Contracts Outline – Attack Sheet

UCC:
Address was this person a merchant, was
the offer a firm offer, Applies
in the sale of moveable goods, (Probably not for leases or
Definitely not services provided)

Restatement:
Applies in some jurisdictions when not a sale of goods, (UCC only
persuasive when changing the law under the restatement
RARE Caseci v. Canio Constr. Group new
default house warranty).

The
WAS[N’T] an offer because. I subjectively
thought the counter-party was offering, and an ORP would
objectively
believe an offer was being made. Embry
v McKittrick Were
the terms specific, and did the parties intend to be bound? (Look
a Who wants to enforce)

REST §24. OFFER
DEFINED

An offer is the
manifestation of willingness to enter into a bargain, so made as
to justify another person in understanding that his assent to
that bargain is invited and will conclude it.

§24 GIFT not an Offer
(b) A proposal of a gift is not an offer, it cannot be enforced
as a K because there was no element of exchange or bargaining

YOU CAN
ALSO Look at Preliminary Negotiations
(Determined Under Parole Evidence) 1. Was there partial
performance by one party that the other party (claiming no K)
accepted? 2. Were all the essential terms agreed, no loose ends?
3. Did either party expressly agree to be bound ONLY on final
written K? 4. Was the complexity of the K so great that it obvi
requires a written K?

Options
K → 1 Can A acting alone make a K if he
wants? 2 Can B take away A’s power to accept?

Yes on 1, No on 2 =
Options K | Yes on 1, Yes on 2 = NO option K

Dickenson
v. Dodds → NOT an Options K, P
knew the property was sold BEFORE acceptance

OFFER
Certain on the Terms? Rest. §33 (1) even
though manifestation of intent of the offer is understood, it
cannot be accepted unless terms are reasonably certain (2) the
terms must provide the basis for determining a breach and
appropriate remedy (3) the fact that one or more terms of bargain
are left open show that intent cannot be understood as offer or
acceptance.

Was the K certain on
its terms? (1) Quantity (2) Time for performance (3) Identity of
Parties (4) Price (5) Subject matter

A K can
still be valid if not all terms are addressed as long as the
parties intended to
be bound by a K

I offer, i
thought steve accepted (Look at seller Who wants to enforce)

• Did
  i think steve accepted subjective
  – would an ORP think steve had accepted objective
• I
  thought that I accepted an offer subjective,
  an ORP would think I accepted an offer Lucy
  v. Zhemer (Drunk
  farm Sale)

Mirror
Image Acceptance The
acceptance must be exactly the same as the offer

It
cannot include any changes to the original offer, (BUT you can
unequivocally accept and SUGGEST
changes)

Was
acceptance made in time? Mailbox
Rule (acceptance
made when mailed NOT when received)

Acceptance
by Promise vs Performance Default
Rule Restatement
§ 30 is
Promise OR Performance (K can specify)

Restatement
§ 54 offer
for acceptance by performance, NO promise notification needed
Carlill v
Carbolic Smoke Co.

Restatement
§ 45 if
accepted ONLY by perf, once perf begins offeror cant revoke (it
is now an Options K, perf has option to complete)

Restatement
§ 62 if by
perf OR promise → once Perf start K is
BINDING on BOTH
parties

Bilateral
K → Regular
K offer to sell, accept, consideration (“Upon [promise]
you may begin” → White
v. Corlies contractor
just started project R§30

Unilateral
K → Acceptance
by performance, CANT accept by PROMISE you MUST PERFORM to accept

Was there a
bargain made, an exchange of promises? (Courts WILL enforce bad
bargains)

REST §
71 To be enforceable performances
or promise must be exchanged, CAN be in
the form of →

(1) An act other
than a promise OR (2) A forbearance (giving up a legal right) OR
(3) The creation, modification, or destruction of a legal
relationship.

GIFT
R§24(b) = not
consideration (1) no intent to be bound (2) cavalier (3) no
evidence Kerksy
v Kerksy sister-in-law
tends farm

SHAM
consideration R§79(d) gift
structured to look like a bargain ($1 for car) SOME courts WILL
enforce, Because the parties structured it like a bargain because
they INTENDED it to be enforced

Conditioned
Gift Not enforced usually negative
language, (ill give G Lucas new camera if he promise not to make
a crappy Star Wars with it)

You
give up a right you never had Dyer v.
national By-Products workers comp

→ →

MODIFICATIONS

Pre-Existing
Duty (1) Will not be consideration after
renegotiation if one parties obligations don’t change (2)
prevents extortion (3) because parties can be more vulnerable
during performance (pilot demands more money mid-flight) Alaska
Packers Assn. v. Domenico Bad nets BUT
Cannery wins, no new consideration.

Unanticipated
Circumstances (Brian Construction
v. Brighenti rubble under house
unanticipated AND fair increase)

Restatement
§ 89(a) Must be unanticipated AND a Fair
increase (Unanticipated event = new consideration)

UCC §
2-209 Modification Does NOT require new
consideration, ONLY requires Good Faith

Must be
confined to writing →

R§110
(1) K of an executor of estate to answer for decedent (2) K to
answer for the duty of another (3) K made upon consideration for
marriage (4) K for sale/lease of land interest (Schwedes
v. Romain no written K)
(5) K not to be performed within one year

UCC
§2-201 Adds K for sale of goods $500 or
more, if between merchants you
must reject within 10 of receiving the goods. (Exceptions
: 1 Specially manufactured goods, 2 other
party agrees to an extent, 3 goods that have been accepted or
paid for cannot use Statute of Frauds to “UN-enforce” the K.
Water methanol Riley v. Capital
Airlines Specially manufactured
recovers for equipment purchased, but not
unmade goods

R§131
A signed OFFER
satisfies the Statute of Frauds IF (1)
signed by the party charged (2) identifies subject matter of K
(3) Indicates a K was made OR offer made by signatory (4) states
all essential terms with reasonable certainty

R§129
Actions in reliance, can sometimes offer
specific performance for a land sale WITHOUT WRITTEN K when
justice can only be had

R§130
1yr+ K must be in writing UNTIL one party
completes, when one party fully completes within a year then
Statute of Frauds wont require written K to enforce.

R§139
Reliance is an exception to Statute of
Frauds requirement IF justice can only be served by enforcement

R§133
Written document DOES NOT have to be
ACTUAL K or memo of K

Express
warranties, Defines the expectations of
the parties, explicitly state the terms of the warranty (On the
midterm “realistic faces in two (2) hours” is express
warranty) → (1) Ex the K says what the warranty is (2) Not
everything said is an express warranty, some can be mere puffery!
(3) An express warranty is an affirmation
of fact that becomes part of the bargain.
(4) Reliance is NOT necessary
to create an express warranty (5) Generally
something is a warranty if the seller asserts a fact of which the
buyer would be otherwise ignorant (6)
PUFFERY is an expression of opinion when it is a general
statement that includes no special knowledge, buyer should
exerciser judgement (These items are the hottest! = Puffery →
NOT WARRANTY) (#6 Royal Bus Machines v
Lorraine Corp. COPY Machines)

Showing
doubt doesnt release seller (CBS
v. Ziff Davis accounting docs)

UCC
Implied Warranty of Merchantability
→ (1) Only applies if the SELLER is a Merchant (2) iWofM means
the goods have to be everything a buyer would NORMALLY EXPECT out
of the goods

NO IMPLIED
WARRANTIES UNDER RESTATEMENT

UCC
Implied Warranty of Fitness for a
Particular Purpose

(1) Implies that the
buyer is RELYING on the sellers ability to furnish suitable goods
for a specific purpose (2) The seller must know of this
particular purpose AND (3) know that buyer is relying on this
purpose

(4) DOES NOT
REQUIRE anyone to be a MERCHANT

UCC § 2-316
Warranty Disclaimers & Modifications

[Disclaimer
valid if reasonable §2-316(1)
] [Disclaim must be clear/conspicuous
§2-316(2) ] [Clear “as is” enforced
§2-316(3)(a) ]
[Buyer could/should inspect AND COULD HAVE FOUND THE DEFECT= no
IMPLIED warranty, shoulda hired expert
§2-316(3)(b) Schnieder
v Miller IMPALA “as is”]
[ Course of Past Dealings/Current Perf can modify implied
warranties §2-316(3)(c) ]

Form
K Restatement §211(1)
Where a party to an agreement…manifests assent to a [form K],
the terms of the form K are enforceable.

Carnival Cruise
v. Shute

Battle
of the forms (traditional last chance
rule not valid)

Acceptance
under UCC §
2-207 When
there is an acceptance that includes different terms from the
offer it IS NOT treated as a counter offer UNLESS:

(1) It is explicitly
stated that acceptance is conditional on the acceptance of the
new terms

§2-207(2)
UCC – By
default such an acceptance with new terms is treated as an
acceptance of the original offer → new terms are proposals to
modify K

If
the K is between Merchants
the new terms are automatically
incorporated
into the K UNLESS

(1) The offer expressly
forbids modifications (2) If the new terms materially alter the K
(3) If the new terms were objected to within a reasonable time

§
2-207(3)
When the parties writings do NOT create a K BUT the actions of
the parties indicates a K then the terms ARE:

Any terms the parties
had in writing (if payment due on delivery then thats a term)

If there are any GAPS
then they are filled with the UCC GAP FILLING PROVISIONS (Default
Rules) – GAP Filler = “A reasonable X”

Step-Saver
v. Wyse Box
top disclaimer materially altered

Look
at → WHAT you did and WHY you did it AND how it fits with
parties intent Every K is subject to Good
Faith Fair Dealing NON-disclaimable

Goldberg
v Levy Bad faith → Intentionally
hurt bus to lower sales

Mutual
Life v Tailored Woman Good Fait →
Didn’t move furs intentionally to avoid lease

“Performance”
Factors (1)
Did the breach go to the heart of the contract, frustrate the
purpose? (2) Did the non-breacher get most of the benefit that
they
contracted to receive? (3) Is the breaching party likely
to cure his non-performance?
“Justice”
or “Equity” Factors (1)
Would finding (or not finding) a material breach create an
unfair forfeiture? (2) Were there actual damages AND Are damage
awards sufficient to compensate the non-breacher? (3) Was the
breacher acting innocently and in good faith, or was their breach
intentional, reckless, or negligent

Material
breach by
the counter party allows
you to pursue rescission
restitution OFF the K Material
breach by counter party also allows you to suspend performance
On
contract: There
was a K, this was supposed to happen, they breached, MAKE IT
BETTER….expectation, reliance, spec perf, neg injunction
Off
Contract:
There was a material breach (you can now stop performing), I
spent money for this…K failed I want restitution. Restitution
is always off K. Not
available for a partial breach.

a
MERE REQUEST IS NOT A BREACH. The must be undisputed intent that
repudiator absolutely will not perform. Harrel
v. Sea Colony boat/sick

UCC §
2-206 When reasonable insecurities arise
either party may, IN WRITING, request adequate assurances. If
assurance isnt given THEN you can suspend perf. If you suspend
before written request then YOU breached (Scott
v Crown heard they were shady)

Was
there a condition Precedent OR
Subsequent Conditions can be →

(1) Express (2)
Implied by wording in the K (3) Constructive, court believes
parties would have set condition if they thought of it

Precedent
must be met BEFORE performance is due
(Internaco-Rotterdam v River Brand Rice
didnt get notice letter = no perf
due)

~~~~~~~~~~~Blurry
Line :O ~~~~~~~~~~~~~~

Subsequent
Must be met after the condition
precedent, ie you must file a claim with
insurance after your house burns Howard
v. Fed Crop Ins. tobaco

GENERALLY
courts will find a Promise NOT a
Condition, because conditions can be very detrimental.

R §
227(1) interpretation of condition
is preferred that will reduce the
obligee’s risk of forfeiture, unless the event is under the
obligee’s control OR he assumed the risk.

3 Doctrines
that Make Condition Less harsh

Waiver
Giving up a right you posses OR the party receiving the benefit
of condition moving forward with out the condition being met.
(Waiver and Estoppel Clark v West
drunk treatise writer)

Estoppel
When the benefactor makes the other party
believe they will continue without (“don’t worry about xyz”)
because party will RELY

Excuse
court excuses for fairness,
justice, or public policy

R § 84
Promise to perform without condition met
is BINDING, unless material and counter-party and promisee was
not supposed to make it occur. §84(2)(a)
you can renege on the waiver as long as there is still time for
the counter-party to meet the condition.

Vagueness
:: When the parties disagree about the scope. There is a
different interpretation of the same word Fragiliment
v. BNS chicken case

1 Terms of the K – does
it define the term? This is weightier then 2-5

2 Look at course of
negotiations – what were the parties thinking OBJ/SUBJ when
they made the K?

3 Course of Current
Performance – in the course of THIS K how have the parties been
performing/acting?

4 Course of Past
Dealings – in PAST K between the parties, how did they treat
those K’s?

5 Trade Usage – ie in
the Horseshoe biz, what does the term usually mean in the
Horseshoe biz?

Restatement
§ 201 Whose Meaning Prevails

If both parties agree
on definition of term eg bananas = machine guns, well then that
is what it means

Exception the the
general rule of 3 (Course of Perf). When can the party still
enforce?

If one party knows the
other party understands a different meaning (eg Party A knew that
party B expected Peerless shipment in Oct, NOT Dec!!) Unfair to
sandbag the other party. This will meet the Obj/Subj test because
the buyer and an ORP would think they are making a K and Subj the
buyer believes he is making a K

Fully
Integrated Contract: A final written
agreement on ALL TERMS of the K. (You should add a “Merger
Clause” to indicate that it IS a fully Integrated K)

Partially
Integrated: Final written agreement on
SOME TERMS of the K

Modern
Version → Assumes K not fully integrated

Trident
Center v. Conn. Gen. Life Ins. (Very
liberally allows PE, if fact Justice Kosinski believes in CA it’s
impossible to draft a K immune to the PE rule)

Allows PE to show if
the K should be Fully VS. Partially integrated

Allows PE
any time it is needed to ESTABLISH vagueness/ambiguity (Even if
not vag/amb on its face) Brown v.
Oliver hotel furniture not mentioned

You CAN use PE to show
vag/amb (goes to JUDGE first then jury if he doesnt throw it out)

More EXPANSIVE view.

MUST BE →
Contemporaneous or Predates K (MUST
PREDATE because after K is a
modification!)

CANNOT BE
→ used to contradict the written agreement BUT only
to interpret terms ie:: amb/vag OR
non-mentioned terms

Traditional
Version → Assumes K is Fully Integrated UNLESS
there is an ambiguity on the face of the K

Thompson
v. Libby (assumes full integration, PE
not allowed to show warranty for logs)

Promissory
Estoppel can make Reliance on a Promise
an enforceable K even without a traditional K (offer, acceptance,
consideration)

R§90(1)
→ (1) a promise (2) acts on the
promise (3) act was reasonable, definite and substantial (4) AND
done in reliance on the promise → Damages
limited at courts discretion

SWORD
separate cause of action (in addition to
breach) enforces a promise when there is not a K

Spooner
v Reserve Life Ins. Failed
elements for bonus → Illusory Promise

Goodman
v. Dicker Met Elements Radio
franchise estopped from
claiming no K

Cohen
v. Cowles Media Group Met Elements
promise expected
to be held by journalist

IMPLIED
EXCUSES→

Mistake
an erroneous belief when K was made,
allows rescission. (HAPPENS BEFORE
K)

Bilateral
both parties mistaken, no one at fault.
(1) Must go to basic underlying K assumption (2) Must materially
affect K (3) party bearing brunt must not bear risk Party
BEARs risk when → K assigns “as is.”
Conscious Ignorance “know but rely anyways.” AND Ct
determines assign is fair.

Unilateral
one party is mistaken (1) Mistake as time
of K (2) basic assumption (3) did not assume risk Tyra
v. Cheney

Impracticability
is “Impossibility” something
unexpected occurs that makes performance very difficult (HAPPENS
AFTER K)

To
rescind must be (1) impracticable for anyone
to perform those obligations (2) violates basic assumption
(3)party not at fault for the impracticability

Death
CNA v Phoenix

Frustration
of Purpose Something unexpected makes
fulfilling pointless (HAPPENS
AFTER K)

PROCEDURAL
DEFENSES→ Problems with how the K was
formed misrepresentation, , non-disclosure, duress, incompetence.
Parol Evidence always
allowed to prove procedural defenses.

Misrepresentation
(1) False representation (2) of a
material fact (3) that affects assent (Misrepresentation does not
need to be intentional ie Bilateral Mistake Halpert
v. Rosenthal no-one knew about
termites)

Non-disclosure
R§161 non-disclosure would prevent a
misrepresentation, basic inaccurate assumption, violation of good
faith, or a reliance based on relationship or trust. (Baseball
Card Dealer v. Kid NO
non-disclosure seller should have known)

Lack of
meaningful choice: Duress Make this K or
else!!!

“or
else” must be illegal (1) Violence (2) Tort (ie defamation) (3)
Violation of prior K (4) Bad faith behavior

Incompetence
(1) Infancy R§14 under 18 (2) Mental
illness or defect R§§13, 15 (3) Intoxication R§16 (4) Undue
influence = Unusual time, place. Insistent demand. Multi
persuaders vs one party (no lawyer/acctnt)

SUBSTANTIVE
DEFENSES: Illegality & Public Policy

Began with
doctrine of illegality → K to commit a
crime is invalid.

Now can be
unenforceable “as against public policy” → Restraint of
trade, bribery, selling votes

Unenforceable when
legislation says so OR interest is clearly outweighed by
countervailing public policy

UNCONSCIONABILITY
→ Complicated and fuzzy, conceptually
important, rare in practice

Has both
procedural & substantive aspects.
Remedies → Void
K, Strike term, Reform term.

Expectation
Your current situation compared to what
you expected to have if the K were fulfilled.

+ add up all the things
you would have if K fulfilled THEN + add up what you have now
(probably negative -)

Hawkins
v. McGee difference between
expected “100% hand” and what he got

Sullivan
v, O’Connor expectation cost for
unexpected third surgery

Measurement –
Cost of Completion vs Diminution in Market Value

If CoC is less than
diminution court will award.

If CoC is more than
diminution look at: Objective/Subjective intent of parties?
Intentional? Minor/Material? Grossly disproportionate value? Will
breacher benefit?

Jacobs
& Young v. Kent piping, Court
awards diminution in value

Reliance
Places NON-Breacher where you are now vs
where you would be if no contract had been formed. Awards
detrimental loss, places non-breacher back in the position that
it would have been in if no K was made. You should not be harmed
because of the other parties breach.

More certain because it
is a known factor where you were before the K

ON K → Must subtract
any loss the breacher can prove they incurred.

Restitution
Places BREACHER back into the position as
if no K was made, to prevent unjust enrichment. Smallest amount D
would want this.

R§373
“damages for total breach” OR
“repudiation”

R§373(2)
non-breacher has no right to rescission
IF he has performed all his duties and only needs to be paid
(cash payment is easy to enforce)

Default
for land sales OR
unique goods = (1)
No adequate remedy at Law$$$ (2) Peculiar, sentimental, unique,
heirlooms (3) hard to cover/replace

Loveless
v. Diehl land sale. Cumbest
v. Harris unique stereo equipment

NEVER AVAILABLE for
Personal Services → Slavery

Not
meant to hurt the breacher, ONLY to help the non-breacher (ie
Theater owner)

MAY be available for
personal services IF performance is unique ie Actor, Athlete,
Ballerina

Foreseeability
R§351 Damages available only when
reasonably foreseeable OR expressly stated

Hadley
v. Baxendale crunkshaft

Mitigation
varies by K type, duty to limit damages
once they become apparent Luten Bridge
Co. v. Rockingham County

Employee
must accept new employment unless inferior or different in kind
Shirley Maclaine v. 20^th
Century Fox

Lost
Volume Seller duty to mitigate is
different, but breacher still liable for lost sales because of
volume Jetz v. Salinas Property

Liquidated
Damages Clause is enforceable if the
court finds it reasonable penalty clauses
NOT enforceable

Benefit
Ease of litigation, parties determine
remedies and are aware of damages, shows parties intent at the
time of K

Kemball
v. Farren entertainer → Penalty
Clause not enforced

Wassenar
v. Towne Hotel bellhop → LDC
because it was a sliding scale amount

(Different than a CAP
on Damages → Midterm)