K

Front 1

OFFER

Back 1

4 Elements 1).Commitment-words or conduct to enter K objective test, would reasonable person hearing words under circumstances believe speaker intends to enter a contractual relationship vs add (invitation to deal) vs (exception- stating all relevant material terms), opinion or predictions, courseof dealings, joke frolic banter, auction-2).Containing all material terms definitely and with certainty about the k, UCC key term is quantity, then reasonable price Service K, material term is term of employment, measured by time or task, rule protects the employee, treat as offer for employment at will to protect employee, re- description and price, law will impose reasonable terms not otherwise provided and agreement to agree in good faith or ambiguous terms the law will impose terms by others, (intent of parties, circumstances reasonably ascertained 3).Communicated, offeree must know of offer in order to be able to accept, crossing offer, no, neither knows of the other, unilateral offer, must know of offer to be entitled to accept, before performance is completed
must have knowledge of offer 4). To identified offeree
cannot assign the offer to another, public offers do not specify an offeree, knowledge of offer performs the requested act, how many offerees , what must be performed, look to intent of offeror objectively and reasonably intend to perform the act

Front 2

Common law rules

Back 2

rules developed by cases, precedent, cover common law contracts

Front 3

UCC

Back 3

Statutory law passed by each state, body of law to cover transactions in moveable goods

Front 4

Contract terms

Back 4

Offer- offeror, offeree, Promise-promisor, promissee, Relationships, assignor, delegator

Front 5

language

Back 5

who are the people and what is happening

Front 6

CONTRACT

Back 6

basis of a consentual transactional relationship, source of all commerce,

Front 7

INTENTION TO CONTRACT

Back 7

Lucy Case, conduct of people indicates intent despite intoxication, Balfore Case-divorce, sued for monies, no intent to form a contract, Sanchez Case, employee at will, reasons why fire people, only for cause, KD Case, ed.testing service reserves right to cancel scores of LSAT, "i did not agree to any such thing" adhesion K ? unconscionable, not unfair under the circumstances, Marble Case, clause and conditions in Italian, "i did not understand" no defense, commercial people do not sign what they do not understand.

Front 8

CONTRACT

Back 8

Promise or set of promises the breach of whcih the law recognizes a duty, a remedy and a promise to perform

Front 9

contract based on governing law

Back 9

common law for real estate and performance of services/ UCC for transactions (sale and lease) in movable objects (goods), would fall under UCC

Front 10

CONTRACT

Back 10

A promise or set of promises the breach of which the law recognizes a duty, a remedy and a promise to perform

Front 11

contract

Back 11

promise or set of promises the breach of whcih the law recognizes a duty, a remedy and a promise to perform

Front 12

CONTRACT/EXPRESS/IMPLIED CONSENT

Back 12

1). Express-parties have written or spoken the terms of the deal, 2). Implied in fact -conduct of one or both parties is necessary to show ascent to contract, 3). Implied in law-circumstances require or indicate we impose consent (victim taken to hospital, MD saves pt life) MD provide benefit, to avoid unjust enrichment of the victim and make fair to MD without ascent nevertheless is to be rightly paid.

Front 13

CONTRACT: GOVERNING LAW

Back 13

Common law: real estate,performance of services

UCC: transactions of movable objects (goods)

Front 14

contract based on governing law

Back 14

common law for real estate and performance of services/ UCC for transactions (sale and lease) in movable objects (goods), would fall under UCC

Front 15

CONTRACT: EXPRESS/IMPLIED/IMPLIED IN FACT

Back 15

1). Express Contract-parties have written or spoken the terms of the deal, 2). Implied in fact conduct of one or both parties necessary to show ascent to contract, 3). implied in Law-circumstances require or indicate we impose consent (victim taken to hospital, MD saves pt life) MD provide benefit, to avoid unjust enrichment of victim make fair to MD without ascent to be rightly paid.

Front 16

CONTRACT FORMATION

Back 16

1). unilateral contract,one party makes promise which demands complete performance

2). bilateral contract-formed with mutual promises, offeror is the master of the offer, controls whether unilateral or bilateral,

Front 17

CONTRACT: COMMUNICATION

Back 17

1). Express contract-parties have written or spoken the terms of the deal,
2). Implied in fact conduct of one or both parties is necessary to show ascent to contract,
3). Implied in law-circumstances require or indicate we impose consent (victim taken to hospital, MD saves pt life) MD provide benefit, avoid unjust enrichment of victim and make fair to MD to be rightly paid though no assent to contract.

Front 18

CONTRACT: FORMATION

Back 18

1). Unilateral contract,one party makes promise which demands complete performance
2). Bilateral contract-formed with mutual promises only, offeror is master of offer, controls whether unilateral or bilateral,

Front 19

BILATERAL CONTRACT

Back 19

Promise is expressly requested by the offer

Front 20

BILATERAL CONTRACT

Back 20

Promise for promise: promise is requested by the offer

Front 21

FORMATION

Back 21

Unilateral Contract,one party makes promise which demands complete performance

Bilateral Contract-formed with mutual promises, offeror is the master of the offer, controls whether unilateral or bilateral,

Front 22

UNILATERAL CONTRACT

Back 22

acceptance required performance

Front 23

bilateral contract

Back 23

promise is requested by the offer, offer is indifferent there fore it can be seen both ways, if offer does not say expressly is assumed to be express

Front 24

UNILATERAL CONTRACT

Back 24

acceptance required performance

Front 25

PUBLIC OFFER

Back 25

offer in exchange for a unilateral contract

Front 26

public offer

Back 26

offer in exchange for a unilateral contract

Front 27

unilateral contract

Back 27

acceptance required performance

Front 28

public offer

Back 28

offer in exchange for a unilateral contract

Front 29

ENTIRE CONTRACT

Back 29

substantial performance of all portions of contract to avoid breach

Front 30

DIVISIBLE CONTRACT

Back 30

Each portion of contract divisible, later non performance will not cause breach of contract

Front 31

CONSTRUCTION CONTRACT

Back 31

Building, home, entire contract performed

Front 32

EMPLOYER K

Back 32

Divisibile contract, month to month contract, separate divisible performances, each performance is divisible, common sense, intention of parties, judgment, or expectations,

Front 33

ACCEPTANCE: UCC

Back 33

Encourage and facilitate formation of a contract, streamline and promote commerence whereever parties have intent to contract, complete and binding agreement, transactions in goods, either promise or performance will accept the offer, turkeys from turkey farmer, accept by promise to deliver turkeys or the act of the farmer sending the turkeys

return promise- i accept or i will do it....act of acceptance by return commitment, or "i will buy, please deliver the car on saturday" acceptance that is express conditioned on new or different terms not conditional on acceptance...this is contract as new term is not a condition of performance....

K where language of the parties agrees.....new or different term, agreement with consumer (non merchant or just between merchants-in business) deliver car for 5000, deliver please on saturday, new or different terms automatically becomes part of the K unless offer limited to only its terms, except those expressed (rejects new terms),

2). offeror expressly rejects the terms when hearing the terms,

3). new or different term materially alters the obligations of the contract (to get the car to Miami over night -will keep the term out).

Diamond Fruit Growers..."battle of the forms" contractual mileu.invoice disclaimed any and all damages...seller new or different terms automatically become part of the contract unless
1). order terms restrict new or different terms,
2). buyer expressly rejects different terms, or
3). material alteration has occured to the contract to change obligations of the parties

consumer-new or different term, K exists where language of the contract terms is agreed to with new term becomes automatically a proposal which must be separately accepted or rejected delivery in reasonable time if time is silent.

UCC - non conforming goods as accomodation

Front 34

UCC Acceptance

Back 34

5000 grade b turkeys sent, non conforming goods, act of acceptance, breach, sue for damages, but if farmer says we send grade b turkeys to see if you can use in place of non conforming goods, counter offer, buyer uses them, contract for grade b turkeys, contract formed with non conforming goods.

Front 35

REAL ESTATE(SERVICE CONTRACT)
ACCEPTANCE, COMMON LAW
UNILATERAL/BILATERAL

Back 35

Unilateral contract: promise $5000 if you paint house, demands performance, acceptance by substantial performance, notice required as part of performance if offeror requires it., becomes part of completion of act, or 2). if completion of performance would not otherwise come to the offerors attention (as master of offer, whatever offeror says you must do to complete performance

Bliateral Contract-bilateral acceptance, 1). acceptance mirrors terms of contract to be valid acceptance common law, (Mirror Image Rule) other wise becomes a counter offer at common law

Front 36

COMMON LAW: BILATERAL ACCEPTANCE

Back 36

1). Commitment, Objective test,2). Communicated right way,meaning accepted no other way (silent -accepted same way the offer came or some other reasonable way as speedy and as legally dependable as original offer came ie. telegram, FAX, call on phone(no) Fugimoto v Pickle Case -never returned contract, signing may have been enough otherwise hardship as not adminIstrating the return 3). Commitment effective on dispatch, Mailbox Rule, bilateral acceptance effective on dispatch (3) levels of knowledge and acknowledgement)

communication: 1) actual knowledge by offeree of terms of offer, 2). revocation and receipt of the offer, 3). bilateral acceptance when send (Mailbox Rule) either when other party has no knowledge of this infornation

Front 37

MAILBOX RULE: EXCEPTIONS

Back 37

1). cannot use if offeror says you cannot use, 2). in option contracts cannot use to straddle end of option, 3).vascilating offeree, offer made, offeree accepts under mailbox rule, offeree changes mind, send rejection to overtake acceptance, mailbox rule applies, contract formed when send acceptance, (protect offeror if I recieve rejection first and act on it that will supercede the mailbox rule) 4). offer made, rejection is sent, before rejection recieved, acceptance is dispatched, that according to Mailbox rule makes the acceptance good, HOWEVER whichever is recieved first is valid, offeree has recieved acceptance so will, a race, up to offeree to see who will win the race....RA..RACE..to get there first

Front 38

MAILBOX RULE

Back 38

acceptance by dispatch

Front 39

ACCEPTANCE: CONDUCT

Back 39

Conduct that would act as a the performed duty promised is the same as the promise...painting the house...landscape the yard

Front 40

CONDUCT: PROMISE FOR PROMISE
MANIFESTATION OF ASSENT TO PERFORM

Back 40

Offeror "master of the offer" manifest ascent to contract, demand conduct aS return promise to be manifested

Front 41

SILENCE: BILATERAL CONTRACT

Back 41

Silence cannot be imposed upon by another party, silence can be adopted by another party as a form of acceptance, "if i do not hear from you it will be seen as acceptance.

Silence- unsoliciteed goods, accepting benefits by mail, if not returned in a timely fashion, (Eel skins-Hobbs)

Common law-acceptance of benefits implies a promise to pay for items, will not make implied promise enforceable as plague to the consumer, conduct such as use and dominion of control IS seen as manifestation of ascent to contract.

Front 42

NON CONFORMING GOODS

Back 42

Accomodation to the buyer, become a counter offer or contract upon acceptance of accomodation at the same time as sue for breach.

Front 43

CONSIDERATKON

Back 43

Good faith bargained for exchange, a benefit delivered and a detriment occurs to the parties

Front 44

Termination of Offer

Back 44

1). Own Terms as to lapse,
2). Acts of the Parties,
3). Events after the Offer is made by operation of Law

Front 45

Offer Own Terms or offer will lapse

Back 45

What ever the offer says is what it means, offeror is the master of the offor, or when the offer is lost in the mail then...have until the 23rd..(one day post reciept as was specified in the letter, if no terms specified, then reasonable time, or as the parties

Front 46

REVOCATION OF OFFER: TERMINATION

Back 46

1) Express-words or statements: recieved by offeree or someone in offeree control to be effective revocation
2). Conduct- prevent performance of conduct, offeree learns of act from reliable source to terminate offer

Front 47

PUBLIC OFFER: REVOCATION

Back 47

Communicate revocation of public offer expressly by publicizing same publicity and media as offer was made OR reasonable means

Front 48

express revocation

Back 48

publicize in same way the offer was made

Front 49

EXPRESS REVOCATION

Back 49

Public Policy Rule -no longer pending offer due to revocation, reliable source notification

Front 50

EXCEPTIONS: IRREVOCABLE OFFERS

Back 50

1). Option contract-offeree pays the offeror to keep the offer open form an agreed time/ offer is the subject matter of the option contract, during option cannot revoke for time agreed.
2). Equitable option-offeree detrimentally, foreseely, reasonably relies upon an oofferee, must stay open for a reasonable time, contractor to bid on a buidling must go to subcontractors, become offers by the painter to perform service, offer submitted withothers to general contractor who detrimentally, reasonably reliance on the bids for a reasonable time, cannot revoke the offers for reasonable time (State v Wheeler) is there a detrimental reliance on plee bargain to convict co-conspirators
3). Merchant firm offer/UCC- merchant business person in writing that the offer will be held open, becomes irrevocable offer for a time stated in offer or a reasonable time if no time is stated.never to exceed three months without consideration.(different levels of merchants-1) in business, 2) goods of a particular kind,3) specialists in kinds of procedures at issue in case with special rules that applies to any one in business. (vodka sell for 1,000 a case for the next twelve months, irrevocable offer for three months, max limit for merchant firm offer) during the three months cannot revoke the offer. "for as long as you place offers with us" reasonable time not to exceed three months.
4). Offer to make unilateral offer-offer made demanding a performance in return, buy ladder , paint and brushes and tarp, half way through, i then revoke, NO, not fair, when unilateral is made must stay open for reasonable time once commence perforrmance,mere preparation is not enough.

Front 51

Patterson v Pattburgh

Back 51

discount given if payment will be made early, P shows up tomake the payment, Mtg withdraws the promise, unilateral contract, not tender the payment, once the debtor has started to perform, offeror must not revoke so the offer must have been kept open for reasonable time

Front 52

REJECTION OF OFFER BY OFFEREE

Back 52

counter-offer is not an acceptance, and is typically treated as a rejection of the offer which can occur any time prior to acceptance of the offer

Front 53

OFFER: TERMINATION

Back 53

Rejection of offer, counter offer, technically after rejection, counter offer, there must be separate and new acceptance to be enforceable.

Front 54

Terminaton by Operation of Law

Back 54

1). Death or incapacity of party (offeror or offeree) offer lapses after reasonable time as you need a person with capacity to perform a contract, no party to the K
2). supervening illegality (law passed to prevent the performance of the contract) no sale of cuban cigars in this location therefore cannot form cigars...pending offers to do an illegal act are terminated
3). subject matter is destroyed-offer cannot be performed, race horse is destroyed, hurt leg, put away

Front 55

Offer materializes - remain open - Offeror 1). revocaton, 2). offeree rejection, or 3). termination by operation of law

Back 55

Pending offer has not been terminatied can be acceptance ucc- promise or performance

Hint 55

Common law -unilateral complete performance and notice and bi- promise or performance

Front 56

ACCEPTANCE: COMMON LAW

Back 56

commitment and communicated correctly -effective on dispatch

Front 57

CONSIDERATION

Back 57

glue holds the offer and acceptance together to create a binding legal obligation

Front 58

consideration

Back 58

makes promise enforceable

Hint 58

trade off, give up, do something not otherwise required to do, make a benefit, enforceable agreement

Front 59

QUID PRO QUO

Back 59

This for that, consideration one promise at a time, whether promises we deal with are enforceable or not where each promise in contract must be reviewed for consideration elements to be enforceable

Front 60

parties to contract

Back 60

enforceable rights and promises in the contract

Hint 60

required to be a party to the contract that meets the test of consideration (elements ) one at a time

Front 61

PROMISE ENFORCEABLE (BARGAINED FOR EXCHANGE)

Back 61

1). promise induce current exchange of performance from the promisee2). promise induce detriment from promisor, 3). promise must be binding not illusory (bargain for exchange, legal disadvantage, mutuality)

Front 62

bargained for exchange

Back 62

my promise to deliver laptop in exchange for you paying $1000

Hint 62

quid pro quo

Front 63

BARGAINED FOR EXCHANGE

Back 63

Past events, no current exchange, will not suffice for present exchange.

Front 64

BARGAIN FOR EXCHANGE
(exception)

Back 64

expectatations of promisee if promisor requested the performance, and promisee performed and expected payment (written revival of a revived debt)

Hint 64

.

Front 65

promise must induce a current exchange of performance from the promisee

Back 65

bargained for exchange

Front 66

LEGAL DISADVANTAGE

Back 66

promise must produce a legal detriment from the promissor

Front 67

BINDING PROMISES

Back 67

not illusory , mutuality

Front 68

current legal exchange offering detriment from promissee and binding not discretionary or illusory

Back 68

bargained for exchange

Front 69

bargained for exchange

Back 69

performance from the other side, promise to deliver lap top in exchange for you pay 1000

Front 70

Promise Exchanges: 1).moral, 2).gift, 3).already occurred are not enforceable

Back 70

Do not equate to the current bargained for exchange. Past events "already occurred" does not equate to the current exchange we seek for the current bargained for exchange.

Hint 70

past act has already been performed, past consideraton caannot support the current new consideration required

Front 71

Promise extinguished Exception

Back 71

Debt barred from recovery: Statute of Limitations has run, debtor revives the debt in writing to effectively promise to make the debt enforceable as matter of public policy (expectation) (dept revived and the exception allowed) therefore new promise enforceable.

Front 72

Promise ALREADY DONE exception

Back 72

promissor request performed, promisse performed with expectation of payment, late promise to pay is enforceable (must be requested)

Hint 72

even though no present exchange, enforceable

Front 73

BARGAIN FOR EXCHANGE V GIFT

Back 73

"Come to my apartment", bargain for presence in my apartment, sufficient to be a bargained for exchange asked for by other party

Front 74

Promise MORAL OBLIGATIONS exception

Back 74

are they enforceable, parent will send 5000 per month, promise,

Hint 74

not enforceable, doing it due to a moral obligation, unless they are bargaining for you to stay as a concord student, then bargained for exchange, if just doing it as a good parent, not sufficient

Front 75

Kearksy v Kearksy

Back 75

come to see us, we will take care of you

Hint 75

what was the exchange, moral obligation, bargaining to see and stay, to care for the farm, bargain, circumstances

Front 76

Sheldon v Blackman

Back 76

came to care, moral feelings, also offered to pay, she said what she bargained for

Hint 76

enforceable promise

Front 77

BARGAINED FOR EXCHANGE

Back 77

promise must cause detriment, legal disadvantage, require promisor do something not otherwise required to do, reasonable and good faith belief in a right to do 1).benefit to promisee is equivalent to 2 ).detriment to promisor, satisfy this element (minority rule)

Front 78

CONSIDERATION: BARGAINED FOR EXCHANGE
Offer detriment from promisor, or creating benefit to promissee

Back 78

Gotlieb v Tropicanna-spin big slot machine, million dollars, diamond club line, card in wheel stopped at one million, I am entitled to one million dollars" she became member of diamond club, doing something that otherwise she was not required to do.

Front 79

reasonable belief that you have a right to do something that other wise you would otherwise not do

Back 79

bastard claim, willing to suppor the child,reasonable belief that he had a right to do something otherwise you would otherwise not do...under the circumstances

Hint 79

yes, detriement caused, she promised not to do something she in good faith believed he could have otherwise being the father

Front 80

ADEQUACY OF CONSIDERATION

Back 80

Tokin or sham as disparity of value vs good and valuable consideration however mostly adequacy of consideration not tested and a peppercorn will do

Front 81

PRE-EXISTING DUTY

Back 81

Binding legal contract, otherwise bargained for exchange $10,000 for benefit to have Moye teach me Contract class, recieve some benefit , however already under duty to teach class to me.....in the minority jurisdiction, we could enforce the contract despite preexisting duty to perform

Front 82

Schwartwein case

Back 82

work for 90 hr , pre-existing duty to work, employee gave 100 day to do the same thing

Hint 82

terminate old contract with start of new, good detriment with the termination of the old contract

Front 83

(PRE-EXISTING DUTY)

Back 83

cannot make promise to another using the same consideration

Front 84

BINDING OBLIGATION

Back 84

Not illusory, Not discretionary

Front 85

GOOD CONSIDERATION/NOT ILLUSORY

Back 85

1). promise does not have a definite undertaking (do best i can to get you bookings-but i cannot promise it)i am saying i will represent without assurances of good job, superimposed obligation to use reasonable and good faith effort to try (to get bookings) Wood v Lucy Lady duff gordon, agent had no binding performance, agent must use good faith effort (duty) obligatory duty the agent must do to perform the contract

Front 86

OUTPUT OR REQUIREMENT CONTRACT

Back 86

OUTPUT: K where someone buys entire output for a particular period, (for one year)

REQUIREMENT: K where promise to fulfill entire requirement for one year.(reasonable based on prior requirement not pertaining to quantity)

Front 87

SATISFACTION OF CONDITIONS

Back 87

Under law, there is an obligation of good faith, binding not illusory,pay only if satisfied, who can say whether i am satisfied, discretionary

Front 88

undertaking without definite goal

Back 88

law imposes requirements, prior quantities, obligatin of good faith

Hint 88

promise at a time, test with enforceablity, induce current promise from otherside, eliminate past acts, moral obligations, doing somethjing not otherwise required or doing somethjing woudl not have otherwise do, monority, the promise may be acceptabel illusory may not be illusory and make them acitonable.

Front 89

CONTRACT

Back 89

Promise or set of promises the breach of which the law gives a remedy, the performance of which the law in some way recognizes a duty.(Common law)

Contract is the total legal obligation which results from the parties agreement.(UCC)

Front 90

freedom to contract

Back 90

power to determine terms of the contract relationship, enforce relationships which are freely and voluntarily entered into since no one should be bound absent their true assent.

Hint 90

subject to : states right ot protec rights and needs of all citizens, sanctity of promises, uphold ethical obligations, free market and economic efficiency, reliance principle ensuring fairness to provide relief to promises.

Front 91

MERCHANT, SALE OF GOODS, UCC 2-104

Back 91

Merchant is one who deals in goods of kind or otherwise by occupation holds himself out as having knowledge or skill peculiar to practice or goods involved in transaction exception, Lousiana

Front 92

Contracts, common law

Back 92

construction contracts, employment agreements, sale of land where contracts are based largely on the decision of judges as opposed to legislative enactment.

Front 93

HYBRID

Back 93

Involves sale of goods and services,

MINORITY Apply Article 2 to sale of goods part of transaction,

MAJORITY Apply Article 2 if the predominant purpose of transaction was sale of goods. If sale of goods is not the predominant purpose, Article 2 does not apply.

Front 94

Enforceable Contract

Back 94

Breach of which entitles the non breaching party to damages either legal or equitable

Front 95

Void Contract

Back 95

no legal obligation on part of promisor, no K formed, contract lacks for consideration

Front 96

VOIDABLE CONTRACT

Back 96

One or more parties have power to avoid legal obligation imposed by contract, where person has been induced by fraud, duress, mistake.

Front 97

UNENFORCEABLE CONTRACT

Back 97

Statute of Frauds, Illegality, immaturity,insanity, Government, Sovereign Immunity against Public Policy.
(improper conduct or subject matter).

Front 98

Express Contract

Back 98

parties manifest their agreement explicitly by words.

Front 99

Implied in Fact Contract

Back 99

agreement is manifest by conduct for mutual assent to the terms.

Front 100

IMPLIED IN LAW: QUASI CONTRACT

Back 100

Court creates obligation in law to do justice even though no promise was ever made or intended. Main purpose is to prevent unjust enrichment (MD cares for pt in ER)

ENRICHMENT: 1). D recieves a benefit, 2). appreciation or knowledge by D of benefit, 3). circumstances make it unjust for D to retain benefit without paying for services.

Front 101

Unilateral Contract

Back 101

Promise for performance

Hint 101

If offeree who accepts by performance has reason to know the offeror will not learn of the acceptance within a reasonable time then the offeree has a duty to exercise reasonable diligence to notify the offeror of the acceptance

Front 102

MAILBOX RULE (COMMON LAW)

Back 102

Acceptance must be made in a manner and by a medium invited by the offeror effective on dispatch binding the offeree to acceptance too late for offeree to reject the offer or revoke the acceptance

Front 103

Revocation

Back 103

effective once recieved by offeree

Hint 103

Restatement: (2nd) power of acceptance ends on the offerors receipt of rejection so the offeree is bound protecting the offeror who relies on the acceptance overtaking a rejection and has passed up another deal

Front 104

ACCEPTANCE BY SILENCE

Back 104

Silence is not acceptance, a promise of acceptance may be inferred by offeree exercise of dominion over the offered property

exceptions: when offeree takes the benefit of offered service with the opportunity to reject, knowing they were made with expectation of payment or otherwise, offeror stated or gave reason to believe that assent may be given by silence or inaction and the offeree in so doing intends to accept

Front 105

Under common law, offer is unenforceable

Back 105

unless supported by consideration

Hint 105

sell car to someone else even though promise to keep offer open

Front 106

OPTION

Back 106

Option is irrevocable limiting offeror power to revoke during time period of option

Front 107

Bilateral Contract, irrevocable

Back 107

1). Firm Offer: contracts for sale of goods 2). option contract - even nominal consideration will do, to form an exchange on fair terms

Hint 107

option contract, recital of proported consideration, in writing, signed by offeror, proposes an exchange on fair terms within reasonable time

Front 108

RECITAL OF PAYMENT, NOT RECIEVED

Back 108

A). False recital is not consideration. B). Offer is made irrevocable, either as an acknowledgement of payment or as a promise to pay, C). Unilateral contract, offeree begins the performance invited by offer where in the offeree must be allowed reasonable time to complete the performance vs, mere preparation to perform not sufficient performance or D). Preparations to perform may constitute reliance thus making the offerors promise binding under Restatement 87.

Front 109

RELIANCE THEORY

Back 109

Sub makes a bid to General, reasonable opportunity to notify Sub of award and acceptance of offer (from sub) and hold open as "option" to avoid injustice

Front 110

OPTION CONTRACT

Back 110

Promise which meets the requirements for the formation of a contract and limits the promisor's power to revoke an offer.

Front 111

OPTION(EXCEPTION TO REVOCATION)

Back 111

Purported revocation by offeror does not terminate offerees power to accept, if offeror refuses to perform, offeree can sue for breach with the presence of an option.

With option, offerees power of acceptance is not terminated by rejection, revocation, death or incapacity of offeror or offeree

MODERN: rejection should not terminate an irrevocable offer, if offeror has detrimentally relied on the rejection, offeree should be estopped from later accepting the offer

Front 112

Contract formation: UCC
(departure from common law)
UCC 1-103, 2-204, 2-205, 2-206, 2-207

Back 112

liberal policy for formation of a contract, departs from common law

Hint 112

Contract for sale may be found even though the precise moment of making is undetermined and it may be formed in any manner sufficient to show agreement where code is silent with respect to formation, issues arising in this context are supplemented by principles of common law

Front 113

Definiteness of Terms
UCC v Common Law

Back 113

UCC- 2-204 (3) even though one or more terms are left open, a contract for sale does not fail for indefiniteness if the parties have intended to make a contract and there is a reasonably certain basis for giving an appropriate remedy.

Hint 113

all other terms (other than quantity) can be filled in and supplied by the UCC as "gap filler" provisions for price, delivery and payment terms. 2-206 (3) a definite and seasonable expression of acceptance in a record operates as an acceptance even if it contains terms additional to or different from the offer

Front 114

MERCHANT FIRM OFFER, UCC 2-205

Back 114

OFFER IRREVOCABLE, MERCHANT FIRM

1). Applies if there has been an offer, 2). Applies when made by merchant, 3). Applies to buy or to sell goods, 4). Applies to a signed writing, 5). Applies to time stated or to reasonable time to max of three months and 6) Applies under reliance and assurance that the offer will remain open

Front 115

BATTLE OF FORMS
DIFFERENT OR ADDITIONAL TERMS

Back 115

COMMON LAW Mirror Image, therefore, acceptance varies from offered terms, is rejection and or counter-offer; no contract formed.

UCC, 2-207 Contract formed, even if acceptance has different or additional terms than offer

Front 116

BATTLE OF THE FORMS

Back 116

Common law: acceptance varying from terms of offer is rejection and counter offer where no contract is formed

Front 117

Battle of the Forms/2-207: provides that definite and seasonable expression of acceptance operates as acceptance even though it states different terms from those offered or agreed upon.

Back 117

purchaser (retailer) orders a quantity of goods from a supplier at stated price and for delivery by or at specified time. seller sends written confirmation to buyer . confirmation reflects the main terms price and puantity but adds some additional information (delivery or payment not mentioned in early discussions) where provisions become part of the parties agreement

Hint 117

A). 2-207- (1)provides solution to resolve conflicts in favor of purchasor - different terms are rejected
B). Knock Out Rule: Conflicting terms are knocked out and do not become a part of the contract.

Front 118

UCC ACCEPTANCE: LOOK TO COMMON LAW

Back 118

Offerees acceptance is an expression of assent to terms offered, not terms of offer mInus different terms.

Nothing in contract law allows for or selective acceptance of terms and nothing in section 2-207 or comments indicate that cure was radically depating from effect of acceptance, where it constitutes an assent to terms offered.

2-207 (1) changes common law mirror image rule, offeror remains master of the offer, Subsection (1) provides offeree two choices: a) offeree can accept terms offered or if he does not want to assent to terms offered unless additional terms or different terms contained in offer become part of deal, he can expressly make acceptance conditional on offeree's assent to additional or differnt terms. Offeree willl not be forced into contract on terms different from those offered.

Front 119

ADDITIONAL TERMS TO CONTRACT: UCC 2-207 (1)

Back 119

There must be a definite and seasonable expression of acceptance despite liberal contract formation in code. Varies mirror image rule, treats seller confirmation as acceptance of offer rather than counteroffer even though terms are additional to or different from those in buyer order form unless expressly conditioned acceptance on buyer assent to additional terms

Front 120

ADDITIONAL TERMS: UCC 2-207(2)

Back 120

What to do with additional terms: 1). Additional terms are considered mere proposals for additions to the contract and are excluded unless accepted.2). if the parties are merchants, such terms become part of the contract unless, a) offer expressly limits the acceptance to terms of the offer and 2). they materially alter it or 3) notification fo objection was given or given within a reasonable time after notification...

Front 121

UCC 2-207 (2) DIFFERENT TERMS

Back 121

Courts vary treatment of different terms in acceptance, formulating three approaches

Hint 121

A). different terms are treated as additional terms, and applies subsection (2) to different terms, B). disregards different terms contained in acceptance since not mentioned in the subsection (2) and therefore not to be construed as proposals that can become part of the contract, and C). knock out rule is applied where conflicting terms on the parties offer and acceptance are knocked out and neither term becomes part of the contract, what is left are the terms on which the contract does not conflict.

Front 122

ADDITIONAL TERMS IN ACCEPTANCE: UCC 2-207

Back 122

Additional Terms in Acceptance or Confirmation.

(1) A definite and seasonable expression of acceptance or a written confirmation which is sent within a reasonable time operates as an acceptance even though it states terms additional to or different from those offered or agreed upon, unless acceptance is expressly made conditional on assent to the additional or different terms.

(2) The additional terms are to be construed as proposals for addition to the contract. Between merchants such terms become part of the contract unless:

(a) the offer expressly limits acceptance to the terms of the offer;
(b) they materially alter it; or
(c) notification of objection to them has already been given or is given within a reasonable time after notice of them is received.

(3) Conduct by both parties which recognizes the existence of a contract is sufficient to establish a contract for sale although the writings of the parties do not otherwise establish a contract. In such case the terms of the particular contract consist of those terms on which the writings of the parties agree, together with any supplementary terms incorporated under any other provisions of this Act.

Front 123

Consideration

Back 123

Restatement (2) performance or return promise that is bargained for in exchange for the promise sought to be enforced

Front 124

CONSIDERATION

Back 124

Bargained for exchange, voluntary exchange relationship, relationship of motive and inducement, consideration induces making of promise and promise induces furnishing of consideration,.forebearance from doing that which he had a legal right to do,

Front 125

Adequacy of Consideration:
"peppercorn"

Back 125

imbalanced, court may consider an extreme imbalance in determining whether the bargain was tainted by fraud, duress, mistake, or unconscionability

Front 126

sham and nominal consideration

Back 126

Restatement (2nd) Modern View: Requires an actual bargain and not a pretense of an exchange. Disparity in value, may indicate that the purported consideration not bargained for but was a pretense. In that situation, consideration may not be met.

Front 127

Mutuality of Obligation

Back 127

consideration concept, requiring that both parties to give something of legal value in order to get something of legal value

Hint 127

Per the Restatement (2nd) if the requirement of consideration is met, there is no additional requirement for the mutuality of obligation..

Front 128

SETTLEMENT OF CLAIMS
CONSIDERATION

Back 128

Restatement (2nd).The forebearance to assert or surrender a claim or defense provides to be invalid is not consideration.

exceptions: where the validity of the claim or defense is uncertain (potential father agrees to pay for infant without certainty of paternity status). Even if the invalidity becomes clear later on, the bargain is judged as it appeared to the parties at the time it was made, the party asserting the claim must assert a good faith belief in its validity.

Public policy favors settlement of disputed claims, if parties can resolve disputes without litigation saving time, money and court resources

Front 129

ILLUSORY PROMISE

Back 129

Whether promise is illusory, whether promisor retains discretion over her own performance,

Court may find consideration by implying an obligation to exercise one's discretion in good faith. where even if you agree to exercise discretion, that discretion is not unlimited you must act in good faith

Front 130

exclusive dealings

Back 130

promise such as Wood v Lucy, Lady Duff-Gordon, seem illusory, but are agreements for exclusive dealings

Hint 130

Judge Cordozo: by granting an exclusive privilege to wood where her sole compensation depended entirely on woods efforts, an implication arose that he would use reasonable efforts to bring profits and revenures into existence.

Front 131

sale of goods contracts

Back 131

UCC 2 - 306 (2) implying an obligation of best efforts to bring profits and revenues into existence.

Front 132

SATISFACTION CLAUSE

Back 132

Subjective or objective satisfaction depends on subject matter of the contract.

Commercial K: objective standard applies requiring the satisfaction of a reasonable person

Personal service: taste or judgment of individual is involved, then subjective satisfaction is required

Satisfaction must be exercised in good faith, promisor must act in good faith in determining its satisfaction with the other party's performance

Front 133

REQUIREMENTS CONTRACT

Back 133

Assures the buyer of a steady supply of goods, seller agrees to sell and buyer agrees to buy all goods of a particular kind that buyer may require in business with no specific quantity stated

Front 134

OUTPUT CONTRACT: UC 2-306

Back 134

Output contract: seller assured of a market for its goods
seller agrees to sell and buyer agrees to buy all of the goods of a particular kind that the seller may produce in its business.

UCC -implies a duty for output or requirements not too indefinite held to mean actual good faith output of the particular party. The essential test, of conduct, in having output requirements is whether the party acted in good faith

Front 135

Modificaton

Back 135

Pre-existing duty

Front 136

MODIFICATION: VALID

Back 136

Assuming unanticipated and substantial difficult changes insuffient to discharge the contractor duty under a theory of impracticability, owner promise to pay additional monies will be enforced as a valid K

Front 137

Restatement (2). 89-

Back 137

promise modifying a duty under a contract not fully performed on either side is binding, if the modification is fair and equitable in view of the circumstances not anticipated by the parties when the K was made.

Front 138

BOUND BY CONTRACT

Back 138

Once parties made a contract, each is bound to what was agreed, neither party has right to uniaterally change terms of agreement, any attempt to do so would be breach.

.

Front 139

Modification:UCC

Back 139

UCC 2-209 Departs from common law, abandons consideration, modification must be in good faith to be enforceable.

Front 140

Accord and Satisfaction

Back 140

Parties agree to modify the performance specified in original contract, where lesser amount is offered by debtor to creditor to resolve a good faith dispute as to liability or amount due.

Hint 140

New substitute agreement is the "accord" , consideration is the detriment of forbearance from suit on original disputed contract. if the offer is accepted, by the other party, an accord is created. Satisfaction is performance of new agreement. When totally performed, satisfaction discharges both the executory accourd and the original contract. If executory accord is not performed, then the obligee may sue on either the original contract or on the accord agreement.

Front 141

Lacking consideration due to no bargained for exchange

Back 141

Gift: a present transfer of an interest in property and conceptually differnt from a promise to make a gift.

Hint 141

Under contract law, the right does not involve the enforcement of a promise where there is no bargain created no reciprocal relationship between the promise and the consideration that the one induced th other..

Front 142

Past consideration

Back 142

the promise does not induce the work and therefore was not the result of the bargain between the parties, already done

Hint 142

robyn employer promises to send her on an all expense paid vacaton to Hawaii for the great work she did last year for the company

Front 143

MORAL OBLIGATION DOCTRINE

Back 143

courts recognize the doctrine where a debtor promises to pay for a debt although there is no longer a legal obligation to do so because the det has been discharged through bankruptcy or barred by the statute of limitations.

Promise made to pay a debt otherwise barred by the statute of limitatikons may be binding under the moral obligation exception. **Promise inferred from voluntary acknowledgement or party payment of the debt as will a statemnt that the statute of limitations will not be pleaded as a defense. However, the promisor is bound only to the terms of the new promise, if the promise is only to pay $2000 of the original $3000 amount, then it is enforceable only to that extent. (referred to as the material benefit rule) Restatement (2) 86, replaces past consideration and moral obligation with "promise for a benefit received" as with Webb v McGowin, "moral obligation" and a material benefit is sufficient consideration to support a subsequent promise to pay a life annuity after webb saved thee life of mcgowen and upon his death the estatem found there was a moral obligation to compensate web for his loss.

Front 144

PROMISSORY ESTOPPEL

Back 144

Restatement (2nd) 90:
Recovery on the basis of reliance, where four requirements must be met;
1). must be a promise 2). promisees reliance must have been reasonably foreseeable to the promisor even though the promisor may not have bargained for it, 3). must have been actual reliance on the promise, 4). circumstances must be such that injustice can be avoided only by enforcement of promise

Front 145

Promissory Estoppel

Back 145

Maker of the promise even though it is not supported by consideration if the promisee relies upon the promise to her detriment and the promisor should have foreseen this reliance, the promise is enforceable but may be limited as justice requires. recovey is generally limited to damages based on teh reliance interest which affords a lesser recovery tahn would a full measure of expecation damages

Hint 145

Promissory Estoppel doctrine, has developed to provide a remedy for promises that fail the test of enforceablityy by treating the promissees reliance as an imdependent and adequate basis for recovery. The doctrine has been applied to several categories of cases: gratuitious promises to convey land if the promisee relied by moving onto the land, making improvements, gratuitous promises to procure insurance, charitable subscriptions, gratuitous intrafamily promises

Front 146

Parole Evidence Rule

Back 146

Rule of Substantive Law

Hint 146

Statement of the substantive law principle that if the parties so intend their final expression will prevail over any antecedent expression of agreement where the question of intent are questions of fact normally submitted to the jury

Front 147

Integrated Writing

Back 147

Parties have regarded the writing as the final embodiment of thier agreement.

Hint 147

When the writing is partially integrated, it can be supplemented by consistent additional terms.
When the writing is both final and complete the writing is totally integrated. Courts treat the issue as involving the intent of the parties as an issue of law.

Front 148

consideraton

Back 148

to constitute consideration, a performance or return promise must be bargained for

Front 149

CONSIDERATION

Back 149

indebtedness, bankruptcy, nonoocrrence of condition, voidable duty, past/moral consideration, options, surety, modified, promissory estoppel, stipulation

Front 150

COMMON LAW: OFFER

Back 150

manifestation of willingness to enter a bargain been made so as to justify the offeree in understanding that her assent to the bargain is invited and if given would conclude it.

Front 151

INTENT:

Back 151

words or conduct used in proposal are words of offer , terms sufficiently clear and definite and not simply of preliminary negotiation (parties, subject matter, time for performance, price to be paid).

Advertisements are more than likely considered as invitations to make an offer.

Essential Terms Vague or missing: Terms "cured"- conduct of parties, Terms "implied"- usage of trade, Terms "cured" gap fillers.

Front 152

COMMUNICATED

Back 152

offer communicated to one party capable of acceptance where power of acceptance has been created in offeree .

Front 153

COMMON LAW: ACCEPTANCE:VALID

Back 153

INVITED/WITH KNOWLEDGE
acceptance of offer on same terms and in manner requested or authorized by offeree by proper offeree with power to accept and knowledge of the offer and acted with the intent to accept it.

Front 154

COMMON LAW: ACCEPTANCE
BILATERAL PROMISES

Back 154

ACCEPTANCE BY PROMISE
offer invites acceptance by return promise,
EXPRESSION OF COMMITMENT
unequivocal intent to be bound
UNCONDITIONAL
MIRROR IMAGE OF OFFER
same terms as proposed in offer

Front 155

COMMON LAW: ACCEPTANCE BY PERFORMANCE

Back 155

offeree can accept only by performance as consideration for the offeror's promise

Front 156

COMMON LAW: ACCEPTANCE BY SILENCE

Back 156

General rule: Silence not acceptance, Exception: silence acts as acceptance in limited set of circumstances (offeree has taken the benefit of services when she had reasonable opportunity to reject)culminating in acceptance.

Offeror stated to offeree reasonable understanding that assent may be manifest by silence therefore acceptance.

Prior dealings between the parties such that it would be reasonable for offeree to notify offeror if she did not intent to accept.

Exercise of dominion or control over goods or property of offeror inconsistent with offerors ownership

Front 157

COMMON LAW: ACCEPTANCE: REASONABLE METHOD

Back 157

If manner and mode is not specified than any reasonable method and by any medium under the circumstances.

Front 158

COMMON LAW: ACCEPTANCE: NOTICE

Back 158

ACCEPTANCE BY PROMISE:
Essential to acceptance by promise, that offeree exercise reasonable diligence to notify offeror that the offer has been accepted or that the offeror recieves the acceptance seasonably.
ACCEPTANCE BY PERFORMANCE
where acceptance is by performance than no notification is necessary to make it effective unless.....
Offer requests notification.
Reason to know offerer will not learn of acceptance with reasonable promptness and certainty such that the offeror exercise diligence to notify offeror within reasonable time.

Front 159

COMMON LAW: ACCEPTANCE: EFFECTIVE:

Back 159

-INSTANTANEOUS communication
-INVITED
invited by the offer, in manner and by medium invited by offer, MAIL BOX RULE
acceptance effective on dispatch.
REJECTION BEFORE ACCEPT does not terminate offeree's power of acceptance until it is received, any acceptance dispatched by offeree after dispatch of rejection is not effective unless acceptance is received by the offeror before she receives the rejection.
ACCEPTANCE BEFORE REJECT
contract binding as soon as acceptance is dispatched.

Front 160

CONTRACT

Back 160

Contract is set of promises between two or more persons the performance of which the law recognizes a viable duty and for the breach of which the law provides a remedy.

A valid contract contains offer, acceptance and consideration with no defenses to contract formation.

Front 161

OFFER

Back 161

Communication from one person to another of intent to be bound to definite terms creates in offeree the power of acceptance.

Front 162

INTENT TO BE BOUND

Back 162

objective theory of contracts: employs in use of a reasonable person in offeree position in order to determine if an offer to enter a contracdt has been extended (specifc intent to be bound).

Front 163

DEFINITE TERMS

Back 163

definite enough so that a court may determine the duties of the parties and be able to fashion an appropriate remedy.

Front 164

COMMON LAW: CONTRACT

Back 164

Common law: definite specific terms and conditions, quantity, time for performance, identity of parties, subject matter and price, offeror is the master of the offer, mirror image, manifestation of intent to be bound

Front 165

ACCEPTANCE

Back 165

assent to terms of the offer, in manner invited or required by the offer or through reasonable means if no method is stated.

Front 166

MIRROR IMAGE: COMMON LAW

Back 166

offer is master of the offer, and where the offer by its language prescribes the manner in which it must be acceptaed then the offer can oly be adcepted in that manner without any qualification condition or additional terms.

Front 167

UNILATERAL OFFER: COMMON LAW

Back 167

Accepted by performance, offeror is prevented from revoking offer for reasonable time after offeree has begun performance.

Front 168

TERMINATION OF OFFER

Back 168

Offer terminated by rejection, time lapse, death, revocation or at the end of a conversation where verbal offer is not accepted.

Front 169

DETRIMENTAL RELIANCE

Back 169

Where reliance was in fact reasonable, the offer will be held open for a reasonable time

Front 170

CONSIDERATION

Back 170

Bargained for Exchange: acts or promises, detriment to promisee or benefit to promisor or both. no pre-existing duty.(consideration substitute)

Front 171

STATUTE OF FRAUDS

Back 171

Contracts unenforceable unless accompanied by a written agreement. (land, marriage, goods for sale of $500 or more, surety ship, executor administrative, for one year or more

Front 172

REVOCATION

Back 172

revocation is good on receipt

Front 173

STANDARD OPTION CONTRACT

Back 173

consideration is stated in a signed contract, or actually paid by offeree in order to keep the offer open than the offer is irrevocable where a payment need normally be made. not a mere acknowledgement of consideration.

Front 174

CONDITIONS AND PERFORMANCE: DISCHARGE PERFORMANCE: FINANCIAL IMPRACTICABILITY

Back 174

Extreme financial impracticability due to changed circumstances, changed conditions discharge performance except in business such as where a cost increases are foreseeable

Front 175

IMPOSSIBILITY OF PERFORMANCE

Back 175

impossibility of performance

Front 176

BREACH OF CONTRACT:
ANTICIPATORY REPUDIATION

Back 176

Party indicates they will be unable or unwilling to perform. Other party has right to suspend performance and sue for breach of contract.

Front 177

SUBSTANTIAL PERFORMANCE

Back 177

Breach of Common Law Contract: Delia did not appear to act in bad faith, however she is not willing to cure, major expectation of contract is denied.causing material breach.

Front 178

REMEDIES

Back 178

Damages to make whole, as if the contract was fully performed. In service contract, not entitled to specific performance, entitled to payment under contract until such time as party reasonably mitigates damages, Consequential damages Incidental damages related to breach and thereafter covering for breach.

Front 179

QUASI CONTRACT DAMAGES

Back 179

reliance damages under quasi contract theory of recovery, for reasonable reliance on the offer.

Front 180

UCC MERCHANTS:

Back 180

Merchant is someone who trades or deals regularly with the goods involved in contract or who otherwise holds themselves out as an expert knowledgeable about the goods

Front 181

UCC, DEFINITE TERMS

Back 181

UCC is more liberal than Common Law re: definite terms, major requirement for valid offer is quantity ( good faith and fair dealing)

Front 182

DETRIMENTAL RELIANCE

Back 182

offeror knew or had reason to know that the offeree would make preparations based on an offer, the offer will be irrevocable for areasonable period of time in order to prevent injustice.

Front 183

UNILATERAL MISTAKE

Back 183

party may avoid a contract if there is a mistaken belief about the basic assumption of the contract by both parties, which has a material affect on agreed performance and where the adversely affected party bore the major risk of mistake. the mistake must operate to make the contract unconscionable and the otehr party should have reason to know of hte mistake or have actually caused the mistake.

Front 184

DISCHARGE OF PERFORMANCE: FINANCIAL IMPRACTICABILITY

Back 184

Extreme financial impracticability: changed circumstances, change conditions may discharge performance, fixed price contracts generally seen to have assumed the risk of cost increases therefore financial impracticability will not discharge performance especially when a cost increase was foreseeable

Front 185

ANTICIPATORY REPUDIATION

Back 185

Party indicates they will be unable or unwillng to perform, Other party has a right to susend performance and sue for breach

Front 186

REMEDIES(COVER)

Back 186

buyer may buy goods from another seller and recover the difference between the orignial contract price and the cover price as long as the buyers purchase of substitute goods is reasonable and made in good faith without reasonable delay. Buyer must mitigate by attempting tocover as a condition to recovery of consequential damages.

Front 187

MITIGATION OF DAMAGES

Back 187

Upon learning of seller's breach, buyer must make seasonable AND reasonable efforts to avoid additional damages

Front 188

CONSEQUENTIAL DAMAGES

Back 188

non breach party who encounters damages which were reasonably foreseeable to a person in the breaching party's position at the time of the contract formation, and which are capable of proving with reasonable certainty, willbe allowed consequential damages.

Front 189

INCIDENTAL DAMAGES

Back 189

include transportation expense, storage expense, other small yet direct expenses related to the breach and cover for it.

Front 190

QUASI CONTRACT

Back 190

Quasi contract claim seeks to recover value for goods or services performed on a equity theory.

Front 191

QUANTUM MERUIT

Back 191

doctrine which asserts that unjust enrichment should be prevented when there is no enforceable contract at law. Amount of recovery is the value of benefit that unjustly enriched the other party.(IF P failed in breach of contract claim they may be entitled to reliance damages.)

Front 192

GRUMBLING ACCEPTANCE

Back 192

request for additional minor terms, there may be an acceptance, unless the additional terms constitute an express condition of the acceptance.

Front 193

OFFER

Back 193

Objective test, master of offer, manifestation of contractual intent to be bound by the certainty of terms, moreso than prelim negotiations

Front 194

ACCEPTANCE

Back 194

power of acceptance, unilateral contract, bilateral contract, mirror image rule, mail box rule, battle of the forms, irrevocable offer: option K, firm offer, lapse of time, death, incapacity

Front 195

COMMON LAW: OFFER

Back 195

manifestation of willingness to enter a bargain so as to justify the offeree in understanding that assent to the bargain is invited and if given would conclude it.

Front 196

INTENT: CONTRACT

Back 196

Intent to make offer, words or conduct in proposal must be words of offer not just words of preliminary negotiation

Front 197

LANGUAGE

Back 197

words of promise and commitement vs invitations to negotiate

Front 198

INTENT

Back 198

language, surrounding circumstances, advertisement to public,

Front 199

DEFINITE AND CERTAIN TERMS

Back 199

Sufficient clear and definite terms, court determines what parties intended and fix damages in event of breach (indefinite terms cured: by conduct of the parties, missing terms implied from usage of trade, prior course of dealing, course of performance and gap fillers

Front 200

COMMUNICATED

Back 200

yes, where power of acceptance has been created within the offeree

Front 201

ACCEPTANCE

Back 201

valid acceptance, manifest assent to the offer, acceptance on same terms and in the same manner requested or authorized by the offeror.(who is accepting, proper party with power of acceptance, with knowledge of the offer

Front 202

MANNER OF ACCEPTANCE

Back 202

has offeree accepted the offer in the manner required by the offer

Acceptance by Promise: expression of commitment, unequivocal intent to be bound, unconditional, mirror image.

Acceptance by Performance:offer invite acceptance, by performng he act, requested and performed is consideration for the offerors promise which constitutes acceptance.

Silence: accepted by virtue of silence, taken the benefit of services when she had a reasonable opportunity to reject them and reason to know that payment was expected. then there is acceptance.

Front 203

OFFER ACCEPTED

Back 203

when no manner is specified than acceptance may be given in any manner and by any medium reasonable under circumstances

Front 204

NOTICE OF ACCEPTANCE

Back 204

acceptance by promise: exercise of reasonable diligence tootify the offeror that the offer has been accepted or that the offeror receives acceptance seasonably

acceptance by performance:
no notification is necessary to make effective unless ....
offer requests notification
reasonable diligence within reasonable time.

Front 205

ACCEPTANCE (Common law)

Back 205

"Mailbox Rule" acceptance effective upon dispatch if properly stamped and addressed. Effective instantaneous, as soon as manifest, invited by offer, as soon as put out of offeree's possession.without regard to whether it reaches offeror.

.

Front 206

ACCETANCE AND REJECTION

Back 206

Rejection sent before acceptance: acceptance dispatched by offeree after she dispatched rejection is not effective unless the acceptance is received by offeror before she receives rejection.

Acceptance sent before rejection: contract binding as soon as acceptance dispatched, subsequent dispatch of revocation of acceptance does not undo the acceptance whether received by offeror before or after receipt of acceptance

Acceptance of option effective upon receipt by offeror.

Front 207

TERMINATION OF POWER TO ACCEPT

Back 207

for acceptance to be valid it must be made while the power of acceptance is still in effect. (lapse of time, seasonable acceptance if sent by mail, direct negotiations"

Front 208

REJECTION

Back 208

Offeree failed to accept offer before lapsed or she communicated to offeror that she does not intend to accept.

Front 209

COUNTER OFFER

Back 209

offeree declined the contract on terms proposed in offer and suggested different terms whereupon the offerees power of acceptance is terminated as not mirror image. (vs. inquiry)

Front 210

PAROLE EVIDENCE RULE

Back 210

introduction of extrinsic evidence of prior or contemporaneous agreements are offered to contradict vary or modify an unambiguous writing that the parties intended as a full and final expression of their agreement.

Ambiguities in writing are frequently construed against the party who prepared it but only if they cannot be clarified in some other way.

Front 211

PAROL EVIDENCE

Back 211

Prohibits introduction of extrinsic evidence of prior or contemporaneous agreements to contradict, vary, or modify unambiguous writing that parties intended to be a full and final exptession of agreement, Discourage liigation encourage parties to put their entire agreement in writing

Front 212

MERCHANT FIRM OFFER, UCC: 2-205

Back 212

Firm offers between merchants are enforceable without consideration

Front 213

UCC: 2-201

Back 213

a writing may satisfy the statute of frauds even though one or more terms (except quantity) are ommitted.

Seller who has completed performance may assign its rights even if terms of the contract prohibit assignment.

Front 214

ASSIGNMENT, UCC 2-210

Back 214

Seller who has completely performed may assign rights even if terms of contract prohibit assignment.

Front 215

CONTRACT MODIFICATION RECISSION WAIVER: UCC 2-209

Back 215

An agreement modifying a contract within this Article needs no consideration to be binding.

(2) A signed agreement which excludes modification or rescission except by a signed writing cannot be otherwise modified or rescinded, but except as between merchants such a requirement on a form supplied by the merchant must be separately signed by the other party.

(3) The requirements of the statute of frauds section of this Article (Section 2-201) must be satisfied if the contract as modified is within its provisions.

(4) Although an attempt at modification or rescission does not satisfy the requirements of subsection (2) or (3) it can operate as a waiver.

(5) A party who has made a waiver affecting an executory portion of the contract may retract the waiver by reasonable notification received by the other party that strict performance will be required of any term waived, unless the retraction would be unjust in view of a material change of position in reliance on the waiver. modification of a contract, must be in writing, if the contract as modified is within the provisions of the statute of frauds. Promise not supported by consideration or one that violates the statute of frauds may be enforceable if the promisee justifiably relies on it to his or her detriment.

Front 216

ASSIGNMENT OF CONTRACT

Back 216

Presumption that assignment of rights under contract includes a delegation of duties, unless clear agreement to contrary.

A promise not to assign without consent of the other party is usually void; assignment is valid in spite of no assignment clause so long as it imposes no additional burden on obligor

Front 217

UCC 2-206 (1) (B)

Back 217

order to purchase goods for prompt shipment calls for acceptance either by prompt shipment or prompt promise to ship. acceptance is by shipment of goods.

Front 218

UCC 2-314

Back 218

implied warrantee of merchantability accompanies every sale by a merchant unless disclaimed by unequioval language. UCC 2-316 (3) (a)- specifically provides that the phrase "as is) may be used to disclaim the warranty.

Front 219

IMPLIED WARRANTEE: UCC 2-315

Back 219

implied warranty that product is fit for buyer's particular purpose accompanies a sale only if seller knows buyer's purpose and knows that buyer is relying on seller judgment in furnishing a produc to suit that purpose.

Front 220

BREACH

Back 220

Non breach party excused from further performance, and entitled to damages consisting of losses that he or she sustained as result of breach

Front 221

OPTION

Back 221

promise to keep a particular offer open for a specified period of time; if supported by consideration, it is a separate contract, and enforceable enforceable during the specified period.

Front 222

ANTICIPATORY REPUDIATION

Back 222

Requires an unequivocal manifestation of intent not to perform, or clear manifestation that party will not perform, . party that has anticipatorily repudiated may retract repudiation prior to time for performance. Such retraction may not occur after other party has materially changed their position in reliance on repudiation

Front 223

ADVERTISEMENT/VALID OFFER

Back 223

contains specific terms such that it could be said to be communicated to an identifiable person.(with quantity, indication of who may accept as first come first serve) here there will be an offer especially if there is a time and a place mentioned.

Front 224

LETTER OF ACCOMODATION

Back 224

Nonconforming shipment is a material breach without letter of accomodation under perfect tender rule.

Front 225

CONSIDERATION: VALID LEGAL DETRIMENT

Back 225

valid legal detriment exsists to help establish consideration when a potential legal claim is surrendered by a party that reasonalby believes at the time of contract formation that they have a valid legal claim

Front 226

REQUIREMENTS CONTRACT

Back 226

Consideration present when buyer agreement to purchase goods is sufficient for seller agreement to supply all goods required for a period (no specific number)

Front 227

CONSIDERATION: (SUBSTITUTE)
PROMISSORY ESTOPPEL

Back 227

where offeree relies to their detriment by making substantial efforts based on offer given by an offeror consideration may be present if offeror should have reasonably foreseen that offeree would rely on offer and that such reliance would be substantial and reasonable

Front 228

FORBEARANCE

Back 228

forbearance of a legal claim is a valid modality to establish legal detriment within the context of consideration

Front 229

EMPLOYEE AT WILL

Back 229

either party at any point may terminate the employment agreement with or without any reason and without being sai to have breached an employment contract because no contract in fact exists

Front 230

UNILATERAL CONTRACT

Back 230

Offeree to unilateral contract starts performance, offer irrevocable for reasonable time

Front 231

MERCHANT FIRM OFFER:UCC

Back 231

continue for a reasonable period of time not to exceed three months determined by a balancing of needs of the parties

Front 232

FORBEARANCE

Back 232

forbearance of a legal claim may serve as a legal detriment for consideration

Front 233

CONTRACT SUFFICIENT WRITING

Back 233

need not be written directly at the time of the formation of the promise and it also need not be addressed to the promisee

Front 234

DEFENSE: INTENTIONAL MISREPRESENTATION OF MATERIAL FACT

Back 234

Intentional Misrepresentation of Material Fact, by seller, sufficient to rescind the contract

Front 235

OFFER

Back 235

manifestation of willingness to enter a bargain so as to justify the offeree in understanding that her assent to teh bargain is invited and if given would conclude it.

Front 236

INTENT

Back 236

Words or conduct used in proposal must be words of offer and not words of preliminary negotiation

Front 237

LANGUAGE

Back 237

words of promise and commitment or invitations to negotiate

Front 238

ADVERTISEMENT

Back 238

proposals made to public such as advertisement are more likely to be considered invitation

Front 239

DEFINITE AND CERTAIN TERMS

Back 239

Term sufficiently clear and definite, a court could determine what parties intended and fix damages in the event of breach

significant terms, parties to contract, subject mattter, time for persformance, price to be paid,

terms missing or vague, the offer may fail for indefiniteness unless cured or missing terms implied from usage of the trade by prior course of dealing between parties or course of performance or can missing term be cured by gap filler

Front 240

OFFER

Back 240

Manifestation of willingness to enter bargained for exchange so as to justify offeree in understanding that her assent to bargain is invited and if given would conclude it.

Front 241

OFFER

Back 241

Manifestation of willingness to enter a bargain so as to justify offeree in understanding that her assent to the bargain is invited and if given would conclude it.

Front 242

INTENT

Back 242

Words or conduct used in proposals must be words of offer and not words of preliminary negotiation

Front 243

LANGUAGE

Back 243

words of promise and commitment or invitations to negotiate

Front 244

INTENT/PURPOSEFUL

Back 244

Words or conduct in proposal must be words of offer not preliminary negotiation

Front 245

ADVERTISEMENT

Back 245

proposals made to public such as advertisement are more likely to be considered invitation

Front 246

LANGUAGE

Back 246

words of promise and commitment or invitations to negotiate

Front 247

ADVERTISEMENT

Back 247

proposals made to public such as advertisement are more likely to be considered invitation

Front 248

DEFINITE AND CERTAIN TERMS

Back 248

Terms sufficiently clear and definite so that court could determine what parties intended and fix damages in the event of breach

significant terms, parties to contract, subject mattter, time for persformance, price to be paid,

terms missing or vague, the offer may fail for indefiniteness unless cured or missing terms implied from usage of the trade by prior course of dealing between parties or course of performance or can missing term be cured by gap filler

Front 249

TERMS

Back 249

Terms sufficiently clear and definite so court could determine what parties intended and fix damages in event of breach

( parties to contract, subject mattter, time for performance, price to be paid, quantity),

Offer will fail for missing or vague terms, indefiniteness unless cured or missing terms implied from usage of trade, prior course of dealing between parties or course of performance or missing term cured by gap fillers

Front 250

COMMUNICATED: COMMON LAW

Back 250

Offer has been communicated to one capable of acceptance

Front 251

ACCEPTANCE: COMMON LAW

Back 251

Offeree manifest assent to offer, acceptance of the offer on the same terms and in the same manner requested or authorized by offeror.

Proper parties with "power of acceptance" accept offer, one with knowledge of the offer has power to accept

Offer invites acceptance by return promise, expression of unequivocal intent to be bound, unequivocal, mirror image, by performance, by silence, prior dealings, exercise of dominion over the goods

Acceptance by promise: exercise reasonable diligence to notify offeror that offer has been accepted or that offeror receives acceptance seasonably.request notification, exercise of reasonable diligence to notify offeror or offeror learns of performance within reasonable time

Front 252

SILENCE AS ACCEPTANCE: COMMON LAW

Back 252

Offeree taken the benefit of services when she has had a reasonable opportunity to reject .

Front 253

ACCEPTANCE : COMMON LAW

Back 253

Acceptance made in manner and by medium invited by the offer effective as soon as it is put out of the offerees possession without regard to whether it ever reaches the offeror:

Mailbox rule where acceptance is effective on dispatch, properly stamped and addressed.

Front 254

REVOCATION

Back 254

offeror may revoke the offer at any time before acceptance even if the offer says it will remain open unless it is an option contract or a firm offer, effective when recieved by the offeree.

Front 255

RELIANCE: COMMON LAW

Back 255

Co-offeror make offer which she should reasonably expect to induct reliance on party of offeree before acceptance and which did induce such reliance.

Front 256

REVOCATION: TRADITIONAL COMMON LAW

Back 256

Offer may be revoked at any time before performance of the requested act has been completed. Once offeree begins to perform the requested act, offer becomes irrevocable

Front 257

SALE OF GOODS, BARGAIN OF PARTIES IN FACT: SUFFICIENT AGREEMENT

Back 257

Conduct of parties recognize existence of contract (2-204)

Front 258

OFFER AND ACCEPTANCE: SALE OF GOODS,
UCC 2-206

Back 258

2-206. Offer and Acceptance in Formation of Contract.

(1) Unless otherwise unambiguously indicated by the language or circumstances

(a) an offer to make a contract shall be construed as inviting acceptance in any manner and by any medium reasonable in the circumstances;
(b) an order or other offer to buy goods for prompt or current shipment shall be construed as inviting acceptance either by a prompt promise to ship or by the prompt or current shipment of conforming or non-conforming goods, but such a shipment of non-conforming goods does not constitute an acceptance if the seller seasonably notifies the buyer that the shipment is offered only as an accommodation to the buyer.

(2) Where the beginning of a requested performance is a reasonable mode of acceptance an offeror who is not notified of acceptance within a reasonable time may treat the offer as having lapsed before acceptance.

Front 259

BATTLE OF THE FORMS

Back 259

one or both parties use oral or written communications in process of forming a contract where order and confirmation forms containing standard boiler plate terms, where conflict between them is possible

UCC: acceptance response to offer is a definite and seasonable expression of acceptance or written confirmation of a prior oral agreement, determine whether the conduct of the parties recognizes the existence of a contract

Front 260

RELIANCE: COMMON LAW

Back 260

Offeror make an offer which she should reasonably expect to induct reliance on the party of the offeree before acceptance and which did induce such reliance

Front 261

REVOCATION: TRADITIONAL COMMON LAW

Back 261

offer may be revoked at any time before performance of the requested act has been completed. Once the offeree begins to perfomr the requested act, the offer becomes irrevocable

Front 262

SALE OF GOODS, BARGAIN OF PARTIES IN FACT: SUFFICIENT AGREEMENT (UCC 2-204)

Back 262

Conduct of parties recognize existence of contract

Front 263

ACCEPTANCE: SALE OF GOODS, UCC

Back 263

Shipment of non conforming goods as accomodation to the offeror is allowed under UCC 2-206. Did seller seasonably notify buyer that shipment of non conforming goods was offered as accomodation to the buyer and not as acceptance

YES: seller shipment of non conforming goods is accomodation and not an acceptance

NO seller shipment of non conforming goods is an acceptance and breach

Front 264

BATTLE OF THE FORMS

Back 264

One or both parties use oral or written communications in forming a contract where order and confirmation forms contain standard boiler plate terms, conflict between forms is possible

Front 265

RELIANCE: CO MMON LAW

Back 265

COofferor make an offer which she should reasonably expect to induct reliance on the party of the offeree before accepntanc eand which did induce such reliance

Front 266

RELIANCE: CO MMON LAW

Back 266

Offeror makes offer which she should reasonably expect to induct reliance on party of offeree before acceptance and which did induce such reliance

Front 267

RELIANCE DAMAGES: COMMON LAW

Back 267

Offeror made offer which she should reasonably expect to induct reliance on the party of offeree before acceptance and which did induce reliance

Front 268

REVOCATION: COMMON LAW

Back 268

Offer may be revoked any time before performance of the requested act completed. Once offeree begins to perform requested act, offer becomes irrevocable

Front 269

REVOCATION: TRADITIONAL COMMON LAW

Back 269

Offer may be revoked any time before performance of the requested act has been completed. Once the offeree begins to perform requested act, offer becomes irrevocable

Front 270

REVOCATION: TRADITIONAL COMMON LAW

Back 270

offer may be revoked at any time before performance of the requested act has been completed. Once the offeree begins to perfomr the requested act, the offer becomes irrevocable

Front 271

SALE OF GOODS, BARGAIN OF THE PARTIES IN FACT: SUFFICIENT AGREEMENT

Back 271

conduct of the parties recognize the existence of a contract (2-204)

Front 272

SALE OF GOODS, BARGAIN OF THE PARTIES IN FACT: SUFFICIENT AGREEMENT

Back 272

conduct of the parties recognize the existence of a contract (2-204)

Front 273

SALE OF GOODS, BARGAIN OF THE PARTIES IN FACT: SUFFICIENT AGREEMENT

Back 273

conduct of the parties recognize the existence of a contract (2-204)

Front 274

ACCEPTANCE: SALE OF GOODS, UCC

Back 274

either prompt promise to ship or by prompt or current shipment of conforming goods

shipment of non conforming goods is an accomodation tot eh offeror as allowed under the UCC 2-206 did the seller seasonably nofify the buyer that the shipment of non conforming goods was offered only as an accompldation to the buyer and not as an acceptance

YES: seller shipment of non conforming goods is not an acceptance

NO seller non conforming shipment is an accepetnace and breach

Front 275

ACCEPTANCE: SALE OF GOODS, UCC 2-206

Back 275

Prompt promise to ship or prompt or current shipment of conforming goods

Shipment of non conforming goods is an accomodation to the offeror allowed under UCC 2-206. Did seller seasonably nofify buyer that shipment of non conforming goods was offered only as accompldation to buyer and not as an acceptance

YES: seller shipment of non conforming goods is not an acceptance. NO seller non conforming shipment is an accepetnace and breach

Front 276

ACCEPTANCE: SALE OF GOODS, UCC

Back 276

either prompt promise to ship or by prompt or current shipment of conforming goods

shipment of non conforming goods is an accomodation tot eh offeror as allowed under the UCC 2-206 did the seller seasonably nofify the buyer that the shipment of non conforming goods was offered only as an accompldation to the buyer and not as an acceptance

YES: seller shipment of non conforming goods is not an acceptance

NO seller non conforming shipment is an accepetnace and breach

Front 277

BATTLE OF THE FORMS

Back 277

One or both parties use oral or written communications in process of forming a contract where order and confirmation forms containing standard boiler plate terms, where conflict between them is possible

Front 278

BATTLE OF THE FORMS

Back 278

one or both parties use oral or written communications in process of forming a contract where order and confirmation forms containing standard boiler plate terms, where conflict between them is possible

UCC: acceptance response to offer is a definite and seasonable expression of acceptance or written confirmation of a prior oral agreement, determine whether the conduct of the parties recognizes the existence of a contract

Front 279

BATTLE OF THE FORMS

Back 279

one or both parties use oral or written communications in process of forming a contract where order and confirmation forms containing standard boiler plate terms, where conflict between them is possible

UCC: acceptance response to offer is a definite and seasonable expression of acceptance or written confirmation of a prior oral agreement, determine whether the conduct of the parties recognizes the existence of a contract

Front 280

PROMISSORY ESTOPPEL DEFENSE

Back 280

Promissory Estoppel Defense: 1). Actual reliance on promise, 2). Definite and substantial change of position occasioned by the promise , 3). Foreseeability of the promisor as reasonable person that the promise would incduce condict of the kind that offurred. Difficulty to establish/meeting the burden of proof should encourage merchants to put agreements in writing and decrease likelihood of proponent of contract being able to prove its existence through perjury.

Front 281

RELIANCE

Back 281

1) Promise the promisor should reasonably expect to induce action of forbearance on the part of the promisee or third person and which does induce the action of forebearance is enforceable notwithstanding the statute of frauds if injustice can be avoided only by enforcement of the promise. Remedy for breach limited as justice requires

Front 282

RECEIPT AND ACCEPTANCE

Back 282

Receipt: taking personal possession of goods. Acceptance: whether buyer indicated intent to keep goods, (shift in emphasis from legal conclusion to a factual conclusion) unambiguous admission by both parties that a contract actually exists.

UCC- contract is found to be enforceable as to goods for which payment has been made and accepted.

Front 283

MEMORIAL (WRITING)

Back 283

signed by party to be charged where three definite and invariable requirements:

1). Evidence a contract for sale of goods, 2). Authentication (signed) by party to be charged, 3). Specify quantity.

Where the memorandum does not confirm the existence of oral contract, party alleging contract has the burden of proving that an oral contract was entered into before the written confirmation, purpose of this subsection of the Code, to rectify abuse developed in law of commerce, holding recipient bound unless he communicated his objection within 10 days.

Front 284

INTENT TO BE BOUND

Back 284

Intent to be bound ie.(Intent, Content, Communicated to identified offeree). 1). words, conduct, writing, demeanor, 2). definite material quantity terms, and 3). language of commitment, communicated to identified offeree to be enforceable, it is not the subjective intent or either party, public policy reasons marital relations are not supported by an intent to be be bound (preliminary negotiations)(gentleman agreement) (interference with marital affairs) no intent to cause legal consequences of a contract unless the writing states “legal and binding” contract.

Front 285

MERCHANT VS CONSUMER AGREEMENTS

Back 285

1). Consumer Agreement: Addition of new or different terms, become proposals for additions to the contract, which can be separately accepted or rejected, if the contract is silent on delivery, perform is to be performed within a reasonable time.
2). Merchant Agreement: Addition of new or different terms, states, “deliver car for 5000, with added terms, “deliver on Saturday”, new or different term automatically becomes part of K;

Three exceptions:
1) Where the Offer is limited to only its expressed terms,
2). Where the Offer expressly rejects the terms,
3). Where new or different terms materially alter the obligations under the contract. (one car dealer in NY, the other car dealer in Miami, Terms : “get the car to NY overnight”, substantial material alteration (Diamond Fruit Growers)

Front 286

MERCHANT

Back 286

(1) "Merchant" means a person that deals in goods of the kind or otherwise holds itself out by occupation as having knowledge or skill peculiar to the practices or goods involved in the transaction or to which the knowledge or skill may be attributed by the person's employment of an agent or broker or other intermediary that holds itself out by occupation as having the knowledge or skill.

Front 287

OFFER

Back 287

Offer: (1) Unless otherwise unambiguously indicated by the language or circumstances (a) an offer to make a contract shall be construed as inviting acceptance in any manner and by any medium reasonable in the circumstances: (b) an order or other offer to buy goods for prompt or current shipment shall be construed as inviting acceptance either by a prompt promise to ship or by the prompt or current shipment of conforming or nonconforming goods, but the shipment of nonconforming goods is not an acceptance if the seller seasonably notifies the buyer that the shipment is offered only as an accommodation to the buyer. (2) If the beginning of a requested performance is a reasonable mode of acceptance, an offeror that is not notified of acceptance within a reasonable time may treat the offer as having lapsed before acceptance

Front 288

EXCEPTION: NON REVOCATION

Back 288

Exceptions: Non Revocable Offers: (4)
1). Option Contracts: offeree pays offeror to keep offer open for an agreed time, “I offer to sell you my house for 100,000. I will pay you 5000 to keep the option open til the end of the month. The Option Contract is a separate contract, during 30 days, offeror cannot withdraw the contract, offer will stay open for time agreed.
2). Equitable Options: “Impliedly, detrimentally, foreseeably, reasonably” relied on offer. Offer must stay open for a “reasonable time”. “where contractor bids making use of a subcontractor bid, an offer for painter/cement submitted to the general contractor who detrimentally, foreseeably and reasonably relies on the offer as submitted for acceptance of the contract. The sub cannot revoke as there has been detrimental reliance by the general contractor on the bid for a reasonable time. (State v Wheeler) plee bargain.
3). Merchant Firm Offers-UCC-puts offer in writing, says it will be held open between merchants, (three captegories) 1). In the business, 2). Deal in goods, 3). Specialists; becomes an irrevocable offer for time stated or for “reasonable time” never to exceed three months without additional consideration.
Made by merchant: Three levels of merchants:
1) people in business,
2). People dealing in goods of one kind,
3). People: specialists in one particular procedure at issue.

Front 289

NON REVOCABLE OFFERS

Back 289

1). Option Contracts: offeree pays offeror to keep offer open for an agreed time, “I offer to sell you my house for 100,000. I will pay you 5000 to keep the option open til the end of the month. The Option Contract is a separate contract, during 30 days, offeror cannot withdraw the contract, offer will stay open for time agreed.
2). Equitable Options: “Impliedly, detrimentally, foreseeably, reasonably” relied on offer. Offer must stay open for a “reasonable time”. “where contractor bids making use of a subcontractor bid, an offer for painter/cement submitted to the general contractor who detrimentally, foreseeably and reasonably relies on the offer as submitted for acceptance of the contract. The sub cannot revoke as there has been detrimental reliance by the general contractor on the bid for a reasonable time. (State v Wheeler) plee bargain.
3). Merchant Firm Offers-UCC-puts offer in writing, says it will be held open between merchants, (three captegories) 1). In the business, 2). Deal in goods, 3). Specialists; becomes an irrevocable offer for time stated or for “reasonable time” never to exceed three months without additional consideration.
Made by merchant: Three levels of merchants:
1) people in business,
2). People dealing in goods of one kind,
3). People: specialists in one particular procedure at issue.

Front 290

TERMINATION OFFER

Back 290

(operation of law)
1). Death or Incapacity: Offeror or offeree, lapses in reasonable time, must have a person of capacity
2). Supervening Illegality-law is passed to prevent contract going forward, before acceptance, new law states cannot sell Cuban Cigars- supervening illegal, pending offers to sell Cuban Cigars automatically terminated ,
3). Destruction of subject matter, race horse “alligar” distroyed, offer is withdrawn, subject matter not capable of being delivered.

Front 291

STATUTE OF FRAUDS

Back 291

Statute of Frauds…”prevention of fraud and perjury”, _ statute that declared certain contracts judicially unenforceable (not void) if they were not committed to writing and signed by the party to be charged. “act for the prevention of fraud and perjury”in cluding contracts of guarantee and contracts for the sale of land.

Topic Notes:
Certain kinds of K's have a writing requirement:

(1) a promise by an executor or administrator to answer damages out of his own estate
(2) a promise to answer for the debt, default, miscarriage of another person
(3) an agreement made in consideration of marriage
(4) any K for the sale of land or interests in land
(5) any agreement that is not to be performed within the space of one year from the making thereof

Front 292

PAROL EVIDENCE

Back 292

Parol or Extrinsic Evidence.
(1) Terms with respect to which the confirmatory records of the parties agree or which are otherwise set forth in a record intended by the parties as a final expression of their agreement with respect to such terms as are included therein may not be contradicted by evidence of any prior agreement or of a contemporaneous oral agreement but may be supplemented by evidence of:
(a) course of performance, course of dealing, or usage of trade (Section 1-303); and
(b) consistent additional terms unless the court finds the record to have been intended also as a complete and exclusive statement of the terms of the agreement .
(2) Terms in a record may be explained by evidence of course of performance, course of dealing, or usage of trade without a preliminary determination by the court that the language used is ambiguous.

Front 293

MODIFICATION/ WAIVER/RESCISSION

Back 293

§ 2-209. Modification, Rescission and Waiver.
(1) An agreement modifying a contract within this Article needs no consideration to be binding.
(2) An agreement in a signed record which excludes modification or rescission except by a signed record may not be otherwise modified or rescinded, but except as between merchants such a requirement in a form supplied by the merchant must be separately signed by the other party.
(3) The requirements of Section 2-201 must be satisfied if the contract as modified is within its provisions.
(4) Although an attempt at modification or rescission does not satisfy the requirements of subsection (2) or (3), it may operate as a waiver.
(5) A party that has made a waiver affecting an executory portion of a contract may retract the waiver by reasonable notification received by the other party that strict performance will be required of any term waived, unless the retraction would be unjust in view of a material change of position in reliance on the waiver.

Front 294

ACCEPTANCE

Back 294

Outward manifestation of unequivocal assent to terms of the offer which can either by express act or by implication from conduct,in a manner authorized or requested to the offeror so that a binding contract has been formed.

Front 295

ACCEPTANCE

Back 295

Acceptance: Outward manifestation of unequivocal assent to the terms of the offer which can either be express or implied. Offerees assent either by express act or by implication from conduct, to the terms of the offer in a manner authorized or requested to the offeror so that a binding contract has been formed.

Front 296

ACCEPTANCE

Back 296

Acceptance: Outward manifestation of unequivocal assent to the terms of the offer which can either be express or implied. Offerees assent either by express act or by implication from conduct, to the terms of the offer in a manner authorized or requested to the offeror so that a binding contract has been formed.

Front 297

ACCEPTANCE

Back 297

Elements of Acceptance (mutual assent to terms, mirror image; If the acceptance modifies the terms or adds new terms, it generally operates as a counteroffer).
1) Commitment: The objective test, reasonable person, speaker intends to contract looking at terms of contract carefully,
2) Communicated in the right way, using the correct method- if the offer says how you must communicate the acceptance must mirror the “right way”, “by mail” not acceptance if you use something other than mail, if the offer is silent to communication, acceptance may be accepted same way the offer came or some other reasonable way-as speedy, as legally dependable as the original offer, whether the offer demands, (Fujimoto Contract),employees given employment contract, offer did not require return, even though may have said so, may create a hardship on the mere failure to return signed contract. Mailbox Rule: bilateral acceptance communicated “the right way” tmirrors offer.
3). Effective on Dispatch: Mailbox Rule: bilateral acceptance communicated in the right way, effective on dispatch forms contract at that moment.
Acceptance by Silence; relation between the parties justifies both the expectation of a reply, and the offerors reasonable reliance and expectation that the lack of one signals acceptance. Ordinarily silence does not give rise ot acceptance.
Qualified Acceptance; conditional or partial acceptance varies the oridinal terms of the offer and openates as a counteroffer.
Express acceptance: written or oral acceptance so as not to dispute sufficiency. Implied acceptance; acceptance implied by the drawee whose actions indicate an intention to comply with the request of the drawer.

Front 298

ACCEPTANCE: UCC

Back 298

UCC- Sale of moveable goods is with reasonable terms, UCC will (find offer where we can).
UCC 2-206 (3) A definite and seasonable expression of acceptance in a record operates as an acceptance even if it contains terms additional to or different from the offer.
UCC 2-207 Sale of Goods, the following considerations apply: where (1) additional terms are to be construed as proposals for addition to the contract.
Between merchants such terms become part of the contract unless:
• (a) the offer expressly limits acceptance to the terms of the offer;
• (b) they materially alter it; or
• (c) notification of objection to them has already been given or is given within a reasonable time after notice of them is received.

Front 299

CONSIDERATION

Back 299

Consideration: Bargained for exchange of legal value, in which both parties incur a legal detriment and gain a legal benefit, Bargain for legal detriment on both sides of the exchange: Incurred sufficient legal benefit and detriment. .
What is Consideration? an act or forbearance or the promise thereof) done or given by one party for the act or promise of another.
Act, forebearance, of the P for which from whcih the D or stranger derives a benefit or advangtage or any laborer detriment or inconvenience susteaned by the P however small, the detriment or inconvenience might be, if such act is performed or inconvenience suffered by the P with the assent express or impled of the D which is fair and reasonable under the circumstances, bargained for exchange in good faith based on a moral duty of fairness.

Front 300

PROMISSORY ESTOPPEL

Back 300

Promissory Estoppel – Consideration Substitute.
A promise made that causes another party to reasonably, foreseeably and detrimentally rely on promise will be enforceable to the extent necessary to avoid injustice. Detrimental Reliance: on promise, used as defense or basis as COA for damages.

Front 301

DETRIMENTAL RELIANCE

Back 301

Detrimental Reliance: reliance by one party on the representations/ promises of another party, causing a worsening of the other party’s position. A consideration substitute, allowing for a promise to be enforced under contract.

Front 302

REVOCATION

Back 302

Revocation: withdrawal of an offer by an offeror

Front 303

REPUDIATION

Back 303

II. Repudiation: persons refusal to accept benefit, contract partys words or actions that indicate an intent not to perform the contract in future, threatened breach. To constitute a repudiation, language must be sufficiently positive to be reasonably interpreted to mean that the party will not or cannot perform. Language of “intent not to perform, except on condition that such conditions beyond the contract constitutes a repudiation” Restatement (2nd).

Front 304

RECISION

Back 304

III. Recision: Affirmative Defense: a party’s unilateral unmaking of a contract for legally sufficient reasons such as the other party’s material breach, or judgment rescinding the contract, as remedy ordefense for non defaulting party, accompanied by restitution of any partial performance to restore the parties ot the precontractual positions to terminate the contract and discharge remaining duties.

Front 305

REJECTION

Back 305

Rejection: refusal to accept a contractual offer, refusal to accept tendered goods,

UCC, buyer rejection nonconforming goods, must be made within a reasonable time after tender or delivery and notice of rejection must be given to the offeror.

Front 306

MISREPRESENTATION

Back 306

Misrepresentation: An assertion or manifestation by words or conduct that is not in accord with the facts with the intent to deceive, conduct amounting to false assertion.

Front 307

DURESS

Back 307

Duress: any unlawful act or threat which overcomes the free will of a party constitutes duress.

Front 308

ANTICIPATORY REPUDIATION

Back 308

A buyer can respond to seller's anticipatory repudiation by waiting to see if seller performs notwithstanding the repudiation, or by declaring the contract breached and suing for breach, or by rescinding the contract

Front 309

DETRIMENTAL RELIANCE

Back 309

reliance by one party on the acts or representations of another party causing a worsening of the first party’s position. Serves as consideration substitute thus making a promise enforceable at contract. Reliance Damages: to rely on promises, reliance must be reasonable ….job for $40,000, not first class, not mansion.

Front 310

STATUTE OF FRAUDS

Back 310

Based on English statute, declared certain contracts judicialy unenforceable (not void) if not committed to writing and signed by the party to be charged inscribed at the end, to constitute prima facia evidence of proper authentication that the signed document evidences a contractual relationship.

Front 311

STATUTE OF FRAUDS

Back 311

2 requirements: first, must evidence a contract for the sale of goods, second, must be signed, any authenticaiotn identifying the party to be charged, third, a quantity term , unenforceable beyond the quantity stated.

Front 312

INTEGRATION

Back 312

One way to ensure that the contract will be found to be a final and complete integration is through the inclusion of a merger clause, which recites that the contract is, in fact, the whole agreement between the parties. However, many modern cases have found merger clauses to be only a rebuttable presumption

Front 313

PAROL EVIDENCE

Back 313

Extrinsic evidence admitted to aid in the interpretation of existing terms. To show that in light of all circumstances surrounding the making of the contract, the contract is ambiguous, necessitating the use of extrinsic "parol evidence" to determine actual meaning (California law)

.[1]To resolve an ambiguity in contract in fact a mistaken transcription of a prior valid agreement established by clear and convincing evidence, not merely by preponderance of evidence.
2). To correct mistakes. To show wrongful conduct such as misrepresentation, fraud, duress, unconscionability or illegal purpose on the part of one or both parties.

[2]To show that consideration has not actually been paid. contract states A has paid B $1,000 in exchange for a painting, B can introduce evidence that A had never conveyed $1,000.to b.
3).To identify parties, especially if parties changed names.
4).To imply or incorporate a term of contract.
5). To make changes in contract after original final contract has been agreed to where oral statements are admitted unless barred by a clause in written contract.[2]

Front 314

TOTAL / PARTIAL INTEGRATION:
PAROL EVIDENCE

Back 314

Total integration occurs if parties actually intended writing to be exclusive and total integration of agreement or if the term offered in evidence would have been included in writing if it had been agreed upon.

Restatement (2nd): Corbin’s Rule: Ascertaining actual intent to determine whether total or partial integration consistent additional terms are admissible if: 1). Alleged agreement is made for a separate consideration, 2). Offered agreement is not within the scope of the offered writing, 3). Offered terms might naturally be omitted within the writing.

Front 315

PARTIAL / TOTAL INTEGRATION

Back 315

Partial or Total integration)
Here is the basic rule for the PER:
a writing, intended to be a final embodiment of an agreement, may not be contradicted by certain kinds of evidence. Next you will have to pay particular attention and time to the following rules to be able to answer a PER question:

1. A integration is defined as a writing that is a final embodiment of an agreement (Rest. 209).
2. A writing that Is final is an integration of the terms embodied in it.
3. When a writing is final and complete, it is a total integration.
4. A writing that is final, but which does NOT completely express the parties' contract, is a partial integration.
5. A partial integration may not be contradicted by "parol" evidence, but may be supplemented by consistent, additional terms.
6. A total integration cannot be contradicted by parol evidence and cannot be supplemented by consistent (non-contradictory), additional terms.
7.The rule applies to terms agreed upon, prior to, but not subsequent to the agreements. Whether the rule applies to contemporaneous agreements is disputed. The majority rule is that the rule applies to contemporaneous agreement.

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PARTIAL /TOTAL INTEGRATION

Back 316

State the rule.
2. Did the parties intend the writing to be a FINAL integration?
3. If so, is the integration partial or total (complete)?
a. If partial, the agreement may NOT be contradicted by prior or contemporaneous agreements, but MAY be supported by consistent (non-contradictory) additional terms.
b. If total, the agreement may NOT be contradicted OR supplemented by prior or contemporaneous agreements.

NOTE: ANY RELEVANT EVIDENCE IS ADMISSIBLE TO SHOW THAT THE WRITING WAS NOT INTENDED TO BE FINAL (DETERMINED BY THE JUDGE AS A MATTER OF LAW).

c. To determine if an integration is total:
i. Four Corners Rule – only look at what is written in the contract – within the four corners of the page.
ii. Collateral Contract Rule (independent agreements admissible so long as they do not contradict the main agreement)

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INTEGRATION

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Integration The first issue in applying the rule is to determine the scope of the written document-that is, whether the parties intended the writing at issue to be the final and complete expression of their agreement. If the parties did not intend to do so, the agreement is not integrated and the rule has no application. Once it is determined that the agreement is integrated, courts examine the parties' intent to decide whether integration is partial or complete. Complete integration occurs when parties intended the writing as a "complete and exclusive expression" of the agreement, and no terms can exist beyond those set in the written contract, traditionally if a written contract appears on its face to be a complete expression of the agreement, the court will consider the writing to be completely integrated and will not permit parol evidence of additional or contradictory terms

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PARTIAL INTEGRATION

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Partial integration occurs when the parties intended the written contract "to be a final expression of the terms it contains, but not a complete expression of all the terms agreed upon-some terms remaining unwritten If the court finds the written contract is only partially integrated, then it will allow the parties to introduce evidence that supplements, but does not contradict, the writing.

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PAROL EVIDENCE RULE

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The parol evidence rule has been subject to two primary, but different, approaches:
Corbin's (contextual) and Williston's (textual).
1). Williston's approach encourages parties to be careful and precise when creating a written contract, thus eliminating the risk of perjured testimony and slippery memories.
2). Corbin's approach, on the other hand, lends itself to uncertainty by permitting parties to use extraneous evidence, including self serving testimony, to vary or avoid any contract that no longer satisfies them.

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PLAIN MEANING RULE: PAROL EVIDENCE

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Rejection of plain meaning rule, such an approach ignored the relevance of intention of parties.

Court: intention of parties can never be ascertained by just examining language of document without considering surrounding circumstances.

Traynor reasoned that when a court invokes Plain Meaning Rule, it interprets contract only according to "Judge's own linguistic education and experience." four corners of the contract.

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PLAIN MEANING RULE

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plain meaning rule, Justice Traynor used a two-step process.
First, the court must determine whether the contract, even seemingly unambiguous, is ambiguous by considering all "circumstances surrounding the making of the agreement . including the object, nature and subject matter of the writing . . . so that the court can `place itself in the same situation in which the parties found themselves at the time of contracting. This implies it should be a simple matter for trial judges to place themselves in the "same situation" as the contracting parties, in spite of the fact that each argues for an inconsistent interpretation. Query also whether it is possible for someone who was not part of the making of the original agreement to ascertain the true meaning of that agreement from selfserving testimony, sometimes false or unreliable, offered by the parties. The court will always be limited to interpretations that have been presented by the parties. Judges' decisions may not be based on what the contract states that the parties really intended, but may ultimately depend on the skills and entrepreneurial abilities of the parties offering evidence.
2). Under the second step of the Traynor approach, if the court decides that the contract language is "fairly susceptible" to either of the offered explanations, the court must admit all offered evidence that is relevant to proving the competing interpretations.

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CONDITIONS AND PERFORMANCE

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Adequate consideration, good faith, fair dealing in contract,

Exceptions: repudiation, revocation, rejection, termination lapse of time, non performance, illegality, duress, minority, lack of consideration, notice.

irrevocable offers: 1). Merchant firm offer, 2). Option, 3). Equity option and Detrimental Reliance,

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EQUITABLE ESTOPPEL

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XV. Equitable Estoppel: (distinct and different from promissory estoppel as herein estoppel by conduct) It is a defensive doctrine preventing one party to take unfair advantage of another party, when through false language or conduct, the person to be estopped induced another person to act in acertian way, with the result that the other peson has been injured in some way.
(founded on principle of fraud- five essential elements to estoppel by conduct…).
1). false representation of concealment of material fact,
2). Representation known to be false by the party making it, or the party was negligent in not knowing its falsity, 3). It was believed to be true by the person to whom it was made,
4). Party making the representation intended that it be acted upon,
5). Party claiming estoppel acted on the representation in away that will result in substantial prejeudice unless the claim of estoppel succeeds.

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ANTICIPATORY REPUDIATION

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An unequivocal refusal to perform contractual obligations seen as a material term of agreement. Promisor unequivocally disavows intention to perform when the time for performance comes. Once repudiation occurs and the non repudiating party has three options:
1)Treat the repudiation as an immediate breach and sue for damages
2)Ignor the repudiation urge the repudiator to perform, wait for the specified to time of performance and use if the repudiating party does not perform
3)Cancel the contract

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PERFECT TENDER

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UCC: Buyer may reject seller’s goods if quality, quantity or delivey of goods fails to conform precisely to the contract. Provisions under the code have softened, allows seller right to cure by substantial performance (after rejection).UCC 2-601

Buyer of goods has legal right to insist on “perfect tender” by seller ,if goods fail to conform exactly to the description in the contract as to quality, quantity or manner of delivery, buyer can reject goods and rescind contract where parties are returned to the positons they occupied before the contract

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OUTPUT CONTRACT

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VIII. Output Contract: output and requirements: seller promises to supply and buyer to buy all the goods or services that seller produces during a specified period and at a set price. Quantity term is measured by sellers output. Output contract assures the seller a market or outlet for the period of the contract.

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IMPOSSIBILITY

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Under the doctrine of impossibility of performance, performance is excused only if performance would not be possible by anyone: an objective standard applies.

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ASSIGNMENT IN WRITING

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There are certain situations in which the assignment must be in writing.
1.Assignment of wages
2.Assignment of any interest in real property
3.Assignment of choses in action worth over $5,000
4.Assignment as collateral for a loan or debt

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ASSIGNMENT REQUIRED IN WRITING

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1.Assignment of wages
2.Assignment of any interest in real property
3.Assignment of choses in action worth over $5,000
4.Assignment as collateral for a loan or debt

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NOVATION

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Novation replaces the original party with a new party. For a valid novation, (i) all parties must assent to novation, (ii) there must be a previously valid contract, (iii) the duties provided for in the contract be extinguished immediately, and (iv) a new, enforceable contract need be created.

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ASSIGNMENT: REVOCABILITY

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Assignments made for consideration are irrevocable, meaning that the assignor permanently gives up the legal right to take back the assignment once it has been made. Donative assignments, on the other hand, are generally revocable, either by the assignor giving notice to the assignee, taking performance directly from the obligor, or making a subsequent assignment of the same right to another. There are some exceptions to the revocability of a donative assignment:

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ASSIGNMENT : BREACH

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A cause of action for breach on the part of the obligor lies with the assignee, who will hold the exclusive right to commence a cause of action for any failure to perform or defective performance. At this stage, because the assignee "stands in the shoes" of the assignor, the obligor can raise any defense to the contract that the obligor could have raised against the assignor. Furthermore, the obligor can raise against the assignee counterclaims and setoffs that the obligor had against the assigno

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PARTIAL PERFORMANCE DOCTRINE

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Partial Performance Doctrine: equitable principal by which failure to comply with the statute of frauds is overcome by a party’s execution in reliance of the other party’s oral promise, of a substantial portion of an oral contract’s prequirements, valuable improvements to land with consent of the vendor, conduct must convincingly evidence the existence of the agreement.

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REFORMATION

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Reformation: 3 safeguards: 1). If alleged contact is within the statute of frauds, the record as reformed must satisfy the statutory requirements. 2). Terms intentionally omitted may not be added by decree of reformation. 3). Reformation is not permitted unless clear and convincing evidence. (NY although a written contract may be reformed a memorandum of a contract may not be reformed. ….exclusionary rules of statute of frauds and parol evidence rule).

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REMEDIES AND DAMAGES

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Remedy at Law for breach is "damages" or monetary compensation.

Remedy In Equity, for breach is specific performance or injunction.

Both remedies award damaged party "benefit of the bargain" or expectation damages, which are greater than mere reliance damages as in promissory estoppel.

Compensatory damages are awarded to compensate an injured party for all legally recognized harms or losses that have been sustained, thus making the injured party "whole" in the eyes of the law.


four types of compensatory damages: Liquidated, Expectation, Reliance and Incidental.

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EXPECTATION DAMAGES

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The general measure of expectation damages is to put the plaintiff in as good a position as he would have been in had the defendant kept his contract – Benefit of the Bargain. The aggrieved party may recover those damages as may fairly and reasonably be considered arising naturally according to the usual course of business Hadley v. Baxendale, 156 Eng.Rep. 145 (1854

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EXPECTATION DAMAGES

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First, determine expectation damages by understanding what the position of the non-breaching party would have been if the contract had been performed.
Second, determine the position that the non-breaching party is in as a result of the breach.
Third, determine how much money the non-breaching party needs to get to the position she would have been in if the contract had been performed as promised.

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CONSEQUENTIAL DAMAGES

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Consequential (Special) Damages. Consequential damages are the less obvious damages that are deemed contemplated by both parties at the time of contracting IF the promisor knows or has reason to know the special circumstances which will give rise to such damages. This is the second rule of Hadley v. Baxendale.

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LOST PROFIT DAMAGES

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Generally lost profits are not allowable because they are too uncertain, (apply Hadley v. Baxendale) Foreseeable and Contemplated by parties).

Lost profits are not allowable where seller can resell product and would have double recovery. Where seller has unlimited supply of product and buyer breaches by failing to buy per contract, there would be unjust result because even if the seller resells, he is not really selling that specific product. Thus the seller is allowed to recover the lost volume profits.

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RELIANCE

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Reliance Damages: detriment incurred by changing positions when expectation damages are uncertain or otherwise unavailable. Goal is to put the aggrieved party in as good a position as he would have been in had the contract not been made.

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RELIANCE

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. Reliance Damages. the detriment incurred by changing positions available when expectation damages are uncertain or otherwise unavailable. The goal is to put the aggrieved party in as good a position as he would have been in had the contract not been made.

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INCIDENTAL DAMAGES: UCC 2-710

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UCC 2-710 (Seller’s Incidental Damages) and 2-715 (Buyer’s Incidental Damages), Damages incident to breach additional costs of storage, shipping, insurance, finance charges, etc.
Most states do not recognize incidental damages as common law, but rather reserve it under UCC. If you are using the common law, you can make an argument by analogy, but I would stay away from it. If you do, make it clear to your grader that you understand that incidental damages are almost always reserved for UCC

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RESTITUTION DAMAGES

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If the seller has been unjustly enriched as a result of the breach, the buy may be able to recover the amount of the benefit conferred on the seller.

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SPECIFIC PERFORMANCE

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Specific performance is an order of a court which requires a party to perform a specific act, usually what is stated in a contract. It is an alternative to award/ for awarding damages, and is classed as an equitable remedy commonly used in the form of injunctive relief concerning confidential information or real property. While specific performance can be in the form of any type of forced action, it is usually used to complete a previously established transaction, thus being the most effective remedy in protecting the expectation interest of the innocent party to a contract. It is usually the opposite of a prohibitory injunction but there are mandatory injunctions which have a similar effect to specific performance.

Under the common law, specific performance was not a remedy, with the rights of a litigant being limited to the collection of damages. However, the court of equity developed the remedy of specific performance as damages often could not adequately compensate someone for the inability to own a particular piece of real property, land being regarded as unique. Specific performance is often guaranteed through the remedy of a right of possession, giving the plaintiff the right to take possession of the property in dispute. However, in the case of personal performance contracts, it may also be ensured through the threat of proceedings for contempt of court.

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NOTICE OF BREACH

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. Effect of Acceptance; Notice of Breach; Burden of Establishing Breach After Acceptance; Notice of Claim or Litigation to Person Answerable Over.
(1) The buyer must pay at the contract rate for any goods accepted.
(2) Acceptance of goods by the buyer precludes rejection of the goods accepted and if made with knowledge of a non-conformity cannot be revoked because of it unless the acceptance was on the reasonable assumption that the non-conformity would be seasonably cured but acceptance does not of itself impair any other remedy provided by this Article for non-conformity.
(3) Where a tender has been accepted
(a) the buyer must within a reasonable time after he discovers or should have discovered any breach notify the seller of breach or be barred from any remedy; and
(b) if the claim is one for infringement or the like (subsection (3) of Section 2-312) and the buyer is sued as a result of such a breach he must so notify the seller within a reasonable time after he receives notice of the litigation or be barred from any remedy over for liability established by the litigation.
(4) The burden is on the buyer to establish any breach with respect to the goods accepted.
(5) Where the buyer is sued for breach of a warranty or other obligation for which his seller is answerable over
(a) he may give his seller written notice of the litigation. If the notice states that the seller may come in and defend and that if the seller does not do so he will be bound in any action against him by his buyer by any determination of fact common to the two litigations, then unless the seller after seasonable receipt of the notice does come in and defend he is so bound.
(b) if the claim is one for infringement or the like (subsection (3) of Section 2-312) the original seller may demand in writing that his buyer turn over to him control of the litigation including settlement or else be barred from any remedy over and if he also agrees to bear all expense and to satisfy any adverse judgment, then unless the buyer after seasonable receipt of the demand does turn over control the buyer is so barred.
(6) The provisions of subsections (3), (4) and (5) apply to any obligation of a buyer to hold the seller harmless against infringement or the like (subsection (3) of Section 2-312).

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UNILATERAL OFFER

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Unilateral Offers: Offer made demand performance in return, (“offer for you to paint my house”) what if: after hearing the offer, you go out and buy the paint, ladder, other materials, once commence performance, when this offer made, offer must stay open for reasonable time once performance has begun, must give reasonable time for completion of performance, “mere preparation to perform is not enough” make irrevocable once completion of performance has begun (commenced) not mere preparation. Must have begun requested act to paint house and have begun “substantial performance” . (Paterson v Pattberg).

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OFFER TERMINATION

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Termination by operation of Law (operation of law) obvious – offer made but not accepted. No law passed, subject matter still there….
a). Death or Incapacity: Offeror or offeree, terminates offer, offer lapses in reasonable time, person of capacity to enter K
b). Supervening Illegality-Law passed to prevent contract going forward, new law states cannot sell Cuban Cigars- supervening illegal, pending offer to do illegal act is terminated.
c). Destruction of subject matter, subject matter destroyed, race horse “allidar” distroyed, hirt leg, offer to sell is withdrawn, subject matter not capable of being delivered.

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ACCEPTANCE: FORMATION

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Common law: Mirror Image where new-different terms become counter offer.

Code/UCC: Encourages formation of contracts, conduct and intention together encourage contracts, stream line approach to commerce, transactions for sale of goods uniform and simple governed by such rules, conduct and language (communication) find a complete and binding agreement whereever we can to complete the transaction.

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ACCEPTANCE BY CONDUCT

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5000 grade B non-conforming goods, is an act of acceptance as it creates the “benefit of the bargain”, shipment of non-conforming goods is a contract for grade A turkeys, however, there is a shipment of grade B turkeys becomes an act of acceptance to form a contract and simultaneously an act in breach; therefore P will recover for breach. Unless shipment of non-conforming goods grade B turkeys is sent as accommodation to buyer, shipment of non-conforming goods becomes a counter offer. If non-conforming goods from counter offer are accepted, than we have a contract.

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UNILATERAL ACCEPTANCE: COMMON LAW

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A). “Substantial performance” required for acceptance
B) Notice of Completion for requested act additionally
notice may be required where completion of performance will not otherwise come to offeror’s attention, law imposes notice requirement.-

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COMMON LAW:BILATERAL ACCEPTANCE

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Bilateral Acceptance: Promise for Promise: must mirror terms of offer to be valid at common law, not supposed to add new or different terms or will become counteroffer.

Acceptance (elements)
1) Commitment: objective test, reasonable person, speaker intends to contract looking at terms of contract carefully,
2) Communicated in right way using correct method- if offer says how you must communicate acceptance must mirror the “right way”, “by mail” not acceptance if you use something other than mail, if offer is silent to communication, acceptance may be accepted same way the offer came or some other reasonable way-as speedy, as legally dependable as the original offer, whether the offer demands, (Fujimoto Contract),employees given employment contract, offer did not require return, even though may have said so, may create a hardship on the mere failure to return signed contract.

Mailbox Rule: bilateral acceptance communicated “the right way” mirrors offer.

3). Effective on Dispatch: Mailbox Rule: bilateral acceptance communicated in right way, effective on dispatch forms contract at that moment.

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ACKNOWLEDGEMENT, COMMON LAW

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Common Law: 3 levels of Knowledge/Acknowledgement:
1). Acknowledgement required with offer, actual knowledge of the offeree, knew of terms for offer to be accepted,
2). Knowledge of revocation or rejection, effective on receipt by the other party whether they know of it, receipt makes it affective,
3). Bilateral Acceptance occurs by right method, effective when sent even though other party may not know the content or never will know of the content, effective on dispatch, when you put mail in mailbox (dispatch) contract is formed to create a valid bilateral acceptance effective upon “dispatch”.

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MAILBOX RULE/WING FOOT MESSANGER

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1). Cannot use mailbox rule if offer says you cannot,
2). Cannot use mailbox rule to straddle the end of the option contract (on 29th day of month to be received post option expiration),
3). cannot use mailbox rule for Vascillating Offeree: Offer made, 1st, dispatch of acceptance, contract formed, valid acceptance, valid communication, 2nd, dispatch rejection, wing foot messenger, mailbox rule applies, contract when first acceptance, however to protect the offeror, if rejection is received first and acted on, this will serve to supersede mailbox rule which was effective on dispatch.
4). Vascillating Offeree, (RARA) offer made, rejection sent, before receipt, acceptance sent, law says mailbox does not apply, whichever is received first by offeror, valid contract if accept first, contract formed at moment of receipt whereas if rejection is received first than the rejection rules and no contract is formed. Race to see who gets there first, RARA reject, accept, reject, accept. B

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BILATERAL OFFER: CONDUCT, COMMON LAW

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Conduct under Bilateral Offer:
1). Indifferent offers can be completed by conduct in performance of the act, even though set up as a bilateral offer. Conduct performs a duty that would have been promised is the same as the promise.
2). Conduct can be specified by offer as manifestation of return promise. “wear yellow shirt Friday”, master of offer, show promise to perform by conduct.
3). Conduct as silence, bilateral offeror, imposes silence on the offeree as acceptance. Law says silence cannot be imposed on the other party but can be adopted by the other party, valid “if you do not hear from me by midnight” silence is adopted as acceptance. though cannot impose silence, can adopt silence.

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CONSIDERATION

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Consideration: “Glue” to hold contract together: make a promise enforceable, trade off: Enforceable promises make a contract, people do something they are not otherwise required to do, make a benefit for the other party, enforceable agreement, consideration supported agreements, exchange, give up something they are not otherwise required to do, consideration supported promises, promises consist of “benefits for bargains” which are looked at and considered one promise a time to determine the elements of enforceability, “quid pro quo” therefore we treat consideration one promise at a time, each agreement has multiple promises and all promises and arrangement to make promises must be carefully considered.

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CONSIDERATION

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Consideration: Three tests:
1). Promise must support a “current legal exchange” of promises from the promisee. That element is called the “bargained for exchange” a “this for that exchange”.
2). Promise must “induce a detriment”, from the promissor, cause a “legal disadvantage” from promissor, legal disadvantage.
3). Promise must be a binding obligation, must oblige the party to the performance, mutuality not illusory or discretionary as to whether the party has agreed to perform

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BARGAINED FOR EXCHANGE

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Minority Rule: Some states, benefit to promisee is equivalent to detriment to promissor, even if promissor is doing what otherwise not right to do, satisfy element. (minority rule) either detriment to promissor, or benefit to the promissee….even if promissor is not suffering detriment.

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ADEQUATE DETRIMENT

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Adequate Detriment: bargain for, and we agree, anyone could step in and say this is not adequate consideration, sometimes we can test adequate consideration when the consideration is so token or so sham, “for good and valuable consideration” (peppercorn) When testing consideration for most scenarios, we do not test for adequacy of consideration

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ILLUSORY CONTRACT

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Illusory Promise: Promissor reserves right is called an illusory promise, no mutuality, to support the promise on the other side. When the party states: “ I feel like it”. Promise may look illusory: but are not: and be successfully seen as good consideration:
1). Promise with Definite Undertaking appears illusory. (no detriment, no binding promise…”cannot promise you anything” superimposed obligation to use reasonable and good faith effort to try to get bookings, “Lucy Lady Duff Gordon” agent had no binding promise, illusory, agent had good faith duty (superimposed) obligatory to satisfy obligations under contract to achieve obligations.
2). Output- Requirements Contract for a particular period: buyer buys all required output or seller sells all inventory for an entire period, those promises appear illusory, who is to say the buyer has any requirements, nothing to say they will do an output or a requirement., more so: Under the requirements of the law, obligation with output and requirement, reasonable obligation to produce a quantity imposed based on prior output and requirements under good faith under the law, the law imposes a quantity, law imposes reasonable quantity
3). Satisfaction Conditions: “To my satisfaction” obligation of good faith, Promise made subject to satisfaction, good faith requirement, only if in good faith that I am not satisfied, although looks illusory, under the law a reasonable obligation of good faith to make a binding obligation, if in good faith not satisfied without definite goal, the law will attempt to achieve an objective under the contract, obligation of good faith, binding not illusory.
4). Definite Undertaking: Any promise without definite undertaking will be allowed as reasonable effort to achieve an objective to form a contract in good faith

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CONTRACT FORMATION: CONSIDERATION:
ENFORCEABLE PROMISES

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To establish consideration, each promise is based on three elements:
1). Exchange of current performances
2). Detriment from promisor, beneift to promisee
3). Promise is binding

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CONSIDERATION SUBSTITUTES (COMMON LAW/UCC)

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Common law: Consideration Substitutes used when needed, when there are not otherwise enforcement of promises.
1) Promissory Estoppel- Promisee has detrimentally, reasonably and foreseeably relied on a promise in response, makes promise enforceable, otherwise would not be enforceable due to change in position. Is the change detrimental, (larger apt to study for law school) Freeberg- awarded at board of director meeting, 200 / mo for life, consideration already given is not a present act, was it reasonable, foreseeable, detrimentally relied on, court found the contract was enforceable even though no consideration, promissory estoppel will make enforceable even though it would not otherwise meet the test.
2) Contracts under Seal-consideration substitute, ancient history, read about them, “I sign and seal the contract” line for signature, theory if someone signed and sealed they admit to good consideration and always enforceable (greatly abused in history).

UCC: Consideration Substitutes:
1). Merchant Firm Offer-in writing and said it will be held open for three months similar to an option contract, if says it will be held open no need for consideration open for up to three months) Only open for a longer period as irrevocable, must pay the merchant, to stay open longer than consideration must be given.
2). Modification under Contract: sale of goods, no valid consideration for a modified promise as long as made in good faith. “offer to sell laptop, 1000, agree to purchase laptop, 1000. Although agree to pay 1000 think it is worth 750, lets modify the agreement, lap top for 750, normally we need good consideration for new promise separated by consideration, already have an obligation to pay 1000. The code says, look, if modification by the parties in good faith, we will enforce even though no valid new consideration, consideration substitute. (policy of the code).**normal consideration do not apply.

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PAROL EVIDENCE

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Williston test: Court should read the document presented, “whether reasonable persons similarly situated would have naturally left terms out of the agreement”, to be proved up later and separately to become part of the contract that will be proved up later as addition to the agreement.
a). If courts says reasonable persons could have done that, have left terms out than than the agreement is a “partial integration” only. If clearly not a complete final written integration agreement, than, “partial integration”, go and prove other terms. If clearly not a total integration, attempt Williston test: to allow or not to allow Parol evidence (additional terms).
b). If court determines reasonable person would not have left out terms than the contract would be a “total integration”. Reasonable persons would not have left the terms as stated out of the contract, or reasonable persons would have left terms of the contract; therefore, terms of the horse and terms of the completion of the house would be in a separate writing, may not have intended the horse within the same contract as the house contract…therefore a partial integration.

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PAROL EVIDENCE

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Four things important to Parol Evidence:
1). Is the contract the final written agreement, is the written agreement a “complete or partial integration”. “Is this is the final integration of the agreement”- If says this is a final and complete written integration, treat as such, as a complete integration, “no terms will be introduced to vary the terms of the agreement, no evidence before can be introduced,
Or if does not say this, than look at the document, for the understanding of the terms, both sign, if looks complete than treat as complete, does not say clearly as intended to be merged as a final written integration: we than make application of a TEST:
Williston test: Court should read the document presented, “whether reasonable persons similarly situated would have naturally left terms out of the agreement”, to be proved up later and separately to become part of the contract that will be proved up later as addition to the agreement.
a). If courts says reasonable persons could have done that, have left terms out than than the agreement is a “partial integration” only. If clearly not a complete final written integration agreement, than, “partial integration”, go and prove other terms. If clearly not a total integration, attempt Williston test: to allow or not to allow Parol evidence (additional terms).
b). If court determines reasonable person would not have left out terms than the contract would be a “total integration”. Reasonable persons would not have left the terms as stated out of the contract, or reasonable persons would have left terms of the contract; therefore, terms of the horse and terms of the completion of the house would be in a separate writing, may not have intended the horse within the same contract as the house contract…therefore a partial integration.
Three other things about Parol Evidence:
1). Can always introduce Parol Evidence to raise a defense to the formation of the contract or to undermine the entire agreement. Though events happened contemporaneously to the formation, it is a defense to the contract, entitled to raise a defense to formation to raise the information that the contract was never formed.
2). Always allow explanation of Ambiguity interpreted in more than one way. Introduce ambiguity as to fruit in the contact, so as not to disguise and explain that the contract contains apples and bananas. (“code red-negotiate for contract lectures”).
3). Subsequent negotiation can always be introduced with all final writings to clarify the writing as to enforceability as the subsequent negotiations are modifications to the existence of the contract which change other terms.

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FORMATION

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Defect in issues, contract unenforceable(offer, acceptance, consideration defects, no commitment, promises, parties)

Minority rules: formation problems Sunday. Ie. No offer, no acceptance, no consideration.

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CAPACITY DEFENSE

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Lack of Capacity-makes a contract voidable, can peform but elects not to, if the incapacity ceases, (the child) can affirm the contract at end of incapacity and be fully obligated by promises. Incapacitated parties are obligated for “necessaries”. (food, electricity, functional items),

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INCAPACITY TO CONTRACT

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Mere fact of incapacity does not create valid defense or void contract unless other party knows or should know of the infermity,

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FRAUD IN INDUCEMENT

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Fraud in inducement, defraud due to the subject matter, signed contract, you know this, represented to you differently, creates voidable contract meaning you can enforce the contract or you can void the contract

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ECONOMIC DURESS

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No defense unless party causing duress also caused problem, takes advantage of bad economic situation,

Defense when they put you in bad situation, ie. heat wave, air condition breaks down, wits end, appliance person, to get air fixed, $1000 per hour,

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UNILATERAL MISTAKE

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Unilateral mistake: one party mistaken about material issue in contract, no defense to contract unless the other party knew or should have known a mistake was made

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MUTUAL MISTAKE

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Mutual mistake: both parties are making false common assumption about a material issue, having sponken they are both mistaken about common matter of material issues of the contract, both parties mistaken, can void by either party or enforce the contract, as long as mutual mistake, both parties make false common assumption about a material issue of the contract, ie rare and valuable diamong, if both thought diamond and was not, false common assumption, was or was not diamond

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AMBIGUITY OF MATERIAL TERMS

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Rule: no contract unless both parties intend same meaning to ambiguious material terms OR one party knows of ambiguity and other party does not enforce contract in the way the non knowing party thinks.

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TANGIBLE EVIDENCE: STATUTE OF FRAUDS

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Tangible Evidence to satisfy statute to allow the enforcement of contracts:
1). Writing: avoid oral agreement, clear tangible evidence, enter into contract, writing must include, identify parties to the contract, must state subject matter, (purchase house, all material terms, price) signed by party to be charged against whom enforcement is sought on any paper or form or a culmination of writings to show the contract.
2). Performance-partial or total performance, either or both parties, full or partial performance, to the extent of the performance as tangible evidence of the contract, ie. deliver 10 months of books, then stop, was to deliver for 18 months, oral agreement, no tangible evidence of written agreement but have tangible evidence of delivery, as much as has been performed, to extent of performance will satisfy statute of frauds. (full performance, understand the contract, can enforce the entire agreement, performace method, tangible evidence contract exists to that extent)
3). Promissory Estoppel- (new) detrimental reliance, if one of parties has so detrimentally, seasonably relied on the contract, then can enforce the contract through Promissory Estoppel. Ie. Airline pilot detrimentally relied on the alaska airline to his detriment, left the job in Utah, got to alaska airlines to be chief oral agreement, move family, changed position, court says we have enough though had not performed the contract at all, detrimentally reliance, entitled to enforcement of contract.

Front 373

PRICE QUOTE

Back 373

Three factors where quote meant offer:
1). Response to inquiry based on specific request, 2). Communication contained detailed terms, 3). Communication stated: immediate acceptance.

Price quotes are advertisements to contract, invitation to contract, explicit nature, more often than not, quote is an advertisement not an offer,

Analysis: If reasonable person should have known the transaction was merely an invitation to contract, or was there specific exchange of information to cause one to see that the agreement meets requirements for a valid offer.

Front 374

PREDOMINANT FACTOR

Back 374

Predominant Factor Test: focus on language, services, costs, hour of services, unlimited quantity, money invested in goods part vs services part, manner in which contract is billed, more likely than not for goods. (K to buy ten widgets) contract for sale of pens,

Front 375

REVOCATION: COMMON LAW

Back 375

Can act to revoke contract at any time before acceptance,

Formation of contract occurs on completion of performance or acceptance

Bilateral contract requires substantial performance. Once offeree starts to perform it becomes irrevocable.Option contract offeree not enabled to get recovery unless substantial performance. Once the offeree begins offer remains open for reasonable time to complete performance

Front 376

CONSIDERATION: COMMON LAW

Back 376

Bilateral contracts bind both parties the minute the parties exchange promises, each promise is deemed to be sufficient consideration in itself.

Unilateral contract binds only the promissor and not the promissee unless the promsiee accepted by performing the obligations specified in the promisors offer

Front 377

UCC: ACCEPTANCE 2-207

Back 377

1).
(1) Definite and seasonable expression of acceptance or a written confirmation sent within reasonable time operates as acceptance even though it states terms additional to or different from those offered or agreed upon, unless acceptance is expressly made conditional on assent to the additional or different terms.
(
2) The additional terms are to be construed as proposals for addition to the contract.
Between merchants such terms become part of the contract unless:• (a) the offer expressly limits acceptance to the terms of the offer;• (b) they materially alter it; or• (c) notification of objection to them has already been given or is given within a reasonable time after notice of them is received.

(3) Conduct by both parties which recognizes the existence of a contract is sufficient to establish a contract for sale although the writings of parties do not otherwise establish a contract. In such case terms of particular fact pattern.

Two questions: Where acceptance has new or different terms from offer 1) is the potential acceptance a definite and seasonal acceptance?, 2). Is it expressly conditioned upon the agreement to the new or additional terms? , (Trick) If we can find “yes” to question one and “no” to question 2 than yes to a contract formation , or no to both, or any other combination than no contract.

Front 378

PREEXISTING DUTY RULE

Back 378

Pre-Existing Duty Rule:
Court asking whether modification will be enforceable without new consideration as modification occurred due to unexpectecd and substantial difficulties. Court held, yes new consideration is not necessary this modification was fair and equitable due to unexpected difficulties. Party seeking modification only asked for limited increase per year. Requirements for valid modification of contract at common law, mutual assent to terms, must have consideration (glue) benefit of the bargain, this case was the exception unanticipated and substantial difficulties to make the modification fair and equitable. UCC in sale of goods, the agreement must be mutual and in good faith, no unanticipated difficulties found, no consideration is required to modify the contract to allow efficiency and flow of business.

Front 379

FORMATION

Back 379

Formation of a valid contract, Governing law, Mutual assent- offer and acceptance, Agreement of parties, definite terms, parties
Consideration (glue) (bargained for exchange), is giving up a right for exchange or doing something something not otherwise obligated to do, occurs detriment to both, or give up the right I otherwise have a right to do.
Pre-Existing Duty Rule: duty exists already, no new detriment, triggers a pre-existing duty discussion raised by facts of the scenario. May have a consideration substitute, *
Requirements and Outputs Contracts: In theory, no binding quantity or amount, thus no legal detriment to support promise to sell, lacks consideration, however there is allowed a guiding limitation, no number requirements, good faith efforts required, no quantity is unreasonably disproportionment. Based on Reasonableness (not unreasonably disproportionate to expectation of previous year), Commercial Expectations, Social and Public Policy, to bind the buyer to a reasonable quantity per previous year expectation or use in the course of business, no breach if no requirements, must be in good faith. Requirements: Contracting party orders all “requirements” olive oil from one specific vendor party (all dough from xyz), all olive oil from venizia olive oil.Outputs: Venizia Olive Company, one supplier is required to supply all required materials to fulfill orders of restaurant (one supplier will supply all dough we produce to go to xyz organization).

Front 380

PARTIAL OR TOTAL INTEGRATION

Back 380

Partial or Total Integration: Purpose: rule: when the parties have a partially integrated agreement, written contract is not complete, therefore prior or contemporaneous agreements are introduced to make the agreement a final agreement. If they do not allow in the writing, evidence which contradicts what is in the written agreement than the agreement is fully integrated.. Exclude prior or contemporaneous writings in fully integrated agreements. Agreement which contradicts the agreement are not allowed, if the contract is intended to be the final embodiment of the integrated writing agreement. Writings not integrated, not containing the full agreement, merely partial, can bring in extra evidence, supplement documentation which does not cntradict. How to tell: whether total or partial integration:
Williston test: 4 Cormers test, on face does doc appear to be total integration
Corbin: Intent of the parties, prevent there was no agreement

Front 381

CONDITIONS

Back 381

Conditions.
1). "terms (or the provisions) of the contract 2). contract not formed absent the occurrence of event beyond the control of parties to the contract. 3).manner of accepting an offer to form a unilateral contract 4). event the occurrence of which either triggers or discharges the duty of a party to a contract to perform obligations

Express/ implied conditions. similar to promises and other terms of contract, events that condition performance of an obligation described by oral or written language of parties ("express conditions") or may implied from circumstances ("implied conditions" or "implied-in-fact conditions") also supplied by default

Front 382

CONDITION PRECEDENT/CONDITION SUBSEQUENT

Back 382

Condition precedent is an event that must occur before performance of an obligation becomes due. Its occurrence triggers the obligation.

A condition subsequent is an event the occurrence of which discharges the obligation.

Front 383

AVOIDANCE OF EXPRESS OR IMPLIED CONDITIONS

Back 383

The consequence for non-occurrence of an event that conditions an obligation in a contract is dramatic: the conditioned obligation of a party is entirely discharged, even when the event seems minor or the degree of deviation from event seems minor.

Front 384

MATERIALITY : CONSTRUCTIVE CONDITIONS

Back 384

Unlike express or implied conditions, and unlike constructive conditions of impracticability or frustration of purpose, the non-occurrence of which will discharge the duties conditioned, the breach of a promise i.e. the non-occurrence of a constructive condition of exchange will only discharge a duty conditioned on performance of the promise if the breach of the promise is material.

Front 385

WARRANTY OF FITNESS

Back 385

Warranties are, for the most part, promises concerning the future performance of goods to be sold or leased, of real property to be sold or leased, of intellectual property to be sold or licensed, or of services to be rendered. If the performance falls short of the promise there is a breach of warranty.

Front 386

WARRANTY OF MERCHANTABILITY, WARRANTY OF TITLE, WARRANTY OF FITNESS

Back 386

seller creates an express warranty by "any affirmation of fact or promise . . . which relates to the goods and becomes part of the basis of the bargain . . . (emphasis added)" and that a seller creates an express warranty by "[a]ny description of the goods which is made a part of the basis of the bargain . . . (emphasis added)." The implied warranty of marketable title in a contract of sale of real property is a statement that the real property conveyed is free of undisclosed claims just as much as it is a promise that the buyer will not suffer undisclosed adverse claims to the real property in the future. If the fact warranted is untrue, there is a breach of warranty (even though it would be odd to say "breach of fact").
Whether the warranty is based on promise or statement of fact, breach of warranty has the same consequences as the breach of any other promise. The party aggrieved by the breach of warranty may recover damages and, if the warranty is a constructive condition of exchange, as it almost always will be, the aggrieved party may be discharged of its own duty or duties of performance. We explore the particular damage and discharge rules of Article 2 of the Commercial Code in the material on remedies.

Front 387

CONTRACT: MEETING OF MINDS

Back 387

The most important feature of a contract is that one party makes an offer for an arrangement that another accepts called a concurrence of wills or consensus ad idem (meeting of the minds) of two or more parties where the concept is somewhat contested. The obvious objection is that a court cannot read minds and the existence or otherwise of agreement is judged objectively, with only limited room for questioning subjective intention meeting or agreement to the [same] thing.] There must be evidence that the parties had each from an objective perspective engaged in conduct manifesting their assent, and a contract will be formed when the parties have met such a requirement. An objective perspective means that it is only necessary that somebody gives the impression of offering or accepting contractual terms in the eyes of a reasonable person, not that they actually did want to form a contract.

Front 388

IMPLIED IN FACT CONTRACT

Back 388

Implied in fact : where parties presumably intend as their tacit understanding inferred from the conduct and other circumstances imply that parties have reached an agreement even though they have not done so expressly.

Front 389

IMPLIED IN LAW CONTRACT

Back 389

Obligation created by law for sake of justice: quasi-contract

it is not in fact a contract; rather, it is a means for the courts to remedy situations in which one party would be unjustly enriched were he or she not required to compensate the other.

Front 390

CONSIDERATION

Back 390

Consideration is something of value given by a promissor to a promisee in exchange for something of value given by a promisee to a promissor

Front 391

CONSIDERATION

Back 391

Consideration consists of a legal detriment and a bargain. A legal detriment is a promise to do something or refrain from doing something that you have the legal right to do, or actually doing or refraining from doing something that you don't have to do. A bargain is something the promisor (the party making promise or offer) wants, usually being one of the legal detriments. The legal detriment and bargain principles come together in consideration and create an exchange relationship, where both parties agree to exchange something that the other wishes to have.
The purpose of consideration is to ensure that there is a present bargain, that the promises of the parties are reciprocally induced. The classic theory of consideration required that a promise be of detriment to the promissor or benefit to the promisee. This is no longer the case.

Front 392

FORMATION OF CONTRACT

Back 392

Contract Formation: affirmative defenses that a party may assert to avoid obligation in contract.
•party must have capacity to contract;
•purpose of the contract must be lawful;
•form of the contract must be legal;
•parties must intend to create a legal relationship; and
•parties must consent.

Front 393

DEFENSES TO CONTRACT

Back 393

factors constituting defenses to purported contract formation include:
• mistake;
• incapacity, including mental incompetence and infancy/minority;
•duress;
•undue influence;
•unconscionable;
•misrepresentation/fraud;
•frustration of purpose.

Front 394

THIRD PARTIES

Back 394

Third parties- The doctrine of privity of contract means that only those involved in striking a bargain would have standing to enforce it. In general this is still the case, only parties to a contract may sue for the breach of a contract. In recent years, the rule of privity has eroded somewhat and third party beneficiaries have been allowed to recover damages for breaches of contracts they were not party to. In cases where facts involve third party beneficiaries or debtors to the original contracting party have been allowed to be considered parties for purposes of enforcement of the contract

Front 395

WRITING, FORMALITIES: CONTRACT FORMATION

Back 395

Formalities and writing: An unwritten, unspoken contract, also known as "a contract implied by the acts of the parties," which can be either implied in fact or implied in law, may also be legally binding.
a). Implied in fact: "real" contracts of no different remedy than "benefit of the bargain,".
b). Implied in law: quasi-contracts, remedy is quantum meruit, fair market value of goods or services rendered.

Front 396

ADVERTISEMENT

Back 396

Advertisement: An offer of a unilateral contract may often be made to many people (or 'to the world') by means of an advertisement. The general rule is that advertisements are not offers however, exception is found where there is sufficiency of language for a reasonable person to see the intent by person, quantity and immediacy of terms.

Front 397

SEVERABLE/ REASONABLE OBJECTIVE TEST

Back 397

The test of whether a clause is severable is an objective test, whether a reasonable person would see the contract standing even without the clauses.

Front 398

BUSINESS EFFICIENCY TEST

Back 398

Proposed by Lord Justice Bowen in The Moorcock, requires a term can only be implied if it is necessary to give business efficacy to the contract to avoid a failure of consideration that parties cannot as reasonable businessmen have intended but only the most limited term should be implied - bare minimum to achieve this goal.

Front 399

ENFORCEMENT

Back 399

UCC imposes implied covenant of good faith and fair dealing in performance and enforcement of contracts

Front 400

SET ASIDE A CONTRACT

Back 400

There can be four different ways in which contracts can be set aside. A contract may be deemed 'void', 'voidable', 'unenforceable'or 'ineffective'. Void-ness implies that a contract never came into existence. Voidable implies that one or both parties may declare a contract ineffective at their wish. Unenforceable implies that neither party may have recourse to a court for a remedy. Ineffectiveness implies that the contract terminates by order of a court where a public body has failed to satisfy public procurement law. To rescind is to set aside or unmake a contract.

Front 401

CONTRACT OBLIGATIONS: COMMON LAW

Back 401

Circumstances under which law will recognize the existence of rights, privileges, powers arising out of a promise.

Front 402

UCC CONTRACT FORMATION (UCC) 2-102 Contracts for Sale of Moveable Goods (UCC) 2-302

Back 402

Liberally construed and applied to promote underlying purpose and policies,
1) simplify, clarify, and modernize the law governing commercial transactions, 2). permit expansion of commercial practices through custom, usage and agreement of parties, 3). make uniform laws among jurisdictions.

Front 403

CONTRACT

Back 403

Intent requirement and content requirement to enter into contract. The formation of a contract is judged by a “Reasonable person standard” in the position of the other person (the buyer) who would believe what was going on based on words and actions of the parties, not subjective intent of the actual parties. (subjective intent “undercover intent” does not matter). Involving specified content; subject and definite terms, quantity of goods, price, time and names. Quotes and advertisements are not deemed an offer unless specifically intended as such where words are analyzed under UCC.
Common law is embodied in court decisions where the courts articulate decisions in positivist terms where argument must have reference given to social, economic and ethical consideration. The Legal System is analyzed into component rules, principles and concepts and fact situations. Positivist attorneys pigeonhole facts based on legal concepts, principles and rules. Social, economic and ethical considerations are taken into account.
UCC: sale of goods, seller is merchant or casual seller, court looks to predominant purpose or predominant factor of agreement

Front 404

OFFER

Back 404

Offer: A promise to do or refrain from doing some specific thing in the future conditioned on the other parties acceptance. A promise is a manifestation of intent to act or refrain from acting in a specified way so made as to justify a promise in understanding that a commitment has been made. The offer must be communicated to the offeree

Front 405

INQUIRY

Back 405

INQUIRY: Will you sell me property on Rockledge for $50,000? The statement is not an offer, but it is an inquiry which seeks information and no more, not a commitment.

Front 406

UNENFORCEABLE CONTRACT

Back 406

Whereas it could be argued: 1). clause ambiguous, 2). construe against author, 3). or against public policy, and declare unenforceable, or 4). offending such as to prohibit recovery by P, it does not prohibit tort recovery such as to protect the best interests of society.

Front 407

EMPLOYMENT AT WILL DOCTRINE

Back 407

Freedom to terminate; with three exceptions:
1). Public policy- Employer is forbidden from firing employee for morally wrong cause.
2). Implied in Fact Promise of job security in manual: Language, Course of conduct, Oral representations.
3). Implied in Law Covenant of Good Faith and Fair dealing. Employer at will made no promise of continued employment subject to termination by either party, however could not be fired against public policy legislative intent.

Front 408

WRONGFUL DISCHARGE

Back 408

Employer may terminate an employee for good cause and for no cause but not for poor cause contrary to public policy. We uphold the state public policy holding that termination for refusal to commit an act may provide a basis of claim for wrongful discharge.

Front 409

PREDOMINANT FACTOR TEST

Back 409

Predominant Factor: to determine whether hybrid contracts containing both goods and services are transactions in goods and therefore covered by UCC or transactions in services and therefore excluded. Contracts look to several aspects to determine the most important element of the agreement

Front 410

SALES OF GOODS
UCC 2-204

Back 410

Law of Sales UCC: UCC 2-204 (3) Failure on the part of the parties to agree to terms of payment would not defeat an otherwise valid agreement. Even though one or more terms are left open a contract for sale does not fail for indefiniteness if the parties have intended to make a contract and there is reasonable certain basis for giving an appropriate remedy. (3)commercial standards on the point of indefiniteness are intended to be applied including terms for performance, open price, remedies and the like.

Front 411

CONTRACT TERMS

Back 411

It is a necessary an agreement in order to be binding, must be sufficiently definite to enable a court to give it an exact meaning with a degree of certainty.

To be enforceable and valid, a contract to enter into a future covenant must specify all material and essential terms and leave nothing to be agreed upon as result of future negotiations.

Front 412

SUMMARY JUDGMENT

Back 412

1. Summary judgment is proper when the words and actions that allegedly formed a contract are so clear that reasonable people could not differ over their meaning.

Front 413

OFFER

Back 413

Determined by objective reasonable person standard.(definite terms, commitment, communicated, to identified offeree)

Front 414

ADVERTISEMENT

Back 414

The general rule is an advertisement does not constitute an offer

Front 415

IMPLIED IN FACT CONTRACT

Back 415

Implied in fact contract, or promise is inferred from conduct, situation or mutual relations of the parties, and is enforced by the law on the ground of justice. We are of the opinion, that facts and reasonable inferences therefrom meet the requirement that the finding of an implied contract be supported by substantial evidence of probative value. Nor could we say that reasonable minds could not so conclude

Front 416

SUMMARY JUDGMENT

Back 416

no genuine issue of material fact and moving party is entitled to judgment as a matter of law. burden is on moving party to prove there is no genuine issue of material fact and, if there is doubt, the motion should be resolved in favor of the party opposing the motion. Once the movant has sustained this burden, the opponent may not rest upon the allegations or denials in his pleadings but must respond by setting forth specific facts demonstrating there is a genuine issue for trial.

Front 417

DEAD MANS STATUTE

Back 417

In suits or proceedings in which an executor or administrator is a party, involving matters which occurred during lifetime of decedent, where a judgment or allowance may be made or rendered for or against the estate represented by such executor or administrator; any person who is a necessary party to the issue or record, whose interest is adverse to such estate, shall not be a competent witness as to such matters against such estate

Front 418

CONTRACT FOR SALE OF GOODS: UCC 2-204(1)

Back 418

A contract for the sale of goods may be made in any manner sufficient to show agreement, including conduct by parties recognizing existence of such a contract.

A vendor as master of the offer, may invite acceptance by conduct and may propose limitations on the kind of conduct that constitutes acceptance. A buyer may accept by performing the acts the vendor proposes to treat as acceptance

Front 419

IMPLIED WARRANTY OF MERCHANTABILITY

Back 419

Disclaimer implied warrant of merchantability must be conspicuous

Front 420

FIRM OFFER/ NEGATE ORAL MODIFICATIONS

Back 420

Promise to make firm offer or negate oral modifications must be separately signed UCC 2-205

Front 421

UNILATERAL CONTRACT

Back 421

An offer to enter into a unilateral contract may be revoked at any time prior to the performance of the requested act. In the present case, the Court found that Defendant revoked the offer prior to Petterson performing the requested action. Iit should be noted that the law applied in this case is not the current law as reflected in the Restatements of Contracts (Second).

Front 422

REVOCABLE OFFERS

Back 422

Revocation can occur any time before acceptance except: when 1). Option contract, 2) Merchant firm offer contract, 3). Detrimental reliance, 4) states "cannot revoke"

Front 423

U.C.C. § 2-210. Delegation of Performance; Assignment of Rights

Back 423

(2) Unless otherwise agreed all rights of either seller or buyer can be assigned except where the assignment would materially change the duty of the other party, or increase materially the burden or risk imposed on him by his contract, or impair materially his chance of obtaining return performance. A right to damages for breach of the whole contract or a right arising out of the assignor's due performance of his entire obligation can be assigned despite agreement otherwise.

Front 424

§ 317. Assignment Of A Right

Back 424

(2) A contractual right can be assigned unless

(a) the substitution of a right of the assignee for the right of the assignor would materially change the duty of the obligor, or materially increase the burden or risk imposed on him by his contract, or materially impair his chance of obtaining return performance, or materially reduce its value to him, or

(b) the assignment is forbidden by statute or is otherwise inoperative on grounds of public policy, or

(c) assignment is validly precluded by contract.

Front 425

Assignment Of A Right

Back 425

(1) An assignment of a right is a manifestation of the assignor's intention to transfer it by virtue of which the assignor's right to performance by the obligor is extinguished in whole or in part and the assignee acquires a right to such performance.

Front 426

RESTITUTION

Back 426

restitution requires a party to disgorge unjust enrichment.

Front 427

ASSIGNEE RESPONSIBILITIES TO DEFENSES TO PAYMENT

Back 427

"The assignee stands in the shoes of the assignor." That is, not only can the assignee (here the Bank) make claims against the obligor (Madonna), but the assignee is also responsible for any defenses to payment that the obligor has against the assignor (here Hennesey's).

To come full circle, the assignor gives the assignee a warranty that there are no claims or defenses, so if Madonna can recover against the Bank, then the Bank can recover against Hennessey's.

Front 428

U.C.C. § 2-210. Delegation of Performance

Back 428

(1) A party may perform his duty through a delegate unless otherwise agreed or unless the other party has a substantial interest in having his original promisor perform or control the acts required by the contract. No delegation of performance relieves the party delegating of any duty to perform or any liability for breach.

Front 429

§ 2-210. Delegation of Performance

Back 429

(1) A party may perform his duty through a delegate unless otherwise agreed or unless the other party has a substantial interest in having his original promisor perform or control the acts required by the contract. No delegation of performance relieves the party delegating of any duty to perform or any liability for breach.

Front 430

318. Delegation Of Performance Of Duty

Back 430

(1) An obligor can properly delegate the performance of his duty to another unless the delegation is contrary to public policy or the terms of his promise.

(2) Unless otherwise agreed, a promise requires performance by a particular person only to the extent that the obligee has a substantial interest in having that person perform or control the acts promised.

(3) Unless the obligee agrees otherwise, neither delegation of performance nor a contract to assume the duty made with the obligor by the person delegated discharges any duty or liability of the delegating obligor.

Front 431

322. Contractual Prohibition of Assignment

Back 431

Unless the circumstances indicate the contrary, a contract term prohibiting assignment of “the contract” bars only the delegation to an assignee of the performance by the assignor of a duty or condition.

Front 432

U.C.C. § 2-609. Right to Adequate Assurance of Performance

Back 432

(1) A contract for sale imposes an obligation on each party that the other‘s expectation of receiving due performance will not be impaired. When reasonable grounds for insecurity arise with respect to the performance of either party the other may in writing demand adequate assurance of due performance and until he receives such assurance may if commercially reasonable suspend any performance for which he has not already received the agreed return.

(2) Between merchants the reasonableness of grounds for insecurity and the adequacy of any assurance offered shall be determined according to commercial standards.

(3) Acceptance of any improper delivery or payment does not prejudice the aggrieved party's right to demand adequate assurance of future performance.

(4) After receipt of a justified demand failure to provide within a reasonable time not exceeding thirty days such assurance of due performance as is adequate under the circumstances of the particular case is a repudiation of the contract.

Front 433

ASSIGNMENT OF RIGHTS: UCC § 2-210; Restatement §§ 317-323.

Back 433

A. Assignment of Rights. A transfer of a right under a contract is an assignment. A person who is obligated to do something is an obligor; the person they are obligated to is an obligee. If an obligee who has contract rights transfers those rights, they are an assignor. The party to whom the assignor transfers rights is the assignee.

B. The general rule is that contract rights are freely assignable. There are several exceptions:

1. Rights that substantially change obligor's duty, increase his risks, or reduce its value to the obligor.

2. Assignment forbidden by the contract. The language "This contract may not be assigned" does not forbid assignment of contract rights.

3. A contractual prohibition of assignment of the right to receive money is not effective when the contract is enforced by a secured party

Front 434

EFFECT ON ASSIGNMENT OF RIGHTS

Back 434

Effect of an assignment.
1. Consideration is not required. A gratuitous assignment is effective, but like any gift promise, it may be revoked for lack of consideration.
2. A valid present assignment substitutes the assignee for the assignor and the obligor must, on receiving proper notice, perform for the assignee. For example, Tenant has a lease with Landlord. Tenant receives proper notice that Landlord has sold the building to Slumlord and that starting March 1, rent is to be paid to Slumlord. On March 1, Tenant pays Landlord. Tenant is in breach for not paying Slumlord.
3. The assignee's rights against the obligor are subject to any claims and defenses that the obligor has against the assignor; i.e., "The assignee stands in the shoes of the assignor."

Front 435

DELEGATION OF DUTIES

Back 435

A transfer of a duty under a contract is a "delegation." If an obligor who has contract duties transfers those duties, they are a delegating party or delegator. The party to whom the delegating party transfers duties is the delegate.

E. The general rule is that contract duties are freely delegable. There are several exceptions:

1. The promisee has a substantial interest in having the original promisor perform the duty personally. The latter includes duties involving personal judgment or skill, or where there has been special trust in the original promisor.

2. Delegation forbidden by the contract. The language "This contract may not be assigned" prohibits the delegation of duties.

F. Effect of a delegation.

After the delegation, both the original delegating party and the delegate are liable for the performance and for breach. For example, A borrows money from B Bank to finance a house purchase. A sells the house to C and C promises to pay B Bank. If C does not pay, B Bank may recover from either A or C (or both up to the amount owed).

Front 436

NOVATION

Back 436

Novation is a three-party agreement in which a third party is substituted for the original promisee. The original promisor no longer has a duty to perform. For example, A borrows money from B Bank to finance a house purchase. A sells the house to C and C promises to pay B Bank. B Bank agrees with A and C that it will look to payment from C and not A. If C does not pay, B Bank may recover only from C.

Front 437

REASONABLE TIME

Back 437

Based on:
1). subject matter of the offer,
2). rate of price fluxuation, 3). period within which the offerors known purpose in inducing the contract can be effectuated, and 4). the mode of communication of the offer.

Front 438

OFFER/THREE ELEMENTS

Back 438

1). expression of intent to enter a present contract, 2). sufficient articulation of the essential terms of the proposed bargain, 3). communication of the intent and the terms to another person who has the capacity to form the contract by a timely and conforming acceptance.

Front 439

UCC 2-206

Back 439

Offer: to make a contract, shall be construed to invite acceptance in any manner and by any medium that is reasonable under the circumstances.

Front 440

COUNTER OFFER

Back 440

Counter Offer: offer relating to the same matter as the original offer, and proposing a substituted bargain different from that in the origninal offer.therefore the offerees power to accept is terminated by making of the counteroffer.

Front 441

UCC 2-206

Back 441

Non conforming goods, shipped, shipment is an acceptance, and at the same time a breach, there is no acceptance if the offeror has reason to believe that none is intended as for example where the offeree promptly notifies him that non conforming goods are beng shipped and are offered only as an accomodation.

Front 442

CROSSOVERS

Back 442

Contract requirement: 1). Parties manifest a mutual acknowledgement of the same terms, (offer and acceptance), Here neither offer accepts the other with a cross over.

Front 443

OFFER THAT INVITES PERFORMANCE

Back 443

Offer that invites perfomance of an act, as acceptance, rather than return promise, becomes irrevocable as soon as the offeree has started to perform the act.

Front 444

REVOCATION

Back 444

Offerees power of acceptance is terminated when the offeror takes definite action inconsistent with an intention to enter into the proposed contract and the offeree acquires reliable information to that effect.

Front 445

BARGAIN FOR CONSIDERATION VS GIFT

Back 445

Promises are legally binding, and enforceable, where the Promisee has relied on teh promise to his injury, even though the reliance was not bargained for. Substantial and Detrimental reliance induced by a gratuitous promise affords a reason for enforcement of the promise without a bargain for consideration

Front 446

QUASI CONTRACT

Back 446

Because the owner was unconscious, there is no actual mutual assent to create a contract, therefor the doctor must proceed in quasi contract to recover for attempts to save the store owner.

Front 447

PROMISSORY ESTOPPEL:

GENERAL/SUBCON

Back 447

Promisor who induces substantial change in position by the promissee in reliance on the promise is estopped to deny its enforcement as lacking consideration.

Front 448

OBJECTIVE THEORY OF CONTRACTS

Back 448

"objective theory" that is the majority rule is that the intent of the parties is not relevant when determining whether a party has given assent to enter into a contract. Pursuant to this theory, a party's intent is determined by examining what a reasonable person, standing in the other party’s position, would conclude the party intended based on the words, conduct and demeanor of that party. This principle is true regardless of what the party actually intended.

Front 449

APPLICABLE LAW

Back 449

common law governs contracts involving services, land or intellectual property

Front 450

VALID CONTRACT

Back 450

in order to have valid enforceable contract there must be offer, acceptance and consideration and lack of formation defenses. Manifestation of present contractual intent communicated to an identified offeree containing definite and certain terms.

Front 451

ACCEPTANCE

Back 451

unequivocal assent to terms of the offer

Front 452

MAILBOX RULE

Back 452

offer is effective upon receipt, an acceptance is effective upon dispatch. offeror as master of offer may specify means of acceptance.

Front 453

CONSIDERATION

Back 453

legally sufficient bargained for exchange of a legal detriment which induces a current performance and is binding upon the parties.

Front 454

DEFENSE: SOF

Back 454

certain contracgts must be evidenced by a writing in order to be enforceable . contracts which by terms cannot be performed within one year at time of formation must be in writing in order to be enforceable.

Front 455

AMBIGUITY

Back 455

when a contract term cannot reasonably be interpreted it is said to be ambiguous

Front 456

MUTUAL MISTAKE

Back 456

when there is a mistaken belief as to a material term the contract may be voidable.

Front 457

MODIFICATION

Back 457

at common law, a modification reqies additional consideration and the statute of frauds may need to be satisfied due to the modification.

Front 458

PAROL EVIDENCE

Back 458

any prior written oral or contemporaneous oral statements which woould contradict vary or alter the terms of the contract will not be admissible where there isa fully integrated contract agreement

Front 459

CONDITIONS

Back 459

an event which occurs at which time a duty arises

Front 460

SATISFACTION OF CONDITIONS-IMPOSSIBILITY

Back 460

when performance cannot be made by any means.

Front 461

IMPRACTICABILITY

Back 461

extreme or unreasonable difficulty not anticipated.

Front 462

BREACH

Back 462

when a party's duty to perform arises and it is not satisfied, excused there is a breach

Front 463

MATERIAL BREACH

Back 463

party has not recieved substantial benefit of the bargain.

Front 464

DAMAGES-GENERAL EXPECTATION

Back 464

loss of what a party reasonably anticipated to obtain from the benefit of the bargain.

Front 465

DAMAGES-CONSEQUENTIAL

Back 465

damages reasonably foreseeable to flow from actual damages

Front 466

SPECIFIC PERFORMANCE

Back 466

specific performance may be granted when services are unique or are of a personal nature, however court will not enforce involuntary servitude as here.

Front 467

GOVERNING LAW

Back 467

ucc governs contracts for sale of goods, goods defined as tangible moveable property.

Front 468

STATUS OF THE PARTIES-MERCHANTS

Back 468

one familiar with the goods subject to the transaction, deals regularly in the items of the sale or that holds themselves out as experts in the field or holds itself out as one having particular knowledge with respect to the goods in question.

Front 469

UNILATERAL MISTAKE

Back 469

party will be allowed to rescind a contract where it can prove a unilateral mistake, a party may receive relief under unilateral mistake where the mistake has a material affect upon the agreed exchanges of the parties, the risk of mistake was not allocated to the party seeking relief and the mistake relates to a basic assumption under the contract. party must either show that enforcement of the contract would be unconscionalbe or the other party knew of the mistake or that it was there fault the mistake was made.

Front 470

ANTICIPATORY REPUDIATION

Back 470

when a party informs the other party that it does not intend to perform a duty in the future that it is obligaated to perform the party has made an anticipatory repudiation.

Front 471

REFORMATION

Back 471

alternatively, parties to a contract can reform the contract due to mutual mistake because actually both parties were mistaken in their performances constituting a mutual mistake and justifying reformation.

Front 472

SPECIFIC PERFORMANCE

Back 472

if unable to obtain reformation or restitution, under unilateral mistake, than specific performance shall be sought.

Front 473

2-207 ACCEPTANCE;
ADDITIONAL TERMS

Back 473

additional terms in acceptance will apply between merchants unless:
1). original offer conditions accdptance on the term sof the offer only..
2). offeror objects to the new or additional terms within a reasonable time or...
3). terms materially change the original offer.

Front 474

SOF: UCC EXCEPTION
WRITTEN CONFIRMATION:
SUFFICIENT MEMO

Back 474

person sued will be presumed to have signed writing if the recipient does not respond to a written confirmation of oral contract within 10 days.

Front 475

UCC: MODIFICATION

Back 475

modification is valid if in writing, does not require new consideration and must be in good faith.

Front 476

UCC: REASONABLE GROUND FOR INSECURITY

Back 476

merchant may request adequate assurance of performance

Front 477

EXPRESSED CONDITIONS

Back 477

fact of occurrence, the event of which either creates or extinguishes an absolute duty to perform.

Front 478

UCC: IMPLIED CONDITION PRECEDENT

Back 478

condition to occur before the duty to perform arises

Front 479

GENERAL DAMAGES
MAJOR BREACH
LOSS OF EXPECTATION
COVER

Back 479

recovery is difference between price of the contract and the price to cover OR recovery may include difference between the price of contract and market price at time it learned of the breach.

Front 480

MUTUAL MISTAKE:
RESTITUTION

Back 480

when there exists mutual mistake as to basic assumption upon which the contract was made contract will be voided, to make parties whole as if the contract was never made.

Front 481

WAIVER/ RETRACTION, EXECUTORY CONTRACT

Back 481

a party that has waived a condition to an executory (yet to be fully performed by either party) contract, may retract that waiver and insist upon the original performance, if such a party gives reasonable notice to the other party that strict performance of the original condition will be required, and the retraction of the waiver is not unjust because the other party has not materially changed their position in reliance on the waiver

Front 482

GIFT: GRATUITOUS PROMISE LACKS CONSIDERATION

Back 482

A promise to make a gift is a gratuitous promise, and lacks consideration. Gifts do not constitute valuable consideration because there is no bargained for exchange, and the promisor gets nothing in return for their promise to act

Front 483

SUBSTANTIAL PERFORMANCE,
IMPLIED CONDITION

Back 483

An implied condition relates to how the parties to a contract ought to behave.
In this situation, no specifics were delineated regarding the size of a water heater. However, in an implied sense, the water heater should be big enough to fit the size of the house. In order for Carl to have acted reasonably, he should have installed a water heater that was at least 40 gallons. Since Carl only installed a 20 gallon water heater, he breached an implied obligation to install a reasonably sized water heater.

Front 484

SATISFACTION OF EXPRESS CONDITION PRECEDENT

Back 484

This situation relates to satisfaction of an express condition precedent. Where the contract states, as here, that performance is conditioned upon the satisfaction of a third person, that third person must first be satisfied while using good faith.

Here, as long as the architect refused in good faith to certify the fireplace, then Carl would be said to be in breach of an express condition precedent. An express condition must be complied with, or else a breach of contract will occur.

Front 485

ASSIGNMENT, STEP IN THE SHOES

Back 485

Bank may recover the reasonable value of the work performed by Carl minus damages to Homer caused by Carl's failure to complete the work. Carl assigned his right to collect payment under the contract to Bank, and Bank promptly notified Homer of the assignment.
Therefore, Bank essentially stepped into Carl’s shoes as related to payment, and any payment that Carl was entitled to receive from Homer, would go instead to Bank. In this situation, Carl abandoned the job after completing seventy-five percent of the work. The Bank would be entitled to recover for the work that Carl completed, subtracted by the damages that were caused by Carl’s refusal to complete the work.

Front 486

FALSE IMPRISONMENT, INTENT, KNOWLEDGE TO SUBSTANTIAL CERTAINTY

Back 486

False imprisonment is an intentional tort, and normally a false imprisonment will occur where a defendant intends, or takes action with knowledge to a substantial certainty, to confine plaintiff to a bounded area with physical means or threats, for any length of time, and in which plaintiff has no reasonable means of escape.

Front 487

INCIDENTAL DAMAGES

Back 487

expenses reasonably incurred in inspection of goods, receipt of goods, transportation and care adn custody of goods rightfully rejected.

Front 488

PUNITIVE DAMAGES

Back 488

tort cause of action, intentional wrongful conduct.

Front 489

CONSEQUENTIAL DAMAGES

Back 489

reasonably foreseeable by person in breaching party's position at formation of the contract and if can be proven with reasonable certainty. future expenses, not speculative,

Front 490

UNCONSCIONABLE

Back 490

absence of meaningful choice on part of one party together with contract terms unreasonably favorable tothe othe party.

Front 491

OBLIGATON V CONDITION

Back 491

whether a contract provision is seen as an obligation (promise) or condition is a matter of interpretation by the court. determined by the intent of the parties.

Front 492

LESSOR

Back 492

generally, lessor not liable for injuries resulting from conditions on premises. lease considered a transfer of rights and responsibilities with regard to conditions on premise. exceptions: dangerous conditions existing at time of lease of property

Front 493

DUTY TO AIDE AND RESCUE

Back 493

generally no duty requires one person to come to the aid of another in peril there are circumstances in which such a duty exists. where d places victim in peril, where special relationship exists, where d gratuitously begins to render aid and discontinutes leving victim n greater peril.

Front 494

UNILATERAL CONTRACT

Back 494

offer for unilateral contract cannot be revoked once the offeree has made a substantial start on performance of the requested act.

Front 495

CONDITION PRECEDENT

Back 495

condition that must occur befor the obligation to which it is attached becomes an ablsolute duty is a conditon precedent.

Front 496

MINOR

Back 496

minor can affirm his contract for full amount or for a lesser amount.

Front 497

LAND OCCUPIER

Back 497

land occupier owed no duty to a trespasser for risks posed by artificial contditions on property. Minority rule: land occupier owes duty of reasonable careto entrants on land regardless of status (invitee, trespasser, licensee).

Front 498

CHILD STANDARD

Back 498

child conduct judged against standard of what a reasonable child of like age, knowledge and experience.

Front 499

BREACH

Back 499

conformity to the standard of care, 1). Learned Hand Formula: did person act conform to the standard of care, social utility, custom, burden, probability, liability, 2). Negligence per se: type of injury, pt. within protected class, no excuse, 3). Res Ipsa Liquitor: D within exclusive control, Not the Fault of the P, negligence occurred.

Front 500

MATERIAL BREACH

Back 500

substantial performance, depriviation of expectation benefit, amount of performance rendered, willing and able to cure, willfulness of breach, bad faith, time is of the essence

Front 501

VGOLD: SPECIAL DUTY TO ACT

Back 501

violation of statute, guest statute, ommission to act, landowner, duty of lessors

Front 502

PROXIMATE CAUSE

Back 502

act and resulting injuries were foreseeable result of D conduct, OR defendant conduct was substantial factor in causing the injury.
Look to superseding intervening acts that will cut off liability,

Front 503

DEFENSES/NON APPLICABLE

Back 503

all defenses to negligence (contributory, comparative, assumption of risk) require some degree of fault on part of the P, here P did not contribute to her injuries, therefore no defenses apply.

Front 504

THIRD PARTY BENEFICIARY

Back 504

define, privity, intent to benefit, classificaiton, vesting, defenses

a third patty beneficiary contract is one wherein performance by promisor will benefit the thrid party, one other than promissee. Status arrises at the formation stage of contract..Origlnal K parties entitled to terminate or modify the third party K unless beneficiary rights have vested; where there is mutual assent, consideration l problems (pre=existing duty) modification is defense to uphold the K.

Front 505

THIRD PARTY BENEFICIARY

Back 505

define, privity, intent to benefit, classificaiton, vesting, defenses

a third patty beneficiary contract is one wherein performance by promisor will benefit the thrid party, one other than promissee. Status arrises at the formation stage of contract..Origlnal K parties entitled to terminate or modify the third party K unless beneficiary rights have vested; where there is mutual assent, consideration l problems (pre=existing duty) modification is defense to uphold the K.

Front 506

MUTUAL MISTAKE

Back 506

when there is a mutual mistake as to a material term, the contract is voidable, material term, one that substantially affects the parties obligations to the contract.

Front 507

MUTUAL MISTAKE

Back 507

when there is a mutual mistake as to a material term, the contract is voidable, material term, one that substantially affects the parties obligations to the contract.

Front 508

MODIFICATION

Back 508

common law, modification, requires additional consideration, statute of frauds may ned to be satisfied.

Front 509

MODIFICATION

Back 509

common law, modification, requires additional consideration, statute of frauds may ned to be satisfied.

Front 510

PAROL EVIDENCE

Back 510

prior written, oral or contemporaneous oral statements, which would contraduct vary or alter the terms of the contract will not be admissible where there is a fully integrated contract.

Front 511

PAROL EVIDENCE

Back 511

prior written, oral or contemporaneous oral statements, which would contraduct vary or alter the terms of the contract will not be admissible where there is a fully integrated contract.

Front 512

SATISFACTON: OF CONDITION: IMPOSSIBILITY

Back 512

when the performance cannot be made by any means,

Front 513

SATISFACTON: OF CONDITION: IMPOSSIBILITY

Back 513

when the performance cannot be made by any means,

Front 514

BREACH

Back 514

where a party's duty to permform arises and it is not satisfied, or excused there is a breach. material breach occurs wher a party has not received the substantial benefit of the bargain.

Front 515

DAMAGES-GENERAL-EXPECTATION

Back 515

loss of what a party reasonably anticipated to obtain from the benefit of the bargain.

Front 516

SPECIAL-CONSEQUENTIAL- HADLEY V BAXENDALE

Back 516

damages reasonabley foreseeable to flow from actual damages, flow in th future

Front 517

SPECIFIC PEFORMANCE

Back 517

granted when services are unigue, or are of a personal nature.

Front 518

MERCHANT

Back 518

one familiar one familiar wigth goods subject to transaction or holds self out as one having parculair knowledg wit respoecdt to goods in question

Front 519

SOF

Back 519

when a contract falls within the statute of frauds a signed writing is necesary to enforce it, contract for sale of goods greater than or equal to 500. when parties have fully performed exchanges under the contract, avoids the statute.