美国纽约州律师资格考试复习笔记 合同法.doc

美国纽约州律师资格考试复习笔记 法.doc Contracts Outline Key Issue #1: Applicable Law , MBE tests 2 kinds of K law: the common law & Art 2 of UCC. o UCC Art 2: applies to all sale of goods regardless of how small the price and who the people are (can be consumers, merchants…etc). , Real estate is not goods, CL applies. , Service is not a sale of goods, CL applies. , Loans and other credit arrangements not sale of goods, CL applies. , In mixed Ks (where sale of goods and non sale of goods are involved), if the sale of goods element is more important, then UCC 2 applies; if K is primarily about services, then apply CL. Exception: , If K itself expressly divides payment, the apply UCC to sale of goods part and common law to the rest. , NY part of the bar tests 3 bodies of law 1) CL with NY variations 2) Art 2 for sale of goods 3) Art 2A of UCC for leases of goods. o Lease of goods UCC Art 2A: , leasing an airplane , UCC Art 2A applies , Applies to lease of business lease or consumer lease (lease a car from Avis) , BUT doesn’t apply to leasing a building (real property not goods). Key Issue #2: Contract formation , Terminologies defined: o K: a legally enforceable agreement (not every A is a K) (1) Is a K formed – offer/acceptance; (2) whether the Agreement is legally enforceable (are there defenses?)] , Express K: created by parties’ words either oral or written , Implied K: created by parties’ conduct//属于implied-in-fact;判断是客 观的，不论双方主观上是否有合意形成 o Quasi K: an equitable remedy Protects against unjust enrichment. (,likely to be tested on MBE,) 属于implied in law , P can recover from quasi K the reasonable value of the benefit conferred (not K price) – will usually not be as much as K price, but not more than the contract price. o Bilateral K: offer can be accepted in any reasonable way o Unilateral K: offer can only be accepted by performance , Note: All Ks are bilateral unless the offer says it can ONLY be accepted by performance. o Void, voidable, and unenforceable contracts , A void contract is one without any legal effect from the beginning (e.g., an agreement to commit a crime); Contracts 1 , A voidable contract is one that a party may elect to avoid or ratify (e.g., a contract by a minor); , An unenforceable contract is one otherwise valid but for which some defense exists extraneous to formation (e.g., the S/F) 1ST STAGE OF THE AGREEMENT PROCESS: OFFER 公共要约只有行为人知道要约的前提下去完成任务才构成接受 两份内容相对一致的交叉要约并不构成合同 如果信息在传递中有错误，即按错误的生效，除非另一方知道或有理由知道该错误 A) Offer: manifestation of an intention to be bound, created by words or conduct. The basic test is whether a reasonable person in the position of the offeree would believe that his or her assent creates a contract. (valid offer? Look at context & content) , Context: ads are usually NOT an offer (look for the mention of newspaper, on storefront) , Ads are not offers b/c there is no quantity term and an unlimited # of persons can accept. , Narrow exception: when the ad says “1 blue dress just like Monica’s, only $1! First come, first served.” An offer b/c it specifies the quantity and who can accept. , Content: vague or ambiguous terms, like “reasonable” or “fair” or “appropriate” = NOT an offer , S agrees to sell car for reasonable price = NO Offer. , Factors to be considered: languages used, surrounding circumstances, prior relationship, industrial custom, degree of definite and certain terms, and method of communication. B) Requirement K: K where quantity be sold is measured by buyer’s requirements or needs 一个例外//UCC要求也只要求必须要有关于数量的条款//此种合同的数量 取决于买家的善意需求//此种合同在assignment时也有特别规定，通常不能 assign,因为会影响义务人的履约，但若收转让人保证其要求和转让人基本一 致，即可转让。 , Look out for words like ALL its requirements, ONLY, SOLELY (commitment to exclusivity = offer to enter into requirements K). , Any increase in buyer’s requirement has to be in line with the buyer’s prior demands – rule of thumb 10% o An excessive increase will be reduced by the court; o Decrease will not be tested because law is uncertain. C) Open price term (missing price term) (common law differs from Art 2) ,, , Common Law (e.g., in the instance of selling land): there is NO offer unless the writing both describes the property and states the price. //但若是服务合 同，没有价格也可能成立合同 Contracts 2 , Art 2: there is offer if parties so intend, it’s still a good offer even though it doesn’t state price 可以用某种方式确定 , Remember: vague price term is NO offer under both CL & Art 2 2ND STAGE OF AGREEMENT PROCESS: TERMINATION OF OFFER o Effect: an offer can’t be accepted if it has been terminated Four ways of termination: 1) Lapse of Time: , If offer states the last date of acceptance, can’t accept after that date. , Even if no deadline is stated, offers don’t last forever. Offers lapse after a reasonable time (fact specific finding, rule of thumb 30 days). 2) Offeror’s Revocation: a) Revocation may be direct or indirect: , Direct revocation: a statement by the offeror to the offeree indicating unambiguously that the offeror has changed her mind (any statement indicating this intention will do) , Indirect revocation: conduct by offeror unambiguously indicating unwillingness or inability to contract with offeree and the offeree is aware of the conduct. o The mere fact that there are similar offers to other people does not revoke a prior offer. b) Revocation of an offer is only effective if it is received before acceptance o Revocation is effective on the day of receipt. o If offeree accepts before her receipt of my revocation , then too late to revoke , an A is formed! Mailbox rule only applies to ACCEPTANCE. c) Generally, offeror can revoke at anytime before acceptance, unless the following FOUR situations occur, then the offer can’t be revoked: 受要约 人如果先拒绝了，如果还在期限内，受要约人仍然可以接受，只要要约 人并没有对拒绝产生信赖。 o Option: a promise to keep the offer open that is PAID for (consideration): consideration , you have bargained away your right to revoke general-contractor 和sub-contractor之间的关系就是等于形成 了一个unilateral option contract. o Detrimental reliance that is reasonable & foreseeable (Promissory Estoppel)此种信赖必须是承诺人所能预期， 若承诺人事先表示明确 反对，则不构成。 , if my reliance is both reasonable and foreseeable. o Part performance of an offer to enter a Unilateral K (By starting performance is acceptance of bilateral K) 只适用单方合同 Contracts 3 , Ex: if offer states acceptance only by performance, and P starts performing: this is unilateral K, once performance begins, O can no longer revoke! ,NY Distinction,: offer can be revoked until performance is completed. , BUT mere preparation for performance is NOT enough to trigger unilateral part performance rule , However, preparation can be reasonable, foreseeable reliance that makes the offer irrevocable. o Firm offer rule under Art 2: ,RULE,: a signed, written promise by a merchant promising to keep an offer open for a period of time发出要约者必须是商人～～; , No consideration is required , writing takes place of consideration. , A firm offer has a 3 months cap , if offer is open for longer than 3 months, it will be scaled back to 3 months. [NOTE: if you have an option, you don’t need a firm offer. Option is better b/c you are not restricted by duration requirement.] , If no time is stated, an offer will be open for a reasonable time NOT to exceed 3 months. , If there is a written open offer in a non-sale of goods situation o MBE: S can revoke before acceptance o ,,NY Distinction,,: if offer is in writing, signed by the offeror and states that offer is irrevocable, then the offer is not revocable during the time stated or for a reasonable time, even if the offer is not supported by consideration (firm offer rule expanded). 3) Offeree’s Rejection: THREE scenarios , Counteroffer: operates as a rejection, but bargaining does not. , But if the offeree asks a question, “will you take $49k?” is considered mere bargaining , not a rejection. , Conditional acceptance: operates as a rejection & termination of an offer , if words such as “if,” “provided that,” “so long as,” “on the condition that” are used in acceptance = rejection. It operates the same way as a counteroffer: it terminates the offer and becomes a new offer.即使在 商人间亦是如此，如果商人在额外条款边加盖了印章“rubber stamp"就是指 accept upon. , An acceptance containing an ADDITIONAL or DIFFERENT terms operates as a rejection under Common Law, but not UCC 2. , Art 2: no mirror image rule; additional terms don’t kill offer Contracts 4 , But the offeree’s additional terms rarely get into the K, they only become part of K if: 这些只影响不同的条款是否属于合同，而不影响合同是否成 立～～～～此条只适用于商人～～～～～ o 1) both are merchants 2) the offer does not explicitly limits acceptance to the terms of the offer; 3) the additional term is not a material change; AND , Ex: disclaims all warranties = material change (unless in the industry is not material) , Ex: change time of delivery = NOT material change 4) offeror does not object within a reasonable time. o Therefore, if either party is a non-merchant, the additional term is merely a proposal that is to be separately accepted or rejected (but the original is not killed). 如果是非商人，也不影响合同的成立，只是不包括不同的条款 o If the original offer contains an objection to any additional or inconsistent terms, and the offeree’s response proposes new terms and states that the response is a counteroffer subject to express acceptance by the original offeror, no contract arises until performance begins. The terms will include what they agree in writing and those supplemented by UCC. 4) Termination by operation of law: , Death/insanity of either party before acceptance: , Death terminates offer even if the other party doesn’t know of the death. , Exception: 适用于所有不可撤销的要约 , Supervening illegality , Destruction of the proposed contract’s subject matter 3RD OF THE AGREEMENT PROCESS: ACCEPTANCE 1) Who can accept? , Generally, an offer can be accepted by (i) a person who knows about the offer; and (ii) who is the person to whom it was made. Offers cannot be assigned, options can be assigned unless the option says no. 2) Offer can (but usually does not) control the manner of acceptance. 如果是一个offer for immediate shipment,既可以promise to ship 来接受，也可以ship conforming or nonconforming 的货物来接受。 Contracts 5 , One can usually accept by offer of bilateral K where nothing is said about how to accept by promising (promising to perform), performing or starting to perform [,,NY Distinction,,: absent an indication to the contrary, acceptance by the same means of communication that the offer was communicated. But, modern trend is to follow the MBE rule.] , language controls. , In unilateral K, can accept only by complete performance. partial performance makes the offer irrevocable, but note the NY distinction) 3) Start of performance as acceptance (in bilateral K) , Unilateral K – need complete performance as acceptance. 4) Improper performance as acceptance: , Common law: Improper performance is acceptance plus a breach of K , Art 2: same as CL , Accommodation exception:If S lets B know why it is sending the wrong goods, then there is NO acceptance and thus NO breach. --视为 counter-offer 5) Silence as acceptance: offeree’s inaction or silence = NOT acceptance,but note silence can be acceptance due to course of dealing ---如果合同双方过去的交易显示 受要约方通常以沉默的方式接受要约，则沉默构成接受 , Offeror can’t single-handedly turn the offeree’s silence into acceptance b/c there is too much chance that the offeree will accept against his will. ,NY Distinction,: unsolicited merchandise in mail is treated as a gift and the receiver is not obligated to pay. 6) Timing: when is an acceptance effective? 1, Mailbox rule:必须是正确投递了以后才算～～ acceptance is effective when MAILED (protects the offeree from offeror’s revocation). , It doesn’t matter whether the letter is ever received! Burden of loss is on the offeror. , Four exceptions to Mailbox Rule , if offer provides otherwise: offer trumps mailbox rule (default) , Irrevocable offer: if there is an options K, the acceptance must be received before the option expires. 1 Key facts: 1) people are at different places 2) there are conflicting communications , You need to figure out which communication controls Contracts 6 , Acceptance, then rejection: under mailbox rule unless the rejection reaches offeror first, and the offeror relies on the rejection, then the mailbox rule applies, thus acceptance would be effective. , Rejection, then acceptance (mailbox rule doesn’t apply) o if rejection is sent first, then acceptance is also only effective when it is received. It’s a RACE , whichever gets there first is effective. ============================================================ DEFENSES AGAINST FORMATION (SOME FLAW IN THE AGREEMENT PROCESS) , most frequently tested: 1) lack of consideration; 2) lack of capacity & 3) mutual mistake 1) D’s lack of capacity to contract --撤销合同的权利属于行为能力不足的一方 o 3 categories: , Infant – under 18 (minors); ,New York distinction,: by statute, infants cannot void contracts in the following situations: o 14.5-year-old or older who contracts for life insurance; o educational loans for those 16 or older; o realty contracts related to marital home; and o contracts involving artistic or athletic services. , intoxication (drug or alcohol) if other party has reason to know; and , mentally incompetent – lacks ability to understand agreement o An incapacitated D has the right to disaffirm (avoid, get out of) the K , P’s incapacity is irrelevant , Actual facts controls: If L is 17, but she says she is 18 , doesn’t matter, actual age controls o An incapacitated D can impliedly affirm a K by retaining the benefit of the K WITHOUT complaint after she gains capacity: , Ex: If L retains the Harley without complaint after she turns 18 , S can enforce the K against her b/c she implied reaffirmed the K. , 3 requirements: 1) D must have lacked capacity at the time of A 2) D later gains capacity 3) D retains the benefit of K w/o complaint o An incapacitated party is liable for necessaries (food, shelter, clothing or medical care) but only on a quasi-K basis 2) Duress/coercion: Contracts 7 o Can’t threaten physical harm or economic harm (economic duress) so as to get the other party enter into K against her free will: , when someone threatens to breach an existing K unless he gets a better deal , the other guy only agrees to a new A b/c he desperately wants to get the first deal done and , no alternative source of supply o taking advantage of fortuitous 偶然发生的circumstance is NOT duress. Ex: selling umbrella for $10 when it rains rather than $3 when it’s sunny out and buying umbrella for $10 is not economic duress. 3) Misrepresentation: o If material misrepresentation about the material facts induced the A, A would not be legally enforceable even if the misrep was honest and innocent. 4) Mistake of fact in existence at time of A: o mutual mistake of material existing fact: , There will be no contract if: , Both parties mistaken, , The mistake concerns a basic assumption of fact on which the contract was made, and , Materiality affects the agreed exchange. ,NY Distinction,: the contract is void in case of mutual mistake. , Note: when the parties know that their assumption is doubtful (so-called conscious ignorance), mutual mistake is not a defense. , K to buy house, both were unaware that the house was destroyed by fire 2 days ago , no K, excused by mutual mistake. If both believe painting is by a certain someone, though it is not stated in the agreement, if that were a mistake, the A would NOT be enforceable. Mistake on the market value of thing is NOT considered material. o unilateral mistake of material existing fact : , The mere fact that one party is laboring under a mistaken belief is NOT a fatal flaw unless the other party is unaware of your mistaken belief 5) Lack of consideration or a substitute for it (essence is bargain) 如果是独家销售合同，法院默认销售方承诺尽最大的努力去推销产品， 这构成有效的 对价~～ 对第三人之前有同样的承诺并不妨碍其成为对价 Contracts 8 ,NY Distinction,: the existence of a written agreement eliminates the need for consideration! (e.g., no consideration is needed if modification is in writing and signed by the party to be charged, or by his agent.) o Definition: bargained for legal detriment , Illusory虚假 promise is not sufficient – if only one party is bound to perform, the promise is illusory and will not be enforced.//如果规定随时可以撤销合 同，则也属于虚假承诺;但任何对撤销的限制都能挽救它，比如 reasonable notice//an agreement to buy only what is desired or choose to order is not a consideration ===should be "require" , Ex: B promises to buy S’s house. S promises to sell unless she changes her mind. There’s no consideration for B’s promise to buy. o Past consideration: is NO consideration at all!例外:过去的债务～～见下面 , You can’t bargain for something that has already been done. , ,NY Distinction,: past consideration is binding if: o the promise is in writing, o the past consideration is expressly stated, o the consideration can be proven, and o the writing is signed by the promisor. o Promise to pay debt barred by S/L (enforceable if in writing)必须写下来 In this case and THIS CASE ONLY, the writing serves as a substitute for consideration in both NY and MBE. ---moral obligation o Adequacy of consideration is irrelevant o Pre-existing duty rule applies to K modification , You need new consideration to modify K (applies only to parties to the original K); exceptions: , The promise is to ratify a voidable obligation; , Unforeseen difficulty so severe as to excuse performance; , The pre-existing duty is owed to a third party rather than the promisor; , There is an honest dispute as to the duty. , If no consideration, but O’s promise to A is in writing? , MBE: no consideration , NY: existence of writing eliminates the need for consideration. , Under Art 2: UCC 2 does not have a pre-existing legal duty rule. Good faith is the test for changes in an existing sale of goods contract. o Partial payment as consideration for promise to forgive a balance of debt** Contracts 9 , Partial payment of debt that is due & undisputed is NOT consideration for the other party’s promise to forgive the debt , If the promise to forgive debt is in WRITING: , MBE: No consideration , not enforceable , ,NY Distinction,: writing eliminates the need for consideration. , BUT if debt is in dispute: there is consideration and the release is enforceable! (law favors the settlement of disputed claims) o Promissory estoppel as a substitute for consideration. 承诺人必须对受承诺人的 信赖有预期 , Elements: , Promise; , Reliance that is reasonable, detrimental and foreseeable; , Enforcement necessary to avoid injustice. , Ex: L promises to renew lease, T repaints house, but L doesn’t renew lease. T must have claim in promissory estoppel if T detrimentally relied and the reliance was foreseeable. , Note: promissory estoppel is not the first choice because some states limit recovery under promissory estoppel to that which “justice requires” 6) Illegality at time of agreement: Illegal subject matter v. illegal purpose o Subject matter of K is illegal then it’s unenforceable! If the subject matter is legal but the purpose is illegal, the agreement is enforceable only by the person who did not know of the illegal purpose. 7) Public Policy o Covenant not to compete: look to (i) the services must be unique; (ii) reasonably necessary to protect the business needs of the employer and reasonable as to both duration and geographical scope; (iii) no unreasonable burden on the parties; (iv) nor harmful to general welfare , Scope: must be reasonable in terms of time limitation and geographic limitation as well as business need for the protection; need for covenant: only applies in employment K. o Exculpatory clause免责条款 (a clause eliminating K liability) , You can contract away liability for negligence in appropriate circumstances ,, , But can’t K away liability for intentional torts or gross negligence. ,, 8) unconscionability (look for oppressive terms or unfair surprise at the time of agreement) --以订立合同时衡量 o look for substantive unconscionability: terms of K are themselves unfair o procedural unconscionability: fine print, legalese, unequal bargaining power Contracts 10 CAVEAT: if you find an issue of unconscionability, you need to spot other bigger issues as the examiners will not test only on the unconscionability thing. 9) Ambiguity in words of agreement o There will be no contract if: , Parties use a material term that is open to at least two reasonable interpretation, , Each party attaches different meanings to the term, and , Nether party knows or has reason to know the term is open to at least two reasonable interpretations. If one party knows that the parties are attaching different meanings to the same term, the K is construed under the terms understood by the other part. ================================================================= KEY ISSUE #3: STATUTE OF FRAUDS (S/F) 供销合同DISTRIBUTING不属于反欺诈条款的范畴 1) K “within S/F”: means that S/F applies (generally: K doesn’t have to be in writing) (MY LEGS: marriage, year, land, executor, goods, surety) 1) transfer of an interest in real estate of more than 1 year’s duration 不包括一年～～ (within S/F) , lease of apartment for 1 yr (not S/F) , sale of real estate , transfer of interest forever, thus falls under S/F , sale of easement for more than 1 yr , under S/F 2) Service K incapable of being fully performed within 1 yr from the date of the agreement 从签订日起计算，而不是义务履行日计算(look at K itself to see what might have happened under K, ignore what actually happens) , if you are given a specific task , theoretically any task can be performed within 1 yr, thus no S/F. , Doesn’t matter what actually happens , it’s okay if the actual task took longer than a year to finish as long as the K might be completed in a year. , Oral agreement of employment for life: , MBE: No S/F. Lifetime Ks don’t have to be in writing , have possibility of dying within a year ,NY Distinction,: Yes S/F. Person has possibility of living for more than 1 yr. , Oral agreement of employment for 3 yr: , Yes, specific time period of more than 1 yr , within S/F , Employment contract violating S/F will be treated as employment at will and each party may terminate at his will. 3) Sale of goods for $500 or more. ---如果是其他合同即使数额超过500了，也不属 于其中，比如建筑合同～～同理也包括适用在修改合同时～～ ,NY Distinction,: Lease of goods where lease payment total $1,000 or more Contracts 11 , Ex: Dell Leasing Co. alleges that Rogers orally agreed to lease a computer for 1 yr for $300/mo. It’s within S/F b/c you add up the total. 4) Promise to “answer for” the debt of another (limited to guarantees) – surety , Guarantee (secondary liability) means: Guarantor orally agreed to pay $1,000 “if debtor did not pay” , Main purpose exception: if you are told the purpose of the guarantee is to benefit the guarantor (e.g. debtor’s debt to creditor is for paint that debtor bought to paint guarantor’s house) then not within S/F. 5) Promise by an estate executor or administrator to use her own funds to pay estate expenses (rare) 6) Promise in consideration of marriage (pre-nuptial or post-nuptial for example) , any consideration that is associated with marriage, or staying in the marriage , but a promise to marry doesn’t fall under S/F. ,,NY distinction,,: Miscellaneous provisions of the NY S/F , promise to pay discharged debt,// , assignment of insurance policy or promise to name beneficiary of such a policy, and// , contracts to pay commission or finder’s fee, unless attorney, auctioneer or licensed real estate broker is involved,// , “equal dignities rule” – in agent/principal relationship, if dealing with “interest in land,” agent must be authorized in writing or principal must ratify. 2) Application of S/F to contract modification: whether K as modified falls within the S/F 是不是适用反欺诈条款，取决于修改后的合同是不是属于该条款的适用范 围～～ o If K provides that all modifications must be in writing and modification was made orally: , Under CL: a clause requiring written modification is not enforceable// , Under Art 2: this clause is enforceable; oral modification would not be effective. 3) Satisfying S/F w/ a writing: 1) Sale of goods for $500 or more (Art 2): writing must contain quantity term & be signed by the party asserting the S/F defense (D) 可以没有价格条款 , no need to include price , doesn’t matter if P signed it. , One exception allowing P to sign to satisfy S/F 原告一方签字约束双方的 情形，只适用于商人～～～～: where 1) both parties must be merchants; 2) writing must confirm a prior agreement & contain a quantity term Contracts 12 23) must be no response within 10 days 2) Lease of goods (art 2A –only in NY): writing must state that it is a lease, the number of items being leased, the length of the lease, the rental payments and signed by D. 3) All other prongs of the S/F: writing must contain all material terms (WHO & WHAT) & be signed by party asserting S/F defense (D).除非是商人间的合同 , Ex: Crain law firm signs the following letter “We agree to employ Jimmy as a lawyer for 3 yr at a salary of $600k a year.” A month later, the firm terminates Jimmy’s employment w/o cause. Jimmy sues the firm for breach of K. Writing satisfies S/F: has material terms: 1) who: jimmy and law firm; 2) what: hired for 3 yr at $600k/yr and 3) singed by the law firm. , However, if jimmy quits and firm sues jimmy, Jimmy would have a S/F defense b/c Jimmy didn’t sign it. The 2 examples show that S/F can be a one way street.] 4) Satisfying the S/F without a writing: (exceptions to S/F) i) Full performance of service contract will satisfy the S/F w/o writing , Part performance does NOT satisfy the S/F , but keep in mind that performing party may still sue and recover in quasi K for reasonable value of services rendered. ii) Part performance in Ks for the transfer of an interest in real estate, requires 2 our of 3 things: 不动产的例外 1. partial payment 2. buyer’s substantial improvement of real estate 3. buyer’s possession of real estate ,NY Distinction,: part performance exception also applies to a lease agreement.] iii) Sale of goods: 动产的例外 , part performance (for goods already delivered by S or paid for by B) satisfies S/F只适用于已经接受或已经付款的部分 , Judicial admission in a pleading, in testimony or in response to discovery , custom-made goods not suitable for sale to others制造商已经开始工作// 为买家特别制造//货物在通常的交易中难以售出 2 Merchants often enter into A over the phone and then sends a letter to confirm. Failure to respond means no fraud. Doesn’t’ want S/F to get in the way. Contracts 13 , Merchant’s confirmatory memo ---只适用于商人～～～ 5) Written authority to sign agreement for another (equal dignities rule)代理合同要不 要书面跟着主合同走 ================================================================= KEY ISSUE #4: TERMS OF THE K (INVOLVES DISPUTES OVER THE DEAL) 1). Words (oral or written) of the parties: Parol Evidence Rule (“PER”) o Effect of a writing: the Parol Evidence Rule keeps out evidence of what the parties said & wrote BEFORE they reduced the terms of their A to writing. , PER: prevent P from getting in evidence (either oral or written) of a prior agreement that contradicts a later written contract. o Comparison of S/F and the PER , A PER problem requires a writing , A S/F problem involves an oral agreement o Exceptions to the Parol Evidence Rule: can always get into evidence , To indicate a condition precedent to the written contract , To correct a clerical error (e.g. typos, transposing numbers, etc) , To establish a defense to the enforceability (formation) of an agreement , Ex: wants rescission on the ground that K is unenforceable due to misrepresentation , A prior valid agreement incorrectly reflected in the writing , Collateral agreement (e.g., an oral minor payment term not reduced and included in a written land transfer K) , To explain the written contract (interpretation) , can always get in parol evidence to show what a term means , To supplement a “partially-integrated” writing (a final statement of the terms included, but not a complete statement of all terms agreed to) , Ex: if a lease agreement is missing certain terms and doesn’t seem to be complete on its face, then you can supplement it with parol evidence. , BUT if you have a “merger clause” which says “this K is limited to the terms set forth herein” , then K is considered complete on its face and therefore can’t be supplemented. o Changing an agreement after it has been reduced to writing (modification) , Modification may need consideration or maybe modification falls under S/F. 若之前的内容并不涉及到合同的主要内容，则不受该条约束。 2). Conduct of the Parties (in the order of hierarchy) o course of performance: what the parties have done under this K (best evidence) o course of dealing: what the parties have done under their earlier contracts Contracts 14 o usage of trade: what others in the trade do under similar Ks. , Ct can use the extrinsic evidence as mentioned about in that order to evaluated the meaning of K. 3). Seller’s Warranties of Quality in a sale of goods under Art 2 o Express warranties that S makes (on facts, promises, or description BUT NOT opinion) [SELLER DOESN”T HAVE TO SAY “I WARRANT”] , Ex: ,,the seller’s use of a sample or model: gives rise to express warranty, it warrants that what you get will be exactly like the sample!! o Implied warranty of merchantability 必须是从出售此种商品的商人处购得;如 果是其他人，则不存在这样的保证 , Definition: when any person buys any goods from any merchant, a term is automatically added to the contract by operation of law – that the goods are fit for the ordinary purpose for which such goods are used. , Key: SELLER must be a merchant who deals in goods of the kind (Seller must sell this particular kind of goods) [Requires specialized knowledge about this particular good.] Implied warranty of fitness for a particular purpose (Seller doesn’t have to be a merchant不需要一定是商人) , Key: buyer has special purpose; buyer relies on seller AND seller knows it , If the question deals with WHY buyer needs a certain good, then the question is dealing with implied warranty of fitness for a particular purpose. 4). Seller’s warranties of quality in a lease of goods under Art 2A (,NY ONLY,) o The same IMPLIED WARRANTIES exist in lease of goods under 2A as in Art 2 sale of goods. o Exception: , NO implied warranty of merchantability when it involves a finance lease made by Bank! , Ex: Roy leases computer from Citibank, who bought the computer from Gigabyte Computer Co. Is there an implied warranty of merchantability: NO implied warranty made by bank, but implied warranty made by computer co. 5). Limitation on warranty liability in sales and leases of goods o Disclaimer of warranties (clause that eliminates warranties) , Seller can’t disclaim an express warranty. S can’t on the one hand make warranties and disclaim them at the same time. Contracts 15 , Ex: K can’t both say “all parts are guaranteed for 2 years” and “all warranties are disclaimed” , Seller or lessor of goods can disclaim all implied warranties with “as is” or “with all faults” , If “as is” or “with all faults” aren’t used, the disclaimer must be CONSPICUOUS in nature (large print, bold face), then it would be effective. o Limitation of remedies (doesn’t eliminate warranty, just limits recovery) , 3 Factors on whether limitations on remedies will be enforceable: , you can limit B’s remedies for both express and implied warranties , test for the validity of any limitation of remedies is “whether it’s unconscionable”? , unconscionability is measured at the time of K, not at time of mishap. o NOTE: property damage is up to Ct to decide. , Where personal injury results from consumer goods, then limitations of remedies is presumed to be unconscionable. ,,, 6). Seller’s delivery obligation in a sale or lease of goods involving a common carrier (e.g. UPS) o Shipment contract: seller must get the goods to a common carrier; make reasonable delivery arrangements & notify buyer of where the goods are o Destination K: seller must get the goods to where buyer is located , FOB (Free on Board) follow by city name other than seller’s city , a destination K. 7). Risk of loss in sales of goods: o Where goods are damaged before buyer gets the goods & neither the buyer or the seller is to blame, who bears the risk of loss? , If the seller bears the risk of loss: the seller must provide new goods to buyer for NO ADDITIONAL COST or is liable for breach of K , If the buyer bears the risk, the buyer must still pay the K price. o The following hierarchy determines who bears the risk of loss: 1. Agreement of the parties control 2. Breach: the breaching party is liable for any uninsured loss (even if the loss is utterly unrelated to the breaching party) , Ex: Beer Co San Antonio Ks to sell bear to Tex Mex Pub in the Bronx. An electrical shortage caused the beer to spoil while being transported by UPS. K is silent on risk of loss, and neither is to be blamed for the problem. Who bears the risk of loss if the bear was delivered on week after K deadline? o Beer Co. would bear the risk of loss b/c it breached first by shipping goods late. o If you find anything breached at all , risk is on the breaching party. Contracts 16 3. Delivery by common carrier other than seller: shifts risk to buyer when seller has completed its delivery obligation. 取决于是shipment contract 还是 destination contract. 4. If no common carrier (e.g. buyer to pick up or seller to deliver), the answer depends on whether the seller is a merchant (whether buyer is a merchant is irrelevant).区分商人和非商人～～～～ , If seller is merchant , seller bears the risk of loss until the buyer takes physical possession of the goods. , If seller is a non-merchant, the seller bears the risk of loss until seller “tenders” the goods 5. If a contract gives the buyer the right to return the goods, the key is whether the buyer is buying primarily for resale or for his own use: , Sale or return: same rules apply// , Sale on approval: risk remains on the seller until the buyer has accepted the goods. 8). Risk of Loss in leases of goods (Art 2A) (,NY,) o The lessor bears the risk of loss even when the goods are in the possession of Lessee. o Exception for finance leases: the lessee would bear the risk of loss if the lessor is a bank. ================================================================= KEY ISSUE #5: PERFORMANCE OF THE CONTRACT 1). Performance of K for the sale of goods (Art 2) , Perfect tender rule: If not, the buyer has the right to reject the non-conforming goods. nd, Cure: a seller who fails to make perfect tender may have an option to cure (2 chance). It usually depends on whether the time for S’s performance has expired or not. o S would have the option to cure by the deadline of delivery. o Exception allowing for option to cure after deadline has past is where there is a history between the parties and the party had previously accepted non- conforming goods. , Installment sales K: 数次DELIVERY在FIXED TIME，不适用PERFECT TENDER o look for K language that requires or authorizes the S to deliver the goods in separate installments Contracts 17 , Ex: if the S makes 5 separate deliveries of 4 kegs each is this an installment sales K? We don’t know yet , need to look at K language. o Perfect tender rule does not apply to an installment sales contract. Policy: assumes seller will cure in the course of ongoing performance. (making it harder for buyer to reject in installment Ks) , B has the right to reject an installment only if there is substantial impairment in the installment that cannot be cured;严重损害且不能修复 , B has the right to reject the entire contract only if a defect in an installment substantially impairs the value of the entire contract. , Acceptance of goods如果拒绝接受货物，卖家又不肯接受货物，则买家可以要求 返还价款并出售货物以获得的款项填补。 o when acceptance occurs: , express acceptance , Buyer must have had opportunity to inspect the goods before the buyer accepts the goods. , Implied:If buyer retains the goods w/o objection after having a reasonable time to inspect them (e.g., for 2 mos), then the buyer has impliedly accepted the goods. , Acts inconsistent with the seller’s ownership , failure to seasonably notify the seller of his rejection o effect of acceptance: , once a buyer accepts goods, it is too late for the buyer to reject , A buyer who accepts non-conforming goods can still get damages , Revocation of acceptance of the goods--不能拒绝只能撤销: o General rule: once a buyer accepts, the buyer cannot revoke acceptance o Exception: a buyer can revoke acceptance within a reasonable time after he discovers a nonconformity only if the non-conformity substantially impairs their value and was difficult to discover. , Requirements: , Nonconformity substantially impairs the value of the goods; , Excusable ignorance of grounds for revocation or reasonable reliance on seller’s assurance of satisfaction; and , Revocation within a reasonable time after discovery of nonconformity. Review: compare rejection and revocation of acceptance of goods Rejection Revocation of acceptance Timing Before acceptance After acceptance Contracts 18 Standard Perfect tender Substantial impairment/difficult to discover Other , Seasonably notify seller requirements , Hold the goods for seller , Follow reasonable seller instructions Consequence, Goods back to seller s , No buyer payment obligation , Buyer’s payment obligation o Can pay with checks; but S doesn’t have to take the checks, can insist on cash; if S insists on cash, B would have additional reasonable time to get some cash (even if after the deadline). , K is okay if it says pay by certain time on certain date 2). Performance of common law Ks , Substantial performance is the standard (means there is no material breach) , still can sue for breach of K and recover damages , BUT I am NOT excused from paying the K price b/c only a material breach will excuse the non-breaching party from performing his part of the bargain. o Where there is material breach, then I can sue her for damages and I am also excused from paying her the K price. But she can recover in quasi-K for the reasonable value of the work that she has done. [On the NY portion of the bar, if you can recover under QUASI K, put it in the answer , they like equitable remedies.] , Divisible Ks o Substantial performance is evaluated on a unit-by-unit basis b/c in divisible Ks payment is divided up on a per unit basis. , Ex: if I K with Martha to pay her $9000 a painted cabana for 10 cabanas, and she paints only 3 cabanas. Martha has substantially performed on 3 cabanas , gets $2,700 (on K price). , Ex: Employment K as usual. ================================================================= KEY ISSUE #6 EXCUSE OF PERFORMANCE BASED ON EVENTS OCCURRING AFTER K IS FORMED 1). Excuse based on the other party’s breach , Art 2: any breach is a breach , if S fails to make perfect tender, B can reject ALL of the goods from S (B is excused from performing) , Common law material breach rule: Contracts 19 i. Damages can be recovered for any breach; ii. Only a material breach by one guy excuses the other guy from performing; iii. Whether a breach is material is a factual question. A court may look at the following factors to determine if a breach is material: , Amount of benefits received by the non-breaching party , Adequacy of compensation for damages to the inured party , Hardship to the breaching party , Extent of part performance by the breaching party , Negligence or willful behavior of the breaching party , Likelihood that the breaching party will perform the remainder of the contract 2). Excuse based on the other party’s repudiation拒绝 by words or conduct (ANTICIPATORY REPUDIATION or INABILITY TO PERFORM) , Anticipatory repudiation 仅仅是表达对自己履约能力的怀疑不够成预期违约 i. An unambiguous (positive and unequivocal) statement (i) that the repudiating party will not perform; (ii) made prior to the time that performance was due. Anticipatory repudiation by one party excuses the other party’s duty to perform. It also generally gives rise to an immediate claim for damages for breach unless the claimant has already finished performance. 另一方也可以 寻找其他人完成合同，且不需要预期违约方。 ii. Anticipatory repudiation can be reversed or retracted so long as there has not been a material change in position by the other party. If the repudiation is timely retracted, the duty to perform is reimposed but performance can be delayed until adequate assurance is provided ,只要另一方并没有信赖， 预期违约方可以撤回关于逾期违约的表述。 , if executory on both sides , sue immediately, rescission, suspension, or urge; , if non-breaching party performed , wait till after due date of other party’s performance , Inability to perform i) Ex: P Ks to paint O’s house with O in exchange for a unique autographed painting. Before P finishes her painting, O sells the painting to Conviser. Is P excused from continuing to perform? Yes. ii) Prospective inability to perform merely raises doubts about performance; thus, it does not meet the unequivocal requirement of anticipatory repudiation. iii) The innocent party may suspend her own performance until she receives adequate assurances of performance. If these are not forthcoming, she may treat the failure as a repudiation. Contracts 20 a. Retraction is possible, but may be ineffective if the other party has changed her position in reliance on the prospective failure. 3). Excuse because of failure of a performance condition a) Definition and distinctions iv) Performance condition: a mutually agreed upon promise modifier. It is language in a K – not merely language in a response to an offer – that does not create a new obligation, but merely limits obligations created by other language in the K. b) How can you identify a contract provision as an express condition i) Watch for words such as “if,” “provided that,” “so long as,” “subject to,” “in the event that,” “unless,” “when,” “until,” and “on condition that.” Most contracts and most bar exam fact patterns do NOT have express conditions. c) What is the standard for satisfying an express condition? i) General rule – strict compliance with express conditions (1) Ex: B Ks to build O’s house. The contract provides “O’s payment for B’s work is expressly conditioned on B’s using Reading pipe throughout.” B instead uses comparable Cohoe pipe. Has the condition been satisfied so that O has to perform, i.e., pay for the house? NO. ,,,, ii) Exception – condition based on approval of one of the contracting parties is treated as satisfied if reasonable person would approve, unless subject is art or other matters that are inherently discretionary. d) How can an express condition be excused? i) Estoppel: (1) Identify the person who benefits from or is protected by the condition. Then look for a statement by that person giving up the benefits and protection of the condition. (2) Estoppel is based on a statement by the person protected by the condition BEFORE the condition event was to occur and requires a change of position. ii) Waiver: based on a statement by the person protected by the condition AFTER the conditioning event was to occur and does not require a change of position. A waiver that is not ancillary从属 or collateral to the main purpose of the K shall be treated as a gift and unenforceable. iii) Failure to cooperate: a party who wrongfully prevents a condition from occurring will no longer be given the benefit of it. 4). Excuse based on a later agreement (5 types) , Modification (substituted agreement) , Accord and Satisfaction (substituted performance) i. Accord: an agreement in which one party to a contract agrees to accept performance different from that originally promised. An accord does not Contracts 21 discharge a contractual duty. It merely suspends the other party’s right to enforce it. 必须要有新的对价 ii. Satisfaction: performance of the accord----不能要求再执行原先的合同; 如果此时债权人要求再执行原先的合同，义务人可以以accord作为抗 辩也可以先承担损失再提出对方违约之诉。 iii. Effect of accord and satisfaction: , the original obligation is excused by accord and satisfaction when the new obligation is performed; , if the accord is not performed, then the other party can sue on either the original obligation or the accord. , Rescission废除 (cancellation) i. if both parties agree to cancel the K after K is formed , then both parties are excused from performing ii. BUT in order for a rescission A to be effective, each party must have some performance remaining , thus if one party has fully performed, the other party can’t rescind. Release 必须要有对价或者是信赖。//Rescission 可以是礼物 , Novation (substituted person) 必须三方同意～～必须有新的一方取代原先的 合同方 i. Novation requires the consent of all parties; ii. Also, if there is a novation, there is substitution, then the old party is excused , Excuse based on a Later Unforeseen Occurrence that makes performance IMPOSSIBLE (common law) or impracticable (Art.2) or frustrates the purpose of the performance 不可抗力不仅仅是“impossible”，可以免除履约义务，同时也是免除了迟延履 行的责任 i. Rule: , Something that happens after contract formation but before the completion of contract performance; , that was unforeseen; and , that makes performance objectively impossible or commercially impracticable (risk of loss must not have been allocated to the party seeking excuse either by terms of the bargain or custom of the marketplace) or , Frustrate the purpose of the performance. ii. Always START with the assumption that later unforeseen events don’t matter on the MBE (it’s pretty tough to get out based on impossibility) , Destruction of thing necessary for performance , BUT: if builder Ks to build house for O. Before builder is finished, house burns down. O sues B for breach , B is NOT Contracts 22 excused, B’s task of building a house is not impossible.--若有不 可抗力，承建方承担损失;但若是修理已经存在的房子，房 主承担责任。 (just b/c it costs more doesn’t mean it’s impossible) , Under Art 2: , Where seller bears the risk of loss, seller is excused from performance if goods that had been identified and the goods are special (e.g., a particular car – Jerry’s1971 Corvette) in the K and are unexpectedly destroyed. But if the goods are fungible items (nothing special about them), the destruction of seller’s quantity of that item doesn’t excuse seller’s delivery of that item. , If the buyer has the risk of loss, a later unforeseen event doesn’t excuse B’s obligation to pay! (just think , it’s never impossible for B to pay即使重病也不行) , Death or incapacity of a person essential for performance (special to K) 主要是指服务合同 , Supervening government regulation or order , if gov’t ordinance frustrates the K, then party is excused from performance. , Frustration of purpose (buyer’s remedy) , need at the time of K both parties understood the purpose of the K AND later on an unforeseen event frustrates that purpose , Ex: if unforeseen event merely makes K less profitable , not excused. ================================================================== KEY ISSUE #7: REMEDIES FOR BREACH OF CONTRACT 1). In rem remedies (“the thing itself”) (rather than monetary damages) 31. Specific performance/injunction: compelling a party to do what he agreed to do. Following requires shall be satisfied for the purpose of obtaining specific performance: (i) legal remedy inadequate (e.g., the performance is unique); (ii) mutuality of performance; (iii) practically enforceable; and (iv) no defense to the performance, the contract exists, and conditions precedent satisfied. , Real property: always can get SP , Sale of goods: available only if the goods are unique (e.g., antique, work of art, 3 Not generally available on the bar. It is viewed as an equitable remedy that is available only if monetary damages are INADEQUATE. Look for damages, not specific performance, unless there is a compelling reason to grant specific performance. Contracts 23 custom goods) , Services: no indentured servitude , (but courts can grant injunction to prevent work for someone else, impose negative restrictions on the person) 2. Reclamation要求归还权: unpaid seller's right to reclaim goods under Article 2 , RULE: unpaid seller has no right to get the goods back from a buyer that has not paid for them , EXCEPTION: seller may reclaim goods from the original buyer (but not a third party), if: , buyer was insolvent on date it received goods; AND , falls under 10 day rule (S must make demand for goods under 10 days), which starts to run from the day that the buyer receives the goods and not the date of the contract, has not expired , EXCEPTION: seller may reclaim goods at any time if the buyer misrepresented its solvency to the seller in writing within 3 months before delivery. Replevy: the buyer may Replevy identified, undelivered goods from the seller if the buyer has tendered 1.full payment and 2. made at least part payment and either (i) the seller becomes insolvent within 10 days after receiving the buyer’s first payment,// or (ii) the goods were purchased for personal, family, or household purposes. In other cases, where the seller has failed to deliver identified goods, the buyer may Replevy them from the seller if the buyer is unable to secure substituted goods. 3. Entrustment委托: , RULE: an entrusting owner has no right to get her stuff back from BFP if the person she entrusted sells her goods to a later BFP! , REQUIREMENTS: (i) merchant must be the one who ordinarily deals in goods of the kind, (ii) the sale must be in the ordinary course of business, and (iii) the entrustment passes only the rights of the entruster. , BUT she will have a cause of action of conversion against the person who sold her goods. 4. Right to request assurance (Article 2) , A party with reasonable grounds for insecurity (that the other party is not going to perform its promise) may request in writing adequate assurance from the other party. , The party seeking assurance may suspend his performance until he receives adequate assurance. , If the other party refuses to provide adequate assurance, the requesting party may treat the contract as repudiated and thus have the right/excuse to get out of the contract. , An assurance provision does not allow a party to rewrite a contract nor can a party Contracts 24 request a special assurance (rather, adequate assurance). Ex. You cannot request payment in cash in case of a sale on credit where the seller feels insecure of buyer’s credit. 5. Reformation 修正 (1) Nature of remedy (a) Equitable remedy (b) Changing (i.e., reforming) a written contract (c) Courts (and bar examiners) are slow to go with reformation (2) Facts to watch for (a) Mistake in writing the agreement (i) People make an agreement and then do not correctly express the agreement in writing. Look for problems in the wording of the written agreement such as omissions, “clerical errors,” etc. (b) Fraudulent misrepresentation as to what is in the agreement (i) Reformation is also available when one party’s mistake about what is in the writing is due to the other party’s fraudulent misrepresentation. (ii) Note: 1. Here the plaintiff is asking the judge to change the K and order the D to perform pursuant to the changed K , fraudulent misrepresentation required 2. Right to cancel the right , honest, innocent misrep is enough 2). Monetary Remedies (Damages) , Liquidated damages: permissible if damages were 1) difficult to estimate at time parties entered into contract, and 2) the clause is a reasonable forecast of probable damages (sliding scale, graduated, flexible, proportionate with breach). , Expectation damages: put the plaintiff in as good a position as full performance (benefit of the bargain damages) Always PUT expectation interest FIRST if there is breach! It is the usual measure of damages.] o RULE: If a party breaches, it must pay whatever it costs the other party to cover. (same in CL & Art 2) LIMITATION in art 2: party who covers must use good faith (honesty in fact and the observance of reasonably commercial standard of fair dealing) o RULE: if party buys good at a certain value, but it is not the stated good, seller owes buyer [market value of the supposed good – the market value of actual good.] o RULE: incidental damages are always recoverable; incidental damage means: a) the cost of arranging a replacement deal; b) expenses the buyer incurs in taking care of non-conforming goods You can get ID in addition to the other damages that you get.] Contracts 25 o RULE: if seller is a lost volume seller (where there is a regular inventory, has lots of the same item), buyer is liable for the lost profit.---一般会有类似 INVENTORY,HIGH-VOLUME的词出现。 , Damages for sale of goods Part Seven of UCC 2 reflects the general contract damages policy of putting the innocent party where it would have been had the contract been performed. There are two relevant facts: (i) who breached; and (ii) who has the goods. i) Seller breaches, buyer keeps the goods [faire market value if perfect – fair market value as delivered] ii) Seller breaches, seller keeps the goods [market price at time of discovery of the breach – contract price] OR [replacement price – contract price] iii) Buyer breaches, buyer has the goods [contract price] iv) Buyer breaches, seller has the goods [contract price – market price at time and place of delivery] or [contract price – resale price] and, in some situations, provable lost profits. Good faith requirement for resale and replacement. , Consequential damages: damages arising from P’s special circumstances, recoverable only if D had reason to foresee at time of contract (where the plaintiff bears the burden of proving that special circumstances were made clear to the defendant at the time of entering into the contract). , Rule of mitigation (rule of avoidability) o Employment context: when somebody is fired, employee will recover difference between old contract salary and comparable job salary o when buyer’s look for comparable employment: whether the P could have gotten the same kind of work in the same city o person does not have to actually go take up the other job. o this mitigation rule is a defense. Burden will be on the breaching employer to show that the employee could have avoided some or all of her damages with reasonable effort. i) Certainty limitations – reasonable certainty test – damages can’t be speculative ================================================================== KEY ISSUE #8 THIRD PARTY PROBLEMS NOVATION:一方已经被释放出合同，另一方取代其进入合同 rd1). Third party beneficiary Law: K is to benefit 3 party (TPB) 只有VESTED以后，第三方才有ENFORCE的权利//不会比原合同方更大的权利 o TPB can enforce the K and sue the breaching party under K and collect damages for breach. Contracts 26 o Vocabulary: o Third party beneficiary: a person who did not make a contract, but still has rights under it, b/c the K was intended to benefit him. o Promisor: person who promises to do something for the third party o Promisee: the other contracting party o Intended v. incidental beneficiary: if the party is named in the K, then the third party is an intended beneficiary. If not, then the third party is an incidental beneficiary. Only an intended beneficiary has legal rights. 法院在考虑是否是Intended的时候，会考虑以下因素: a) Whether the third party was designated in the contract b) Whether performance was to be made directly to the third party c) Whether the third party was specifically given any rights under the contract; and d) Whether the third party had such a relationship with the promisee as would indicate that the promisee wanted to benefit him. e) Some performance is to be made directly to her; and f) She stands in a close relationship to the promisee. rdo Creditor/donee beneficiary (gift): if a 3 party is a creditor of the promise, rdthe 3 party is a creditor beneficiary. If not, the third party is a donee beneficiary. o Rescission or modification of the K ---看利益是否VESTED，有三种方法:同 //信赖//提起诉讼要求执行 a)Manifests assent to the promise in a manner invited or requested by the parties; b)Brings suit to enforce the promise; or c)Materially changes position in justifiable reliance on the promise. o The two original parties can rescind the K before vested . o Can’t rescind the K if TPB learns of it and relies on it. “vested” rdo Rights of 3 party beneficiary o An intended TPB can sue the breaching K w/o privity of K o Promisor can raise any defenses that he has against the promisee when he is sued by the TPB此条很重要，因为题经常问TPB能否prevail o TPB can recover from promisee ONLY IF the TPB is a creditor beneficiary, otherwise the TPB has no rights against the promisee at all. 受赠者受益人不 能起诉受承诺人，除非守承诺人通知了受益人并预见到其信赖且受益人 确实建立了信赖。 o Rights of promisee Promisee can sue promisor for breach, even if TPB is only a donee beneficiary (but in this case, promisee would not have suffered very much damage) Contracts 27 2). Delegation of duties 所有合同都可以转让，除了私人服务合同和长期按需供应合 同(这个有例外) o RULE: contractual duties may be delegated w/o the obligee’s (person to whom duty to owed) consent (delegation would be valid even if the obligee objects to delegation) o Exception 1: K language (CONTROLS) says delegation is prohibited or assignment is prohibited: then delegation would NOT be valid. 和转让权利不同， 合同说不能转让即不能准让。 o Exception 2: if duties involve special skills or a party with special reputation, this party can’t delegate, not even to someone in the same field or who has similar skills. o Consequences if delegate does not perform: , Delegating party remains liable (where as in novation, the delegating party would be excused) 转让债务方自己仍然承担责任---SECONDARY LIABILITY，权利人并不需要先要求承担方履行 , If the delegate gets consideration for performing duties, then the delegate would also be liable to oblige. 承担方只有是有对价承担，才对此义务负 责 43). Assignment of Rights: rdo Definition: 2 people make a K, later 1 party transfers his rights under K to 3 party o Assignor is person who later transfers rights under a K o Assignee is person to whom rights are transferred o Obligor is person who owes performance under contract o Requirements for making an assignment: o no need for consideration, gratuitous (gift) assignments are valid o assignment will need to be in writing if it is for more than $500. (???) o Attempt to assign is no good (e.g., I promise to assign); need language of assignment: “I assign” or “I hereby assign.” o Restrictions on assignment禁止转让--仍可以转让，转让人承担违约责任//转让 无效 o K clauses: , A clause that merely prohibits assignments from a clause: U can still assign your right (but not your obligation), but if you assign your right, you have breached K , A clause completely invalidates assignments, e.g., says “assignment of rights under K are VOID”: completely invalidates assignment , not only can’t you do it, but assignment itself will be invalidated. o Court-imposed (CL) limitation: an assignment can’t substantially change the duties of the obligor , Right to receive payment can always be assigned , no substantial 4 Assignment involves a two-step process while third party beneficiary issue involves only one step – third party present at the very beginning. Contracts 28 change (e.g., writing a check to one person is not a big change from writing a check to another person) , Change in the services themselves , might be a substantial change , In requirements K (quantity is specified): assignable as long as the assignee’s requirements are not out of line with the assignor’s. o Rights of an assignee转让人并不保证义务人会履行义务，他只保证不会错误 行使撤销转让权，以及义务人不存在受让人不知道的对转让人的抗辩使得受 让人无法强制义务人履行//和义务转让的规定不同 o Assignee can sue the obligor: if the obligor doesn’t perform o Obligor has the same defenses against the assignee as it would against assignor (the assignee steps into the assignor’s shoes and has only the rights that the assignor has) o Notice to obligor of assignment , payment by the obligor to the assignor is effective unless the obligor is aware of the assignment o Multiple assignments (Who gets to collect) o Gratuitous assignments: the LAST gratuitous assignee in time wins (no need for consideration) b/c a later gift assignment revokes an earlier one , But if the earlier assignment was made in writing: , MBE: writing doesn’t matter , ,NY Distinction,: a written assignment signed by assignor is irrevocable. o Assignments for consideration: the FIRST assignee for consideration wins b/c assignments for consideration are much more durable in nature. , Note: being the first person to notify the obligor is NOT enough. In storder for the assignee to prevail, he must also be the 1 to obtain payment from obligor or judgment from obligor. Contracts 29