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Contracts (K), General Rules, Exceptions, Testing Notes - Coggle Diagram

- - - - Modern Rule: a person lacks capacity to K if MI (i.e., to reasonably understand the transaction) at time of contracting
      - Power of Avoidance (or Disaffirmation): If MI person exercises right to disaffirm K:
        
        unlike minors, the MI person is obligated to not only return any goods, but also liable for damages or reasonable value for use of any goods or services
        
        UNLESS other party was aware of incompetence - then MI party is treated as minor
      - Ratification: a person MI AT TIME OF contracting may expressly/impliedly ratify the K if they later become competent
      - Necessaries Exception:
        
        the MI party can disaffirm the K but the provider of the necessaries can recover in quasi-K for the reasonable value of goods/services
        
        additional necessary - legal representation in connection w/ incompetency proceedings
    - - Modern Rule: minors (under 18) may enter into a K, but is voidable at minor's option
        
        majority of jurisdictions - neither of the following affect minor's avoidance rights:
        
        Marriage or emancipation;
        
        Misrepresenting the minor's age
      - Power of Avoidance (or Disaffirmation):
        
        if minor exercises right right to disaffirm K:
        
        minor is obligated to return any goods received but not liable for any damages or reasonable value for use of any goods or services
      - Ratification:
        
        once minors turn 18, they may expressly or impliedly ratify Ks entered during minority and bind themselves to obligations they might otherwise have disaffirmed
      - Necessaries Exception
        
        A minor's K for necessaries (food, clothing, shelter, medical care) is voidable, but merchant has quasi K right to recover reasonable value or goods or services
  - - - Fraudulent Misrepresentation (4 Elements)
        
        1 Misrepresentation
        
        What would be sufficient to prove this element:
        
        oral or written misrepresentation
        
        Fraudulent conduct such as concealment;
        
        a half-truth
        
        Not misrepresentation:
        
        broken promise
        
        opinions of guesses
        
        D must have made an assertion inconsistent w/ existing facts
        
        2 State of Mind
        
        Need both scienter and intent
        
        Scienter
        
        D made assertion either knowing it to be false OR knowing they had no idea if it was true or false
        
        Intent
        
        intent to mislead - D made assertion for purpose of misleading OR knowing there was a substantial likelihood to mislead
        
        3 Materiality of Misrepresentation
        
        objective materiality; OR
        
        such an assertion is likely to induce a reasonable person to enter into a K
        
        subjective materiality
        
        if the party making the assertion had reason to know that it was likely to induce the particular aggrieved party into entering the K
        
        4 Reasonable Reliance on the Misrepresentation
        
        reliance on the misrepresentation must be reasonable
      - Non-Fraudulent Misrepresentation (2 kinds)
        
        Negligent misrepresentation
        
        Misrepresentation
        
        2 Materiality of the misrepresentation
        
        Reasonable reliance on the misrepresentation;
        
        D would have known the assertion was false had he exercised reasonable care
        
        Innocent misrepresentation
        
        Misrepresentation
        
        2 Materiality of the misrepresentation
        
        Reasonable reliance on the misrepresentation;
        
        D made an assertion not in accord w/ existing facts
      - Fraudulent Nondisclosure
        
        Fraud consisting of Ds silence when duty to disclose
        
        the nondisclosure was material to the K
        
        reasonable reliance on nondisclosure; AND
        
        a duty of disclosure and failure to fulfill it
        
        GR: no duty to disclose to trading partner
        
        BUT if a party is aware of material facts unlikely to be discovered by the other through ordinary care/diligence - duty to disclose that info exists when:
        
        parties enjoy relationship of trust and confidence (family relationships or the relationship between a professional client)
        
        Party's past assertion was true at the time, but has been rendered untrue by intervening events
        
        if obligation of good-faith would require that the party disclose the info
        
        (real estate transaction where one part knows of a termite infestation)
  - - - 1. A threat
      - 2. That is wrongful in nature
        
        3 types of circumstances
        
        what is threatened is a crime or tort
        
        What is threatened is a criminal prosecution or bad-faith civil process
        
        What is threatened is a bad-faith breach of K (a.k.a. economic duress)
        
        most commonly tested
      - 3. No reasonable choice but to succumb to the threat
        
        rarely an issue if what's threatened is crime/tort, or criminal prosecution/bad-faith civil suit
        
        BECAUSE their is scarcely a "reasonable" alternative choice
        
        Hard cases - economic duress
        
        three situations
        
        1 no adequate and reasonably priced substitutes for the services/goods being threatened to be withheld
        
        threatened breach would cause aggrieved party to break his own K to another
        
        when alternative of acquiescing to the threat and later suing for damages is inadequate to address the harm caused
  - - - 1. Unfair persuasion used (multi-factor test for this element); AND
        
        discussion of the transaction at an unusual or inappropriate time;
        
        consummation of the transaction at an unusual place;
        
        insistent demands that the transaction or business be finished immediately;
        
        extreme emphasis on the untoward consequences of delating the transaction;
        
        the use of multiple persuaders against the target of persuasion;
        
        absence of 3rd P advisors to the targer of persuasion;
        
        statements that there is no time to consult a financial advisor/atty
      - Other party was vulnerable to such persuasion
        
        a vulnerable party can be established if one of the following exists:
        
        mental infirmity dye to age or illness
        
        vulnerability is due to recent trauma or event
        
        There is a relationship of trust or condidence
  - - - 1 Procedural Unconscionability
        
        bargaining process created an absence of meaningful choice for aggrieved party
      - 2 Substantive Unconscionability
        
        K terms are unreasonably favorable to one party to the K
        
        (ex: excessive price, extreme consequences for breach, or grossly unfair provisions)
    - - Upon a finding of unconscionability, court may:
        
        refuse to enforce K;
        
        excise the offending clause and enforce remainder; or
        
        limit application of offending clause to avoid unconscionable result
  - - - Subject of K itself is specifically prohibited by law
      - K formed for purpose of committing crime or tort
      - K performance would violate certain values/freedoms designated by the state
        
        i.e., K prohibiting a party's right to marrying for an extended period of time
- - - - Marriage Ks
      - Year - Ks that can't be performed w/in one year of their making
      - Land - Ks for the sale of land
      - Executor - Ks of an executor or administrator to answer for a duty of a decedent
      - Guarantee - K of guarantee or suretyship
      - Sale of goods - Ks for sale of goods at a price of $500 or more (UCC)
    - - Ks Not to be Performed w/in a Year
        
        measured from the date K made, NOT date performance begins
        
        At point of formation, is it at all possible (even if not probable) to complete required performance w/in 1 yea?
        
        is yes - doesn't need to be in writting
        
        Frequently tested situations
        
        K that can be breached or excused w/in a year of its formation
        
        This is potentially true of any K and so would swallow the one-year rule
        
        Irrelevant - what matters is not whether K can be breached in the year, but whether K can be performed in full by its terms w/in one year of formation
        
        Lifetime or permanent K of employment is not governed by SoF, can can be oral
        
        Life can end w/in the year
      - Guaranty/Suretyship Agreements - Main purpose exceptions
        
        Although guarantee Ks are generally w/in SoF a primary exception is the main purpose doctrine
        
        Main purpose doctrine - where the main purpose of the guarantor is to protect their own economic interests, the guarantee agreement is not governed by the SoF - can be oral
  - - - terms required:
        
        identify to parties to the transaction
        
        The nature and subject matter of the K; AND
        
        The essential terms of the agreement , such as price and date for performance
    - - (ex: initials, typed, stamped or preprinted signature, or letterhead)
    - - Land Sale Ks - part performance requires a showing of at least 2 of the 3 following:
        
        Payment of all or part of the 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
  - - - Ks for sale of goods for $500 or more are under the UCC SoF
    - - (1) Signed writing (normal SoF way)
        
        Writings;
        
        Describe Quantity; AND
        
        Signed by the party against whom enforcement is sought
      - (2) Merchant's Confirmations
        
        two merchants enter oral agreement, one sends other written confirmation of agreement
        
        SoF satisfied against the recipient merchant IF:
        
        BOTH sender an recipient are merchants;
        
        Writing is in confirmation of the K and contains a quantity; AND
        
        Recipient does NOT send written objection w/in 10 days
      - (5) Specially Manufactured goods:
        
        SoF satisfied against buyer who orders custom goods from a manufacturer if:
        
        Manufacturer can't resell the goods in the ordinary business
        
        Manufacturer detrimentally relied by beginning performance before buyer's withdrawal; AND
      - (3) Judicial Admission
        
        a party admits K formation in pleading, testimony, or otherwise in court
      - (4) Partial Performance
        
        Despite absence of writing, an otherwise valid K is enforceable for:
        
        goods for which payment made/accepted; OR
        
        goods which have been received/accepted
- - - - Yes
        
        The UCC Applies
        
        Are one or Both parties Merchants?
        
        A Merchant is "one who regularly deals in goods of a kinds sold or who otherwise by his profession holds himself out as having special knowledge or skills as to the practices or goods involved"
        
        Several UCC rules apply depending on if a party is a merchant
      - No
        
        Common Law Applies
        
        Governs Real Estate, and Services Ks
      - What is a good?
        
        Any movable item. Does not include intangibles (goodwill, IP), meny, legal claims, services, or real property
      - Mixed goods and services
        
        I.E. a party sells a good, and offers to install it
        
        Then determine which part of the K is MOST PREDOMINANT then apply the law that applies to that type of K
        
        Predominantly Service
        
        Predominantly Goods
        
        Predominant Purpose Test:
        
        K language - was it described as a goods K
        
        Nature of supplier's business - Best Buy sells goods
        
        Value of goods v. services - i.e., $30 in goods, but $2 in services
      - What is Sale?
        
        transaction in which a seller transfer title of goods to buyer
  - - - Oral and written expression of the agreement
    - - formed by conduct rather that words
    - - arises where one party bestows benefit on another and it would be unjest not to pay the reasonable value of the benfit
- - - - In some contracts, one of the parties promises a performance that will benefit a 3rd P
      - Critical Issue: the circumstances under which the 3rd P beneficiary sue to enforce K
    - - the right of an aggravated 3rd P beneficiary to bring action against Br promisor or promisee depends on their classification:
        
        Intended Beneficiary:
        
        one the contracting party intended to benefit (often named in K)
        
        Creditor Beneficiary
        
        promisee seeks a performance form promisor in order to make a gift of that performance to 3rd P
        
        Donee Beneficiary
        
        Promise seeks a performance from promisor in order to make a gift of that performance to a 3rd P
        
        Standing to sue [yes]
        
        intended Benes can sue the promisors who directly promised to provide the benefit, but can't sue the promisees based on the K
        
        Incidental Beneficiary
        
        3rd P who will benefit from a promisor's performance as a practical matter, but are not intended beneficiaries
        
        Standing to sue [NO]
    - - Parties to a K are free to modify or rescind by mutual consent, and may modify or rescind a 3rd P beneficiary provision w/o consent unless beneficiary's rights under the K have vested
        
        With intended beneficiaries, vesting occurs when:
        
        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 promisee; OR
        
        Rights of beneficiary have vested under express K terms
      - Defenses Available to Promisor: any valid defenses the promisor has against the promisee are also effective against the 3rd P beneficiary
  - - - Assignment:
        
        A transfer of a right to receive a K performance
      - to be effective, owner of the right must manifest an intention to make a present transfer of an existing right
      - Rights to Be Assigned
        
        all rights generally assignable except when:
        
        EXC 1 when assignment would materially change duties of other party
        
        EXC 2 when obligor has personal interest in rendering performance to the obligee and not a 3rd P
        
        EXC 3 When it would violate applicable law or public policy
        
        EXC 4 when assignment is prohibited by the K
        
        however, most courts will treat this as a breach of K by assignor, but not a basis for nullifying assignee's rights
        
        Exc - if the K provision provides that any assignment of this K "ARE VOID" or similar language, than any assignment is completely negated
      - Assignment for Value versus Gratuitous Assignment
        
        Assignment for Value
        
        valid against obligor and cannot be revoked by assignor
        
        A gratuitous assignment has the following legal effects:
        
        Between assignee and obligor
        
        laid against obligor, who cannot claim lack of consideration as a defense
        
        Between assignor and assignee
        
        under law of gifts, an executory gift is revocable but an executed gift is not
        
        a gift is executed when there is intention coupled w/ actual or symbolic delivery
      - Rights and Obligations of the Parties After Assignment
        
        Rule: an assignee gets whatever rights to the K his assignor had; AND
        
        an assignee tales subject to whatever defenses the obligor could have raised against the assignor
        
        Payment to Assignor: Obligator's payment to assignor is a defense unless the obligor has been notified that
    - - Delegation: occurs when a 3rd P agrees to satisfy a performance obligation owed by one of the parties to a K
      - Rights of the Obligee against the Delegator
        
        A delegation of duties does NOT operate as "transfer" of duties from delegator to delegatee
        
        Absent a novation (agreed substitution of one obligor for another), a delegation does not relieve the delegator from his obligations under the K (obligee can still sue delegator)
      - Liability to the Delegatee
        
        To he delegator
        
        if delegation was for consideration, delegator has a breach of K action against delegatee
        
        To the obligee
        
        if delegation was for consideration, obligee can bring action against delegatee as an intended 3rd P
      - Delegable Duties
        
        generally, all contractual duties are delegable
        
        exc 1: personal services
        
        exc 2: When the K prohibits delegation
- - - - Consideration
        
        Must be a bargained-for-exchange
        
        there was something (good or service) that was promised, and the promise must have been made in order to obtain something else of value
        
        Quid pro quo
        
        General Rule: Promise is unenforceable unless it is supported by consideration
        
        exc:
        
        Except: Promissory Estoppel :no_entry:
        
        A K can be formed w/o consideration when a party relies on a 1) promise; 2) when relience was reasonable, detrimental, and foreseeable; AND 3) enforcement of the K is necessary to avoid injustice
        
        Benefit/Detriment Test (legal value analysis - whether there is a benefit to the promisor and/or a detriment to the promisee
        
        legal detriment test - whether promisee is:
        
        doing something you have a legal right NOT to do; OR
        
        forgoing some activity he HAD a legal right to do
        
        A bargained for legal detriment to the promisee
        
        Inadequacy of consideration
        
        courts don't police the equivalence or fairness of the exchange
        
        Illusory Promise:
        
        Promise of performance that leaves performance to the unlimited discretion of the promising party
        
        Does not constitute consideration
        
        Gratuitous promises (gifts)
        
        promise to make a gift is not, generally unenforceable due to insufficient consideration
        
        exc:
        
        gratuitous transfers are legally binding - if you give title as a gift - K law can't get if back for you
        
        Alternatives to Consideration
        
        Past or Moral Consideration
        
        GR: a promise in exchange for something already given or performed is NOT supported by consideration ("past consideration")
        
        EXC:
        
        a written promise to pay a debt barred by Statute of Limitations
        
        1 more item...
        
        a written promise to pay debt discharge by bankruptcy
        
        Material Benefit Test (minority rule): Promise made in recognition of a past benefit conferred is enforceable IF:
        
        2 more items...
        
        Promissory Estoppel:
        
        A promisee that reasonably relies to his detriment on a gratuitous promise may be able to enforce that promise even w/o consideration - 4 elements
        
        (1) A Promise
        
        (2) Foreseeable reliance
        
        (3) Actual Reliance (must be induced by the promise)
        
        (4) Injustice w/o enforcement
        
        factors to analyze
        
        5 more items...
      - Mutual Assent = O + A
        
        Acceptance
        
        Acceptance (Common Law)
        
        Acceptance must mirror terms of offer + be communicated to the offeror
        
        Two Excs:
        
        Unilateral K: Acceptance is effective only be completing performance, no communication is required unless offer provides otherwise
        
        Acceptance by mail:
        
        3 more items...
        
        UCC - Acceptance by Seller's Shipment
        
        Acceptance by seller's shipment of nonconforming goods
        
        seller can accept buyers offer to purchase goods for prompt or current shipment in 3 ways:
        
        (1) Prompt/current Promise to ship goods;
        
        (2) Prompt/current Shipping of conforming goods; or
        
        1 more item...
        
        (3) Shipping non-conforming goods, UNLESS the sellers send the shipment as an accommodation (then that's counteroffer)
        
        1 more item...
        
        UCC Battle of Forms
        
        UCC Rejection of Mirror Image Rule
        
        An offeree's nonconforming acceptance or confirmation (with additional terms) will operate as an effective acceptance of the offer, thus forming a K (not a counteroffer)
        
        fine print of buyer/seller forms will rarely include the same things - UCC says this is okay
        
        Effect of Additional or Different Terms
        
        Between merchants, the additional terms in offeree's acceptance or confirmation become part of the K - EXCEPT in 3 circumstances
        
        (1) the offer expressly limits acceptance to its own terms
        
        (2) if offeror objects to the additional terms within reasonable time
        
        (3) if the additional terms would materially alter the K
        
        1 more item...
        
        Note: an additional term is one added by the offeree, that the offeror was silent on
        
        "Different" terms in the two writings dealing w/ the same topic knock each other out ("Knockout Rule")
        
        Conditional Acceptance
        
        If offeree's "acceptance" is specifically conditioned on offeror first agreeing to the additional terms in their acceptance
        
        NOT an effective K - because offeree has issued a Counteroffer
        
        Ks formed by conduct
        
        Under UCC, a parties' conduct in recognizing the existence of a K is sufficient to establish a K even though their writings don't establish a K
        
        What terms will be in the K here:
        
        2 more items...
        
        Offer
        
        Multiple Offers:
        
        Commercial Advertisements:
        
        American Rule:
        
        Ads, catalogs, price lists are invitations for offers, since responses may exceed available supply of goods or services NOT OFFER
        
        1 more item...
        
        Reward Offers:
        
        Offers because they are communications that promise $ in exchange for performance of specific tasks
        
        Offer and Acceptance under Unilateral Contracts
        
        Bilateral K
        
        offer seeking acceptance by promise - a promise is being exchanged for a promise
        
        once promises are exchanged, both parties are bound
        
        Unilateral K
        
        Offer seeking performance in return (i.e. reward offers)
        
        Offeror not bound until offeree completes performance, and offeree never bound
        
        1 more item...
      - Don't just say offer acceptance and consideration. You need to include the lack of defense against enforcement
    - - Unilateral K: formed by through a promise in exchange for performance
      - Bilateral K: formed when by an exchange of promises
    - - Offer Creates the power of acceptance in the offeree
        
        4 ways to terminate this power
        
        (1) Lapse:
        
        after time stated in offer, or after a reasonable time
        
        RT determined
        
        (1) subject matter/market conditions, AND
        
        (2) degree of urgency and means of transmission
        
        1 more item...
        
        (2) Death or incapacity:
        
        of either party after offer is made terminates the power of acceptance
        
        (3) Revocation by offeror:
        
        Must be revoked before acceptance + revocation must be communicated to offeree
        
        Direct Revocation - offeror directly communicates to offeree an intent to withdraw the offer
        
        Indirect Revocation - 2 requirements:
        
        (1) offeror takes action that is inconsistent w the intent to go through with the offer; AND
        
        (2) Offeree learns of such action from reliable source
        
        Offeror may revoke at anytime, for any reason
        
        Preventing Revocation
        
        American Rule - the offeror can revoke even if he gave a specific time to accept
        
        Option K (common law) - Elements
        
        Offer + Separate promise to keep it open + Valid Mechanism for enforcing subsidiary promise (consideration is most common way)
        
        1 more item...
        
        Reliance/Construction:
        
        Courts will hold offer open when the offeree has detrimentally relied on them
        
        1 more item...
        
        Firm Offer under UCC:
        
        Irrevocable offer by a merchant to buy or sell goods w/o consideration (3 requirements)
        
        3 more items...
        
        (4) Termination by Offeree's Rejection
        
        Outright rejection of the offer
        
        Rejection via counterclaim:
        
        counteroffer = rejection + new offer
        
        exc:
        
        1 more item...
        
        Rejection via non-conforming acceptance
        
        Mirror image rule (CL):
        
        acceptance must mirror the terms of the offer, and any variation is counteroffer
- - - - UCC Default Provisions: used to fill gaps when K doesn't address the matter, BUT parties are free to set default rules aside by contracting otherwise
        
        Implied Warranties: (3)
        
        Warranty of Title:
        
        for sale of all goods, there is an implied waranty of:
        
        rightful transfer of the goods; AND
        
        no liens or security interests are attached to the goods
        
        good title to the goods;
        
        can only be excluded or modified by:
        
        Specific langauge; OR
        
        circumstances which give buyer reason to suspect seller does not claim unencumbered title
        
        Warranty of Merchantability:
        
        Goods fits for ordinary purposes for which those goods would be used
        
        ONLY applies if seller is a merchant
        
        Displaced by:
        
        specific use of the word "merchantability" and conspicuousness if in writing; OR
        
        any other language or circumstances that would be reasonably understood by a buyer to exclude the warranty ("as is" or patent defects)
        
        Warranty of Fitness for a Particular Purpose:
        
        Goods being sold are fit for the particular purpose buyer intends to use them for
        
        ONLY applies when, at time of contracting, seller has reason to know:
        
        the particular purpose for which the goods are required; AND
        
        the buyer is relying on seller's expertise to select reasonable goods
        
        Warranty negated when:
        
        disclaimer is written, clear, and conspicuous; OR
        
        goods have patent defect which were easily detectible
        
        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 affirmation of promise or fact;
        
        any description of the goods; OR
        
        any sample or model
        
        need not use words "warrant" or "guarantee" to create - however, vague or "sales talk" statements are considered "puffing," not warranty
        
        Missing Terms: Under the UCC, where there are pertinent missing terns, the following default rules will fill in missing terms:
        
        Price term:
        
        Reasonable price at time established by K for delivery
        
        Time term:
        
        Reasonable time
        
        Place of delivery term:
        
        Seller's place of business (i.e., FOB seller)
      - Common Law Default Rules for Service Contract
        
        missing price term
        
        if one party performs service at the request of another, but no price is discussed in advance, then CL default rule applies
        
        reasonable value for service rendered
      - UCC/CL Obligation of Good Faith and Fair Dealing
        
        another source of "gap-filling" is obligation of good faith and fair dealing in the performance and enforcement of the K (UCC and Restatement)
        
        Good faith = honesty in fact and the observance of reasonable commercial standards of fair dealing in the trade
        
        good faith obligation where terms of K leave critical term, such as price, satisfaction or quantity open to the determination of one party
        
        Open Price Term:
        
        If K leaves price to be fixed by one of the parties, then the party must fix price in good faith
        
        Satisfaction Terms:
        
        If K contains a satisfaction clause or similar term, then thedetermination as to whether party's performance obligation must be exercised in good faith
        
        Open Quantity Terms:
        
        Arises in 2 contexts
        
        2 more items...
        
        Under UCC, party entitled to determine the particular quantity of goods to be sold must make determination in good faith
        
        UCC also prohibits any unreasonably disproportionate demand or tender, if there was either:
        
        2 more items...
    - - Objective Meaning Trumps Subjective Meaning
        
        Exc:
        
        when one party has reason to know of another's subjective understanding, the first party is bound by the meaning
      - Contra proferentem:
        
        Rule: if the term is included in K, then in case of doubt it is construed against the drafter
        
        Ks subject to this rule of construction
        
        all Ks drafted by one of the parties, whether an adhesion K or one between parties of equal bargaining power
    - - Extrinsic evidence (outside four corners of the K) that can be used to fill gaps and resolve ambiguity in Ks
        
        Definitions under UCC:
        
        Usage of Trade
        
        is any practice or method of dealing having such regularity of observance in a place or trade as to justify an expectation that it will be observed w/ respect to the transaction in question
        
        A.K.A. [What all members of the trade do]
        
        Broad
        
        1 more item...
        
        Course of dealing
        
        is a pattern of conduct concerning previous transactions between the parties that is fairly to be regarded as establishing a common basis of understanding for interpreting their subsequent expressions ad other conduct
        
        [what the parties did in their previous Ks]
        
        Narrower
        
        1 more item...
        
        Course of performance
        
        is present when a particulate K involves repeated occasions for performance by a party and the other party, w/ knowledge of the nature of the performance and opportunity for objection to it, accepts the performance or acquiesces in it w/o objection
        
        [how the parties have acted under their current K]
        
        Narrowest
        
        1 more item...
        
        Admissible uses:
        
        To fill in gaps (supplemental terms) + resolve ambiguity (explain terms)
        
        Inadmissible uses:
        
        to contradict express terms of K
        
        If conflict between the three (UoT, CoD, CoP) then, CoP prevails over CoD, and CoD prevails over UoT
        
        Note: narrow preset first, then narrow past, then broad past
      - Parol Evidence Rule - but for the UCC
    - - Governs admissibility of oral and documentary evidence of negotiations and other communications between parties that took place prior to or during execution of K
        
        Integration
        
        Partial integration
        
        terms w/in K are intended as final expression of those specific terms
        
        Note: the terms "full integration" and "partial integration" are interchangeable
        
        Complete integration
        
        K intended to represent a complete and exclusive statement of all the terms
        
        Determining Partial and Complete Integration
        
        Merger clause:
        
        writing contains complete/entire agreement or other words to that effect - merger clause means complete integration
        
        Mistake in Integration
        
        A "Scriver's Error" (typo, and the like), may be cured by reformation when it can be determined the parties intended otherwise.
        
        Purpose for Which Evidence is introduced:
        
        effect of the rule depends on the purpose the Parol evidence is being introduced
        
        Purpose 1 - To explain or Interpret Terms of Written K
        
        Majority Rule: Parol evidence is always admissible for this purpose
        
        Purpose 2 - To Supplement Terms of Written K
        
        Rule: Parol evidence is admissible for this purpose unless the K is completely integrated (i.e., has merger clause)
        
        UCC distinction: trade usage, course of dealings, and course of performance can supplement completely integrated agreement
        
        remember Parol evidence focused on the immediate negotiations of the K
        
        Purpose 3 - To Contradict Terms of Written Contract
        
        Rule: parole evidence is not admissible for this purpose (if K is fully integrated)
        
        UCC distinction: course of dealing/course of performance may be admissible in sale of goods cases to "qualify" the meaning of an integrated term
        
        When will PR Rule NOT Apply
        
        Subsequent Agreements - because PE rule looks at past communications
        
        Collateral Agreements - because PE rule doesn't apply to communications about other agreements
        
        Attack on Validity of the Written Agreement
        
        PE rule only applies if there's a valid written agreement - thus, it will not bar efforts to prove the following bases for invalidity of K
        
        Failure of oral condition precedent to agreement
        
        Mistake or Duress;
        
        Fraud; OR
        
        Reformation:
        
        for P to obtain reformation, it must be shown:
        
        3 more items...
      - Parol = extrinsic
- - - - Seller's obligations = transfer and deliver foods
      - Buyer's obligations = accept and pay for goods
      - When something happens to the goods before buyer receives them:
        
        If seller bears RoL, he must provide replacement goods
        
        If buyer bears RoL, he must pay the K price regardless
      - Carrier cases v. Non-carrier cases
        
        carrier cases: parties to a sale of goods K agree to use common carrier (trucking firm, train, etc.)
        
        When does RoL transfer to buyer?
        
        Shipment K - RoL passes to buyer when goods are delivered to the carrier
        
        Identified as "FOB Seller," or K is silent (default rule)
        
        Buyer bears RoL if goods are damaged in transit
        
        Destination K - RoL passes to buyer when goods are tendered at the destination point specified in the K
        
        Identified as "FOB" Buyer"
        
        Seller bears RoL if goods are damaged in transit
        
        Non-carrier cases: parties to a sale of goods K do not agree to use a common carrier
        
        When does RoL transfer to buyer?
        
        if seller is NOT a Merchant - as soon as gods are made available to him (tendered)
        
        if seller IS a Merchant - once goods are physically in buyer's possession
    - - Common Law
        
        Preexisting Duty Rule:
        
        a promise to increase compensation for duties ALREADY OWED is unenforceable because there is no consideration for the modification
        
        Exc:
        
        Mutual modification of an existing K is enforceable if both parties agree to different performance what was originally required by the original K
      - Unforeseen Circumstances (MODERN LAW)
        
        PD Rule not applicable if increased compensation is given in exchange for promised performance that has been rendered substantially more burdensome than reasonably anticipated at K formation
      - UCC
        
        Agreement modifying an existing K needs no consideration to be enforceable - But must be in good faith
    - - A party entering a K makes many assumptions about the present and future
      - when assumptions turn out to be faulty, parties may be excused under doctrines of mistake, impossibility, impracticability, and frustration of purpose
      - Faulty Assumptions Regarding Present Material Facts: A.K.A. MISTAKE
        
        Unilateral Mistake
        
        One party's mistake about present material fact(s) is NOT excused
        
        UNLESS the other party knew/had reason to know of the party's mistake
        
        Mutual Mistake
        
        When both parties are mistaken - K is voidable by disadvantaged party if all 3 reqs are met:
        
        (1) mistaken assumption relates to material fact (not just value);
        
        (2) mistake made by both parties; AND
        
        (3) disadvantaged party did not bear risk of mistake under K
    - - Impossibility
        
        both parties excused if performance has been rendered impossible by events occurring after K formed
        
        Requirement 1: Impossibility must be objective
        
        objective impossibility occurs when performance literally impossible FOR ANYONE due to circumstances beyond control of parties
        
        Objective impossibility examples
        
        K subject matter is destroyed
        
        Service provider dies prior to performing service K
        
        Supervening law or legal development makes performance illegal (K to buy a gun prior to state firearm ban)
        
        Requirement 2: The contingency that creates the impossibility was not known to the parties at the time of the K; It arose after the K was unanticipated
      - Impracticability
        
        Courts are reluctant to excuse performance where for any reason other than impossibly
        
        however, under doctrine of impracticability, a promisor may be excused from performance where:
        
        contingency causing impracticability was unforeseen; AND
        
        increased cost/burden of performance would be far beyond what either party anticipated
        
        Impracticability Under the UCC
        
        increased cost, and rise or collapse of a market are viewed as business risks, the sort of risks that fixed-price Ks are expected to account for
        
        does not rise to level of impractiacabilty
        
        UCC cases where impracticability has been found typically involve shortages caused by war or embargo, local crop failure, unforeseen shutdown of major sources of supply
      - Frustration of Purpose
        
        where a contingency occurs that dramatically reduces the value of performance to the receiving party
        
        Modern Test (3 elements):
        
        Principal purpose in entering K is substantially frustrated;
        
        frustration of incidental or non-material purpose would not trigger the excuse of FoP
        
        Frustration was substantial in nature; AND
        
        Non-occurrence of the event that caused frustration was basic assumption of the K
    - - Rescission:
        
        Both parties voluntarily agree to excuse the K
        
        Rescission is permissible where both parties to a K have remains performance due
      - Accord and Satisfaction:
        
        the parties may make an ACCORD, which is permissible when one party has already performed and is waiting on the other party to finish performing
        
        Accord - obligee promises to accept substitute performance in satisfaction of the obligor's existing duty
        
        One side already performed + 'you were supposed to do X, bit now you're proposing to do Y'
        
        Legal Effects:
        
        Accord and Satisfaction satisfies the obligor's original obligation
        
        Accord alone does not discharge obligor's duty; it only suspends the obligor's duty
        
        Validity of Accord - Consideration Required
        
        General K law applies - consideration is required
        
        May be sufficient consideration if:
        
        where the accord involves an agreement for partial or substitute performance, the substitute performance differs significantly form the original performance, or its obligation is doubtful
        
        Where the accord involves an agreement for partial payment, there is a good-faith or bona fide doubt about the amount owed
        
        Example:
        
        parties agree to partial performance in exchange for partial payment
        
        completion of the accord would discharge the original obligation - aka satisfaction
    - - Direct AR may be established in two ways:
        
        A party's definitive statement that it will breach; OR
        
        A party's voluntary act that renders party unable to perform its contractual obligations
      - Adequate Assurance of Performance
        
        If AR cannot be established but there are reasonable grounds for insecurity, the insecure party may make demand for AAP
        
        Failure to Give Adequate Assurance
        
        Failure to respond w/ reasonable assurances = repudiation
        
        CL: Reasonable Time
        
        UCC: 30 days
      - Rights if Aggrieved Party upon Repudiation
        
        Cancel K and terminate all rights/obligations under it;
        
        Bring action for damages or specific performance; OR
        
        Ignore the repudiation and continue under the K
      - Retraction of a Repudiation:
        
        A party who made an AR to another may retract unless/until the other party:
        
        acts in reliance on repudiation;
        
        accepts repudiation by signaling this to breaching party; OR
        
        commences suit for damages/specific performance
    - - In some Ks, obligation to perform is conditioned upon some triggering event/action by another.
        
        Rules Governing Failure of a Condition
        
        Common Law Rules:
        
        right of the parties in the event of an express condition depends on whether the condition is express or implied
        
        Failure of Express Condition
        
        any failure of an express condition (i.e. less than 100% strict compliance) will discharge the party's obligation to perform
        
        Identifying express conditions
        
        1 more item...
        
        Excusing Failed Express Conditions:
        
        1 more item...
        
        Implied Conditions (Material Breach and Substantial Performance)
        
        When possibility of a breach is not addressed by an express condition, it is still a breach; however, under the law of implied conditions courts can treat that breach in 2 ways:
        
        2 more items...
        
        Failure Condition that Cannot be Excused
        
        where condition has failed and cannot be excused, there are other methods of enforcement to mitigate consequences for breaching party
        
        Divisibility of the K
        
        1 more item...
        
        Quantum Meruit:
        
        1 more item...
        
        Failure of Condition under UCC
        
        Express and Implied Condition in Relation to the Perfect Tender Rule (PTR)
        
        under PTR, terms for a K for sale of goods are enforced exactly, every K term treated as an express condition
        
        Perfect Tender Rule: The seller is in breach if the goods fail in any respect to confirm to the K
        
        if Seller fails to make Perfect Tender, buyer has 3 courses of action
        
        3 more items...
        
        Work-Arounds for Breaching Sellers
        
        3 more items...
- - - - Monetary Damages at Common Law
        
        Expectation damages
        
        (Court's default) aggrieved party will be entitled to amount that will restore him to amount he would have HAD K BEEN PERFORMED
        
        entitled to WHAT YOU EXPECTED TO GET minus WHAT YOU ACTUALLY GOT
        
        Calculating the Monetary Award Formula
        
        loss of value of the breaching party's performance
        
        Plus any incidental and consequential cost generated by the breach
        
        Minus any payments received from the breaching party
        
        = expectation damaged of the aggrieved party
        
        Minus any costs saved as a result of the breach
        
        Limitations on right to Recover Expectation Damages
        
        aggrieved party may not be able to recover the full amount in the following situations
        
        Situation 1: expectation damages can't be calculated with reasonable certainty
        
        Not mathematical certainty - but court can't pull number from thin air
        
        1 more item...
        
        Situations 2: damages are unforeseeable
        
        frequently tested
        
        Damages not foreseeable, are not recoverable
        
        Situation 3: where damages can be mitigated
        
        If you can lower damages, you con only recover the amount of expectation damages available - had you mitigated
        
        1 more item...
        
        Sometimes Situation 4: where cost of performance greatly exceeds the market value of performance
        
        CoP - cost that would be incurred in an effort to perform as promised under K
        
        1 more item...
        
        Markey Value of Performance - net increase in market value of finding substitute performance of the K
        
        1 more item...
        
        Reliance Damages
        
        designed to restore aggrieved party to the position he was prior to the K
        
        entitled to WHAT YOU HAD if you HAD NOT RELIED ON THE K
        
        non-br party entitled to reliance interest measured by:
        
        Any expenditures made in preparation for performance or in actually performing
        
        Less: any loss which the br party can prove the non-br party can would have suffered even if the K had been completed
        
        When can reliance damages be recovered?
        
        Reliance damages may be available where expectation damages are not available:
        
        SUCH AS when they are too uncertain or speculative
        
        Restitution Damages
        
        the value of benefits conferred upon other party in the transaction
        
        entitled to WHAT YOU GAVE to the BREACHING PARTY
        
        Calculations
        
        Court's discretion and as justice requires by either:
        
        reasonable value or cost of benefits conferred; OR
        
        extent to which the other party's property has increased in value because of the performance rendered
        
        Non-br party is likely to elect to recover Restitutionary damages WHEN
        
        it would exceed the amount recoverable based on his expectation interest
        
        most likely to arise in the context of a "losing K"
        
        Important Limitations:
        
        Available if aggrieved party has partially performed but NOT if party fully performed
        
        Liquidated Damage Clause/ Provisions
        
        LDCs
        
        designed to provide damage of their own choosing in the event of breach - Such previsions are:
        
        enforceable if court finds it to be valid LDC designed to compensate for breach
        
        unenforceable if court finds it constitutes a penalty designed to punish the breach
        
        if court (using LDC Test) finds the clause is a penalty - then it is stricken from the K and default rules apply
        
        LDC Test
        
        Prong 1:
        
        was the clause reasonable at the time of contracting in relation to anticipated harm
        
        1 more item...
        
        Prong 2:
        
        was the clause reasonable in relation to the harm and losses that actually occurred due to breach
        
        Non-default money damages - parties express money damage remedy
      - the GR: in American contract law is that a remedy for a breach of K is a payment of expectation damages
        
        That should be the starting point of every analysis - this it the default award
      - Monetary Damages under UCC
        
        Sellers Remedies
        
        right to recover depends on whether the goods were delivered and accepted by buyer
        
        goods delivered and accepted -> remedy is K price
        
        If not delivered and accepted (because buyer wrongfully rejected or repudiated):
        
        then the seller can recover damages and the measure depends on whether seller has resold goods to a 3rd P
        
        If seller has re-sold
        
        1 more item...
        
        If seller has NOT re-sold
        
        1 more item...
        
        Lost Volume Sellers = supply of goods exceeds the demand
        
        1 more item...
        
        Buyers Remedies
        
        depends on whether buyer has covered (bought replacement goods)
        
        If buyer covers (in good faith)
        
        difference between K price and cover price
        
        If buyer does NOT cover
        
        difference between K price and market price
        
        Difference in Value Damages for Accepted Goods
        
        available if buyer receives and accepts nonconforming goods from the seller
        
        Buyer is entitled to recover difference between value of goods contracted AND value of the goods actually received
        
        Incidental Damages
        
        buyer or seller can recover incidental damages, which are the expenses in either seller dealing w/ the goods after buyer's breach (e.g., storing them) or buyer arranging for cover (e.g., transportation costs)
        
        Consequential Damages
        
        Under UCC only buyer can additionally recover consequential damages that were reasonably foreseeable to seller @ time the K was entered
        
        UCC does not explicitly give seller this right
        
        (e.g., lost profits because of delay in obtaining goods)
        
        Specified Date missed
        
        if buyer sets a delivery date and communicates that time is of the essence
        
        If seller breaches, their liable for all "consequential Ds" reasonably flowing from the breach - INCLUDING lost profits
      - Equitable Remedies
        
        Two Types
        
        Specific Performance
        
        extraordinary remedy by which br party is ordered to perform
        
        Only available when monetary award is considered inadequate
        
        Where Specific Performance Is Generally Available:
        
        unique objects (works of art and precious heirlooks); OR
        
        Real property
        
        Specific Performance under the UCC
        
        UCC liberalizes the rule governing the availability of SP
        
        "Uniqueness" requirement ->
        
        1 more item...
        
        "Capable of immediate performance" requirement ->
        
        1 more item...
        
        Where Specific Performance is Not Available:
        
        Ks for personal services and long-term Ks or relationships
        
        Negative Injunctions
        
        order prohibiting br party form doing something
        
        most common and important area is the employment setting
        
        Availability turns on whether formation employer is seeking mid-term or post-employment
        
        Mid-Term Relief:
        
        when employee under K for a specific period of time Brs by departing before the end of the period, a negative injunction will be available even absent K prohibition, to prevent competing if employee's services are unique or extraordinary
        
        1 more item...
        
        Post-Employment Relief (Covenants not to Compete)
        
        K provision that prohibits post-employment competition
        
        1 more item...
    - - Promissory Estoppel
        
        The type of interest a party may recover under promissory estoppel depends on the jx, as some courts award:
        
        expectations damages;
        
        reliance damages; OR
        
        choose on a case-by-case basis and tailor the remedy to the injustice at issue
      - Restitution and Unjust Enrichment
        
        recall this is an alternative to expectation damages for br of K
        
        However, in the following contexts restitution may be available even when the other party has not Br (i.e., restitution is also a separate cause of action)
        
        Benefits Conferred under a Failed K
        
        when a P bestows benefits on another in connection w/ a failed K (e.g., incapacity, fraud, duress) the party bestowing the benefit may recover their value via restitution
        
        Benefits Conferred by a Breaching Party
        
        A party that Brs a K may recover the benefits on the non-Br party, SO LONG AS there is an offset for any damages caused by the breach
        
        General Unjust Enrichment (No Express K)
        
        A party that confers benefits on another may recover their value where it is unjust for recipient to retain the benefits w/o paying, even absent any express or implied-in-fact K
        
        Two common scenarios where UE is appropriate
        
        2 more items...
        
        A person who bestows benefit w/o request by the party is considered an "officious intermeddler," not entitled to recovery
        
        1 more item...
      - Agreed-To Remedies
        
        parties may K out of the legal and equitable remedies available under the law by specific agreed-to remedies in the K
        
        Two typical forms
        
        Liquidated Damage Clauses (see above); AND
        
        Provisions limiting or excluding damages
        
        Provisions that limit or alter the measure of damages available
        
        i.e., excluding consequential damages
        
        Exclusive remedies, such a limits to repair or replacement of defective goods
        
        such provisions are generally enforceable unless they are unconscionable or they fail their essential purpose
        
        Limitation of consequential damages for personal injury is prima facie unconscionable