LAW SCHOOL ESSENTIALS CONTRACTS PROFESSOR GEORGE S. GEIS UNIVERSITY OF VIRGINIA SCHOOL OF LAW

Transcription

1 LAW SCHOOL ESSENTIALS CONTRACTS PROFESSOR GEORGE S. GEIS UNIVERSITY OF VIRGINIA SCHOOL OF LAW CHAPTER 1: INTRODUCTION A. My Gal Get cntract law int yur DNA This means tw things: 1. Yu knw the basic structure f the law and are cmfrtable ging with a cmmn sense answer when it is crrect. 2. Yu have a DNA twitch when a rule is triggered that defies cmmn sense. Dn t fall fr the tricks! Recgnize the clse-call situatins B. Three Basic Questins 1. Has an enfrceable cntract been? 2. Has the cntract been (r is the perfrmance )? 3. What are the fr? C. What is a Cntract? A cntract is a with Best definitin: a Lk fr an agreement plus a special legal basis fr enfrcing the prmise (e.g., bargained-fr ). Example 1: I prmise t give yu $1,000 next week. Yu say, OK, I accept. Is this a cntract?

2 D. Gateway Issue Which universe are yu in? 1. Tw Universes The law f cntracts and sales spans tw : Universe One The We are in this universe whenever a cntract deals with real estate r. Example 2: Yu hire me t mw yur lawn. Is this cntract gverned by the cmmn law?. Universe Tw Article 2 f the We are in this universe whenever a cntract deals with. Article 2 f the UCC applies t all parties wh enter int a gds cntract, nt just merchants. Example 3: Yu agree t buy 5 dzen pencils frm Staples. Is this cntract gverned by cmmn law?. We d nt care abut Revised Article 2 f the UCC. It is nt the law anywhere. The law is ften the same in bth universes but there are a few key differences that will smetimes arise. 2. Mixed Cntracts Cntracts that have elements f bth and. Example 4: Yu agree t purchase a ht water heater frm Bilermaker Inc. fr $1,000. As part f the deal, Bilermaker prmises t install the ht water heater in yur hme. Is this cntract gverned by the UCC?. Rule #1: The all r nthing rule Mixed cntracts must fall int ne universe r the ther. Limited exceptin: if the agreement is divided int tw mini-cntracts, called a cntract, then each f thse mini-cntracts can be in a separate universe Themis Bar Review, LLC Law Schl Essentials Cntracts

3 Example 5: Yu agree t purchase a ht water heater frm Bilermaker Inc. fr $950. As part f the deal, Bilermaker prmises t install the ht water heater in yur hme fr an additinal $50. Is this latter installatin part f the deal gverned by the UCC? Rule #2: The predminant purpse rule In rder t figure ut which universe yu are in fr a mixed cntract, yu have t lk at the main reasn fr entering int the cntract. Ask: Des the gd r service part f the cntract play a bigger rle? Example 6: Yu cmmissin the famus artist Andy Warhl t paint yur prtrait fr $1 millin. Des the UCC apply? Example 7: Yu cmmissin my mther-in-law, Mickey, t paint yur prtrait fr $10. Des the UCC apply? Themis Bar Review, LLC Law Schl Essentials Cntracts

4 CHAPTER 2: FORMATION OF CONTRACTS: OFFER A. Frmatin f Cntracts Fur big tpics: 1. Agreement prcess ( and ) t cntract frmatin 4. Statute f Frauds Mnemnic: All Cntracts Dn t Stink. (ACDS) B. Agreement Prcess Exam Tip 1: This is a tpic that law prfessrs lve t test. A cntract is typically created by an. Can be brken dwn int the and. Offer Will yu g t the ftball game with me? Acceptance Sure. Cunterffer Hw abut we g skating instead? After a cunterffer, the prcess starts ver. C. Offer 1. Definitin An ffer is a manifestatin f a willingness t enter int an agreement by the fferr that creates a in the fferee. Animalizing the prcess Think f the ffer as a caterpillar cute, fuzzy, but fragile. Once it is accepted, then the caterpillar turns int a beautiful butterfly yu have a cntract. 2. Creating a Legal Offer Offer and acceptance are gverned by the. Outward appearances f wrds and actins are what matters, nt secret intentins. Key questin: whether the fferr displays an bjectively t be bund Themis Bar Review, LLC Law Schl Essentials Cntracts

5 Example 8: I ffer t sell yu my Jeep Wrangler fr $5,000 but I have my fingers crssed behind my back and in my mind I m thinking, Of curse I dn t mean it; n way I ll ever sell the Jeep t yu. If yu say OK, d we have a cntractual agreement? Lk fr situatins invlving r. Example 9: Yu see me n the side f the rad with the hd f my Jeep Wrangler pen and wires pulled ut everywhere. I kick the side f my Jeep and yell, I d sell this stupid junker fr $5! Yu yell back, I ACCEPT. D we have a cntractual agreement? Expressins f pinin Example 10: We are talking causally in the law schl parking lt, when I lean against my Jeep Wrangler and ask yu, hw much d yu think this ld thing is wrth? Yu reply (generusly), I dn t knw, maybe abut $10,000. I say, OK, I accept. D we have a cntractual agreement? The ffer must usually be directed t a. Example 11: Yu hear that there are a bunch f gd deals t be had n Wall Street. S yu walk dwn thrugh the trading pit, saying I accept I accept I accept. D yu have any cntracts with the stck traders? Limited exceptin: cntest ffers r reward ffers where smene prmises smething t anyne wh accmplishes a certain task. Example 12: I ve lst my pet cat, Mnster, and I take ut a newspaper advertisement prmising $100 t anyne wh finds my cat by this Friday. Yu see the ad, find Mnster, and cme by my huse n Thursday t cllect the reward. D we have a cntractual agreement?. Hw specific must an ffer be? At cmmn law, all must be cvered in the agreement. Typically means the parties, subject, price, and quantity Themis Bar Review, LLC Law Schl Essentials Cntracts

6 The UCC is. The law is mre willing t plug the gaps and find a cntract even thugh the agreement leaves ut a few key terms. Generally, yu nly need t identify the, the, and the under the UCC. Imprtant: The DOES NOT nrmally need t be stated. Example 13: Beth ffers t pay Seth $50 every week t wash her car each Saturday fr the next year. Is this deal cvered by the cmmn law? Is it a valid ffer?. Example 14: Beth ffers t pay Seth a fair price every week t wash her car fr the next year. Is this a valid ffer? Example 15: Bb ffers t buy 500 windshield wiper blades next week frm Sue fr $5 each. Is this deal cvered by the cmmn law?. Is it a valid ffer?. Example 16: Bb ffers t buy 500 windshield wiper blades next week frm Sue fr a fair price. Is this a valid ffer?. Example 17: Bb ffers t buy windshield wiper blades next week frm Sue fr a fair price. Is this a valid ffer? Example 18: Bb ffers t buy all the windshield wiper blades that I need fr the next 10 years frm Sue at a fair price. Is this a valid ffer? Requirements cntracts and utput cntracts The quantity is nt explicitly specified but, nevertheless, they are sufficiently definite enugh t cunt as an ffer. Requirements cntract I dn t knw hw many I need ver the next X years, but I prmise t f them frm yu. Output cntract I dn t knw hw much I will be able t make r prduce ver the next X years, but I prmise t f it t yu. These are legally binding cntracts Themis Bar Review, LLC Law Schl Essentials Cntracts

7 A valid ffer must give the t the ther side. Ask: Culd the purprted fferee simply say I accept and knw that they have the deal? Tw cmmn fact patterns: are preliminary cmmunicatins that still reserve a final rund f apprval with the speaker. May nt cnfer a pwer f acceptance t the ther side are usually understd as _ Exceptins: (1) and (2) advertisements that are very specific and leave nthing pen t negtiatin, including hw the acceptance can ccur. Example 19: I tell yu that yu had better decide fast if yu want t buy my huse, as I expect t have a tn f ffers next week. Yu say, I accept. Is this a cntract? Example 20: I place an advertisement in the paper prmising t sell my 1994 Jeep Wrangler fr $5,000, first cme, first served. Yu shw up at my huse waving a check and say I accept. Is this a cntract? Themis Bar Review, LLC Law Schl Essentials Cntracts

8 CHAPTER 3: OFFER (CONT D) A. Terminating the Offer ( Squashing the Caterpillar ) 1. Revcatin The fferr revkes the ffer by t the fferee. Example 21: I ffer t sell yu my huse fr $100. A split secnd later I yell, I revke. Is there a squashed caterpillar?. Example 22: I ffer t sell yu my huse fr $1 millin. A day later I decide that I dn t want t mve and mutter t myself in my ffice Frget it. I revke that ffer. Is there a squashed caterpillar? 2. Cnstructive Revcatin The fferee learns that the fferr has taken an actin that is abslutely incnsistent with the cntinuing ability t cntract. Called a Dickinsn v. Ddds Example 23: I ffer t sell yu my huse fr $1 millin. A day later yu are talking with Mickey and learn that she bught my huse that mrning fr $1.1 millin. Yu run t my huse waving a check and say, I accept. Is this a cntract?. Example 24: I ffer t sell yu my huse fr $1 millin. A day later yu are talking with Mickey and learn I ffered t sell her my huse that mrning fr $1.1 millin. Yu run t my huse waving a check and say, I accept. Is this a cntract?. Example 25: I ffer t sell yu my signed cntracts textbk fr $100. A day later yu are talking with Mickey and learn that she bught my signed cntracts textbk fr $100. Yu run t my huse waving a check and say, I accept. Is this a cntract?. 3. Rejectin The rejects the ffer. Example 26: I ffer t sell yu my Jeep fr $5,000. A split secnd later yu yell, NO I mean YES! Is there a squashed caterpillar? Themis Bar Review, LLC Law Schl Essentials Cntracts

9 4. Cunterffer The makes a. Example 27: I ffer t sell yu my Jeep fr $5,000. A split secnd later yu say, I ffer t buy it fr $4,500. I remain silent. Ten secnds later yu say, OK, OK I ll buy it fr $5,000. Is there a cntract? Be careful t distinguish a cunterffer frm a mere cunter-inquiry r indecisin. Example 28: I ffer t sell yu my Jeep fr $5,000. A split secnd later yu say, Maybe nt, I better check my bank balance. I remain silent. Ten secnds later yu say, OK, OK I ll buy it fr $5,000. Is there a cntract?. 5. Death An ffer will be terminated when the dies. Nte: The death f ne party after the cntract has been made des nt nrmally terminate the cntract. 6. Lapse f Time If a amunt f time passes, the ffer is destryed. Example 29: I ffer t sell yu 1000 barrels f il fr $100 each. Yu remain silent, and I never revke. Five years later, when the price f il has jumped t $500, yu call me up and accept. Is there a cntract?. B. Revival f an Offer Even if an ffer is squashed, the can always thrw ut a new ffer with the exact same terms as befre (called revival). C. Irrevcable Offers ( The Caterpillar s Pwer Shield ) 1. In General Example 30: I ffer t sell yu my huse fr $1 millin and I prmise, prmise, prmise nt t revke this ffer fr a week. Five minutes later, I say, Never mind I revke the ffer. Can yu still accept? In a few circumstances, the caterpillar is ging t be prtected there is ging t be smething else ging n that makes the ffer irrevcable Themis Bar Review, LLC Law Schl Essentials Cntracts

10 2. Irrevcable Offers Fur Ways 1. The fferee can buy an. Example 31: I ffer t sell yu my huse fr $1 millin. Yu als pay me $100 in exchange fr a prmise that I will nt revke this ffer fr a week. Five minutes later, I say, Never mind I revke the ffer. Can yu still accept? What if the $100 will g tward the purchase price?. 2. A in the UCC can make a t buy r sell gds think f it as a binding free ptin. A merchant is smene wh in the type f gds at issue. In ther wrds, a. A firm ffer has t be, cntain an nt t revke, and must be by the. A firm ffer lasts fr either (1) as lng as stated in the firm ffer r (2) fr a reasnable time perid nt t exceed. Example 32: I ffer t sell yu a cntracts textbk fr $100 and I prmise via a signed writing nt t revke this ffer fr a week. Five minutes later, I say, Never mind I revke the ffer. Can yu still accept?. Example 33: Yur law schl bkstre ffers t sell yu a cntracts textbk fr $100 and it prmises via a signed writing nt t revke this ffer fr a week. Five minutes later, it says, Never mind I revke the ffer. Can yu still accept?. Example 34: Yur law schl bkstre ffers t sell yu a cntracts textbk fr $100. Five minutes later, it says, Never mind I revke the ffer. Can yu still accept?. Example 35: Yur law schl bkstre ffers t sell yu a cntracts textbk fr $100 and it prmises via a signed writing nt t revke this ffer fr a week. Ten days later yu stp by the bkstre t accept the ffer. Can yu still accept? Themis Bar Review, LLC Law Schl Essentials Cntracts

11 3. A ffer t cntract cannt be revked by the fferr if the fferee has. This arises frm a prmise that requests acceptance by an f the prmisee instead f a return prmise by the prmisee (which is called a cntract). Example f unilateral ffer Example 12 abve Example 36: I prmise t pay yu $1,000 if yu prmise t paint my huse. Unilateral r bilateral ffer?. Example 37: I prmise t pay yu $1,000 if yu paint my huse. Unilateral r bilateral?. Since a unilateral ffer can nly be accepted by perfrmance, it des nt seem fair t allw the prmisr t revke nce the prmisee starts the perfrmance and is trying t accept. The law gives the fferee the right t finish. Example 38: I prmise $10,000 t the winner f a swim race t Alcatraz Island. The swimmers dive ff the dck and are ging strng tward the island. When they re abut half way, I stand up n Fisherman s Wharf with my bullhrn and yell, I REVOKE! Can the winner f the race insist n the prize? Nte: The fferee des nt have t perfrmance and can stp at any time. Example 39: Yu are swimming in the Alcatraz race, but yu get really tired and swim t a bat. Can I sue yu fr breach f cntract? 4. An ffer cannt be revked if the fferee and n an ffer in a freseeable manner. Lk especially fr a general cntractr subcntractr cntext. Example 40: A builder wh is bidding n a law schl building prject receives an ffer frm a subcntractr t supply all the carpet fr $20,000. Armed with this knwledge, the builder ffers t renvate the building fr $100,000. Befre the law schl accepts the bid, the subcntractr calls t revke its carpet ffer. Can the GC builder still accept the carpet ffer frm the subcntractr? Themis Bar Review, LLC Law Schl Essentials Cntracts

12 CHAPTER 4: ACCEPTANCE A. In General An acceptance is a manifestatin f a willingness t enter int the agreement by the fferee. Gverned by the Famus phrase: The fferr is master f the ffer. The fferee must accept the ffer accrding t the rules f the ffer. Example 41: I ffer t sell yu my Jeep fr $50 and state that in rder t accept this ffer, yu must spring int a handstand, walk acrss the rm t me, and sign this piece f paper. Yu lk at me funny, just stand there, and say, I accept. Is there a cntract?. Related cncept unilateral and bilateral ffers The fferr gets t decide which type f ffer t make and the fferee must play by the fferr s rules. Example 42: I prmise t pay yu $1,000 if, and nly when, yu paint my huse. Yu say, I accept. Is there a cntract?. Example 43: Bb sends a letter t Sue, reading, please ship me 500 windshield wiper blades next week fr $5 each. Sue mails back a letter: I accept. Unilateral r bilateral ffer?. Is there a cntract? If there is any ambiguity between a unilateral r bilateral ffer, yu can accept in either reasnable manner. Example 44: Bb sends a letter t Sue, reading, please ship me 500 windshield wiper blades next week fr $5 each. Sue ships 500 wiper blades the next day. Is there a cntract?. What if the seller tries t accept but ships the wrng gds? Imprtant: The UCC treats this as an plus a. Example 45: Bb sends a letter t Sue, reading, please ship me 500 Bsch windshield wiper blades next week fr $5 each. Sue ships 500 Slshed wiper blades the next day. Is there a cntract? Themis Bar Review, LLC Law Schl Essentials Cntracts

13 B. Other Specific Rules Abut Acceptance The ffer has t be specifically directed t the persn trying t accept it. Refer t Example 11 Even with an pen-t-all reward ffer, yu must abut the ffer in rder t accept it. Example 46: I ve lst my pet cat, Mnster, and I take ut a newspaper advertisement prmising $100 t anyne wh finds my cat by this Friday. Yu never see the ad, but find Mnster raming near my huse and return the cat t me. Later, yu learn abut the reward ffer and cme by t cllect. D we have a cntractual agreement? Like with revcatins, yu must generally yur acceptance t the ther side fr it t be effective. Example 47: Yu ffer t buy my cntracts textbk fr $50. I say, I ll think abut it. That night, while I m alne brushing my teeth, I say t myself, That s a gd ffer I shuld really accept that ffer...in fact, I d accept that ffer right nw I accept! The next mrning yu call me up and revke the ffer. Is there a cntract? C. Mailbx Rule Deals with the f when an acceptance becmes. When there is a delay between sending an acceptance and when an acceptance is received, the law must make a tugh chice: Is the cmmunicatin effective when sent r when it is actually received? Mailbx Rule: an acceptance sent by mail is valid when the letter is. Des nt apply if the fferee sends smething else first, such as a r a Only applies t Des nt apply t Unclear whether it applies t ther types f media (e.g.,, s, instant messaging) Themis Bar Review, LLC Law Schl Essentials Cntracts

14 Example 48: I send yu an ffer. Yu mail back yur acceptance. I call yu befre I receive yur letter and I revke my ffer. Is there a cntract? Example 49: I send yu an ffer. Yu mail back yur acceptance. The letter gets lst and never shws up. Is there a cntract?. Example 50: I send yu an ffer. Yu mail back yur acceptance. Yu change yur mind and call me up befre I receive yur letter t reject the ffer. Is there a cntract?. Example 51: I send yu an ffer. Yu mail back a rejectin. Yu change yur mind and mail back an acceptance a few hurs later. Bth letters arrive at my huse n the same day. Is there a cntract?. Yu d nt get the prtectin f the Mailbx Rule yu sent the rejectin first. D. Acceptances withut Cmmunicatin (by Silence) Exceptins t the requirement that yu must cmmunicate yur acceptance t the fferr: Unilateral r ; Unilateral ffer where the parties are gegraphically clse, such that the fferr will clearly see that perfrmance is ccurring; Past histry where serves as acceptance, such that the fferee shuld reasnably the fferr if she des nt accept; r The fferr says that acceptance must cme via silence and the fferee intends t accept the ffer by silence. Example 52: I ve lst my pet cat, Mnster, and I take ut a newspaper advertisement prmising $100 t anyne wh finds my cat by this Friday. Yu see the ad, find Mnster, and cme by my huse n Thursday t cllect the reward. Can yu get the mney even thugh yu never cmmunicated yur acceptance t me?. Example 53: Mickey buys her weekly keg f beer by calling up Pabst n Mnday and leaving a message requesting delivery n Friday. On Mnday, she leaves her message as usual but Pabst des nt deliver the keg that Friday. Distraught, Mickey asks if she has a cntract fr this keg? Example 54: I ffer t sell yu my Jeep fr $500,000, saying, yu may accept this ffer by remaining silent fr five secnds. Yu stare at me but dn t say a wrd. After five secnds pass, d we have a butterfly? Themis Bar Review, LLC Law Schl Essentials Cntracts

15 E. Implied-in-Fact Cntracts Ntin that yu can cmmunicate acceptance withut r. Yu can cmmunicate acceptance by r. Example 55: I walk int Cheap Cuts, a ppular haircut franchise where the service fferings and prices are psted abve the cash register. The energetic receptinist ffers t put my name in, and I sit dwn t wait. A haircutter cmes frward t call my name; I fllw and she cuts my hair. When I walk tward the exit, the receptinist tells me that I we them $15. Must I pay even thugh I never said a single wrd? Themis Bar Review, LLC Law Schl Essentials Cntracts

16 CHAPTER 5: COUNTEROFFER AND UCC A. Cunterffer at Cmmn Law The cmmn law universe uses the rule. The terms in the acceptance must match the terms f the ffer, r it is nt an acceptance; it is a. A cunterffer kills the ffer. Treat acceptances as anther frm f cunterffer. Lk fr wrds such as if, nly if, n the cnditin that, etc. Example 56: I ffer t mw yur lawn n Saturday fr $50. Yu say, OK, if yu cme ver n Sunday. D we have a cntract? B. UCC In General The UCC is mre frgiving fr acceptances that d nt match the terms f the ffer exactly. Replaces the mirrr image rule with Just because there is a cntract, hwever, DO NOT assume that all f the terms in the purprted acceptance are ging t gvern that relatinship. It des nt matter whether the parties are fr this first part f (whether a technical cunterffer can still cunt as an acceptance). Example 57: I run a business n the side: Geis s Chainsaws. Yu send me a purchase rder requesting a chainsaw fr $400. On the back f this frm is an indemnificatin prvisin saying, seller agrees t indemnify buyer in the event f a lawsuit. I send back a cnfirming mem that is exactly the same as the purchase rder, except fr a prvisin n the back saying, buyer agrees t indemnify seller in the event f a lawsuit. What is the mst likely utcme?. It is pssible that a dispute arises and ne f us tries t back ut f the deal. Imagine that after the frms are exchanged, the market price fr Geis s Chainsaws skyrckets and they are selling fr $1,000. I n lnger want t be bund by ur cntract. First, is there a cntract? Secnd, if there is a cntract, what is the indemnity term, if any, that gverns ur cntractual relatinship? Themis Bar Review, LLC Law Schl Essentials Cntracts

17 2. UCC 2-207(1) Text f 2-207(1): A definite and seasnable expressin f acceptance [r a written cnfirmatin] which is sent within a reasnable time perates as an acceptance even thugh it states terms additinal t r different frm thse ffered r agreed upn, unless acceptance is expressly made cnditinal upn assent t the additinal r different terms. Example 58: Yu send a purchase rder requesting acceptance f yur chainsaw ffer by this Friday. I send back my cnfirming mem tw weeks later. Is there a cntract?. Example 59: Yu send a purchase rder. I send back a timely cnfirming mem that says, Thanks, but I n lnger sell chainsaws; hwever, I have a hand saw which yu can have n the exact same terms. Example 60: Yu send a purchase rder. I send back a timely cnfirming mem saying, OK, n the cnditin that yu agree t indemnify me against a lawsuit fr harm arising frm the chainsaw. D we have a cntract?. Example 61: Same facts as Example 60, but my acceptance letter has a bunch f terms n the back, all f which matches yurs, except buyer agrees t indemnify seller against a lawsuit fr harm arising frm the chainsaw. D we have a cntract?. 3. UCC 2-207(2) Just because a slightly different acceptance makes a butterfly (cntract), it des nt mean that that the new term in the acceptance will cntrl. It might cntrl but must lk at 2-207(2). The new term will nly cme in if the fllwing are all true: Bth parties are ; The new term des nt the deal; The initial ffer did nt acceptance t its terms; and The fferr des nt within a reasnable time t the new term. Very difficult fr the new term(s) in the acceptance t gvern the cntract. Example 62: Same facts as Example 61. Is my indemnity term part f the cntract?. Example 63: Des the answer change if the buyer is Lwe s? Themis Bar Review, LLC Law Schl Essentials Cntracts

18 4. The Knck-Out Rule Drafting ambiguity in UCC Ntice the language f UCC 2-207(2) it says additinal terms but it des nt say additinal r different terms. Sme curts have said the drafters just frgt t include different. These curts use the same analysis whether it is an additinal r different term. Sme curts have said that the drafters were f the difference between an additinal term and a different term. An additinal term can still cunt as an acceptance but there is n way a different term will cme in under 2-207(2). Sme curts apply the rule. The curts will knck-ut bth f the terms and g back t the UCC gap filler prvisins. 5. UCC 2-207(3) What happens if there is nt a real cntract but the parties still act as if there is an agreement? In that case, 2-207(3) gives parties a : nly the terms that bth parties agreed upn in the writing will becme part f the cntract; all the ther terms will drp ut and be supplied by the UCC default rules. 6. Earlier Agreement Fllwed by Written Cnfirmatin als gverns the situatin where tw parties have a cntract, usually a, upfrnt and a party sends ver a cnfirming mem with additinal terms that g further than the earlier agreement. D these terms cme in? Bad news: the statute makes n sense (1): [A definite and seasnable expressin f acceptance r] a written cnfirmatin which is sent within a reasnable time perates as an acceptance [even thugh it states terms additinal t r different frm thse ffered r agreed upn, unless acceptance is expressly made cnditinal upn assent t the additinal r different terms.] S if yu see this fact pattern (early agreement + written cnfirmatin with new terms), just wrk thrugh the same steps as abve fr 2-207(2) decide whether the new terms will cme in. But recgnize that the new terms will very rarely cme in Themis Bar Review, LLC Law Schl Essentials Cntracts

19 CHAPTER 6: CONSIDERATION A. General Nature f Bargained-Fr Cnsideratin Cnsideratin means a deal where parties are exchanging prmises that invlve a r a. Yu can quickly determine whether there is a prblem related t cnsideratin by asking the fllwing questins: Wh is making the prmise that needs t be supprted by the law (the )? The ther side is the. Is there a t the prmisr r a t the prmisee? Was this? Did ne side make a prmise in rder t induce the ther side t make a reciprcal prmise? Example 64: I prmise t pay yu $1,000 if yu prmise nt t watch the next seasn f American Idl. Yu d nt watch the shw, but I refuse t pay yu the mney. Wh is the prmisr?. Wh is the prmisee?. Did I benefit frm the exchange f prmises? Did yu incur a legal detriment, even thugh nt watching the shw is gd fr yu?. S is there bargained fr cnsideratin?. The key: Nt ding smething that yu are legally entitled t d can cunt as a legal detriment. Watch ut fr gift prmises and gifts. Yu may nt have bargained-fr cnsideratin. Example 65: Every year fr Christmas, Mickey gives me a tacky tie, and I give her an ugly sweater. Can she sue me this year if I refuse t give her a present? Example 66: I prmise t give yu my Jeep if yu cme t my huse t pick it up. Is there bargained-fr cnsideratin?. This is a cnditinal gift. B. A Few Tricks 1. Adequacy f Cnsideratin A curt des nt need t stamp fair price n every cntract. The pretense f cnsideratin des nt cunt Themis Bar Review, LLC Law Schl Essentials Cntracts

20 Example 67: I prmise t sell yu my Jeep fr $1. Is there bargained-fr cnsideratin?. 2. Prmise A prmisr must clearly cmmit t the deal r there is n cnsideratin. Example 68: Yu prmise t buy my Jeep fr $5,000 n December 1 st if yu feel like it. Is there bargained-fr cnsideratin?. T determine if a prmise is illusry, ask whether there is a way fr the prmisr t. cntracts Nt illusry Real cntracts with cnsideratin Example 69: I prmise t pay Mickey $500 if she paints a prtrait f my family that meets my satisfactin. She says OK. Is there bargained-fr cnsideratin?. and cntracts (see Example 18) are nt illusry prmises. There is a way t breach. 3. Cnsideratin Past cnsideratin cnsideratin. Example 70: Yu are trying t win a race t Alcatraz when the sharks start t circle. I swing my bat ver t pick yu up. Grateful, yu prmise t pay me $500 fr the rescue. Is there bargained-fr cnsideratin?. 4. Settlement f a Legal Claim Prmising nt t sue smene can cunt as cnsideratin as lng as there is (1) an in the validity f the claim and (2) a fr that belief. C. Cntract Mdificatin and the Preexisting Duty Rule Exam Tip 2: Law prfessrs like t test n this issue. 1. Cmmn Law Has histrically fllwed the preexisting duty rule Rule: A prmise t d smething that yu are already t d is NOT cnsideratin Themis Bar Review, LLC Law Schl Essentials Cntracts

21 Example 71: Yu rent an apartment frm Slumlrd fr ne year, rent is $2,000 a mnth. Later that year, yu start running shrt n cash, and yu bth agree t mdify the rent t $1,500 per mnth. Can Slumlrd sue yu at the end f that mnth fr the extra $500?. There is n bargained-fr cnsideratin fr the mdificatin cntract. There are sme exceptins and there has been a mdern change. Example 72: Same facts as Example 71, except yu agree t re-rent the apartment fr anther year when the rent is lwered t $1,500 per mnth. Can Slumlrd sue yu at the end f that mnth fr the extra $500? Example 73: Same facts as Example 71, except Slumlrd s sister, Slumlady, agrees t cver $500 f yur mnthly rent if yu stay in the apartment. Is there bargained-fr cnsideratin? 2. UCC Des nt fllw the preexisting duty rule Ask: Whether a mdificatin has been made in If s, it will be binding even withut. Example 74: Mickey cntracts with Pabst t buy her weekly keg f beer fr $75. Later in the week, Pabst calls back t say there is a wrker shrtage that week, and it can t get her the beer unless she pays $100 s Pabst can utsurce delivery. Mickey says, OK charge what yu must, I need my beer. Is the price mdificatin binding?. Example 75: Same facts as Example 74 but Pabst knws that Mickey will d anything fr her beer. On Friday mrning, Pabst calls t say, yu better pay us $1,000 r we wn t deliver yur keg. Mickey says, OK charge what yu must. Is the price mdificatin binding? Themis Bar Review, LLC Law Schl Essentials Cntracts

22 CHAPTER 7: CONSIDERATION SUBSTITUTES A. Prmissry Estppel (Reliance) Reliance can arise when ne party makes a prmise and the ther party relies n that prmise t take sme actin. Lk fr three key elements: 1. A prmise is made that wuld reasnably be expected t induce ; 2. The prmisee des take in reliance n that prmise; and 3. can nly be avided by enfrcement f the prmise. Example 76: Grandpa Mneybags prmises t pay his granddaughter Katie $100,000 next mnth s she desn t have t wrk anymre. Katie quits her jb. Is this bargained-fr cnsideratin?. Des grandpa nevertheless have t keep his prmise? Nte: d nt nrmally need t prve detrimental reliance (element 2) when pursuing the reliance thery t cllect n a charitable gift prmise. Reliance is smetimes used as an in the general cntractr-subcntractr cntext. See Example 40 B. Quasi Cntract Smetimes called a cntract implied-in-law. Think abut a situatin where yu wuld have made a cntract if yu culd have, but yu culdn t fr sme reasn, r lk fr a situatin where ne party has cnferred a benefit n the ther side under circumstances where it wuld be fair fr the party t repay that benefit. Elements: 1. Did the plaintiff cnfer a t the defendant? 2. Did the plaintiff reasnably expect t get? 3. Wuld it be t let that defendant keep the benefit withut paying? Themis Bar Review, LLC Law Schl Essentials Cntracts

23 Lk fr whether there was an the benefit, r there was a gd reasn why the ther side did nt have an pprtunity t accept r decline the benefit. Example 77: I am teaching away fr this Themis curse when I suddenly grab my chest and keel ver with a heart attack. A student rushes ut t hire a dctr, wh saves my life. Later, that student asks me t pay her back fr the dctr s fee. Must I?. Example 78: I hear abut his cl thing called quasi cntract and rush ver t paint yur huse while yu are taking yur cntracts exam. When yu cme hme, I stick ut my hand and demand a reasnable payment fr the paint jb. Will I recver?. Quasi-cntract damages are smetimes as justice requires t the f the benefit cnferred. C. Mral Obligatin Plus Subsequent Prmise A few jurisdictins have sme case law suggesting that a mral bligatin plus a subsequent prmise t pay can be binding. Nrmally, this wuld be cnsideratin and nt binding. Example 79: Recall the facts f Example 70. Yu are trying t win a race t Alcatraz when the sharks start t circle. I swing my bat ver t pick yu up. Grateful, yu prmise t pay me $500 fr the rescue. Is there bargained-fr cnsideratin?. Might I argue mral bligatin if yu later refuse t pay me $500?. D. The Seal Histrically, a seal acted as a cnsideratin substitute. Des the seal act as a cnsideratin substitute in mst jurisdictins nw? Themis Bar Review, LLC Law Schl Essentials Cntracts

24 CHAPTER 8: DEFENSES TO CONTRACT FORMATION Seven defenses yu shuld knw: Incapacity 3. 4., Misrepresentatin, and Nndisclsure 5. Duress Uncnscinability A. Misunderstanding Each party attaches a different meaning t the same wrds. Yu must shw: The parties used a that is pen t tw r mre interpretatins; Each side attaches a t the term; and Neither party r f the cnfusin. Example 80: I verbally cntract t sell yu a bike fr twelve fifty. Yu think I m trying t unlad the bike by selling it fr $ I think yu recgnize that this is a rare editin bike and yu are willing t pay $1,250. D we have a cntract?. Example 81: Same facts as Example 80 except I knw yu wuld never pay $1,250 fr the bike and yu must think the price is $ Is there a cntract?. Fr hw much?. B. Incapacity Wh lacks the capacity t make a cntract?, typically under the age f - tw standards: 1. Cannt understand the and f yur actins Themis Bar Review, LLC Law Schl Essentials Cntracts

25 2. Cannt act in a in relatin t the transactin and the ther side. A persn, and the ther side knws it. What happens if yu make a cntract with smene wh lacks capacity? The cntract is deemed. The incapacitated persn can the cntract. Fr necessities, the party wh lacks capacity must still pay fr the necessities, nt necessarily the cntract price. Includes fd, clthing, and shelter A party lacking capacity can the deal by keeping the benefits f the cntract after capacity is btained. Example 82: Amelia is age 16 but lks much lder. She buys a used airplane fr $5,000. The wings fall ff as she pulls away frm the dealer s lt. Can Amelia get her mney back?. Example 83: Same facts as Example 82, except the plane flies OK. Amelia turns 18 and cntinues t use the plane. Can she get her mney back nw? Example 84: Same facts as Example 82 except Amelia is nw 32 and takes LSD prir t buying the plane. She has n idea what she is ding, but witnesses say she seemed perfectly lucid while negtiating and buying the plane. Can Amelia get her mney back? C. Mistake 1. In General A mistake is a belief that is nt in accrd with a. Example 85: Mickey cntracts with her stck brker t buy a share f Ggle stck fr $500. When the price drps t $400 the fllwing mnth, can she get ut f the deal by saying, I made a mistake; I thught the price was ging t g up?. 2. Mutual Mistake Affects bth parties The adversely affected party can if the fllwing are true: There is a mistake f existing at the time the deal was made; Themis Bar Review, LLC Law Schl Essentials Cntracts

26 It relates t a f the cntract and has a material impact; and The impacted party did nt f mistake. Example 86: We are walking alng a trail when I lean dwn t pick up a shiny rck. Ww, I say, lk at that diamnd. I ll sell it t yu fr $10,000. Yu agree and pay me the mney but are sad t learn later that the rck is plain quartz. Can yu get ut f the cntract? Example 87: Same facts as Example 86, except I say, Ww lk at that shiny rck; I wnder what it is. Well, whatever it is, I ll sell it t yu fr $10,000. Can yu get ut f the cntract? 3. Unilateral Mistake Mistake by ne party Harder t assert as a defense The adversely affected party has t prve all the elements f mutual mistake, plus either that: The mistake wuld make the cntract ; r The ther side, had reasn t knw f, r the mistake. Example 88: Mickey decides t mve t an annual purchasing mdel fr her beer kegs and slicits 25 brewers fr ffers. Twenty-fur f the brewers qute her prices in the $100,000 t $120,000 range. But ne brewer makes a mistake abut the quantity f kegs she lists and qutes a price f $10,000 fr the year s supply. Can Mickey snap up the last deal and bind them t a cntract fr $10,000? Themis Bar Review, LLC Law Schl Essentials Cntracts

27 CHAPTER 9: DEFENSES TO CONTRACT FORMATION (CONT D) A. Fraud, Misrepresentatin, and Nndisclsure 1. Misrepresentatin and Fraud A misrepresentatin is a statement at the time f cntracting that is. It can either be intentinal (called ) r accidental. T assert this defense, the party must shw: 1. A misrepresentatin f a ; 2. Must be r ; and 3. Must be made under circumstances where it is t n the misrepresentatin. Example 89: Befre buying my Jeep Wrangler fr $3,000, yu ask me hw the car runs. I say, It s a great car. In actuality it nly runs n fur ut f six cylinders and the radiatr leaks. Can yu get ut f the cntract? Example 90: Same facts as Example 89 except yu ask me if the car runs OK, and I say yes, knwing that it has all the mentined prblems. Can yu get ut f the cntract?. Example 91: Same facts as Example 90 except I dn t knw abut these prblems. Can yu get ut f the cntract? Example 92: Same facts as Example 91 except the nly thing wrng with the car is that the cigarette lighter desn t wrk. Can yu get ut f the cntract? Fraud in the executin: yu trick smene int signing smething that they d nt even knw was a cntract. Example 93: Yu re walking dwn the street when yu run int Dave Matthews. Yu ask fr his autgraph and then laugh when he hands back the paper. If yu shw that he just signed a cntract prmising t play music at yur birthday party fr just a $100 fee, is Dave bund? Themis Bar Review, LLC Law Schl Essentials Cntracts

28 2. Nndisclsure Clsely related t misrepresentatin Yu are remaining quiet nt making a misstatement r saying smething that is nt true. Yu rarely need t tell the ther side everything abut what it is yu are cntracting abut. Watch ut fr. Example 94: I m selling my huse, but I have a very bad termite prblem. I hide the ripples in the flr with carpets and put plants n the damaged stairways. Yu buy the huse but sn learn f the termite infestatin. Can yu get ut f the cntract fr nndisclsure?. B. Duress An imprper that deprives a party f making a meaningful chice t cntract. Lk fr situatins where there is. One party makes threats t induce anther party t enter int a cntract r mdify a cntract. Example 95: Pabst threatens t breach a cntract with Mickey t sell her beer unless Mickey agrees t extend the cntract fr anther year at duble the price. Mickey has exhausted her credit with every ther brewer and feels that she has n chice but t accede t this threat. Is Mickey bund fr the next year?. : a party puts very intense sales pressure n anther party (ften smene wh is weak-minded r susceptible t high-pressure sales tactics). C. Illegality Illegal cntracts are. Nte: A cntract that is entered in f an illegal act, but is nt itself illegal, will be enfrced. Example 96: Tny Spran agrees t pay Paulie $10,000 t knck ff Artie? Legally binding as a cntract?. Example 97: Same facts as Example 96. Paulie hires a taxi t drive him ver t Artie s restaurant t carry ut the jb. Can Paulie claim an illegality defense t avid paying the cab driver?. Typically the law will leave parties where they stand. Mdern trend: allw less guilty parties t get their mney back Themis Bar Review, LLC Law Schl Essentials Cntracts

29 Example 98: Same facts as Example 96 except Tny pays Paulie the $10,000 upfrnt. If Paulie refuses t perfrm, can Tny get the mney back?. Cntracts against will nt be enfrced. E.g., a brad exculpatry agreement r a prmise t pay smene fr divrcing her spuse. D. Uncnscinability 1. Prcedural Uncnscinability A defect in the bargaining prcess itself Lk fr a hidden term r (lack f a meaningful chice). 2. Substantive Uncnscinability A rip-ff in sme term r terms f the cntract Nte: Sme jurisdictins require bth prcedural and substantive uncnscinability befre a deal will be struck dwn; sme nly require ne r the ther Themis Bar Review, LLC Law Schl Essentials Cntracts

30 CHAPTER 10: STATUTE OF FRAUDS (SOF) A. In General It is a barrier that sme cntracts must meet in rder t becme legally binding cntracts. The gal f the SOF is t prevent false assertins abut a cntract that was never really created. Example 99: I walk up t yu ne day and say, I m s glad that yu agreed t sell me yur huse fr just $50,000. Yu stare at me puzzled and reply, Wh are yu? We ve never met. I laugh and say, See yu in curt. Will I win the lawsuit?. Always ask tw questins: 1. Des the SOF apply t this transactin? 2. If s, has the SOF been? Typically, the SOF requires a signed by the, r sme perfrmance. B. Is the Cntract in SOF Wrld? The SOF nly applies t a few types f cntracts: - a cntract made in cnsideratin f marriage; - a cntract prmising t guarantee the debt f smene else; - a cntract that, by its terms, cannt be perfrmed within ne year f its making; - has special SOF rules that apply fr gds cntracts fr a price f r mre; and - a cntract fr the sale f an interest in real prperty. Mnemnic: Mr. SOUR r M. SOUR Example 100: Mickey buys beer n credit frm Pabst, prmising t pay $499 at the end f the mnth fr her five kegs. Pabst sues her at the end f the mnth fr failure t pay. Are we in SOF wrld? The One Year rule is interpreted very narrwly the questin is whether there is n pssible way that the cntract can be perfrmed within a year. Example 101: I verbally cntract with the mayr f Charlttesville t build an exact replica f the Egyptian pyramids at the edge f twn fr $50 billin Themis Bar Review, LLC Law Schl Essentials Cntracts

31 Are we in SOF wrld? Example 102: I verbally cntract with the mayr f Charlttesville t manage all city electins thrugh 2020 fr $50. Are we in SOF wrld? C. Has the SOF been Satisfied? Tw main ways t satisfy the SOF: (1) by r (2) by. 1. Service Cntracts Cmmn Law a. Perfrmance f a service cntract by either side satisfies the SOF. Example 103: William Shatner verbally agrees t hire Spck t build a huse n Enterprise Acre estate; in exchange Shatner will prvide charm lessns t Spck fr the next three years. Is this cntract in SOF wrld?. Spck builds the huse, but Shatner refuses t prvide the lessns, asserting an SOF defense. Is Shatner right? f a service cntract will nt satisfy the SOF. b. Writing A writing signed by the party against whm the cntract is being enfrced will satisfy the SOF. Yu d nt need bth signatures n the writing. The writing des nt need t be a frmal cntract. It has t cver the fundamental facts: Indicate that a cntract has been ; Identify the ; and Cntain the f the deal. 2. UCC a. Writing A signed writing will satisfy the SOF under the UCC. Requirements differ slightly: Themis Bar Review, LLC Law Schl Essentials Cntracts

32 N need t mentin the Must mentin the sld What if yu make a mistake and list the wrng quantity? Cntract is nly enfrceable under the SOF fr the quantity mentined in the signed writing. Example 104: Mickey verbally cntracts with Pabst t buy 100 kegs f beer fr $75 each. Later, Pabst sends her a signed cnfirmatin rder stating that the parties agree t cntract fr 50 kegs f beer (n price is listed). Even later, Pabst asserts a SOF defense and refuses t sell Mickey any beer. Can Mickey satisfy SOF?. b. Perfrmance n a gds cntract will satisfy the SOF, but nly fr the quantity that has been and. Example 105: Same facts as Example 104 except there is n cnfirming mem. Mickey changes her mind and decides t rder sme kegs f Fat Tire beer. Later, Pabst delivers 25 kegs t Mickey, and she eagerly stres the kegs in her basement. Can Pabst satisfy SOF?. Is Mickey cntractually bligated t buy the ther 75 kegs?. c. Custm Made r Specially Manufactured Gds Exempted frm the SOF A maker can satisfy the SOF as sn as it makes a tward the manufacturing f the gds. Example 106: I cntract verbally with Crks Brthers t buy 100 white dress shirts with GSG mngrammed n the pcket fr $10,000. Crks Brthers sends me the shirts but I change my mind and send the shirts back. Can I assert a SOF defense if Crks Brthers sues fr the $10,000? d. A judicial admissin, such as a statement in a pleading r during testimny, satisfies the SOF under the UCC Themis Bar Review, LLC Law Schl Essentials Cntracts

33 e. Failure t Object The failure t bject t a cnfirming mem within will satisfy the SOF, but nly if bth parties are. Example 107: Mickey verbally cntracts with Pabst t buy 100 kegs f beer fr $7,500. Later, Pabst sends her a signed cnfirmatin mem with all material terms. Mickey has changed her mind, crumples up the mem and thrws it in the crner. Ten days later, des Pabst satisfy the SOF? Example 108: Same facts as Example 107 except the buyer is nw Whle Fds. Ten days later, after the mem arrives at Whle Fds, des Pabst satisfy the SOF?. Even thugh there is n signed writing by Whle Fds? Themis Bar Review, LLC Law Schl Essentials Cntracts

34 CHAPTER 11: PERFORMANCE OF THE CONTRACT: PAROL EVIDENCE RULE A. Perfrmance f the Cntract Fur big tpics: f perfrmance bligatins Mnemnic: Pizza With Crawling Escargt. (PWCE) B. Parl Evidence Rule (PER) 1. In General The first step in deciding whether a party has perfrmed is figuring ut what the agreement entails. Ratinale fr PER: If the parties have reduced their agreement t a cmprehensive writing, then earlier statements r writings abut that transactin are nt ging t be part f that agreement. The PER will bar thse earlier pieces f evidence frm cming in. Lk fr a that the curt finds is a agreement earlier r statements abut the same deal will nt cme in. Des the parl evidence rule apply t later written r verbal statements abut the deal? Des the parl evidence rule apply t earlier written dcuments?. 2. Integrated Writing Gateway inquiry: Have the parties created an integrated writing? This is a cmprehensive writing full and final expressin f the parties agreement. A curt may decide that the writing is cmpletely integrated, partially integrated, r nt integrated. Cmplete integratin the cntract expresses terms f the agreement. Partial integratin there is a written and final writing, but sme terms may nt have been included Themis Bar Review, LLC Law Schl Essentials Cntracts

35 The parties may be able t bring in earlier evidence if it relates t a term nt dealt with in the partially integrated writing. Distinguishing between an agreement that is nt integrated frm ne that is fully r partially integrated: One pwerful piece f evidence is whether that writing cntains a. If s, many curts will stp inquiry and deem the writing integrated. Example 109: Disney signs a cntract with Hugh Grant t make a mvie fr $2 millin. It cntains the fllwing language right abve the signature line: This is the entire agreement between the parties. N representatins r prmises have been made save fr thse set ut in this memrandum. Hugh later argues that Disney had verbally prmised t prvide a free huse in Beverly Hills while he was filming and they did nt. Can he intrduce this evidence? Example 110: Same facts as Example 109 except Hugh argues that during the meeting but after the written cntract was signed, they verbally agreed that $2 millin was nt enugh and that he wuld get $3 millin. Disney later sent a check fr $2 millin. Can Hugh intrduce this evidence? Curts may ask whether, under the circumstances, an extrinsic term f the agreement wuld frm the writing. If s, it des nt vilate the PER and can be intrduced as evidence if it des nt cntradict the writing. The UCC is mre frgiving: presumes that a writing is, at mst, nly a integratin, unless the parties wuld have certainly included the disputed term in the writing. Example 111: Same facts as Example 109 except Hugh argues that Disney verbally ffered him, prir t signing, a sequel part fr $5 millin. Can he intrduce this evidence? 3. Circumstances the PER Des Nt Bar Evidence The PER des nt bar evidence relevant t a defense against Themis Bar Review, LLC Law Schl Essentials Cntracts

36 Even if a writing is ttally integrated, a party can always intrduce evidence f a Example 112: Same facts as Example 109 except Hugh nw argues that Disney verbally ffered, prir t signing, t sell him a seasn pass t Disneyland fr $1000. Can he intrduce this evidence?. Even if a writing is ttally integrated, a party can still intrduce evidence f a prir cmmunicatin that is designed t interpret an in the agreement. Example 113: Same facts as Example 109 except the parties disagree ver which mvie Hugh will make. Disney believes that Hugh will make The Lne Ranger. Hugh claims that they had verbally agreed he wuld make Oz the Great and Pwerful. Can Hugh intrduce this evidence? 4. PER v. SOF If the questin des nt have a signed writing, think. If the questin des have a signed writing, alng with an earlier discussin f the deal, think Themis Bar Review, LLC Law Schl Essentials Cntracts

37 CHAPTER 12: WARRANTIES AND CONDITIONS A. Warranties 1. In General A warranty is a abut a term in the cntract that explicitly t the party making the prmise. Example 114: I agree t sell yu my Jeep fr $5,000 but we dn t discuss any ther term. If the wheel falls ff as yu drive away, can yu get ut f the deal? What if I include a warranty that the Jeep will run fine fr the next 1,000 miles?. Yu can all warranties. Use f the phrase as is. 2. UCC Three Warranty Issues a. Express Warranty A prmise that affirms r describes the gds that becmes a. The use f a r creates an express warranty that the gds sld will be like the sample. Example 115: Yu walk int an AutZne stre t buy sme hubcaps. The clerk shws yu sme flr samples that are bright gld and says, These are ur best mdel. Yu buy that mdel f hubcaps, but find they are an ugly yellw when yu pull them ut f the bx. AutZne has breached an. b. Implied Warranty f Merchantability Only triggered when the seller is a, dealing in the gds at issue. The merchant makes an implied warranty, unless disclaimed, that the gds are ging t be fit fr. Example 116: Yu walk int an AutZne stre t buy sme plish fr yur hubcaps. The clerk waves yu ver t aisle 12 where yu pick up a can f hubcap plish. When yu spray it n yur hubcaps, they turn an ugly yellw clr. AutZne has breached an Themis Bar Review, LLC Law Schl Essentials Cntracts

38 Example 117: Yu walk int an AutZne stre and the clerk tells yu that their delivery van is fr sale. Yu buy it, but it breaks dwn the next day. Has AutZne breached the implied warranty f merchantability? Can a merchant disclaim this warranty?. Lk fr very language. c. Implied Warranty f Fitness fr a Particular Purpse Triggered whenever the buyer relies n the seller s in picking ut a type f gd that is ging t be used fr a. The seller makes an implied warranty, unless disclaimed, that the gds will satisfy the special purpse. Example 118: Same facts as Example 116 except yu can t decide between three different types f hubcap plish. Yu ask the clerk which ne is right fr yur aluminum ally hubcaps, and he picks up a can and says, THIS is the brand yu want. When yu spray it n yur hubcaps, they turn an ugly yellw clr. AutZne has breached an Can a nn-merchant extend this warranty by implicatin? Can the warranty be disclaimed?. B. Cnditins 1. In General A cnditin is a way t shift risk by stating that ne party s cntractual bligatins are nly ging t kick in if sme des r des nt take place. Cnditins are very strict. Example 119: Yur rich and eccentric Aunt Antinette prmises yu $5,000 if yu pass yur cntracts exam n the express cnditin that yu dn t spend any time studying. Yu spend six hurs with the Themis Law Schl Essentials lecture and easily pass the exam. Must yur aunt pay yu the $5,000?. Cnditins can be either be r. Mst imprtant implied cnditin is the Themis Bar Review, LLC Law Schl Essentials Cntracts