Contract Disputes & Commercial Litigation Flashcards

In a claim for breach of the implied covenant of good faith and fair dealing, a party must show that the defendant:

Answer: Acted to deprive the other party of the benefit of the bargain in a way not contemplated by the contract

The implied covenant prohibits conduct that frustrates the reasonable expectations of the other party and deprives them of the benefits they were promised, even if not expressly prohibited.

Under the doctrine of 'unjust enrichment' in commercial disputes, a plaintiff must establish that the defendant received a benefit, the plaintiff conferred that benefit, and:

Answer: Retention of the benefit without payment would be inequitable

Unjust enrichment (quasi-contract) requires that retention of the benefit without compensation would be inequitable—it is an equitable remedy independent of the defendant's fault.

A 'material adverse change' (MAC) clause in an acquisition agreement allows the buyer to walk away from the deal if:

Answer: A disproportionate change occurs in the target's business or financial condition relative to industry peers

Delaware courts (Akorn v. Fresenius) have interpreted MAC clauses narrowly, requiring a significant durationally-lasting change that disproportionately affects the target relative to its industry peers.

Under FRCP Rule 12(b)(6), a complaint survives a motion to dismiss if it contains:

Answer: Sufficient factual matter to state a plausible claim for relief

Under Twombly and Iqbal, a complaint must contain sufficient factual allegations to raise a right to relief above the speculative level and make the claim plausible.

In commercial litigation, the 'economic duress' doctrine allows a party to void a contract modification when:

Answer: One party was subjected to a wrongful threat that left no reasonable alternative but to agree

Economic duress requires a wrongful act or threat (not just hard bargaining) that coerces assent, and no reasonable alternative available to the victim.

Under the CISG (UN Convention on Contracts for the International Sale of Goods), which of the following automatically governs a sales contract between parties in two different contracting states unless excluded?

Answer: The CISG governs automatically unless parties expressly exclude it

The CISG applies automatically when both parties are from contracting states, but parties can opt out under Article 6 by explicitly excluding its application in the contract.