v Is there a contract or a promise?
v Is this a contract for the sale of goods? UCC§2-204
o What is the predominate factor (goods/services)? Look to comparative
costs, intent of the parties
o Are the parties merchants? UCC§2-104
v Is there an offer? Re§24, Lucy
o Was the offer revoked? Re§36,
§ Did the offeree die Re§36d,
§ Rejection/counter-offer Re§36a,
§ Expressly conditional add’l terms UCC§2-207, Itoh, Dorton
§ Lapse of time Re§36b,
§ Revocation Re§36c,
§ Indirectly communicated Re§43, Dickenson
§ Cannot be revoked if option contract Re§37,
o Was it made by an ad? Re§46, Lefkowitz
§ Was it revoked by a subsequent ad? Re§46,
o Firm offer or option contract Re§25, UCC§2-205,
o Part performance Re§45, Ever-Tite
o Signed? UCC§1-201(37),
o Objective intent is what matters Re§24, Lucy
v No Contract.
o Is there a promissory estoppel Re§90, D&G Stout, Feinberg
o Reliance damages Re§139
§ Is there equitable estoppel
o Restitution (quasi-contract, unjust enrichment) Callano
v Is there an acceptance?
o By promise? Re§32, Re§56
o By performance? (unilateral K) Re§32, Re§54, Int’l Filter, Evertite,
o Has performance begun? Re§62,
o Has there been part performance? Re§69, Allied Steel,
o Could silence operate as acceptance Re§69, Corinthian
o When is the acceptance effective? Re§63,
o By mail? §63 (when racing revocations/rejections §40)
o Was the offeror notified of acceptance? Re§56
o Was rejection received before acceptance? Re§40
o Was it definite and seasonable? UCC§2-207(1)
o Acceptance with different/additional terms?
§ Counteroffer under common law (mirror image rule) Dresser
• Last shot rule Dresser (temp agency)
§ Sale of goods? UCC§2-207(1) Brown Machine, Dorton
• Expressly conditional acceptance? UCC§2-207(1)
Dorton (failed) Itoh (used lang from Re)
• Expressly limit acceptance? materially alter? or have they been
rejected? UCC§2-207(2), Brown Machine, Dorton
• Is there conduct to suggest a contract? UCC§2-207(3), Itoh
• Different terms/additional not accepted? Northrop
o Duress? Alaska Packers, (If not then modification Re§89)
o Was buyer notified that nonconforming goods were accommodation,
not acceptance? UCC§2-206 Corinthian
v Even if you don’t read the contract you are still bound to it. ProCD
v Is there a statute of frauds concern? UCC§2-201, Lucy
o A writing with signatures?
o Longer than1 year?
§ Is it theoretically possible to complete less than 1yr? Klewin
§ What was the intent of the parties? Death? Termination?
§ Was there full performance by one side?
o Transfer of land? Richards
o Sale of goods >$500? UCC§2-201
o quantity is only material term, recovery limited at stated amountUCC§2-201(1)
o was there an objection UCC§2-201(2),
o were goods accepted or payment accepted UCC§2-201(3)(c),
o Guarantee for payment? Bishop
v Is there consideration?
o Bargained for? or was it a gift? Re§71, Hamer, Schnell, Toras-Moshe
o Is there mutuality of obligation? Re§79, Hamer, ,Wood, Schnell
o Is the promise illusory? Re§77, Mattei, Eastern Airlines, Wood, Fiege
o Is there consideration for each alternative performance? Re§77,
o Is this a settlement? Re§74, Fiege, Target
o No consideration?is there reliance Re§90 Feinberg, Ricketts, Cohen, D&G
v What are the terms of the contract?
o Is it a requirements contract (output)? EAL, Laredo, Laclede
o Is it impracticable by failure of presupposed conditon UCC§2-615, EAL
o Is there an express condition Re§224, Peacock
v Later evidence of missing/additnl/inconsistent terms - Parol Evid. UCC§2-202
o Is contract the final written expression of one or more terms?
o Has it been adopted as a complete exclusive statement of the terms
(Integrated)? Re§209
o Four Corners Rule- Gianni, (TX, NY)
§ Industry/trade custom Hurst
o Judge decides whether to admit parol ev. Masterson, (CA)
o Is there a merger clause?
o Is there ambiguous language? Use evidence to point to one meaningKingston, PG&E
o No price term? UCC§2-305
o Is there evidence to contradict the contract?
o Is there a merger clause? Re§209,
o Evidence from before the contract (parole)? UCC§2-202
§ Dealing, Performance, Trade, See UCC§1-303
o Evidence after the contract?
o Modifications? Re§89, Watkins
§ Duress Alaska Packers, Parcelli
§ Economic duress Lorel,
v Was there a separate contract?
v Was there a breach?
o Was it material? Re§241, Re§242, Walker (not material)
o Was there substantial performance? Re§237 OW Grun (no), Plante (yes)
o Does it violate the constructive condition of exchange? Laredo
v Was there perfect tender? UCC§2-508
o If not, were assurances made? UCC§2-609
v Was there a warranty?
o Was it waived? UCC§2-209,
o Express? (affirmation, promise, descrip, sample) UCC§2-213, Bayliner
o Was it implied? UCC§2-314,
§ Merchantability? UCC§2-314
§ Specific purpose? UCC§2-315
15%
25%
90m
13.5
22.5
60m
9
15
90m
20% 18
30% 27
60m
12
18
Re§24 – Definition of an offer
Re§25 – Options contracts
Re§30 – Form of acceptance invited
Re§32 – Offer invites acceptance by promise or performance
Re§36 – Methods to terminate offer
Re§37 – Termination option contract (generally can’t)
Re§40 – Mailbox rule races revocations
Re § 42 – Revocation: Offer terminated when offeree receives from the offeror a manifestation of an intention not
to enter into the contract
Re§43 – Indirect revocation
Re§45 – Option contract created by part performance or tender
Re§46 – Revocation of an advertisement (general offer)
Re§54 – Promise for Performance (no notification unless expressly req.)
Re§56 – Acceptance by Promise (must notify offeror of acceptance) Prom. for Promise
Re§62 – Partial Performance = acceptance by performance
Re§63 – Accepted when sent, except Option K is when received
Re§69 – Silence is not acceptance unless (3 things)
Re§71 – Exchanges
Re§73 – Performance of a legal duty is not consideration
Re§74 – Settlement Claims (Giving up rights you don’t have)
Re§77 – Illusory and alternative promises
Re§79 – Mutuality of Obligation
Re§87 – Option Contract
Re§89 – Modification
Re§90 – Promissory estoppel
Re§139 – Remedies for promissory estoppel
Re§209 – Integrated agreements
Re§210 – Completely and partially integrated
Re§214 – You can look at evidence prior to contract WHEN… (Masterson)
Re§215 – No Contradiction of Integrated Terms (don’t look at evidence)
Re§216 – Consistent Add’l Terms: look at prior evidence when not integrated
Re§224 – Express condition
Re§225 – Effects of non-occurrence of a condition
Re§237 – Failure to Perform as promised (was there substan. perf?)
Re§241 – Material breach definition
Re§242 – Duties Discharged by Material Breach
Re§251 – May demand Assurance if it appears there will be a breach
Re§347 – Expectation Damages
Re§350 – Avoidability as a Limitation on Damages
Re§351 – Unforeseeability & Special Circumstances as Limits on Dam.
Re§352 – Damages must be reasonably certain
Re§353 – Emotional losses (usually excluded)
Re§356 – Liquidated Damages (must be reasonable)
UCC§1-303 – Def. Course of Performance, Dealing, Usage of Trade
UCC§2-104 – Def. of Merchant
UCC§2-201 – Statute of Frauds
UCC§2-202 – Parol/Extrinsic Evidence
UCC§2-204 – Contract Formation (terms may be undefined)
UCC§2-205 – Firm offers (option contracts) (<3 mos.) (no consid. req.)
UCC§2-206 – Offer/Acceptance in Formation of Contract (Non-conforming goods not
acceptance if buyer notified that it’s an accommodation)
UCC§2-207 – (2) Additional terms, (3) Conduct
UCC§2-209 – Modification, rescission (cancellation), and waiver
UCC§2-305 – Open Price Term
UCC§2-308 – No Specified Place of Delivery
UCC§2-310 – Time/Place Payment is Due (if undefined)
UCC§2-313 – Expressed warranties (affirmation, promise, description or sample) no
opinions, need not be explicit
UCC§2-314 – Implied warranties (merchantability, usage of trade)
UCC§2-315 – Implied Warranty for Particular Purpose
UCC§2-316 – Exclusion or Modification of Implied Warranty must be conspicuous
UCC§2-508 – Perfect Tender (may cure non-conf. goods)
UCC§2-601 – Improper Delivery – buyer may reject, accept whole or part
UCC§2-609 – Rights to Adequate Assurance of Performance
UCC§2-610 – Anticipatory Repudiation – if buyer thinks seller will breach they can wait, or resort to
remedy for breach in advance, or not perform
Hawkins – hairy hands, 100% good hand
Crow v. Bayliner – brochure not express warranty because it was for diff prop. 2-213
Consideration (bargain)
Hamer – uncle will pay if you stop drinking… §79
Toras-Moshe – ledger entry about the library, no bargain, no reliance, unenforceable
gift promise §71
Schnell – “for a penny” sham consideration, moral obligation not consideration §79
Feinberg – woman was promised $ until death. no consideration, but she wins b/c
she relied on it.§90
Kirksey – give up your land and raise your children’s here (conditional gift) §71
Consideration (promises)
Mattei – “satisfactory leases,” read in good faith for consideration, satisfaction clauses.
Illusory promise? §77
Eastern Airlines (EAL) – requirements K, no mutuality of obligation
Wood v Lady Duff Gordon – exclusive agency as an assumption of its duties based
on reasonable efforts (Wood is exclusive brand mgr. to endorse fashions for Lady)
Fiege – potential baby daddy supports child unaware that he’s not the father so mother
won’t sue for bastardy §74
Target/Indian case – settlements, forbears her right to sue §74
Reliance, Promissory Estoppel & Unjust Enrichment
Ricketts – grandfather pays $2k so she won’t have to work if she doesn’t want to.
Reliance, but no consideration.§90
Feinberg – see under consideration
Cohen – Gave newspaper a tip if they promised not to reveal his ID but they did.
Reliance and enforcement to prevent injustice. §90
D&G Stout – distributor relies on promise from supplier and misses another biz opp
when they pull their supply. He wins for P.E. §90
Callano – landscapers sue for restitution from home mfr after no one paid for hedges
§2-201(3)(c)
Offer
Lucy – sale of land on the back of check, subjective intent is not okay, obj intent matters
Owen – no contract with an offer. Owen wanted to buy store, Tunison never offered.
Fairmont Glass – request for lowest price should be deemed as an offer to buy
Lefkowitz – sale of stoles $1, first come first served. ads are not offers.
Acceptance
Int’l Filter – offer was accepted b/c of IF's "OK" after CG's acceptance of
the proposal (offer). IF's letter asking for water samples would have served as notice if it
were required. §54
Carbolic Smoke Ball – notice of acceptance §54
Ever-Tite – Roofing, performance begin when loading truck, §54, §32, §62
Allied Steel – Machinery installed at Ford, wanted indemnity clause for both allied
and ford employee negligence. Acceptance of an offer by part performance in
accordance with the terms of the offer is sufficient to complete the contract. §62
Corinthian Pharmaceutical – Pharma contract for 1000 vials. 50 vial delivery is
accommodation, not an acceptance. §2-206
Bishop – surety of a debt to a guy in Nova Scotia, notice of acceptance §56
Options/firm offers
Dickinson v. Dodds – Option Contract. train station chase, revocation of offers. first
to speak wins. no power to seal the deal = no offer.§43
Ragosta – Prep for performance does not = performance. Financing loan and going
to meet seller at bank does not constitute performance as acceptance. Perf not
tendered.§42, 45
Mirror Image/2-207
Brown Machine – buyer’s purchase order was the offer, seller’s acknowledgement
was acceptance and was “expressly made conditional on their assent §2-207
Dorton – carpet mart owner, “subject to” language is not sufficient to trigger the unless
clause of 2-207. Last unobjected to terms rule. Must say “expressly conditional on assent
to add’l terms.”
Itoh – Expressly conditional clause was never assented to = no K. but K was formed
per conduct 2-207(3) but w/o add’l arbitration clause b/c it was not assented to.
Step-Saver – Contract was reached, delivery included warranty disclaimer which
materially altered §2-207(2). Opening box assents to terms, if you don’t agree return
unopened --must explicitly say “expressly conditional on the assent to the additional or
different terms” did not trigger unless clause §2-207(1)
ProCD – buyer accepts goods when after inspecting, he fails to reject them §2-204,§2206 – one form no 2-207. Outside of the box gave notice of the terms, and the buyer
had the right to return,
Klocek – Purchased from Gateway, didn’t trigger unless clause for additional terms
must be clearly expressed, arbitration clause §2-207(1) buyer is not a merchant and did
not assent to the terms
Dresser – uses temp agency but routinely refuses to sign contract with non-solicitation
clause, pays anyway. Mirror image rule
Liability before offer and acceptance (promissory estoppel)
Drennan – gen. contractor relied on lowest bid so revocation was unjust. §90
Baird – Offer was withdrawn before it was accepted. No promise. §90
Statute of Frauds
CR Klewin – oral contract was between contractor and developer for UConn
housing, SOF – is it literally possible to complete multi-year project in one year?
Richard – The exception to real estate SOF is part performance. 2/3 items must be
fulfilled: possession, improvements, or payments. (Ledger case)
Duress, Modification, & Pre-existing duty
Alaska Packers – Duress, lack of consideration for the contract modification §89
Watkins – Excavator hit rock and modified to 9x price for “same job.” Rescission &
Reformation but modification is fine now per §89
Parole Evidence Rule
Gianni – Four corners rule. Based on the K, it appears completely integrated. Omit
parol evidence. (More conservative than Masterson) §2-202 or §231
Masterson – Look at evidence to decide whether K is integrated. Evidence may show
that it’s not integrated and you will bring this in to explain ambiguity. §214
Interpretation
PG&E – agree to perform work under the indemnity, damages to the rotor occurred:
parole evidence should be included to interpret ambiguous language
WWW – when parties set down agreement in clear complete doc, writing should be
enforced according to its terms. (Four Corners)
Hurst – horsemeat, error-allowance: course of performance industry custom even with
four corners
Raffles – cotton arriving on a ship refused to accept because multiple “Peerless” ships,
- latent ambiguity allows parole evidence
Colfax Envelope – ambiguous language, they took a gamble rather than clarifying
the term and are thus responsible for the result
Filling gaps
Lewis – Seller suggested wrong oil knowing what it was used for knew buyer would
rely. Violated implied warranty of fitness. For a specific purpose Doesn’t have to be btw
merchants. §2-315
S.C. Electric –Warranty Disclaimer must be conspicuous §2-316(2) and (3)
Bloor – Falstaff did not make good faith effort to market beer. Fair trading standard.
Northrop v. Litronic – 90warr v. indefinite warr. Knock out rule, diff terms replaced
by UCC gap-filler. §2-207
Specific Relief
Laclede – Specific performance awarded for propane supply b/c other sources
unlikely
Walgreen – Specific perf. awarded b/c too difficult to estimate damages on 10 yr lease
Klein – Specific perf. denied as damages suffice. Plane not unique & he would sell it.
Damages
USNI –expectation damages when paperback was released early to hardcover’s loss
Sullivan – botched nose job got reliance damages. Can’t get overlapping reliance &
expectation damages
Larado Hides – covered for breached hide supplier contract §2-712, §2-713
Diasonics – Lost Volume Seller must prove could mfr 2d machine for same $ §2708(2)
Algernon Blair – Quantum meruit (think lotto tix). Can recover restitution even if
they would have lost more money than they were owed on the contract.
Jacob & Young – Reading pipe. Expectation damage = 0. Diff in value v. cost to
repair.
Mitigation
Luten Bridge – bridge built in the woods even after they should have stopped.
Avoidability to limit damages.§350
Parker – Shirley McLean’s western role was inferior i.e. would not mitigate her loss
Foreseeability
Hadley – mill shaft broke. Courier had no reason to know business could not proceed
w/o it = unforeseeability. §351
Liquidated damages
Wasserman – clause estimating damages based on gross receipts were found to be
unreasonable in light of the loss. §356
Gustafson – $210/day damages for 67 day delay to pave road were not found to be
unreasonable. §356
Express conditions
Luttinger – If condition is not met, no duty to perform. Could not get financing so
seller had to give back their deposit.
Peacock – Express Condition. Gen. contractor will pay subs when owner pays. Must
supply express condition so court can’t get around.
Implied conditions
Kingston – Constructive Condition of Exchange. Apprentice must complete condition
to get silk mercer’s shop
Material breach/Substantial performance
Plante – Substantial Performance. Blder refused to finish b/c owner wouldn’t pay due
to misplaced wall.§241
O.W. Grun – Roofer put in streaky roof. Not substantial performance b/c did not meet
owner’s wishes and must be entirely replaced.§242
Walker – tomato on the sign, not a material breach§241
Sale of goods – perfect tender and assurances
Scott – seller can demand assurances if thinks buyer might breach. can’t suspend
performance unless doesn’t receive assurance. §2-609
Buyer’s Remedies
§2-712 Cover
§2-713 Market (buyer learns breach)
§2-716 Specific Performance
§2-714 buyer keeps non-conform. goods
§2-715 Incidental Damages
Seller’s Remedies
§2-706 Resale
§2-708(1) Market (TPT)
§2-709 Action on the Price
§2-708(2) Lost Volume Seller
§2-710 Incidental Damages
§2-704 Salvage unfinished goods
§2-718 Liquidated Damages
Cover price – K price + Inc. Damages – Expenses Saved = Damages
Common Law Damages Re§347 (expectation)
Re§139 Promissory estoppel damages
Re§349 Reliance damages – as good a position as if K had not been made.
Re§347 Expectation damages – as good a position as if K was executed.
Re§353 Emotional losses
Re§356 Liquidated damages
Restitution – as good a position as the benefit the defendant got. (Lotto tix)
Sunk costs + Expected Profits – Mitigation = Damages
Limitations on Damages
Re§350 Avoidability – recover unavoidable damages. Must mitigate.
Re§351 Unforeseeability – consequential damages
Re§352 Reasonable Certainty – to protect breaching party
Re§353 Emotion Damages usually excluded
Re§356 Liquidated damages must be reasonable, stated in advance
Stepsaver gives 2-207(2) example of material alteration to K btw merchants. No unless
clause and opening box not enough to accept. Klocek shows that merchant to
nonmerchant does not make a K unless nonmerchant expressly assents to terms.
Silence is not assent and 5 days is not long enough to show assent. ProCD was not a
battle of the forms. Buyer notified of add'l terms inside box and have the power to reject
by returning the software. 2-204: conduct recognizing existence of K means there is a
K. 2-606 acceptance when you fail to reject.