Source: http://www.thelaw.agency/restatement-second-of-contracts/
Timestamp: 2019-09-22 06:11:31
Document Index: 546124293

Matched Legal Cases: ['§ 34', '§ 38', '§ 39', '§ 40', '§ 46', '§ 51', '§ 52', '§ 53', '§ 55', '§ 59', '§ 61', '§ 62', '§ 73', '§ 81', '§ 82', '§ 83', '§ 84', '§ 139', '§ 158', '§ 240', '§ 216', '§ 217', '§ 224', '§ 225', '§ 229', '§ 237', '§ 240', '§ 238', '§ 210', '§ 237', '§ 243', '§ 253', '§ 250', '§ 251', '§ 266', '§ 272', '§ 309', '§ 311', '§ 318', '§ 321', '§ 322', '§ 333', '§ 338', '§ 350', '§ 348', '§ 349', '§ 353', '§ 335', '§ 373', '§ 371', '§ 376', '§ 377']

﻿ RESTATEMENT (SECOND) OF CONTRACTS – The Law.Agency | Social Media Forum for Law Students and Lawyers
Home RESTATEMENT (SECOND) OF CONTRACTS
Chapter 1……………………………………………………………………………………… 5
MEANING OF TERMS………………………………………………………………… 5
1. Contract Defined……………………………………………………. 5
Chapter 2……………………………………………………………………………………… 5
FORMATION OF CONTRACTS—PARTIES AND CAPACITY……………….. 5
15. Mental Illness or Defect…………………………………………… 5
Chapter 3……………………………………………………………………………………… 5
FORMATION OF CONTRACTS—MUTUAL ASSENT…………………………. 5
TOPIC 2. MANIFESTATION OF ASSENT‐‐IN GENERAL…………………. 5
20. Effect of Misunderstanding……………………………………… 5
TOPIC 3. MAKING OF OFFERS…………………………………………………. 6
24. Offer Defined…………………………………………………………. 6
25. Option Contracts……………………………………………………. 6
26. Preliminary Negotiations…………………………………………. 6
27. Existence of Contract where Written Memorial is Contemplated…………………………………………………………………… 6
30. Form of Acceptance Invited……………………………………… 6
32. Invitation of Promise or Performance……………………….. 6
33. Certainty……………………………………………………………….. 7
34. Certainty and Choice of Terms; Effect of Performance or Reliance…………………………………………………………………………… 7
TOPIC 4. DURATION OF THE OFFEREE’S POWER OF ACCEPTANCE. 7
35. The Offeree’s Power of Acceptance………………………….. 7
36. Methods of Termination of the Power of Acceptance…. 7
38. Rejection……………………………………………………………….. 7
39. Counter‐offers………………………………………………………… 8
40. Time when Rejection or Counter‐offer Terminates the Power of Acceptance…………………………………………………………. 8
41. Lapse of Time…………………………………………………………. 8
42. Revocation by Communication from Offeror Received by Offeree…………………………………………………………………………….. 8
43. Indirect Communication of Revocation…………………….. 8
45. Option Contract Created by Part Performance or Tender 8
46. Revocation of General Offer…………………………………….. 9
48. Death or Incapacity of Offeror or Offeree………………….. 9
TOPIC 5. ACCEPTANCE OF OFFERS…………………………………………… 9
50. Acceptance of Offer Defined; Acceptance by Performance; Acceptance by Promise ……………………………….. 9
51. Effect of Part Performance without Knowledge of Offer 9
52. Who May Accept an Offer……………………………………….. 9
53. Acceptance by Performance; Manifestation of Intention not to Accept…………………………………………………………………….. 9
54. Acceptance by Performance; Necessity of Notification to Offeror 10
55. Acceptance of Non‐Promissory Offers 10
56. Acceptance by Promise; Necessity of Notification to Offeror 10
58. Necessity of Acceptance Complying with Terms of Offer 10
59. Purported Acceptance Which Adds Qualifications…………………………………………………………………. 10
60. Acceptance of Offer Which States Place, Time or Manner of Acceptance…………………………………………………………………….. 10
61. Acceptance Which Requests Change of Terms 11
62. Effect of Performance by Offeree Where Offer Invites Either Performance or Promise 11
63. Time when Acceptance Takes Effect 11
69. Acceptance by Silence or Exercise of Dominion……………………………………………………………………….. 11
Chapter 4………………………………………………………………………………………………… 11
FORMATION OF CONTRACTS—CONSIDERATION……………………………………………………………………. 11
TOPIC 1. THE REQUIREMENT OF CONSIDERATION………………………………………………………………… 11
71. Requirement of Exchange; Types of Exchange………………………………………………………………………… 11
73. Performance of Legal Duty 12
74. Settlement of Claims 12
77. Illusory and Alternative Promises………………………………………………………………………… 12
79. Adequacy of Consideration; Mutuality of Obligation………………………………………………………………………. 12
81. Consideration as Motive or Inducing Cause 13
TOPIC 2. CONTRACTS WITHOUT CONSIDERATION………………………………………………………………… 13
82. Promise to Pay Indebtedness; Effect on the Statute of Limitations……………………………………………………………………… 13
83. Promise to Pay Indebtedness Discharged in Bankruptcy…………………………………………………………………….. 13
84. Promise to Perform a Duty in Spite of Non‐Occurrence of a Condition……………………………………………………………………….. 13
86. Promise for Benefit Received………………………………………………………………………… 14
87. Option Contract…………………………………………………………………………. 14
89. Modification of Executory Contract…………………………………………………………………………. 14
90. Promise Reasonably Inducing Action or Forbearance…………………………………………………………………… 14
Chapter 5………………………………………………………………………………………………… 14
THE STATUTE OF FRAUDS…………………………………………………………………………………. 14
TOPIC 8. CONSEQUENCES OF NON‐COMPLIANCE……………………………………………………………………… 14
139. Enforcement by Virtue of Action in Reliance 15
Chapter 6………………………………………………………………………………………………… 15
MISTAKE……………………………………………………………………………….. 15
152. When Mistake of Both Parties Makes a Contract Voidable 15
153. When Mistake of One Party Makes a Contract Voidable 15
154. When a Party Bears the Risk of a Mistake 15
158. Relief Including Restitution; Supplying a Term 16
Chapter 9………………………………………………………………………………………………… 16
THE SCOPE OF CONTRACTUAL OBLIGATIONS…………………………………………………………………………. 16
TOPIC 1. THE MEANING OF AGREEMENTS…………………………………………………………………….. 16
201. Whose Meaning Prevails 16
204. Supplying an Omitted Essential Term 16
TOPIC 2. CONSIDERATIONS OF FAIRNESS AND THE PUBLIC INTEREST…………………………………………………………………………… 16
205. Duty of Good Faith and Fair Dealing 16
208. Unconscionable Contract or Term 17
TOPIC 3. EFFECT OF ADOPTION OF A WRITING……………………………………………………………………………. 17
209. Integrated Agreements……………………………………………………………………. 17
210. Completely and Partially Integrated Agreements……………………………………………………………………. 17
211. Standardized Agreements……………………………………………………………………. 17
213. Effect of Integrated Agreement on Prior Agreements (Parol Evidence Rule) .. 17
214. Evidence of Prior or Contemporaneous Agreements and Negotiations…………………………………………………………………… 18
215. Contradiction of Integrated Terms 18
216. Consistent Additional Terms 18
217. Integrated Agreement Subject to Oral Requirement of a Condition……………………………………………………………………….. 18
TOPIC 5. CONDITIONS AND SIMILAR EVENTS……………………………………………………………………………… 18
224. Condition Defined 18
225. Effects of the Non‐Occurrence of a Condition……………………………………………………………………….. 19
229. Excuse of a Condition to Avoid Forfeiture……………………………………………………………………….. 19
Chapter 10………………………………………………………………………………………………. 19
PERFORMANCE AND NON‐PERFORMANCE………………………………………………………………………. 19
TOPIC 1. PERFORMANCES TO BE EXCHANGED UNDER AN EXCHANGE OF PROMISES………………………………………………………………………….. 19
234. Order of Performances………………………………………………………………….. 19
TOPIC 2. EFFECT OF PERFORMANCE AND NON‐PERFORMANCE…………………………………………………………………… 19
236. Claims for Damages for Total and for Partial Breach 19
237. Effect on Other Party’s Duties of a Failure to Render Performance…………………………………………………………………… 19
238. Effect on Other Party’s Duties of a Failure to Offer Performance…………………………………………………………………… 20
210. Part Performances as Agreed Equivalents…………………………………………………………………….. 20
241. Circumstances Significant in Determining Whether a Failure is Material 20
242. Circumstances Significant in Determining When Remaining Duties are Discharged……………………………………………………………………. 20
243. Effect of a Breach by Non‐Performance as Giving Rise to a Claim for Damages for Total Breach 20
TOPIC 3. EFFECT OF PROSPECTIVE NON—PERFORMANCE…………………………………………………………………… 21
250. When a Statement or an Act is a Repudiation……………………………………………………………………. 21
251. When a Failure to Give Assurance May be Treated as a Repudiation……………………………………………………………………. 21
253. Effect of a Repudiation as a Breach and on Other Party’s Duties 21
256. Nullification of Repudiation or Basis for Repudiation……………………………………………………………………. 21
Chapter 11………………………………………………………………………………………………. 22
IMPRACTICABILITY OF PERFORMANCE AND FRUSTRATION OF PURPOSE……………………………………………………………………………….. 22
261. Discharge by Supervening Impracticability………………………………………………………………. 22
265. Discharge by Supervening Frustration……………………………………………………………………… 22
266. Existing Impracticability or Frustration……………………………………………………………………… 22
272. Relief Including Restitution; Supplying a Term 22
Chapter 14………………………………………………………………………………………………. 23
CONTRACT BENEFICIARIES……………………………………………………………………….. 23
302. Intended and Incidental Beneficiaries…………………. 23
309. Defenses Against the Beneficiary………………………… 23
311. Variation of a Duty to a Beneficiary…………………….. 23
313. Government Contracts………………………………………. 24
Chapter 15………………………………………………………………………………… 24
ASSIGNMENT AND DELEGATION………………………………………………. 24
TOPIC 1. WHAT CAN BE ASSIGNED OR DELEGATED…………………. 24
317. Assignment of a Right………………………………………… 24
318. Delegation of Performance of Duty……………………… 24
321. Assignment of Future Rights……………………………….. 24
322. Contractual Prohibition of Assignment………………… 25
TOPIC 2. MODE OF ASSIGNMENT OR DELEGATION…………………. 25
328. Interpretation of Words of Assignment; Effect of Acceptance of Assignment 25 TOPIC 3. EFFECT BETWEEN ASSIGNOR AND ASSIGNEE …………………………………………………. 25
332. Revocability of Gratuitous Assignments………………. 25
333. Warranties of an Assignor………………………………….. 26
TOPIC 4. EFFECT ON THE OBLIGOR’S DUTY…………………………….. 26
336. Defenses Against an Assignee…………………………….. 26
338. Discharge of an Obligor after Assignment…………….. 27
Chapter 16………………………………………………………………………………… 27
REMEDIES……………………………………………………………………………… 27
TOPIC 2. ENFORCEMENT BY AWARD OF DAMAGES…………………. 27
317. Measure of Damages in General…………………………. 27
348. Alternatives to Loss in Value of Performance……….. 27
349. Damages Based on Reliance Interest…………………… 28
350. Avoidability as a Limitation on Damages……………… 28
351. Unforeseeability and Related Limitations on Damages 28
352. Uncertainty as a Limitation on Damages……………… 28
353. Loss Due to Emotional Disturbance…………………….. 28
335. Punitive Damages……………………………………………… 28
TOPIC 4. RESTITUTION…………………………………………………………. 29
371. Measure of Restitution Interest………………………….. 29
373. Restitution When Other Party is in Breach……………. 29
371. Restitution in Favor of Party in Breach…………………. 29
376. Restitution When Contract is Voidable………………… 29
377. Restitution in Cases of Impracticability, Frustration, NonOccurrence of Condition or Disclaimer by Beneficiary … 29
Chapter 1 MEANING OF TERMS
FORMATION OF CONTRACTS—PARTIES AND CAPACITY
Where the contract is made on fair terms and the other party is without knowledge of the mental illness or defect, the power of avoidance under Subsection (1) terminates to the extent that the contract has been so performed in whole or in part or the circumstances have so changed that avoidance would be In such a case a court may grant relief on such equitable terms as justice requires.
FORMATION OF CONTRACTS—MUTUAL ASSENT
TOPIC 2. MANIFESTATION OF ASSENT‐‐IN GENERAL
each party knows or each party has reason to know the meaning attached by the
that party has no reason to know of any different meaning attached by the other, and the other has reason to know the meaning attached by the first
TOPIC 3. MAKING OF OFFERS
An offer may invite or require acceptance to be made by an affirmative answer in words, or by performing or refraining from performing a specified act, or may empower the offeree to make a selection of terms in his
Unless otherwise indicated by the language or the circumstances, an offer invites acceptance in any manner and by any medium reasonable in the
Even though a manifestation of intention is intended to be understood as an offer, it cannot be accepted so as to form a contract unless the terms of the contract are reasonably
The terms of a contract are reasonably certain if they provide a basis for determining the existence of a breach and for giving an appropriate
The fact that one or more terms of a proposed bargain are left open or uncertain may show that a manifestation of intention is not intended to be understood as an offer or as an
§ 34. Certainty and Choice of Terms; Effect of Performance or Reliance
The terms of a contract may be reasonably certain even though it empowers one or both parties to make a selection of terms in the course of
Part performance under an agreement may remove uncertainty and establish that a contract enforceable as a bargain has been
Action in reliance on an agreement may make a contractual remedy appropriate even though uncertainty is not
TOPIC 4. DURATION OF THE OFFEREE’S POWER OF ACCEPTANCE
35. The Offeree’s Power of Acceptance
An offer gives to the offeree a continuing power to complete the manifestation of mutual assent by acceptance of the
A contract cannot be created by acceptance of an offer after the power of acceptance has been terminated in one of the ways listed in §
rejection or counter‐offer by the offeree, or
death or incapacity of the offeror or
In addition, an offeree’s power of acceptance is terminated by the non‐occurrence of any condition of acceptance under the terms of the
§ 38. Rejection
An offeree’s power of acceptance is terminated by his rejection of the offer, unless the offeror has manifested a contrary
A manifestation of intention not to accept an offer is a rejection unless the offeree manifests an intention
to take it under further advisement.
§ 39. Counter‐offers
A counter‐offer is an offer made by an offeree to his offeror relating to the same matter as the original offer and proposing a substituted bargain differing from that proposed by the original
An offeree’s power of acceptance is terminated by his making of a counter‐offer, unless the offeror has manifested a contrary intention or unless the counter‐offer manifests a contrary intention of the
§ 40. Time when Rejection or Counter‐offer Terminates the Power of Acceptance
Rejection or counter‐offer by mail or telegram does not terminate the power of acceptance until received by the offeror, but limits the power so that a letter or telegram of acceptance started after the sending of an otherwise effective rejection or counter‐offer is only a counter‐offer unless the acceptance is received by the offeror before he receives the rejection or counter‐offer.
An offeree’s power of acceptance is terminated at the time specified in the offer, or, if no time is specified, at the end of a reasonable
What is a reasonable time is a question of fact, depending on all the circumstances existing when the offer and attempted acceptance are
Unless otherwise indicated by the language or the circumstances, and subject to the rule stated in 49, an offer sent by mail is seasonably accepted if an acceptance is mailed at any time before midnight on the day on which the offer is received.
Where an offer invites an offeree to accept by rendering a performance and does not invite a promissory acceptance, an option contract is created when the offeree tenders or begins the invited performance or tenders a beginning of
The offeror’s duty of performance under any option contract so created is conditional on completion or
§ 46. Revocation of General Offer
Where an offer is made by advertisement in a newspaper or other general notification to the public or to a number of persons whose identity is unknown to the offeror, the offeree’s power of acceptance is terminated when a notice of termination is given publicity by advertisement or other general notification equal to that given to the offer and no better means of notification is reasonably available.
An offeree’s power of acceptance is terminated when the offeree or offeror dies or is deprived of legal capacity to enter into the proposed contract.
TOPIC 5. ACCEPTANCE OF OFFERS
50. Acceptance of Offer Defined; Acceptance by Performance; Acceptance by Promise
Acceptance of an offer is a manifestation of assent to the terms thereof made by the offeree in a manner invited or required by the
Acceptance by performance requires that at least part of what the offer requests be performed or tendered and includes acceptance by a performance which operates as a return
§ 51. Effect of Part Performance without Knowledge of Offer
§ 52. Who May Accept an Offer
§ 53. Acceptance by Performance; Manifestation of Intention not to Accept
An offer can be accepted by the rendering of a performance only if the offer invites such an
Except as stated in 69, the rendering of a performance does not constitute an acceptance if within a reasonable time the offeree exercises reasonable diligence to notify the offeror of non‐acceptance.
Where an offer of a promise invites acceptance by performance and does not invite a promissory
acceptance, the rendering of the invited performance does not constitute an acceptance if before the offeror performs his promise the offeree manifests an intention not to accept.
Where an offer invites an offeree to accept by rendering a performance, no notification is necessary to make such an acceptance effective unless the offer requests such a
the offer indicates that notification of acceptance is not
§ 55. Acceptance of Non‐Promissory Offers
Acceptance by promise may create a contract in which the offeror’s performance is completed when the offeree’s promise is made.
§ 59. Purported Acceptance Which Adds Qualifications
A reply to an offer which purports to accept it but is conditional on the offeror’s assent to terms additional to or different from those offered is not an acceptance but is a counter‐offer.
§ 61. Acceptance Which Requests Change of Terms
§ 62. Effect of Performance by Offeree Where Offer Invites Either Performance or Promise
Where an offer invites an offeree to choose between acceptance by promise and acceptance by performance, the tender or beginning of the invited performance or a tender of a beginning of it is an acceptance by
Such an acceptance operates as a promise to render complete
an acceptance under an option contract is not operative until received by the
Where an offeree takes the benefit of offered services with reasonable opportunity to reject them and reason to know that they were offered with the expectation of
Where the offeror has stated or given the offeree reason to understand that assent may be manifested by silence or inaction, and the offeree in remaining silent and inactive intends to accept the
Where because of previous dealings or otherwise, it is reasonable that the offeree should notify the offeror if he does not intend to
An offeree who does any act inconsistent with the offeror’s ownership of offered property is bound in accordance with the offered terms unless they are manifestly But if the act is wrongful as against the offeror it is an acceptance only if ratified by him.
FORMATION OF CONTRACTS—CONSIDERATION
TOPIC 1. THE REQUIREMENT OF CONSIDERATION
To constitute consideration, a performance or a return promise must be bargained
A performance or return promise is bargained for if it is sought by the promisor in exchange for his promise and is given by the promisee in exchange for that
the creation, modification, or destruction of a legal
The performance or return promise may be given to the promisor or to some other It may be given by the promisee or by some other person.
§ 73. Performance of Legal Duty
the forbearing or surrendering party believes that the claim or defense may be fairly determined to be
The execution of a written instrument surrendering a claim or defense by one who is under no duty to execute it is consideration if the execution of the written instrument is bargained for even though he is not asserting the claim or defense and believes that no valid claim or defense
each of the alternative performances would have been consideration if it alone had been bargained for;
one of the alternative performances would have been consideration and there is or appears to the parties
to be a substantial possibility that before the promisor exercises his choice events may eliminate the alternatives which would not have been consideration.
“mutuality of ”
§ 81. Consideration as Motive or Inducing Cause
The fact that what is bargained for does not of itself induce the making of a promise does not prevent it from being consideration for the
The fact that a promise does not of itself induce a performance or return promise does not prevent the performance or return promise from being consideration for the
TOPIC 2. CONTRACTS WITHOUT CONSIDERATION
§ 82. Promise to Pay Indebtedness; Effect on the Statute of Limitations
A promise to pay all or part of an antecedent contractual or quasi‐contractual indebtedness owed by the promisor is binding if the indebtedness is still enforceable or would be except for the effect of a statute of
The following facts operate as such a promise unless other facts indicate a different intention:
A statement to the obligee that the statute of limitations will not be pleaded as a
§ 83. Promise to Pay Indebtedness Discharged in Bankruptcy
§ 84. Promise to Perform a Duty in Spite of Non‐Occurrence of a Condition
Except as stated in Subsection (2), a promise to perform all or part of a conditional duty under an antecedent contract in spite of the non‐occurrence of the condition is binding, whether the promise is made before or after the time for the condition to occur, unless
occurrence of the condition was a material part of the agreed exchange for the performance of the duty and the promise was under no duty that it occur; or
uncertainty of the occurrence of the condition was an element of the risk assumed by the
A promise made in recognition of a benefit previously received by the promisor from the promisee is binding to the extent necessary to prevent
to the extent that its value is disproportionate to the
is in writing and signed by the offeror, recites a purported consideration. for the making of the offer, and proposes an exchange on fair terms within a reasonable time; or
is made irrevocable by
An offer which the offeror should reasonably expect to induce action or forbearance of a substantial character on the part of the offeree before acceptance and which does induce such action or forbearance is binding as an option contract to the extent necessary to avoid
A promise which the promisor should reasonably expect to induce action or forbearance on the part of the promisee or a third person and which does induce such action or forbearance is binding if injustice can be avoided only by enforcement of the The remedy granted for breach may be limited as justice requires.
TOPIC 8. CONSEQUENCES OF NON‐COMPLIANCE
§ 139. Enforcement by Virtue of Action in Reliance
A promise which the promisor should reasonably expect to induce action or forbearance on the part of the promisee or a third person and which does induce the action or forbearance is enforceable notwithstanding the Statute of Frauds if injustice can be avoided only by enforcement of the The remedy granted for breach is to be limited as justice requires.
the extent to which the action or forbearance was foreseeable by the
Where a mistake of both parties at the time a contract was made as to a basic assumption on which the contract was made has a material effect on the agreed exchange of performances, the contract is voidable by the adversely affected party unless he bears the risk of the mistake under the rule stated in §
In determining whether the mistake has a material effect on the agreed exchange of performances, account is taken of any relief by way of reformation, restitution, or
the other party had reason to know of the mistake or his fault caused the
the risk is allocated to him by the court on the ground that it is reasonable in the circumstances to do
§ 158. Relief Including Restitution; Supplying a Term
In any case governed by the rules stated in this Chapter, either party may have a claim for relief including restitution under the rules stated in § 240 and
In any case governed by the rules stated in this Chapter, if those rules together with the rules stated in Chapter 16 will not avoid injustice, the court may grant relief on such terms as justice requires including protection of the parties’ reliance
THE SCOPE OF CONTRACTUAL OBLIGATIONS
TOPIC 1. THE MEANING OF AGREEMENTS
Where the parties have attached the same meaning to a promise or agreement or a term thereof, it is interpreted in accordance with that
that party had no reason to know of any different meaning attached by the other, and the other had reason to know the meaning attached by the first
Except as stated in this Section, neither party is bound by the meaning attached by the other, even though the result may be a failure of mutual
When the parties to a bargain sufficiently defined to be a contract have not agreed with respect to a term which is essential to a determination of their rights and duties, a term which is i~èasonab1e in the circumstances is supplied by the court.
TOPIC 3. EFFECT OF ADOPTION OF A WRITING
Whether there is an integrated agreement is to be determined by the court as a question preliminary to determination of a question of interpretation or to application of the parol evidence
Where the parties reduce an agreement to a writing which in view of its completeness and specificity reasonably appears to be a complete agreement, it is taken to be an integrated agreement unless it is established by other evidence that the writing did not constitute a final
A completely integrated agreement is an integrated agreement adopted by the parties as a complete and exclusive statement of the terms of the
A partially integrated agreement is an integrated agreement other than a completely integrated
Whether an agreement is completely or partially integrated is to be determined by the court as a question preliminary to determination of a question of interpretation or to application of the parol evidence
Except as stated in Subsection (3), where a party to an agreement signs or otherwise manifests assent to a writing and has reason to believe that like writings are regularly used to embody terms of agreements of the same type, he adopts the writing as an integrated agreement with respect to the terms included in the
Such a writing is interpreted wherever reasonable as treating alike all those similarly situated, without regard to their knowledge or understanding of the standard terms of the
Where the other party has reason to believe that the party manifesting such assent would not do so if he knew that the writing contained a particular term, the term is not part of the
A binding completely integrated agreement discharges prior agreements to the extent that they are within its
An integrated agreement that is not binding or that is voidable and avoided does not discharge a prior agreement. But an integrated agreement, even though not binding, may be effective to render inoperative a term which would have been part of the agreement if it had not been
ground for granting or denying rescission, reformation, specific performance, or other
§ 216. Consistent Additional Terms
Evidence of a consistent additional term is admissible to supplement an integrated agreement unless the court finds that the agreement was completely
An agreement is not completely integrated if the writing omits a consistent additional agreed term which
such a term as in the circumstances might naturally be omitted from the
§ 217. Integrated Agreement Subject to Oral Requirement of a Condition
TOPIC 5. CONDITIONS AND SIMILAR EVENTS
§ 224. Condition Defined
A condition is an event, not certain to occur, which must occur, unless its non‐occurrence is excused, before performance under a contract becomes due.
§ 225. Effects of the Non‐Occurrence of a Condition
Performance of a duty subject to a condition cannot become due unless the condition occurs or its non‐ occurrence is
Unless it has been excused, the non‐occurrence of a condition discharges the duty when the condition can no longer
Non‐occurrence of a condition is not a breach by a party unless he is under a duty that the condition
§ 229. Excuse of a Condition to Avoid Forfeiture
To the extent that the non‐occurrence of a condition would cause disproportionate forfeiture, a court may excuse the non‐occurrence of that condition unless its occurrence was a material part of the agreed exchange.
Chapter 10 PERFORMANCE AND NON‐PERFORMANCE
TOPIC 1. PERFORMANCES TO BE EXCHANGED UNDER AN EXCHANGE OF PROMISES
Where all or part of the performances to be exchanged under an exchange of promises can be rendered simultaneously, they are to that extent due simultaneously, unless the language or the circumstances indicate the contrary.
Except to the extent stated in Subsection (1), where the performance of only one party under such an exchange requires a period of time, his performance is due at an earlier time than that of the other party, unless the language or the circumstances indicate the
TOPIC 2. EFFECT OF PERFORMANCE AND NON‐PERFORMANCE
A claim for damages for total breach is one for damages based on all of the injured party’s remaining rights to
A claim for damages for partial breach is one for damages based on only part of the injured party’s remaining rights to
§ 237. Effect on Other Party’s Duties of a Failure to Render Performance
Except as stated in § 240, it is a condition of each party’s remaining duties to render performances to be exchanged under an exchange of promises that there be no uncured material failure by the other party to render
any such performance due at an earlier time.
§ 238. Effect on Other Party’s Duties of a Failure to Offer Performance
Where all or part of the performances to be exchanged under an exchange of promises are due simultaneously, it is a condition of each party’s duties to render such performance that the other party either render or, with manifested present ability to do so, offer performance of his part of the simultaneous exchange.
§ 210. Part Performances as Agreed Equivalents
If the performances to be exchanged under an exchange of promises can be apportioned into corresponding pairs of part performances so that the parts of each pair are properly regarded as agreed equivalents, a party’s performance of his part of such a pair has the same effect on the other’s duties to render performance of the agreed equivalent as it would have if only that pair of performances had been promised.
the extent to which the behavior of the party failing to perform or to offer to perform comports with standards of good faith and fair
In determining the time after which a party’s uncured material failure to render or to offer performance discharges the other party’s remaining duties to render performance under the rules stated in § 237 and 238, the following circumstances are significant:
the extent to which the agreement provides for performance without delay, but a material failure to perform or to offer to perform on a stated day does not of itself discharge the other party’s remaining duties unless the circumstances, including the language of the agreement, indicate that performance or an offer to perform by that day is
§ 243. Effect of a Breach by Non‐Performance as Giving Rise to a Claim for Damages for Total Breach
With respect to performances to be exchanged under an exchange of promises, a breach by non‐ performance gives rise to a claim for damages for total breach only if it discharges the injured party’s remaining duties to render such performance, other than a duty to render an agreed equivalent under 240.
Except as stated in Subsection (3), a breach by nonperformance accompanied or followed by a repudiation gives rise to a claim for damages for total
Where at the time of the breach the only remaining duties of performance are those of the party in breach and are for the payment of money in installments not related to one another, his breach by non‐ performance as to less than the whole, whether or not accompanied or followed by a repudiation, does not give rise to a claim for damages for total
In any case other than those stated in the preceding subsections, a breach by non‐performance gives rise to a claim for total breach only if it so substantially impairs the value of the contract to the injured party at the time of the breach that it is just in the circumstances to allow him to recover damages based on all his remaining rights to
TOPIC 3. EFFECT OF PROSPECTIVE NON—PERFORMANCE
a statement by the obligor to the obligee indicating that the obligor will commit a breach that would of itself give the obligee a claim for damages for total breach under 243, or
a voluntary affirmative act which renders the obligor unable or apparently unable to perform without such a
Where reasonable grounds arise to believe that the obligor will commit a breach by non‐performance that would of itself give the obligee a claim for damages for total breach under 243, the obligee may demand adequate assurance of due performance and may, if reasonable, suspend any performance for which he has not already received the agreed exchange until he receives such assurance.
The obligee may treat as a repudiation the obligor’s failure to provide within a reasonable time such assurance of due performance as is adequate in the circumstances of the particular
§ 253. Effect of a Repudiation as a Breach and on Other Party’s Duties
Where an obligor repudiates a duty before he has committed a breach by non‐performance and before he has received all of the agreed exchange for it, his repudiation alone gives rise to a claim for damages for total breach.
Where performances are to be exchanged under an exchange of promises, one party’s repudiation of a duty to render performance discharges the other party’s remaining duties to render
The effect of a statement as constituting a repudiation under § 250 or the basis for a repudiation under 251 is nullified by a retraction of the statement if notification of the retraction comes to the attention of the injured party before he materially changes his position in reliance on the repudiation or indicates to the other party that he considers the repudiation to be final.
The effect of events other than a statement as constituting a repudiation under 250 or the basis for a repudiation under § 251 is nullified if, to the knowledge of the injured party, those events have ceased to exist before he materially changes his position in reliance on the repudiation or indicates to the other party that he considers the repudiation to be final.
Where, after a contract is made, a party’s performance is made impracticable without his fault by the occurrence of an event the non‐occurrence of which was a basic assumption on which the contract was made, his duty to render that performance is discharged, unless the language or the circumstances indicate the contrary.
Where, after a contract is made, a party’s principal purpose is substantially frustrated without his fault by the occurrence of an ‐event the non‐occurrence of which was a basic assumption on which the contract was made, his remaining duties to render performance are discharged, unless the language or the circumstances indicate the contrary.
§ 266. Existing Impracticability or Frustration
Where, at the time a contract is made, a party’s performance under it is impracticable without his fault because of a fact of which he has no reason to know and the non‐existence of which is a basic assumption on which the contract is made, no duty to render that performance arises, unless the language or circumstances indicate the
Where, at the time a contract is made, a party’s principal purpose is substantially frustrated without his fault by a fact of which he has no reason to know and the non‐existence of which is a basic assumption on which the contract is made, no duty of that party to render performance arises, unless the language or circumstances indicate the
§ 272. Relief Including Restitution; Supplying a Term
In any case governed by the rules stated in this Chapter, if those rules together with the rules stated in Chapter 16 will not avoid injustice, the court may grant relief on such terms as justice requires including protection
of the parties’ reliance interests.
CONTRACT BENEFICIARIES
the circumstances indicate that the promisee intends to give the beneficiary the benefit of the promised
An incidental beneficiary is a beneficiary who is not an intended
§ 309. Defenses Against the Beneficiary
A promise creates no duty to a beneficiary unless a contract is formed between the promisor and the promisee; and if a contract is voidable or unenforceable at the time of its formation the right of any beneficiary is subject to the
If a contract ceases to be binding in whole or in part because of impossibility, illegality, non‐occurrence of a condition, or present or prospective failure of performance, the right of any beneficiary is to that extent discharged or
Except as stated in Subsections (1) and (2) and in 311 or as provided by the contract, the right of any beneficiary against the promisor is not subject to the promisor’s claims or defenses against the promisee or to the promisee’s claims or defenses against the beneficiary.
A beneficiary’s right against the promisor is subject to any claim or defense arising from his own conduct or
§ 311. Variation of a Duty to a Beneficiary
Discharge or modification of a duty to an intended beneficiary by conduct of the promisee or by a subsequent agreement between promisor and promisee is ineffective if a term of the promise creating the duty so
Such a power terminates when the beneficiary, before he receives notification of the discharge or modification, materially changes his position in justifiable reliance on the promise or brings suit on it or manifests assent to it at the request of the promisor or
If the promisee receives consideration for an attempted discharge or modification of the promisor’s duty which is ineffective against the beneficiary, the beneficiary can assert a right to the consideration so received. The promisor’s duty is discharged to the extent of the amount received by the
The rules stated in this Chapter apply to contracts with a government or governmental agency except to the extent that application would contravene the policy of the law authorizing the contract or prescribing remedies for its
the promisee is subject to liability to the member of the public for the damages and a direct action against the promisor is consistent with the terms of the contract and with the policy of the law authorizing the contract and prescribing remedies for its
TOPIC 1. WHAT CAN BE ASSIGNED OR DELEGATED
317. Assignment of a Right
An assignment of a right is a manifestation of the assignor’s intention to transfer it by virtue of which the assignor’s right to performance by the obligor is extinguished in whole or in part and the assignee acquires a right to such
the assignment is forbidden by statute or is otherwise in‐ ‐operative on grounds of public policy, or
assignment is validly precluded by
§ 318. Delegation of Performance of Duty
An obligor can properly delegate the performance of his duty to another unless the delegation is contrary to public policy or the terms of his
Unless otherwise agreed, a promise requires performance by a particular person only to the extent that the obligee has a substantial interest in having that person perform or control the acts
Unless the obligee agrees otherwise, neither delegation of performance nor a contract to assume the duty made with the obligor by the person delegated discharges any duty or liability of the delegating
§ 321. Assignment of Future Rights
Except as otherwise provided by statute, an assignment of a right to payment expected to arise out of an
existing employment or other continuing business relationship is effective in the same way as an assignment of an existing right.
Except as otherwise provided by statute and as stated in Subsection (1), a purported assignment of a right expected to arise under a contract not in existence operates only as a promise to assign the right when it arises and as a power to enforce
§ 322. Contractual Prohibition of Assignment
Unless the circumstances indicate the contrary, a contract term prohibiting assignment of “the contract” bars only the delegation to an assignee of the performance by the assignor of a duty or
A contract term prohibiting assignment of rights under the contract, unless a different intention is
does not forbid assignment of a right to damages for breach of the whole contract or a right arising out of the assignor’s due performance of his entire obligation;
is for the benefit of the obligor, and does not prevent the assignee from acquiring rights against the assignor or the obligor from~ discharging his duty as if there were no such
TOPIC 2. MODE OF ASSIGNMENT OR DELEGATION
328. Interpretation of Words of Assignment; Effect of Acceptance of Assignment
Unless the language or the circumstances indicate the contrary, as in an assignment for security, an assignment of “the contract” or of “all my rights under the contract” or an assignment in similar general terms is an assignment of the assignor’s rights and a delegation of his unperformed duties under the
Unless the language or the circumstances indicate the contrary, the acceptance by an assignee of such an assignment operates as a promise to the assignor to perform the assignor’s unperformed duties, and the obligor of the assigned rights is an intended beneficiary of the
TOPIC 3. EFFECT BETWEEN ASSIGNOR AND ASSIGNEE
332. Revocability of Gratuitous Assignments
Unless a contrary intention is manifested, a gratuitous assignment is irrevocable if
the assignment is accompanied by delivery of a writing of a type customarily accepted as a symbol or as evidence of the right
Except as stated in this Section, a gratuitous assignment is revocable and the right of the assignee is terminated by the assignor’s death or incapacity, by a subsequent assignment by the assignor, or by notification from the assignor received by the assignee or by the
A gratuitous assignment ceases to be revocable to the extent that before the assignee’s right is terminated he obtains
a new contract of the obligor by
A gratuitous assignment is irrevocable to the extent necessary to avoid injustice where the assignor should reasonably expect the assignment to induce action or forbearance by the assignee or a sub‐assignee and the assignment does induce such action or
as security for or in total or partial satisfaction of a preexisting debt or other
§ 333. Warranties of an Assignor
Unless a contrary intention is manifested, one who assigns or purports to assign a right by assignment under seal or for value warrants to the assignee
that any writing evidencing the right which is delivered to the assignee or exhibited to him to induce him to accept the assignment is genuine and what it purports to
An assignment does not of itself operate as a warranty that the obligor is solvent or that he will perform his obligation.
An assignor is bound by affirmations and promises to the assignee with reference to the right assigned in the same way and to the same extent that one who transfers goods is bound in like
An assignment of a right to a sub‐assignee does not operate as an assignment of the assignee’s rights under his assignor’s warranties unless an intention is manifested to assign the rights under the
TOPIC 4. EFFECT ON THE OBLIGOR’S DUTY
336. Defenses Against an Assignee
By an assignment the assignee acquires a right against the obiigor only to the extent that the obligor is under a duty to the assignor; and if the right of the assignor would be voidable by the obligor or unenforceable against him if no assignment had been made, the right of the assignee is subject to the
The right of an assignee is subject to any defense or claim of the obligor which accrues before the obligor receives notification of the assignment, but not to defenses or claims which accrue thereafter except as stated in this Section or as provided by
Where the right of an assignor is subject to discharge or modification in whole or in part by impossibility, illegality, non‐occurrence of a condition, or present or prospective failure of performance by an obligee, the right of the assignee is to that extent subject to discharge or modification even after the obligor receives notification of the
An assignee’s right against the obligor is subject to any defense or claim arising from his conduct or to which he was subject as a party or a prior assignee because he had
§ 338. Discharge of an Obligor after Assignment
Except as stated in this Section, notwithstanding an assignment, the assignor retains his power to discharge or modify the duty of the obligor to the extent that the obligor performs or otherwise gives value until but not after the obligor receives notification that the right has been assigned and that performance is to be rendered to the
So far as an assigned right is conditional on the performance of a return promise, and notwithstanding notification of the assignment, any modification of or substitution for the contract made by the assignor and obligor in good faith and in accordance with reasonable commercial standards is effective against the The assignee acquires corresponding rights under the modified or substituted contract.
Notwithstanding a defect in the right of an assignee, he has the same power his assignor had to discharge or modify the duty of the obligor to the extent that the obligor gives value or otherwise changes his position in good faith and without knowledge or reason to know of the
against the owner or an assignor having a power of avoidance, unless given by him or by a person in possession of the writing with his consent and any necessary endorsement or assignment;
against a subsequent assignee who takes possession of the writing and gives value in good faith and without knowledge or reason to know of the discharge or
TOPIC 2. ENFORCEMENT BY AWARD OF DAMAGES
317. Measure of Damages in General
Subject to the limitations stated in § 350—53, the injured party has a right to damages based on his expectation interest as measured by
the loss in the value to him of the other party’s performance caused by its failure or deficiency, plus
any cost or other loss that he has avoided by not having to
§ 348. Alternatives to Loss in Value of Performance
If a breach delays the use of property and the loss in value to the injured party is not proved with reasonable certainty, he may recover damages based on the rental value of the property or on interest on the value of the
the reasonable cost of completing performance or of remedying the defects if that cost is not clearly disproportionate to the probable loss in value to
If a breach is of a promise conditioned on a fortuitous event and it is uncertain whether the event would have occurred had there been no breach, the injured party may recover damages based on the value of the
§ 349. Damages Based on Reliance Interest
Except as stated in Subsection (2), damages are not recoverable for loss that the injured party could have avoided without undue risk, burden or
Damages are not recoverable for loss that the party in breach did not have reason to foresee as a probable result of the breach when the contract was
as a result of special circumstances beyond the ordinary course of events, that the party in breach had reason to
§ 353. Loss Due to Emotional Disturbance
§ 335. Punitive Damages
Punitive damages are not recoverable for a breach of contract unless the conduct constituting the breach is
TOPIC 4. RESTITUTION
371. Measure of Restitution Interest
the reasonable value to the other party of what he received in terms of what it would have cost him to obtain it from a person in the claimant’s position, or
the extent to which the other party’s property has been increased in value or his other interests
§ 373. Restitution When Other Party is in Breach
Subject to the rule stated in Subsection (2), on a breach by non‐performance that gives rise to a claim for damages for total breach or on a repudiation, the injured party is entitled to restitution for any benefit that he has conferred on the other party by way of part performance or
The injured party has no right to restitution if he has performed all of his duties under the contract and no performance by the other party remains due other than payment of a definite sum of money for that
§ 371. Restitution in Favor of Party in Breach
Subject to the rule stated in Subsection (2), if a party justifiably refuses to perform on the ground that his remaining duties of performance have been discharged by the other party’s breach, the party in breach is entitled to restitution for any benefit that he has conferred by way of part performance or reliance in excess of the loss that he has caused by his own
To the extent that, under the manifested assent of the parties, a party’s performance is to be retained in the case of breach, that party is not entitled to restitution if the value of the performance as liquidated damages is reasonable in the light of the anticipated or actual loss caused by the breach and the difficulties of proof of
§ 376. Restitution When Contract is Voidable
§ 377. Restitution in Cases of Impracticability, Frustration, NonOccurrence of Condition or Disclaimer by Beneficiary
A party whose duty of performance does not arise or is discharged as a result of impracticability of
performance, frustration of purpose, non‐occurrence of a condition or disclaimer by a beneficiary is entitled to restitution for any benefit that he has conferred on the other party by way of part performance or reliance.
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3rd Restatement and 402a - CAUCC 2-201 Statute of Frauds