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74 Cards in this Set
- Front
- Back
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Contract definition
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Promise of which, in breach, law gives remedy or, for performance, law recognizes a duty
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Promise
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Manifestation of intention to act or refrain from acting in specified way
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Promisor
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person manifesting intention
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Promisee
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person who manifestation is addressed
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Agreement
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manifestation of mutual assent on party of 2+ persons
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UCC…goods or services?
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Goods
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EXPECTATION INTEREST
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P is put in a position which he would have been if K had been performed
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EXPECTATION FORMULA
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Value of promise - value actually delivered + incidental loss - cost avoided
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RELIANCE INTEREST
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P put back in position that P would have been had K not been made
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RELIANCE FORMULA
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Expenditures made in preparation of performance - expenses saved from breach
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RESTITUTION INTEREST
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D is put back in a position which D woul dhave been had K not been made
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RESTITUTION FORMULA
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What D has gained
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FORESEEABILITY
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damages not recoverable for loss party in breach did not foresee; loss may be foreseeable if it follows in ordinary course of events or in special circumstances
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D only liable for damages foreseen __...?
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At execution of K
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UCC 2-715
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Incidental damages include expenses incurred in inspection/receipt/transportation/care/custody of goods; consequential damages include any loss resulting from requirements/needs seller knew at time of K and injury
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R 352/CERTAINTY
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Damages are not recoverable for loss beyond an amount that evidence permits to be established with reasonable certainty
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R 350 / AVOIDABILITY
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Damages not recoverable for loss that injured party could have avoided without undue risk, burden, humiliation; must mitigate damages
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UCC 2-706
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Seller not accountable to buyer for any profit made on resale
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R 356/LIQUIDATED DAMAGES
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only allowed up to an amount that is reasonable in light of anticipation of breach; large unreasonable amounts unenforceable; public policy prohibits
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UCC 2-719
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Parties can contract around liquidated damages by inserting expressed clauses
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TEST TO EXAMINE LIQUIDATED DAMAGES
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Reasonableness test: 1) did parties intend to provide for damages as a penalty; 2) is injury caused by breach one that is difficult of accurate estimation at time of K?
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R 355 / PUNITIVE DAMAGES
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punitive damages are not recoverable for breach unless breach is also a tort
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SPECIFIC PERFORMANCE
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awarded when monetary damages are inadequate; usually reserved for special items like antiuque cars, land, priceless items
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UCC 2-716 / SPECIFIC PERFORMANCE
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allowed when goods are unique; in other circumstances allowed where money is an inadequate remedy; SP not allowed where damage compensation is available
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2 ELEMENTS OF FORMATION OF K
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MUTUAL ASSENT OF PARTIES AND SHOWING THAT ASSENT IS THE KIND THE LAW WILL ENFORCE
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Mutual assent: subjective or objective?
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It is objective and based on words and acts of parties
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OFFER
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Need 1) manifestation of present contractual intent 2) certainty and definiteness of terms 3) communication of offeree of the offer
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R 24 / offer
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offer is manifestation of willingness to enter into a bargain
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Letter of intent an offer?
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No
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Invitation to bid an offer?
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No
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Advertisement generally an offer?
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No
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REVOCATION
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offer generally can be revoked until acceptance
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R 45 / unilateral K revocation
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can't revoke if offeree has already begun performance if unilateral contract
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R 42 / revocation notification
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offeree's power of acceptance is terminated when offeree receives from offeror a manifestation oof an intention not to enter intro poroposed K
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Mailbox rule
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offer is accepted as soon as its dispatched
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Mailbox rule with option K
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effective upon acceptance if option K
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Unilateral K
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contracts that result from acceptance by performance
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Bilateral K
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contracts that result from acceptance of a promise
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R 54 / acceptance notification?
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Notification is not required when accepting via performance unless 1) offeror has no way of learning of acceptance and a) offeree exercises due diligence in notifying or b) offeror learns of performance or c) offer states notification isn't required
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R 69 / acceptance by silence
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Silence only acceptable 1) when offeree takes benefit of offered services with reasonable opportunity to reject 2) offeror stated or vgave offeree reason to understand that assent can be manifested by silence 3) because of previous dealings, reasonable that offeree should notify offeror IF HE DOESN'T WANT TO ACCEPT
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UCC 2-204 / Open terms?
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Doesn't kill K if parties meant to make a K and there is reasonably certain basis for giving remedy; court will look to gap filler rules to fill in open terms
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DIFFERENT MEANINGS BY EACH PARTY? WHO'S MEANING PREVAILS?
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R 201
1) if one party didn't know the other party had a different meaning, but the other party knew party's first meaning, use that 2) if one party had no reason to know of any other meaning by other party but other party had reason to know of the meaning use by first party, sue that 3) except above, you drop the term and likely lose mutual assent if it is an important term |
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PAROL EVIDENCE
general definition |
when there is a writing that represents the final embodiment of the contract or some terms, but parties want to introduce evidence of extrinsic agreements not in the written agreement to prove existence of additional or modified terms not found in the writing
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UCC 2-202
COMPLETE INTEGRATION |
expression of entire agreement between parties; parole evidence rule precludes evidence of prior or contemporaneous agreements to contradict or supplement the contract
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UCC 2-202
PARTIAL INTEGRATION |
an expression of only a portion of the agreement; parole evidence only precludes prior agreements that contradict a term in the contract or contemporaneous oral agreements
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UCC 2-202
COMPLETE OR PARTIAL INTEGRATION? |
use following methods:
- four corners/plain meaning - collateral contract - majority approach is "reasonable person approach" - intention of the parties |
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UCC 2-202 / TO DETERMINE COMPLETE OR PARTIAL INTEGRATION:
four corners/plain meaning |
if writing appears final, it is conclusively presumed to be
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UCC 2-202 / TO DETERMINE COMPLETE OR PARTIAL INTEGRATION:
collateral contract |
all writings are deemed to be partial integrations
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UCC 2-202 / TO DETERMINE COMPLETE OR PARTIAL INTEGRATION:
reasonable person approach |
if writing appears to be complete expression of parties' agreement, it is unless additional terms would be natural to enter a separate agreement as to such terms
MAJORITY APPROACH |
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UCC 2-202 / TO DETERMINE COMPLETE OR PARTIAL INTEGRATION:
intention of parties |
relevant evidence is allowed for intent, including prior negotiations
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BATTLE OF THE FORMS UCC?
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UCC 2-207
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UCC 2-207
general requirements |
- acceptance must be seasonable
- sent in reasonable time - valid acceptance even if it states additional terms to those offered |
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UCC 2-207
merchants // added terms |
if two parties are merchants, added terms of acceptance become part of K unless:
1) offer expressly limits acceptance to the terms of the offer 2) materially alter it 3) notification of objection to the terms has been given already or is given with reasonable time after they're received |
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UCC 2-207
not merchants // added terms |
If two parties aren't merchants:
additional terms are proposals for additions to contract...not automatically added in like merchants |
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K with different terms on acceptance than in offer...uh oh.
What do you do? |
Gap fill if possible
No mutual assent otherwise; K not valid |
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What is a "merchant"?
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one who regularly deals in goods of the kind sold or who otherwise by his profession holds himself out as having special knowledge or skills as to the practices or goods involved
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mirror image rule
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absolute and unequivocal acceptance of each and every term of the offer
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MUTUAL MISTAKE DEFENSE
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When both parties entering into a contract are mistaken about facts relating to the agreement, the contract may be voidable by the adversely affected party if:
The mistake concerns a basic assumption The mistake has a material effect on the agreed-upon exchange The party seeking avoidance did not assume the risk of mistake |
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UNILATERAL MISTAKE
...A DEFENSE? |
GENERALLY NO DEFENSE.
Where only one of the parties is mistaken about facts relating to the agreement, the mistake will not prevent formation of a contract. However, if the nonmistaken party knew or had reason to know of the mistake made by the other party, he will not be permitted to snap up the offer. |
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UCC 2-202 RE: PAROL EVIDENCE
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Under the U.C.C., a party cannot contradict the writing but he may add consistent additional terms unless:
(i) there is a merger clause, or (ii) the courts find from all the circumstances that the writing was intended as a complete and exclusive statement of the terms of the agreement. |
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HAWKINS
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harry hand case
expectation interest |
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SULLIVAN
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screwed up nose
reliance interest |
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TONGISH
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sunflower farmer
restitution interest |
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HADLEY V. BAXENDALE
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broken millshaft
foreseeability or harm (lack thereof) |
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Chicago Coliseum
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boxing
certainty of harm |
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Rockingham County
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bridge to nowhere
avoidability of harm |
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LOVELESS
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improved house/land
special performance |
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CUMBEST
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stereo; special
special performance |
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PEPSI
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harrier jet
advertisement is an invitation to negotiate |
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LUCY
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drunk guy sells land
we look at objective standard and not subjective standard of person for offers...would reasonable person think it's an offer? |
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CARBOLIC SMOKE BOMB
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don't get sick ball
ad was a unilateral offer to perform |
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HOBBS
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eel skins
acceptance by silence due to prior dealings |
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SUN PRINTING
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different meanings re:price
no k since different terms can't be settled |
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RAFFLES
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different meanings of peerless boat
no k since terms didn't match |
