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Valid Contract: Issue-Spotting Flowchart (STEP THREE; What remedies…

- - - - If not, then no Contract.
        -The CL Mirror Image Rule requires that ... any acceptance of an offer match identically the terms of that offer. A party cannot accept to different terms then the ones presented.
        UCC §2-207 allows for parties to form Ks even if the terms do not match identically.
        K will be found either under 2-207(1) & (2) or under 2-207(1) & (3).
        
        Under (1) & (2), the parties have a definite and seasonable expression of agreement or written confirmation.
        
        If no differ/additional terms, valid K.
        
        If differ/additional terms, are both parties merchants?
        
        If yes, add. terms part of K unless;
        
        express limit,
        
        terms materially alter, or
        
        timely objection.
        
        Also, if yes, differ. terms cancel each other out.
        
        If not, additional terms are proposals for addition.
      - If yes to Acceptance, ... then ask: Was there valid Consideration?
        Benefit or Detriment
        Bargained-for-Exchange
        Adequacy Irrelevant--
        
        Peppercorn Theory: The law will not decide what is adequate consideration.
        
        No Past Consid.
        
        Consideration for a past transaction may not be used again for a new transaction, must be bargained for.
        
        Pre-Existing Duty Rule
        
        A party that already is under a duty to act cannot unilaterally modify K with prior consideration. New consideration is required.
        
        Illusory Promises
        
        Where a party has not given anything of value in a bargained-for-exchange, no K.
        
        Also, ...
        Promissory Estoppel
        
        A remedy may be granted in equity in the absence of a remedy at law if there is ...
        (1) a promise made that the promisor should expect to be relied on, (2) the promisee in fact relies,
        and (3) injustice result.
        
        Consideration Substitute
        
        If not, then no valid consideration.
        
        If yes to Consideration, ... then ask: Are there any Defenses to Formation?
        STATUTE OF FRAUDS: The following require a written K.
        
        K in consideration of Marriage.
        
        K over 1 year.
        
        K for Land.
        
        K for Executory Promises
        
        K for goods ($500 or more)
        
        K for Suretyship
        
        MISTAKE (mutual or unilateral)
        
        See Remedies; Mutual Mistake & Unilateral Mistake
        
        AMBIGUITY
        
        Where the parties had differ. understandings of K words, and neither party knew or had reason to know of the ambiguity, a K was not formed.
        
        ILLEGALITY
        
        K to engage in illegal act void but K in furtherance may still be enforceable (i.e., Taxi driver that didn't know client was going to rob store must till be compensated).
        
        INCAPACITY
        
        An offer is terminated if either the offeror or offeree dies or becomes incapacitated.
        
        UNCONSCIONABLE
        
        Under Modern Unilateral Mistake Rule, a unilateral mistake is grounds for rescission if enforcement would be unconscionable,
        
        Unconscionability may be procedural or substantive.
        
        FRAUD, DURESS
        
        A K induced by physical duress—threat of bodily harm—is void; a K induced by improper threats—another type of duress—is voidable. Voidable also are contracts induced by undue influence, where a weak will is overborne by a stronger one.
        
        If yes, then what is the result? Move to (STEP THREE) question of Remedies.
        
        If not, ... then valid Formation of Contract ... Move to (STEP TWO) question of Performance.
        
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- - - - Modifications require new consideration on both sides under traditional CL. If one party fails to provide adequate consideration, no K.
        
        An agreement modifying a K under UCC §2-209 needs no consideration to be binding. The modification must however be made in good faith (No-holdout rule).
        
        "Good Faith" means honesty in fact in the conduct or transaction concerned. GF in the case of merchant means honesty in fact and observance of reasonable commercial standards.
      - The parol evidence rule is a substantive common law rule in contract cases that prevents a party to a written contract from presenting extrinsic evidence that discloses an ambiguity and clarifies it or adds to the written terms of the contract that appears to be whole.
      - UCC §1-303
        
        A "course of dealing" is a sequence of conduct concerning previous transactions between the parties to a particular transaction that is fairly to be regarded as establishing a common basis of understanding for interpreting their expressions and other conduct.
        
        "course of performance" is a sequence of conduct between the parties to a particular transaction that exists if: (1) the agreement of the parties with respect to the transaction involves repeated occasions for performance by a party; and (2) the other party, with knowledge of the nature of the performance and opportunity for objection to it, accepts the performance or acquiesces in it without objection.
        
        A "usage of trade" is any practice or method of dealing having such regularity of observance in a place, vocation, or trade as to justify an expectation that it will be observed with respect to the transaction in question. The existence and scope of such a usage must be proved as facts. If it is established that such a usage is embodied in a trade code or similar record, the interpretation of the record is a question of law.
- - - - Misrepresentation requires proof of the following elements:
        
        A false statement of fact, Intention, or opinion;
        
        Addressing a fact, intention or opinion material to the contract;
        
        Made with the requisite state of mind (intentional, negligent or innocent);
        
        Actually and justifiably relied on by the other party; and
        
        Caused damage to the other party.
        
        Misrepresentation may be Intentional, Negligent or Innocent.
        
        A misrepresentation is material if ...
        (1) it would be likely to induce a reasonable person to manifest his assent or
        (2) if the maker knows that it would be likely to induce the recipient to do so.
      - Mutual mistake renders a K voidable, but not if a party assumed the risk of the mistake.
        -A party bear the risk of mistake when (1) risk is allocated by agreement, (2) party had limited knowledge, or (3) the risk is allocated by this court on the ground that it is reasonable in the circumstances to do so.
        -- The K may also be reformed by mutual mistake (or unilateral).
      - Unilateral mistake under the traditional rule is not grounds for rescission unless ...
        (1) the non-mistaken party knew or should have known of the mistake,
        (2) the non-mistaken party caused the mistake, or
        (3) the non-mistaken party had a duty to disclose or failed to disclose the mistake.
        But, under the modern rule, unilateral mistake is grounds for rescission if ...
        (1) the party seeking rescission is not at fault,
        (2) the mistake is vital or essential,
        (3) enforcement would be unconscionable,
        (4) prompt notice is given of the election to rescind,
        (5) the mistake is one of calculation, not judgement, and
        (6) the status quo ante maybe be restored.