1. What is the APPLICABLE LAW?

The UCC governs the sale of goods, with applicable rules also applying to
merchants.
The Common Law are majority rules governing contracts other than the sale of
goods.
Mixed contracts are determined by the more important part of the deal, except
divided contracts in which both UCC and common law rules may apply.
Types of Ks: Unilateral K: offer expressly required perf as method for
acceptance. Divisible Ks: perf divided into 2+ parts under K; number of parts due
from each party is the same; and perf btwn parties is equivalent. Option K: agmt to
leave open in exchange for consideration. Ads: gen preliminary proposal unless
words are to identifiable person, e.g. first come first serve.
2. Contract FORMATION problems
Offer requires 1) a manifestation of a present intent to contract demonstrated by
promise, undertaking or commitment, 2) definite and certain terms, and 3)
communicated to an identified offeree.
Content: Sales price & description. UCC quantity. Reqt K terms of
exclusivity. Real estate ID of land and price.Employment duration.
Termination. Revocation: unambiguous stmt by offeror to offeree or unambiguous
conduct indicating unwillingness to K that offeree is aware of. No rev for option
K, firm offer (UCC offer cant be revoked for up to 3 months if offer to buy or sell
goods, signed written promise to keep open and party is merchant), detrimental
reliance (reasonably foreseeable detrimental reliance) or start of
performance. Rejection: counteroffers kill; addl terms under CL mirror image rule;
lapse of time, e.g. > 1 month; conditional acceptance kill.
Acceptance is a manifestation of assent to the terms of an offer in the manner
prescribed or authorized by the offer.Full performance; Start performance; Offeree
promise to perform; Mailbox rule (acceptance effective when mailed, all else when
received); Seller of goods sends wrong goods, unless with explanation (then its a
counteroffer)
Addl terms: CL mirror image rule; UCC one party merchant addl term is
proposal subject to sep rejection; both parties merchant addl term is part of K
unless materially alters, offeror objects w/in reas time, or offer limits acceptance to
the terms.
Consideration requires a bargained-for exchange of legal detriment between the
parties. Past consideration is no consideration, except expressly requested
performance/ forbearance and expectation of payment. New consideration reqd for
pre-existing K or statutory duty: except in CL, unforeseen difficulty, third party
promise or promise to pay debt barred by SoL.

Substitutes: written promise when prior obligation had applic legal defense;
promissory estoppel
Defenses. Incapacity: under 18 has a rt to disaffirm K unless minor retains benefit
after gaining capacity. Illegality subject matter illegal K is void; subject matter is
legal, purpose is illegal enforceable only by person who didnt know of illegal
purpose. Public policy.Misrepresentation/Nondisclosure innocent party may rescind
if induced to enter K by fraudulent misrep or non-fraudulent material
misrep . Duress improper threat and no reasonable alternative. Unconscionability
unfair surprise and oppressive terms at time of K. Ambiguity/Misunderstanding ea
party uses a material term open to two reas interpretations; ea party attaches dif
meaning to term; neither party knows or has reason to know the term is subject to
two imterps causing ambiguity. Mistake no K ifmutual mistake on basic
assumption of fact that materially effects agreed exchange and not a risk that either
party bears. Unilateral mistake not voidable unless other party knew or should have
known. SoF
SoF: applies to Marriage, Year, Land, Executory guarantee, Goods > $500,
Suretyships (My Legs). Satisfy by perf, writing, or judicial admission. In real estate,
part perf reqs two of payment, possession, or improvements. Writing reqs:NonUCC: parties, subj matter, terms & conditions, consideration, sig. UCC: quantity
terms and sig, unless confirmatory memo of oral K and no obj w/in 10 days.
TERMS (disagreements): PER: integration issues. Merger clause is highly
persuasive but not determinative. No PE to reform or contradict written terms,
unless theres a mistake in integration. PE ok to argue defense to enforcement,
explain ambiguous terms, to provide addl terms if only partial integration, or addl
terms would ordinarily be in sep agmt. Conduct: course of perf (same ppl, same K),
course of dealing (same ppl, sim K) custom and usage (dif ppl, sim K).UCC
Default: delivery obligation - either Shipment Ks or Destination Ks; risk of loss
determined by agmt, breach (even slight), delivery by common carrier (shipment K
risk of loss to buyer when seller delivers to carrier; destination K risk of loss to
buyer when seller delivers to buyer), if none, merchant seller risk of loss to buyer
on receipt of goods; if non-merchant risk of loss to buyer upon tender. If risk of
loss on buyer buyer pays full K price; on seller possible liability on seller for nonperf); implied warranty of merchantability if dealing in goods of that kind and
fitness for a particular purpose if seller has reason to know of purpose and
reliance. .
All Ks have implied warranty of good faith and fair dealing.
3. PERFORMANCE problems
Breach of contract occurs any time a party refuses to perform under the terms of
the agreement. Such breaches are categorized as either material or minor, with
material breaches excusing the other party from performance.
Sale of goods: Perfect tender: if sale of goods, Ss perf must be perfect or B can
reject. Rejection of goods: retain and sue for damages or reject all of a commercial

unit and sue for damages. Cure: S has second chance at perfect tender if: S had
reasonable ground to believe delivery OK OR time to perform hadnt
expired. Installment Ks: B can reject installment only if theres a substantial
impairment that cant be cured. Acceptance of goods: if accepting goods, B cant
later reject. Payment doesnt equal acceptance w/o opp to inspect. Implied
acceptance if B keeps for reasonable amt of time. Revocation: if B hasnt accepted
goods, B may cancel K by revoking acceptance if: nonconformity substantially
impairs value of goods, excusable ignorance of grounds for revocation or reasonable
reliance on Ss assurance, and revocation w/in reasonable time after discovering
nonconformity.
Common law: substantial performance