Conditions
What is a condition?
event or state that must occur or fail to occur before a party had a duty to perform, or
event or state – the occurrence or nonoccurrence of which – releases a party from a duty under the K
What is the implied duty of good faith? and what is the UCC good faith definition
every contract includes an implied duty of good faith and fair dealing for performance and enforcement
UCC good faith: honesty in fact and observance of reasonable standard for fair dealing in the trade
*good faith does not apply to formation, only to performance and enforcement
What is unconscionability??? and what is procedural vs substantive unconscionability?
contract or term "such as no man in his sense and not under delusion would make on the one hand, and no no honest or fair man would accept, on the other"
- procedural: absence of bargaining power, surprise (bargaining naughtiness)
- substantive: terms overly one sided (evils in the resulting contract)
what is a completely integrated agreement vs a partially integrated agreement?
completely integrated: final and complete writing; the agreement was adopted by the parties as a complete and exclusive statement of the terms of agreement
partially integrated: final but not complete; leaves out consistent additional agreed-upon terms that are agreed to for separate consideration or one that might naturally be omitted from the contract
not typically construed as offers, but rather invitations to make an offer
except!!!!
-when ad is clear, definite, explicit, and leaves nothing to negotiate
- like the jacket case where guy wanted to buy the jacket "first come first serve"
What is are express conditions compared to implied conditions?
express: a condition set out specifically in the agreement; A performance that is subject to an express condition cannot become due unless the condition occurs or its nonoccurrence is excused
implied: a condition that is not explicit, but is understood as required; each party's performance is impliedly conditioned on the other party's performance
What is modification?
a change to the original terms of an agreement
What is frustration of purpose?
- supervening event
- nonoccurrence of the event was a basic assumption of parties making the K
- purpose of K has been completely or almost completely destroyed
- purpose was known/realized by both parties at the time of making the K
When can an oral agreement supplement a written contract? (3 elements)
1. oral agreement is a collateral one
2. oral agreement does not contradict any express or implied provisions of the writing, and
3. oral agreement is one that parties would not ordinarily expect to be embodied in the writing
collateral agreement: a single term agreement that induces a party to enter into a contract
what is an option contract and when is it binding?
promise to keep an offer open that is bargained for; a separate K
binding if:- in writing
- signed by offeror
- identifies consideration
- is only available for a reasonable amount of time
What are the two categories of Ks subject to conditions of personal satisfaction?
1. Conditions based on commercial value or quality, operative fitness, or mechanical utility; dissatisfaction cannot be unreasonable or arbitrary
2. Conditions based on taste, judgment, fancy; good faith required
What is the difference between common law and UCC for modification?
common law: consideration required for modification
UCC: good faith required for modification
unfair persuasion of a party
factors:
- relationship between parties
- circumstances of the transactions
- also, pattern of over persuasion usually involves: discussion at unusual or inappropriate time, demand that business be finished at once, use of multiple persuaders, statements that there's no time to consult financial advisers or attorneys
purpose is to give meaning to the manifested intent of the parties
ambiguous: more than one reasonable meaning
vague terms: the breadth of a term
What is an option contract and when is it binding (4 requirements)?
promise to keep an offer open that is bargained for; offeror bargains away their right to revoke, usually in exchange for money; a separate contract?
binding if:
- in writing
- signed by offeror
- identifies consideration
- only available for a reasonable time
What kind of performance is required for Conditions? Common law and UCC
CL: substantial performance; doesn't need to be perfect, parties must substantially perform
UCC: perfect tender - if goods fail to conform in any way, buyer may:
reject all
accept all
accept any commercial unit and reject the rest
What is the preexisting duty rule?
promise to perform, or the performance of, an existing legal duty is not consideration
- nothing bargained for if a party promises to do something that he is already obligated to do or forbears from doing something he is not legally entitled to do
What is the difference between impossibility and impracticability
Both need:
1. supervening event
2. nonoccurrence of event was basic assumption of parties in making K
3. impossibility - effect of the event is that party's performance is objectively impossible
impracticability - effect of event is that party's performance is impracticable (unduly burdensome, can't be done w/o great loss, risk, or other hardship
4. party seeking relief was not the cause
5. neither party assumed the risk of event occurring
For Interpretation, what do courts look at/what matters? for Restatement/CL, for UCC?
CL & Restatement:
- words and conduct
- writing as a whole
unless a diff intention is manifested: (1) generally prevailing meaning, (2) technical terms and words of art
- course of performance, knowledge, and opportunity to reject (for repeated performances)
- other manifestations of intention of the parties
UCC (1-205):
- course of dealing and usage of trade
UCC (2-208):
- course of performance
What is liquidated vs unliquidated?
liquidated: predetermined and agreed upon measure of damages (no dispute)
unliquidated: not predetermined or agreed upon (good faith dispute - dispute about amount owed or something like that)
In what situations is a condition excused?
hindrance or failure to cooperate
wrongful, but not necessarily bad faith
actual, material breach
anticipatory repudiation
prospective inability or unwillingness to perform
reasonable beleif
divisibility of K
waiver of estoppel
What are the 6 workarounds to the preexisting duty rule?
- new or different consideration
- unforeseen circumstances
- honest dispute as to duty
- voidable obligations
- promises to third parties
- existing debts
What is misrepresentation? material misrepresentation?? fraudulent misrepresentation????
assertion not in accord with the facts
- did misrep actually induce buyer to make the K?
- was buyer justified in relying on the misrep
material misrep:
- would the representation likely induce a reasonable person to manifest intent?
- did the party know that the representation would likely induce intent?
fraudulent misrep:
- Did party intend to induce the party to manifest intent?
- AND, did the party know or believe the representation was false?
- OR did the party lack confidence that the representation was truthful
- OR did the party know that they did not have basis stated or implied for the representation
What is Statute of Frauds and what are the 6 scenarios? Also, what are the writing requirements for SoF?
SoF requires that certain types of contracts be memorialized in a writing signed by the party defending against the enforcement
6 scenarios:
Marriage, Year, Land and Real Estate, Executory, Goods over $500, Surety
a written contract must:
- reasonably identify the subject matter of the contract
- indicate a contract has been made between the parties or offered by the signer
- includes the essential terms of an unperformed promise with reasonable certainty
- includes the signature of party to be bound
What is promissory estoppel and the 3 requirements?
equitable doctrine that prevents the withdrawal of a promise by a promisor if it will adversely affect a promisee who has adjusted her position in justifiable reliance on the promise
must have:
- promise
- reasonable reliance
- injustice if no enforcement