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110 Cards in this Set
- Front
- Back
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What is an offer?
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Would a reasonable person in a similar situation or in the position of the plaintiff think she was being empowered to create a contract via acceptance?
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When is an offer effective?
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upon RECEIPT (RST 68)
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How long is an offer effective?
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within the stated time if there is one; if no stated time then a reasonable time determined by trade usage, circumstances, etc. IF THERE IS A DELAY IN THE OFFER getting to the offeree, usually the clock will start ticking from the time when the offeree would have normally received the offer.
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When is an offer revocable?
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Any time prior to acceptance.
EXCEPTIONS: 1. Option contract with consideration 2. Offeree relied ON THE EXPRESS OR IMPLIED PROMISE to his detriment if the reliance was foreseeable by the offeror 3. Offeree relied ON THE PROMISE ITSELF and the reliance was foreseeable by the offeror (RST 87(2)) 4. Unilateral contract: Can't revoke once the offeree starts performance, preparation doesn't count as performance. (RST 45) 5. For goods: UCC 2-205 says it stays open for a reasonable time not to EXCEED THREE MONTHS if there was no consideration. |
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What terminates the power of acceptance?
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1. Death of the offeror(even without notice
2. Death of the offeree (unless it's an irrevocable offer like an option contract with consideration) 3. Offeree's rejection, which can't be undone once he has rejected 4. Offeree's counter-offer 5. Revocation of the offer 6. Expiration of the offer |
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What constitutes acceptance of an offer?
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Any means reasonable under the circumstances UNLESS otherwise indicated by language or circumstances. (UCC 2-206, RST 30).
IF the contract indicates acceptance by promise, there can still be acceptance if the offeree begins to perform AND the offeror knows about it and agrees to that manner of acdeptanct. |
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Can silence be acceptance?
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NO, unless it's indicated as OK by prior dealings, OR
if the offeror indicates assent may be given by silence or inaction (RST 69) |
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How does acceptance have to be communicated?
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PER THE OFFER, or if the offer doesn't say then for goods can use any medium reasonable under the circumstances (UCC 2-206(1)(a)) or in non-goods contracts, the same way the offer was communicated or by any medicum "customary in similar transactions at the time and place the offer is received." (RST 65)
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Do you have to notify the offeror of acceptance?
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Yes, and if you accept but don't notify the offeror within a reasonable period of time it may not be valid and the offeror wouldn't be bound. (RST 54 and 56)
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What happens where an offer invites acceptance by performance? (non-goods)
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Starting performance is acceptance. No notice is required UNLESS the offeror specifies.
BUT if the offeree knows that the offeror isn't going to know about the beginning of performance with reasonable promptness and certainty, the offeror's duties will be discharged. EXCEPTIONS: 1. Offeree excercises reasonable diligence in notifying offeror. 2. Offeror learns of the acceptance in a reasonable time. 3. The offer indicates that notification is not necessary. RST 54 |
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What happens where an offer invites acceptance by performance? (goods)
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UCC 2-206(2) Have to notify offeror in a reasonable time or the offer is considered to have lapsed.
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What happens were an offer invites acceptance by a promise?
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Unless specified by the contract, offeree has to use due diligence to notify offeror of acceptance or ensure that the offeror seasonably receives the acceptance. RST 56
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When is acceptance effective?
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By whatever the offer says,
OR WHEN SENT Exceptions: 1. Option contract: when it's received by the offeror 2. Sent by improper means or it is improperly dispatched, then upon receipt. 3. If it's improperly dispatched but still arrives when it would have normally, then effective when sent. |
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What happens if the acceptence is late?
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Three options:
1. Counter offer 2. Can waive lateness & accept. 3. If it's sent in a reasonable time even after the offer has expired it's valid unless the offeror informs the offeree that it's too late. |
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What are included in the terms of acceptance of a non-goods contract?
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Mirror image rule: anything that's not exactly like what was offered then makes it a counter offer. There may be a simultaneous suggestion of alternative terms, but they if the offeree accepts the terms of the contract then they are just suggestions that can become modifications.
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What are included in the terms of acceptance of a contract for the sale of goods?
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2-207
Additioinal terms: NON-MERCHANT INVOLVED: If the offeree UNAMBIGUOSLY accepts but states additional terms, they are only considered as proposals. BETWEEN MERCHANTS: Additonal terms become part of the contract UNLESS: 1. The offer expressly limits acceptance to the terms of the offer. 2. The additonal terms materially alter the contract. 3. The additonal terms are rejected within a reasonable time. |
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When is rejection of an offer valid?
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Upon receipt.
If offeree both accepted and rejected, acceptance would be effective when sent and rejection not until received, so pay attention to that. CAVEAT: Estoppel may operate to bar the enforcement of a contract where the offeree got the rejection BEFORE the acdetpance and acted in reliance on it. |
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When are shrinkwrapped warranties valid?
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Courts are divided over it.
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When are box-top licenses valid?
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If the purchaser is not aware, not valid.
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What constitutes consideration?
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Bargained for exchange, or a legal detriment (something you weren't required to do, or refraining from exercising a legal right)
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Is a pre-exisiting duty consideration?
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No, a promise regarding a pre-existing obligation to the other party doesn't constitute a legal detriment.
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What if the offeror doesn't state the manner of acceptance?
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Offeree chooses.
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Is it consideration if a party promises to forebear a claim?
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Yes, as long as the claim is valid or the party who is forebearing in good faith thinks it is.
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Accord and Satisfaction
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A subsequent agreement with new consideration (i.e. paying early) to resolve unliquidated debt. If there is breach, the breached party can sue on the original agreement or the modified agreement.
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Substitute contract
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Means the parties form a new contract, and if there is breach the breached party can only sue on the new contract. Usually has to do with changing the parties in a contract, i.e. someone takes over someone elses debt.
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Illusory promises as consideration
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"if I feel like it" , the promise is in control of the promisor, so it's not consideration
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Nominal consideration
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Not sufficient.
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Promissory estoppel
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1. Second party induced an expectation
2. First party relied on the expectation AND 3. First party would suffer detriment if the expectation wasn't met. |
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What agreements are covered by the statute of frauds?
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1. Cannot be performed within a year of the making of the cntract.
2. Promise to answer for the debt or default of another (surety) 3. Agreements made upon consideration of marriage. 4. Sale of land 5. Lease of real property longer than a year. 6. Agreement by purchaser of real property to pay an indebtness secured by a mortgage 7. Sale of goods $500 or more 8. Sale of personal property $5,000 or more 9. Leases of goods $1,000 or more 10. Assignment of contract rights. |
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Who has to sign in an agreement for the statute of frauds?
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The party against whom enforcement is sought.
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What constitutes a signature in the statute of frauds?
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Any mark or symbol the signer intends to authenticate a writing.
Can be written, printed, stamped, engraved. Signatures can include initials, imprinted signatures, letterhead, company logos. |
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What is the difference between a complete and partial integration in a writing?
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A complete integration is an expression of the parties' agreement in its entirety.
A partial integration is an expression of only a portion of the agreement. |
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What happens to extrinsic evidence if it is a complete integration?
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It precludes evidence of prior or contemporaneous agreements to contradict or supplement the contract. Basically, nothing gets admitted.
HOWEVER, a consistent additional term will be permitted if it has to do with the course of dealing, course of performance or trade usage. UCC 2-202(1) |
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What happens to extrinsic evidence if it is a partial integration?
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Prior written or oral agreements that are contradictory and contemporaneouas oral agreements are not permitted.
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How do you prove consistent additonal terms to a partial integration under parol evidence?
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Contemporaneous writings; course of dealing, course of performance, or trade usage UCC 2-202, RST 214, 416
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How do you determine if a writing is a complete or partial integration?
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1. "four corners"
2. "collateral contract" concept, where all writings are deemed partial integrations. 3. Williston: Majority approach, "reasonable person" approach, says complete integration unless a reasonable person would make a separate agreement on the additonal terms. 4. Corbin: "intention of the parties" approach, allows all relevant evidence on the issue of intent. UCC 2-202 |
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What is a merger clause?
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It establishes that the writing is intended to be the complete expression (complete integration) of the agreement between the parties. They will usually be enforced absent proof of fraud, mistake or other defense.
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What's the difference between the NY and California views on the parol evidence rule?
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Look in class notes
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What is the "plain meaning" rule for contract interpretation?
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If a writing appears unambiguous on its face, it must be interpreted solely on the basis of the writing. Most jurisdictions apply this.
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What is Williston's approach to contract interpretation?
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"Reasonable person" approach, if the writing is not an integration and is unambiguous, the terms should be interpreted by an objective test: the interpretation of a reasonable person.
IF the writing is not an integration and is amibiguous, subjective intent of the parties is relevant. |
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What is Corbin's approach to contract interpretation?
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"Reasonable expectations of the parties" approach, allows all relevant extrinsic evidence to assist in interpretation, including subjective intent of the parties. This is what UCC and RST use.
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What is course of performance?
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Pattern in the performance of a contract. UCC 2-208(1)
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What is course of dealing?
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Sequence of previous conduct between the parties that establishes a common basis of understanding for interpreting their expressions and conduct. UCC 1-205.
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What is usage of trade?
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A practice employed with regularity in a place, vocation or trade. 1-205(2)
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If there is more than one writing for a contract, how do you interpret the writings, separately or as a whole?
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As a whole.
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What happens with open or unspecified terms in a contract?
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Depending on the situation, they can be filled with course of performance, course of dealing, trade usage or "gap fillers" provided in the UCC
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What happens if there are different meanings attached to a term?
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The meaning that prevails is that of the party who had no reason to know of the meaning attached by the other party, and the other party knew or had reason to know of the meaning attached by the first party. RST 201
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What if there are different meanings attached to a term, and neither party knows or has reason to know of the other parties understanding of the term?
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A contract is not formed.
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What are considered valid terms in an adhesion contract?
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Ter terms that a reasonable person would anticipate and agree to. RST 211(3)
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Does the UCC require that modifications to a contract be supported by consideration?
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NO UCC 2-209(1)
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Does a non-sale-of-goods executory contract modification require consideration?
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YES, except:
1. "unforeseen difficulties" modificaton 2. if justice requires enforcement of the modification due to a material change of position in reliance on the modified promise. RST 89 |
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Waivers
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look in notes
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What is in RST 90?
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Promissory Estoppel
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What is the doctrine of promissory estoppel?
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Protection for a party who relies to their detriment on the promise made by another, and protects from the injustice even if there is not an enforceable contract.
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What are some examples of places where promissory estoppel may be used?
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Intra-family, philanthropic, promises of a gift of land, promises made by a bailee, general contractors relying on sub-contractors bids, contract modifications where one party has materially changed position based on it, preliminary contract negotiations (Hoffman v Red Owl), extensive contract negotiations, indefinite contracts, letters of intent.
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What are defenses to contract formation?
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Minors, mental impairment, duress, undue influence, unilateral or mutual mistake (at the time the contract is made) and one that is not a mistake of judgement,
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Is a seller of goods in breach if delayed or non-delivery of goods is due to impossibility/impracticability?
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No, UCC 2-615, as long as the breaching party did not cause or assume the risk, and as long as the non-occurence of the event was a basic assumption on which the contract was made. RST 261
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Is a party liable for breach for impossiblity/impractacability and if not why not?
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They are not if they didn't cause or assume the risk that triggered the impossiblity/impractacability, and as long as the non-occurance of an event was a basic assumption upon which the contract was made. RST 261.
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What happens if after a contract is made there are supervening events which substantially frustrate a party's purpose in entering the contract?
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His duties are discharged as long as he was not at fault, and the non-occurance of such event was a basic assumption on which the contract was made. RST 265
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What are constructive conditons?
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Judicially imposed conditons imposed in the interest of justice.
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Execution of contractual duties
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Do this out of my notes.
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What options does a party have if another party breaches the contract?
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1) cancel
2) wait for the party to perform 3) sue |
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What constitutes repudiation?
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1. making a statement that he will breach the contract
2. engaging in voluntary affirmative action which renders him unable to perform the duty 3. failing to provide assurance when it's been asked for with good reason RST 250, UCC 2-609 |
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What can the party do who has had a non-goods contract anticipatorily repudiated by the other party?
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1. Bring action
2. Discharge remaining duties. RST 253 |
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Does parol evidence rule apply to modifications once the contract has been executed?
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No
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What in a contract might suggest complete integration?
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Merger clause
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Who makes the decision about parol evidence, judge or jury?
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Judge
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What are the two main questions to ask to determine whether parol evidence can come in?
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1. Whether the parties intended an integration.
2. If they intended an integration, is it complete or partial. |
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What happens to extrinsic evidence when there is a completely integrated contract?
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It can't come in.
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What happens to extrinsic evidence when there is a partially integrated contract?
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Consistent terms can come in.
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What's the main difference between Williston and Corbin in contract interpretation?
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Williston says use the objective reasonable man approach, Corbin says look at the actual intentions using prior negotiations, etc.
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What's the risk in using the Corbin/Traynor approach to parol evidence?
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That eventually contracts will mean nothing.
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Does the parol evidence rule prevent the admission of misrepresentation, duress, mutual mistake, lack of consideration, etc, even if there is a merger clause?
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No.
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UCC 2-202(b) Parol evidence: does it presume full or partial integration?
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Partial
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Can extrinsic evidence of course of performance, course of dealing, usage of trade be admitted under parol evidence even if their is a complete integration?
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Yes
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Under UCC 2-202 do you have to find ambiguity in agreement for extrinsic evidence of course of dealing, course of performance or usage of trade to be admitted under parol evidence?
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No, code is silent on ambiguity
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Which UCC code is for parol evidence?
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2-202
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What would Williston say about admitting extrinsic evidence of a contemporaneous oral agreement? Corbin?
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Williston would say contemporaneous written can come in, but contemporaneous oral would be subject to parol evidence rule.
Corbin would say superseding agreements are the key, and so if contemporaneous means simultaneous it should be admitted. WILLISTON"S VIEW PREVAILED. |
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Under 2-202, how do you keep out extrinsic evidence of course of dealing, course of performance or usage of trade?
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Specifically negate it in the agreement.
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If a merger clause is in a contract, and is boilerplate language, how do you make sure it gets enforced and is not dropped out?
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Make the parties initial it.
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Is a merger clause presumptively valid?
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No, depends on the jurisdiction. Some say it is, some say it's not and those jurisdictions would allow in extrinsic evidence might be able to come in to explain or supplement the writing.
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What did Holmes say about the meaning of language?
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It's not stable or definite.
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What is the basic question Derrida asks about language in a contract?
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Who is the master of understanding?
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In UCC 1-303, what is the priority of course of dealing, course of performance and usage of trade?
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Course of performance it top
Course of dealing comes next' Usage of trade is last. |
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Performance and breach: what is a conditon?
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A condition is an event, not certain to occur, which must occur, unless its performance is excused before performance under a contract becomes due. RST 224
CAVEAT: the passage of time doesn't count, because its certain to occur |
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What happens if a conditon in a contract doesn't occur?
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The duty to which the condition is attached will not be triggered, and the duty is suspended and eventually discharged. The buyer can waive the conditon.
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What is the rule regarding compliance for express conditons?
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Strict compliance.
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What is a constructive condition?
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A condition implied in law that a court says exists even if there is nothing in the language of the contract.
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What is the rule regarding compliance for constructive conditons?
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Substantial performance.
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What is a waiver?
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Excuse of non-occurence of a duty.
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Can a waiver be retracted?
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Yes, if it's before the time of the conditon unless there was reliance on it and then estoppel precludes retraction.
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Can a waiver that occurred after the time the condition was supposed to occur be retracted?
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No, it becomes an election and can't be retracted even in the absence of reliance.
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Why is the idea of tender so important in constructive conditons?
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Because if you can show you were ready, willing and able to pay, then the other party has to perform or be in breach which means you have fulfilled your part of the constructive condition and you can place the other party in default. UCC 2-507, 2-511
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If you have substantially performed, can you materially breach?
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No
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What would be a litigating strategy if there was substantial performance under a contract?
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Sue off the contract for restitution.
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What should be your litigating strategy is there is not substantial performance under a contract?
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Sue on the contract for material breach. RST 241
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What is divisibility of contracts designed to do?
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Prevent forfeiture, which the law abhors.
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What kind of things will courts look at to see if a contract is divisible?
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What the intentions of the parties are, if there was a single consideration or consideration for each part, was performance divided into parts, if parties said entire performance was required.
RST 241: have to have corresponding pairs of performance and agreed equivalents |
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Are the ongoing payments typical in construction contracts treated as paired equivalents thus making divisible contract?
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No
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If you are suing for breach, and doing it off-contract in restitution, can you sue for more than the value of the contract?
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No, otherwise you possibly have unjust enrichment.
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What are the steps when an aggrieved party seeks to suspend performance or to refuse to render performance an dterminate the contract?
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1. See if there is uncured breach. If so, proceed.
2. Then ask if there was an exchange of promises? If yes, proceed. 3. Was the perormance in question due at an earlier time than that of the aggrieved party? if so, proceed. 4. Was it a material breach? IF NO: Aggrieved party must continue performance and treat it like a partial breach, which gives a right to damages but NOT to suspend or terminate. IF YES: Aggrieved party can treat it as partial breach (continues performance) or as total breach (stops performance). BUT if circumstances are such that the aggrieved party can give the breaching party a chance to cure, he has to do that (time frames are in RST 242). |
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Where is the right for cure in the UCC?
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2-508
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What is the risk an aggrieved party takes in classifying a breach as "total" and stopping performance?
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The court may not agree, and then the aggrieved party would then be in material breach and could be sued. i.e. stopping work on construction projects is perilous
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What is the definition of anticipatory repudiation?
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UCC 2-610 an overt communication that or an action that renders performance impossible or demonstrates clear intention not to continue with performance. Performance doesn't have to be made literally impossible.
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For a sale of goods, what are the choices for a party to a contract that has been anticipatorily repudiated by the other party?
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UCC 2-610 says
1. await performance or 2. resort to any remedy for breach AND 3. Suspend own performance. |
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Under the doctrine of anticipatory repudiation, can you bring suit before the time of performance is due?
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YES
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Can anticipatory repudiation be retracted under the UCC?
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yes, 2-611 says it can be retracted if the other party hasn't cancelled or materially changed his position or otherwise indicated he considers the repudiation final.
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Can a party ask for adequate assurance whenever they want?
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No, you have to have reasonable grounds for insecurity.
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Where is the Right to Adequate Assurance of Performance in the UCC?
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2-609
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What are the 4 elaments of the prima facie case for mutual mistake?
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1. Erroneous belief must be to facts as they existed at the time the contract was made
2. mistake must be MUTUAL 3. There has to be a material effect on the agreed exchange of performances. 4. Has to be on a basic assumption on which the contract was made. |