Mixed Contracts

Question 1

What is the consequence when a condition against assignment is waived?

Answer 1

It cannot be enforced again.

Question 2

How is a contract modified under:

1. The U.C.C.
2. Common Law

Answer 2

UCC: Good faith modifications are allowed.

Common Law: Consideration is required for any modification.

More Info: Contract Modification

Question 3

When a buyer accepts non-conforming goods delivered by a seller, what is the rate they must pay?

Answer 3

The contract rate for the conforming goods even if the nonconforming goods are more expensive.

Question 4

What does reformation require?

Answer 4

1. A prior valid agreement that
2. Has been incorrectly reflected in writing
3. Established by clear and convincing evidence

The parol evidence rule is inapplicable to reformation.

Question 5

What is a U.C.C. seller’s right to cure when performance is overdue?

Answer 5

1. If the seller has reasonable grounds to believe that tender would be acceptable
2. If he notifies the buyer

Then,

3. He may have reasonable time to substitute a conforming tender.

Question 6

What does a perfect tender require?

Answer 6

That the goods match what is contracted for and are delivered on the day that they are due.

Question 7

What is a condition precedent for there to be a third-party beneficiary?

Answer 7

A valid underlying contract.

Question 8

What is the proper measure of damages in a construction contract?

Answer 8

Profits expected + Cost expended

(up until time of the breach)

Question 9

When can a request for adequate assurance result in repudiation?

Answer 9

When obligor expresses doubt of their ability to perform, the obligee may demand adequate assurances. If assurances are not forthcoming within a reasonable time, then, the absence of assurances may be treated as a repudiation.

Question 10

What type of breach is a failure to perform a contractual obligation on time?

Answer 10

A non-material breach if a time is of the essence clause is not stated in the contract. A non-material breach does not let the damaged side out of the agreement.

Question 11

Who bears the risk of loss for new construction?

Answer 11

When a building is destroyed without fault, the builder bears the risk of loss. It is a breach of contract if a builder walks away from the project.

Question 12

Who bears the risk of loss for renovations?

Answer 12

The owners of the building bears the risk of loss. When a building during renovation or remodeling is destroyed without fault, it excuse builder’s duty to perform. The builder can walk away from the project without breaching the contract.

Question 13

The mailbox rule only applies to what?

Answer 13

An acceptance of an offer that is sent first (no other response was sent besides the acceptance)

Question 14

Differentiate:

FOB seller’s place of business v. FOB buyer’s place of business

Answer 14

FOB Seller’s: Risk of loss is on the buyer during transit.

FOB Buyer’s: Risk of loss on seller during transit.

Question 15

What are the elements of a bona fide purchaser?

Answer 15

1. Pays value
2. Takes in good faith

And

3. Takes without notice of any encumbrances
   * More Info:* Bona Fide Purchaser

Question 16

What is the exception to the statute of frauds requirement for suretyships/guarantees?

Answer 16

There is no need for the statute of frauds formalities when the main purpose of the surety is for the benefit of the provider of the surety. If the main benefit is to the grantor of the surety, the statute of frauds does not apply.

Question 17

What is the enforceability of contracts with:

Mutual Mistake v. Unilateral Mistake

Answer 17

Mutual: If both parties are mistaken of a material part of the agreement, then rescission of the contract is appropriate.

Unilateral: The contract is enforceable unless non-mistaken party knew or should have known of the other party’s mistake.

Question 18

When a debt is barred by the statute of limitations, how can it be enforceable?

Answer 18

When there is a new promise to pay an amount, then the amount in the new promise is binding.

Question 19

What is an aleatory condition?

Answer 19

Where the promisee’s right to cancel is dependent on a condition outside his control, the promise is not illusory, and the agreement will be enforceable. The contract is enforceable

Question 20

What are the requirements for an accord and satisfaction?

Answer 20

1. A genuine dispute
2. The parties agree to a new performance

And

3. Upon performance, the old contract is discharged.
   * More Info:* Accord and Satisfaction

Question 21

Differentiate the effect of:

Subjective v. Objective Impossibility

…on the duty to perform

Answer 21

Subjective impossibility: A person cannot do it; however, it does not excuse the duty to perform.

Objective impossibility: Nobody on earth can do it, and it does excuse duty to perform.

Question 22

What is a novation?

Answer 22

It replaces an obligation to perform with a new obligation, or it replaces a party to an agreement with a new party. A novation effectively discharges the duties contracted for under the original agreement.

Question 23

With the > $500 statute of frauds requirement, what is the amount a measurement of?

Answer 23

The total contract price

Question 24

When must adequate assurances be provided pursuant to the U.C.C.?

Answer 24

Within 30 days.