Defenses
Warranties
Making a Contract
Random
Excuses
100

How many defenses are there and name them

8 Defenses

1. Illegality

2. Public Policy 

3. Mistake

4. Incapacity

5. Duress

6. Undue Influence

7. Misrepresentation

8. Unconscionability


100

What are the types of Warranties 

Express

Particular Purpose

Implied 

100

Name the parts of a contract

1. Offer

2. Acceptance

3. Consideration

100

What is a waiver

Intentional relinquishment of a known right

100

what's the difference between excuses and defenses.

DEFENSES - Why contracts are voidable from the moment you get into it

EXCUSES - Reasons why can can get out of a contract - something unforeseen occurs and completing it would be impossible

200
Describe the two types of Incapacity 

Infancy (Under 18)

  • R.2d § 14 – all contract with infants are voidable


Mental Incapactiy (always mention both test and state which one is satisfied)

  • R.2d § 15 – contract is voidable if party is:

  • Cognitive Test –  a person is unable to understand the nature and consequences of transaction, 

        OR

  • Attitudinal Test – a person is unable to act reasonably in relation to transaction and other party has reason to know

200

What is the UCC Standard Warranty 

Merchantability 

200

What is the CISG (BONUS: what does it not apply to)

CISG:

  • It’s Supreme

    • Meaning the CISG governs unless parties' contract around it.

  • Only applies to the international sale of goods

    • Between parties whose places of business are in different states (countries)

    • And both states (countries) signed the CISG


CISG doesn't apply to:

  • intangibles,

  • electricity,

  • ships,

  • vessels or

  • aircrafts

  • distributorship agreements





200

What is the rule for Good Faith 

  • To breach a duty of good faith and fair dealing a party must intend to ‘mess with’ the other party.

200

When you use excuse, what type of damages do you get?

No, but you can seek restitution 

300

Name the types of Mistake and their elements 

  • Unilateral Mistake

    • Where there was a mistake of one party at the time of the K

      • Error concerns a fact

      • The fact is the basic assumption on which the mistaken party made the contract

      • The mistake has a material effect on the exchange

      • The mistaken party must not have borne the risk

      • Enforcement of the contract would b unconscionable

      • Mistaken party does no bear the risk if other party caused, knew or should have known of the mistake 

    • Remedy: Unilateral mistake renders the contract voidable, but only if the mistaken party did not bear the risk


  • Mutual Mistake

    • Where both parties have made a mistake at the time of the K


      • Parties must have shared an error of fact

      • The fact is the basic assumption on which the contract was made

      • The mistake has a material effect on the agreed exchange of performance

      • The adversely affected party must not have borne the risk

    • Remedy: Mutual mistake renders the contract voidable by the party that did not bear the risk of mistake


  • Scrivener’s error (people who wrote out things out before copy machines existed)

    • Rescission or Reformation (to fix mistake)

300

What are the elements of Particular Purpose 

  • Three-part inquiry:

    • Was there a particular purpose?

      • Purpose has to be unusual, and that purpose made known to the seller

    • Did seller have reason to know of particular purpose?

    • Did buyer rely on seller’s skill or judgment? 

300

Types of Extrinsic Evidence 

  • Parol Evidence

    • oral or written

  • Conduct    

    • Course of dealing

      • Parties conduct under previous contract

    • Course of performance

      • Parties conduct under current contract

      • More important that trade usage

    • Trade Usage

300

how do you calculate damages 

Full K price – diminution in value (the difference between the value you got and the value you want)

300

What are the types of Excusee

1. Impossibility

2. Impracticability

3. Frustration of Purpose

400

Describe the Different types of Misrepresentation

  • Affirmative Misrepresentation

    • Misrepresentation (must be material or intentional)

    • Scienter (i.e., knowledge of falsity)

    • Intent to deceive and defraud

    • Belief and reliance on the misrepresentation

    • Damages 


  • Omission Misrepresentation

    • Is there a duty to disclose material facts relating to latent defects

      • Material facts must disclosed when:

        • Necessary to prevent previous assertion from being fruadulent

        • Necessary to correct a mistaken basic assumption of buyer where failure to disclose would be bad faith

        • Necesssary to correct a mistaken assumption of buyer as to a writing

        • Based on a relationship of trust and confidence

    • Misrepresentation (must be material or intentional)

    • Scienter (i.e., knowledge of falsity)

    • Intent to deceive and defraud

    • Belief and reliance on the misrepresentation

    • Damages 

400

How do you disclaim warranties?

Disclaimers UCC § 2-316

  • Express Warranties

    • You can’t really disclaim an express warranty

      • But you can limit it by:

        • Putting a time limit on it

        • Or a condition on it

    • But beware of Parol Warranties and the PER

      • Not going to come in unless you can get the exception of frauds

        • But seller may just claim mistake

  • Merchantability

    • Disclaimers must be express and conspicuous and must mention “merchantability”, or

      • Just say “as is” or

      • “with all faults”

  • In consumer contracts, must be given in advance of purchase

  • Particular purpose

    • Relatively easy – just say “no warranties other than those contained herein”

400

Describe the Parol Evidence Rule and the different approaches 

CL Parol Evidence Rule

  • PER bars evidence of prior or simultaneous agreements, whether written or oral; if that evidence is being introduced to bury the terms of a written integrated agreement


Willistonian Approach

  • If a contract can have only one reasonable meaning, the court decides the dispute as a matter of law

Extrinsic evidence:

  • Doesn’t not come in if the contract is clear

  • Even if there is a latent ambiguity


Corbinian Approach

  • Even if a contract seems clear on its facts, it may have a latent ambiguity

  • Court may use extrinsic evidence to determine the nature of the agreement:

    • The parties’ negotiations

    • Their course of dealing, post-contractual conduct & course of performance

  • Usages of trades relevant to the interpretation of ambiguous terms


400

A business-interruption insurance contract includes the following provision labeled Epidemic Exclusion: “The Insurer excludes from coverage all losses arising from or relating to any epidemic or pandemic, including but not limited to: influenza, typhoid, cholera, measles, mumps, rubella, or chicken pocks outbreaks that require the Insured to temporarily close its business until the epidemic passes.” The insured seeks to recover after a municipal order required that it close for three months during the COVID-19 pandemic. Which canon of construction is most helpful to the insurer if it seeks to rely on the policy’s Epidemic Exclusion?

a. Expressio unius (lists are assumed to be complete).

b. Ejusdem generis (non-exclusive lists are presumed like things).

c. Contra proferentem (contracts are construed against the drafter).

d. Courts should give effect to each contractual provision.

a. Expressio unius (lists are assumed to be complete).

400

Selma Seller owned two saws that she used in her woodworking business. Butch Buyer noticed the saws one day when he was in Selma’s warehouse picking up a load of cut wood. Selma explained that he second saw was a spare that was not in working order and that she just kept around in case the saw she was using broke. Butch explained that he had been looking for that exact type of saw because he needed it for a very particular type of work that he did. Selma agreed that the saw was suitable for that work. However, she reminded him that it was not in working order. She told him that it just needed some parts and she suggested where he might get the parts and how he could repair the saw. Nonetheless, she said that she had not used the saw in years and that she would have to sell it to him “as is.” They agreed on a price. She wrote out a receipt and wrote on it in hand in bold capital letters: “SOLD AS IS.”


Butch took the saw back to his business. He got the parts and repaired the saw himself. Nonetheless, when he tried to use it, it violently malfunctioned, doing harm to its internal mechanics and rendering it permanently unusable.


Which of the following statements is TRUE?


a. Butch could sue for a breach of the implied warranty of merchantability.

b. Butch could sue for a breach of the implied warranty of fitness for a particular purpose.

c. Butch could sue for breaches of both implied warranties.

d. Butch could not sue for a breach of either implied warranty.

b. Butch could sue for a breach of the implied warranty of fitness for a particular purpose.

500

In which of the following circumstances can an infant avoid a contract and not have her recovery adjusted for damage or depreciation?


a. Mary Minor, age 16, wants to disaffirm a contract in which she bought a car that she drove while intoxicated, and the car cannot be salvaged.

b. Melanie Minor, age 16, wants to disaffirm a contract in which she bought a car, which was damaged when a drunk driver smashed into it while it was parked, and the car cannot be salvaged.

c. Madelyn Minor, age 17 years, 10 months, entered into a one-year lease agreement and wanted to disaffirm after six months.

d. Melissa Minor, age 16, wants to disaffirm a one-year lease agreement that she entered into by presenting a fake driver’s license and claiming to be 21.

b. Melanie Minor, age 16, wants to disaffirm a contract in which she bought a car, which was damaged when a drunk driver smashed into it while it was parked, and the car cannot be salvaged.

500

Which of the following statements by a salesman regarding a car for sale would MOST LIKELY constitute an express warranty of quality?

a. “This is a great car!”

b. “You’re going to love it!”

c. “The car is mechanically in perfect condition.”

d. “This car once belonged to Jon Voight.”

d. “This car once belonged to Jon Voight.”

500

Which of the following contracts would be governed by the UN Convention on the International Sale of Goods (CISG)? Assume all transactions involve states that are parties to the CISG.


a. A purchase for personal use by a California wine grower of a laptop computer manufactured in and shipped from South Carolina.

b. A purchase for use for business purposes by a German tourism business of three tour boats manufactured in and shipped from South Carolina.

c. A purchase by a California power company of electricity produced at a Canadian power plant.

d. A purchase for business purposes by a German wine grower of a laptop computer manufactured in and shipped from South Carolina.

d. A purchase for business purposes by a German wine grower of a laptop computer manufactured in and shipped from South Carolina.

500

Difference between expressed and implied condition [in regards to performance]

Express Conditions

  • Act or event which unless excused must occur for the other party’s duty of performance arises


Implied Conditions

  •  failure of one of these conditions is a breach, and if it is a material breach, you can avoid contract

500
Elements of Impracticability under the CL and UCC
  • Common Law

    • Unexpected event

    • Risk not allocated to party seeking excuse of performance

    • Unexpected event renders performance commercially impracticable 


  • UCC (seems to only apply to sellers)

    • Was there a supervening event the non-occurrence of which was a basic assumption 

    • Would performance impose a serious hardship?

    • Allocation of risk?

      • To avoid risk, you can add a force majeure clause (clause that removes liability from both parties for catastrophic events, such as natural disasters and warfare)