracts - Construction
Parole Evidence Rule (PER)
Parole Evidence Rule (PER)
Where the parties express their agreement in writing, with the intent that it embodies the full and final expression of their bargain, any other expressions, written or oral, made prior to the writing, and any oral expressions made, are inadmissible to vary the terms of the writing.

UCC - If no "Merger Clause" (boilerplate), consistent additional terms?
PER - Modification
If SUBSEQUENT expression or agreement that varies terms then:
1) Under Common Law-requires additional consideration
2) Under UCC-no consideration required if modifications made in good faith

*BUT look at whether the modification triggers the SoF
Contracts - Condition (v. Promise)
CONDITIONS that occur lead to a duty to perform, and failure to perform that duty is a breach. Failure of condition excuses performance so there is no breach.

CONDITION - event, other than the passage of time, that will extinguish, modify, limit or create a duty to perform.

PROMISES - commitments to do or refrain from doing something.
Types of Conditions (3)
1) Precedent
2) Subsequent
3) Express v. Constructive
Contracts - Breach
A breach occurs when a promisor has a duty and fails to perform it.
Minor Breach v. Material Breach
Did obligee obtain substantial benefit of the bargain despite the defective performance?

YES? A material breach discharging duty to perform.

NO? Minor breach. Non-breaching party must still perform.
Breach - Anticipatory Repudiation
Party to K clearly informs the other party before the due date of performance they do not intend to perform.

Other party is entitled to treat the anticipatory repudiation as a breach of the K, and immediately sue.
Contracts - Excuses / Discharge
1) Implied covenant of good faith & fair dealing (ICGF&FD)
2) Discharge
ICGF&FD
Exists in every K requiring both parties do nothing to prevent performance by other party.

Employment K? Breached by termination for refusal to do illegal act

Insurance K? Bad faith denial of coverage
Discharge
IIFAW
IIFAW
1) Impossibility - objective (no one can perform)
2) Impracticability - extreme/unreasonable difficulty/expense; could not be anticipated
3) Frustration of Purpose - destruction of object of contract
4) Accord and satisfaction - agreement to accept something different + consideration = performance of accord = satisfaction
5) Waiver
Contracts - Remedies (2)
1) Legal Remedies
2) Equitable Remedies
Legal Remedies
BCRNL
BCRNL
1) Benefit of the bargain (expectancy)-Contract v. Market price
2) Consequential/Future, including lost profits. Analysis: a) causal ("But for"), b) Foreseeable (at formation), c) certain, d) unavoidable? then reasonable duty to mitigate
3) Reliance - Where other damages difficult to calculate: can be recovered even if no K completed (enforcement of promise-Promissory Estoppel or detrimental reliance)
4) Nominal damages
5) Liquidated damages - agreed upon damages in the K; reasonably forecast
UCC Legal Remedies
1) Damages: Perfect Tender Rule. Remedies? Benefit of the bargain/cover/warranty

2) Replevin (delivery of the goods)
Equitable Remedies
1) Specific Performance
2) Rescission
3) Reformation
Equitable Remedies - Specific Performance?
Requires:
1) Valid K
2) All conditions met
3) inadequate legal remedy (goods are unique)
4) Feasible court supervision (personal services Ks NOT supervisable)
Provisional Remedies in Aid of Specific Performance
TRO/Preliminary Injunction:
1) a reasonable likelihood of success on the merits
2) a threat of irreparable harm if the injunction is not granted
3) a balancing of the hardships in Ps favor

In addition, to obtain a TRO, there is a special showing required of IMMEDIATE IRREPARABLE HARM if TRO is not granted immediately.
Equitable Remedies - Rescission (3)
1) Mutual Mistake
2) Unilateral Mistake
3) Misrepresentation- Intentional, negligent, or Innocent
Equitable Remedies - Reformation
Usually based on mistake, such as scrivener's error
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