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Contracts (Defenses (Mental Incompetency (Incapacity): mentally…

- - - - Misrep
      - Materiality
      - Reas reliance
      - State of mind: Scienter/intent is NOT needed, instead:
        
        Neg misrep: reas care would have revealed misrep
        
        Innocent misrep: good faith assertion that was not true
    - - Reas reliance on nondisclosure
      - Nondisclosure was material to the K
      - duty of disclosure and failure to fulfill (relationship of trust and confidence, where an assertion that had been true has been rendered untrue by intervening events, or obligation of good faith requires disclosure -- usually in real estate Ks)
    - - misrep: assertion inconsistent w/ existing facts (including concealment, but not including a broken promise) (only statements of fact are misreps, unless its an opinion of an expert or professional)
      - state of mind: need BOTH 1) scienter (made assertion knowing it to be false or knowing he had no idea whether it was true or false) AND 2) intent to mislead (made assertion for purpose of misleading or knowing there was a substantial likelihood to be misled)
      - Materiality of misrep: Objective materiality = would induce reas person to enter K. Subjective materiality = reason to know it would induce this person to enter into K
      - Reas Reliance: Unreas if aggrieved party knew otherwise, knew person making statement was unreliable, or no one could believe the statement
    - - Avail for all 3 types: 1) Shield (avoidance): can be used as defense of K breach claim. 2) Sword (rescission + reliance damages): tort action for rescission of K and for damages resulting from reliance on misrep
      - For fraud + non-fraud misrep but not nondisclosure: may live w/ the K and sue for benefit of the bargain (ex. damages for not getting as good gas mileage)
      - For fraud misrep only: punitive damages
  - - - minor obligated to return any goods received that still remain but not liable for damage, wear/tear, depreciation in value, or destruction
      - if a service K or lease and therefore not returnable, minor under no further obligation to compensate other party -- good to go
- - - - CL: Failure of implied conditions: Court can treat in 1 of 2 ways:
        
        Determining Materiality: 1) amt of benefit received, 2) adequacy of compensatory damages, 3) extent of part performance, 4) hardship to breaching party if K is terminated, 5) negligent or wilful behavior 6) likelihood of full performance. Time is not material unless "of the essence" or specifically stated in the agreement (time range not enough).
        
        Failure of Timely Performance: If performance on a specific day is vital or the K contains a "time is of the essence" provision, delay will probably be a material breach. But courts will consider all circumstances in determining how important performance at a specific time is. Delay at onset (rather than after part performance) is more likely to be material, as well as in mercantile settings (more so than in land Ks, where time is rarely of the essence).
        
        Material Breach: occurs if obligee does not receive the substantial benefit of her bargain as a result of failure to perform or defective performance (breach is serious enough). Nonbreaching party: 1) is relieved from her duty of counterperformance, and 2) will have an immediate right to all remedies for breach of the entire K including total damages.
        
        Substantial Performance/Minor Breach: occurs if obligee gains the substantial benefit of her bargain despite the obligor's defective performance (insignificant delays or deficiencies in quantity/quality). Aggrieved party is not relieved of her duty of performance under the K but is entitled to damages.
      - Failure of express conditions like satisfaction clauses or conditions precedent (conditioned upon, unless/until, due upon completion) --> discharges party's obligation to perform, and the breacher cannot recover (even if an act of god destroyed the work). Discharge due to condition failure is a breach defense. Exceptions (performance NOT discharged):
        
        bad faith: can't prevent condition in bad faith
        
        gross forfeiture: avoid grossly disproportionate loss for minor infraction
        
        waiver: party who is discharged by the failed condition can waive and perform anyway
        
        impossibility or illegality. The condition is excused, and the person whose promise was affected will be due their full payment minus costs and profits allocable to whatever is "missing" from the impossibility
      - Failure of condition that cannot be excused
        
        breaching party can argue K is divisible and only part of K has been materially breached. Divisibility test: is it easily apportioned into agreed equivalents? If whole is sum of its parts, then it's divisible. If it's more (i.e., a house), then it isn't divisible.
        
        Quantum meruit: breaching party may recover reas value of benefits conferred which will be reduced by damages caused by breach
    - - A buyer's right to reject goods under the PTR is cut off by acceptance, if buyer: 1) after a reas opp to inspect the goods indicates to seller that they conform or that she will keep them, 2) fails to reject within a reas time after tender or delivery or fails to seasonably (w/in a reas time) notify seller of rejection, or 3) does any act inconsistent with the seller's ownership [2-606].
        
        Notice: If in connection w/ rejection the buyer fails to notify seller that the goods have a defect, she cannot rely on that defect to justify rejection or to show seller's breach if: 1) the seller could have cured the defect had he known or 2) b/w merchants when the seller has after rejection made a request in writing for a full and final written statement of all defects [2-605]
        
        A buyer that has already accepted goods may revoke acceptance (creating a rejection) if the goods have a defect that substantially impairs their value and: 1) she accepted them on the reas belief that the defect would be cured and it has not been, or 2) she accepted them because of the difficulty of discovering defects or b/c of the seller's assurance that the goods conformed to the K. [2-608]. Revocation of acceptance must occur 1) w/in a reas time after buyer discovers or should have discovered the defects, and 2) before any substantial change in the goods occurs that is not caused by a defect present at the time seller relinquished possession.
        
        Legal consequences: If buyer successfully rejects, then may sue for damages unless cured by seller. If buyer accepts: must pay K price, but may seek damages for non-conformity if seller has been seasonably notified.
      - Exceptions to PTR
        
        Installment Ks: right to reject when there is more than one delivery (installments) is much more limited than in a single delivery contract situation. An installment can be rejected only if the nonconformity substantially impairs the value of the installment and cannot be cured (buyer can reject a shipment but may be required to accept substitute goods; deficiency in quantity can be cured by an additional delivery and vice versa for too many goods). Whole K is breached only if the nonconformity substantially impairs the entire K.
        
        Seller's right to cure: Seller may w/in the time originally provided for performance (or after delivery if time wasn't specified in K) "cure" rejected goods by giving reas notice of her intention to do so and making a new tender of conforming goods which the buyer must then accept. If buyer rejects goods that the seller reas believed would be acceptable (express assurances from buyer, trade usage, COD, COP), the seller (upon reas notice to buyer) has a further reas time beyond original K time to make a conforming tender.
    - - CL: If the contract is silent on order, then if one party's performance takes time to complete and the other's doesn't, the performance over time is an implied condition of the other. If the performances can be done more or less simultaneously, the performances are concurrent conditions of each other
        
        if one party breaches an agreement of concurrent conditions, the aggrieved party, to win on a breach action, must show that he did or was prepared to perform his condition.
      - UCC: CL rules apply, but if it's silent on order, most sales Ks involve delivery and payment of goods, so performance is treated as concurrent, meaning each performance is conditioned on the performance of the other
  - - - Pre-existing duty rule: increasing compensation for duties already owed = unenforceable modifications (b/c no consideration)
      - Exceptions
        
        Mutual Modification of an existing K is enforceable if: 1) both parties agree to different performance from originally req'd + 2) difference is not a mere pretense of a newly formed bargain
        
        Modern Law: Unforeseen circs: preexisting duty rule not applicable if increased compensation is given in exchange for same performance that has now become substantially more burdensome than reas anticipated when K formed. Barbri: 1) circs that were unanticipated by the parties when the K was made and 2) modification must be fair and reas.
      - Even if a written K expressly provides that it may be modified only by a writing, the parties can orally modify the K.
    - - UCC: agreement modifying an existing K needs no consideration to be enforceable as long as made in good faith If modification makes goods $500 or more, will need to be in writing. If a modification makes it go from $500 or more to less than $500, the oral modificaiton will be enforceable.
      - If a UCC K explicitly provides that it may not be modified or rescinded except by a signed writing, that provision is given effect. If the K is b/w a merchant and nonmerchant, this provision requires the nonmerchant's separate signature.
  - - - contingency that creates the impossibility arose after making the K and was unknown/unanticipated by parties
      - avail under both CL and UCC
      - Impossibility is objective = performance literally impossible for anyone due to circs outside control (i.e. personal service K and party died or became incapacitated; destruction of subject matter of K) +
        
        a temporary impossibility (like something making performance impossible for a set period of time) only suspends performance, doesn't excuse it
        
        If the seller's supply gets destroyed and the buyer specifically wanted only those products (e.g., the marijuana he grew), impossibility is available. If the buyer was just recommended to contact seller and does not know about his strains, seller must still find marijuna to sell to buyer.
    - - the risk was neither assumed nor allocated by the parties +
      - increased cost/burden of performance would now be far beyond what either party anticipated
      - impracticability was unforeseen, +
      - UCC: These are biz risks, to apply need shortage caused by war/embargo, local crop failure, or unforeseen shutdown of supply (natural disaster)
    - - Unilateral mistake: 1 party's mistake about material fact(s) as they exist at the time of K-ing. Not excused unless: 1) other party knew/had reason to know, or 2) serious clerical error and reliance (unless due to extreme neg or if the other partied relied on the error)
        
        If the aggrieved party is aware of the other party's intentions (trying to breed a barren cow anyway), they assume the risk and cannot void the contract (if cow does give birth)
      - Mutual mistake: of fact/existence, not value. both parties labored under a common faulty assumption concerning the present facts. K voidable by disadvantaged party when all 3 met: 1) mistake relates to material facts + 2) mistake made by both parties + 3) disadvantaged party did not bear risk of mistake. (buyer tells seller he wants to breed the cow even tho they both think its most likely barren, seller can't rescind the K once cow successfully gets pregnant after the sale) Remedy: Rescission
      - Mistake by an intermediary/in the transmission (of an offer or acceptance): the message is operative as transmitted unless the other party knew or should have known of the mistake
  - - - Satisfaction = performance of the accord
      - Need both --> accord + satisfaction = discharge of original duty. Accord alone only suspends performance
      - Accord: obligee promises to accept substituted performance in satisfaction of the obligators' existing duty
      - Consideration is req'd for an accord (substituted performance differs significantly from the original performance or its obligation is doubtful)
      - may be suff. consideration: Where the accord involves an agreement for partial payment there is good-faith or bona fide doubt about the amt owed
      - bilateral executory accord: agreement that existing claim will be discharged in the future by the rendition of a substituted performance (will then be accord + satisfation)
  - - - After demand, can suspend own performance if commercially reas
      - Failure to respond w/ reas assurances (or in a reas time or for UCC, 30 days) = repudiation
    - - cancel K and terminate all rights/obligations under it AND
      - bring action for damages or specific performance OR
      - ignore repudiation and continue
    - - acts in reliance on repudiation
      - accepts repudiation by signaling this to the breaching party OR
      - commences suit for damages/specific performance
- - - - Partial Integration = terms w/in K are intended as final expression of those specific terms (final)
      - Complete integration: K intended to represent a complete and exclusive statement of all the terms (exhaustive)
        
        Court relies on whether a merger clause was included. MC states words to the effect that the writing is the complete and entire agreement of the parties. Court may also look at how detailed the contract is, and for any references to other discussions/writings
    - - To contradict the terms of a K, parol E is admissible unless the K is integrated (final OR exhastive). Course of dealing or performance can qualify the meaning of a term.
      - If purpose of extrinsic E is to explain or interpret the terms of a written K, parol E is admissible regardless of integration. Some jxs first require a showing that the term is ambiguous.
      - To supplement the written K --> Parol E admissible unless K is completely integrated.
        
        UCC distinction: trade usage, course of dealings and course of performance can supplement even a completely integrated K
    - - Evidence proving a written K is invalid or valid is not barred by PER.
        
        Proof of validity allowed: 1) failure of oral condition precedent (must be completed for K obligations to become effective) 2) want of consideration/false recital, 3) mistake or duress, 4) fraud 5) reformation: (must show a] there was an antecedent valid agreement, b] it was incorrectly recorded due to mistake or fraud, c] prove a and b by C&C E)
      - Subsequent agreements entered into after the execution of the written doc -- only applies to communication prior or during execution
      - Collateral agreements: if different/ancillary agreement;--> no effect of PER if entirely distinct
      - oral conditions precedent to the whole agreement (agree to let an expert verify the authenticity of something before deal goes through)
  - - - Missing price term = reas value for services rendered (also DUE when services are rendered)
      - Missing duration term = employment at-will rule: employer can fire/employee can quit at any time, for any reason, w/o notice. Maj rule: assurances of job security made to employee and assurance in manual may negate gap fillers recovery for breach if duration term is present: salary for the remaining term, but fired employee must mitigate by making reasonable efforts to seek comparable employment
    - - open price terms = fix in good faith
      - satisfaction terms = exercised in good faith
      - Good faith = honesty in fact. For "merchants", = honesty in fact + observance of reas commercial standards of fair dealing in the trade
      - 2-306: open quantity terms = party that determines amt of goods sold must do so in good faith. Output k: buyer agrees to purchase all of a seller's output of a good. Requirement K: seller agrees to supply all the buyer's reqs for a good.
        
        the supplier is protected from "disproportionate demands" (compared to estimates in the K or normal or comparable prior supply needs). A good faith demand that is still disproportionate will not take effect and the supplier only needs to supply the usual amt. Wiggle room of less than 10% of previous requirement/supply
    - - Express Warranties = Goods will conform to some standard. Arises whenever seller expressly makes them as part of the basis of the bargain in the following ways:
        
        any description of the goods
        
        any sample or model
        
        any affirmation of promise or fact
        
        need not use words "warrant" or "guarantee" to create but a mere affirmation of the value of the goods (puffing) does not create warranty
      - Missing terms
        
        Time term = reas time
        
        Place = seller's place of biz (i.e. FOB [free on board] seller -- means buyer has risk of loss during transit)
        
        Price term = reas price at time of delivery (FMV)
      - 3 Implied Warranties
        
        Warranty of merchantability: goods fit for ordinary purposes for which those goods would be used. ONLY if seller is a UCC "merchant"
        
        Displaced by 1) specific use of word "merchantability" and conspicuousness if in writing OR 2) any other lang/circs that would be reas understood by a buyer to exclude the warranty (sold "as is" or there are patent defects)
        
        Warranty of fitness for a particular purpose: Goods fit for the particular purpose buyer intends to use them for. ONLY applies when, at time of K-ing, seller has reason to know: 1) particular purpose for which the goods are req'd AND 2) the buyer is relying on seller's expertise to select reas goods. Applies to any kind of seller.
        
        Warranty negated when: 1) disclaimer is written, clear, and conspicuous OR 2) goods have patent defects which were easily detectable
        
        Warranty of Title: Good title to goods + rightful transfer of the goods + no liens attached to the goods
        
        can be excluded or modified by 1) specific lang OR 2) circs which give buyer reason to suspect seller does not claim unencumbered title
  - - - only applies to defeat the enforceability of the boilerplate terms inconsistent w/ the reas expectations of the purchaser
      - usually insurance Ks or Ks of adhesion
    - - party has reason to know of other party's subjective understanding (then that understanding controls)
      - at time of K-ing, both parties share subjective understanding (then that understanding controls)
  - - - Shipment K (default if not express): seller promises to turn the goods over to carrier. Risk of loss --> on buyer when goods are delivered to the carrier. "FOB (free on board) seller**
      - Destination K: Seller promises to tender delivery at a particular destination. Risk of loss --> on buyer when goods are tendered at the destination point specified in the K. "FOB buyer."
    - - If seller is NOT a merchant: risk of loss is on buyer upon tender of delivery
      - If seller is a merchant: risk of loss is on buyer when goods are physically in buyer's possession
- - - - beneficiary brings suit on the matter
      - beneficiary changes position in justifiable reliance on the K
      - beneficiary manifests assent to the K at the request of promisor or promise
      - rights of beneficiary have vested under express terms
    - - If promisor's performance is intended to benefit a donee beneficiary --> promisee has not suffered any econ loss and therefore cannot recover damages (maybe SP if appropriate)
      - If promisor's performance is intended to benefit a creditor beneficiary --> promisee may secure SP of the promisor's obligation
  - - - assignment for value: valid against obligor + cannot be revoked by assignor
      - gratuitous:
        
        b/w assignee/obligor: valid against obligor who cannot claim lack of consideration as a defense
        
        b/w assignor/assignee: under law of gifts, executory gift is revocable but an executed gift is not. Executed = intention + delivery (actual/symbolic)
    - - obligor has personal interest in rendering performance to the obligee and not a 3rd party
      - would violate applicable law or public policy
      - assignment materially alters risks or obligations of other party
      - assignment is prohibited by the K (but most cts treat an assignment in K violation as a breach of K but not a nullification of the assignee's rights)
    - - he will do nothing to defeat/impair value of assignment and has no knowl of facts that will do so
      - right as assigned actually exists and is subject to no limitations or defenses good as against assignor
  - - - To delegator: if delegation was for consideration, delegator has a breach of K action against delegatee who doesn't perform
      - To obligee: if for consideration, obligee can bring action against delegatee as an intended 3rd party beneficiary of the delegation; otherwise, delegatee not liable to obligee
- - - - Unilateral vs Bilateral Ks: Modern view: all Ks are "indifferent" in that they may be accepted by either a promise or performance. [see beginning performance under Revocation]
        
        Unilateral K: May be accepted only by complete performance (e.g., "I'll give you $20 only if you mow my lawn").
        
        Offeree is generally not required to give notice that he has begun performance, but is required to notify offeror about completion of performance. If not given, the K is formed but the offeror's duties are discharged for failure of an implied condition subsequent. Offeree is free to stop performance at any time or not undertake performance at all (his "option").
        
        No notice required if: 1) offeror waived notice or 2) offeree's performance would normally come to offeror's attention within a reasonable time.
        
        UCC: If offeree fails to notify offeror about beginning of performance (acceptance) within a reas time, the offeror may treat the offer as having lapsed before acceptance. [2-206(2)]
        
        Mere preparation (e.g., ordering parts needed for repairs) is not sufficient for acceptance, no matter how detrimental to the offeree; offeror may still revoke
        
        Multiple acts: if a unilateral K calls for multiple acts, option K is completed after performance of one act
        
        2 circs where unilateral K (accepted only by full performance) is formed: 1) where offeror unambiguously indicates that completion of performance is the only manner of acceptance, and 2) where the offer is to the public, such as a reward, which so clearly contemplates performance as acceptance.
        
        Bilateral: Exchange of mutual promises (most Ks). May be accepted by promise or beginning of performance.
        
        Bilateral K: Acceptance must be communicated to offeror unless offer provides otherwise
        
        If a K is not formed because mirror rule not followed or UCC offer objects in advance to any changes, a K may actually be formed if the parties begin to perform under it as if it formed. The last communication sent to the party who performed is considered a C-O, and performance acceptance.
        
        Silence as acceptance: 1) If the offeree silently takes offered benefits and had a reas opp to reject them and had reason to know compensation was expected, the court will often find acceptance, esp. if prior dealings or trade practice create a commercially reas expectation of silence as acceptance or if offeror gave offeree reason to understand that A may be through silence. 2) where offeror has given offeree reason to understand that acceptance may be communicated by silence, silence is effective acceptance if offeree intends as such. 3) from previous dealings or other circs, it is reas that the offerree should notify the offeror if he does NOT intend to accept (like an auto-renew subscription unless you affirmatively opt out)
      - Offeree's power of acceptance can't be assigned to another except in an option contract, and the offeree must know of an offer to be able to accept it.
      - UCC: Unless otherwise provided in the offer, an offer is construed as inviting acceptance in any reasonable manner and by any reasonable medium under the circumstances, including conduct by both parties that recognizes the existence of such a K. Any objective manifestation is usually sufficient. (look to means used by offeror, means customarily used in similar transactions, and if the means of communication is equivalent in speed and reliability to the means used by the offeror)
      - UCC 2-206: offer to buy goods for current or prompt shipment is construed as inviting acceptance by either a promise to ship or by current or prompt shipment of conforming or nonconforming goods. If no promise or shipment in a reas amt of time, buyer may treat the offer as lapsed.
        
        Shipment of Nonconforming Goods: acceptance of offer, creating a bilateral K, as well as a breach of the original K unless the seller notifies the buyer that the shipment of nonconforming goods is offered as an accommodation, which counts as a C-O. The buyer may accept the goods (and C-O), reject the goods (in which case the seller may reclaim them), or accept in part and reject in part.
      - Common Law: 2 Reqs for A
        
        Mirror Image Rule: Absolute and unequivocal acceptance of each and every term of the offer. Any new/different terms make a rejection & C-O. Statements that make implicit terms explicit do not prevent acceptance. A request for clarification is not automatically a rejection and C-O.
        
        A must be communicated to the offeror: if offer stipulates means of communicating acceptance, do that. If silent, offeree is free to use any reas means of transmission. Reas includes same means used by offeror, means customarily used in similar transactions, and means of communication that is equivalent in speed and reliability to the means used by the offeror. (Exceptions: silence, unilateral K, mail.) An acceptance by unauthorized means may still be effective if it is actually received by the offeror while offer still exists.
        
        Implied-in-fact Ks are formed by conduct rather than words (emergency plumbing service before making express K. upon completion, homeowner has an implied-in-fact obligation to pay the plumber reas value of services)
        
        Implied-in-law Ks arise where one party bestows a benefit on another and it is unjust for the recipient to retain the benefits w/o paying (a doc performs emergency med services on unconscious patient, creating an implied-in-law obligation for payment)
      - UCC: Battle of the Forms: Proposal of new/different terms in a timely acceptance is an effective acceptance unless expressly made conditional on assent to the new/different terms (conditional acceptance). Dickered terms (quantities, price) generally match. Boilerplate terms (arbitration, warranties, parties' standard forms) are less likely to match
        
        Nonmerchant: If any party is not a merchant, the new/diff terms are considered mere proposals and do not become part of the K unless the offeror expressly agrees to those terms. (applies also to written confirmations -- mere proposals)
        
        Between Merchants: if both parties are merchants, additional terms will be included in the K unless: 1) they materially alter the original offer terms (resulting in surprise or hardship if incorporated w/o express awareness of the other party, like warranty disclaimers or clauses that change past courses of dealing, or that change risk or remedies, but not delivery date), 2) the offer expressly limits acceptance to the terms of the offer, or 3) the offeror has already objected to the particular terms or objects within a reas time after notice of them is received.
        
        Different Terms: Some courts handle the same as additional terms. "Knockout Rule" (Majority): conflicting terms in O/A are knocked out of K and any gaps are filled by UCC defaults (like "w/in a reas time" for delivery date). Differences in price, quantity or quality may mean there is no K (no meeting of the minds). Minority rule: diff terms of the acceptance are treated as mere proposals for addition
        
        Merchant's confirmatory memo confirming an oral agreement that contains different/new terms is also subject to the battle of the forms. [2-207(1)]. New terms are in K unless materially alter or receiving party timely objects. Different terms are mere proposals.
        
        In situations where it cannot be determined which communication was O and which was A but parties act as though there was a K, UCC considers it a binding K. [2-204(2)]. (agreed-upon terms + gap-fillers)
        
        Conditional acceptance: If acceptance is made expressly conditional on assent to new/different terms, nonconforming acceptance is NOT effective to form a K, but instead creates rejection + C-O, which can't be accepted by performance. If performance follows a conditional acceptance anyway, the new terms are not included -- only agreed-upon terms and UCC gap fillers [2-207(1), (3)])
        
        Majority rule: conditional A is created by clear and conspicuous language that tracks the language of 2-207
        
        Minority rule: response must clearly communicate that offeree is unwilling to proceed unless and until offeror agrees to the new terms (to create a conditional A)
      - Mailbox Rule: Acceptance effective at moment of dispatch provided mail is properly addressd and stamped, unless: 1) offer stipulates not effective until received or 2) exercising option K (effective upon receipt). MR applies to any means of transmission that involves foreseeable delay b/w dispatch and receipt (caselaw has extended it to email, web orders, and fax). Everything else (termination, rejection, etc.) is effective upon receipt.
        
        Does not apply if offeree sends rejection first, in which case whichever arrives first is effective.
        
        Applies if offeree sends acceptance before rejection, unless offeror receives rejection first and changed his position in reliance on it, in which case the offeree will be estopped from enforcing the K.
        
        An acceptance by unauthorized means or improperly transmitted may still be effective if actually received by offeror while still open.
        
        Once offeree dispatches:
        
        binding K and offeree cannot withdraw acceptance
        
        offeror is bound even if lost in transit, if there is proof of proper dispatch
        
        offeror may not effectively revoke
    - - Offer cannot be accepted if it has been terminated. Termination by offeror: revocation. Termination by offeree: rejection or counteroffer
        
        Counteroffer = rejection + new offer. Mere bargaining is not a counteroffer, but a conditional acceptance ("provided," "so long as") terminates the original offer. A mere inquiry ("Would you take/consider...") will not terminate an offer unless a reasonable person would believe the offer had been rejected.
        
        Offeror's Revocation
        
        Irrevocable/Preventing Revocation
        
        Option K: ancillary contract. Offeree gives consideration for a promise by offeror to not revoke (to hold offer for the main K open for a certain time). Must be accepted w/in option period or a reas time. A false recital of consideration is rebuttable (maj rule). PE may be avail as a remedy (to enforce the promise to keep open) only if there has been a detrimental reliance
        
        UCC 2-205 Firm Offer: merchant's signed written offer that gives assurance to keep offer open is not revocable even w/o consideration. Irrevocable for time stated or reas time BUT no longer than 3 mos even if stated otherwise (longer than 3 mos NEEDS consideration to stay open, and become a CL K past 3 month mark). The buyer's attempt to negotiate better terms does not terminate the offer. (Barbri: if stated period longer than 3 mos, the firm offer is actually good until exactly 3 months. No consideration needed.)
        
        Detrimental reliance (if offeror could reas expect offeree would detrimentally rely on offer, and offeree does so, offer will become option k w/ reas option period). Ex: subcontractor bids that general Ker accepts and uses in its own bid.
        
        Beginning performance Modern Rule: (unilateral K: irrevocable once performance begins [not prep] and until reas time to complete performance, offeree may withdraw at any time (but offeror may not revoke); Bilateral/indifferent K: start of performance completes K so revocation is impossible, but notification of start of performance may be necessary).
        
        Revocation effective when received by offeree, or published.
        
        Offeror may revoke at any time before acceptance (even if offeror promised to hold it open but its not a true option K). Revocation must be communicated to offeree. Direct revocation: directly communicates an intent to withdraw the offer. Indirect revocation: 1) offeror takes action that is inconsistent w/ the intent to go through w/ the offer (like disposing of the subject matter of the offer) and 2) offeree learns of such action from reliable source
        
        Functional Equivalents Rule (for offers made to multiple people): offeror revokes in a functionally equivalent way to offer (i.e. internet forum, or same publication as offer), unless there is a better way to communicate revocation (like you have a list and contact info of everyone who has accepted so far, have to do it individually). Terminates power of A even if offeree is unaware of the revocation.
        
        Offeree's Rejection
        
        Express: Statement by offeree that she does not intend to accept the offer. Rejections are effective when received by offeror.
        
        A rejection or counteroffer to an option does not constitute a termination of the offer. Offeree is free to accept the original offer within the option period unless the offeror has detrimentally relied on the offeree's rejection.
        
        Rejection via non-conforming acceptance: Mirror image rule (CL): acceptance must mirror the offer terms, any variation is a counteroffer (rejection and new offer)
        
        Lapse of Time: If the offer provides that it will expire within a certain time, that period commences when the offer is received by offeree. If the offer is delayed and that fact is or should have been apparent to offeree, the offer terminates at its original time. If time not stated in K, terminates after a "reas time" determined by 1) subject matter (stable, like real estate or cars, or volatile like something in a "bubble") and market conditions and 2) degree of urgency (something frozen) and means of transmission (face to face conversation offers end at the end of the conversation unless otherwise stated)
        
        Termination by Operation of Law
        
        Death or Insanity: Offer is terminated if either party dies or is adjudicated insane or mentally incompetent prior to acceptance (regardless of communication of the fact to the other party). Offer will not terminate if the offeror's termination power is limited (option K).
        
        Destruction of Subject Matter after the offer (if before, the contract is invalid due to mutual mistake).
        
        Supervening Legal Prohibition of Proposed K
        
        Revival: An offeror can revive a terminated offer by lang or conduct restating the offer or giving more time to decide (after offeree's rejection, offeror says "Well why don't you think about it for another day.")
      - Promise, Undertaking or Commitment: Language: "offer," "promise," as opposed to "quote", "asking $30 for." Surrounding circs (joke, brag? --> courts look to what offeree reasonably understood), prior practice and relationship of parties, Method of communication: broad communications (catalogs, circulars, even shopping websites) are more likely to be solicitations/invitations for offers, and the shopper initiating the sale makes the offer (American advertising rule), industry custom
        
        Exception: Advertising: Language that identifies who gets limited supply of goods even if there is an excess in demand IS an offer ("first come first served," or "first 10 customers")
        
        Reward offers: are offers b/c they promise $ in exchange for performance of specific tasks. 1) self-limiting (task rewarded can only be performed once) 2) open-field (many parties -- like for med tests -- unless limiting lang of how many participants they'll take), 3) auctions: invitations, and bids are offers (but "w/o reserve" = offer to sell to highest bidder)
      - Definite and Certain Terms: Have enough essential terms been included for a K to be capable of being enforced (or for a court to determine a remedy)? Important: 1) identity of offeree, 2) subject matter, and sometimes 3) price to be paid (for real estate, and land description). UCC: quantity of goods. Missing terms: does not nec. prevent K formation if parties intended to make a K and there is a reas certain basis for giving a remedy. Court can supply reas terms as gap-fillers that are consistent w/ parties' intent. The more missing terms, the less likely the intent to contract is. Vague Terms: Not an offer under CL or UCC if too vague to be enforced. Part performance or acceptance can cure vagueness/uncertainty.
        
        UCC 2-305(2) lets the price term of a contract be fixed by the seller, but the seller must do so in good faith. If they fix the price in bad faith, they lose this right, and the buyer gets to set a reasonable price (UCC 2-305(3))
        
        Offer for employment must include the nature of the work to be done (compensation is not required). If duration is not specified, it's construed as an offer for employment at will.
      - 2 Elements
        
        Outward Manifestation/Communication: oral, written or conduct
        
        Signal that acceptance will conclude the deal (power of acceptance). Preliminary negotiations are not offers.
  - - - Output contracts (i.e., ones in which the buyer agrees to purchase everything the seller produces) do not involve illusory promises and are enforceable. They are specifically approved by the UCC, which implies a covenant of good faith and precludes unreasonable demands [UCC Secs. 1-304, 2-306]. Requirement K (also an exception): buyer promises to buy from seller all of the goods the buyer requires.
      - Aleatory Condition: where the promisee's right to cancel is dependent on a condition outside his control, the promise is not illusory and the agreement will be enforceable (conditions and contingencies)
      - Ks where a party has the right to cancel if that right is restricted (e.g., 60 days' notice requirement)
      - Exclusivity agreements (like exclusive marketing) b/c the ct will find an implied promise to use best efforts
      - Unilateral and option contracts, or voidable promises (e.g., one made by an infant)
      - Gratuitous suretyship promises made before or at the same time that consideration flows to the principal debtor
    - - a written promise (e.g., to pay a debt) that has expired past the SOL and is unenforceable but a new promise is made in writing or is partially performed.
      - a written promise to pay a debt discharged by BK
      - Material benefit test (minority rule): promise made based on past benefits enforceable if: 1) promisee conferred the benefit on the promisor (not a 3rd party), and 2) the benefit is material. Exception: not enforceable if the benefits were previously contracted for by the promisor
      - Modern trend: if a past act benefited the promisor and was performed by the prpmisee at the promisor's request or in response to an emergency, a subsequent promise to pay for that act will be enforceable.
  - - - Ks that can't be performed w/in one Year of their making, or for performance more than 1 year into the future
        
        Ask: at point of formation, is it POSSIBLE (not probable) to complete req'd performance w/in 1 year? (if so, doesn't need to satisfy SOF, an be oral)
        
        measured from date K was made (not date performance begins) -- and don't use hindsight either (if it was not, in fact, completed w/in one year)
        
        Lifetime employment Ks are exempt b/c the person could die w/in 1 year of K formation
      - Ks for (future) sale of Land
        
        Real estate brokerage agreements and building construction Ks considered service agreements, so outside SOF
        
        Includes easements, lease of property for more than a year, mortgages, fixtures, minerals or structures if they are to be severed by the buyer, authorizing an agent to sell real property
        
        Present sale/conveyance of land (deed) is outside SOF but sales of real property are covered
      - Ks for which the consideration is Marriage (like I will pay you a dowry if you marry my daughter)
      - Ks of an Executor or administrator to personally answer for a duty/debt of a decedent
      - Ks of guarantee or Suretyship guarantee -- promise to answer debt of 3rd party. 2 exceptions (= outside SOF):
        
        When creditor discharges original debtor from his obligation b/c of a guarantee by a 3rd party to pay the debt
        
        When main purpose of the guarantor is to protect his own econ interests (met by controlling shareholder, but probably not a normal shareholder)
      - Ks for the Sale of Goods priced $500 or more. K is not enforceable beyond the quantity of goods in the writing (e.g., if the quantity is misstated)
    - - Writing: Memorandum of agreement from before, during or after formation (including a letter to a 3rd party, a written O or A that formed the K, a letter repudiating and therefore admitting to the K, a receipt, a check w/ memo details)
        
        Must include essential terms like: 1) ID of parties to the transaction, 2) nature and subject matter of the K, and 3) the essential terms of the agreement, such as price and date of performance. Enough must be written to allow a court to enforce the K (give the parties what they bargained for).
        
        Land sale Ks: traditionally, needed legal description of land. More recent decisions suggest that an address or some other description of the property is enough. Also need the price.
        
        Employment Ks: Length of employment + nature of work. Compensation is not required.
      - Signature: any symbol w/ intention to authenticate the writing (initials; typed, stamped or preprinted signature; letterhead; e-signature; emails are usually considered to be signed if they have any kind of authenticating mark)
      - Tacking: Writing need not be a single document; you can tack several docs that once combined satisfy all reqs of the SOF
        
        Satisfied if all docs are signed or if a signed doc incorporates unsigned docs by reference
        
        If unsigned docs are not incorporated by reference in a signed doc, tacking together can still satisfy SOF if:
        
        There is at least 1 signed writing ambiguously establishing a K relationship b/w the parties
        
        the signed and unsigned docs clearly refer to the same subject matter, and
        
        there is clear and convincing E of agreement to the unsigned docs by the party against whom enforcement is sought
      - Performance (as a work-around of a signed written doc)
        
        Land sale Ks: Part performance will make an oral K for the sale of land enforceable if (need at least 2 of 3 -->, or conveyance). May only sue for specific performance (equity), not damages.
        
        payment of all or part of purchase price
        
        taking possession of land
        
        making substantial improvements to property
        
        One-Year Ks
        
        If fully performed --> enforceable despite SOF
        
        If only partially performed --> not enforceable
        
        Quantum meruit --> avail to the partly performing party who is otherwise out of luck. Can recover reas value for part performance
        
        Sale of Goods Ks: UCC SOF satisfied by part performance of a sale of goods K
    - - Recovery for benefits conferred: one party bestows benefits upon another in connection w/ an unenforceable oral K. Aggrieved party may recover the value of the benefits conferred (e.g., reas value of the services or part performance rendered).
      - Promissory Estoppel: May be avail for detrimental reliance on unenforceable oral K.
        
        One party to an oral K w/in the SOF promises other party he will create a signed writing so party relies by not taking other steps to satisfy SOF --> most cts will apply PE
        
        Where no specific assurances of creating a signed writing are made but reliance is instead simply on the underlying oral K itself: Majority will apply PE. Substantial minority: PE is preempted by SOF (not enforceable).
      - In-ct admission: Party admits K formation in pleading, testimony etc. --> only enforceable up to quantity admitted
    - - 5 ways to satisfy UCC SOF:
        
        Merchant's confirmation: 2 merchants enter oral agreement, 1 sends the other written confirmation of agreement --> SOF satisfied if recipient fails to object w/in 10 days
        
        Confirmation of agreement is valid if: 1) sufficient under UCC SOF (signed + quantity term) 2) writing is in confirmation of the K, 3) sent w/in a reas time of formation, and 4) based on a real agreement or discussion b/w the parties and 5) must be actually received.
        
        In-ct admission: Party admits K formation in pleading, testimony etc. --> only enforceable up to quantity admitted
        
        Signed writing
        
        writing = any intentional reduction to tangible form, including electronic doc
        
        signed by the party against whom enforcement is sought = any symbol w/ intent to authenticate
        
        suff. to indicate that a K for sale has been made b/w the parties
        
        stating 1) the type of goods and 2) the quantity. If quantity not present, not enforceable unless 1) other lang in the writing provides clear basis for measuring quantity or 2) output/requirment Ks (lack of price term is ok). Quantity can be stated ass all of the seller's output or all of the buyer's requirements (limited to the buyer's good faith needs). All other terms, like price, can be gap-filled w/ "reasonable" terms.
        
        Note: written offer does not satisfy writing req (contrary to CL rule) unless merchant's firm offer rule is met (then the writing is enforceable against the merchant making the firm offer)
        
        Partial Performance
        
        Enforceable for: 1) goods to the extent for which payment made/accepted, 2) goods to the extent of which have been received/accepted
        
        if divisible goods --> only enforceable for # accepted/paid for
        
        If indivisible --> part payment renders K enforceable
        
        Specially manufactured goods: Must meet all 5 reqs:
        
        specially manufactured for buyer
        
        not suitable for sale to others
        
        substantially began manufacture or made commitments to get
        
        actions to begin manufacture or procure occurred under circs which reas indicate goods were for buyer
        
        actions to begin manufacture or procure occurred completely before seller received notice of buyer's revocation
      - UCC alternative basis for enforcement? (PE)
        
        Minority: express lang of UCC precludes it
        
        Construction contractors: all cts protect a general contractor via PE even if the oral subcontract in question is for goods $500 or more
        
        Majority: PE avail if strong case
- - - - Negative Injunction: orders prohibiting breaching party from doing something (usually in employment setting). Availability turns on whether mid-term or post-employment relief
        
        Mid-term relief: When employee under K for a specific period of time and breaches it --> negative injunction avail to prevent competing if employee's services are unique or extraordinary (athlete, performer)
        
        Post-employment relief: K provision that prohibits post-employment competition. Validity depends on:
        
        scope of non-compete clause reas? (duration/geography)
        
        express provision? won't usually imply this one
        
        Is there a significant biz justification for enforcing restraints, like trade secrets or entrepreneurial knowl?
    - - Specific Performance: Nonbreaching party may request SP ONLY IF the legal remedy is inadequate (if the subject matter of the K is rare or or unique). Essentially an order from the ct to the breaching party to perform or face contempt charges.
        
        Equitable Defenses to SP: 1) laches: arises when a party delays in bringing an equitable and the delay prejudices the defendant, 2) unclean hands: arises when the party seeking SP is guilty of some wrongdoing in the transaction (must be related to K), 3) sale to a bona fide purchaser: If the subject matter of the K has already been sold to another in good faith, right to SP is cut off.
        
        Always avail for land sale Ks b/c all land is unique. May also be avail for rare or unique goods. Not avail for service Ks or Ks req'ing ongoing cooperation of parties (LL/T), no matter how rare or unique, b/c of the difficulty to enforce (and unconstitiutionality of involuntary servitude...)
        
        Specific performance covenant not to compete will be granted if: 1) the services to be performed are unique and 2) the covenant is reasonable (necessary to protect a legit interest of the person benefited by the covenant, reas geo scope and duration and must not harm the public).
    - - Buyer's Remedies
        
        Cancellation: buyer can reject goods b/c they do not conform (material breach), cancellation is an option.
        
        Replevin: If buyer has made at least part payment of the purchase price of goods that have been identified under a K and the seller has not delivered the goods, the buyer may replevy the goods from the seller if: 1) the seller becomes insolvent w/in 10 days after receiving buyer's payment or 2) the goods purchases were for personal, family, or household purposes. But the buyer must tender any unpaid portion of the purchase price to the seller. Can also replevy undelivered goods from seller if buyer is unable to secure adequate substitute goods.
        
        Specific Performance: 1) uniqueness: need only adequately search and be unable to find reas substitutes, 2) capable of immediate performance req: SP allowed in output and requirement Ks (both need ongoing cooperation)
      - Seller's Remedies: buyer wrongfully rejects or revokes acceptance of goods on or before delivery
        
        Right to Withhold Goods: If buyer fails to make payment due on or before delivery. May also withhold if goods are sold and credit and before delivery seller discovers that the buyer is insolvent. But seller must deliver if buyer tenders cash as payment. [2-702]
        
        Right to Recover Goods: If seller learns buyer received goods on credit while insolvent, seller may reclaim goods upon demand made w/in 10 days after receipt of goods (unless a misrep of insolvency has been made to seller in writing w/in 3 mos before delivery)
        
        Seller's ability to force goods on buyer are limited to an action for price when the seller is unable to resell the goods to others at a reas price.
  - - - Expectation: Sufficient to buy a substitute performance. CL: "Benefit of the bargain." UCC: "Cost of cover." Profits (price of substitute performance - K price) + incidental costs actually expended in performing, until other party breaches. (- any payments received from breacher, - any costs saved as a result of breach).
        
        Aggrieved party might not be able to recover full expectation when: 1) cost of performance greatly exceeds its market value 2) cannot be calculated w/ reas certainty (new biz w/ no profit history), 3) damages are unforeseeable, 4) damages can be mitigated
        
        Employment K: If K is for employment for a specified time and employer fires employee early, employee has duty to mitigate damages by looking for comparable work (similar position in same general locale)
      - Reliance: If expectation damages are too difficult to measure, plaintiff may recover for the cost of their performance, putting plaintiff in the position she would have been in had the K never been formed. Calc: money spent in prep for or actual performance - loss breaching party can prove aggrieved party would have suffered if K fully performed
      - Consequential: reflect losses over expectation damages. Usually lost profits. May only be recovered if at the time the K was made, a reas person would have know or foreseen the damages as a probable result of breach. In UCC, only a buyer may recover these. The mere fact that something is being repaired is not enough to know that there will be lost profits.
      - Incidental: can be included in UCC Ks. Include expenses reas incurred by buyer in inspection, receipt, transportation, etc. of fully rejected goods. Can also include seller's expenses of storing, shipping, returning and reselling goods as a result of buyer's breach
      - Restitutionary damages (breaching party): Value of benefits conferred upon either party in transaction. Calc based on ct's discretion and as justice reqs, by either: 1) reas value or cost of benefits conferred OR 2) extent to which the other party's property has increased in value b/c of the performance rendered (pro rata K price) -- whichever is less, minus the aggrieved (nonbreaching) party's damages. Limitation: avail if aggrieved party has partially performed but NOT if fully performed
      - Promissory Estoppel: either expectation or reliance. Quasi-K/ Unjust Enrichment: restitution
    - - Was clause reas at time of contracting in relation to anticipated harm?
      - Is clause reas in relation to harm/loses that actually occurred?
      - Did parties intend for clause to be a LDP or a penalty?
      - When prong 2 met but not prong 3, cts are split: Majority: clause is still valid/enforceable. Minority: clause is unenforceable. If ct finds the provision is in fact a penalty, it will be stricken from the K and damages will be awarded in accordance w/ default rules.
    - - Buyer's Remedies
        
        If seller does not deliver or buyer rejects goods/revokes acceptance damages are usually difference b/w K price and market price (or cost of buying replacement goods, cover) + incidental (associated w/ securing cover) and consequential damages - any expenses saved as a result of the seller's breach. If buyer anticipates breach, damages are measured at the time buyer learns of the breach.
        
        If seller delivers nonconforming goods that buyer accepts: if buyer accepts goods that breach one of seller's warranties, buyer may recover difference b/w value of the goods as delivered and the value they would have had if they had been K-conforming/as warranted + incidental and consequential damages. To recover damages for defects, buyer must have within reas time after discovering defects notified seller of the defect. If the seller gives better/more expensive goods, seller is not entitled to any more $ than K price.
        
        If seller anticipatorily breaches damages are the difference b/w the market at the time the buyer learned of the breach and the K price.
        
        Consequential: peculiar costs arising to buyer b/c of particular use or need for the goods. Can recover only if foreseeable -- seller 1) had reason to know of the buyer's general or particular reqs, and 2) the subsequent loss resulting from those needs could not reas be prevented by cover. Particular needs must be made known to the seller but not general reqs.
      - Seller's Remedies
        
        If buyer refuses to accept goods or anticipatorily breaches K damages are the difference b/w K price and market price or b/w K price and resale price, + incidental damages (ads, storage) (but not consequential damages) - any expenses saved as a result of breach (i.e. less shipping for less distance). Market price is measured at time and place of delivery.
        
        Lost Volume (seller's supply of goods exceeds demand): If using resale price and seller is in a worse position than performance of K, seller may also recover lost profits (volume) + incidental damages (cost of getting stuck w/ the goods and costs of resale), but seller must show: 1) could have sold to both breaching buyer and resale buyer, 2) would have been profitable to make both sales, 3) probably would have made the additional sale regardless of buyer's breach
        
        Price: If buyer accepted goods and did not pay or has not accepted goods and seller is unable to resell them at reas price or if goods were lost or damaged at a time risk of loss was on buyer, seller may maintain an action against buyer for the full K price.
- - - - Nature of supplier's biz (i.e. Best Buy)
      - Value of goods vs. services
      - K lang: was K described as a goods K?