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CONTRACTS II – SPRING 2016
SECTION ONE
UNIVERSITY OF MISSOURI SCHOOL OF LAW
PROF. ROBERT H. JERRY, II
Professor’s Contact Information
Office:
Phone:
Email:
336 Hulston Hall
(573) 884-0946
jerryr@missouri.edu
Course Goals and Objectives
“Contract law is the law of exchange.[1] It is the set of background rules that govern the
enforcement of a certain set of promises – those the law deems ‘enforceable.’ By providing
those background rules, contract law enables private ordering among individuals and
organizations and thereby facilitates the operation of markets.”2
Thus, the second semester of Contracts continues the exploration of the substantive law of
contracts as set forth in the common law and various statutory codifications (primarily Article 2
of the Uniform Commercial Code). Our goal is to cover the topics not covered in Contracts I on
which you will be tested on the bar examination administered in Missouri and in other states. 3
Our objectives are to develop and acquire



a thorough understanding of the fundamental rules of contract law, including both the
common law and selected elements of statutory contract law;
an appreciation for and understanding of the theories, values, and public policies that
underlie existing contract law and shape its continuing development;
the knowledge and skills necessary to (a) determine which rules and authorities apply to
a particular situation, (b) analyze transactions and the process of contracting, (c) extract
rules and policy from cases and statutes, and (d) problem-solve in light of the client’s
objectives.
1
The idea of “exchange” in contract law is usually used to explain when a performance or return promise
is “bargained for,” which is one of the essential elements of demonstrating the existence of
consideration. See Restatement (Second) of Contracts § 71. Although most enforceable contracts are
accurately described as resulting from a “bargained-for exchange,” there is an alternative category of
enforceable contracts where there is neither a bargain nor an exchange. See id., § 17(2). In these
contracts, the promises are enforced based on reliance or unjust enrichment. See id., §§ 82-90.
2
Thomas A. Lambert, Syllabus, Contracts (Section One), Fall 2015.
3
All of the topics covered in Prof. Lambert’s fall Contracts I course are testable on the bar exams in
every state.
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Books
The required texts are the same ones you used in Contracts I with Prof. Lambert: Farnsworth,
Sanger, Cohen, Brooks & Garvin, Contracts: Cases and Materials (8th ed. 2013); Farnsworth et
al., Selections for Contracts, 2015 edition.
I endorse the same optional study aids recommended by Professor Lambert in his Contracts I
Syllabus.
Course Web Site: TWEN
I will use a course web page on TWEN (The West Education Network). The syllabus and other
course materials will be posted on this website. I will also use the portal on the TWEN site to
post assignments. I may occasionally send email messages to the email account that you
designate when you register with TWEN. Please check your email account regularly to make
sure it remains functional during the course.
How I Will Conduct Class
I will use an “on-call system” to conduct class. The class will be divided into five groups, and
two of the groups will be on-call each class. The schedule for the different groups will be
posted on the calendar. The groups are as follows:
Group
Group 1
Group 2
Group 3
Group 4
Group 5
Last Name Begins With
A-C
D-Ki
Kj-Me
Mf-Smith, A.
Smith, B. - Z
Final Exam, Grading, and Attendance
The final grade. Your grade for this course will be based on your score on the final examination.
I reserve the option to raise a grade for particularly strong classroom recitation or to lower it for
particularly weak classroom recitation.
The final exam. The final exam will be a three-hour open book exam. “Open book” means that
you may consult any inanimate resource you wish during the exam. This includes, but is not
limited to, (a) your casebook, (b) the “Selections for Contracts” supplement, (c) materials
prepared either by you individually or by members of a study group in which you participate,
(d) handouts distributed in class, (e) materials placed on the TWEN site for this course, and (f)
other secondary materials. I will have more to say about the final exam later in the semester.
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Attendance. I expect you to attend all classes. American Bar Association rules require “regular
and punctual class attendance” by students. I understand that sometimes an absence is
unavoidable, but I do not make a distinction between excused and unexcused absences. I will
circulate an attendance sheet at the beginning of every class. If you must be absent on more
than four occasions for any reason, please visit me so that we can discuss the problem.
Consequences attach to four or more absences, as discussed in the next paragraph.
Attendance, participation, and the exam. Having four or more absences creates a presumption
of “particularly weak classroom participation.” You will not be allowed to take the exam if you
exceed seven absences, except with the permission of the Associate Dean for Academic Affairs.
Tardiness. Getting to classes that begin at 8:00 a.m. on time can be challenging for some
students, and all of us sometimes face circumstances (sometimes outside our control) that
make it impossible to get to a particular class on time. It is, however, distracting when any of us
arrives late. Thus, in a large enrollment class like ours, punctuality is especially important.
I will distribute attendance “sign-in” sheets promptly at 8:00 a.m. If you are not in your seat at
the time I distribute the sign-in sheets, you are not to sign the sheet. For purposes of the
attendance policy, being late is the same as being absent. All of this being said, I would prefer
that you come to class when supervening circumstances prevent you from being on time rather
than not coming to class at all.
Cancellation and make-ups. It may become necessary for me to cancel a class and schedule a
make-up. I will try to schedule the make-up by trading class hours with another of your Section
1 professors. If I am unable to do this, your absence from the make-up session will not count
toward your total absences if for a good reason and with written notice to me prior to the start
of the make-up session.
Office Hours; How to Reach Me
Because I am generally available in my office, I do not have specific office hours. In other
words, please feel free to stop by at any time. I do have meetings from time to time, and there
are some occasions in the spring when I will have out-of-town travel commitments. If it is easier
for you (and especially if you miss me after a couple of tries), email me or talk to me after class
about setting a specific time for an appointment.
In addition to coming by my office, feel free to communicate with me by email. I will try to
respond as soon as I can; if you e-mail me about the course, please mention "Contracts" in the
subject line so that I will be less likely to miss your e-mail among the many I receive daily.
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Policies
Intellectual Pluralism
The Law School community welcomes intellectual diversity and respects student rights.
Students who have questions concerning the quality of instruction in this class may address
concerns to either the Dean or Director of the Office of Student Rights and Responsibilities
(http://osrr.missouri.edu). All students will have the opportunity to submit an anonymous
evaluation of the instructor at the end of this course.
Academic Integrity
Academic integrity is fundamental to the activities and principles of both the Law School and
the legal profession for which you are preparing to join. All members of the Law School
community must be confident that each person's work has been responsibly and honorably
acquired, developed, and presented. Any effort to gain an advantage not given to all students is
dishonest, whether or not the effort is successful. The Law School community regards breaches
of its Honor Code as extremely serious matters. In the event that you violate our Academic
Integrity rules on any portion of the work required for this class, you may expect a failing grade
in this course as well as possible disciplinary sanctions ranging from probation to expulsion.
When in doubt about plagiarism, paraphrasing, quoting, collaboration, or any other form of
cheating, consult the course instructor.
Disabilities
If you anticipate barriers related to the format or requirements of this course, if you have
emergency medical information to share with me, or if you need to make arrangements in case
the building must be evacuated, please let me know as soon as possible. If disability related
accommodations are necessary (for example, a note taker, extended time on exams,
captioning), please register with the Office of Disability Services
(http://disabilityservices.missouri.edu), S5 Memorial Union, 882-4696, and then notify either
Associate Dean Mitchell or Denise Boessen in the main office of your eligibility for reasonable
accommodations. The Office of Disability Services is responsible for reviewing documentation
provided by students requesting academic accommodations and for accommodation planning
in cooperation with students and instructors, as needed and consistent with course
requirements. For other MU resources for students with disabilities, click on "Disability
Resources" on the MU homepage.
Requirement of Consent for Redistribution of Recordings of Classes
University of Missouri System Executive Order No. 38 lays out principles regarding the sanctity
of classroom discussions at the university. The policy is described fully in Section 200.015 of the
Collected Rules and Regulations. In this class, students may make audio or video recordings of
course activity unless specifically prohibited by the faculty member. However, the
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redistribution of audio or video recordings of statements or comments from the course to
individuals who are not students in the course is prohibited without the express permission of
the faculty member and of any students who are recorded. Students found to have violated this
policy are subject to discipline in accordance with provisions of Section 200.020 of the Collected
Rules and Regulations of the University of Missouri pertaining to student conduct matters. In
addition, a violation may affect a student’s grade.
Laptops and Cell Phones
I ask that cell phones be turned off during class, but there are exceptions. For example, if you
are responsible for a dependent, I understand that you may need to be available at all times
(e.g., to deal with an emergency, etc.). If that is your situation, please put your phone on the
“vibrate only” mode. There may be other exceptional situations that require a phone to be
ready for use.
In that same vein, it is permissible to use laptops, tablets, and similar devices (“mobile devices”)
in class for note taking and to access Web materials related to the class. Because of the
potential for a mobile device screen to be distracting to those seated near you, what I require is
that you not use a mobile device during class for non-class purposes (such as checking e-mail,
social media sites or other websites, or text messaging) or in any other manner disruptive to
those around you. This is simply one aspect of a shared value of our law school community -that we all conduct ourselves professionally, which includes respecting our classmates and our
class setting.
Outline of the Course
Here is a tentative list of the topics we will cover this semester. The list is subject to change.
Reading assignments for the next class will be posted on the TWEN portal shortly after the
conclusion of each class. As the semester unfolds, I will provide you with anticipated
assignments for several forthcoming topics at a time. It will sometimes be the case that we will
not cover all the material assigned for a particular day (sometimes it is helpful and important to
read ahead somewhat in order to make sense of material we are covering in a particular class);
when that happens, you should always review the “non-covered” material for the next class
period unless I specifically advise otherwise.
Getting Started: Review and Introduction
Ch. 4 Policing the Bargaining Process
Sec. 1
Capacity
A.
Basic Principles
B.
Minority
C.
Mental Incapacity
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Sec. 2
A.
B.
Overreaching
Pressure in Bargaining
1.
Basic Principles
2.
Pre-Existing Duty (“PED”) Rule
3.
Avoiding the PED Rule: Rescission & Modification
4.
Avoiding the PED Rule: New Consideration
5.
PED to a 3rd party
6.
Duress
7.
Undue Influence
Concealment and Misrepresentation
1.
Basic Principles
2.
Fraud and Misrepresentation
3.
Promissory Fraud
Ch. 5 Determining the Parties Obligations under the Contract
Sec. 1
The Parol Evidence Rule (“PER”)
A.
Basic Principles
B.
PER and Contracts for the Sale of Goods
C.
No-Oral-Modification Clauses
Sec. 2
Interpretation: The Use of Extrinsic Evidence of the Parties’ Intent
A.
Basic Principles
B.
Methods of Dealing with Ambiguity
C.
Rules in Aid of Interpretation
D.
Function of Judge and Jury
Sec. 3
Use of Extrinsic Evidence from Commercial Context
Sec. 4
Use of Extrinsic Evidence to Supplement or Qualify: Course of Dealing,
Usage of Trade, and Course of Performance
Sec. 5
Objective Interpretation and Its Limits
Sec. 6
Supplementing the Agreement with Terms Supplied by Law: Gap Fillers;
Warranties; and Mandatory Terms
A.
Filling Gaps – Generally
B.
Filling Gaps by Statute
C.
Gap Filling With Respect to Product Quality: Implied Warranties
1.
Implied Warranty of Merchantability
2.
Implied Warranty of Fitness for a Particular Purpose
3.
Excluding Implied Warranties
4.
Other Limits on Implied Warranties
D.
Express Warranties
E.
Supplementing the Contract with Mandatory Terms—Good Faith
Ch. 6 Limits on the Bargain and Its Performance
Sec. 1
Unfairness
Sec. 2
Standard Form and Adhesion Contracts
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A.
B.
C.
D.
Sec. 3
A.
B.
C.
D.
E.
Sec. 4
A.
B.
Sec. 5
A.
B.
C.
Ch. 7 Remedies
Sec. 1
Sec. 2
A.
B.
C.
Sec. 3
A.
B.
C.
Sec. 4
Basic Principles
Agreeing to Boilerplate
Duty to Read and Duty to Disclose Terms
Sources of Policing: Courts; Legislatures; and Agencies
Unconscionability
Basic Principles
Two Views
Price Unconscionability
Unconscionability in Franchises
Unconscionability: Arbitration Clauses
Performing in Good Faith
Basic Principles
Content of the Obligation of Good Faith
Public Policy
Basic Principles
Illegal Contracts
Judicially Created Public Policy
Specific Relief
Measuring Expectation
Introduction: Lost Profits and Fixed Costs
Losing Contracts
Cost of Completion and Diminished Value
Limitations on Damages
Avoidability
1.
Basic Principles
2.
Mitigation and Contracts for the Sale of Goods
3.
Employment Contracts
Foreseeability
Certainty
Liquidated Damages and Penalties
Ch. 8 Performance and Breach
Sec. 1
Conditions
A.
Effects of Conditions
1.
Basic Principles
2.
Separate Contracts
B.
Problems of Interpretation
1.
Condition, Duty, or Both?
2.
Satisfaction Conditions
3.
Third-party Satisfaction Conditions
C.
Mitigating Doctrines
1.
Prevention
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Sec. 2
A.
B.
C.
Sec. 3
A.
B.
C.
Sec. 4
A.
B.
Sec. 5
A.
B.
Ch. 9
Sec. 1
Sec. 2
Sec. 3
Sec. 4
Sec. 5
2.
Waiver, Estoppel, and Election
3.
Disproportionate Forfeiture
Constructive Conditions of Exchange
Basic Principles
Time for Performance
Concurrent Conditions and Tender
Mitigating Doctrines
Substantial Performance
1.
Basic Principles
2.
Perfect Tender Rule
3.
Wrongful and Ineffective Rejections
Divisibility
Restitution
Suspending Performance and Terminating the Contract
After-Acquired Evidence
Hindrance and Prevention
Prospective Non-Performance
Anticipatory Repudiation
1.
Basic Principles
2.
Permissible Responses to Repudiation
3.
Retraction
Assurance of Due Performance
1.
Basic Principles
2.
Adequate Demands for Adequate Assurances
Basic Assumptions: Mistake; Impracticability; and Frustration (Additional
Reasons for Excusing Nonperformance)
Unilateral Mistake
Mutual Mistake
A.
Basic Principles
B.
Sale of Goods
C.
Risks of Limited Knowledge
D.
Mistake and Restitution
Impracticability of Performance
A.
Basic Principles
B.
Supervening Events
C.
Impossibility and Impracticability under Article 2
D.
Foreseeability
E.
Risk-Bearing Analysis
F.
Force Majeure Clauses
G.
Casualty to Goods
Frustration of Purpose
Half Measures
A.
Impracticability and Reliance
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B.
Ch. 10
Sec. 1
Sec. 2
Sec. 3
Sec. 4
Reliance Interests
Third Parties: Rights and Responsibilities
Third-Party Beneficiary Contracts
Delegation of Duties
Assignment of Rights
Contests between Assignees and Obligors
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