GOULD S BAR EXAM FLASH CARDS FOR CONTRACT LAW

Transcription

1 Gould's Bar Examination Flash Card Series GOULD S BAR EXAM FLASH CARDS FOR

2 GOULD S LEGAL EDUCATION Providing Quality Learning Solutions to All Law Students WEBSITE OFFICE TELEPHONE E.MAIL contact@gouldslegaleducation.com

3 Gould's Bar Examination Flash Card Series SHOPPING LIST

4 SHOPPING LIST 1. CONTRACT DEFINITION and APPLICABLE LAW. 2. CONTRACT FORMATION. 3. STATUTE OF FRAUDS. 4. PAROL EVIDENCE RULE. 5. DEFENSES. 6. CONDITIONS AND PERFORMANCE. 7. BREACH OF CONTRACT. 8. REMEDIES. 9. THIRD-PARTY ISSUES. 10. QUASI-CONTRACT AND WARRANTY.

5 Gould's Bar Examination Flash Card Series APPLICABLE LAW

6 APPLICABLE LAW CONTRACT DEFINITION. -Set of Promises Between Two or More People. -Under Which Performance Becomes a Duty. -Pursuant to Which the Law Provides a Remedy. UNIFORM COMMERCIAL CODE / UCC. -Sale of Readily Identifiable Moveable Goods, Considered at Contract Formation. -Merchants Deal Regularly with Goods in Contract, or Otherwise an Expert. COMMON LAW. -Services Contracts, Real Property Contracts, and All Contracts Other than UCC Contracts.

7 Gould's Bar Examination Flash Card Series CONTRACT FORMATION

8 CONTRACT FORMATION OFFER. INTENT TO BE BOUND. DEFINITE TERMS. ACCEPTANCE. ACCEPT. REJECT. TERMINATE. REVOKE. CONSIDERATION. BARGAINED FOR EXCHANGE. LEGAL DETRIMENT. PROMISSORY ESTOPPEL.

9 Gould's Bar Examination Flash Card Series OFFER

10 OFFER OFFER, COMMON LAW. Communication. INTENT TO BE BOUND -Objective Theory of Contracts. -Not Offers. Preliminary Negotiations, Advertisements, Jest, Auction Items with Reserve. DEFINITE TERMS. -Strictly Defined. Quantity, Price, Time, Subject, Parties. -Real Estate. Price and Legal Description of Property. -Cure for Indefiniteness. Agreement to Agree, Part Performance. Price Term that is Set at a Later Date Should be Calculated at Fair Market Value. OFFER, UCC. Communication. INTENT TO BE BOUND -Objective Theory of Contracts. -Not Offers. Preliminary Negotiations, Advertisements, Jest, Auction Items with Reserve. DEFINITE TERMS. -Liberally Defined. Need Parties and Quantity. -Outputs and Requirements Contracts Cured through Good Faith and Fair Dealing, and Sudden or Substantial Changes in Quantity Will Violate Good Faith and Fair Dealing. -Gap Fillers Supply Missing Terms. Performance, Dealing, Usage of Trade. -Price Term that is Set at a Later Date Should be Calculated at Fair Market Value.

11 Gould's Bar Examination Flash Card Series ACCEPTANCE: COMMON LAW

12 ACCEPTANCE: COMMON LAW ACCEPTANCE. -Common Law Mirror Image Rule / Bilateral. Assent to Terms of Offer in Manner Invited or Required, or Through a Reasonable Means if None Stated. -Common Law Unilateral. Acceptance through Full Performance, and Includes Rewards, Prizes or Contests. Must be Aware of Offer to Accept Rewards. Lack of Full Performance Not a Breach, because No Acceptance. -Silence / Implied-In-Fact Contracts. If Authorized by Offeree, Through Acceptance of Services, or through Implication of Prior Dealings. RJECTION. COMMON LAW. Additional Terms in the Acceptance, or Express Rejection. TERMINATION. -Time Lapse, Death or Insanity of Offeror, Unambiguous Conduct. -Offer are Open for a Reasonable Period of Time, Determined by Needs of Parties and Subject Matter. REVOCATION. -Effective Upon Receipt by Offeree,. -Public Offers Must be Published Through Same or Reasonable Modality as Offer, but Offeree Need Not be Aware of Published Revocation. IRREVOCABLE. -Part Performance. Unilateral Contract, More than Mere Preparation to Perform, but Rather Substantial Action. -Detrimental Reliance. Offeror Knew Offeree would Make Preparations, Open for Reasonable Time. -Option Contract. Paid Consideration to Keep Offer Open for Stated Period. -Mailbox Rule. Acceptance Effective Upon Dispatch, Unless Offer States Otherwise.

13 Gould's Bar Examination Flash Card Series ACCEPTANCE: UNIFORM COMMERCIAL CODE

14 ACCEPTANCE: UCC ACCEPTANCE. -UCC Mutual Assent. Conduct by Parties Evincing a Contract. -UCC Different Terms in the Acceptance. Reasonable, Minor, Do Not Materially Alter, Offeror Merchant Does Not Object within Ten Days, or Offeror Non-Merchant Expressly Approves. -UCC Accommodation Shipment. If Seller Ships without Note, but with Note Can Only be Accepted by Buyer Upon Receipt of Goods. -Silence / Implied-In-Fact Contracts. If Authorized by Offeree, Through Exercise of Dominion of Goods Sent by Seller, or through Implication of Prior Dealings. ACCOMMODATION SHIPMENT. -Request from Buyer for Prompt or Immediate Shipment. -If Seller Promises to Ship, or Ships Goods, then Seller Has Accepted the Offer from Buyer, and if Goods are Non-Conforming then Seller has Breached the Contract. -NOTE. If Seller Sends Note of Accommodation, then Seller Has Not Accepted the Offer from Buyer; and Non-Conforming Goods is a Counter-Offer that Buyer May Accept or Reject. RJECTION. UCC. Express Rejection. TERMINATION. -Time Lapse, Death or Insanity of Offeror, Unambiguous Conduct. -Offer are Open for a Reasonable Period of Time, Determined by Needs of Parties and Subject Matter. REVOCATION. -Effective Upon Receipt by Offeree. IRREVOCABLE. -Detrimental Reliance. Offeror Knew Offeree would Make Preparations, Open for Reasonable Time. -Option Contract. Paid Consideration to Keep Offer Open for Stated Period. -Merchant s Firm Offer. Signed by Merchant, for Stated or Reasonable Time, Not Exceeding Three Months. -Mailbox Rule. Acceptance Effective Upon Dispatch, Unless Offer States Otherwise.

15 Gould's Bar Examination Flash Card Series CONSIDERATION

16 CONSIDERATION CONSIDERATION. BARGAINED FOR EXCHANGE. -Promisor Make Promise with Intent to Induce Promisee to Do Something. Nominal / Sham. Inadequate Amount May Still Constitute a Bargaining Process. Gift. No Bargaining as Promisor Gets Nothing in Return, and a Promise to Make a Gift is a Gratuitous Promise Lacking Consideration. LEGAL DETRIMENT. -Promisee Does Something They Do Not Legally Have to Do, or Refrains from Doing Something they Have a Legal Right to Do. -Promisor Must Gain Legal Benefit, or Promisee Must Suffer Legal Detriment. -Past Consideration. Not Valid. -Illusory Promise. Illusory for Vague Terms or Unfettered Right of Termination without Notice, but Not for Requirements or Outputs Contracts if Use Good Faith. -Moral Obligation. Where Former Consideration Surrendered Innocently, Moral Obligation May Serve as a Substitute for Consideration to the Extent Necessary to Prevent Injustice. -Surrender / Forbearance of Legal Claim. Sufficient Consideration for a Return Promise, and May be Another s Potential Claim as Long as There is Good Faith Belief that Claim is Valid Legal Detriment Exists. -Illegal Activity. Contract Void. PROMISSORY ESTOPPEL. -Reliance. Substitute for Consideration. -Original Promise. Binding if Induces Detrimental Reliance.

17 Gould's Bar Examination Flash Card Series STATUTE OF FRAUDS / WRITING

18 STATUTE OF FRAUDS / WRITING STATUTE OF FRAUDS / SUFFICIENT WRITING. -Some Contracts Need Writing for Enforceability. -Signed by Party to be Charged / Defendant or Their Agent. -Must Contain All Material Terms. SALE OF GOODS $500 OR MORE. Stating Quantity, with Signature through Initials or Company Letterhead. -Goods Accepted and Paid For. Payment Accepted. -Specially Manufactured Goods. Not Suitable for Sale to Others, and Substantial Start or Commitment for Procurement of Goods. -Estoppel. Admission During Court-Related Activity. -Lease of Goods. More than $1K, Stating that it is a Lease, with Terms. -Merchants Confirming Memorandum. Including Quantity, Between Merchants, with Terms, Signature of the Party to Be Charged, and Receiving Merchant has Reason to Know of Memo and Does Not Object within Ten Days. ONE-YEAR RULE. Performance Impossible within a Year of Formation. -Full Performance by One Party. Even if Takes Longer than a Year. MARRIAGE. Such as Prenuptial Agreements. -Mutual Promises to Marry. Oral Contract Enforceable. LAND-SALE. Includes Leases Over One-Year, Stating Price, Signed by Seller, Full Description of Land. -Improvements, Down Payment, Possession, Part Performance. In Reliance on Oral Offer. SURETY / EXECUTOR. Pay Debt, or Perform Duty, of Another. -Should Normally Include Language Such as If Debtor Does Not Pay the Required Amount. -Main Purpose Rule. No Writing If Promissor s Main Purpose is to Further Their Own Interests.

19 Gould's Bar Examination Flash Card Series MODIFICATION

20 MODIFICATION and PAROL EVIDENCE RULE MODIFICATION. After Contract Formation, but Before Full Performance. -Requires Agreement of Both Parties. Pre-Existing Duty. Modification that Benefits Only One Party Violates Pre-Existing Duty, Unless It is Fair and Equitable Given Current Situation Not Anticipated at Contract Formation. COMMON LAW. Requires Additional Consideration, and May be Oral. -May be Allowed without Consideration if Unforeseen Difficulties Arise Making Performance Impracticable, as Long as the Modification if Fair Under the Circumstances. UCC. Requires Good Faith and Fair Dealing, and Must Meet the Parameters of the Statute of Frauds if Five Hundred or More Dollars. ACCORD AND SATISFACTION. Agreement When there is a Dispute Regarding Liability or Amount Due, and Accord is Lesser Substituted Performance in Discharge of Existing Duty, and Once Duty is Performed Satisfaction Exists. PARTIAL PAYMENT. Full Payment on Check for Less than Disputed Amount is an Accord, and Cashing of Check is Satisfaction, if the Debt is Unliquidated / Unascertained or Subject to Honest Dispute. However, UCC Allows a Party to Accepts Check Under Protest or With a Reservation of Rights Allowing that Party to Seek Additional Performance. NO ORAL MODIFICATIONS CLAUSE. Generally Honored, Unless Either Party Alters Their Position in Reliance on Modification, which is a Waiver of the Prohibited No Oral Modification Clause.

21 Gould's Bar Examination Flash Card Series PAROL EVIDENCE RULE

22 MODIFICATION and PAROL EVIDENCE RULE. PAROL EVIDENCE RULE. MERGER CLAUSE. Evidence of Prior or Contemporaneous Agreements Not Allowed to Vary or Contradict Terms in Integrated Contract. -Prevents Fraud. -Partial Integration. Some Issues are Fully Delineated, and Other Issues are to Be Determined at a Later Date. -Contract Defenses. May Show Evidence of Voidable Contract or Non-Enforceable Contract, Duress, Ambiguity, Mistake, Fraud, Subsequent Modification, Oral Condition Precedent, Illegality, Lack of Consideration. MISSING TERM GAP FILLERS. Common Law Methods of Interpretation. Primary Purpose Given Great Weight, Construed Against Drafter, Written Rules Over Boilerplate, Handwritten Rules Over Typed, Worded Prices Rule Over Numeric Prices, Specific Disclaimers Honored. UCC Customs of Interpretation. -Course of Performance. Best Indication of What the Parties Originally Intended. May Be Used to Ascertain the Meaning of an Event Not Mentioned in the Written Contract. -Course of Prior Dealings. Used to Ascertain Terms that were Not Changed by a New Agreement. -Usage of Trade. Considers the Business Itself, the Regular Behavior of People in the Profession, and Business Location to Ascertain the Meaning that the Specific Profession Attaches to Terms.

23 Gould's Bar Examination Flash Card Series DEFENSES: MISTAKE SITUATIONS

24 DEFENSES: MISTAKE SITUATIONS MUTUAL MISTAKE. -Mistaken Belief. -Basic Assumption. -Both Parties. -Material Effect on Agreed Performance. -Adversely Affected Party Bore Major Risk of Mistake. -Not Applicable to Market Conditions, Land Sellers, Builders. UNILATERAL MISTAKE. -Elements of Mutual Mistake. -Mistake Makes Contract Unconscionable. -Non-Mistaken Party had Reason to Know of Mistake, or Caused Mistake. ERROR IN TRANSCRIPTION. -Written Contract Does Not Reflect Agreement. AMBIGUITY. -Material Term Open to at Least Two Reasonable Interpretations,. -Each Party Attaches Different Meanings to Term. -Neither Party Knew that Other Party Attached a Different Meaning. -If One Party is Aware of Misunderstanding, Enforcement May be Based on Understanding of Other Party. MISUNDERSTANDING. -Indefinite Terms, or Different Subjective Understanding About Material Terms. -May Prevent Meeting of the Minds if Either Party was Aware of Misunderstanding. REMEDIES. Reformation, Rescission, Reliance, Restitution, Voiding.

25 Gould's Bar Examination Flash Card Series DEFENSES: PRESSURE SITUATIONS

26 DEFENSES: PRESSURE SITUATIONS DURESS. -Wrongful Act or Threat. -Overcomes Free Will of Other Party. -Question is Whether or Not Other Party was Influenced. -Does Not Include Civil Litigation Threats, Does Include Threats of Criminal Acts, Threats to Breach a Contract Leading to Modification, Wrongful Taking of Property. UNDUE INFLUENCE. -Fiduciary with Specialized Knowledge. -Occupies a Position of Significant Confidence as Regards Other Party. -Possesses More Knowledge or Expertise than Other Party. -Within Fiduciary Relationship Unduly Persuades Less Experienced Party. MISREPRESENTATION / INDUCEMENT FRAUD. -Material Misrepresentation / False Statement. -Scienter, a Culpable State of Mind. -Intent to Induce Reliance on False Statement. -Plaintiff Justifiably Relies. -Plaintiff Suffers Pecuniary Loss. -Fraud in the Execution Occurs when Innocent Party Tricked into Signing Document Later Converted to a Contract. -Fraudulent Concealment is Omission or Failure to Disclose Material Fact or Defect. UNCONSCIONABILITY. -Unfair or One-Sided Contract or Clause. -Shocks Conscious, Beyond All Reasonable Standards of Fair Dealing- -Procedural where Process Unfair, Substantive where Contract Results in Oppressive Harshness. ADHESION CONTRACTS. -Non-Bargained For Clauses, Often in Boilerplate. -Exceptionally Favorable to Drafter. REMEDIES. Reformation, Rescission, Reliance, Restitution, Voiding.

27 Gould's Bar Examination Flash Card Series DEFENSES: ILLEGAL CONTRACTS

28 DEFENSES: ILLEGAL CONTRACTS INCAPACITY. Infants. Under Eighteen Contract for Luxuries May Disaffirm, but Not for Necessaries. Insanity. Judicial Determination that Party Did Not Have Mental Capacity to Understand Contract. Intoxication. Unaware of Legal Consequences at Contract Formation. Agency. Agent May be Liable as Third Party for Breach if Fail to Disclose Principal s Capacity, Agent Becomes Personally Involved, or Agent Guarantees Contract. Ratification. By Minor Reaching Majority through Failure to Disaffirm in Reasonable Time After Reaching Majority, through Express Ratification, or through Inducing Conduct, but May Not Ratify if an Infant Lies About Age. ILLEGALITY. Gaming and Wagering Contracts. Inherent Illegality. Lending Contracts. In Violation of Usury Statutes. Maintenance and Champerty Contracts. Improper Financing of Another s Lawsuit. Services Contracts. Without a Needed State License, and No Fee is Collectable. PUBLIC POLICY VIOLATIONS. Non-Compete Covenants. Require Consideration, and May Not be Unreasonably Broad in Duration, Subject, Geography Restraints of Trade. Price Fixing, Allocation of Markets, Unfair Business Practices. Exculpatory Clauses. For Gross Negligence, Intentional Torts, Breach of Contract. REMEDIES. Reformation, Rescission, Reliance, Restitution, Voiding.

29 Gould's Bar Examination Flash Card Series CONDITIONS

30 CONDITIONS CONDITION. Event Other than Passage of Time that Triggers, Limits or Extinguishes a Duty to Perform. Express Condition. Created by Specific Language, and Require Strict Compliance. Constructive Condition. Created by Operation of Requiring Substantial Performance, and Preventing Unjust Enrichment. Implied Condition. All Contracts Require Good Faith and Fair Dealing to Make Reasonable Efforts at Contract Compliance. -Divisible Contract. Where a Contract is Clearly Divided into Separate Parts, Performance of First Part Will by One Party Will Trigger Performance of Other Party. Condition Precedent. -Must Occur Before Duty to Perform of Other Party is Triggered. -Satisfaction Clause. Third Party, Good Faith, Subjective Reasonable Person Standard for Personal Taste, and Waivers of Substantial Conditions May Require Substitute Consideration. -Time is of the Essence. For Common Law any Delay May be Treated as Breach, and for UCC Delay After Time for Performance is a Breach. Condition Concurrent. -Simultaneous Performance. Condition Subsequent. -Pre-Defined, Uncertain, Future Event that May Trigger Performance. Exclusive Dealings. -Each Party Must Use Best Efforts to Supply or Promote Other Party.

31 Gould's Bar Examination Flash Card Series PERFORMANCE

32 PERFORMANCE EXCUSE AND DISCHARGE OF CONDITIONS. Later, Unforeseen Events. Excuse through Avoidance of Forfeiture. If Express Conditions Will Result in Extreme Forfeiture, and Damage to Other Party is Minor. Hindrance / Prevention. Other Party s Wrongful Conduct Prevents Performance. Waiver. -Often for Minor Issues. -May Not be Withdrawn After Justifiable Reliance. -Continuation of Performance After the Other Party Failed in Their Performance is a Waiver. Impossibility of Performance. Performance of Contract Objectively Impossible; Includes Death / Incapacity (Temporary Until Regaining Capacity), Destruction of Subject Matter if Specifically Identified., Failure of Means or Mode if Specifically Identified, Subsequent Law or Regulation, Intervening Illegality. Financial / Commercial Impracticability. Discharge if Extreme Such as Complete Cut-Off of Supplies, but Often Not for Fixed Price Contracts where Future Price Fluctuations are Foreseeable. Agricultural Contracts. -Due to Weather Conditions and Other Unforeseeable Events. -Farmer Must Give Sufficient Notice to All Parties and Allocate Available Crops Fairly Amongst Contracts. Frustration of Purpose. Party Will No Longer Receive Benefit from Contact, and More Likely if Highly Unforeseeable and Fully Frustrated.

33 Gould's Bar Examination Flash Card Series CONTRACTUAL RIGHT TO SUE

34 CONTRACTUAL RIGHT TO SUE ANTICIPATORY REPUDIATION. When One Party to a Bilateral Executory (Yet to Be Fully Performed) Contract Clearly Indicates they are Unable or Unwilling to Perform, the Other Party May: Cancel the Contract and Sue for Breach of Contract. Consider that Mutual Rescission has Taken Place and Discharge the Contract. Try and Rectify the Performance of the Breaching Party. Retraction of Anticipatory Repudiation. May Occur Before Performance Due if Other Party has Not Relied on Repudiation or Sued. Mitigation of Damages. Non-Breaching Party Must Make Reasonable Efforts to Secure Alternate Performance from a Different Party. PROSPECTIVE INABILITY TO PERFORM / VOLUNTARY DISABLEMENT. -Where Reasonable Grounds for Insecurity Regarding Performance Arise. Right to Adequate Assurances of Performance. Insecure Party Writes Other Party Seeking Adequate Assurances of Performance, and if Not Forthcoming in a Timely Fashion, then Anticipatory Repudiation.

35 Gould's Bar Examination Flash Card Series MATERIAL BREACH / SUBSTANTIAL PERFORMANCE COMMON LAW CONTRACT

36 MATERIAL BREACH / SUBSTANTIAL PERFORMANCE COMMON LAW CONTRACT MATERIAL BREACH OF COMMON LAW CONTRACT. SUBSTANTIAL PERFORMANCE FACTORS. Deprivation of Expected Benefit. Amount of Performance Rendered. Whether Defendant is Willing and Able to Cure. Willfulness of the Breaching Party. Bad Faith of the Breaching Party. Whether or Not Time is Of the Essence. DIVISIBLE CONTRACT. -If First Part Completely Performed, Other Party Must Perform.

37 Gould's Bar Examination Flash Card Series THE UCC PERFECT TENDER RULE

38 UCC BREACH OF CONTRACT: THE PERFECT TENDER RULE UCC PERFECT TENDER RULE. BUYER S INSPECTION / ACCEPTANCE / REJECTION OF GOODS. -Must be Timely. -Must Give Notice to Seller if Non-Conforming Goods, and Follow Reasonable Instructions from Seller. -Buyer May Make Reasonable Efforts to Sell Goods. -Implied Acceptance if Buyer Keeps Goods for a Reasonable Amount of Time. -Mere Payment for Goods is Not Acceptance. NON-CONFORMING GOODS. -If Delivered After Time for Performance, then Breach. -Perfect Tender Includes Tendering of Cash to Seller. -Buyer May Accept, Reject, Accept / Reject, the Non-Conforming Goods. REVOCATION OF ACCEPTANCE. -Must Make Stronger Showing of Non-Conformity through Substantial Impairment that was Difficult to Discover. INSTALLMENT CONTRACTS. -For Each Delivery, May Reject for Substantial Impairment that Cannot Be Cured. -For Entire Contract, May Cancel if Defect Substantially Impairs Value of Entire Contract. SELLER S RIGHT TO CURE. -With Seller s Notice to Buyer, Before or After Time for Performance. -May Occur Through Shipment of Conforming Goods, or Through a Price Adjustment. OUTPUTS AND REQUIREMENTS CONTRACTS. Outputs. Buyer Agrees to Buy All that a Seller Produces. Requirements. Seller Agrees to Supply All of the Materials that a Buyer Requires. -Output / Production or Requirement / Demand Must be Proportionate to Previous Amounts. EXCLUSIVITY AGREEMENT. Distributor Must Use Best Effort to Sell Product, as Consideration.

39 Gould's Bar Examination Flash Card Series RISK OF LOSS

40 DELIVERY / RISK OF LOSS TITLE TO GOODS. May Pass From One Party to Another Only After Goods are in Existence. SELLER S RISK OF LOSS. If Seller Bears Loss, then Must Replace Goods at No Additional Cost. BUYER S RISK OF LOSS. If Buyer Bears Loss, then Must Pay the Contract Price. FREE ON BOARD / F.O.B. Seller Bears Expense of Putting Goods in Possession of Carrier and Having Goods Loaded. F.O.B. Seller s Plant or City. Shifts Risk to Buyer at Shipping, if Notice and Reasonable. F.O.B. Buyer s Place of Business / Destination. Shifts Risk to Buyer Upon Delivery. NO COMMON CARRIER. Seller Bears Risk Until Possession by Buyer. FREE ALONGSIDE / FAS. Seller Delivers to Carrier, and Buyer Arranges for Transport. COST, INSURANCE, and FREIGHT / CIF. Seller s Price Includes Cost, Insurance and Freight to Buyer s Destination. NO ARRIVAL / NO SALE. Seller Relieved of Risk of Loss if Goods are Lost in Transport.

41 Gould's Bar Examination Flash Card Series COMMON LAW REMEDIES

42 COMMON LAW REMEDIES EXPECTATION INTEREST. -To Make Party Whole, and In as Good a Position as They Were Prior to Contract. -Damages are Equal to Value of Defendant s Promised Performance, Minus Benefits to Plaintiff for Partial Performance by Defendant. -Builder Breach. Owner May Recover Cost of Completion which is Difference Between Actual Cost of Completion and Contract Price, Plus Reasonable Recovery for Delay. -Owner Breach. Builder May Recover Expected Profit Plus Costs Expended. -Risk of Loss for New Building Contracts. If No Fault of a Party, then Destruction Before Completion Requires Completion by Builder. -Employment. At-Will Unless Protections Such as Prior Notice. MITIGATION OF DAMAGES. -Avoidable through Reasonable Effort. CONSEQUENTIAL DAMAGES. -Damages Reasonably Foreseeable at Contract Formation, and Consequential to Breach. INCIDENTAL DAMAGES. -Includes Transportation, Storage and Other Small, Direct Costs Related to Breach.

43 Gould's Bar Examination Flash Card Series UCC BUYER REMEDIES

44 UCC BUYER REMEDIES EXPECTATION INTEREST. -Under Benefit of the Bargain, Buyer is Entitled to Be Put in Same Position as if Performance Had Been Rendered. -Buyer the Rightfully Rejects, Must Follow Reasonable Instructions from the Seller. COVER. -Buys Reasonable Replacement Goods in Good Faith without Delay, and Covers the Difference. CONTRACT / MARKET DIFFERENTIAL. -If Keeps Non-Conforming Goods, Buyer is Entitled to Difference Between Promised and Delivered Value of Goods. REJECTION. -Buyer May Reject Non-Conforming Goods, and Throw Them Back to Seller. PRE-PAYMENT. -Buyer May Recover Pre-Payment Made for Non-Conforming Goods. MITIGATION OF DAMAGES. -Avoidable through Reasonable Effort. CONSEQUENTIAL DAMAGES. -Damages Reasonably Foreseeable at Contract Formation, and Consequential to Breach. INCIDENTAL DAMAGES. -Includes Transportation, Storage of Non-Conforming Goods, and Other Small, Direct Costs Related to Breach. SPECIFIC PERFORMANCE. -Inadequate Remedy at Law. Unique Goods.

45 Gould's Bar Examination Flash Card Series UCC SELLER REMEDIES

46 UCC SELLER REMEDIES EXPECTATION INTEREST. -Under Benefit of the Bargain, Seller is Entitled to Be Put in Same Position as if Performance Had Been Rendered. -Buyer Wrongfully Refuses to Accept Goods, or Anticipatorily Repudiates. IN GENERAL. Seller May Withhold Delivery, Stop Delivery, Resell Goods with Good Faith and in a Commercially Reasonable Manner, Recover Difference Between Resale Price and Contract Price, Recover Incidental Damages, Recover Damages for Non-Acceptance of Goods, Recover the Contract Price, or Cancel the Contract. -No Consequential Damages. CONTRACT / RESALE DIFFERENTIAL. -Seller Sells Goods to Third Party in Commercially Reasonable Manner, with Good Faith, and Recovers Difference Between Sale and Resale Prices. CONTRACT / MARKET DIFFERENTIAL. -If Seller Does Not Sell Goods, then May Recover Difference in Market Price. LOST VOLUME SELLER. -Seller has Large Stock, and Buyer Anticipatorily Repudiates by Returning Item, Seller is Entitled to Lost Profit from that Sale. CUSTOM MADE GOODS. -Seller Entitled to Contract Price. ACTION FOR THE CONTRACT PRICE. -Applicable Where Goods are Received and Buyer Does Not Pay Seller. RESALE. -Commercially Reasonable Resale while Reasonably Identifying Broken Contract. -If Private Sale Must Give Buyer Reasonable Notice, if Public Sale Goods Must be Identified and Sale Must be Made at Usual Place or Market for Public Sale. INCIDENTAL DAMAGES. -Includes Transportation, Storage and Other Small, Direct Costs Related to Breach. RECLAMATION. -Seller May Reclaim Goods, Where Buyer Purchased on Credit but was Insolvent, and Seller Makes Demand within Ten Days.

47 Gould's Bar Examination Flash Card Series MISCELLANEOUS REMEDIES

48 MISCELLANEOUS REMEDIES RELIANCE INTEREST. -Where Plaintiff Relies to Their Detriment. RESTITUTION INTEREST. -Benefit Conferred to Plaintiff Less Caused by Breach, Prevents Unjust Enrichment. UCC BATTLE OF THE FORMS. -For Non-Conflicting Terms, Last in Time Rules. -For Conflicting Terms, Knockout Rule, and Gap Fillers Related to Course of Performance, Prior Dealings and Usage of Trade. SPECIFIC PERFORMANCE. Equitable Remedy. Definite and Certain Contract. Inadequate Legal Remedy. Feasibility. Not Feasible for Services Due to Involuntary Servitude, and Difficulty of Measuring Quality of the Performance of an Artisan. Mutuality of Remedy. Available Under the UCC for Unique Goods, and for Real Property. Defenses. Unclean Hands, Laches, Sale to Bona Fide Purchaser, Statute of Limitations. NON-COMPETE COVENANTS. -Must Protect Legitimate Interest Where Services are Unique. -Must be Reasonable in Geographic Area and Time Limits. REFORMATION. -Mistaken Integration of Mutual Assent. RESCISSION. -Unilateral because of Breach or Defense, or Mutual if Both Parties Agree.

49 Gould's Bar Examination Flash Card Series MISCELLANEOUS REMEDIES, CON T

50 MISCELLANEOUS REMEDIES, CON T ENTRUSTMENT. -No Right Against a Bona Fide Purchaser for Value. -May Sue Original Party Entrusted for Conversion. LIQUIDATED DAMAGES. -Contractual Clauses Stating Available Remedies. -Must be Reasonable Forecast of Actual Damages. -Excessive Penalty Clauses, or Overbroad Blunderbuss Clauses, Will Not be Honored. STATUTE OF LIMITATIONS. -Common Law is Set by Parties, or Statute. -UCC is Four Years of Breach, or as Modified by Parties. SPECIAL GOODS. -Reasonable Costs, and Incidental Damages or Lost Profits. -Employers are Allowed Monetary Damages or an Injunction Preventing a Party with Special Skills from Working for a Different Employer. EMPLOYMENT CONTRACTS. -Employment Contract are Often At-Will Contracts, and Are Terminable At Any Time by Any Party, Unless Protections are Provided. Employee Breaches. Employer May Receive the Difference Between Compensation Paid to Substitute Employee and that Which Would Have Been Paid to Breaching Employee. Employer Breaches. Damages Related to the Breach. CONSTRUCTION CONTRACTS. Owner Breaches After Full Performance by Contractor. Contractor Entitled to Full Payment. Owner Breaches Before Construction Begins. Contractor Entitled to Lost Profits. Owner Breaches During Construction. Expected Profit Plus Costs. Contractor Breaches Before Full Performance. Owner Entitled to Cost of Completion, Plus Costs Related to Delay in Construction.

51 Gould's Bar Examination Flash Card Series THIRD-PARTY BENEFICIARY

52 THIRD-PARTY BENEFICIARY INTENDED BENEFICARY. -While a Specific Person Need Not be Named, the Intent to Designate a Third-Party Beneficiary Must be Present at Contract Formation. Promisee. Provides Consideration, May Sue Promisor for Breach. Promisor. Gives Consideration to Beneficiary. Intended Beneficiary. Named and Intended Person that Receives the Benefit of a Contract, and May Sue Both Promisee and Promisor. VESTING OF RIGHTS. -Rights are Subject to Termination or Modification Before Vesting. Vesting Occurs when Beneficiary: Learns and Assents to the Contract. Materially Changes Their Position to Detriment in Justified Reliance. Or Brings Suit to Enforce the Promise. CREDITOR BENEFICIARY. -Promisor Satisfies a Pre-Existing Debt or Obligation, and May Sue Promisee or Promisor. DONEE BENEFICARY. -Receives Benefits Gratuitously from Promisee, and May Sue Only Promisor. INCIDENTAL BENEFICIARY. -Not Intended and Have No Enforceable Rights.

53 Gould's Bar Examination Flash Card Series ASSIGNMENT

54 ASSIGNMENT AND DELEGATION ASSIGNMENT. -During Performance Stage, Transfer of Contract Rights. -Effective when Obligor Learns of Assignment. Assignor / Obligee. Party that Transfers Rights to Assignee. Obligor. -Not Involved in the Direct Assignment. -Payment to Assignor is Effective Until Obligor Learns of the Assignment. -May Attack the Assignment as a Variation of Rights, or as Non-Assignable. Assignee. New Party to which Rights are Transferred. REVOCATION. -Where Assignor Dies or Goes Bankrupt, where Assignor Makes a Subsequent Assignment of Same Right, or where Assignor Gives Notice of Revocation. Irrevocable Assignments. Irrevocable if Assignee is Delivered a Symbolic Document Symbolizing Right, Assignment is Supported by Consideration, Assignment is in Writing, Assignee Detrimentally Relies, or Assignee Receives Performance from Obligor. NON-ASSIGNABLE RIGHTS. Common Law. Material Alteration of Duty or Risk of Obligor, or a Prohibition through Statute or Contract. UCC. Material Alteration to Obligor.

55 Gould's Bar Examination Flash Card Series DELEGATION

56 ASSIGNMENT AND DELEGATION DELEGATION. -During Performance Stage, Transfer of Obligation or Duty to Perform. Delegator. Party that Transfers Duty and Remains Secondarily Liable as Surety for Proper Performance Unless Novation. Obligee. Party Owed the Performance. Delegatee. New Party that Agrees to Perform. NON-DELEGABLE DUTIES. Contract Prohibition. If Prohibited by Contract. Unique Skills, Personal Judgment, Training or Experience. Delegation Must Not Alter Performance. ADEQUATE ASSURANCES OF PERFORMANCE. -If Obligee Experiences Reasonable Grounds for Insecurity as a Result of Delegation, then May Seek Adequate Assurances of Performance. NOVATION. -Agreement between Both Parties to Original Contract to Add Substitute Party, Constituting a Release.

57 Gould's Bar Examination Flash Card Series WARRANTY

58 WARRANTY WARRANTY. Privity. Plaintiff May be the Purchaser, Family Member, or Guest, and Defendants are Anyone in the Distributive Chain. Express Warranties. Cannot be Disclaimed. -Affirmations that are More than Opinions. -May Include the Use of a Sample or Model. Implied Warranties. Merchantability. Arises Automatically Out of a Merchant Sale, that Goods are of Fair or Average Quality. Fitness for a Particular Purpose. Where Buyer Relies on Seller s Expertise to Purchase and Item, and Seller is Aware of the Reliance. Limitations. -May Include Recoverable Amount, Return and Refund Amounts, and Replacement, but May Not be Unconscionable by Limiting Personal Injuries. Disclaimers. -Implied Warranties, if Clearly Written, Conspicuous, Including the Word Merchantability.

59 Gould's Bar Examination Flash Card Series QUASI-CONTRACT

60 QUASI-CONTRACT QUASI-CONTRACT. Detrimental Reliance. Implied-in-Fact Contract. -Applicable where the Contract has Failed, or No Contract Exists. -Reasonable Amount. Restitution. -Quantum Meruit. For Otherwise Breaching Party that Has Rendered Some Services or Resources. May be Entitled to As Much as He Deserves. Pro Rata Contract Price Less Damages Due to Breach. Prevents Unjust Enrichment of the Non-Breaching Party.