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Contract Law Flowchart PDF
Contract Law Flowchart PDF
Fraudulent Misrepresentation Undue Influence Seller / lessor is a Risk transfer Risk transfer on tender
Misrepresentation of material fact Clear & convincing evidence that the merchant? on delivery of
Damages Waiver of Breach Equitable Remedies at specified loc.
Intent to deceive transaction “induced domination” of a documents
Justifiable reliance by other party weaker party
Compensatory Construction If injury is proven, damages = represented Presumed in relationships of trust &
Yes Risk transfer on receipt
value less price paid (+ punitive damages) confidence & must be rebutted
Owner Breach
Duress Mistakes: Contract remains enforceable No Risk transfer on tender of deliv.
Sale of Sale of Threatened by wrongful/illegal act unless mistake is Bilateral (both parties
Land Goods Before Economic duress if party exacting the made mistake) & mistake of material fact;
During
construction price also created the need OR gross/obvious math error. UCC RIGHTS & DUTIES
Buyer construction
begins
Breach Unconscionability (often: fine print or adhesion contracts): Parties have substantially unequal Duties & Rights of Seller / Lessor Duties & Rights of
Specific bargaining positions, and enforcement of the term would be manifestly unfair/oppressive. Buyer / Lessee
Profits + costs Conforming Goods ● Tender of Deliv.
performance; if Profits Payment at
incurred Shipment Contract: Facilitate deliv. with carrier; provide
land is already Lost designated time/
Discharge from Contractual Duties buyer nec. docs to get possession; notification of
sold, diff. btw. profits place of delivery
shipment.
contract price & Contract price After Right to Inspect
Performance according to contract terms. Destination Contracts: Deliver at designated location;
market value Seller + interest completion Discharge by Operation of Law: goods and reject
reasonable notice; necessary documents.
Breach Alteration: innocent party discharged when if non-conforming
Rescission: requires formation of a new Perfect Tender unless (1) parties agree otherwise, (2)
Contractor Breach other materially alters terms w/o consent. Acceptance: (1)
Consequential contract w/ consideration. May be oral cure w/in contract timeframe, (3) substitution of carrier; (4)
Statute of Lims: on suing for breach (UCC indication; (2)
unless RE or req’d in writing (UCC). in installment contract, substantial impairment of entire
contracts on goods: 4 yrs reducible to 1 yr) contract; (5) unforeseeable commercial impract. (6) presumed if
Diff. btw. Novation: substitution of a 3rd party for an
Punitive (rare in Bankruptcy ● Frustration of Purpose reasonable time
contract Before Before original party. Requires: (1) prev. valid destruction of identified goods; (7) reasonable grounds to
contract law) Impossibility: objective, unforeseeable, believe non-conforming goods acceptable; (8) buyer elapsed; OR (3)
price & construction construction obligation; (2) agmt by all parties; (3)
supervening event: (1) party dies, (2) doesn’t specify reason for refusing goods. acts inconsistent
market begins completed discharge of prior party; (4) new, valid
Nominal subject matter destroyed, OR (3) change Warranties (UCC defaults): Title (good title, no liens, no w/ seller’s
value contract with consideration.
in law makes performance illegal. infringement); Express, Implied, Merchantability, Fitness ownership.
Substitute Agreement.
Commercial impracticability: unforeseen for a Particular Purpose.
Liquidated Costs incurred by Accord & Satisfaction: suspends original
and signif. increase in difficulty of Product Liability: Breach of Warranty; Negligence Duties of
(fixed) Cost above owner to complete agmt until new accord is complete. Obligor
performance causing extreme burden. parties met?
contract price work can discharge via orig. contract or accord. (failure to exercise reasonable care; misrepresentation
(tort)); Strict Liability (unreasonable danger; product
Types of Damages defects; design defects; inadequate warnings.)
Known in advance that
Amount is a reasonable
damages would be difficult Yes
estimate & not excessive? Compensatory: Direct losses & costs Consequential (special): Foreseeable Discharge by Op. of Law Yes No
to estimate?
sustained + incidental dmgs (costs incurred to damages resulting from consequences of a
Other agreement, Complete
Fixed price schedule rec’v alt. performance), less losses avoided. breach, possibly including lost profits on
Yes mutual rescission, etc. Performance
set by contract items intended for resale.
Punitive (exemplary): Extremely rare in
A party contract law; typically only if a breach also Nominal: Establish technical injury or
Rescission & constitutes a tort, and in limited instances of
Return of goods possesses wrongdoing where no actual loss sustained. BREACH &
Restitution bad faith insurance settlements.
contracted goods REMEDIES Seller Breach Buyer Breach
Liquidated (fixed) Damages: Contractually
Goods have Mitigation of Damages: Innocent party is agreed-upon amounts to be paid in
Market value of Seller Refuses to Deliver Goods in Seller’s Possession
been Reformation required to mitigate damage suffered to the compensation (not penalty) for breach if
goods is substituted Cancel & dmgs Withhold delivery
consumed/sold extent possible. actual dmgs would be difficult to estimate.
& dmgs (diff. btw. contract & resale)
Contractual duties Land, unique Specific Cover & dmgs
Equitable Remedies Rescind & dmgs
must be carried out goods Performance Replevy & dmgs
Rescission & Restitution: Contract is Specific Performance: Court orders a Goods In Transit
Only monetary dmgs Most contracts Quasi Contract Specific
terminated and the parties are returned to party to complete contractual obligation. Stop delivery: damages as above
are available & personal svcs Recovery perf. (unique goods)
their original pre-contract state; goods (or Often RE and unique goods contracts;
Complete delivery: damages as below
equal value) and money returned. never personal services contracts. Nonconforming Goods
Reject & dmgs Goods In Buyer’s Possession
Quasi Contract Recovery: Requires: (1) A
The Law of Contracts by Jeremy Modjeska (http://j.modjeska.us). Reformation: Court reforms contract to Sue for purch. price & incidental dmgs
party has conferred a benefit, (2) with a Revoc. of accept & dmgs
Source material: CLARKSON ET AL., BUSINESS LAW: TEXT AND CASES, conform to parties’ original intent, remedy a
reasonable expectation payment, (3) in a
11TH ED. (Cengage, 2008); American Law Institute & National mistake/fraud, or remove/revise an overly Resell & dmgs
non-volunteer capacity, & (4) w/o recovery, Goods: reclaim Lease: reclaim
Conference of Commissioners on Uniform State Laws, Uniform strict noncompete covenant. (merchant buyers)
the other party would be unjustly enriched. w/in 10 days property
Commercial Code (U.C.C.) (2005).