Contract II Outline
I. General Contract Terms to keep in Mind
a. Acceleration Clause: upon breach the whole sum becomes due
b. Course of Performance: Conduct of parties in performing contract
c. Course of Dealing: Pattern of performance in contracts
d. Usage of Trade: Particular way this particular market handles similar situations
e. Secret of Contracts: CONTRACT RIGHTS HAVE VALUE!
II. Rights & Duties in a Contract
a. Person who makes a promise incurs a duty.
b. The person who accepts the promise has a right.
i. A will buy car for $500 from B. B has a duty to sell & right to $500. A has a duty to give $500 & a right to car. Consideration is creating a duty and right exchange.
ii. When change is made in existing contract there is no longer a pairing.
c. It is possible to change the contract in regards to pre-existing duty rules
i. Attempts to avoid the rule and is widely criticized, but often used
ii. Make sure there is consideration for the revised information. Do something new to serve as new consideration. Does not have to be equal.
iii. In essence, you cancel the original contract.
1. Under the original contract each party has a right and a duty. Then, both parties promise to release their right; entering into a second a contract of release.
2. It is okay to include this with the new contract information. However, it makes it difficult to differentiate that case from one where the intention of one party was not to do it, except for duress.
III. Statute of Frauds: Violation is unenforceable contract
a. Sale of Goods: UCC §2-201
i. Basic Provision in 1
1. Contract for the sale of goods, priced over $500 is not enforceable unless there is some writing sufficient to establish and contract and signed by the party to be charged
a. Signature somewhere is sufficient
b. Can have more than one document: No requirement that everything has to be in one
2. No gap filler for quantity! Must be established in writing
ii. Exception for Merchants in 2
1. If within a reasonable time a writing in confirmation of a contract and sufficient against the sender is received and the party receiving it has reason to know it contents, it satisfies subsection 1 unless written notice of objection to its contents is given within ten days after it is received
iii. Contract that does not meet subsection 1 but is valid for other respects is en
nation of promise to convey.
2. Contract not performed within a year
a. General Rule
i. Any contract not performed within a year, has to be in writing
ii. Any contract that is performable within a year does not have to be in writing.
1. Just the possibility of being performed within a year, not definite.
b. Problem of Part Performance
i. If one party can perform within a year, then the contract is not within the statute, even if the other party could not perform within the year
c. Problem of performance by specific person v. anybody
i. Specific to individual: Court says the only person who can perform the contract is that person
1. If that person might die within a year, that contract is within a year
ii. Not specific could be completed by someone else, even upon the death of the original, so that the contract could exceed a year.
3. Contracts over $500
ii. In Writing
1. Contain all of the essential terms: main/significant points