Contracts
Common Law or UCC? ALWAYS STEP 1!
Goods predominate
Real estate and services predominate
UCC
Is someone a merchant?
Common Law
Formation? Step 2
Some parts of Art 2 may/n't apply
Offer with definite and certain terms is communicated with intent to enter a K
Bilateral K: exchange of promises
Unilateral K: Promise exchanged for performance
Acceptance
Consideration (rare, mostly MBE)
No Defenses, such as:
Before revocation, rejection, or counteroffer = valid acceptance
Counteroffer negates 1st offer, switches parties around
mere bargaining is not a counter
mirror image rule applies: if a new K isn't
the same as the OG, it's a counteroffer
Mirror image rule doesn't apply: counter
with new terms counts for acceptance
conditional acceptance is a counter
Mirror image rule: accepting but changing the
terms may/n't be, depends on UCC or CL
counter under CL
acceptance under UCC
if critical terms are different, knockout rule
cancels both conflicting provisions
Offeror can control the method of acceptance
If offeror says nothing, ee can accept by starting performance
Acceptance by letter
valid on dispatch
if sending an acceptance after a rejection, then
whichever gets there first is valid
but in a unilateral contract, offeree
must finish for contract to be valid
a bargained for exchange
Reciprocally induced legally valuable detriments/promises
an act of forbearance works if it gives a benefit to the other party
CL: pre-existing duty can't act as
consideration for a new promise
UCC: New consideration is not reqd to modify a
goods contract, good faith is the only test
Promissory Estoppel: substitute for consideration, requires:
- Reasonable, detrimental, and foreseeable reliance
- Enforcement is necessary to avoid injustice
1.Promise
lack of capacity
Statute of Frauds (VERY COMMON FOR QUESTIONS),
requires a signed writing including the material terms of the K
illegality
misrepresentation
nondisclosure
duress
unconscionability
mistake of fact (either mutual or unilateral)
people under 18
mental incompetents
intoxicated people
Suretyship (promise to pay another's debts)
Promise in consideration of marriage
K that can't be done within a year
real estate contracts
sale of goods for $500 or more
if mutual then voidable by the adversely affected party
unilateral enforcement is not voidable unless the non-mistaken person had reason to know about the mistake, then voidable by the mistaken party only
Interpretation: Step 3
K construed as a whole, preference given to written provisions using the OG meanings of words, construed against the drafter if ambiguous
Gap filling provisions
For if K isn't explicit
Parol evidence rule
Warranties
Express warranty
Implied warranty of merchantability
implied warranty of fitness for a specific purpose
created by the seller
become part of the agreement if they are the basis of the bargain
included with every sale of goods
goods must be fit for their ordinary purposes
requires a direct representation by the seller or seller's representative that the product will fit what the buyer wants
unusual fact patterns, usually a seller
picking something out for a buyer
can alter this with explicitly excluding or
modifying their language about merchantability
must be conspicuous if in writing,
ie words like "as is," "with all faults," etc.
Can also alter/exclude this warranty by course of
dealing, course of performance, or usage of trade
missing terms - supplied by ucc
whether the meaning of a document can be determined by the negotiations of parties prior to the written contract. 2 Questions
- What's the purpose of the evidence being intro'd
- Does the evidence relate to a term/K that's integrated
integrated is whether parties inteded written K to be the final terms
was a merger clause included? generally says something like "this writing is the complete and entire agreement of the parties" if so, then can't use this
also may look at how detailed K is
if purpose is to explain/interpret terms of a written K, it's admissible (may need to show ambiguity)
UCC uses usage of trade, course of dealing,
and course of performance to supp terms
Performance: 4
Remedies: 5
3rd Paries
Duty to perform generally discharged by:
performance
tender of performance
a completed condition subsequent
Otherwise discharged if it's:
illegal
impossible
impractical
frustrated
rescinded
other party fails to fulfill a promise large enough to breach K
Conditions
type
implied
constructive
express
timing
concurrent
precedent
subsequent
Breach
minor
must still perform, but get dmgs
major
excused from performance and entitled to all remedies available
UCC: buyer may reject some or all of product if it doesn't conform. Can't reject after accepting/failing to inspect, unless goods are so defective their value is substantially impaired
at CL, watch out for preexisting duty rule in modification questions
Monetary Damages
expectation damages
reliance damages
restitution
liquidated damages
Under UCC
seller's remedies depend on whether goods have been delivered
buyer's remedies include damages or specific performance. A key factor is if buyer has bought replacement goods
Equitable remedies
Specific performance
restitution
unjust enrichment
negative injunctive relief
only if money would be inadequate relief, ie land/unique objects
watch out for Laches defense
beneficiary
assignment
delegation of the obligation
do they have standing to sue promisor?
incidental beneficiary? no
Intended beneficiary
against breaching promisor? yes
against promisee not performing? no,
must be an independent obligation
transfer right to receive benefits to someone else.
May transfer all or part of a right
Assignee may enforce K against obligor
can't assign rights that substantially change a K's risks/duties, those that are for future rights to arise under future K's, and those that are illegal
3rd agrees to perform part of K for one of the parties
delegator is still on the hook unless there's a novation
novation:obligee releases delegator from
obligations in exchange for liability of delagatee
can't delegate
personal performance K when relying on individual's unique qualitys
if K prohibits