Contract is a promise for the breach of which the law either

provides a remedy or recognizes as a duty - R1R UCC (2-102) or Restatement? Contract for Goods? or Mix of Services Goods - 2-205, movable inc specially manufactured goods, minerals, oil, gas, and strucures to be removed form real staete Hooker -> If mix look as to the cause of complaint. Otherwise look at predominant nature Type of Contract - Express/implied in fact, Quasi Contract(Cotnam). Quantum merit Claim Are parties Merchants? 2-104 knowledge or skill, applies to battle of forms, firm offers, mod Formal/informal Bilateral/Unilateral Not in UCC or Restatement. Acceptance by performance R 45 Adhesion? Mutual Assent+Consideration=K Mention usually offer acceptance, but not always 2-204 Objective Theory of contract Formation, mention subjective Advertisement? Advertisements not offers - Leonard Advertisements making definite offer - Lefkwitz if sufficiently limited to avoid the problem of potentially unlimited liability Carbolic - stated to any person who qualified, invited acceptance Invitation to offer?/Price quote? Nebraska Seed Offer? manifestation of willingness to enter into a bargain, so made as to justify another person in understanding that his assent to that bargain is invited and will conclude it. Look at words in context, past history, and business norms Leonard - Was the belief that manifest of intent was serious reasonable? Was the offer made in jest? Did offeree know/HR2K, that the offer was jest? Look at manifest intent, features, actions, Zehmer/Leonard Does the offeror have the ability to offer?

 Does the offer exhibit a willingness to be bound without further

action on her part? Advertisements Offer to accept offers If quotations are specific enough, they may be considered offers Willingness to begin negotiations Is the offer addressed to a specific person? Courts will limit liab if to everyone Is the offer reasonably certain in its terms? R 33 - Need to be able to tell if party breached and appropriate remedies UCC 2-204 - only need to be able to determine the breach Don't need price? Can impute 2-305; reasonable time? 2309 Is there acceptance? - R 53, no doubts. Grumbling is effective R 50 - look at outward manifestions of intent, R 22 if can find assent in communications, don't need to pin down specific time Conditional Acceptance? R 59 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. Was the accepter someone who had the power to accept? R 52 Irrevocable offer? R 25 Offer to Office Holder? R 52 Multiple Persons? Reward R 29, usually when someone accepts, power of acceptance created is terminated Did the offeree know of the offer when it was accepted? If not, and they just performed, then no contract. Unless civic duty R 23 Crossed Offer? No K. R 23. Hole in one -> Motive irrelevant Method of acceptance determined? If specifies acceptance, cannot express consent otherwise RS 58, Specific time, place, manner R 60. Mailbox R 63. Can be accepted in an reas. manner unless specified UCC 2206 Reas. Manner of Acceptance - can use anyreasonable manner Specified in Contract? If yes, follow. Can exchange promise,

perform, or begin performance R 32 Performance specified? If yes, promise to perform /= Acceptance Not specified? Assume can perform or promise RS 32 Begin to perform? R 62 - where express promise or performance valid methods of acceptance, beginning to perform operates as promise to render complete performance Need to notify? Promise - R 56 notify in reasonable manner. If rail to use reason diligence but acceptance still reaches offeror, valid. No mailbox rule, Effective on Receipt Need to notify for performance? R 54 If Offeror request or offer has reason to know offeror has no adequate means of learning of the performance w/ reasonable promptness and certainty, must reas. diligence to notify offeror, or offeror learns of performance within reasonable time in order to avoid discharge of offeror's duties. Exception - if specified as not required UCC - acceptance of purchase order by shipping good, mailbox rule. Separate notice of delay, if not notified of acceptance within a reasonable time, Seller may assume offer lapsed UCC 2-206 Acceptance by performance Part Performance If acceptance conditional on acceptance of terms, no contract If just a modification, w/o requirement of acceptance, then OK Was the offer still valid when the acceptance was rendered? R 35 Dickinson v. Dodds, Petterson (unilateral offer) UCC 2-206 Reasonable time, UCC 1-103 common law governs Did offeree accept through silence - R 69 Silence /= assent, but if voluntary accept benefit combined with reason to know of provider's expectation of payment, could give way to implied promise Unsolicited merchandise - common law if enjoy benefit => Acceptance. Contract implied in fact. Employee handbook update - continued working => acceptance Quasi Contract? Pay restitution Negative Option Contracts - silence=acceptance if prior

agreement that silence is acceptable assent Course of dealing in past indicate silence=acceptance Form Contract? Look at Battle of forms. ProCd Rolling Contracts (not sure if necessary) Reasonable Expectations - R 232 not bound even if signed if other party has reason to know that the party who signed would not manifest assent if knew term in dispute Unconscionable terms - Procedural and substantive unfairness, absence of meaningful choice, unreasonab favorable Means of communication - RS 30, 65 any reasonable unless specified Is offer still valid? Death/incapacity Expiration of Time - reasonable time if not specified R 41 Revocation by Offeror - effect if occurs before acceptance R 42, Petterson Not effective until Receipt Indirect Communication Sufficient - Dickinson, R 43 Revocation of offers made to public - publicize RS 46 Revoke before deadline - unless firm offer, can revoke until acceptance Rejection - communicate intent not to enter R38. Destroys power of acceptance, Inquiry /=rejection Counteroffer - no longer able to accept original R 39, unless counteroffer while considering Deviant Acceptance - Adrente, Mirror Image rule. Acceptance that Defines Implied Terms? Acceptance w/ suggestions? - valid if requested not required Irrevocable offers? R 42 can revoke until accepted, unless supported by consideration, reliance, or UCC Conflicting communications Revocation of offer : if acceptance sent < received revocation, no K Rejection followed by acceptance: If rej arrives first, even if acceptance sent first, no K Acceptance followed by Rejection: if acceptance sent first,

K, if rejection arrives before acceptance, no K bc of reliance R 63 Option contract? acceptance effective upon receipt, need certainty after time expires (don't know what means) Did the offeror know, or have reason to know, of the acceptance? Did the parties agree on the material definitions of the terms? Did the offeree begin performance on the offer? Option contract? Good or service? Common law Option Contract - need consideration, even if nominal RS 87. Some cts say recital ok Reliance on promise of irrevocability - star paving Preparing to perform - No liability unless reliance.R 45 beginning performance for acceptance by performance => acceptance. ASK KATZ ABOUT IF PROMISE OR PERFORMANCE? Firm offer (goods) UCC 2-205 reasonable time, not more than three months Merchant? (only applies) By terms gives assurance will be open? Signed written promise of irrevocability Preprinted forms - must be separately signed Traditional option contract enforceable - if supported by consideration, 2-205 doesn't apply Reliance on promise of irrevocability - can lead to recovery Common law is displaced by particular provisions of UCC 1103 Mirror image and Battle of forms? Whose meaning prevails? Mirror image - last offer, acceptance=terms of last offer. UCC 2-207 - Acceptance contains same terms or additional/Different terms? If same terms => K on terms If Additional/Different, Definite and seasonable expression of acceptance or written confirmation? If no, no K Acceptance expressly Conditional? If yes => counteroffer, Other party accept ? => K If does not accept, Acceptance by Conduct?

2-207(3) Look at conduct of parties, if yes, K on common terms and conflicting/additional terms knocked out and replaced by UCC gapfillers If No => If between merchants, additional terms are part of contract unless 1 of 3 Offer expressly limits acceptance to terms of offer additional terms material alter K Notificaiotn of objection is given in reasonable time If No=> Not all parties are merchants, additional terms are not included and are proposals for modification IF No=> Different terms Knockout rule and replaced with gap filler Find contract on terms of offer - first shot Treats different and additional as being the same Acceptance of proposal for Mod, performance is not assent, must be express Indefinite Terms and Agreements to agree, must be reasonably definite in order to enforce R 33 Gaps? R 33 may show intent not to be bound, but if terms are definite enough to provide bassis for determing breach and remedy => K UCC 2-204 if intend to make contract and reasonable certain basis for remedy Look at Step Saver - additional terms in written confirmation Indefinite Terms enough to produce remedy? R 33 Price? Sun printing - Ct can find price, or can be set to some reason. standard 2-305. Can use market price, course of dealings Include time? set reasonable time RS 33 Illusory Contracts 0 R 77 can impute good faith requirement or use estimates Indefinite Agreements for sale of goods Open Price? - Reasonable price 2-305. Parties contract includes usage of trade, course of dealing, or course of

performance Ct can impute if contract is silent on price, agreement to agree and parties fail or parties agree on external standard. If at discretion of one of parties? must use good faith Time and place for delivery? Delivery - due at agreement 2305 reasonable 2-309 Time for payment, unless otherwise, time and place where goods are received Quantity - MOST IMPORTANT without defined quantity, cannot determine if there's performance 2-503, or whether buyer has duty to pay 2-507 Output and Requirement contracts - 2-306 good faith output of seller or requirements of buyer Duty of Good faith - unreasonably disproportionate, prevents speculation, cannot cease production Breach - Precontractual liability - sunk costs Can be contract, implode duty to negotiate in good faith, of promissory estoppel Binding Agreement with written document to follow? need to reduce to final form Unjust Enrichment? If confer benefit before negations end? Restitution Misrepresentation - misrepresentation of intent - liab for reliance Promises made during negotiations Irrevocable offers Promissory Estoppel - Hoffman Duty to bargain in Food Faith - R 205, UCC 1-304 Letters of Intent - can be enforceable contract unjust enrichment, reliance Consideration? Are promises enforceable? R 17 Bargained for Exchange - R 59 Transactions of exchange - consideration si what each party seeks in return for promise. Respective promises are consideration - R 75 Flow of benefits and detriments - What has promisee given up or Promisor has received? Hamer

Promise as consideration? - as long as what was promised would be consideration - R 75 Performance - as long as not legal duty R 73 (unless modify) Forbearance - mayhem need promise to forbear, not just actual forbearance. Actual restraint look at PE R 71 Gratuitous promise? Reliance under promissory estoppel? If no, unenforceable. Gratitude /= consideration Otterbein Conditional gifts - fulfillment of condition /= consideration Charitable pledges - legal fiction, pledges made in exchange or each other, use PE R 90 Adequate consideration? peppercorn, do not inquire unless fraud, oppression, or unconscionability Hamer v. Sidway, freedom of contract Exchanging sums of money - not consideration if different sums Settlement of disputed claims - if claim asserted in good faith, promise is enforceable R 74 Pretense of consideration? Sham - recital /= consideration Recitals in options - effective under R 87, not adopted Nominal - usually enough. R 73 can use for contract modifications Preexisting legal duty - past consideration /= consideration. Strict application leads to no good faith modifications Payment as portion of preexisting debt - promises for other promises are consideration Modification? Extortion v. Good faith? If not, tear up old contract, come up with new Austin v Loral, duress, modification, allows extortion and prevents good faith. Too Broad and Narrow UCC - needs no consideration for modifications if not bad faith 2-209 Modification due to unanticipated circumstances? permitted if fair and equitable in view of circumstances not anticipated by parties when contract was made R 89

Release of settlement claim - not pursuing litigation is consideration If new promise to complete K is new duty, applies to mistake, impossibility, frustration fo purpose or ant oerh R 261. Mistake - 152 Good faith modification under UCC - 2-209 need no new consideration, still req good faith 1-304, honest in fact and observance of reason commercial standards of fair dealing 1-201 Reliance on Modification - use promissory estoppel Past consideration No consideration - Mills v Wynam, moral duty, not legal Material Benefit Rule - Webbm factor is performed duty, died believing it R 86, enforce necessary to prevent injustice Promises to pay obligations discharged by operation of Law Bankrupcty R 83 - enforceable Debts barred by SoL enforceable - R 82 Obligations incurred by minors/incapacity continued ratification after adult enforceable R 85 Debts discharge due to failure of a condition - R 84 Illusory Promises - mutuality of obligation, if not bound, no K What is promised? What can be inferred from obligations expressed? Too indefinite? Option to use at discretion? /= K R 77 Exclusive dealing? Duty to use best effort? Duff Gordon - implied promise of best efforts UCC 2-306 Contracts subject to condition Conditional promises - defined R 224, if cannot occur => illusory R 76 Promisor in control of occurrence of condition - most difficult, if coplete discretion, promise is illusory Is forbearance option? under R 76 must be good consideration, sometimes impute good faith

look at alternatives Conditions of satisfaction? Must use good faith, issue of mutual obligation Right of unilateral termination - consideration as long as obligation to provide notice or exercise right to terminate (not important to course) Output and Requirement Contracts? - consideration bc agree to refrain from buying or selling from anyone else Good faith 2-306 Alternative promises or performance? Must all be consideration, or if several are small must have large probability of success for main - R 77 Promissory Estoppel Used as substitute for consideration? or tort like solution? Misrepresentaiton of fact different than broken promise Promissory Fraud 0 where person misrepresents intent to perform (not important) reasonable reliance on unenforceable promise - Kirksey, Ricketts Defined - R 90 )1_ a promise (2) promisor's reasonable expectation that the promise will induce action or forbearance by the promisee (3) actual reasonable reliance by the promisee and (4) necessity of enforcingg the promise to avoid injustice Key is foreseeable and reasonable detrimental reliance Family gift Option Contracts Charitable Subscriptions - MLK, Allegheny Comercial settings - employer Promissory Estoppel as independent cause of action PE in Restatments Hoffman, Goodman, PE and Parole Evidence Precontractual Liability Remedies: Interpretation and Construction of Contracts? Whose meaning to use If same meaning, =that meaning If different meanings - (a)party 1 did not know of any

different meaning of party 2 and party 2knew the meaning(b)party 1 HNR2K of diff meaning attached by party 2 and party 2HR2K attached by party1. Otherwise not bound. Terms found in circumstances surrounding creation of contract 1-201, R 5, UCC 1-303 can include pirate customs Interpretation (best efforts to what parties meant) v Construction ( evaluate as law for pub policy) Can look at Trade usage R 222, Past dealings R 223, or Course of Performance 2-208 Words don't have fixed meaning - Pac Gas Use meeting of minds (sub shared understanding) or objective approach plain meaning, or reasonable understanding (Frigaliment) Interpreting Express Terms - many contracts need interpretation R 200 Plain Meaning - Trident - plain meaning is preferable Contextual interpretation - corbin, determine meaning in light of all circumstances If purpose of term is discernible and contemplated by both parties= strong case R 202 Look at parole evidence, examine effect of four corners approach on up Maxims of construction/interpretation - Construe language consistently in contract where can, R 202,UCC 2-316 Assume parties intend every part of contract to have legal effect Resolve ambiguity against drafter - used in contracts of adhesion if both actively participate has less support Expression of once excludes others & of Same kind or class Specific terms govern general terms - R 203, UCC 2317 (Tongish) Negotiated terms govern boiler plate R 203 Contract must be construed consistent with public interest

Effect of misunderstanding - R 201 if same word, different meanings, misunderstanding R 20 Ambiguity - Peerless, may find no K R 200, Vauge -Frigaliment usage of trade, course of dealing and course of performance -R 219 v 1-303 All uses relevant to proper intepretaion R 220, may be used to supplant or qualify R 221 Use know or had reasont o know rule Under UCC 1-201 look at Trade usage, course of dealing, or course of performance. Assume enter contract Newcomer to industry? Still bound Course of dealing - sequence of prior dealings UCC 1303 Course of performance - repeated occasion for performance in contract w/ knowledge of nature of the perforamcen and opportunity for objection UCC 2-208 Parol Evidence Rule meant to preserve integrity of written contracts Parol Evidence - prohibits introduction of evidence of prior understandings or negotiations between parties to vary or contradict written version fo the contract if parties intend for that writing to be a complete and final version of their agreement Oral and Written Evidence Evidence of Prior and COntemporaneous Agreements Excluded UCC 2-202, R 214 can have subsequent oral modifications or written Substantive rule of Contract law, rule of evidence INtegrated WRitten Contracts - only applies when parties intend it to be integrated R 209 If final of some but not all provisions, partial integrated 2 210 If of fully integrated Written Contract, no supplemental terms R 210 UCC 2-202 Libbey UCC can be explinae with evidence of course of

dealing, usage of trade, or course of performance Effect of partial integrated Written contract - may be explained or supplement by parol evidence, but not contradicted UCC 2-202 Brown v. Oliver Mention still need to convince jury that evidence is persuasive Determining if writing is integrated Role of Merger Clause - presume integrated, not always conclusive R 216, UCC 2-202 does not address Four corners - if the writing appears on its face to be complete, presumed to be fully integrated and parol evidence is excluded Extrinsic Evidence - considered other circumstances but absolutely no parol evidence Parol Evidence admissible to show lack of integration Corbin. If if parties meant to include the term as part of their agreement but failed to include it, writing was not intended as a final and complete expression of the agreement and evidence of the term should be admitted Look at whether disputed term might naturally have been omitted from writing R 216, or whether disputed term certainly would have been included UCC 2-216 IF separate consideration, strong indication of partial agreement R 216 Look at sophistication of parties, length of the agreement, and degree of detail/opportunity to amend Step Saver - can have basic integrated agreements Role of Court - GateKeeper, Q of law not fact Supplementing partially integrated Contracts must determine if additional terms are consistent or contradictory UCC 2-202 Does not Specifically correct or absence of

reasonable armory approaches probe not on exam Resolving Ambiguity and plain meaning - two views Plain meaning is easily discerned Thee meaning intended by parties should prevail over fixed, plain, or standard meaning Corbin, Pac Gas Can permit Parol Evidence to determine existence of ambiguity, prove meaning to which language of the instrument is reasonable susceptible Trident - Pac Gas chips away at contract system bc of idea that words are inadequate to express ideas Prevents court from rewriting contracts, but may rewrite intent of parties Also is that presume that parties select worse with care, not always justified In determining plain or standard meaning of terms, use evidence or usage of trade, course of dealing, or course of performance Risk of perjury is limited bc of outside evidence ( not subjective) Exceptions to Parole Evidence Conditional formation R 217 - can show contract did not exist if condition precent, does not permit evidence to show that one of the party's obligations to perform was subject to consistent not in contract, R is opposite allows parol evidence to prove either formation of the contract or performance of a duty was subject to a condition not expressed Invalid Contract - Illegality, Fraud, Duress, Mistake, Lack of COnsideration R 214 Can be used to show contract was made pursuant to a mistake R 214 and party may introduce evidence to contradict a recital that there was consideration R 218

 Reformation due to mistake in integration R 215 Modification of Contracts Consideration REquirement - traditional rule is that mod

must be supported by consideration or substitutes Agreement to mod performed agreement is really a new contract. Can just rescind first agreement Preexisting Duty - R 71 Alaska packers, Stilk, can have token consideration R 73; Duress. A performance similar to original obligation is consideration if it differs in what was required in a way which reflects more than the pretense of bargain Mention one day earlier/later Evidentiary, channeling, cautionary purposes Economic duress - Adjust consideration req whether good faith or bad faith Legitimate commercial reason or objectively demonstrable reason Modification enforceable due to reliance - modifications are enforceable under promissory estoppel R 90 Accord/Satisfaction - Undisputed claims - just make slightly earlier day or change performance - petterson Waiver and estoppel-R89 Waiver is voluntary relinquish of known right, key Q is whether reliance is a necessary element of waiver. 2-209 = eyes, may be reatraced with notice unless reliance Conditions defined 224 An event, which is uncertain to occur, upon which a duty of one of the parties depends Use to control sequence of performance end to directly or indirectly alleviate the risks the parties face in entering into the contract QWhether one party's failure to fully perform merely gives the other party a right ot recover damages or if it justifies the other party in suspending its own performance or refusing to go ahead with the deal In general, express terms must be strictly complied with Otherwise, determine if promise or condition

COndition that limits or qualifies a promise Establishing the sequence of performances Excusing performance Procedural Conditions Alternative performances Ensuring Satisfaction - good faith implication Consequences of failure of condition R225 Duty imposed by the promise associated with the condition does not become due until the condition occurs If due to the passage of time or other circumstance,s a condition can never occur, duty on which occurrence of the condition depends is discharged. Nonoccurrence of a condition does not give rise to a claim for damages unless one of the parties has made a promise to cause the condition to occur Substantial performance of a promise is a constructive condition of the other party's duty to perform Failure of a condition=discharge of duty Inman - no opportunity for factual dispute bc of failed condition Distinguishing COnditions from promises Promises=formation, conditions=performance. Promises form basis of the duties, conditions limit these promises R224 Is duty created? -> performance Construction as a promise is preferred bc of remedies - if promise, damages, if condition, excuse from duty, and may result in forgetting benefits of the contract R 227(1) - because of potentially harsh consequences of the failure of a condition, ambiguous language is usually construed as a promise rather than as a condition Howard - stated" Condition precent" as one term, vs not for another meant ins

company knew how to ake a term a condition Time for performance May be conditions or promises, k Look at who assumed risk of nonpayment Conditions PRecent - must occur before a duty to perform a promise matures If condition does not occur the duty that is subject to the condition does not become due Conditions subsequent - event that if occurs, excuses a duty that has already matured Terminates a duty R 230 Affects burden of proof ( for subsequent promisor who would seek to show tha it has been relieved of its duty, on party seeking enforcement if precedent) Some courts place burden on party that asserts condition has occurred Burden of proof is considered absurd Conditiosn subsequent - both parties' performances must occur simultaneously - sale of goods, UCC 511. Unless parties have agreed otherwise, the seller's duty to deliver goods is conditional on the seller's tender of the goods - UCC 2-507 Express condition - spelled out in term of agreement, no substantial performance IMplied Conditions - based on parties' conduct. Derived from intent of the parties as determined by their conduct, the context of the transaction, and the implied meaning of other language in the agreement. RELATE TO IMPOSSIBILITy Constructive conditions Kingston v Preston, material breach by one party excuses the other party from performing Substantial performance of each party's promise is a condition of the other party's duty to perform. Duty of good faith and fair dealing as

constructive condition Conditions requiring satisfaction or approval - R 228 whether a reasonable person int eh position of the promisor would have been satisfied Functional utility and matters of personal Dissatisfied by accepts benefit, might look at good faith, restitution theory Excuse of conditions When condition fails to cur, a party whose duty depends on its occurrence is discharged from its contractual duties, unless the condition is excused R 225 Ancillary conditions, which are not material part of agreed exchange, may be excused due to their possibility of performance R271, look at purpose of contract Condition may also be excused if its occurrence is hindered by one of the parties, R 271 good faith If the promisor repudiates its obligations R 255 where a person repudiates the contract, conditions on that party's duties that are within the control of the other party are excused Are revived if repudiation is retreated. Also, repudiation must have contributed to nonoccurrence of the condition If the party whose duty is subject to the condition waives the condition or is otherwise estopped from asserting its failure DID OTHER PARTT PROMISEE ACT IN RELIANCE ON ALLEGED WAIVER AND TWHETHER A TERM THA WAWS A MATERIAL PARTY OF THE EXCHANGE CAN BE WAIVED Also ask whether waiver can be revived or reinstated If a condition is waived or if the promisor is estopped from insisting not eh

occurrence of the condition, promiser must perform even though the condition has not occurred Time of waiver - use estoppel Waiver - intentional relinquishment of known right, need not be intentional know or HR2K Clark v West - publisher know of consumption, and repeatedly promised would pay the additional, contract for a good book, not to abstain from drinking No waiver of material conditions bc of lack of consideration in the deal Conditions are sometimes excused or limited to avoid a forfeiture that otherwise might occur Estoppel against conditions - estopped if promisee relies on a misrepresentation of fact, a promise, or conduct by the obligor in connection with the condition Most obvious example - when the promise cease its efforts to ensure satisfaction of the condition in reliance on the obligor's promise hat it will perform regardless of any failure of condidtion A promisee's reliance on either the promisor's statement of fact, or on his or her express or implied promise toe excuse a condition may prevent a promisor from insisting on strict compliance with it Can be estopped throguh failruet o insist on compliance with a condition, waiver does not usually require reliance Estoppel, unlike waiver, can apply to a material condition Reinstatement of a condition A condition once excused due to waiver for estoppel can be revived (only if condition has not passed yet - R 84

Substantial performance Self help resolution Perfomance as discharge of contractual duties Discharges duties created by contract - R 235 Disputes: Factual inquires over parties' conduct

Most courts take positionthat a condition can be reinstated unless the other party has changed its position in some material and permeant wau in reliance on the waiver - R 84 Waivercompared to Estoppel and modifications Modfication=new contrat, need mutual assent Waivers can occur thorugh unilateral conduct of one of the parties, though estoppel usually requires some action by promisee in reliance COnsideraion is not necessary for either air or estoppel, modification may not be unilaterally retracted Nonwaiver conditions are wearable R 229 - conditions are likely to be excused when strict adherence would result in a disproportionate forfeiture

or inquiries over the meaning of the contract Mateiral breach, substantial performance and constructive conditions Two conditions for breach 1) ALWAYS GET A REMEDY R236 2) May also be entitled to temporarily suspend its own performance or sometimes terminate or rescind Conditions for material breah - extent of harm to injured party, adequacy of monetary damages to compensate, ability and willingness of the breachingg party to implant cure, the good faith of the breaching party, and the extent to which the breaching party will suffer a forfeiture if the breach is treated as material all from R 241 If mistakenly suspend based on material breach,

may itself be a material breach JAcob and Youngs - no material efect Late performance? is time of the essence? Can just compensate with money Boilerplate does not count - 242 Willful default - Cardozo in Jacobs and young, good faith cannot be discharged (no willful intent), REstatemetn 241 - just a factor Rights of injured part after material breach 236 - if partial breach, can give opportunity to breach, can continue performance and seek money damages, or can treat breach as total breach if not cured If material breach injured part can suspend or terminate because e substantial performance of one part's obligations under a contract is a constructive condiion of the remaining duties to perform - 237 Total v partial breach - usually need opportunity to cure, Constructive conditions and substantial performance - Each part's duty of performance is conditioned on the other pary's substantial performance of tis reciprocal contractual obligations - RS 237 Buyer's duty to pay is conditioned on tender of good UCC - 2-511 Duty to deliver based on tender of price - 2507 A breach of the whole contract by buyer permits seller to cancel the contract - 2703 IF seller's failure oto deliver conforming tender goes to the whole contract, buyer is afforded a similar right - 20711 Substantial performance - Jcobs and Young Substnatial performance satisfies any constructive condition derived form that duty to the other party's obligations to

perform Limited by own terms, only applies when the breach is not serious An uncured material breach of a promise continesu to operate as as a failure of a constructive condition to ther otter party's duty to perform R237 Limited bc a person who has only substantially performed a promise has not fully performed and s thus liab for damages caused a as a result of its breach Divisilbity of contracts - applies when parties have agreed to a succession of performances that can be easily separated into discrete parts, material breach of one portion may not operate to discarhge injured part from continuing ot perform in connection with other divisible porttions of the contract -233 Depends on intent of parties - look at (1) wether parties' performances are separable into corresponding pairs of performances and (2) whether the parts of each pair of performances were regarded as agreed equivalents - R 183 If a material breach of one part substantially impairs overall purpose of contrat, contract cannot be apportioned - R 240 Restitution for part performance - if in material breach can recover for part performance prior to the breach offsetting Performance and breach in Contracts for Goods

Effect of breach depends on single delivery or deliveries in installments Single delivery - can reject even if defect is minor? If installments - right to refusal depends on whether defect has a material effect on buyer , Has duty to accept conforming tender, usually after inspecting. If buyer rejects, seller usually enjoys opportunity to cure with a conforming tender If buyer accepts, has duty to pay unless revokes acceptance if discovers latent defect 2-301 sellers duty to transfer and deliver, buyer's duty to accept and pay Tender by seller Tender of delivery - req seller to put and hold conferring goods at the buers disposition and give the buyer any notification reasonably necessary to enable him to take delivery - 2-503 IF contract silent about terms, occurs at reasonable time - 2-309 If shipped by independent carrier, tender can occur at either when the goods are placed in hands of carrier, or when carrier tenders them at specified destinations, must tender an documents necessary to take possession 2-503 Payment and buyer's right to respect Buyer has duty to pay for goods it accepts - 2-709 Tender of payment is condition of seller's tender - 2-511. and is due except for agreement

when and where buyer receives goods - 2-310 Otherwise, place of business - 208. Tender occurs when seller delivers to a carrier inshipment, but payment not due until buyer receives them Buyer's right inspect - 513. If reveals defect, can reject goods. In documentary sale, must pay with documents, cannot inspect until later after payment Breach in single delivery contracts perfect tender rule - 2-601 Can reject if ineffective in any way, even if substantial performance hree alts if fails in any way to conform to contract May reject whole, accept whole, or accept any unit and reject rest Defect need not be matieral Provides for greater certainty than a rule permitting rejection only for defects that are material prevents buyer from having to make subtle judgment about whether breach is seriousRameriz Ways is constrained

Contract may prevent rejection for minor imperfection implied warranty 2314. Breaching sell rusually enjoys right to cure 2-508 Only applies to single delivery contracts - 2612 In order to reject buyers must comply with req of giving timely notice of rejections 2-602. Shoul provide terms of rejection These limitations deprive buyers of alarge inceptive to take opportunistic advantage of a nor defect - 2605 Breach in installment sales - Major reject only if substantially impairs value of that installment - 2-

612, may not coancel unless one or ore installemtsn substantially impairs value of K 2-307 unless otherwise agreed, single delivery unless circumstances give either party right to make or demand delivery in lots tacit approval Substantial impairment look at material breach 241. IF buyer breaches by wrongfully rejecting installment, seller is entitled to exercise own rights - 2-703 Sellers right to cure, if defects in individual delivery are serious enough to substantially impair value, seller can still cure. Cure IS ABSOLUTE . Does not depend on 2508 deadline for performance or whether seller had reasont o believe buyer would accept If seller gives assurance of cure, buyer may not reject - 2-612

2-508 must give respective notice of flaw and intent to cure Defects can be material if in one installemnt or flaws in multiple installemnts. Failrue to make timely payments is substantial impairment buyer's acceptance 0 IF accept goods, must pay price 2-607 If accept, ability to revoke depends on whether defect is one that substantial impairs value of the goods - 2-607 BUyer has duty to pay price for goods he or she accepts even if goods are defective. Can still recover from seller for damages - 2-714 Rejection or acceptance acceptance most often occurs thorugh buers failure to effectively reject them Rejection - must seasonably notify seller of rejection (not just flaw) - 2-602, must specify grounds for rejection - 2-605 Does not apply if cannot determine defect or if seller could not cure defect 2-605 - in transactions between merchants,

buyer waives any defect it does not specify after the seller makes a written request for full and final statement of goodsl Acceptance of goods - accept if buyer fails to reject 2-606 unless buyer does not have reasonable opportunity to inspect goods Acceots if engage in any act inconsistent with seller's ownership - 2-606 contented use after giving notice purporting to reject - some varies. Little financial choice not to use, practical considerations. May be liab for consideations REvocation of acceptance - 2-608 Can only revoke only if buyer originally accepted goods on reasonable relief that defect would be cured, if buyer accepted goods without discovering defect, crane revoke if acceptance induced by difficulty of discovering defect or by seller's assurances 2-608 Can only revoke if substantial impairment to him - lookout individual circumstances Consideations relevant to whether subtnail impair nature of defects, costa nd length of any time req for

repair of goods, whether past repair attempts have successful, buyers ability to use goods while repairs are tempted extent of inconvenience and consequential har, and availability and cost of alternative goods. Revocation of acceptance permitted three situations - accepted goods on reasonably belief that seller would cure and seller has failed to cure within reasonable time.]\, difficulty of discovering defect prior to acceptance, or where buyer filled to discover defect because of seller's assurances about quality does not matter if good faith all under 2-608 Notice and timing - timely and unequivocal notice, if based on sellers' failure to implant, time goes beyond times sated in 2-207 from 2-608 BReaching party's right to cure How long should be given opportunity to cure? Domestic sales - when time for performance has not yet expired or where the buyer rejects a nonconforming tender which the seller had reasonable grounds oto believe would be acceptable with or without a money allowance if seasonably notifies a future reasonable time to substitute conforming

Anticipatory Repudiation If breach total, injured party can terminate contract, cease

tend r-- 2-508 Ramirez - failure to cure ihtin reasonable time justified buyer in terminating contract Common law right to cure R 241 -, R 237 - it is a condition of each part's remaining duties to render performances to be exchanged, that there be no uncured material failure by other party to conform. A breach that cannot be cured is more likel to give rise to total breach

performance of its own obligations R 237, and bring an immediate action for breach, r243. Howver, cannot be certain to occur until time for performance REpudiation has same effect as breach - R253 Repudiation permits injured party to suspend performance, and i the breach is not cured within a reasonable time or is not susceptible to cure, to terminate the contract, cease perforamcmes of its own duties and bring an immediate action to recover damages caused by such a breach. Manner of repudiation IF WRONGLY TAKE ACTION< IN BREACH! Threat of material breahc - repudiation is one that would qualify as a material breach, threat of partial breach is not repudiation r250 Definite and unequivocal - required - Harrell buyer did not repudiate but instead asked to be released UCC - reasonably indicates a rejection of

the continuing obligation - 2-610. R Must be sufficiently positive to be reasonably interpreted to mean that the party will not or cannot perform - 250 Perforamcen impossible IF party takes voluntary actionthat appears to make performance impossible repudiation R250 INsolvency is not grounds, must demand assurances - 252 Circumstnace involuntarily foisted on a party are not usually treaed as a repudiation - r250 Effect of repudiation - can bring immediate action to recover damages for total breach R253, can allow to treat contract as terminated and discharges all liabilities for injured party R253, mostly excuses other party's obligations - 255l however, injured part can wait for performance and urge other party to retract its repudiation - 2-610. Retraction permitted before performance is due2-611, provided has not changed position or canceled the contract - 256 Immediate action to recover damage for total breach - most important consequence -- R253 REpudiation of unilateral obligations -ANTICIPATORY REPUDIATION DOES NOT APPLY TO UNILATERAL CONTRACTS, or BILATERAL CONTRACTS WHERE ONE PARTY HAS PERFORMED ALL OF ITS OBLIGATIONS. must wait till performance e- 253 Discharge of aggrieved part's remaining obligations, excuse of conditions Repudiation gives injured party right ot terminate the contract and discharge its

remaining obligations - 253 Seller may cease manufacture 2-704, use its commercial judgment to continue their manufacture, sell the uncompleted goods - 2-704, ot stop delivery of goods in transit IF seller repudiates, buyer can stop payment - 2-705 Most expresss conditions are similarly excused only if repudiation contributed to the nonoccurrence of the condition 255 IF condition is one that would not have occurred regardless of the repudiation, parties are discharged from their obligations under the contract - 255 Aggrieved pArty's Reponse to repudiation Can wait for goods for a commercially reasonable time - 2-610 Mist take care not to incur expenses that could have been avoided. Can urge other party to retract repudiation without waiving right - R257 May suspend its own performance even if it decides to wait rather than cancel 2-610 REtractino of repudiation If aggrieved party indicates has considered repudiation as final or cancels the contract in response to repudiation R256, 2-611, or injured party materiall changes position (even without notice) cannot revoke Can retract in any reasonable manner, provided unequivocal - 2-611 Still can be liab for dmages in interim Reupiation in contracts for domestic sales of Goods Permits remedy, but only if the repudiation is a performance not yet due the loss of

Contracts Defenses Types of contracts defenses Can resist three ways

which ill substantially impair the value of the contact to the other Substantiall impaired if the ultimate tender the injured party must wait to receive will result in material inconvenience or injustice Same standard of repudiation as common law Failure to provide adequate assurances when required to do so under 2-609 is repudiation under 2-610 PRospective inability and right to adequate assurance of performance Reasonabl grounds for insecurity 2-609 - when reasonable grounds for insecurity arise with respect to the performance of either party the other may in writing demand adequate assurances of due performance and may suspend performance UNder common law, 251 If both are merchants, use commercial standards for reasonableness of grounds for insecurity DEmand for adequacy assurance of performance Mannerof demand - Must be clear and direct, not a request for a meeting or clarification adequacy of the assurances - ICannot demand more than would be necessary to adequately assure before time for assurances - Reasonable time, in 2-609 must be within 30 days Consequences of failure to provide adequate assurances - may treat as repudiation - 2-609, R251

Can deny allegations - just matter of fact Might demur, contending that the law does not provide relief even when accepting truth of the facts Allege additional facts tahtif proven would be a valid defense to claim Contracts contrary to public policy; illegal contracts - balanced against freedom to contract, mention precise purpose of public policy in question Contracts that violate pulic policy Contracts for an illegal purpose -void if furtherance of illegal purpose, circumvent legal prosreption, or illegal tort/crime, all void Contracts in restraint of trade - if limiting competition is main purpose, void R187 If ancillary to a contract with otherwise legitimate purpose, are legal if impose reasonable restraints that are narrowly tailored to serve legit purpose of underlying main agreement - not to compete Approaches - might eliminate convenient, could eliminate offencese portions of the clause , or may reform R182 (Best approach) contracts in violation fo public licensing laws depends on purpose of licensing law if pretext the public, contract made in violation of the licensing law is illegal and unenforceable. If merely to generate revenue, lack of license will not affect enforceability of K R181 contracts affecting family relationships surrogancy, prenuptial, postnuptial, cohabitation. Public policies regarding preservation of family relationships

gambling contracts - not legal imited remedies and liability waivers - 1302 - UCC generally adheres to freedom of contract, specifics that obligation of good faith, diligence, reasonableness and care may not be disclaimed by agreement Permits parties to detainee by agreement standards of these duties as long as not manifestly unreasonable UCC 2-719 - can provide for remedies in substation for the remedies otherwise provided by the code for breach of a contract for sale fo goodsSubstituted remedy is not enforceable if it is unconscionable and any attempt to exclude consequential damages for personal injuries caused by defective consumer goods is presumed to be unconscionable , or if fails inessential purpose, can ignore and seek recourse through normal remedies Generally enforceable provided agreement is clear and conspicuous and participant fully appreciates the risks in volved, and waiver does not exculpate the defendant from reckless or grossly negligent conduct Reluctnat to enforce liability waivers when involved performance of public duty or practical necessity otherwise not available Effect of finding of illegality Void or voidable - R 7, are completely void

only where they are completely illegal severabliilty of illegal terms - 2-302 - can sever unconscionable contract provisions Agreed damages that are determined to be unenforceable penalties - 2-718 and common law - just eliminate provision Resitution for benefits conferred - is not usually available for illegal contact, justification si that permitting recovery would frustrate purpose of the public policy that underlies refusal to enforce contract, depends on relative importance of public policy Incapacity Obtaining assent improperly Improper persuasion - Whas there something inappropriate about the manner in which one fo the parties o evinced the other to assent to the agreement and whether the law should intercede to restrain enforcement of K due to this behaivor Contract law assumes people deal with each other at arms length (lowest/highest prices can obtain). fraud, misrep and nodisclousre Relationship between tort of deceit and misrepresentation in contract - difficult to prove tort, but in Ks a false representation might be used by party injured as grounds for recovery of damages due to breach of warranty, could use to try to avoid contract entirely through recession R 164, Voidability due to mispreresentation misrepresentation is "assertion that i not in accord without he facts - R159 When assertion is make w/ knowledge that is lie, is fraudulent - R162 Fraud in fact and fraud in inducement

Fraud in fact rarely occurs, R 163. WHen prevents injured from understanding nature of document she signed, fraud prevents formation of K misrepresentation of fact Cannot be mere opinion - R159 However, false misrepresentation of opinion, particularly if expert or special relationship, provides bassi for relief R168 intentional or reckless misrepresentaiton R 162 - for tort of deceit, misrepresentation must be intuitionally false and intended to deceive. Reckless might not be intentionally false, but are usually intentional, such as when knows have no knowledge but holds oneself as expert R162 fraudulent or material misrepresentaion Can rescind if fraudulent or material. Fraudlendt if person who made false assertion knew it was false, believed it was false, did not have the confidence he stated or implied in truth, or did not have bassi he or she stated or implied in truth of assertion - R162 negligent and innocent misrepresentations - material if is likely to induce a reasonable person to manifest his assent to an agreement, or if the person who has made the false representation knows that it will in fact be likely to induce assent not eh part of the other party involved R162 Reaosnable person,can look at subjective qualitiess Reasonale Reliance - must have reasonably relied on by injured party - R162

Similar to standard for revocation of acceptance in K for goods, where substantially impair Always mention breach of warranty False statement made in response to direct inquiry is nearly always actionable actionable Nondisclosure - if attempt to cover up facts fraud R 160, if aware of information other party might reasonably be expected to wish to know, may be liab even if don't try to conceal Sinlence about mateiral fact can serve as fraud or material misrepresentation is silent party has duty to speak Fiduciary duty - duty to dislcose when confidential of fiduciary relationship - R 161 effect of subsequent discovery of falsity - if discover prior disclosure is incorrect, duty to correct - R 161 Example of duty to disclose - Termite house material nondisclosure Effect of contractual no reliance provision- R 196 cannot disclaim reliance in waivers, where disclaimer of reliance has been freely negotiated and was not itself induced by a misrepresentation, ct likely to enforce, LOOK AT WHERE BOILERPLATE Improper threats 0 if assent not freely given no K R174 Duress leads to K being voidable when one fo the parties unacceptably pressures the other with an impermissible threat in ore to obtain consent - R175 When Duress, essential Q is whether threat deprived other party of ability to consent to agreement Physical duress - Makes K void, R174 Extortion - threat to instate civil proceedings is not duress. If disclosinginfo that can lead to criminal charges, duress R176 bc cannot use criminal law

for personal reasons Threats to take other legal action - if civil, good faith, not duress - R176 A threat to commit a crime or tort, threat of criminal prosecution and a bad faith threat to bring a civil action are improper - 176 A threat is improper if th threaened act would harm the recipient and would not significantly benefit the party making the threat - R176 Also improper if the effectiveness of the threat is significantly increased by prior unfair dealing by the party making the threat - 176 Cannot use power for illegitimate purposes Economic duress - uses financial pressure to induce an agreeement Hard bargaining distinguished - mere threat of loss of bargain is not duress, parties are gee to drive whatever bargain market will bear Duress in obtaining assent ot modification Alaska packers, Austin v Loral/ Standard is whether the agreement was induced by an improper threat that eft the other party with no reasonable alternative other than to assent to the proposed modigication Distinguihs from consideationlook at ability to cover IF cover is reasonable, hard to assert duress Financial difficulties? ask about whether need know about financial strain before dealing Undue influence - When person who is target of unrelenting effors to persuade is unusually vulnerable to its effects, K may be avoidable due to undue influence - R177 Means one obtains another party's assent by acting in an impermissibly overbearing way

Even if know of great need or desire, can make own price Zero sum game Fiduciary or confidential relationship, voidable at decision of beneficiary - R173. Only need to show result of the bargain was unfair If close and trusting relationship, relief from overbearing and unfair persuaiv efforts is available - R177 Need to show contract was under the domination fo the party engorged in the ovebeaing pressure or involved in a sufficiently lose relationship so that he or she is justified in believing the person will not engage in conduct which is inconsistent with the relationship Need also to show that the party exercising influence must engage in some type of unfair persuasion Family members Clsoe relationships are not normally trustingg relationship Serious illness/death - good Unconscionablity - unenforceable due to combination fo procedural and substantive problems where neither flaws in the bargaining process nor defects in substantive terms, standing alone, are sufficient to make contract unenforceable Equitable foundations of unconscionability Drawn from balancing respect hardships that would be suffered by parties if equitable releif granted or denied Standardized form contracts - adhesion contacts - take it or leave it, one party in complete control of terms. Mostly feasible. Reduce transaction costs, facilitate modern transactions Genreally enforceable if conform to the reasonable expectations of the parties Term is beyond a partys reasonable

expectations when the party enforcing the term has reason to beliece the party against whom the agreement is enforced would not have accepted the agreement had he or she known the agreemetncontained the term Look at whterh term is bizarre or oppressive, whether term eviscerates nonstandard terms specifically agreed to, whether the term eliminates the dominant purpose of the contract, whether the other party had a opportunityo read th rem, and whether the term is illegible or otherwise hidden Even if within reasonable expectations MAY STILL BE UNCONSIONABLE bc no real cohice Direct and intdrect techniques for refusing to enforce one sided deals - 2-302 principle is to prevent oppression and unfair surprise; Williams "UNconscionability has generally been recognized to include an absentce of meaningful choice on the part of one of the parties together with contract terms which are unreasonably favorablee to the other part Subttantive and procedural unconscionability Two prongs Procedurally unconscionable when one of the parties lacked a meaninguchoice in entering the contract Substntaibely unconscionable when its terms are oppressible one sided - 2-302 Sliding scale approach - more substantively oppressive, less evidence of procedural unconsionability is required to come to the conlsuion that the term is unenforceable One sided bargaining power is usually not enough, need disparity in sophistication, lack

of ability to study K and its terms. Separate initial terms of contracts 2-719 if contract for goods the excuses personal injuries, presumed et be unconscionable sometimes used to determine whether liquidated damages are too low 356 cmt a unconscionability between merchants - presume not to be unconsionabilityprocedurally. forms of relief - 2-302 courts must permit parties to introduce evidence concerning commercial setting, purpose, eand effect of the K as an aid in determining whether it was unconscionable decision is for judge not jury Can find contract is unenforceable, refuse to enforce offensive term, or can even make adjustments to contract - 2-302 Restitution is usual if can prove conferred benefit that was enjoyed Uncionscionability and freedom of contract - can criticize that fails to fully consider the benefial impact of contractual provisions involved for consumers and that they inappropriately limit consumer choice. However, can correct misconduct not fully addressed by traditional doctrines of fraud duress and undue influence. May be too paternalistic Duty of good faith - impose an implied duty on the parteis to do nothing to interfere with the other parties performance of contractual obligations R315 Must prevent a party from interfering with the efforts of the other party to satisfy a condition on which the first party's duty of performance depends - R 245 Also limits precontractual behavior, may not engage in affirmative action that seeks to harm other party If enter into agreement to agree or letter of

intent, must negotiate in good faith Meaning of the duty of good faith performance R205 - good faith depends on the context in which it is used; UCC - honest in fact and observance eof reasonable commercial standards of fair dealing 1201 duty to use best efforts - Wood - exclusive dealings. UCC duty to use best efforts in any agreement by either the sell rot eh buyer for exclusive dealing the g any agreement by either the sell rot he buyer for exclusive dealing in the kind of goods involved in the transaction, byte he seller to supplythe goods and by the buyer to promote their sale 2-306 duty of good faith in specific circumstances REquiremens and output contracts - 2-306 actual output or requiemets as may occur in good faith cannot cease production. Can not expand or contract quantity need to speculate or avoid discretion to set price - 2-305 reasonable price. 2-316 a price to be fixed by theslelr or by the buyer means a price for him to fix in good faith. Prevents illusory promises Commerical standards of fair dealing int eh trade 2-13 unilateral termination - loan acceraltion clauses, must be reasonable. 2-309 indent in duration lasts for reasonable time but otherwise may be terminated at any time by either party Usually quire reasonal notification fo uniater termination fo an agreement o permit other party to make alternative arrangements - 2-309 contract modifications - 2-209 need good faith modifications, don't need consideration.

Common law - reequiment is fair and equitable in view of the circumstances not anticipated by the parties R89 employment at will lender liabilty REmedies: Expectations - normal remedy is money dmages 345 sufficient to place aggrieved party in as good a position as it would have been if the contract had been performed EXPECTATIONS ARE A CEILING ABOVE WHICH DAMAGES SHOULD NOT BE AWRDED< AND A FLOOR WHICH SETS MINIMUM AMOUNT THAT SHOULD BE RECIEVED Remedies in general PUrose of contract remedies Types of remedies Procedural - specific performance, anticipatory repudiation, etc. Money as substitute for performance equitable - specific performance, inception, Damages based on injured partys expectations Expectaiton - 344 - seek to put party in as good of a position as if K had been performed, 347 compensates aggrieved party for any value lost directly as result of the breach Consequential dmages, incidental daamges For businesses, usually lost profits. For consumers may be lost wages Damages are limited only to harm caused by the breach 347 punitive - 355 - generally incompatible even if breach is internal unless breaching party's conduct rose to level of intentional tort Limited to willful and wanton misconduct nominal - 346 - available when injured party is unable to establish any loss as result of a breach economic analysis of contact damages - Efficient breach - if it is more efficient for a party to breach a contract an d pay expectancy damages in order to enter a superior contract, courts will ot interfere

by requiring the breaching party to pyy more than what was due Criticism - fails to take into account transaction costs, specific performance, to force renegotiation, question of whether allocation efficiency is a proper goal of contract law Causation - not liab for all bad luck incurred by other party burden of proof on defendant. Substantial factor in causing harm. Must be reasonable certain R 352lost profits UCC 2-715 must require causation Limits on damages: Foreseeability - most important limit - Hadley. Two rules AT THE TIME K WAS MADE!!!!!!!!!!!!!!!! Injured party may recover for general or direct damages and can recover for harm that occurred as a result of particular requirements or circumstances if were foreseeable by the breaching party at the time K was made Direct and consequential damges direct general damages - don't need proof of foreseeability. "lost value of promised performance 347 conseuqtial special dmages - tacit agreement minority . normally use reason to foresee Tets of foreseeability Reasont to foresee - only can receive when breaching party had reasont o foresee the harm as a probable result of the breach (objective test ) R 351 Applied as of the time parties entered into the contract, does not apply paroel evidence rule Nature of harm that must be foreseeable, not the extent of the harm. Etreme conditions in market are not recoverable Only need to foresee nature of the harm rather thatn circumstances that caused the pbreach

Foreseeabilty of lost profits - lost profits are foreseeable only if the unabilablyityof the loan from antoerh lender was foreseeable at the time the loan agreement was made Types of lost profits - direct profits - readily foreseeable. Secondary profits - more likely to be foreseeable in connection wit a sellers failure to deliver the products that are the primary source than secondary products Goodwill - difficult to calculate, but foreseeable Tacit agreement test - Minority only used in arkansas - only impose liability if it may fairly be presumed that the breachign party would have assented to if they had been presented to his mind. P had to go beyond this and prove that D at least tacitly agreed to assume responsibility Rejected by UCC 2-715 Look at whether grossly inproportionate with consideration received, not mainstream Foreseeability in Domestic sales of goods 2-715(2) Consequentila damages resulting from sellers breach include: any loss from general or particular requirements and neds of which seller had reason to know and could not be covered and any injury to person or property from breach of warranty LImit on recovery for emotional distress - USUALLY OT AVAILABLE, EVEN IF PROBABLY FORESEEABLE. Only awarded for public humiliation, physical, etc. failing to properly convey illness of loved one R 353, have been awarded in Ks where likelihood of such harm is particularly acute Limits on damages - mitigation - cant recover if could have reasonably avoid, even though would require additional affirmative steps R350 application of principle that can recover dmages only for the harm caused by the breach. Cannot inc damages in

repudiation Mitigation in employment contracts - Parker - even if wrongfully discharged, must mitigate. Employers must mitigate mitigation by dealing with the breachign party - not required to mitigate by accepting performance of breaching party if three other party is willing to perform only if injured party surrenders its rights to revere on broken K - 250 Shaken faith in buyer, no obligation defendants equal opportunity to minimize loss -if both parties have equal opportunity to minimize injured party's loss, injured partys failure to take advent of its opportunity does not limit. Permits gambling by injured party, failure to preserve incentive to considera w die rainge of mitigation methods lost voluemt transactions - if additional transaction can recover lost profit 2-708. If not merchant, not lost volume Injured party must probe had capacity to enter into additional transaction, that it would have entered int additional transaction if the breach had not occurred and that this additionaltransactinowould have resulted in profit expenses incurred in mitigation - can entitle reasonable expenses incurred in efforts to mitigate 34 cmt,\ 2-704 - canmake commercially reasonable choice between completing manufacture or selling for scrap 0 can not make unreasonable costs. Limits on dmages - reasonable certainty - Dempsey dages only recoverable if reasonably certain (352). Lost profits of new businesses - no track record, likelihood of failure. rational basis test - x market value of a chance - value of lost opportunity for profit - expected value Reasonble certainty in domest sales of goods - 1-103

- gernally applies common law pricniples except when expressly displaced, most courts apply certainty even though not present in UCC Limits on damages - attorney fees and litigation costs; interest - usually each pays own. Prejudgment Interest(rarely used) - delayed payment doesn't make party in as good position if performed. If only money is req in contract can obtain interest R354. Coruts can provide just rate of compensation had it been paid when performance due Remedies in contracts for sale of goods - breach by seller Buyers procedural rights - 2-711 can reject, revoke, etc. Can also cancel K Cancellation is unilateral termination of K due to breech - 2-106, doesn't lose right to recover dmages bc of breach Applies if seller repudiates, buyer rightfully rest, or buyer rightfully revokes Seller has right to cure 2-508 Buyers can also retain security interest in defective good and to resell to recoup any portion of price buyer has already paid Cover must be made in good faith and without unreasonable delay 2-712 Breach by seller: repudiation, nondelieery, rejection, or revocation Recovery of down payment - 2-711(1) can recover down payment if rejects or revokes. If accepts despite defect, seller can recover full price 2-607 Unjust enrichment Damages based on cost of cover - normal remedy - 2-712 Good faith cover - honesty in fact and observance of reasonable commercial standards of fair dealing - 1-201 Reasonable substitute - need not be

identical, if no equivalent alternatives, otherwisee reasonalne adjustments made Risk of paying more for goods is risk that parties attempted to avoid, addiotnal expense is measure of damages 2-712 If trying to buy and sell all can acquire (like a broker), can recover market value damages 2-713 Issue of recouping downstream customer WIthout unreasonable delay - if delay, price based on at time of breach - 2-713. Reasonable time based on nature purpose and circumstances of the action Damges based on market value - If failed to try to cover or if failed to comply with 2-712 - recovery is based on difference between market vale and contract price . Relevant market is where goods were to be tendered - 2-713. Market value in repudiation cases - Q is when to take measure of damages - learning of breach language from 2-713. FORK!!! 2-723 sates time buyer learned of repudiation - learned of breach is different. Detracs from rights accorded to buyers by 2-610 wait commercially reasonable time before resoying to remedy Specific performance - generally available if goods are unique, cover is difficult, or if moon damages are inadequate to satisfy Buyers dmages for accepted goods - breach of warranty Buyers incidental dmages - 2-715 need not be foreseeable, just must be reaosnable Buyer's consequential damages Reason to know - Consequentila damages resulting from sellers breach include: any loss from general or particular requirements and neds of which seller

had reason to know and could not be covered and any injury to person or property from breach of warranty Objective standard Preventable - not recoverable if could have prevented by cover or otherwise. even if foreseeable 2-715. unreasonably fails t cover or delays Speculative profits - need reasonable certainty proven track record xpenses saved a sa result of the breach diminished by extent of reductino of expenses, 2-712, 713 REmedies in contracts for sale of goods - breach by buyer Sellers procedural rights identification of goods to the contract right to identify 2-704 facilities right to resell under 2-706. Identiied when parties designate specific items to be deliver to buyer unfinished goods - if partially completed may treat as subject of a resale as long as there is manner of demonstrating that the items were intended for contract with buyer - 2-704 right to stop delivery - may stop delivery 2705, terminates when goods have been delivered to buyer or carrier receives if obligated to deliver Damages based on the resale price - has ight to resell 2-706.IF price is lower can recover difference with incidental damages minus expenses saved. must be conducted in good faith and commercially reasonable manner If fail, limited to market and contract price under 2-708 damages baed on the market value - at time and place of tender, obtaining windfull lost profit for lost volume sellers - 2-7087 if

inadequate to put in as good a position, measure of dmges is profit including reasonable overhead which seller would have made Neri - goal od expectation damages 1-305. Lost volumes eller if has readily available supply of similar goods. Must also look at relationship between supply and demand Calculating lost volume seller's lost profits depends on whether resulting sale would have resulted in a profit Need to prove that could have made addiotnal sale, profit of additional sale, and that it would have likely made additional sale due credit fo repayments or proceeds of resale lost profit should be reduced by giving due credit for payments or proceeds of resale - 2-708 limited to apply to situations where seller has resold for scrap - proposed revision deletes language Recvoery of the onctact price - when buyer accepts goods 2-709, if wrongly reject, entire price will fail unless good cannt be resold or where circumstances indicate that any reasonable effort at resale would be futile. If shipment contract, and goods are destroyed en route, buyer must pay price ALWSY LOOK AT WHEN TAKE POSSESSION sellers incidental dmages -always entited to incidental damages - storing costs 2-706, 2-710 sellers consequential dmages - silent about consequential damages, revised permits sellers to recover consequential damages, however in a consumer contract between merchant seller nd soncumer buyer, may not recover consequential dmages from buyer 0 2-710 Employment contracts - recover additional salary that must be paid to new employee. Breach by employer wages for balance of remianig term discounted to

present value,must mitigate Breach of service Ks Cost of performance or difference in value - unfair forfeiture jacob and youngs - difference between market value and contract value. look t main purpose of K Peevyhouse 0 limits to incidental aspect of K 0 breach of incidental term of K does not justify cost of performance damages that are grossly disproportionate May be unarticulated application of foreseeability n hadley If breach by receiptient - contract price minus costs avoided, or cost fo part performance rendered plus profit would have earned Reliance and restitution Reliance and resititution as alts Reliance Used when Exectation damages speculative or uncertain dempsey - losing contract Promises enforceable under promissory esotppel - Hoffman v red liab found too uncertain or difficult ro measure public policy to limit damages - full expectation damages might discourage otherwise desirable transaciont between members of society essential and incidental reliance - essential - incurs in preparing to perform or in performance, incidental are incurred in pursuit of collateral transactions Icidental reliance v incidental dmages incidental damages incurred in mitigation Lost opportunity for profit as reliance expense opportunity cost 0 sometimes recoverable Reliance damage sin contacts for sale of goods - UCC does not mention reliance, but 1-103 preserves includes estoppel

 Limiattons precontract expenses - dempsey 0 not incurred in

reliance. contrasted to anglia - if foreseeable even though not incurred in reliance. Likely explanation is different concenptions of reliance Dempsey is true reliance, anglia is expectations disguised as reliance - revenue would have made up precontract expeness foreseebiltiy of reliance expenses - not recoverable unless breaching part hd reason to knowessential is foreseeable inherently, incidental 0 marketing, etc. not foreseeable unless foreseeable mitigation - applies to reliance, may not recover for expenses incurred after learned orepudiation dempsey reasonable certainty - reliance is easy to prove unless opportunity costs loss contracts - expectation as limit on reliance damages - 349 - breaching party should be afforded opportunity to prove that value fo injured party's expectation was less than its reliance expense. If performance of K would have resulted in loss, should not rescue P REstiution - preventing unjust renichment, can be used if no K, part performance rendered. Value is benefit to D As alt for breach - 373 available for remedy for total material breach. Restitution may be sought bc want property back or difficulty in proving lost expectations Ignores contact and seeks recovery of benefits conferred and unjustly retained Abailable only when there has been either a repudiation or uncured material reach, must be total breach - 373. Restitution not avail for partial breach Usually avail only when recession REsitution in sale of goods - 2-711 recovery of deposit, if breach goes to full contrac as well

 eclamatino 2-702 Specific restitution is complicated 372 Lostt contracts - expctatio as a limti on restitution justified on pricniple that a part who has breached K

should not be enttiled to assert ontract as source of refuge Exception is when injured party has substnailaly performed and only perforamcen is payment 373 divisibiltiy Restitutionf ro breacing party REstituion when contract is unenforceable or when quasi contract Agreed remedies Limited remedies Types Optional if exlsive uncionsbality failure of limited remedy to achieve essential purpose Liquiated damages Penalty or enforceable [ir[pse difficulty of determing actual amdages reaosnablness comapred to anticipated or acutal harm Alternative performances and bonuses Effect of agreed remey on specific performance uncionsionablity of liquidated damages agreements to pay attorneys fees and other costs of litigation Alternative dispute Resotlion Equitable remedies Inaqeduacy of legal remedy Sale of hoods Services Difficulty of supervisoin injucnitos as an altnertive

Real estate Effect of liquidated damages Balancing o equities - injunction or specific performance mutuality of remedy unreaonsbal harship indefinite conract unfairness mistake unclean hands public policy performance impossible or impracticable Change of Circumstances Excuse and Mistake Always LOOK AT (1) MATERIALITY AND (2) WHO BARES RISKS!!!! Mistake Mutual mistake Basic assumption of the contract Material effect on the exchange Assumption of the Risk? Unilateral Mistake Relationship of Mistake to Warranty, Misrepresentation and Fraud Change of circumstances - impossibility, impracticability and frustration of purpose - concerned with subsequent surprise, mistake is previous suprise Future is uncertain, strong measure of protection aginst uncertain future by contracting R 263 - Limited relief to situations where unanticipated events reselt in destruction of the subject matter of the contract R 265 - impossible but where contemplated purpose was frustrated R 261 - Where change in circumstances had not made performance impossible nor completely frustrated the purpose of the contract but where the burden of performing had changed in a way that was beyond the risks assumed by the parties when contract formed (commercial impracticability) Excuse due to impracticability of performance

Taylor v Caldwell, treated as implied condition fo theater Not strictly impossible, would have been able to do emergency barn raising Allowed for death (esp in service contract, person must be essential) R 262, destruction of specific good (must be indetenfied at time of contract) R 263, or governmental interference R 264 Difference between impracticability and frustration of purpose, frustration of purpose - performance is viable, but goes against very purpose of contract. does not count profit Commercial impracticability BExcuse due to changed circumstances depends on whether the nonconcurrence of the event which disrupted performance was a basic assumption on which contract was made UCC 2-615, R 261. 1000 bushels from this farm v 1000 bushels in general Still must be basic assumption of contract, where contract is silent, examine circumstances Economic Analyssi usually places risk on party in best position to guard or insure against loss Performance impracticable Circumstances beyond control fo the parteis Asusmption of the risk - denies excuse Casualty to identified goods Frustration of purpose - Krell Excuse warranted when purpose fo the contract has been frustrated because of the occurrence of an event the nonoccurence of which was vatic assumption for making the contract. Must be unexpected, must substantially frustrate purpose Must have been beyond control of party seeking excuse and risk must not have been assumed

Effect of Force Majeure clauses - removes uncertainty Risk of loss in contracts for sale of good If contract or authorizes seller to ship goods via independent carrier, risk of loss rest upon buyer or seller depending on FOB UCC 2-509 If delivered without being moved, risk shifts from seller to buyer - 2-509 If goods delivered directly to buyer two rules - if seller is merchant, risk passes only on receipt. Otehrwise risk passes when seller tenders delivery 2-509 Apportionment of divisible contacts - where divisional, appropriate to what has already been performed Resitution for part performance subsequent impossiblit does not affect rights already acquired - Krell Modern Approach - require recitation for value of any benefits conferred before occurrence of disrupting event, perhaps with some adjustment for reliance expenses incurred by other party R 272 Tend to award restitution or value fo the benefits conferred thorugh part performance R 272 Abatement of price an effect of insurance can use insurance ot changes circumstances R 272 - PRotection against unjust enrichment if no benefit conferred, not liab. Adjustment of the contract - could make equitable adjustment UCC 2-615 increased cost does not excuse performance

 Is there consideration? Is there a bargain? Is each party giving up something in return for the benefit? If not, then no contract, but promissory estoppel may apply Promises to give a gift are not valid contracts Preexisting duty rule (already legally bound to do what is

asked?) Was the consideration pretextual or nominal? Is there fraud, duress or unconscionability? If a change to prior agreement, is it fair in light of circumstances? Is the promise binding without consideration? Did the promisor intend the service or good as a gift? Did the promisor know, or have reason to know, that the promisee would detrimentally rely on the promise in a reasonably foreseeable way?

Can extrinsic evidence be used to clarify the contract? Was the contract a complete manifestation of the parties intents? Was the information discerned from extrinsic evidence of such importance that it would have been included if they wanted it to be? Is the extrinsic evidence a subsequent or contemporaneous contract? Is the evidence used to show duress, unconscionability, fraud or mistake? If partial integrated contract, parol evidence can be used if it does not contradict existing terms If total contract, cannot be used to supplement or contradict the writing Is there breach? Did the parties perform in good faith? Did the party in breach substantially perform his promise? Does it substantially impair the non-breaching partys use? Is it an integral part of the overall contract? Has the party in breach been given the opportunity to cure his defects?

 If for goods, has party accepted the good? If yes, must show substantial impairment If no, perfect tender rule applies Has the breach occurred, or is it in anticipation of occurrence? Is there a defense to the breach? What damages ought to be awarded? Are the profits too speculative? Were the damages foreseeable ex ante? Would the parties have consented to the agreement in light

of what was at stake? Was the breach willful? Did the party mitigate damages? With goods, did buyer seek to cover? Did non-breaching party take reasonable steps?

Checklist UCC? or Common Law/Restatement? Is there a valid Contract Type? express/implied in fact/ quasi contract (Cotnam) Formal/informal Bilateral (two promises) Unilateral (One) Acceptance by performance R 45 Merchants - 2-104 knowledge or skill that he has is particular to goods involved. Battle of Forms, Firm offers, Modifications Offer, acceptance, consideration Offer?

Acceptance Bilateral or Unilateral In case of Doubt? Are terms sufficiently definite? Option Contract? Illusory? Mutuality of Consideration? Objective Intent? Surrounding Circumstances? Misunderstanding? See Mistake. Duration of the contract? Are there conditions precedent or promises? What kind of contract Employment/Personal Service: At will? Identifiable Period Compare UCC 2-306. Absence of Specific Time Provisions, notice of Termination Is there a Hanbook? What does it Provide Buyer/Seller UCC? Output? Modification Pre-Existing Duty? New Consideration? Rscission? Waiver Undue Influence

Use of Excessive Pressure to Persuade one vulnerable to such pressure AND AN application of excessive Duress Accord/Satisfaction Grounds for enforcement Formality? Bargain? Public Policy? UNconscionability? Moral Obligation? Promissory Estoppel? UCC Question or Analogy? Mutuality of obligation? Is Contract Divisible? Ways to strike down a writing Lack of mutual assent Construction Reasonable Expectations Unconscionability/Public Policy Parol Evidence Integrated Complete/Partial Explain/supplement or contradict Intentions Illgal/fraud,duress Justifications for nonperformance Mistake Unilateral/Bilateral Who bears the risk of loss? Waiver/Estoppel? Impracticability? Who bears the risk of loss? Frustration? Purpose of K Defeated Frustraiton should be total or near total (worthless) Risk not reasonably forseeable Who bears risk of loss Conditions precedent to performance? Conditions subseqquent

 Constructive fraud Actual Fraud Breach Partial Substantial performance Forfeiture? Willful? Material Is it Curable? Can it be paid for in damages? Suspension of Performance? Willful? Total Given a time to cure? Good Faith/Fair dealing? time is of the essence for goods? Termination? Risk of loss to injured? Risk of Fofeiture to breacher? Installments? Does it impair the value of the whole K? Willful? Substnaitaldelay? Urgent needs? Anticipatory Repudiation Statement Not Vague Doubts Can ask for assurances of performance Voluntary action tha tmakes performance impossible Propsective inability to perform Promisee may suspend her performance Fork:Can sue ? Insolvency is not REpudiate when performance is due? Retration of repudiation Can be retracted unless party Final acts: Sues for breach Changes her position materially in

Rescission No adequate remedy at Law? Forfeiture? Damages - Expectation Reliance Restitution Liquidated Damages Clauses Alternative performance? Are the damages tough to estimate? is if a reasonable forecast of actual or anticipated harm?

reliance on repudiation or states that she regards the repudiation as final 2-611(1) Cancelllation and new contract with someone else UCC - buyer repudiates and seller sells goods to someone else Seller repudiates and buyer buys comparable goods Mitigation is required by securing alternate contract if one is reasonably available UCC 2-610commercially reasonable time Repudiation ignored then sued on - repudiate may insist on performance, then sue without having waived rights UCC - 2-610 remedies if lost performance will substantial impair the value of the contract to him Can await performance or resort ot any remedy for breach even though repudiate has notified that he would await performance If repudiatee has no more duties, generally cannot breach suit until performance is due UCC damages for repudiation - buyer - 2-713(1) measure of damages is difference between market price at time buyer learned of the breach and contract price

 Are they a penalty? Are they unreasonably large or unconscionable? Shotgun clause? Has purpose for the clause vanished? Specicifc Performance Is there adequate remedy at law? Is it a unique item? Land? Is if for a personal service? Does it impose servitude oran

undesirable relationship? Is there an independent harm? Would enforcement harm anyone? Economic Waste? Limitations on Expectation damages Mitigation General - Was there a reasonable attept to cover? Could you have done the other at the same time? Personal services? Is there compatable employment available? Difrenet or inferior employment? in a different locality? Foreseeability Could the damages have been reasonably foreseen? Are the damages proportional to the consideration? Did the D have special knowledge of the dmages that would arise? Punitive damages - no recovery unless a tort as well Emotional distress - No recovery unless the breach also caused bodily harm or serious emotional disturbance was a particularly likely result UCC Buyer's remedies 2-711 Buyer's remedies in General, Buyer' interest in Rejected Goods 2-712 - buyer's damages for non-delivery or repudiation 2-714 - Buyer's damages for breach in regard to accepted goods 2-715 Buyer's incidental and Consequential Damages 2-716 Buyer's Right to Specific performance or Replevin

 2-717 Deductino of Damages from the Price 2-718 LIquidation or Limitation of Damages Seller's REmedies 2-702 Seller's Remedies on Discovery of Buyer's Insolvency 2-703 Seller's Remedies in General Seller's Right to Identify goods to K notwithstanding breach

or salvage unfinished goods 2-706 Seller's Resale including contract for resale 2-708 Seller's Damages for non-acceptance or repudiation 2-709 Action for the Price 2-710 Seller's incidental damages