Contract Disputes & Commercial Litigation Flashcards

In commercial real estate disputes, a 'time is of the essence' clause means that:

Answer: Failure to meet deadlines constitutes a material breach justifying rescission

When time is of the essence, missing a performance deadline is a material breach that entitles the non-breaching party to terminate the contract and seek damages.

Under the doctrine of commercial impracticability (UCC Section 2-615), a seller may be excused from performance if:

Answer: Performance has become impracticable due to the occurrence of a contingency whose non-occurrence was a basic assumption of the contract

Section 2-615 requires that the supervening contingency was not foreseeable and was a basic assumption of the contract—mere price increases rarely suffice.

A financial litigator analyzing a claim for tortious interference with contract must establish that the defendant's interference was:

Answer: Intentional and improper, without justification or privilege

Tortious interference requires intentional, improper interference—courts use the Restatement factors to determine impropriety, focusing on the defendant's purpose and means.

Under the UCC, when a buyer's check for goods bounces and the seller seeks to reclaim goods already delivered, the reclamation right under Section 2-702(2) must be exercised within:

Answer: 10 days after the buyer's receipt of the goods

UCC 2-702(2) gives the seller a 10-day window to demand reclamation, extendable to a reasonable time if the buyer made a written misrepresentation of solvency within 3 months.

In commercial arbitration under the Federal Arbitration Act (FAA), a court may vacate an arbitration award only on limited grounds, including:

Answer: Corruption, fraud, or undue means in procuring the award

FAA Section 10 provides narrow grounds for vacatur: corruption, evident partiality, arbitrator misconduct, or exceeding powers—courts have very limited review of arbitration awards.

The 'economic loss rule' in commercial litigation generally bars recovery in tort for:

Answer: Purely economic losses unaccompanied by physical injury or property damage

The economic loss rule prevents plaintiffs from recovering purely financial losses through tort claims when those losses arise from a commercial transaction—the contract is the proper vehicle for such disputes.