common
The first issue to consider is whether the court will apply the UCC or the
in part for the
law in this case. The court could apply the UCC because the contract was
Contracts for the
purchase of flooring material, which, as defined by the UCC, is a good.
the
sale of goods are governed be the UCC. The court could alternatively apply
. This
common law because the contract was in part for installation of the flooring
the court will
likely,
Most
law.
n
installation is a service, which is governed by the commo
contract to
look to whether the materials or the installation is the larger part of the
all bases in this
cover
to
determine which standards to use. Both analyses will be given
UCC, and the
case. The UCC standards will be evaluated from the provisions of the
d) of the Law of
(Secon
common law standards will be evaluated from the Restatement
legal principles.
Contracts since this is the authority frequently cited by courts to clarify
since the
stance
circum
in
The next issue to consider is whether the change
doctrine used to
agreement was made will justify Waller Brothers nonperformance. One
Restatement,
excuse nonperformance is mistake. Mistake, in both the UCC and the
of the formation
only applies when the information relied upon was incorrect at the time
excuse of
of the contract, so in our case, a later change in price will not allow an
r doctrine
nonperformance by Waller Brothers under the doctrine of mistake. Anothe
§ 2-302 and the
used to excuse nonperformance is unconscionability. In both the UCC
ct or term was
contra
Restatement § 208, unconscionability is only an excuse when the
ct becoming
unconscionable at the time the contract was made, so in our case, a contra
Brothers.
Waller
of
unconscionable at a later time will not excuse the nonperformance
is
The final doctrine used to excuse nonperformance is impracticability. This
is
clause
This
.
clause
e
included in our written contract in the form of a Force Majeur
the control of the
intended to remove liability for nonperformance when an event beyond
ticability
parties makes performance impracticable. The UCC § 2-615 governs imprac
cost alone is
and Force Majeure clauses. Official comment 4 says that an increase in
events and
only a justification for excuse of performance if it is caused by unforeseen
comment b
alters the nature of the performance. Similarly the Resta temen t§ 261 official
a contract under
explains that market shifts or financial inability do not generally excuse
cted for will
the common law. In either case, a 30% increase in price of the goods contra
. Market
most likely not convince a court that performance was made impracticable
later. For
goods
fluctuations are a risk assumed by the seller when they contract to sell
doctrine to
these reasons, Waller Brothers will most likely be unable to rely upon any
excuse their nonperformance.
rs a
The next issue to consider is whether we can agree to pay Waller Brothe
that the
is
make
could
we
higher price now but refuse to pay it later. The first contention
a contract can
modification fails for lack of consideration. UCC § 2-209(1) explains that
eration, so if the
be modified, if agreed to by both parties, after formation without consid
ctual
UCC is used, we cannot claim lack of consideration to escape our contra
ct is binding
contra
a
ing
modify
e
obligations. The Restatement § 89 states that a promis
the
by
if it is fair and equitable, and if it is based on circumstances not anticipated
cannot claim
parties when the contract was made. If the common law is used, we also
e to modify the
lack of consideration because changed circumstances led to this promis
of
contract as required in the Restatement. Either way, we cannot claim lack
consideration to invalidate the modification.
rs.
The next contention we could make is bad faith on the part of Waller Brothe
honesty in fact
Both the UCC § 2-103 and the Restatement § 205 define good faith as
the contract
and observing standards of fair dealing. Because the price changed after
they acted in
was made and Waller Brothers at all times gave us accurate information,
sed price of
good faith, and we cannot later claim bad faith to escape paying the increa
undue influence
the modified contract. The final contention we could make is duress or
s of undue
by Waller Brothers. In both the Restatement and the UCC, the two aspect
a relationship
of
se
becau
influence and duress are 1) one party has a dominant position
se the
and 2) that party uses that position of dominance to unfairly bargain. Becau
that can
nce
relationship in this case is not one recognized as a relationship of confide
pay the amount
lead to undue influence or duress, we cannot use this contention to only
e later
escap
to
in the original contract. Because these contentions will not allow us
s unless we
payment, we should not agree to the higher rate for the goods and service
are willing to pay it later.
sed
The final issue to consider is whether we can agree orally to pay the increa
ng
requiri
ct
contra
l
price, but later refuse to pay based on the language in the origina
l relevant
modifications to be in writing and signed. Under the UCC there are severa
the statute
under
falls
ation
modific
sections. UCC § 2-209(3) says that if a contract after
since
that
of frauds then the requirements of that statute must be satisfied. This means
requirements
our contract is for the sale of goods, presumably for more than $500, the
ment of writing
of UCC § 2-201 must be satisfied. UCC § 2-201 (3)(b) says that a require
ce of a contract
from the statute of frauds can be waived by an admission of the existen
ation of the
by the party invoking the defense. Since we would be agreeing to the modific
the
contract, we would have to admit this, so a lack of writing would not excuse
enforcement of the modification.
UCC § 2-209(2) says that when a contract contains a clause preventing
the
modification without a signed writing, that signed writing is required to modify
ed in this
contract. This means that since our contract contains the clause describ
UCC § 1-203
er,
Howev
.
subsection, our modification would be required to be in writing
increased price
implies an obligation of good faith in all contracts. If we agree now to the
in good
acting
not
are
we
,
with the intention of not paying it later because of this clause
we cannot use
faith and have committed fraud. For these reasons, if the UCC applies,
get out of
the language of our contract regarding modification of the agreement to
paying the higher price.
used
If the common law applies, the common law statute of frauds will not be
court
The
.
writing
because this contract does not fit into one of the five types requiring a
s a signed
would however look to the express clause in our contract, which require
implies an
205
writing to modify the agreement. Again, however, the Resta temen t§
price with the
obligation of good faith in all contracts, so agreeing to pay the increased
For these
fraud.
intention of not doing so later is acting in bad faith and committing
contract
reason, if the common law applies, we cannot use the language of our
price.
higher
regarding modification of the agreement to get out of paying the
in the
Based on all the factors discussed above, I would advise Ms. Carmody
te
alterna
an
and
als
following way. Because it will be quite difficult to find the materi
gh they cannot
installer, we would prefer to work out a deal with Waller Brothers. Althou
to pay a
require us to pay more for the work already contracted for, we should agree
done on time. If we agree to
somewhat higher price in the interest of getting the work
when required to because we
pay more for the work, we should pay the higher amount
higher price, we will need to
must act in good faith. If we choose not to agree to pay the
repudiating the contract. If they
contact Walle r Brothers and ask if they are anticipatorily
the flooring to mitigate our
are, we should try to find another supplier and installer of
er for the damages we suffered
damages. We should also commence a lawsuit to recov
because of their breach.