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224 Cards in this Set

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Express Contract
formed by language, oral or written
Implied Contract
formed by manufestations of assent other than oral or wirtten language, i.e. conduct
Quasi-Contract
not a contract, a way to recover the benefit conferred / prevent unjust enrichment
Bilateral Contract
requires an exchange of promises
Unilateral Contract (in general)
requires the exchange of an act for a promise
2 types of unilateral contracts
1. offeror clearly indicates that performance is the ONLY manner of acceptance
2. there is an offer to the public clearly contemplating acceptance by performance (reward offer)
Void Contract
contract without any legal effect from the beginning

ex: a contract to commit a crime
Voidable Contract
a contract that a party may elect to avoid or ratify

ex: a contract by a minor
Unenforceable Contract
a contract otherwise valid but for which some defense exists extraneous to formation

ex: violates Statute of Frauds
3 Elements to Create a Contract
1. mutual assent (offfer + acceptance)
2. consideration or a substitute
3. no defenses to formation
test for mutual assent
objective standard: did the words or conduct manifest a present intention to enter into a contract?
3 requirements for an Offer
1. an expression of promise, undertkaing, or commitmennt to enter into a contract
2. definite and certain in its terms
3. communicated to the offeree
Definite and certain offer
1. must identify the offeree or class of offerees
2. definition of the subject matter depends on the type of contract
subject matter of the offer for a real estate transaction
requires identification of LAND and PRICE terms
subject matter of the offer for a sale of goods
requires that the quantity be certain or capable of being made certain
subject matter of the offer for an employment contract
duration of employment must be specified
when can missing terms in the offer be supplied by the court generally?
if they are consistent with the parties' intent (generally)
what missing terms in the offer can be supplied by the court under the UCC?
reasonable price term and reasonable time for performance
effect of vagueness in an offer
may defeat formation of a contract unless acceptance or part performance makes the vague term clear
what happens if an offer provides that a material term will be agreed on at a future date?
formation fails
2 ways to terminate an offer
1. act of either party
2. operation of law
what is termination of an offer by the offeror called?
revocation
termination of an offer made by publication
can be terminated only by use of comparable means of publication - revocation is effective when published
requirements for the offeror to terminate an offer
1. offeror directly communicates to revocation to the offeree OR
2. offeror acts inconsistently with continued willingness to maintain the offer AND the offeree receives correct information of this from a reliable source
when if a termination of an offer by the offeror effective?
when revocation is received by the offeree
when can an offeror revoke an offer at will?
when the offer is not supported by consideration or detrimental reliance, even if he has promised not to revoke for a certain period of time
4 limitations on an offeror's power to revoke
1. option contract supported by consideration
2. firm offer under the UCC
3. offeree's detrimental reliance on the offer which the offeror could reaosnably have expected
4. offeree has embarked on performance of a unilateral contract
Definition of a firm offer under the UCC
a signed writing by a merchant (one who deals in goods of the kind sold) promising to hold an offer open for some period of time
2 ways an Offeree can terminate an offer
1. rejection
2. lapse of time
2 ways for an offeree to reject an offer
1. express rejection
2. making a counteroffer
2 facets of a counteroffer by oferee
1. rejection of initial offer
2. a new offer
when is rejection of an offer by an offeree effective?
when receive by the offeror
what is the effect of rejection of an option by the offeree?
does not terminate the option; offeree can still accept the offer within the option period unless offeror has detrimentally relied on offeree's rejection
termination by lapse of time
offeree's failure to accept an offer within the time specified or within a reasonable period of time (if none is specified) terminates the offer
3 ways that an offer may be terminated by operation of law
1. death or insanity of either party
2. destruction of the proposed contract's subject matter
3. supervening illegality
3 requirements for acceptance of a bilateral contract
1. offeree has the power of acceptance
2. unequivocal terms of acceptance
3. communication of acceptance
Who has the power of acceptance?
the person to whom the offer was addressed; any member of the class to whom the offer was addressed
When can the power of acceptance be assigned?
an option contract supported by consideration can be assigned to a new offeree
unequivocal acceptance - common law
acceptance must mirror the terms of the offer, neither omitting nor adding terms
unequivocal acceptance - UCC
acceptance need not mirror the offer's terms; acceptance indicating intention to enter into a contract is valid unless made conditional on the acceptance of the new terms
Which terms govern? offer or acceptance? - UCC, non-merchant(s)
terms of the offer govern if one of the parties is a non merchant
Which terms govern? offer or acceptance? - UCC, merchants
additional terms proposed in the acceptance become part of the ocntract unless
1. they materially alter the agreement
2. the offer expressly limits acceptance to the terms of the offer
3. the offeror objects within a reasonable time to the additional terms
UCC - split of authority on different terms in the acceptance
1. some courts treat different terms like additional terms
2. knockout rule: conflicting terms are elimintaed entirely and the terms are provided by the UCC
method of communication of accpetance - UCC
permits acceptnace by any reasonable means unless the offeror unambiguously limits acceptnace to a particular means
Mailbox Rule
acceptance by mail (properly addressed and stamped) is effective at the moment of dispatch
Mailbox Rule for mail improperly sent
acceptance is effective upon receipt
Mailbox Rule - what if the offer stipulates that acceptance is not effective until received?
Mailbox Rule does not apply if offer stipulates that acceptance is not effective until received
Mailbox Rule - applicatin to option contract
Mailbox Rule does not apply; acceptance effective upon receipt only
What if the offeree sends a rejection and then an acceptnace by mail?
whichever arrives first is effective
What if the offeree sends an acceptance and then a rejection by mail?
the acceptance is effective when sent (Mailbox Rule) UNLESS the rejection arrives first and the offeror detrimentally relies on it
3 instances where acceptance can be made without communication
1. express wavier of communication in the offer
2. offer requires an act as acceptance
3. offeree silently takes the offered benefits
Mental state requirement for offeree of a unilateral contract
must act with knowledge of the offer and be motivated by it
When must the offeree of a unilateral contract give notice of performance to the offeror?
1. if the offeror requests notice
2. if the act would not normally come to the attention of the offeror
2 elements of consideration
1. bargain
2. legal value
Is an economic benefit required for adequate consideration?
no. Giving the other party peace of mind or gratification in exchange for something may be sufficient to establish a bargain
Past consideration rule
a promise given in exchange for something already done does not satisfy the bargain requirement
exceptions to the past consideration rule
1. a past obligation uneforceable due to a technical defense (st. of limitations) will be enforceable is a new promise is made in writing or is partially performed
2. if the past act was performed by the promisee at the promisor's request, then a new promise to pay for than act is enforceable
Legal Value - Judicial evaluation of adequacy of consideration
courts do not inquire into the adequacy of consideration except if it is token consideraiton (devoid of value) or sham consideration (recited in the contract but not paid)
Legal Value - majority view
court requires that a party incur a detriment to satisfy the legal value element
Legal Value - minority view
incuring a detriment or conferring a benefit on the other party both satisfy the legal value element
Preexisting legal benefit rule
generally, performing or promising to perform an existing legla duty is insufficient consideration
exceptions ot preexisting legal duty rule
1. new or different consideration is promised
2. the promise is to ratiy a voidable obligation
3. the preesiting duty is owed to a third person
4. there is an honest dispute as to the duty
5. there are unforeseen circumstances sufficient to discharge a party
What consideration is needed for an agreement modifying a contract under the UCC?
none if the agreement is made in good faith
Which of the following are adequate consideration for payment on an existing debt?
1. payment of a smaller sum
2. payment in stock rather than cash
3. payment sooner than originally requires
payment in stock and payment sooner are adequate consideration; payment of a smaller sum is generally not sufficient consideration for a promise of the creditor to discharge the debt
Can a promise to refrain from suing on a claim be adequate consideration?
yes, as long as the claim is valid or the claimant in good faith believes that the claim was valid
Mutuality Requirement
consideration must exist on both sides of the contract
Substitutes for Consideration
1. promissory estoppel or detrimental reliance
2. modification under the UCC
3. written promise to pay legal obligations barred by law / technical defense
Elements of promissory estoppel
1. promise
2. reliance that is reasonable, detrimental, and foreseeable
3. enforcement is necessary to avoid injustice
What is the effect of a seal?
the majority view is that a seal is no longer a valid substitute for consideration
3 types of defenses to formation
1. absence of mutual assent
2. absence of consideration
3. public policy defenses
What are the 3 requirements for mutual mistake?
1. the mistake concerns a basic assumption on which the contract was made
2. the mistake has a material adverse effect on the agreed-upon exchange
3. the adversely affected party did not assume the risk of the mistake
mistakes about value
generally not a defense to formatino
When is a unilateral mistake a defense to formation?
only when the nonmistaken party knew or should have known of the mistake
What happens if there is a mistake by an intermediary?
the message will be operative AS TRANSMITTED unless the party receiving the message should have been aware of the mistake
Latent Ambiguity Mistakes - neither party aware
no contract unless both parties intended the same meaning
Latent Ambiguity Mistakes - both parties aware
no contract unless both parties intended the same meaning
Latent Ambiguity Mistkaes - one party aware
binding contract base on what the ignorant party reasonably believed to be the meaning of the ambiguous words
5 defenses to formation which exhibit a absence of mutual assent
1. mutual mistake
2. unilateral mistake
3. mistake by intermediary
4. latent ambiguity mistakes
5. misrepresentation
When does misrepresentation make a contract voidable?
the contract is voidable by an innocent party who was induced to enter a contrct by a fraudulent misrepresentation and who justifiably relied on the misrepresentation
Public Policy Defense to formation
illegality of contract - if the condsideration or subject matter of the contract is illegal, then the contract is void
If the purpose of the contract is illegal, it is voidable by whom?
a party who was:
1. unaware of the purpose OR
2. aware but did not facilitate the purpose AND the purpose does not involve serious moral turpitude
5 Defenses to Formation based on Lack of Capacity
1. under age 18
2. insane persons
3. intoxicated persons (if other party knows of intoxication)
4. duress
5. coercion
2 Defenses to Enforcement
1. Statute of Frauds
2. Unconscionability
Agreements subject to the Statute of Frauds (6)
1. promises by executors to pay estates' debts out of their own funds
2. promises to answer for the debt or default of another
3. promises made in consideration of marriage
4. promises creating an interest in land
5. promises that cannot be performed within one year from the date of the agreement
6. agreements for the sale of goods for $500 or more
4 exceptions to the rule that agreements for the sale of goods for $500 or more are subject to the statute of frauds
1. specially manufactured goods
2. written confirmation of an oral agreement between merchants
3. admission in pleadings or court that a contract for goods existed
4. partial payment or delivery made and accepted
5 requirements of the Statute of Frauds
writing contains
1. identity of parties
2. identification of the contract's subject matter
3. terms and conditions of the agreement
4. recital of consideration
5. signature of the party to be charged or his agent
When is unconscionability tested?
at the time the contract was MADE
What is the difference between the rights of an intended beneficiary and those of an incidental beneficiary to a contract?
only intended beneficiaries of a contract have contractual rights
3 factors in identifying an intended beneficiary of a contract
1. identified in the contract
2. receives performance directly from the promisor
3. has some relationship iwth promisee to indeicate intent to benefit
2 types of intended beneficiaries
1. creditor beneficiary: to whom the promisee owes a debt
2. donee beneficiary: who the promisee intends to benefit gratuitously
A third party beneficiary can enforce a contract only when his rights have _________ .
vested
3 ways for 3rd party beneficiary's rights to vest
1. 3rd aprty manifests assent to a promise in the manner requested by the parties
2. 3rd party brings a suit to enforce the promise
3. 3rd aprty materially changes pposition in justifiable reliance on the promise
Prior to _______, the promisor an dthe promisee are free to _______ or _________ the rights of a 3rd party beneficiary under the contract.
vesting, modify or rescind
When can a 3rd party beneficiary sue the promisor on the contract?
always
Does the promisor have any defenses against a suit by the 3rd party beneficairy to a contract?
yes. promisor may raise any defense that he would have against the promisee and MAY be able to raise the defenses that the promisee would have against the 3rd party beneficiary
When can the promisor assert the promisee's defenses against a 3rd party beneficiary in a suit by the 3rd party beneficiary?
When the promisor made a non-absolute promise to pay what the promisee owes the beneficiary, the promisor can assert the promisee's defenses
When can a creditor 3rd party beneficairy sue the promisee?
always - there is an existing obligation between them
When can a donee 3rd party beneficiary sue the promisee?
only if grounds for a detrimental reliance remedy exist
3 limitations on assignment
1. an assignment that would substnatially change the obligor's duty or risk
2. an assignment of future rights to arise from future contracts
3. an assignment prohibited by law
Effect of a clause prohibiting assigment of the contract
bars only delegation of the assignor's duties
Effect of a clause prohibiting assignment of contractual rights
generally, does not bar assignment but gives the obligor the right to sue for damages
Effect of a clause providing that attempts to assign will be void
bars assignment
Effect of assignee's notice of a nonassignment clause
assignment is ineffective
What kind of consideration is required for an effective assignment?
None - a gratuitous assignment is effective
2 requirements for effective assignment
1. assignor must manifest an intent to immediately and completely transfer his rights
2. right being assigned must be adequately described
What kind of assignment is irrevocable?
an assignment for consideration
What kind of assignment is generally revocable?
an assignment not for consideration
When is a gratuitous assignment irrevocable?
1. obligor has already performed
2. a token chose is delivered
3. an assignment of a simple chose is put in writing
4. the assignee can show detrimental reliance on the gratuitous assignement
4 ways to terminate a revocable gratuitous assignment
1. death or bankruptcy of assignor
2. notice of revocation by assignor to assignee or obligor
3. assignor taking performance directly from the obligor
4. subsequent assignment of the same right by assignor to another
Effect of Assignment
establishes privity between the obligor and assignee; extinguishes privity between the obligor and assignor
If the assignee sues the obligor, what defenses does the obliigor have?
any defense inherent in the contract
If the assignee sues the obligor, can the obligor assert any defenses the assignor might have against the assignee?
NO
2 reasons the assignee can sue the assignor
1. wrongful exercise of the power to revoke
2. when obligor successfully asserts a defense agaisnt the assignor in an action brought by the assignee against the obligor
Effect of a subsequent assignment on an initial revocable assignment
the initial assignment is revoked
general effect of a subsequent assignment on an initial irrevocable assignment
the initial assignment prevails
a subsequent assignment will trump an initial irrevocable assignment if the subsequent assignee has paid value and taken without notice of the first assignment AND (5)
1. subsequent assignee gets the first judgment agains the obligor
2. subsequent assignee gets the first payment of a claim from the obligor
3. subsequent assignee gets delivery of a token chose
4. subsequent assignee is a party to a novation releasing the assignor OR
5. subsequent assignee can proceed agaisnt the initial assignee on an estoppel theory
Duties that cannot be delegated
1. duties that involve personal judgment and skill
2. delegation would change the obligee's exepctancy (output and requirements contracts)
3. a special trust was reposed in the delegator by the other party to the contract
4. there is a contractual restriction on delegation
requirement for an effective delegation
delegor must manifest a present intention to make a delegation
When can an obligee require the delegate to perform? On what theory?
only if there has been an assumption - delegate's promise to perform is supported by consideration

obligee is a 3rd aprty beneficiary of the contract between the delegator and the delegate
When can the obligee sue the delegator?
always, the delegator remains liable on the contract
Must the obligee accept performance from the delegate?
yes as long as the duty delegated was one that was allowed to be delegated
Absent evidence of intention, how are ambiguities contrued?
against the party preparing the contract
Effect of a merger clause
strengthens the presumption that the written document is final, not conclusive
what is parol evidence?
evidence of prior or contemproaneous negotiations and agreements between the parties to a contract
parol evidence is inadmissible if the written contract ....
is intended as a complete and final expression of the parties
7 Excpetions to the Parol Evidence Rule
1. formation defects
2. existence of a condition precedent to a contract
3. parties' intent regarding ambiguous terms
4. consideration problems
5. prior valid agreement incorrectly reflected int he writing (by mistake)
6. collateral agreement that does not contradict the main contract and is not a part of the main contract
7. subsequent modifications
a condition is ...
an event, the occurrence or nonoccurrence of which will create, limit, or extinguish the absolute duty to perform
test to determine whether a clause is a promise or a condition
the intent of the parties governs - judged by the words of the agreement, prior practices of the parties, and custom in the business
Effect of failure of a promise
gives rise to breach
Effect of failure of a condition
relieves a party of the obligation to perform
Three classifications of conditions
1. conditions precedent
2. conditions concurrent
3. condition subsequent
definition of condition precedent
condition that must occur before an absolute duty of performance arises in the other party
definition of conditions concurrent
conditions that are capable of occurring together, at the same time
definition of a condition subsequent
condition that cuts off an already existing duty of performance
effect of occurrence of condition precedent
performance is due
effect of occurrence of condition concurrent
if one condition has occurred, performance of the other is due
effect of occurrence of condition subsequent
duty to perform is excused
express condition
a condition expressed in the contract itself
implied condition
conditions to be inferred from evidence of the parties' intention

a.k.a. implied in fact condition
constructive condition
condition read into the contract by the court without regard to the parties' intention in order to ensure the parties receive what they bargained for
A duty of performance becomes absolute when conditions are either ________ or ________.
performed or excused
Effect of a party wrongfully preventing a condition from occurring
the condition is excused - the party in the wrong will no longer be given the benefit of the condition
excuse of contition by actual breach
an actual, material breach by one party excuses theother's duty of counterperformance
Anticipatory repudiation applies only if there are ___________ duties on both sides of a _________ contract,
executoy; bilateral
4 alternatives for the nonrepudiating party under anticipatory repudiation
1. treat the contract as totally repudiated and sue immediately
2. suspend his own performance and wait until the performance is due to sue
3. treat the repudiation as an offer to rescind and treat the contract as discharged
4. ignore the repudiation and urge performance - this does not waive the repudiation
Anticipatory Repudiation: an unambiguous statement that the repudiating party ___________ made ______________.
will not perform; prior to the time for performance
When can anticipatory repudiation be retracted?
it can be retracted until the nonrepudiating party has accepted the repudiation or detrimentally relied on it
Effect of prospective inability of unwillingness of other party to perform
innocent party may suspend his performance until adequate assurance of performance are given by the other party; if no assurances are given, the innocent party may treat it as a repudiation
Standard for finding prospective inability or unwillingness to perform
reasonable person standard
excuse of condition by substantial performance
where a party has almost completely performed but has breached in a minor way, there is no forfeiture of a return performance
Substantial performance is usually not applied if the breach is __________.
willful
damages for substantial performance
the substantially performing party may be required to compensate the other party for the incomplete performance
Excuse of condition by divisibility of contract
where a party performs at least one unit of a divisible contract, he is entitled to the agreed equivalent for the unit(s) performed even though he fails to perform the other units
3 requirements for a divisible contract
1. performance of each party is divided into 2+ parts under the contract
2. number of parts due from each party is the same, and
3. performance of each part by one party is teh agreed equivalent of the corresponding part by the other party
Definition of an installment contract - UCC
a contract that authorizes or requires delivery in separate lots
When may a buyer declare total breach of an installment contract under the UCC?
only if defects in an installment are such as to substantially impair the value of the entire contract
excuse of condition by estoppel waiver
a party may waive a condition by indicating that he will not insist on it
when can a party retract his own estoppel waiver of a condition?
at any time unless the other party relies on the waiver and changes his position to his detriment
Election Waiver of a condition
when a condition is broken, a party waives the condition by electing to continue under the contract
What kind of conditions can be waived if no consideration is given for the waiver?
only conditions which are ancillary or collateral to the main purpose of the contract
What is the effect of waiver of a condition on a party's right to damages?
waiving a condition does not waive a party's right to damages for the other side's defective performance
excuse of condition for impossibility, impracticability, or frustration
apply the same tests as those applied for discharge of a duty due to impossibility, impracticability, or frustration
The duty to perform may be discharged by occurrence of a condition __________.
subsequent
The duty to perform may be discharged by _________ performance or _________ of performance.
complete; tender
Effect of supervening illegality of the subject matter on the duty to perform
discharges the duty to perform
By what kind of standard is impossibility measured?
objective standard - no one could perform according to the terms of the contract
When must the impossibility arise in order to discharge the duty?
after the contract was entered into
A party who has partly performed prior to impossibility can recover under what theory?
quasi-contract
3 examples of impossibility
1. death or physical incapacity
2. subsequent law renders the subject matter illegal
3. subsequent destruction of the contract's subject matter or means of performance
A contract is NOT discharged by death or incapacity of the person who was to perform the services if the services ....
are of a kind that can be delegated
Discharge of the duty to perform by impracticability
a party could encounter extreme and unreasonable difficulty or expense that was not anticipated if required to perform
4 requirements for discharge of the duty to perform for frustration of purpose
1. supervening event
2. not reasonably foreseeable at the time of contracting
3. which completely or almost completely destroys the purpose of the contract
4. the purpose was understood by both parties
2 requirements for discharge of the duty to perform based on mutual rescission
1. both parties expressly agree to discharge the duty
2. the contract is executory on both sides
When can mutual rescission be made orally?
it can be made orally unless the subject matter is wihthin the Statute of Frauds or it involves a contract for the sale of goods requiring a rescission to be in writing
How do the rights of a 3rd party beneficiary affect mutual rescission by a promisor and promisee?
Where the rights of the 3rd party beneficiary have vested, a contract will NOT be discharged by mutual rescission of the promisor and promisee
2 requirements for partial discharge of a duty by modification - common law
1. mutual assent to the modifying agreement
2. consideration unless the modification is only a correction
4 requirements for discharge of a duty by novation
1. previous valid contract
2. an agreement among all parties, including the new one
3. immediate extinguishment of contractual duties between original contracting parties
4. valid new contract
2 requirements for discharge of a duty by release and/or covenant not to sue
1. in writing
2. supported by new consideration or promissory estoppel elements
When does a second contract between the same parties discharge the duties of the first contract?
where the second contract expressly or impliedly immediately revokes the first contract
Definition of an Accord
an agreement in which one aprty to a contract agrees to accept performance different from that originally promised
Does Accord require consideration?
Yes
When is consideration less than that of the original contract sufficient for Accord?
if it is of a different type or is to be paid by a 3rd party
When is payment of a smaller amount valid consideration for Accord?
if the smaller payment is made in good faith and there is a bona fide dispute as to the claim
What is Satisfaction?
performance of the accord
What is the effect of Accord?
it DOES NOT discharge a contractual duty; it merely suspends the other party's right to enforce the duty
What is the effect of Satisfaction?
it discharges both the accord and the original debt
Duties may be discharged by the lapse of time if ..... (2)
1. each party's duty is a condition to the otehr's duty
2. neither aprty performs his duty
Discharge by Account Stated
parties agree to an amount as a final balance due in settlement of all previous transactions (at least 2) between them
Rights of nonbreaching party upon material breach
1. nonbreaching party's duty of counterperformance is discharged
2. nonbreaching party has an immediate right to all remedies for breach of the entire contract
Rights of nonbreaching party upon minor breach
1. nonbreaching party may be allowed to recover damages BUT 2. nonbreaching party must still perform under the contract
6 factors for determination of materiality
1. amount of benefit received by nonbreaching party
2. adequacy of compensatin for damages to injured party
3. extent of part performance by breaching party
4. hardship to breaching party
5. negligent or willful behavior of breaching party
6. likelihood that breaching party will perform the remainder of the contract
When is failure to perform by the time stated in the contract considered a material breach?
1. if the nature of the contract makes timely performance essential
2. if the contract expressly provides that the time is of the essence
Failure to perform by the time stated in the contract is generally not a material breach if performance is rendered within ____________.
a reasonable time
Expectation Damages
damages to put plaintiff in the same monetary position as if the breaching party had performed as agreed
Reliance Damages
damages to put the plaintiff in the same economic position as if the contract had never happened
Restitution Damages
damages to put the defendant in the same economic position as it the contract had never happened
Damages must be reasonably certain; a court will not award damages that are ____________ in nature.
speculative
Measure of damages for contracts for the sale of goods
the difference between the contract price and the market price when the seller tenders the goods or when the buyer learns of the breach
If the buyer in a contract for the sale of goods accepts nonconforming goods, the buyer may recover what damages?
the difference between the value that the goods would have had if they had been as warranted and the actual value of the goods
What are incidental damages?
the cost of finding a replacement
When are incidental damages recoverable?
always
Measure of damages for contract for sale of land
the difference between the contract price and FMV
Measure of damages for employment contract breached by employer
full contract price less wages earned elsewhere after breach
Measure of damages for employment contract breached by employee
the cost to replace the employee
Measure of damages for breach of construction contract by owner before completion
builder is entitled to profits that would have resulted from the contract plus any costs expended
Measure of damages for breach of construction contract by owner after completion
builder is entitled to the full contract price plus interest
Measure of damages for breach of construction contract by builder
owner is entitled to the cost of completion plus reasonable compensation for the delay
Measure of damages for breach of construction contract by late performance of the builder
owner is entitled to damages incurred because of late performance only
Can a builder recover for work performed on a construction contract if the builder subsequently breaches?
Yes but only through quasi-contract
Measure of damages for missed payment in a contract calling for payments in installments
recovery of the missed payment only unless the contract contains an acceleration clause
When are consequential damages awarded?
if a reasonable party would have foreseen at the time of contracting that such damages would result from breach
When are punitive damages awarded?
they are not generally awarded in commercial contract cases
When are nominal damages awarded?
where a breach is shown but no actual loss is proven
Avoidable Damages
there is no recover for damages that could have been avoided without undue burden n the plaintiff
2 requirements for a valid liquidated damages provision
1. damages were difficult to ascertain at the time the contract was formed
2. amount agreed upon was a reasonable forecast of compensatory damages
Under the UCC, a court can consider the ________ damages incurred in determining whether a liquidated damages clause is valid.
actual
Generally, when is specific performance an available remedy?
when monetary damages are insufficeint to compensate
2 instances where specific performance is always available
1. contracts involving the sale of land
2. contracts for the sale of unique or rare goods
When is specific performance available for breach of contracts for the sale of services?
never
3 additional equitable defenses to an action for specific performance
1. laches - plaintiff delayed bringing the action and the delay prejudiced the defendant
2. unclean hands - party seeking specific performance is guilty of wrongdoing in the transaction at issue
3. sale to a bona fide purchaser of the subject matter in question
Requirements for quasi-contractual relief to remedy a failed contract
the failed contract results in unjust enrichment to one of the parties
Can a breaching party recover in quasi-contract?
Yes, as long as the breach did not involve serious wrongful or unconscionable behavior
Requirements for quasi-contractual relief where there is no contractual relationship (4)
1. on party has conferred a benefit on the other
2. conferring party had a reasonable expectation of being compensated
3. benefits were conferred at the express or implied request of the other person
4. unjust enrichment would result if the defendant were allowed to retain the benefits without compensating the plaintiff
Can quasi-contractual relief be granted if the defendant received no benefit?
Yes, if the plaintiff expended something on the defendant's behalf