A.

UCC or Restatement
B. Negotiations
No good faith requirement—look at fraud, misrep

C. Type of K/ Parties
1. Bilateral
2. Unilateral
3. Firm Offer
4. Option
- irrevocable for set amt. of time (has to have consideration)
5. Requirement
i. Should have quantity—but okay it’s proportionate to prior dealings- has to be in
good faith
6. Implied (through conduct of parties)
i. In fact: when breacher sues-- Quantum Meruit- as much as he deserves
ii. In law: when reasonable person would want k-- Quasi-contract-- as much as he
deserves (includes profit
E. Offer
a. Ad
b. Illusory
Lacking an essential term
Subject-to or binding only one party *not k under Eastern Airlines
Lacks consideration
Lacks quantity—has to be comparable to prior quantities (and in good faith)
c. Joke—objective standard—if reasonable p thought it was k- it’s a k (subj. intent
immaterial)
d. Essential terms
A. Restatement: Subject matter, price, payment terms, quantity, quality, duration,
work to be done (duck say quack quack when people pass)
B. UCC- quantity
e. Material Terms—c ore of k
f. Revocation- until last minute
g. Arbitration Clause- okay unless geographically out of the way (cruise ship)
h. Anything undercutting what may be an offer

F. Acceptance
a. Illusory—Can’t bind one party, but not another
b. Essential terms—UCC- only quantity or requirements k (or ct. can use past performance
to fill in indefiniteness)
c. Mailbox Rule-
A. K is in force at time of dispatch- even if mailis lost
d. Mirror Image Rule—UCC 2207

a. 2207- Merchant v Non-Merchant

i. Merchant- will not use last shot rule
  Any supplemental material (price, quality, warranty, arbitration)
terms not part of k, just proposals- k binding, without material
terms
 Additional terms- will become part of the contract unless 1)
expressly limiting condition 2) materially alters 3) other party
objects
 Different terms- Knock-out rule
 Can make clauses expressly conditional- not contract until other
party assents to terms ( have to show was unwilling to proceed with
transaction though)
 Disclaimer of a warranty- material alteration
 Conflicting terms do not become part of the k-k is formed on the
terms that the parties agree - conflicting filled w gap filler
 UCC- Can look at the “course of dealings”- can say there is a larger
agreement
ii. When it comes to consumers: not clear if 2207 applies because only one for- if
not read and revoke clause within a reasonable time – better chance of
consumer winning
 Argue reasonable time
 Review and Reject (like Gateway – or scroll and accept)
 Additional and Different are proposals for addition that require
express assent by consumer

e. Counter Offer- terminates original offer

f. Silence and Retention

F. Consideration (or promissory estoppel)

1. Nominal—ct. won’t inquire as to adequacy unless gross disproportion—shows no real
bargaining for (sham) or $$ amt fixed
2. Adequate under:
- Fraud
- Warranty?
3. Recital- Smith --- okay- can collect at any time- shows intent to be bound
4. Failure- not getting what you thought- sham- not bargained or (restatement)
5. Past- never adequate
6. Moral- only good for revival of past debt of 1. Infants 2. Cases barred by stat. of frauds 3.
Bankruptcy
7. Want
- Wanted something in return- but got nothing or nothing of value
8. Magic Words or Seals
i. UCC- Seal not recognized
ii. Restatement – Seal shows rebuttable presumption of consideration
iii. Options:
a. Recital of consideration okay—even if it’s not there (find case)
 9. Promissory Estoppel
1. Have to have a promise
2. Promisor should reasonably expect (foreseeable)
3. Supposed to induce
4. Action or forbearance
5. And does induce reasonable actual or forbearance

Ex:

a. Families- Rickets changed position – detrimental reliance

b. Retirees—reasonably, foreseeably, and detrimentally
c. Franchisees--- Agency issue—Equitable Estoppel—includes reliance costs
a. Misrepresentation or fraud—must be of material fact
d. Cohen- promise must be clear and definite
e. Charitable- binding without action or forbearance
f. Construction—Drennan- foreseeable that general contractors will rely on bids-
applicable unless “snap-u0p”

Remedies: reliance and restitution

10. Modifications
- UCC: no consideration
- Restatement:
A. Stump Homes- modification has to be in writing
B. Pre- Existing Duty Rule: can’t change duties already owed under existing
k, unless there is new consideration for it (excavation case- extra work –
not contemplated by the parties is consideration)
C. Brian Construction—fair, equitable, circumstances (restatement)—
should have consideration
- Duress/ Coercion- modification voidable by victim

H. Statute of Frauds
1. Applies to:
i. (UCC) goods more than $500, anything that takes over a year from k
ii. K for land sales of leases more than a year- (have to have price too)
iii. Services- cannot be fully performed in less than a year from making of k
2. If falls within categories- has to be in writing and signed by defendant
3. TELL whether it applies or not
4. Remedies
Can talk about remedies available if statute of fraud applies (restitution default rule,
followed by reliance)
 5. Does it apply or not to oral k-
6. Was there a writing w signature
7. Exception? Partial /Complete Performance/Goods Accepted and Paid For
i. UCC- If the goods are specially manufactured for buyer and not suitable for sale to
others
ii. Restatement- Actions in Reliance- If one party changed his position in such a way that
injustice can only be found through specific performance- k will be enforced
1. Look to availability of other remedies- cancellation- restitution
2. The foreseeability that the changing of position was foreseeable to
promisor
iii. Complete performance- k completely enforceable

H. Interpretation
a. Intent to be bound?
b. Ambiguous- Void
A. Restatement: if one party knew meaning attached by other..

c. Vague (application)
A. UCC- trade usage (chicken case)
B. Dress case: covenant strictly construed against those seeking enforcement
C. Parol Evidence-- Integrated- Partial or Not?
i. Integrated/Partially Integrated
ii. Was it supposed to be the FINAL Writing- Integrated- Brown
iii. What does k mean, either oral or written? If written- d will argue
integrated- interpret terms of k. Other sign will say- not integrated-
vague or ambiguous – bring in parol evidence. What’s a chicken,
what’s a dress—make argument why it is or not
iv. Integrated- Partially Integrated – not big discussion of parol evidence
if it’s clear what was being sold
v. Sometimes vagueness issue/ sometimes ambiguity
vi. HEIRACHY- If using parol evidence- paragraph for each
i. Text
i. Negotiations
i. What parties said about the text when entering the deal
ii. Course of Performance- what was actually done
i. Prior Dealings
i. Industry Custom
d. Party’s purposes- did they intent to be bound?
- Offeror is the master of offer—free to contract as they would like
- Embry- if reasonable man would take as a k- it’s a k
 Intention is judged by his outward expressions and excludes all questions in
regard to his unexpressed intention

B. Third Parties
a. Beneficiary (buyer--> seller--> contractor)
i. Right of beneficiary to sue on contracts made for his benefit
 ii. Buyer can sue both parties
ii. Does not apply to personal services
 
b. Intended- have right to enforce k-- one whom which concurring the benefit on will
satisfy obligation owed to the promisee
c. Incidental-- not the intended benefit-- no rights against promiser or promissor
d. Agent
Express
Implied
Apparent
Signs of authority: 1. previous dealings 2. profession 3. principle 4.
corporations 4. Extraordinary
Sauber-
 Could answer phone, permitted employee to conduct business,
purported authority to customers

e. Fiduciary
f. Lawyer
 Have some authority
 How much?
 General authority
 Procedural
 Negotiate
 NO authority to settle the case
 Can get a letter from client to authorize attorney to settle for certain amt.
 
C. Assignment versus Delegation
 Assignment: Absolute and irrevocable (Kelly Health v Prudential- wasn't an
assignment)
 Rights to contract given-- such as collecting debt
 Barred if it materially changes duty, increases risk, changes value
 
 Authorization (Delegation)- Conditional and revocable
 Duty to perform under contract given
 Assignment of responsibility (sub-contractors)
 Barred where there is a substantial interest in having original promisor perform
 

D. Performance/ Breach
i. Implied duties
ii. Good Faith (immutable)- decency, fairness, reasonableness – BREACH—trying to go around
k
i. UCC- look at industry standards, honesty
iii. Warranties
1. Express
i. Distinguish- Fact / Promise/ Prediction Opinion
a. Warranties cover facts and promises, prediction but not opinions
  
2. Implied (immutable) for merchants (UCC)
i. UCC Warranty of merchantability
Limited to merchants-- average stuff- that works more or less
-Average
ii. UCC Warranty of fitness for a particular purpose
 Implied that goods will perform purpose
 Specialized -- can for merchants and individuals
 UCC:
 Seller must have reason to know of the buyer’s particular purpose
 Seller must have reason to know that the buyer is relying on the seller’s
skill or judgment to furnish appropriate goods; and
 Buyer must in fact rely on the seller’s skill or judgment
 
 
 
iv. Disclaimers
a. "As IS"
 Has to be conspicuous
 Integration clause -- (as to exclude parol evidence)
 This is all you get - this is meant to be the final and exclusive statement of
the terms of the agreement relating to the subject matters covered
 
v. Conditions. Remedy: Forfeiture (defense to conditions)
1. Implied
2. Express- (where parties explicitly agree to a duty based on conditional happening)
 Has to be material breach
3. Constructive - (condition made by court)
 
4. DEFENSE: waiver- willingness to forego a condition- pg 232 Emanuel (implied-
continuing performance, acceptance of benefits under k)

5.
ii. Material breach-- must be a breach of the very PURPOSE or root of the agreement an
cannot relate simply to a subordinate or incidental matter

J. Defense
1. Public Policy
i. Does it violate?
ii. Just bc it’s illegal doesn’t mean it won’t work- can invalidate in some
iii. Rough Justice (ex: not paying illegal aliens)
iv. Cuban cigars—violate pp- not valid
a. The Yuck test- void
b. PP is the justification behind all contract doctrine

2. Capacity (remedy: voidable)

 i. Age (necessities exception)
An infant does not have the capacity to bind himself absolutely by k, but an
infant’s liability for necessaries is not based on the actual k to pay for them, but
on a k, implied by law or “quasi-k”
 K stands as if it never existed- adult most return whatever was received by
the infant

ii. Mental Illness (Voidable)

1. A person incurs only voidable contractual duties by entering into a
transaction if by reason of mental illness or defect
2. He is unable to understand in a reasonable manner the nature and
consequences of the transaction or
3. He is unable to act in a reasonable manner in relation to the transaction
and the other party has reason to know of his condition

3. Misrepresentation (Assertion that is not in line with the facts – VOIDABLE)

If a party’s manifestation of assent is induced by either a fraudulent or a
material misrepresentation by the other party upon which the recipient is
justified in relying, the k is voidable by recipient.

i. False
(not known to the speaker- unqualified statements of fact)
ii. Material (if it induces someone to do something)
HAS to be a material misrep to be voidable
iii. Fact
iv. Innocent
See Halbert :An innocent misrepresentation of a material fact warrants
recession where one induces another to enter into a k by means of a
material misrepresentation, the latter may rescind the k

v. Vokes- wild card

R: A statement of a party having.. Superior knowledge may be regarded as a
statement of fact although it would be considered as opinion if the parties
were dealing on equal terms USE THIS

2. Fraud (intentional tort Voidable by victim)

i. False- knowingly making false statements
ii. Fact- about a material fact that was made to induce the buyer
iii. Intentionally
iv. Remedies: punitive
v. Proof: clear and convincing – hard to prove (mental aspect)—HAVE to of relied
on it
vi. This is a tort—if you affirm k—have to sue in tort for damages
vii. Can say—writing was induced by fraud—doesn’t matter what it says
3. Duress
Exists when one by the unlawful act of another is induced to make a k or
perform some act under circumstances which deprive him of the exercise of
free will
i. Cf modification without consideration
ii. Alternatives
iii. Good Faith
4. Undue Influence
i. Ordorozzi shake-down

5. Unconscionability
1. Procedural
a. Hidden, obscure—one party lacking meaningful choice
b. In small font—ISSUE OF NOTICE
c. Normal font—can’t be buried somewhere
d. Second screen shows up after submit order-
procedurally unconscionable

and/or (either should be enough to throw out clause)

2. Substantive
a. Talks about the fact that the clause is just a “nasty
clause”
b. Goes to the issue of merits
c. Unfair, one-sided
 Remedies vary

6. Mutual Mistake
i. Something that is not in line with the facts at the making of the k
1. Reformation? Beyond a reasonable doubt
If the writing doesn’t accurately reflect the parties’ agreement- ct will fix
1. Reformation-- Beyond a reasonable doubt
 Allows you to rewrite it
 157 Effect of Fault of Party Seeking Relief
a. A mistaken party is not barred from reformation or avoidance
unless they acted in bad faith or not in accord with standards of fair
dealing
 
b. Material- if not material-- not voidable and subject to reformation
 
 
 
2. Restitution/ Recession- avoidance (voidable if mistake)
-- Not beyond a reasonable doubt
  Mistake must be a 1. basic assumption on which k was made, 2.must
have a material effect, and 3. injured party must not bear risk - then
voidable by injured party (unless one who was allocated the risk)
 
a. Under Restatement- If rules will not avoid injustice, reliance may be
granted
 
 

 
 
 
7. Unilateral mistake
1. Material
A mistaken party is not barred from reformation or avoidance unless they acted
in bad faith or not in accord with standards of fair dealing- established beyond a
reasonable doubt-- when error is material-- victim is entitled to reformation
 
 
2. Good faith?
3. Snap up
1. If injured party can show that other party knew or had reason to know
 
4. To avoid: 1. mistake must be of basic assumption, material effect, not bear risk

8. Impossibility (voidable)/ Impracticable

1. Perish/death/major legal interference/ Designated goods
 Very rare likelihood of occurrence-- but high likelihood of success
 Transatlantic rules for Impracticable:
1. Something unexpected occurred
1. The occurrence must not have been allocated by either party or
by custom
1. Occurrence must have rendered performance impracticable
 
 
9. Changed circumstances / Frustration of Purpose
1. Serious "unforeseeable" changes
1. Contract was based on an implied condition (occurrence of event)-- no
occurrence-- no value to plaintiff
extreme cases in which purpose of k is totally destroyed
-- If you can use for other purposes-- no relief
 
 Occurrence is more likely (maybe change in
market value), likelihood of success is very low
 Car Case: The doctrine of frustration is limited to cases where the frustrating event
was unforeseeable and the value of the bargained-for item is totally destroyed
 
B. Remedies
A. Injunctive Relief
i. Land: yes
ii. Goods: Unique or hard to get
iii. Services: hard to get (yet can sometimes sue employers to get jobs back)
 
B. Damages and Remedies
i. Restitution- disgorge d of unjust enrichment
ii. Reliance - costs incurred- puts p back in place as if k was never made
iii. Expectancy- expenses + profits – default
iv. Liquidated Damages?-
i. Nuclear Option? *invalid void as a penalty
ii. Awarding damages for measurable damages? Only good if immeasurable
iii. Is it disproportionate? Excessive
1. At time of k disproportionate
2. At time of breach? – may have been reasonable in beginning, but
not at end
 
v. Punitive- only available if there is a tort
vi. Attorney's Fees
vii. Rescission
1. If condition not met or
2. Material Breach
3. Mutual material mistake
viii. Reformation
Immaterial mistake
ix. Void v Voidable
x. Quantum Meruit
1. "As justice requires"
 
xi. Incidentals-
Storage, (Neri- storing boat + profit could have sold 2)- to prevent further loss- not
foreseeable
xii. Consequentials-
Have to be foreseeable or notice (Hadley)
xiii. Cover different between k price and - UCC- Tongish
i. Cover must be “reasonable” “good-faith” “without delay”
xiv. Change in Market Value( Restatement) – Cove (UCC) r- or lost profits
xv. Rental Value
xvi. Specific Performance :
 Inherently unique
 Rare
 Or “proper circumstances”
 
  
C. Limits
i. Measurable
1. Liquidated damages not applicable to measurable damages
iii. Mitigation
Must Mitigate Damages- Take reasonable steps to avoid further damages
 Don't have to accept "different" or inferior jobs
 
Iv. Dempsey- Can only collect after the signing and before the breach

Abby ordered a cob salad in tiawana plus donut rings.

Pat caught many fish during unusually uncomfortable mornings until it instantly changed.