Source: https://www.scribd.com/document/90220870/New-Outline
Timestamp: 2017-05-27 17:48:47
Document Index: 354962833

Matched Legal Cases: ['§45', '§86', '§201', 'arty 4', '§229', '§351', 'artK 2']

New Outline | Parol Evidence Rule | Breach Of Contract
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1. Must have mutual assent “meeting of the minds” a. Duty to Read: A party is bound by his objective indication of assent, despite the lack of a subjective agreement due to his failure to read i. This includes clicking “I Agree” on a website 2. Offer requires (1) manifestation of willingness to enter into a bargain, (2) clear and definite, (3) so made as to justify another person that his assent to that bargain is invited and will conclude it. a. “Reasonable Person” distinguishes “offers” from invitation to negotiate (i.e. advertisements) b. Factors for (2): completeness of bargain, context, prior dealings, etc. c. Option K’s: requires a signed writing stating purported consideration and the exchange is on fair terms within a reasonable time only revocable by time lapse i. Part Performance in Option K (§45): Commencement of performance creates an option, which suffices for consideration, can argue it was “mere preparation” d. UCC: Defines “goods” to include movable things other than money and various intangible rights Must deal “mainly” with goods NOT exclusively i. UCC Offer: any manner inviting acceptance reasonable under circumstances (MUST BE BETWEEN MERCHANTS) 1. UCC Firm Offers (“Steady” Offers): requires (1) signing a writing (2) assurance offer will be open (3) by a merchant, with a 3 month limit, rejects common law need for consideration e. Not Offer: Offer made as joke or offeree knows or should know offeror lacks intent or knowledge of other party’s mistake may be construed as no offer i. Preliminary Negotiations/ Invitation to Deal ii. Advertisements f. Termination of Offer: A contract can only be terminated by: i. Rejection Silence cannot constitute acceptance ii. Counteroffer Terminates original offer iii. Offeror’s Death or Mental Disability If offeror dies or is rendered mentally disabled 1. If mental disability manifests after acceptance, the contract is still binding iv. Revocation Offeror has power to revoke anytime before acceptance (NOT in Options though) 1. Must be communicated to offeree 3. Acceptance requires (1) manifestation of assent (cannot be an imposed duty to reject offer) (2) showing express commitment to the terms of the offer a. Must be accepted in the manner specified “offeror is master of the offer” b. Mirror Image Rule: Acceptance is valid only if it “mirror’s the offer” (however in unilateral contracts, substantial compliance may still bind the other party) c. UCC “Perfect Tender” Rule: Performance must mirror the terms specified in the contract exactly or else contract is invalid. (NO SUBSTANTIAL COMPLIANCE) d. Methods of Acceptance: i. If no method specified, language is ambiguous or only suggests a method, any reasonable method suffices ii. Part-Performance Rule: In unilateral contracts, constitutes an implied promise to complete the performance specified in the contract, thus commencement of performance= acceptance 1. Otherwise an offer in a unilateral contract can be revoked before performance begins iii. Notice is necessary for a bilateral contract
Option Contracts (Reliance on option without consideration): An offer is binding as an option if the offeror should reasonably expect to induce action on part of the offeree before acceptance and does induce such action. When one party places a naïve faith in someone who is indifferent to their welfare. however generally is valid for option contracts and courts do not delve into the adequacy of consideration a. Pre-Existing Duty Rule: No consideration if one party already has an obligation to perform as specified in the contract 1. Moral Benefit/ Altruism Form of past consideration 1. which was only worth $25.  Promissory estoppel cannot be asserted to make an b. UCC Acceptance: any manner sufficient to show agreement
1. Material Benefit (minority rule) is when a promise is made after a material benefit (moral obligation) is received requires no consideration. Promises made in negotiations can be enforced when a party makes a pre-contractual commitment on which the other party reasonably relies i. Illusory Promises An agreement that depends on the wish. Promise to pay past debts.
option K binding where the offer is not meant to become binding until consideration is received
. although it wasn’t an “even” exchange the drachma were worth more to her b/c of her financial hardship in Greece. Not Requiring Consideration (Promise is enforceable) i. “Officious” Acts imposing a benefit on someone. Not Consideration: i. acceptance is effective upon receipt if late v. policy of wealth generating ii. b.000. Promissory Estoppel is an alternative means for remedy for a normally unenforceable contract that requires (1) a promise (2) that reasonably induces action or forbearance. UCC Version: Pre-Existing Duty doesn’t apply to the sale of goods. the other party’s naiveté may be outweighed by the other’s underhandedness.1. Sham/ Nominal Consideration may NOT be consideration. ONLY necessary if the offeror has no adequate means of learning of the performance iv. EXCEPTION: Moral Obligation can be argued iii. will or pleasure of a party will NOT be enforced vi. option contracts and modifications require consideration a. (3) the promise must have induced a reasonable reliance on such action and forbearance. However. See Promissory Estoppel
1. courts are disinclined to enforce gifts ii.
v. Past Consideration 1. If incorrectly labeled. v Gimbel Bros. must act in “Good Faith”. for benefits received (or if statute of limitations ran out) requires no consideration iii. For a unilateral contract. and (4) injustice can only be avoided by enforcing the promise a. Consideration requires (1) a legal detriment and (2) a bargain for exchange.000 Drachma in exchange
for $2. Conditions of a gift (and gifts themselves). i. the imposed is victimized rather than unjustly enriched iv. “Mailbox” Rule: accepted on dispatch as long as it is addressed and posted correctly 1. then demanding payment. James Baird Co. Batsakis v Demotsis Demotsis received 500.
Material Benefit Rule (§86): If a person receives a material benefit from another.e Statute of Frauds) ii. Pop’s let her lease run out on her old shop and then Resorts withdrew their offer. wood block to save McGowin from being seriously injured or killed.
b. Contract that falls short of becoming effective due to an omission in agreement
1. The movant must have unofficiously intended to charge for it and must have not imposed it on the recipient “In between gratuitous and officiousness” b. Protection of Another’s Life or Health: A person who obtains or performs services necessary to protect ones health has a claim of restitution if the circumstances justify intervention without a prior agreement (Credit Bureau Enterprise v. Resorts gave her a counteroffer and was assured that they would finalize the deal. (4) the circumstances are such that it would be inequitable for that party to retain the benefit without paying for it a. McGowin subsequently promised to pay him for the services rendered. but if he promises to pay anyway it is enforceable d. Boston University) c. Contracts entered into by minors are enforceable if it was for “necessary” goods or services e. Pop’s was entitled to reliance damages. a subsequent promise to revive that obligation will become enforceable a. Charitable Pledges may be enforced if donative intent is clear and the charity reasonably relied on the donation (King v. Moral Obligation is aimed at the enforcement of a promise with “past consideration”. Resorts International Hotel.
. Pop’s Cones. other than gratuitously. Webb v McGowin Webb sacrificed himself by throwing himself off a ledge with a
75 lb. UCC Application: Promissory Estoppel can be invoked under the UCC in 2 instances: i. The material benefit rule requires (1) the promisor to be unjustly enriched by a prior benefit received from the promise (2) the benefit was not a gift (3) the promisor makes a promise in recognition of the benefit (4) and the promises value is not disproportionate to the benefit 1. Unjust Enrichment (Quasi-Contract) is a contract implied in law (no words) that requires (1) a benefit to be conferred from the other party. Legal Formality prevents promise made good for consideration unenforceable (i.i. a subsequent promise to compensate the person for rendering such a benefit is enforceable i. A debt barred by statute of limitations can be enforceable if someone subsequently promises to pay the debt b. A voidable debt can usually be avoided by the debtor based on some contractual defect. Inc v. Here.  Pop’s Cones tried to relocate to
Resort’s boardwalk and Resorts’ executive director assured her that the proposal was going to be approved. Inc. A debt discharged by bankruptcy can be enforceable if someone subsequently promises to pay c. (2) that party must have knowledge of the benefit (3) and accepted or retained that benefit. Moral Obligation was sufficient to support the subsequent promise. if a person was subject to legal obligation that has since become enforceable. Pelo)
MORAL OBLIGATION (PROMISSORY RESTITUTION)
Confirmation exception: writing does not have to be signed by the party to be charged if deal is (1) between merchants (2) a written confirmation signed by sender is sent within a reasonable time (3) the receiving party has reason to know of the contract and (4) does not object in 10 days f. then no writing is required c. Specially manufactured goods do not require a writing if seller had made substantial commitments regarding the goods 2. Executor/ Administrator contracts require a writing when an estate assumes liability to a creditor of the decadent for a debt incurred before their death g. Reliance regarding sale of land must refer to the contract that such party would not have acted if there was no oral contract d. UCC Sale of Goods over $500 requires writing. (2) a promise that is secondarily liable and (3) creditor (obligee) must know of have reason to know of suretyship i. Death: The one year provision only applies to performance. The writing must (1) be signed (electronic or company seal okay) (2) identify the parties and material terms (3) can be multiple papers pieced together (one must be signed and refer to the same transaction) b. If payment was made and goods have been accepted then no writing is required 3. One Year requires a writing if the contract cannot be performed within 1 year after the contract is made. Statute of Frauds requires a contract within its scope may not be enforced unless it is in writing and signed i. stepping into the shoes of the initial promisee and becoming primarily liable for the debt. EXCEPTIONS: i. Part Performance Exception states oral contracts for transfer of interest in land does not require a writing if (1) payment is made to show performance (2) possession is taken as evidence of the oral contract (3) improvements made to show reliance ii. Promissory Estoppel Exception states that a promise reasonably expected to induce reliance and does. THIS IS NOT A SURETYSHIP ii. Novation is a substituted contract.STATUTE OF FRAUDS
1. Suretyship requires writing if it is (1) a promise to creditor to answer debt or duty of another. Land requires writing if the contract is for the sale of interest in land and includes leases over a year and mortgages BUT DOES NOT INCLUDE contracts incidentally related to land (contract to buy a building) i. Main Purpose Rule Exception states if the promisor’s primary purpose in making a promise of suretyship is for his own interest. then that promise may preclude a necessary writing (promisee’s conduct must corroborate the existence of a contract)
. not to discharge (when employee dies). if possible to be performed in 1 year then no writing required i. also note that modifications can knock something over or under $500 benchmark i. TRIGGER “Lifetime Contracts” e. Exceptions 1. Judicial Admission states that if someone admits the existence of contract in pleadings they cannot invoke Statute of Frauds as a defense to enforcement ii. Marriage contracts require a writing when the prospective spouse agrees to a marriage settlement (Pre-nuptials) h. courts generally resists 1 year rule and may view discharge as possibility of performance under a year.
Comes into play when (1) contract does not provide a term necessary to fulfill parties’ expectations (“business efficacy”) (2) when bad faith served as a pretext for the exercise of a contractual right to terminate (3) When contract gives discretion to a party to determine performance ii. courts can supply missing terms by interpretation and construction (reasonable price. Agreements to agree (Irresolution) are usually indefinite at common law. No payment terms COD expected 7. reasonable time. if no time is specified in the contract f. delivery at seller’s place. Rights not personal can be transferred 3. Patterson Protecting the “reasonable expectation” of the parties 4.INDEFINITENESS & INTERPRETATION
1. Approaches: 1. payment due at delivery) a. No time period reasonable time 8. “Good Faith” is always implied (best efforts in negotiation) h. No price assumed reasonable 6. Ambiguity requires interpretation when (1) a word has more than one meaning. Van Alstine Near absolute priority to terms in contract 5. Objective Standard may use a reference to allow a missing term to be subsequently included by the courts and make contract enforceable e. subsequent performance can cure indefiniteness. Terms left for future determination can be (1) settled objectively by “reasonable standard” (2) or a formula can be set in advance b. Summers Good faith is avoidance of bad behavior 3. Vagueness requires interpretation when a word is stated so obscurely that one cannot reasonably determine its meaning c. court fills in terms with gap fillers i. (2) there is a misunderstanding on that word (more reasonable meaning usually prevails) i. UCC “Honesty in fact and observance of reasonable standards of fair dealing” 2. reliance on such contracts usually take form of part performance and can demand expectation damages rather than just reliance damages g. Employment contract w/ no duration “at will” 2. “Good Faith” is required in contract negotiations however (1) no promises are made until the final agreement is reached nor (2) does either party have a duty to persist negotiations or pursue consensus (FORK: sometimes it may be implied in “Good Faith” to continue to negotiate to resolve outstanding terms) i. Gap Fillers (NOT ONLY IN UCC) are legally implied terms to supplement and clarify language (only supplement NOT override) 1. but UCC allows agreements to agree as long as the parties intended to form a contract i. Reliance/ Restitution applies to contracts that are too indefinite. “Bad Faith” is looking to the letter to get around its spirit
. No sequence of performance performances must be made concurrently 4. Employment Contracts are terminable at will. Indefiniteness will render a contract invalid if “material term” of agreement is (1) unduly indefinite and (2) incomplete terms indicate parties did not intend a contract. Implication of minimum warranties 5. “Spirit of the Contract” “Good Faith” is fulfilling the spirit of the contract. If one party is at fault for misunderstanding Favor innocent! d. If there are two reasonable understandings No contract! ii. UCC: a contract does not fail for indefiniteness as long as parties intended to make a contract.
parol evidence may be admitted to supplement writing (parol evidence must still be consistent with current contract. Partial Integration is when the contract is not a complete and final record of the agreement. Minority views are Purely Subjective View (what parties actually interpreted) and Objective View (“reasonable person”) l. Principles of Interpretation i. HOW INTEGRATED IS THE AGREEMENT? a. IS THIS AGREEMENT INTEGRATED? (NO ADMIT PAROL EVIDENCE/ YES MAYBE) 3. not necessarily what the parties meant but what they probably should have meant in making the manifestations that were made j. difficult to enforce because courts don’t think people can orally restrict their rights to modification) i. Words should be give ordinary meaning unless there is a good reason to be interpreted otherwise ii. TEST: To interpret a disputed term in a contract. but not camels” v. if the common denominator is 2 wheels. “No skateboards. the general word is limited by the specific one. usually totally integrated when a (1) Merger Clause exists or a (2) “No Oral Modification” Clause is present (which states no modification will be binding unless written and signed by both parties. the court will consider: (1) language of contract (2) preliminary negotiations (3) trade usage (4) legal standard (5) course of performance (6) maxims k. the meaning stands no matter how idiosyncratic (2) if they don’t attach the same meaning. probably no contract (no “meeting of the minds”) 1. but limited to clarify ambiguous or vague terms b. Modified Subjective View is the restatement (§201) majority rule which states that (1) if both parties attach the same meaning to a term. negotiated prevails iv. “Contra proferentum” When one party has drafted the contract with unclear language. Maxims of Interpretation i. the implication is that other things of the same kind are excluded vii. Construction will go beyond available facts to find. “Noscitur a sociis” If a word is ambigious it can be qualified by words that it is used in a series with vi. “Expresso unius est exclusion alterius” When a thing of one kind is expressed. Parol evidence can still be admitted. CANNOT CONTRADICT!)
. Total Integration is when no term can exist beyond those set out in writing. rollerblades or other means of locomotion would include wheelchairs and motorbikes. choose validating meaning iii. subsequent agreements are not covered by the rule and parol evidence can be admitted) 2.i. the term will be construed against him
If interpretation fails. so that it refers to like things 1. When agreement consists of both boilerplate and negotiated terms. “Ejusdem Generis” When specific and general words are connected. Example. Parol Evidence Rule applies where an agreement is recorded in writing and one of the parties proffers evidence to prove a term that is not contained in the writing or expand on a term in the writing (ONLY COVERS TERMS ALLEGEDLY AGREED PRIOR AND CONTEMPORANEOUS TO THE WRITTEN CONTRACT. then the party who knew or should have known the other party’s meaning is bound to that meaning (3) if neither party knew. “Ut res magis valeat quam pereat” If between a meaning that would invalidate the contract and one that would validate it.
There are three views: Liberal (always invoke). this may also include analogous contractual relationships in the market (Nanakuli Paving) 6. How Do We Determine Integration? i. undermines contract law)
REGULATION OF IMPROPER BARGAINING (makes contract “voidable”)
1. can be contemporary usage)(2) if the movant/ defendant a member of that trade? (3) Usage should not be employed if specifically mentioned to be excluded in writing i.e. v Shell Oil Co. the objectively reasonable expectations of applicants and intended beneficiaries regarding that terms of insurance contracts will be honored even though painstaking study of the policy provisions would have negated those expectations (Policy behind this is fairness and most people don’t read the entire contract) i. duress) f. trade usage and course of performance would be implied into contracts. so to interpret merchant contracts courts may treat as parol evidence (1) course of performance (2) course of dealing (3) trade usage a. Doctrine of Reasonable Expectations will usually be invoked if there is a dispute involving an insurance contract.
d. Usage of Trade is viewed by (1) determining if the market has a well-established custom (does not have to be a custom of great longevity. Expected price protection in the contract due to trade usage. here. Course of Performance is viewed by determining if the parties acted like the contract was in action “post performance” f. Evidence offered to prove invalidity (i. when circumstances require a reformation of the writing (term was omitted by mistake) e. parol evidence only admitted to interpret sole ambiguous terms ii. Expressed Terms in the contract itself b.c. fraud. Moderate (invoke if ambigious term is present). Corbin’s Contextual Approach The court considers all of the proffered evidence to determine its relevance to the parties intent and then applies the parol evidence rule to exclude evidence that contradicts the meaning of the agreement 4. Court held. Collateral Agreement is when a parallel agreement exists in relation to the contract. Government Regulations are viewed by conclusiveness e. Course of Negotiations c. but is an independent agreement and not part of the contract in dispute. Course of Dealing is viewed by prior dealings between the same parties. Misrepresentation is an assertion not in accord with the facts a. UCC states that consistent terms should be admitted unless it seems they would have been in the contract if they were supposed to 5. is a condition that triggers the effectiveness of a contract) d.  Nanakuli entered into two long term
contracts to purchase its requirements of asphalt from Shell Oil. Conservative (never invoke. ARE THERE APPLICABLE EXCEPTIONS? a. Fraudulent Misrepresentation occurs when an assertion is made (1) with knowledge of falsity and (2) an intent to mislead (3) about a material aspect of the contract (FORK:
. Ambiguity or vagueness is wording can admit parol evidence even if contract is fully integrated c. Equitable remedy. Four Corners Approach “The full agreement is contained within the four corners of the paper it is on”. if they do not contradict expressed terms. Nanakuli Paving and Rock Co. UCC “HERMENEUTICAL CIRCLE”: The UCC presumes that merchants intend to contract in light of their own market’s customary practices. INSURANCE CONTRACTS a. mistake. will be admissible as parol evidence b. Oral condition to the contract will probably be admitted as parol evidence (“Oral condition precedent.
Counterarguments against “adhesion contracts” “reasonable” alternatives in the marketplace or despite reading the clause. Florida Test “Anything materially affecting the value of the 2. the defrauded party is not held to the agreement (Park 100 Investors v Kartes) ii. “adhesion contracts”) and (2) Substantive Unconscionability (unfairness in resulting contract) unless one is particularly strong i. Undue Influence is when (1) one party is unusually susceptible (2) the other party over persuades them (No need for fiduciary relationship. Needed to correct a “good faith” mistake 3. California Test Includes that it must be observable to the diligent buyer (stricter) b. DISCLOSURE TESTS 1. Economic Duress is when one party (1) voluntarily accepts the terms of another (2) the circumstances permitted no other evidence and (3) appeared to be the result of coercive acts of the act party (4) FORK: the threatening party must have caused the financial hardship (Posner View) [Other view is that the threatening party only has to know of the financial hardship and take advantage. UI requires vulnerable party] 4. victim would have agreed anyway
property that the seller knows are NOT readily observable”
. Requires both (1) Procedural Unconscionability (unfairness in bargaining process. Duress may be a good defense for contract modification if the “consideration requirement” is already satisfied 3. Duress is when a party (1) makes a threat (physical. but Odorizzi suggests that the weak party must be justified in thinking the stronger party will protect their welfare) (3) relief is only available when the weaker party can show the dominant party abused their power by unfair persuasion [Not duress because duress requires improper threat. Concealment Deliberate conduct to hide a fact 3. Unconscionability is the absence of meaningful choice by one party resulting in contract terms unreasonably favorable to the other party a. TYPES: 1. financial) (2) that is improper (beyond legitimate rights) and (3) it must induce the apparent assent (4) that leaves no other reasonable alternative but to agree a. Prevent previous assertion from being fraudulent 2. Affirmative False Statement 2. Negligent Misrepresentation is made (1) without a deliberate intent to mislead but (2) person failed to act with due care in ascertaining and communicating the truth (3) relating to a material fact of the contract c. he must disclose such facts i.Sometimes only need materiality for negligent or innocent misrepresentations) (4) which justifiably induces (FORK: objective v subjective) the other party to enter into the contract and (5) causes injury (Not barred by Parol Evidence Rule) i. not cause it] b. Innocent Misrepresentation is made (1) without a deliberate intent to mislead (2) based on an erroneous belief in good faith (3) relating to a material fact of the contract 2. Nondisclosure (silence) Only fraudulent if other party has a duty to disclose a. Signatures: When a signature is procured through fraud. The other party is entitled to a fact due to the trust or confidence they have with the other party ii. WHEN TO DISCLOSE? 1. personal. Needed to correct a mistake of the other party 4. “Duty to Disclose” Rule is where the seller of a home is aware of facts materially affecting the value of the property.
5. Court held that a mere economic loss is not sufficient to excuse performance on grounds of impracticability or frustration of purpose
9. A condition must be an (1) uncertain event (2) with some element of futurity and (3) can be an occurrence or nonoccurrence a. redundant and still sends you back to the above defenses to improper bargaining) b. Frustration of Purpose applies when (1) an unexpected supervening event (2) substantially destroys (3) the principle purpose of the contract (4) where the nonoccurrence of the event was a basic assumption of the contract and (5) the party was not the cause or bore the risk of the supervening event a. A mistake of law could qualify as fact (“Ignorance of the law is no excuse”) b. “Force Majeure” Clause is a provision that may state that parties have an excuse to avoid the contract is performance is prevented or delayed by circumstances “beyond the control” of the party seeking excuse (however. Karl Wendt Farm Equipment v International Harvester Co. A mistake of fact must be distinguished from a mistake of meaning (misunderstanding) iv. Implied (in fact) Conditions are less strict on term construction and are implied by interpretation (not barred by parol evidence rule)
. Unilateral Mistake is when (1) one party makes an error in fact (2) that was a basic assumption of the contract (3) has a material effect on the contract (4) the mistaken party has not bore the risk of the mistake and (5) the equities favor relief i.  Wendt entered into a contract
with Harvester and the market hit a recession so Harvester sold off its equipment to companies that wouldn’t work with Wendt. “Doctrine of Conscious Ignorance” is when one party knows something may materially affect their agreement but does not take steps to investigate. An incorrect prediction of future events is not a mistake iii. This party may not claim mistake due to this doctrine 7. so (4) enforcement would be unconscionable and (5) the other party can be placed in status quo a. EXCEPTIONS: i. Mutual Mistake is when (1) parties share an error in fact (2) that was a basic assumption of the contract (3) the mistake must have a material effect on the agreed upon exchange (4) the adversely affected party must have not bore the risk (USUALLY NO CONTRACT B/C NO “MEETING OF THE MINDS”) c. In Pari Delicto Rule Takes into account the relative fault and guilt of the parties in both illegal contracts and contracts that violate policy 6. Express Conditions are subject to “strict compliance” when the language of the contract articulates the intent to make performance contingent on the event b. Usually the mistaken party won’t recover unless the other party should have been “put on notice” by the mistake ii. Contracts Against Policy are either illegal contracts (even if agreed upon) or contracts that harm to public interest outweigh the benefits to the public and parties a. Error is judgment is not a mistake ii. where the nonoccurrence was a basic assumption of the contract (2) the effect of the event renders the party’s performance “impracticable” (3) the party seeking relief was not at fault in causing occurrence and (4) the party seeking relief must not have bore the risk of the event (Developed from Impossibility which is seldom used in modern courts) 8. Impracticability applies when (1) an event occurred after the formation of the contract. Mistake is a (1) belief not in accord with the facts (2) about a material fact existing at the time the contract was executed (3) that occurred notwithstanding the exercise of reasonable care.
Anticipatory Breach (Repudiation) applies if a party expressly repudiates before performance. Material Breach allows a claim for damages and discharge of obligations (after opportunity to cure fails). HOW CAN I AVOID A CONDITION? a. written. implied or oral) (3) doubtfulness and indefinite statements are not enough to constitute anticipatory repudiation (ALTHOUGH THIS IS A BREACH IT HELPS PARTY ANTIPATE A BREACH AND MITIGATE THEIR OWN DAMAGES) a. a repudiation requires (1) a clear manifestation of an intent not to perform the contract on the date of performance (2) intention must be definite and unequivocal (expressed. Doctrine of Constructive Conditions hold that the fulfillment of a promise in a bilateral contract can be construed to be a condition of the other party’s performance even in the absence of an express provision to that effect 11. where strict enforcement is unfair)
BREACH & REPUDIATION
1. “Good Faith”) d. Breach is any non-performance by the obligor. Obstructive conduct by other party (breaches “good faith”) c. non-breaching party may choose to treat as partial breach (sue for damages and let contract continue or suspend performance and wait for cure) or treat as total breach (terminate and sue for damages) 4. Retraction: Can be retracted before the repudiated party’s next performance is due unless the aggrieved party has already materially changed his position in reliance on the repudiation or considered the repudiation final i. Doctrine of Substantial Compliance holds that a plaintiff who has failed to perform a constructive condition in some immaterial aspect may still recover if the other party breached (i. Construed Conditions are “implied by law”.e. Estoppel allows avoidance of a condition if one party induces the other party to reasonably believe the condition has been fulfilled or not necessary then the other party relies on that to his detriment (usually for more material aspects of contract) d. When other party has a duty to facilitate condition (breaches “good faith”) b. $300) [EXCEPTION: “Willful Transgressor Effect” Any party who willfully breaches won’t recover] (CONSIDERED A NON-MATERIAL BREACH) [CANNOT USE IF PROMISE IS EXPRESSED B/C THEN “STRICT COMPLIANCE” APPLIES] 12. Factors are (1) if it defeats the entire purpose (essence) of the contract or defeats the expectations / benefits of the non-breaching party (2) the extent of partial performance (3) the likelihood to cure the breach (4) willfulness of breach (unless willfull breach is of trivial aspects) (5) degree of hardship 3. Waiver allows avoidance of a condition when the other party expressly agrees to perform even if the condition is not satisfied (this waiver can be retracted prior to the due date of the conditions fulfillment provided the other party does not act in reliance on the waiver first) e. Forfeiture allows a court to use its discretion to decline the full enforcement of one party’s legal rights. Promissory Conditions not only indicate the occurrence of an event but guarantee the event will take place (if the condition is not satisfied by the promisor BREACH) 10.c.e. HOW DO WE DETERMINE IF A BREACH IS MATERIAL? a. if that enforcement would have a disproportionately harsh impact on the other party (§229: Will allow a court to disregard an express condition of a technical nature. not by fact because parties never discussed or expressed this intent to each other (i. indicating an intention to breach or messing up performance 2. Non-Material Breach allows a claim for damages later but non-breaching party must still perform 5. UCC states no other act of reliance is necessary to constitute repudiation final if the aggrieved party indicates its finality
. can breach by reneging. $298 v.
Reliance Damages are designed to put the non-breaching party in the position they were in before the contract was entered into (“erase the whole mess”) [Often awarded if: Damages are too speculative or promissory estoppel claim] 3. he has a right to suspend performance and demand adequate assurance of future performance before calling off the contract. Assurance is when one party (merchants under UCC) reasonably suspects an anticipatory breach from new facts. Specific Performance (Injunction) is usually used in unique situations when legal remedies are not adequate [Cannot be used to make someone refrain from doing something (Reier Broadcasting v Kramer)] 5. it also includes unborn young of animals and growing crops b. Consequential Damages is an injury to a person or property directly resulting from the breach of the contract a. Goods include all things movable and tangible other than money or services. UCC states if a party has reasonable ground for insecurity regarding the others performance. Foreseeability of Loss Test (§351) To recover consequential damages the damages (1) must flow naturally from the breach (2) both parties must be aware of the damages and not assume the risk of those damages at the time of the contract Cause of Action Remedial Goal Principal focus of remedy Breach of Contract Benefit of bargain
Promissory Estoppel Enforcement of promise
the sum of money needed to place the plaintiff in the same position they would have been in
Reimbursement of expenses and losses unless justice requires fuller enforcement
Unjust Tort Enrichment Restoration Redress of injury of enrichment Restitution The sum of Disgorgement money needed to of the value return plaintiff of what was to the status quo received ante. IF YOU ASK FOR TOO MUCH ASSURANCE BREACH) i. failure to provide assurance will be a BREACH (HOWEVER. arguable and courts split on whether farmers are merchants c. Merchant is one who deals in goods of the kind or by occupation had knowledge or skill relating to the goods involved. UCC applies to the transaction of goods (versus buying information) a. Expectation Damages are designed to put the non-breaching party in the position they would have been in if the contract has been fulfilled 2. may make a written demand asking for adequate assurance
1.b. “Good Faith” is honesty and using reasonable commercial standards of fair dealing in the trade
. Restitution Damages are designed to make the breaching party disgorge the unjust enrichment they have incurred from the non-breaching party (Movant may recover more money than actually lost b/c (1) damages here are not limited by the profit or loss under the contract and (2) the measure of services=”reasonable” market value) [Breaching party can recover if non-breaching party conferred a benefit Part-Performance] 4.to compensate for loss or injury caused by defendants
a contract in writing cannot be orally rescinded or modified if original writing did not allow it 11. Acceptance can be in any manner sufficient to show agreement (including conduct) and by any medium reasonable in the circumstances. a promise to ship can be acceptance. EXCEPTIONS i. and (4) does not object in 10 days 12. (3) the receiving party has reason to know of the contents. UCC uses the “certainly would have been included” test (Natural Inclusion Test) a. if a contract as modified falls under SoF. and (2) evidence of consistent additional terms unless the writing was intended also as a complete and exclusive statement of terms 13. description of goods. Payment and acceptance no writing required if payment has been made and goods have been accepted iv. Indefiniteness not indefinite if parties intended to make a contract (but need a reasonably certain basis to give remedy). can agree to agree later 10. but not if seasonably notifies it is an accommodation b. if no time stated then a reasonable time with a max of 3 months 8. Extrinsic Evidence may be supplemented by (1) course of deal. Accomodations: following an order or offer to buy goods for prompt shipment. an offer to buy goods for prompt shipment can be accepted by promise or conduct upon receipt of shipment a. modification of a minor term may be oral. Estoppel does not require a writing if a party admits in pleading or testimony that a contract for sale was made iii. Confirmation Exception: a writing does not have to be signed by the party to be charged if deal is (1) between merchants (2) written confirmation signed by sender is sent within a reasonable time of the oral contract. Specially manufactured goods do not require a writing if seller had made a substantial commitment regarding specially manufactured goods for the buyer. or course of performance. generally designed to provide relief for sellers not buyers ii. writing must (1) indicate a sale of goods made between parties. Firm Offers do not require consideration if (1) created by a merchant (2) in a signed writing (3) giving assurance it will be held open. sample or model (2) relating to the goods. the modification must be in a signed writing a. and (3) representations become part of basis of bargain b. (2) signed by party charged. Offer can be in any manner reasonable under circumstances. trade usage. Modification  no consideration needed and no pre-existing duty rule. a good faith modification will suffice (can argue that the modification was opportunistic and not in good faith). applies when accepted goods do not conform to the contract a.7. and (3) can omit (or incorrectly) terms but must specify a quantity (not enforceable beyond this written quantity). but retains the common law rule that the offeror is the master of the offer a. Implied Warranty of Merchantability is an implied warranty that goods are (1) of fair average quality and (2) will be fit for the ordinary purposes for which goods are used (merchantable) (3) and applies if the seller is a merchant with respect to that type of good
. Express Warranty requires (1) an affirmation of fact/promise. Parol Evidence Rule: the written terms intended by the parties as the final expression of their agreement cannot be contradicted by evidence of any prior agreement or contemporaneous oral agreement. otherwise offerer can treat the offer 9. Statute of Frauds requires a signed writing for the sale of goods over $500. Warranties are a kind of guarantee or promise by a seller of goods that they will have certain characteristics. Notice required in a reasonable time when beginning a requested performance.
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