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197 Cards in this Set

  • Front
  • Back
What is a contract?
A contract is a promise, the breach of which the law gives a remedy.
What law generally governs contracts?
Common Law
What is the exception to the rule that common law generally governs contracts?
Contracts for the sale of goods are governed by Art 2 of the UCC, as well as common law. Art 2 prevails where they conflict.
What are the classifications for contract formation?
Contracts may be express or implied.
What are the classifications for contract acceptance?
Contracts are either bilateral or unilateral.
What is an express contract?
An express contract is one formed by written or oral language.
What is an implied contract?
One formed by manifestations of assent other than oral or written language (eg: conduct)
What is a quasi-contract?
Where an agreement does not qualify as a contract, a quasi-contract may be used to avoid unjust enrichment.
What is a bilateral contract?
A contract that requires an exchange of promises. (contracts generally fall here)
What is a unilateral contract?
A contract that:
1) Clearly indicates that performance is the only manner of acceptance, OR
2) Is an offer to the public clearly contemplating acceptance by performance.
What are the 3 types of unenforcable contracts?
Void; Voidable; Unenforceable.
What is a void contract?
One without any legal effect from the beginning. (eg: contract to committ crime)
What is a voidable contract?
One that a party may elect to avoid or ratify (eg: a contract by a minor)
What are the 3 elements required to create a contract?
1) Mutual assent
2) Consideration
3) No defense to formation
What is mutual assent?
Offer and acceptance.
What is the standard for determining whether mutual assent is present?
Objective standard (eg: did the words or conduct manifest a present intention to enter into a contract?)
What are the 3 elements of an offer?
1) expression of promise, undertaking, or commitment to enter into a contract
2) definite and certain terms
3) communicated to the offeree
What factors help distinguish a priliminary negotiation from an offer?
1) language
2) surrounding circumstances
3) prior relationship of parties
4) method of communication
5) industry custom
6) degree of definiteness of terms
Are advertisements ussually offers?
No. They are usually invitations to deal.
What are the essential terms that must be in a contract?
1) Identification of the offeree (all contracts)
2) Identification land and price terms in RE transaction
3) Quantity in a contract for the sale of goods
4) Duration of employment in an employment contract
What happens when a contract is missing terms?
Certain missing terms may be supplied by the court if consistent with the parties' intent.
What happens if the contract terms are vague?
A vague term may defeat formation unless acceptance or part performance makes the term clear.
What is the effect of an offer providing a material term will be agreed on in the future?
Formation fails.
What are the 4 ways offers are terminated?
1) Revocation
2) Rejection
3) Lapse of time
4) By operation of law
How may the offeror revoke an offer?
1) Directly communicating the revocation to the offeree
2) Acting inconsistently with continued offer openness and the offeree is aware of this info.
When is revocation effective?
Effective when recieved
How may offers originally made by publication be revoked and when is it effective?
Only by use of comparable means of publication and effective when published
When can an offer be revoked?
Generally, offers can be revoked at will prior to acceptance (even if the promised not to revoke for a period of time)
When is on offeror's power to revoke limited?
1) There is an option contact supported by consideration
2) There is a firm offer under the UCC.
3) The offeree has detrimentally relied on the offer and the offeree could have reasonable expected it.
4) The offeree has begun performance on a unilateral contract.
What is an option contract?
The party with the power of acceptance has given consideration for the offer's irrevocability.
What is the NY rule regarding revocation?
If an offers is in writing, signed by the offeree, and states it is irrevocable, the offer is not revocable for the stated period or reasonable period even when not supported by consideration.
What is a firm offer?
A signed writing by a merchanct promising to hold open the offer for some period of time.
How long can a firm offer be held open?
At most 3 months.
What is the effect of an offeree starting performance on a unilateral contract?
This is ussually construed as an option contract giving the offeree reasonable time to complete performance.
How may an offeree reject an offer?
1) Expressly
2) By making a counter offer (more than a mere inquiry)
What is the total effect of a counteroffer?
It is both a rejeciton and a new offer.
When is rejection effective?
When received.
What is the effect of rejecting an option?
Rejection of an option does not terminate the offer. The offeree can still accept in the option period if offeror did not detrimentally rely.
When does lapse of time constitute a rejeciton?
If the offeree fails to accept within the time specified by the offer OR within a reasonable time in none was specified.
What events will terminate an offer by opperation of law?
1) Death or insanity of either party;
2) Destruction of the proposed contract's subject matter;
3) Supervening illegality
When will death or insanity not terminate an offer?
When the offer is of the kind the offeror could not terminate (eg: option contract)
What are the 3 elements of a valid acceptance?
1) An offeree with the power of acceptance;
2) Unequivocal terms of acceptance;
3) Communication of acceptance.
Who may accept?
1) The person to whom the offer was addressed;
2) A member of the class to whom the offer was addressed.
Can the right to accept an offer be assigned?
No, but option contracts supported by consideration can be assigned.
What form must acceptance take at common law?
Acceptance must mirror the offer terms (otherwise it may be a counter offer).
What form must acceptance take under the UCC?
An acceptance need only indicate intention to enter into a contract and not be made conditional on the acceptance of new or different terms.
Under the UCC, what is the effect of new or different terms in the acceptance?
1) Where one of the parties is a non-merchant, the terms of offer control and New terms are proposals.
2) Between merchants, new terms become part of the contract unless they materially alter the agreement, the offer expressly limits acceptance to the offer's terms, or the offeree rejects to the terms in a reasonable time.
3) Different terms usually get "knocked out"
Under the UCC, what is the effect of new terms that will materially alter the agreement?
They do not prevent contract formation, but only become part of the contract if the offeror expressly assents to inclusion.
Under the UCC, what is the effect of different terms that will materially alter the agreement?
Some courts treat them like new terms, others use the knock-out rule
What is the standard for communication of acceptance?
What means may be used for acceptance?
Any reasonable means may be used unless the offer unambiguously limits acceptance to particular means.
What is the mailbox rule?
If acceptance is by mail or similar means it is effective upon dispatch if properly addressed and stamped.
What are the limitations on the mailbox rule?
1) Does not apply if the offer stipulates that acceptance is not valid until received.
2) Does not apply if an option contract is involved.
What happens if the offeree sends a rejection and an acceptance?
Whichever arrives first is effective.
What happens if the offeree sends an acceptance and then a rejection?
The acceptance is effective unless rejection arrives first and the offeror detirmentally relied upon it.
What happens if acceptance is transmitted by unauthorized means?
It is effective if actually received by the offeree while the offer is still open.

**ie, no mailbok rule.
Under what circumstance may an offer be accepted without communication?
An executory contract may be formed without communication where
1) there is an express waiver of communication in the offer;
2) the offer requires an act as an acceptance; OR
3) the offer silently take the offered benefits.
What is the role of consideration?
A contract is only enforcable if supported by consideration or a substitute.
What are the 2 elements of consideration?
1) Bargained-for-exchange
2) Legal value
What constitutes a bargained-for -exchange?
The parties must exchange promises in bilateral contract or a promise for an act in unilateral contract.
Is there a bargain involved when one party gives a gift?
No. But an act or forbearance by the promisee will be sufficient if it benefits the promisor.
Must the exchange have economic value?
No. Peace of mind or gratification in exchange for something may be enough to establish a bargain.
Can past or moral consideration satisify the bargain requirement?
Generally, it cannot.
What are the exceptions for past or moral consideration?
1) Past obligation unenforcable because of a technical defense will be enforcable if a new promise is made in writing or is partially performed;
2) A new promise to pay for past act performed at the promisee's request will be enforceable.
What is the NY rule regarding past consideration?
It is binding if:
1) The promise is in writing;
2) The past consideration is expressly stated;
3) The consideration can be proven; and
4) The writing is signed by the promisee.
Will courts inquire into the adequacy of consideration?
Generall not, unless it is token or sham consideration.
Can a pre-existing legal duty constitute sufficient consideration?
Generally not.

**Different from past consideration because not act is yet to be performed.
When can a preexisting legal duty constitute valid consideration?
1) New or different consideration is offered;
2) The promise is to ratify a voidable obligation;
3) The duty is owed to a 3rd person rather than the promisor;
4) There is an honest dipute about the duty; or
5) The are unforseen circumstances sufficient to discharge the party.
What is the UCC rule regarding contract modification?
A good faith agreement to modify needs no consideration to be binding.
How can preexisting debts be discharged?
Although payment of a smaller sum than due on existing debt is generally not sufficient consideration for a promise to discharge, court will try to avoid this result through the exceptions.
Can forbearance to sue constitute valid consideration?
Yes, provided the claim is valid or the claimant in good faith believed the claim valid.
What is the requirement of mutuality?
Consideration must be given on both sides of the contract.
What is an illusory promise?
A promise that is unenforcable because only one party is bound to peform.
What are some examples of courts implying promises to infer mutuality?
1) Requirements and output Ks
2) Conditional promises, unless the condition is entirely in promisor's control
3) K's where a party has the right to cancel if it is somehow restricted (eg: notice)
4) Voidable Promises
5) Unilateral and option Ks
When is a promise to chose among several alternative means of performance no illusory?
1) every alternative involves legal detriment to the promisor;
2) At least one alternative involve legal detriment and the power to chose rest with the promisee or 3rd party; or
3) A valuable alternative is actually selected.
What are the 4 substitutes for consideration?
1) Promisory estoppel or detrimental Reliance.
2) Modification under UCC
3) Promises to pay legal obligation barred by law.
4) Seal.
What is promissory estoppel?
A substitute for consideration where
1) the promisor should reasonably expect her promise to induce action or forebearance,
2) of a definite and substantial nature, and
3) such action or forbearance is in fact induced
What is UCC rule regarding modification?
Consideration is not necessary to a good faith written modification.
What is the rule regarding promises to pay legal obligations barred by law?
If a legal obligation is not enforcable under law, a new promise to fulfill the legal obligation is enforceable if in writing.

NOTE: Only enforceable according to the new terms, not the original terms.
What the NY rule regarding seals?
In NY and many other states, as well as under the UCC, a seal is no longer a substitute for consideration.
What are the 2 defenses to contract formation?
1) Absence of mutual assent (mistake and misrep);
2) Public policy defenses.
When does mutual mistake constitute absence of mutual assent?
1) The mistake contains a basic assumption on which the contract was made;
2) Mistake has a material adverse effect on the agreed upon exchange; and
3) The adversely affected party did not assume the risk of mistake.
How does a party assume risk?
When the party knows that their assumption is doubtful, they are deemed to assume the risk that their assumption is wrong.
Can a mistake in value constitute the defense of mistake?
No. Courts presume parties assume the risk of determing value.

Exception where the parties rely on a 3rd party to determine value
When can a unilateral mistake constitute an absence of mutual assent?
Where the nonmistaken party knew or should have known of the mistake, the contract is voidable by the mistaken party.
Can a mistake by a transmitting intermediary constitute an absence of mutual assent?
Not unless the party receiving the message should have been aware of the mistake.
What is misrepresentation?
A party induces another to enter into a contract by using fraudulent misrepresentation or by using nonfraudulent material misrepresenation.
What is the effect of misrepresenation?
The contract is voidable by the innocent party if he justifiably relied on the misrepresentation.
When is public policy (illegality) a defense to contract formation?
1) If the consideration or subject mater is illegal, the contract is voidable.
2) If the purpose is illegal, the contract is voidable by a party who was either unaware of the purpose OR aware of the purpose but did not facilitate the purporse and the purpose does not involve serious moral turptitude.
What are the defenses based on lack of capactity?
1) Infancy (except for contracts involving that party's necessities).
2) Insanity
3) Intoxication (If the other party knew of the intoxication)
4) Duress.
What is the effect of a lack of capacity defense?
The contract is voidable by the party that lacked capacity.
What constitutes duress?
Usually requires more than one party's taking economic advantage of another.
Can an infant affirm his contract?
Yes, upon reaching the age of majority. Failure to disaffirm in reasonable time after turning 18 constitutes affirmance.
What are the NY exceptions to infants' lack of capacity?
Infants cannot void contracts in the following situations:
1) 14.5 years or older who contracts for life insurance;
2) Educational loans by those 16 or older;
3) All contracts by 18 year olds;
4) Realty contract related to marital home; and
5) Contracts for artistic or athletic services.
What are the defenses to enforcement?
1) Statute of frauds
2) Unconscionability
When is the statute of frauds applicable?

M - Marriage
Y - Year
L - Land
E - Executor
G - Goods
S - Surety
What are the requirements of the statute of frauds?
The writing must contain the following:
1) Identity of the parties sought to be charged
2) Id of the contract's subject matter
3) Terms and conditions
4) Recital of the considerations
5) Signature of the party to be charged.
Must the writing for statue of frauds be a full-fledge contract?
No and it need not even be on one piece of paper.
Who needs to sign the writing to satisfy the SOF?
Only the party to be charge (ie the party being sued).
What are the exceptions to the SOF?
1) For a sale of goods, part payment or acceptance of part of the goods take the contract of of the statute to the extent of the partial payment or acceptance.
2) For a sale of land most states do not apply the statute if performance unequivocally indicates that the parties contracted for sale.
3) Courts occasionally use promisory estopel to remove the contract where it would be inequitable to allow the SOF to defeat a meritorious claim.
What is the additional NY coverage of the SOF?
The following K are also included:
1) Promise to pay discharged debt;
2) Assignment of insurance policy or promise to name beneficary
3) Contracts to pay commission or finders fee, unless w/ atty, auctioner, or RE broker.
What is the additional NY exception to the SOF?
SOF not applicable where there has been part performance under a lease.
What is the enforcement defense of unconscionability?
A contract may be void where the clauses are so one-sided as to be unconscionable. (tested at the time the K was made)
Can nonparties rights or duties in connection with the contract?
What is the typical 3rd party beneficiary situation?
The promisee contracts with the promisor that the promisor will render some performance to the 3rd party beneficiary.
What is a the difference between an intended and an incidental 3rd party beneficiary?
Only the intended beficiaries have contractual rights.
How do you distinguish incidental form intended 3rd party beneficiaries?
Consider whether the beneficiary:
1) Is identified in the contract;
2) Receives performance directly from the promisor; OR
3) Has some relationship with the promisee to indicate intent to benefit.
What are the 2 types of intended beneficiaries?
1) Creditor beneficiary, a person who is owed a debt by the promisee
2) A donee beneficiary, whom the promisee intended to benefit gratuitously.
When does the beneficiary acquire contractual right?
Only when his rights have vested.

Prior to vesting the promisee and promisor are free to modify or rescind the beneficiary's rights.
When does a beneficiary's rights vest?
When the beneficiary:
1) Manifests assent to a promise in the manner requested by the parties;
2) brings a suit to enforce the promise; Or
3) materially changes position in justifiable reliance on the promise.
Can an intended beneficiary sue the promisor?
Yes, but the promisor may raise any defense against the promisor it had against the promisee.
Can an intended beneficiary sue the promisee?
1) Creditor beneficiary can sue the promisee.
2) Donee beneficiary can only sue the promisee if grounds for a detrimental reliance remedy exist.
What is the typical situtation where a party assigns his rights to a 3rd party?
X and Y contract with each other. Y (assignor) assigns his rights to X's (obligor) peformance to Z (assignee).
What contract rights may be assigned?
Generally all contract rights may be assigned.
What are the exceptions to assignment?
1) Assignment would substantially change the obligor's duty or risk;
2) An assignment of future rights to arise from future contracts; or
3) Assignment prohibted by law.
What is the effect of a "no assignment" provision?
Clause prohibiting the assignment of the contract will be construed as prohibiting assignment of the assignor's duties.
What is the remedy for breach of a "no assignment" provison?
Does not bar assignment, but merely gives the obligor the right to sue for damages. Unless the contract provides that attempts to assign will be void.
What is necessary for an effective assignment?
1) The assignor must manifest an intent to immediately and completely transfer his rights;
2) The right assigned must be adequately described.
Is a writing necessary for an effective assignment?
Is consideration required for assignment?
What is the NY rule for assignment not supported by consideration?
It is irrevocable if in writing and signed by the assignor.
Is assignment for consideration revokable?
An assignment for consideration is irrevocable.

A gratuitous assignment is irrevocable if:
1) The obligor has already performed;
2) a token chose is delivered;
3) A simple chose is put in writing; OR
4) The assignee can show detrimental reliance on the gratutitous assignment.
How may a revocable assignment be terminated?
1) Death or bankrupty of the assignor;
2) Notice of revocation to the assignee or obligor
3) The assignor taking performance directly from the obligor; OR
4) Subsequent assignment of the same rights by the assignor to another
What is the effect of assignment?
Establishes privity of contract between the obligor and assignee while exstingushing privity between the obligor and assignor.

Basically once the assignment is effective, only the assignee is entitled to performance.
Can the assignee sue the obligor?
Yes, as the assignee is a real party in interest.
What defenses can the obligor raise against the assignee?
Any defense inherent in the contract.

Can't raise defenses the assignor might have against the assignee.
Can the assignee sue the assignor?
Yes, for:
1) Wrongfully exercising the power to revoke an irrevocable assignment;
2) Where the obligor successfully asserts a defense against the assignor in an action brought by an assignee.
To what extent is the assignor liable for the obligor's performance?
The assignor will not be liable if the obligor is incapable of performance.
What is the additional NY rule for successive assignments of the same rights?
It has an additional exception, whereby the assignment of a construction contract (or money due thereunder) is not valid until filed.
What happens if there have been successive assignments of the same rights?
The first irrevocable assignment will prevail.
What are the exceptions to the first assignment rule?
If the subsequent assignee has paid value and taken without notice, he may prevail where
1) he gets the first judgment against the obligor;
2) he gets the first payment of claim from the obligor;
3) he gets token delivery of a token chose;
4) he is a party to novation releasing the assignor; or
5) he can proceed on estoppel theory
What is the typical delegation situation?
Y (obligor/deligator) promises to perform for X (the obligee). Y then delegates his duty to Z (delegate).
What duties may be delegated?
Generally all duties.
What are the exceptios to the general rule regarding what duties may be delegated?
1) Duties involve personal judgment and skill;
2) Delegation would change the obligees expectancy;
3) A special trust was reposed in the delegator; or
4) There is a contractual restriction.
What are the requirements for effective delegation?
Delegator need only manifest a present intention to make a delegation.
Is the deligator discharge from liability on the contract?
No. The obligee may sue the delegator for nonperformance by the delegate.
Whats is the modern rule regarding the effect of the words assigning "the contract" or "all my rights under the contract"?
They are usually construed as including an assumption of the duties by the assignee, unless contrary intention appears.
How are contracts to be construed?
As a whole and according to the ordinary meaning of words.
How are ambiguties construed?
Against the party preparing the contract, absent evidence of the intent.
What is the parole evidence rule?
Evidence of prior or contemporaneous negotiations and agreements that contradict, modify, or vary contractual terms is inadmissible if the written contract is intend as complete and final.
What is a merger clause?
A recital that the contract is complete on its face. (strengthens presumption that the written document is final)
What are the exceptions to the parole evidence rule?
Evidence of
1) Formation defects
2) Existence of a condition precedent
3) The parties intent regarding ambiguous terms
4) A prior valid agreement which is incorrectly reflected in the writing
5) A collateral agreement that does not contradict the main contract and is not so closely connected as to be part of the main contract.
When can nonperformance constitute a contractual breach?
1) When a present duty to perform has arisen; and
2) That duty has not been discharged.
When does a present duty to perform arise?
There is an absolute promise or all conditions have been met or excused.
What is a promise?
A commitment to do or refrain from doing something. (may be conditional or unconditional)
What is a condition?
An event (other than the passage of time) the occurence or nonoccurrence of which will create, limit, or exstingusih the absolute duty to perform.
How is a provision interprated to be a promise or a condition?
When unclear, the basic test is the intent of the parties as judged by:
1) the words of the agreement,
2) prior practices
3) business customs.
Do court generally prefer promises or conditions?
In doubtful situations the court perfers a promise, because a promise will suport the contract.
Why is the distinction between a promise and condition so important?
Failure of a promise gives rise to breach, whereas failure of a condition relieves a party of the obligation to perform.
Can a provision be both a promise and a condition?
Yes. eg, where the 2nd party's duty to pay is conditioned on the 1st party's performance of her promise.
What is a condition precedent?
A condition that must occure before performance is due.
What is a condition concurrent?
Conditions to occur at the same time.
What is a condition subsequent?
Condition that cuts off already existing duty and excuses performance.
When are conditions excused?
1) When a party wrongfully prevents a condition form occuring;
2) An actual, material breach by one party, excuses the others duty of counter performance;
3) Anticipatory repudiation;
4) When a party has reasonable grounds to believe the other party will be unable to perform;
5) Substatial performance;
6) Divisibilty of contract;
7) Waiver or estoppel
What is anticipatory repudiation?
A party's unequivocal communication that they will not perform their duty under the contract.
What are the remedies for anticipatory repudiation where the contract is unilateral or not executory?
The non-repudiating party must wait until the time originally set for performance.
What are the remedies for anticipatory repudiation where the contract is bilateral and executory?
1) Treat the contract as reputiated and sue immediately;
2) Suspend his own performance and wait until the performance is due to sue;
3) Treat the repudiation as an offer to rescind and treat the contract as discharged;
4) Ingore the repudiation and urge preformance.
Can repudiation be retracted?
Yes, until the other party has accepted or detrimentally relied on it.
In what ways may a duty to perform be discharged?
1) Performance or tender of performance;
2) Condition subsequent;
3) Illegality;
4) Impossibility, Impracticability, or Frustration;
5) Rescission;
6) Modification of contract;
7) Novation;
8) Cancellation;
9) Release;
10) Substituted contract;
11) Accord and satisfaction;
12) Account Stated;
13) Lapse;
14) Operation of law;
15) Statue of limitations;
What is discharge by impossibility?
Object standard that nobody could have performed according to the terms of the contract. (eg; death, destruction of subject matter, etc).
What is discharge by impracticability?
Discharge where a party encounters extreme and unreasonable difficulty/ expense that was not anticipated.
**must be above and beyond normal risk
**distinguish from mistake
What is discharge by frustration?
Discharge where there is
1) A supervening event;
2) That was not reasonably foreseeable at the time of contracting;
3) Which almost completely destroys the purpose of the contract; and
4) The purpose was understood by both parties.
What is discharge by recission?
Where a contract is executory on both sides and both parties agree to rescind.
Can there be mutual recission where the rights of a 3rd party beneficiary have already vested?
What is partial discharge by modification?
A duty may be discharged partially by modification of the K if there is mutual assent and consideration.

** consideration is not necessary where the modification is only a corrcetion or for a modification for the sale of goods.
What is discharge by novation?
Discharge where there's a new contract substituting a new party for one of the parties to the original contract.
What are the elements of novation?
1) A previous valid contract;
2) Agreement among all parties including the new parties;
3) Immediate extinquishment of the contractual duties between the original parties; and
4) a valid new contract.
What is an accord?
An agreement where one party to a contract agrees to accept perfomance different from that originally promised.
Does an accord require consideration?
Yes, consideration can be less than that of the original contract if it is of a different type.
When is pariial payment of an original debt sufficient consideration for an accord?
1) When it is made in good faith; and
2) There is a bona fide dispute to the claim.
What is satisfaction?
Performance of the accord which discharges both the accord and the original debt.
When is a breach material?
When the non breaching party does not receive the substantial benefit of his bargain.
What remedies are available for a material breach?
1) May treat the duty to counter perform as discharged; and
2) Has an immediate right to all remedies for breach of the entire contract.
What is the remedy for a minor breach?
The aggrieved party may recover damages but must still perform under the contract.
What is the effect of a minor breach coupled with anticipatory repudiation?
It is treated as a major breach.
What is the test for materiality?
Courts look at
1) The amount of benefit received by the nonbreaching party;
2) Adequacy of compensation for damages;
3) Extent of part performance by the breaching party;
4) Hardship to the breaching party;
5) Negligent or willful behavior of the breaching party; and
6) Liklihood that the breaching party will perform the remainder.
What is the effect of lack of timely performance?
Generally not a material breach if performance is rendered within a reasonable time.
What is the effect of a "time is of the essence" provision?
Failure to perform on time is a material breach.
What are the remedies for breach of contract?
1) Damages
2) Specific preformance
3) Rescisson
4) Restitution
What are compensatory damages?
Damages designed to put the nonbreaching party into as a good a position as they would have been had the other party fully performed.
What are the 2 types compensatory damages?
Standard measure and consequential
What are the standard measure of damages?
Usually the expectation damages that would permit the plaintiff to buy a substitute.

**May also cover reliance (the cost incured by performing)
What is the standard of certainty need for standard measure damages?
The damages must be reasonably certain. (eg, lost profits for a business that can't open on time are usually too speculative).
What are the standard measure damages for sale of goods?
1) Breach by seller = K price - replacement price
2) Breach by buyer = K price - resale price.
What are the standard measure damages for sale of land K?
K price - fair market value.
What are the standard measure damages on employment contracts?
1) breach by employer = full K price - wages earned elsewhere.
2) breach by employee = costs to replace the employee.
What are standard measure damages on construction contracts?
1) breach by owner = profits from K + cost expended.
2) breach by the builder = cost of completion + reasonable compensation for delay.
What are consequential damages?
Damages awarded in addition to standard measure, which will be given if a reasonable person would have forseen such damages would result from the breach.
Who bears burden of proving forseeability of consequential damages?
The plainfiff bears the burden where "special circumstances" are involved.
When will a liquidated damages provision be valid?
1) The damages were difficult to ascertain at the time the contract was formed; and
2) the agreed upon amount was a reasonable forecast of compensatory damages.
Can liquidated damages be recovered when there ar no actual money damages?
Yes, so long as the requirements are met.
What happens when the nonbreaching party fails to mitigate damages?
Recovery will be reduced by the amount that might have been avoided by mitigation.
When can a party sue for specific performance?
When the legal remedy would be inadequate. (basically when the subject matter is rare or unique).
Is specific performance available for services?
What is recission and restitution?
A nonbreacher may rescind and sue for damages at law or in equity.

If benefit has already been transfered to the breacher, the non-breacher is entitled to restitution.
When is quasi-contractual relief proper?
When no contractual relief is available.
What must be shown to recover quasi-contractual relief on a faild contract?
That the failed contract resulted in unjust enrichment of one of the parties.