CAS Bar Contracts and Commercial Law Flashcards

A contract is voidable on grounds of duress when:

Answer: One party made an improper threat that left the victim no reasonable alternative but to agree

Economic duress requires an improper threat coupled with no reasonable alternative, making the resulting assent involuntary.

Under UCC Article 2, when both parties are merchants and a contract is formed despite a battle of forms, additional terms in the acceptance:

Answer: Become part of the contract unless they materially alter it, were objected to, or the offer expressly limits acceptance

UCC § 2-207(2) provides that between merchants, additional terms become part of the contract unless they materially alter the agreement, the offer expressly limits acceptance, or the offeror objects within a reasonable time.

Which test is used by California courts to determine whether a contract term is unconscionable?

Answer: Both procedural and substantive unconscionability, with both required in some measure

California courts apply a sliding scale: both procedural and substantive unconscionability must be present, but the more egregious one element, the less of the other is required.

Under California law, the statute of frauds requires a writing for contracts that cannot be performed within one year. This one-year period is measured from:

Answer: The date the contract is made

The one-year period under the statute of frauds runs from the date the contract is formed (made), not from when performance commences.

In a contract for the sale of goods, the risk of loss passes to a buyer who is not a merchant when:

Answer: The buyer receives actual physical possession of the goods

Under UCC § 2-509(3), when neither a shipment nor destination contract is involved and the seller is not a merchant, risk of loss passes to the buyer upon tender of delivery, but for a non-merchant buyer receiving goods, the practical rule is actual receipt.

The doctrine of anticipatory repudiation allows the non-breaching party to:

Answer: Sue for damages immediately after the repudiation, without waiting for the performance date

When a party clearly repudiates before the time of performance, the non-breaching party may treat this as a total breach and immediately pursue remedies.

Under California's version of the UCC, a security interest in personal property is perfected most commonly by:

Answer: Filing a UCC-1 financing statement with the Secretary of State

Under UCC Article 9 as adopted in California, perfection of a security interest in most personal property is accomplished by filing a UCC-1 financing statement with the California Secretary of State.