FALL 2018 CONTRACTS – PROFESSOR KETTLE – ESSAY CHART
STEP 1: FORMATION (Threshold Question: UCC or Restatement?) (OFFER + ACCEPTANCE = MUTUAL ASSENT) (MUTUAL ASSENT + CONSID = K)
BiL: offer invites accept. by return prom. R 2nd 30(2) offer invites by perform./ prom. offeree chooses & beginning is a return promise R 2nd 62
UniL: offer can be accept. by perform. if MOO specifies R 2nd 53, beginning perform. is not accept. if offeree notif. offeror of non-accept. R 2nd 53 (2), notif. not necessary unless MOO requests R 2nd
54.
IIL/ Quasi K: (1) benefit on D by P (2) apprec. by D of benefit (3) accept. of benefit [Bailey v. West, court found no quasi K where benefit was officiously conferred on West]
Output/ Req. K: a term which measures quantity by the output of the seller or the reqs. of the buyer means such actual output or reqs. as may occur in good faith UCC 2-306 [McMichael v. Price,
sand case, K was enforceable b/c good faith that McMichael could/would sell was understood at time of K]
Offer (intent to be bound, to definite terms, comm. to
Acceptance (must be definite and unequivocal)
Consideration (benefit or detriment; bargained for
offeree) R 2nd 24
Termination: 1. Lapse of time, 2. Revocation, 3. Rejection
(includes Counter-Offer) 4. Offeree dies
Rejection: by c/o (mere inquiry v. counter); effective when
rec’d; option K offeree can reject & accept later before option
expires UNLESS offeror detrimentally relies on offeree’s
rejection
Irrevocable Offers:
1. By merchant UCC 2-205 – Firm Offer: promise to
hold open, irrevocability can’t exceed 3 mo.
[Lonergan v. Scolnick, buying 40 acres of Joshua
Tree. Held: letter from seller not offer b/c buyer had
no reason to believe that his acceptance would seal
the deal]
2. Option supported by consideration
3. Option inducing reliance: must be in writing, signed
by offeror, and a reasonable time R 2nd 87 (1)
4. Detrimental reliance by offeror – req. reasonable
expectation & creates option K to avoid injustice R
2nd 87 (2)
5. UniL offer where offeree has begun performance –
must get reasonable time to perform, mere prep.
doesn’t count R 2nd 45 cmt. (f) [Marchiondo v.
Scheck, P is broker and finds buyers for D seller. D
revokes offer for sale. Held: broker accepted by
performance is entitled to commission]
6. Mailbox Rule – once acceptance sent by mail offer
cannot be revoked
Revocable when: offeree receives a manifestation of intent not
to be bound
Advertisements: offer when clear, definite, explicit and leaves
nothing up to negotiation [Lefkowitz v. Great Minneapolis
Surplus Store, fur coats case]
“acceptance of an offer is a manifestation of assent to the terms
thereof made by the offeree in a manner invited or required by
the offer” R 2nd 5(1); “unless otherwise unambiguously indicated
by the language or circumstances an offer to make a K shall be
construed as inviting accept. in any manner and by any medium
reasonable in the circumstances” UCC 2-206
@ Common Law: Mirror-Image  otherwise c/o
-any conduct that evidences MOM is accept.
-Mailbox Rule – accept. valid when sent; no MBR for opt. k and
MBR invalid if offer said no MBR
-accept. then reject. – MBR applies unless reject. arrives 1st
@ UCC: Add. & diff. terms  object. Intent to accept UNLESS
accept. expressly conditional on assent on new terms; OR
-both parties start to perform
-accept. by unauthor. method is still accept. if rec’d by offeror
when offer is still open
UCC 2-606: Acceptance of Goods  (a) after reasonable
opport. to inspect goods signifies to the seller that the goods are
conforming or that he will take or retain them in spite of their
non-conformity; or (b) fails to make an effective reject., (c) does
any act inconsistent w/ seller’s ownership
[LaSalle National Bank v. Mel Vega, buyer sent K & said it
would be executed when signed by trustee, seller executed &
sent back, buyer did not have trustee sign so no K]
By shipment…[Corinthian Pharmaceuticals v. Lederle
Laboratories, partial shipment of non-conform. is c/o not
accept. b/c it explicitly stated it was an accomm.] UCC 2-206
By shipment… FOB/ Destination – seller allocates risk till
goods reach buyer, FOB/ Shipment – buyer takes risk upon
shipment UCC 2-319
By perform… Accept. by perform. req. part of offer requests
perform. & includes accept. by a perform. which operates as a
return promise R 2nd 50 (2); where offeror invites accept. by only
perform. then option K R 2nd 45
exch.)
Adequate: Once req. met, no req. of adequacy R 2nd 79 [Hamer
v. Sidway, nephew gets $ for not smoking or drinking, can be
forbearance, does not have to be adequate or equitable, must
induce promise]
Inducement: does not itself have to induce promise R 2nd 81
[Thomas v. Thomas, widow allowed to stay even though
agreement was made out of respect for dead brother, $1
payment sufficient consid. regardless of why they made the
deal]
Nominal: a sham or nominal consideration does not satisfy R 2nd
71, R 2nd 79 cmt. D [In re Edwin Farnham Greene, couple in an
affair create a K once they breakup but $1 not sufficient
consideration because it is nominal]
NO Consideration If…
Illusory promise (uncertain terms)
Moral obligation EXCEPTION where there is a
material benefit [Webb v. McGowin, man saved
from block of lumber = material benefit] [Mills v.
Wyman, no enforceable promise where moral
obligation is not material benefit]
Past consideration EXCEPTION binding to extent
necessary to prevent injustice but not binding if
conferred as gift or value is disprop. R 2nd 86
Pre-existing duty EXCEPTION where agreement
modif. needs no consid. UCC 2-209(1); where
perform. of legal duty can be new consid. if it is
different R 2nd 73 [Levine v. Blumenthal, agreement
to reduce rent is unenforc. b/c duty to pay rent is
PEED so no consid.]
Promissory Estoppel: substitute for consideration. R 2nd 90, 139:
Detrimental reliance on promise, foreseeable/reasonable, remedy
is limited as justice requires [Rickets v. Scothorn, grandfather’s
promise enforced because granddaughter unjustly relied on it]
1
STEP 2: PERFORMANCE (is K Void: a K that cannot be enforced; is K Voidable: either party can avoid valid K; is K Unenforceable: valid but one party refuses to
carry out its terms)
A. Contract Terms: Interpretation & Construction
Certainty:
- Even though a manifestation of intention is intended to
be understood as an offer, it can’t be accept. so as to form
a K unless the terms of the K are reasonably certain R 2nd
33 [Varney v. Ditmars, employer offered to give
employee a “fair share of profits” the court found that
the terms were so indefinite it was pure conjecture]
Indefiniteness:
- R 2nd 33 (2) term of K reasonably certain if they provide
basis for determining the existence of a breach and for
giving approp. remedy (3) missing terms may show lack
of intent to K [MGM v. Scheider, actor in TV series, Held:
missing term of start date of film could be determined
by customs of industry]
Price Gaps:
-@ UCC 2-305 K can be concluded even if price is
unsettled, price is reasonable price at time of delivery but
MUST include quantity  OPEN PRICE TERM
-@ CL: R 2nd 204 when parties to a bargain defined to be
a K have not agreed to a term which is essential to their
rights and duties, a term which is reasonable under the
circumstances is supplied by court [Oglebay v. Armco,
after finding intent to K regardless of the failure of the
pricing system held that the terms were to be filled and
the K enforced]
Interpretation (prior dealings/ industry customs):
UCC 2-202: terms of K can’t be contradicted by outside
evidence but can be supplemented and explained 
LOOK TO PAROL EVIDENCE RULE
2nd
R
206: In choosing among meanings, the meaning is
chosen which operates against the drafter of the
document
A. Contract Terms: Modification

CL R 2nd 89: modif. of K not fully performed is
binding if modif. fair and equitable, and
circumstances not anticipated at time of K
 UCC 2-209: an agreement modifying K doesn’t
need consid. to be binding
[Angel v. Murray, garbage delivery case, court allowed
modification b/c it met reqs. in R 2nd 89]
C. Discharge of Duty:
Performance:
@ CL Substantial perform. is enough; factors to decide if
@ CL Last Shot Rule: if perform. happens after exchange of
substantial perform. is ok (1) how much of K benefit did
innocent party receive, (2) to what extent will damages make up
for imperf. perform., (3) extent to which breach was wrongful or
in bad faith
@ UCC “Perfect Tender Rule” UCC 2-601 is required.
UNLESS (a) goods do not conform but time of perform. not
expired UCC 2-508, OR (b) if it is an installment K
messages, parties believed K existed, whoever sent last form
prevails
Impracticability, and Frustration of Purpose
Changed Circumstances: Impossibility,

@ UCC Knockout Rule: UCC 2-207
If Additional  one party is not merchant then
terms are a proposal
If Additional  both merchants then terms become
part of K unless: materially alter, offer expressly
limits to terms, or offeror rejects w/in reason. time
If Diff.  one party is not merchant terms adopted
If Diff.  both merchants then “Knockout Rule”
Parol Evidence Rule: Evidence not allowed where the K is
fully integ. If not, then evidence of the agreement outside of
writing can be allowed in ONLY to supplement not to
contradict. UCC 2-202
UCC 2-615: unless a greater obligation is assumed,
no breach if by the occurrence of a contingency the
non-occurrence of which was a basic assumption on
which K was made
 @ CL FOP – R 2nd 265: (1) a purpose without which
the K makes little sense, (2) substantial (more than
profit loss), (3) non-occurrence of frustrating event is
a basic assumption on which K was made
 @ CL Impracticability – R 2nd 266: (1) performance
is impracticable or (2) frustrated without fault of
party by event that non-occurrence of which is basic
assumption on which K was made
Accord & Satisfaction: (1) good faith dispute over amount,
(2) in writing, signed by parties, (3) states that it is an “Accord &
Satisfaction”
D. Excuse of Condition:
B. Third Parties:
Anticipatory Repudiation: UCC 2-610 (1) info about
Assignment of Rights
@ UCC 2-210: Must not increase the burden on the other party
or allow them to receive less than he would have for his bargain
@ CL R 2nd 317 (2): a K right may be assigned unless it (a)
materially changes burden on other party, (b) statute forbids, (c)
assignment is validly precluded BUT under R 2nd 322 K
prohibition limits rights NOT power
Delegation of Duties
@ CL R 2nd 318: An obligor can properly delegate his duty
unless the oblige has a substantial interest in having that person
perform the K
potential breach must be from reliable source, (2) duty to
inquire, (3) duty to cover  Duty to mitigate triggered
Can file suit OR wait for non-performance
Retraction of Repudiation: when no reliance
Actual Material Breach
Duty is discharged but material breach to core of K; party can
treat as (a) partial breach or (b) total breach. Can terminate
performance and collect for entire K.
Immaterial Breach
Remedy for promise broken is merely damages but must
continue to perform; breaching party can get restitution.
Condition Precedent: Never Occurred  No Duty
Novation
An agreement between two parties in a K for a third party
to step into replace one of the parties. All must sign.
2
Waiver/ Estoppel: if party waives other party’s conditional duty,
original party may retract waiver UNLESS other party relied on
the waiver of the duty
STEP 3: REMEDIES
Damages for Breach
1.
2.
3.
Expectation: R 2nd 344 (a). Having the benefit
of the bargain, being put in as good as a
position as if the contract had been performed.
Reliance: R 2nd 344 (b). Reimbursed for loss
caused by reliance, put in as good a position as
he would have been had the contract not been
made
Restitution: R 2nd 344 (c). Having restored to
one any benefit one conferred on the other
party. The goal of this remedy is to undo the
unjust enrichment of the breaching party
 Disgorgement: repayment for ill-gotten
gains imposed on wrongdoers by court
 USE Restitution for K that terminates due
to FOP and for Rescission
@ UCC Buyer’s Remedies: UCC 2-711
When seller’s time for perform. arises seller may:
(1)
(2)
(3)
do nothing – breach by seller
make nonconforming tender – breach by seller
make conforming tender – perform. by seller
Seller’s Failure to Tender – Buyer can get…
 Damages: recover market price minus K price
 Cover: purchase similar goods elsewhere and recover
replacement price minus K price. See UCC 2-712.
 Specific Perform. See UCC 2-716.
 Replevin: buyer can get identified undelivered goods from
seller if similar goods available in marketplace. See UCC 2-716.
ONLY IF (a) seller becomes insolvent w/in 10 days
of receiving payment from buyer OR; (b) goods were
partially paid for by buyer only for family or personal
purposes
Limitations to Damages
-
-
Rescission, Reformation and Release
Mitigation: duty to not make position worse;
See R 2nd 350
Foreseeability: can recover (1) all damages
reasonably foreseeable at time of K; (2) special
conditions communicated to all parties; See R
2nd 351
 Hadley Rule: Loss of profits not
recoverable where violating party did not have
ability to foresee the loss at the time the K was
made; See UCC 2-715(2)(a) OR See R 2nd 351
(1)
Certainty: must be able to prove damages with
reasonable certainty; See R 2nd 352
Specific Performance (See UCC 2-716, R 2nd 357)
is appropriate when the contract refers to something that
is unique and other damages or remedied would not
succeed in restoring the non-breaching party
 Elements for Specific Perform.: (1) difficulty of proving
damages w/ reasonable certainty, (2) difficulty of procuring a
suitable substitute perform. by means of money awarded as
damages, and (3) likelihood that damages will be collected
*** Usually NOT awarded for service K b/c forcing
someone to perform a service may be against labor laws,
constitutional rights etc. ***
Injunctive Relief: getting a court order saying that
something must occur or restrain the occurrence of
something.
@ UCC Seller’s Remedies: UCC 2-703
a.
b.
c.
d.
Right to price upon accept.
Right to reclaim goods
Wrongful rejection: if buyer wrongfully rejects
seller has alternative remedies (1) collect damages (2)
resell goods (3) recover the price (4) incidental
damages IN ADDITION to other three
Loss volume seller: seller can recover for lost
profits if seller has a large capacity to sell goods and
seller would have made sale if buyer hadn’t breached
(K price minus seller’s costs); See UCC 2-708(2)
3
Rescission: the undoing of K and restoring the parties to
their pre-K positions. See UCC 2-209.
Reformation: seeks to restore the efficacy of a writing
that improperly reflects the agreement. See R 2nd 155.
*** Rescission & reformation are usually a result of a
mutual mistake regarding a material fact of the K***
Release: writing that manifests intent to discharge other
person of duty.
@ CL: release must generally be supported by
consideration to discharge duty
@ UCC: a claim of right can be discharged in whole or
part w/o consideration by waiver or renunciation that is
signed and delivered by aggrieved party. See UCC 1-306.