Juris Doctor (JD) Contracts Flashcards

24 sample cards from the Contracts deck

Sampled from the end of the deck, so these are different cards from the ones shown on the syllabus page.

1. How may a condition be excused?

   By waiver, estoppel, the wrongful prevention or hindrance by the party benefited by the condition, voluntary disablement, or to avoid forfeiture (where insistence on the condition would cause disproportionate loss).

2. What is the doctrine of substantial performance, and to which contracts does it apply?

   A party who substantially performs (i.e., commits only a minor, non-material breach) may recover the contract price minus damages caused by the deficiency. It applies to common-law contracts (NOT to the UCC, which uses the perfect tender rule).

3. List the factors used to determine whether a breach is material.

   (Restatement 2d 241) (1) Extent to which the injured party is deprived of the expected benefit; (2) adequacy of compensation in damages; (3) extent of forfeiture by the breaching party; (4) likelihood the breaching party will cure; and (5) good faith and fair dealing of the breaching party.

4. What is anticipatory repudiation, and what options does the non-repudiating party have?

   A clear, unequivocal statement or act before performance is due indicating a party will not perform. The non-repudiating party may (1) sue immediately, (2) suspend performance and await performance, (3) treat the contract as discharged, or (4) urge retraction. The repudiation may be retracted before the other party materially relies or cancels.

5. What is the difference between a material breach and a minor breach in terms of remedies?

   A minor (partial) breach lets the non-breaching party recover damages but does NOT excuse their own performance. A material breach allows the non-breaching party to withhold/cancel their own performance AND sue for damages (total breach).

6. Distinguish impossibility from impracticability as grounds to excuse performance.

   Impossibility: performance is objectively impossible (no one could perform) due to an event like destruction of subject matter, death of a personal-service performer, or supervening illegality. Impracticability: performance is still possible but only with extreme and unreasonable difficulty/expense caused by an unforeseen event whose non-occurrence was a basic assumption.

7. State the elements of the doctrine of frustration of purpose.

   (1) A supervening event substantially frustrates the principal purpose of the contract; (2) the non-occurrence of that event was a basic assumption of both parties; (3) the frustration is not the fault of the party seeking discharge; and (4) the party did not assume the risk. Performance remains possible but is now pointless to one party.

8. What is the goal of expectation damages, and what is the basic formula?

   To put the non-breaching party in the position it would have occupied had the contract been fully performed (the "benefit of the bargain"). Formula: loss in value + other (incidental + consequential) loss − cost avoided − loss avoided.

9. What are reliance damages and when are they typically awarded?

   Damages that reimburse the non-breaching party for expenditures made in reliance on the contract, restoring them to their pre-contract position. They are used when expectation damages are too speculative to prove, or in promissory estoppel cases.

10. What is the measure of restitution damages?

    The value of the benefit conferred on the breaching party (preventing unjust enrichment). It restores to the plaintiff the reasonable value of goods/services rendered, and can sometimes exceed the contract price.

11. State the rule of Hadley v. Baxendale governing consequential damages.

    Consequential damages are recoverable only if they were reasonably foreseeable to the breaching party at the time of contracting — i.e., arising naturally from the breach, or from special circumstances communicated to or known by the breaching party.

12. What is the duty to mitigate damages, and what is its effect?

    The non-breaching party must take reasonable steps to avoid or reduce its losses. Damages that could have been reasonably avoided are not recoverable (mitigation reduces the recovery; it is not an affirmative duty owed to the breacher).

13. What requirements must a liquidated damages clause meet to be enforceable?

    (1) Actual damages were difficult to estimate at the time of contracting, and (2) the stipulated amount is a reasonable forecast of probable harm. If it operates as a penalty (grossly disproportionate), it is unenforceable.

14. When will a court grant specific performance, and for what subject matter is it most common?

    When the legal remedy (money damages) is inadequate, contract terms are definite, and enforcement is feasible. It is routinely available for land (every parcel is unique) and unique goods (rare items, antiques), but NOT for personal-service contracts.

15. What are the equitable defenses of laches and unclean hands?

    Laches bars equitable relief when a plaintiff's unreasonable delay in suing prejudices the defendant. Unclean hands bars a plaintiff who has acted inequitably or in bad faith with respect to the matter in suit.

16. Distinguish an intended third-party beneficiary from an incidental beneficiary.

    An intended beneficiary is one the contracting parties intended to benefit (a creditor or donee beneficiary) and who may sue to enforce the contract. An incidental beneficiary benefits only by happenstance and has NO right to enforce the contract.

17. When do an intended third-party beneficiary's rights "vest," and why does it matter?

    Rights vest when the beneficiary (1) manifests assent to the promise, (2) sues to enforce it, or (3) materially and justifiably relies on it. After vesting, the original parties cannot rescind or modify the contract without the beneficiary's consent.

18. Distinguish an assignment of rights from a delegation of duties.

    An assignment transfers a party's contractual rights/benefits to a third party (assignee). A delegation transfers the performance of a party's duties to a third party (delegate). Most rights are assignable and most duties delegable, except where prohibited or where the duty is personal/unique.

19. Does a delegation of duties relieve the delegating party (delegator) of liability?

    No. The delegator remains liable on the contract unless the other party agrees to a novation (substituting the delegate and releasing the delegator). The delegate becomes liable only if it assumes the duties for consideration.

20. State the parol evidence rule.

    When parties reduce their agreement to a writing intended as the final expression of their bargain, evidence of prior or contemporaneous agreements (oral or written) that contradicts or, for a fully integrated writing, supplements the terms is inadmissible.

21. Distinguish a fully integrated from a partially integrated writing for parol evidence purposes.

    A fully integrated writing is the complete and final statement of ALL terms — no extrinsic evidence to add or contradict. A partially integrated writing is final but not complete — extrinsic evidence may supplement (add consistent additional terms) but not contradict it.

22. Name situations in which parol (extrinsic) evidence is admissible despite the parol evidence rule.

    To (1) clarify an ambiguity, (2) show a defense to formation (fraud, duress, mistake, illegality, lack of consideration), (3) prove a condition precedent to the contract's effectiveness, (4) prove a separate/collateral agreement, or (5) show a subsequent modification.

23. How does a court interpret an ambiguous term, and what is the rule of contra proferentem?

    Courts give terms their plain/ordinary meaning, read the contract as a whole, and consider course of performance, course of dealing, and usage of trade. Under contra proferentem, ambiguities are construed against the party who drafted the contract.

24. Under the UCC, rank course of performance, course of dealing, and usage of trade when interpreting and supplementing terms.

    Express terms control over all three. Among the gap-fillers, the order of priority is: course of performance (conduct under THIS contract) > course of dealing (prior conduct between the parties) > usage of trade (custom in the industry).

What this deck covers

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