I.

OFFER
Definition: A manifestation of a willingness to enter into a contract in such a way that the other party knows that assent is all that is necessary to cement the deal. A. Elements: 1. Definite (nouns)--> price & quantity Detailed, specific, etc. 2. Committed (verbs) Willing to commitnot maybe or "ify" 3. Communicated Offer Acceptance Revocation (O/r revokes) Rejection (O/ee rejects) Express: Language was used (based on oral or written terms) Implied: Actions were used (based on conduct/actions) Judged based on Objective Standard (i.e. what a majority of reasonable people would think) Lucy v. Zehmer. 1954. Zehmer (O/r) said he was only joking when he offered to sell his land to Lucy (O/ee) even though they 'wrote' a contract on a napkin, Lucy went out the next day got an attorney, inquired into the title of the land, etc. (Analysis: It is immaterial what the unexpressed intention is, only concerned with the outward expressed intention ).

II. ACCEPTANCE
Definition: A manifestation of assent to the offer, made in the manner invited or required by the offeror. A. Elements: 1. Responsive 2. Absolute & Unequivocal 3. Communicated Offer Acceptance Revocation (O/r revokes) Rejection (O/ee rejects) B. Termination of Acceptance 1. Revocation Offeror (or reliable third person) must inform offeree before tender 2. Lapse of Time Offer lapses after a reasonable amount of time (unless otherwise stated) Counting days--do not include the day of the offer 3. Rejection by Offeree

An offeree's power of acceptance is terminated by his rejection UNLESS offeror has manifested a contrary intention "I'll take it under advisement" means NO (i.e. rejecting the O) 4. Death or Incapacity of Offeror Terminates the power of acceptance immediately at the time of death or incapacitynot when offeree learns of it 5. Counter-Offer Offeree changes or adds his own terms RESTATEMENT 36: The O/ee now becomes the O/r Mere inquiry is not a terminator of acceptance Example: "$2,000 sounds good, but would you consider $1,500?" UCC 2-207 "Battle of the Forms" (applies to counter-offers) 1a.) If there is a definite and seasonable expression of acceptancethan the K is accepted. 1b.) If there is NOT a definite and seasonable expression of acceptance, or if the acceptance is expressly conditional on assent to the additional terms (i.e. proviso language) than there's no acceptance, but rather, a counter-offer. 2.) If there IS acceptance (by a definite and seasonable expression) Between Non-Merchants: additional terms are only proposals and have to be accepted by O/r to become part of K (must expressly agree) Between Merchants: additional terms automatically become part of the K UNLESS: - They're rejected within a reasonable time - The offer is expressly limited to its original terms - The additional terms materially alters the Offer (e.g. disclaimer of warranty, arbitration clauses, etc.) 3.) If there is NOT acceptance/C-O (i.e. if there is proviso language) The courts throw out the disagreed upon terms and put in "gap fillers" such as - A reasonable price (if the price is what is disagreed upon) - A reasonable time (if the time is what is disagreed upon) - Goods to be picked up @ seller's place of business (if delivery is what is being disagreed upon) C. Options and Option Contracts a. An "option" is a stated time frame the O/r gives the O/ee (e.g. you have five days to accept this O) b. An "option contract" occurs when consideration is given to solidify and make the O irrevocable for the stated option time. (e.g. O/ee gives O/r $50.00 to keep the O open for a specified amount of time)

D. Firm Offer

III. CONSIDERATION
Definition: A promise or performance, which is bargained for, given to or by the P/ee or P/or Elements: 1.) Must be bargained for 2.) Must have value that the law recognizes Consideration can be in the form of: - Promise or act - Service - Money or personal property - Forbearance Sufficiency v. Adequacy 1. Courts look to sufficiency not adequacy unless dealing with fungibles (same nature) Example of fungibles: $20 for $100 = not consideration b/c it's the same nature $ 20 of Greek money for $100 of U.S. money = is consideration b/c its not the same nature (Batsakis v. Demotsis. 1949.) 2. Nominal consideration is not consideration Schnell v. Nell. 1861- involved invalid mother's will to children, father offered to still pay in exchange for one centno consideration b/c it was nominal Forbearance Refraining from doing something you have a legal right to do. Hamer v. Sidway. 1891. - Uncle promised nephew $5000 to refrain from smoking, drinking, cursing, gambling, etc. until he turned 21. Nephew was entitled to $5000 because his consideration was the forbearance for something he had the legal right to do Forbearance to sue on an invalid claim may be consideration provided there is an honest belief (subjective standard) in the validity of the claim and the belief is reasonable (objective standard). Fiege v. Boehm. 1956. - Boehm truly thought Fiege was the father of her child. He promised her that he would pay child support if she did not take him to court for bastardy. Fiege stopped paying when he found out he was not the father. Boehm consequently took him to court for bastardy

and was successful. (Analysis: Since Boehm had an honest and good faith reasonable belief that Fiege was the father, she prevailed even though the claim he was the father was technically invalid) Illusory Promise If it looks like one party is not bound (i.e. not giving consideration) .courts imply good faith. Wood v. Lady Duff-Gordon. 1917. Wood and Gordon entered into contract where Gordon promised to endorse designer clothes and split the profit if Wood marketed them. The 'illusory promise' of Wood was to "take out all such patents and copyrights and trademarks as may in his judgment be necessary to protect the rights and articles affected by the agreement." Wood sued after Gordon refused to pay b/c she considered the agreement to not be a contract because Wood didn't give any consideration. Courts implied that Wood was to give a "good faith" effort to market her designer clothing. (Analysis: It was obvious that Wood had given consideration because if he didn't do everything he could "in his judgment" than Gordon wouldn't have made any money, and therefore there would be nothing to split with Wood). Output Contracts (everything put out) Example: John promises to buy ALL of the widgets that the Widget Co. makes Problem is that the Widget Co. may, if they feel like it, make 50,000 widgets so they'd make more money from John because he would HAVE TO buy themor maybe or they don't feel like making any for a few months without consequence or detriment (i.e. no consideration) John's consideration: buying all and every widget Widget Co.'s consideration: Illusory--courts would imply good faith to prevent a problem Requirement Contracts (whatever's required) Example: Widget Co. promises John that they'll provide him with all the widgets he desires... Problem is that John may need no widgets in August, but 10,000 in Septemberso it appears that John can back out at anytime at no detriment to him (i.e. no consideration) Widget Co.'s consideration: making all the widgets required John's consideration: Illusory--courts would imply good faith to prevent a problem

Past Consideration At the time of the contract, both parties are bargaining for something (past consideration = no consideration) Example: John ordered pizza for his study group on Tuesdayon Friday, he tells his class "I need five dollars from everyone for the pizza last Tuesday.the students say ok. Can John sue if students don't pay?... NO b/c he didn't bargain for it until after the fact. Hayes v. Plantation Steel. (1982). Hayes announced his intent to retire well in advance of any promise of extra retirement pay; his intention to retire was arrived at without regard to any promise by Plantation Feinberg v. Pfieffer. 1959. The board of directors decided to pay "retirement privileges" to Feinberg (extra pension in addition to her normal retirement pay). AFTER, they informed her of this decisionshe worked for eighteen more months and then decided to retire. Therefore, the boards offering to give extra retirement privileges shaped Feinberg's decision to retireonce she retired, she sought no other employment. She sued after they reduced her pension seven years later. Courts found that a pension contract existed between the parties. Mills v. Wyman (1825). Mills provided nursing and board to Wyman's ill 25 yr old son. AFTER the services were rendered, Wyman offered to pay for her services but then later refused to pay. Mills sued but courts found that a moral obligation existed.but isn't enough to be consideration (i.e. past consideration = no consideration) Past-Due Monetary Debts-Restatement (Second) #82- Promise to pay Indebtedness; Effect on the Statute of Limitations (SOL) 1.) A promise to pay all of part of a pre-existing debt is binding [even if the SOL has run] if you promise to pay it and there is no other reason why it is unenforceable besides SOL. 2.) A promise to pay, without consideration, is enforced (after SOL has run) if: a.) voluntarily admit there is owed money (e.g. "oh yeahI still owe you money") b.) voluntarily transfer something as a partial payment or collateral (e.g. "here's $50 for now")

c.) admit that SOL will not be pleaded or used as a defense (e.g. "don't worry, I won't use SOL, I'll pay you") Example: John lends student $500 and student promises to pay back $550 later. Time goes by, student moves out-ofstate...never paying John back. By coincidence, while on vacationJohn runs into student. John: "heywhatever happened to that money you owe me?" Student: "oh man, I'm so sorryI forgot. I'll pay you here's $100. I'll get the rest to you next week." =DEBT RENEWED! Pre-Existing Duty-Where someone is trying to get MORE for something they already had a duty to do. Example: Maid service is hired for $100 to clean a house, after starting they ask for another $50 to do a clean "really well". Harris v. Watson. 1791. Ship encountered problems at sea. Harris, a seaman, requested additional compensation to navigate the ship out of danger. The Master and Commander, Watson, agreed to pay five guineas above Harris' wage. Once out of danger, Watson refused to pay and Harris sued. Courts found that Harris had a pre-existing duty as a seaman to navigate the ship. Stilk v. Myrick. 1809. Two crewmembers abandoned ship and the captain was unable to hire replacements. He told the remaining crewmembers that he would overcompensate them by splitting the wages of the two who had deserted if the others would work to make up for the lost labor. One of the crewmembers, Stilk, sued after the captain refused to pay what he had promised. Courts found in favor of the captain because Stilk had a pre-existing duty to work hard enough to make up for lost crewmen. Lingerfelder v. Wainwright Brewery Co. 1891. Architect, Lingerfelder, threatened to quit half-way through completion...Brewery Co. offered more money to honor the contract between them. Lingerfelder finished and Brewery Co. refused to pay anythingLingerfelder sued. Circuit Court ruled

in favor of Lingerfelder, Supreme Court reversed stating Lingerfelder had a pre-existing duty to perform the contract. Accord & Satisfaction v. Substituted Contract: "Payment of a less sum on the day a debt is due in satisfaction of a greater, can NOT be satisfaction of the whole, BUT the gift of a horse, hawk, or robe in good satisfaction is good" (quote from Lord Coke in Pinnel's Case). Example #1: Bill owes John $1,000. Bill tells John that he just lost his job so he won't be able to pay him the whole amount but he can give John $800 and his PS3. If John accepts the $800 and PS3and gives it to John...Bill's debt is paid "in satisfaction". An executory accord suspends the original duty until the accord is completed satisfactorily (or breached--see below). **If Bill breaches and didn't give John the $800 and PS3, John can sue for EITHER the original K ($1,000) OR the accord ($800 and PS3). Example #2: If Bill says he'll deliver the $800 and PS3 on Nov 1st. But on Oct 31st, John changes his mind and decides he no longer wants the PS3 so he sues Bill for the original $1000. --possible?? NO, John has to wait until Nov 1st. (until the date agreed to) A substituted contract completely releases the parties from their obligation from the original K and now ONLY the second K will be valid. There is usually a "moment of freedom" from the original K--where the parties either tear up the K or Example: Brian owes Chris $200 in a contract they have. Brian says,"let's forget our old K...and instead of the $200, I'll give you $50 and my John Deere lawnmower." Since Chris really needs a new lawnmower, he tears up the original $200 K.and he agrees to the substituted contract. **If Brian breaches, Chris can ONLY sue for the $50 and lawnmower (can only sue for the substituted contract).

If it's ambiguous as to an accord or substitute Kthe courts prefer an accord. Paying LESS THAN what is OWED-Original K is still enforceable unless there is a good faith dispute/belief that a lesser amount is owed(e.g. contracted work wasn't finished or done correctly) Example #1: John hires Ned's Roofing Co. to re-shingle his roof for $2000. Ned actually only re-shingles two-thirds of the roof. John has a good faith dispute/belief that the entire amount of $2000 is owed. John doesn't have to pay anything until its resolved in court. However, Ned could accept less money because of his less work. Example #2: John hires Sam's Garage Door Co. to install a new garage system for $1500. Sam does a great job and John is satisfied. However, John tells Sam that he ran into some financial difficulty and can only pay $1000. Sam can sue John for left over $500. "Paid-In-Full" If there's a good faith dispute over an amount owed, a check that says "paid-in-full" which is cashed will be treated like an accord and satisfaction (i.e. it's done, can't sue). But it MUST BE CLEAR and the other party must be aware that the payment is intended as a paid-in-full payment. Example: John hires Mike to build a tool shed made of oak for $3000. Half-way through the job, Mike runs out of oak wood and finishes the shed with pine wood. John realizes this and refuses to pay the full $3000 because John insisted on oak so he writes a check to Mike for $2000 and writes "paid-in-full" in the memo. Mike sees this and cashes the check. .since there was a good faith dispute over the amount owed, and the fact that Mike knew the check was a paid-infull payment, the parties are done and Mike can't sue John for the remaining $1000. "Cashed Under Protest" *Old School*-- Can still sue for a check that is cashed under protest. UCC 3-311 changes this.

Old School Example: (same example as above) Mike believes that pine is just as good as oak, if not better.so he takes the "paid-in-full" check from John and cashes it anyway because he really needs the money for Christmas. So Mike cashes the check, but writes "cashed under protest" above his signature on the endorsement line..he can later sue John for the remaining $1000. Enforcing a Promise WITHOUT Consideration: Moral Obligation (MO) General Rule: MO is not binding (i.e. not enough to be valid consideration) MO is a subsequent promise to pay a debt which is normally barred by: 1.) Statute of Limitations 2.) Infancy 3.) Bankruptcy but would be enforceable w/o consideration b/c of MO 4.) (a) P/or rec'vd "material benefit" from P/ee (b) Rec'vd under circumstances to create a moral obligation (c) A subsequent promise to pay (d) Nature of circumstances is such that P/ee reasonably believed that he would be compensated Webb v. McGowin. 1935. Webb was moving a pine block which was about to fall on McGowin. To save McGowin's life, Webb falls with the pine block which prevented injury to McGowininstead though, Webb is severely injured. As a result, McGowin promised to pay his medical expenses and $15/week for the rest of Webb's life. McGowin later died which stopped the weekly payments. Webb sued McGowin's estate and, after appeal, court found in favor for Webb b/c of MO. (that is, McGowin received a material benefitso until Webb dies, he would be entitled to $15/week). Promissory Estoppel When someone detrimentally relies (via action or forbearance) on a promise made by another party, and there is

NO binding contractcourts could enforce promissory estoppel which enforces part or all of the promise. Two Restatements: 1.) Restatement #90 1.) A promise made that is reasonably expected by the P/or to... (could foresee) 2.) .induce action or forbearance of a definite and substantial character on the part of the P/ee 3.) ....it actually does induce such action or forbearance 4.) ....and will be binding if injustice is avoided only by enforcing the promise 2.) Restatement (Second) #90 (1) A promise which the promisor should reasonably expect to induce action or forbearance on the part of the promisee or a third person and which does induce such action or forbearance is binding if injustice can be avoided only by enforcement of the promise. The remedy granted for breach may be limited as justice requires. (2) A charitable subscription or a marriage settlement is binding under Subsection 1 without proof that the promise induced action or forbearance (i.e. promises to charities and promises in marriage settlements are binding w/o detrimental reliance)
Differences between First and Second Restatement #90: 1st: definite and substantial reliance/forbearanceand enforces the entire promise 2nd: just needs reasonable relianceandlimits remedy to whatever is needed to prevent injustice

Example--Student X is going home to New York for Thanksgiving. John is going to New Jersey for Thanksgiving. John offers student X a ride to New York since they're going in the same general direction. Student X is excited since he won't have to buy a roundtrip plane ticket and accepts John's offer and calls his parents telling them that he'll catch a ride with John. The day they're suppose to leave, John calls student X and says he's changed his mind and doesnt feel like going home for Thanksgiving anymore. 1.) John made a promise that was reasonably expected to

2.) induce action of a definite and substantial character (e.g. student didn't buy plane tickets, changed his plans around, etc.) 3.) and Student X actually did change his plans around and not buy plane tickets as he would have otherwise 4.) .so it would therefore be binding since injustice would occur if the promise were not enforced Example: John offers Student X a job at his new law firm in Florida when student graduates. Two years go by and another word is never mentioned about the law firm in Florida. The whole time student X is thinking he has a job in Florida.Eventually, student X graduates and moves down to Floridacalls up John, and says "ok!..I'm here in Florida!..When do I start?".. Surprised, John says, "really? that was two years agothat business proposition with new law firm fell through" (assuming there was detrimental reliance)... Remedy under the 1st Restatement: John has to give student X the job or pay student X the salary he would have made Remedy under the 2nd Restatement: Whatever's fair to prevent injustice such as enough money to move back to Michigan
Restatement (Second) #87: Deals with General Contracts and SubContractors. If a sub gives a bid to a general contractor, it can be assumed that he relied (detrimentally) on it and they are bound. (Branco Enterprises, Inc. v. Delta Roofing, Inc. 1994.) Example: John advertised for bids from contractors to build his house. Tom, a general contractor, wanted to put in a bidso he knew he would need electrical, plumbing, and landscaping subcontractors to do work on the house. Tom got all of the subcontracting bids and told John that he would build his house for $200,000. John accepted this bid and they entered into a contract. Three days later, George, the electrical sub-contractor backed out and said he wasn't going to do the work for the amount he originally said he would. Since Tom relied on George's bid to his detriment, he can sue for promissory estoppel. Limits on The Doctrine: A party will be liable for a promise made during preliminary negotiations if they should reasonably expect to induce an action or forbearance of a definite and substantial nature, and the promise does induce such action or forbearance, and injustice would result if relief were not granted. Hoffman v. Red Owl Stores. 1965.

Relying on Red Owl's repeated promises and advice (no formal offer, though) that he would be able to obtain a supermarket franchise from them, Hoffman sold his existing business, moved to a new town, bought and sold a small grocery store, and took out a business loan. Red Owl later informed him that he would not receive a franchise from them. Hoffman sued for lost income and moving expenses incurred in reliance on Red Owl's promise. Restatement #89 (d): Deals with modifying contracts already in place. Angel v. Murray (1974)-- *Not in book. Maher had a 5 year contract with the city to collect garbage. Due to unanticipated circumstances, the work load went up 20-25%. As a result, Maher requested an extra $10,000. The city agreed to give it to him, but a taxpayer sued. Is he bound by the pre-existing duty rule??... The courts allow the modification of a contract under RS #89D if: 1. ) fair and equitable (i.e. wasn't forced, and its fair) 2.) contract is executory (i.e. not completely performed) 3.) circumstances were not anticipated Here, the city's population grew unexpectedly and resulted in an increase of garbage. There fore the 3 above elements would fit. Under the UCC (goods) a modification does NOT need more consideration if it is done in good faith.

IV. REMEDIES
1.) Expectation Damages (profit) 2.) Reliance Damages (no profit, just money back) 3.) Liquidated Damages (agreed upon terms written into contract incase of breach) 4.) Consequential/Incidental/Special Damages (damages above and beyond-but still as a result of-the breach) 5.) Restitution (what the DEF was unjustly enriched) -- equitable remedy, not a damage 6.) Specific Performance (making breacher fulfill the contract) -equitable remedy, not a damage **ALL damages must be foreseeable and proved with reasonable certainty (cannot guess or give mere estimate)

** With ALL damagesPL must act in good faith to keep damages low (i.e. mitigate or avoidability) A. Expectation Damages Where a profit is involved with the contract The goal is to put PL in the position he would be in if the K had been performed (i.e. give PL the 'benefit of the bargain') Hawkins v. McGee. 1929. Surgeon offered and guaranteed patient with a deformed hand that he would have a 100% working hand after he performed a skin graft, taking skin from chest and put on palm. The Hawkins hand eventually grew hair and thus sued for expectation damages. The jury had to come up with the difference in value of a "good hand" and the hairy hand (i.e. difference between what was promised and what was actually received). So the jury had to give the PL the benefit of his bargain. Peevyhouse v. Garland Coal & Mining. 1962. Couple leased their land to mining company so they could strip mine for coal. Garland promised to restore Peevyhouse's land to its previous condition. After they were done, Garland refusedthus breaching the contract. The cost to restore the land was $29,000.however, had the restoration occurred, it would've only brought the land value to $300. (Analysis: Courts said that if there's a breach PL's will either get the cost of completion ($29,000) OR diminution of value ($300)-- IF its not the main purpose of the contract and its grossly disproportionate to the cost of repair--since the main purpose of the contract was to lease the landnot restoring itAND the two numbers were grossly disproportionate...the court awarded only the diminution of value=$300). GOODS: --If SELLER breaches-a.) FMV (fair market value) - K price Example: X has a $300 cell phone and sells to Y for $200, if X backs out of K, what can Y sue X for? FMV - K price = $100 b.) Cost of the substitute goods ("cover") minus the K price Example: What if Y didn't want the $100, but wanted the cell phone? Y would have to go get the same phone from somewhere else (cover), but had to pay $225 instead. What can Y sue X for? Cover price - K price = $25

Example: K to sell used text book for $25, seller breaches and doesn't sell, the buyer would go buy the same used book from someone else for $40. Damages= [40-25=$15] --If BUYER breaches-a.) K price - Resale price Example: X has a phone for $300, contracts to sell to Y for $350but Y backs out of contract. So X ends up having to selling it to Z for $250. What can X sue Y for?.....REMEMBER: The goal of expectation damages are to put the PL in the position had the K been fulfilled.. K price - resale price [$350 - $250 = $100] b.) K price - FMV (if not resold) Example: If X decided to keep the cell phone and not re-sell it, X can sue Y for $50. [$350- $300= $50] SERVICES: (usually construction contracts) --if BUILDER breaches-Cost of completion OR diminution of value (minus any cost saved) Example: X hires Y to build a house for $150,000, Y backs out (breaches) and X had to hire a new contractor for $160,000.X's damages are $10,000 --if OWNER breaches-a.) Cost-to-Date PLUS profit OR the contract price - costs saved Example: X hires Y to build a house for $160,000 then fires Y after partial completion.Y's damages are what he already spent PLUS PROFIT **New business will have a hard time proving damages with reasonable certainty because they won't have history/finance books to show actual damagesmere estimate may not be sufficient** Losing Contract-If the cost of completing the contract costs more than what the price of the contract wasits a losing contract; and the "loss" is subtracted from any rewarded damages. Example: If a builder enters into a contract for $8000.but then ends up needing more materials or sub-contractors

than he originally thought and has to buy $4000 more materials/labor beyond the cost agreed upon in the initial contract ($8000).and then the owner of the house fires the contractor..the builder can sue for. BUT he's not entitled to the additional money he spent. (i.e. he has to subtract the $4000) B. Reliance Damages (getting out-of-pocket money back) The goal is to put the PL in the position he would be BEFORE the contract was entered into. Part performance under control of the non-breacher Example: John is suppose to buy a used contract book from a student for $25. John sends a check to the student for $25 but then after cashing the check, student breaches and doesn't send the book to John. So now John has to go out and buy the same book from someone else, and ends up having to spend $40. If suing for reliance damages -- $25 (out-of-pocket expenses paid to the breacher) If suing for expectation damages -- $40 Example: Student pays John $200 in advance for ten tutoring sessions. John never performs any of the sessions so the student hires a different tutor for $250. If suing for reliance damages --$200 (out-of-pocket expenses paid to the breacher) If suing for expectation damages-- $250 Anglia Television v. Reed. 1971. Anglia hired Reed to perform in a play on tv. Reed backed out of the contract, and Anglia couldn't find a substitute. Anglia sued for all the money they had spent to make the production. Reed said that he should only have to pay for any costs incurred AFTER he breached the contract. But Anglia spent money on the set, designers, directors, etc. knowing that Reed was going to play the lead role before he breached. So Reed had to have known that a large amount of expenses had already been incurred and if he broke the contract, all those expenditures would be wasted. Restatement (Second) #349--Injured party has a right to damages on reliance interest including expenditures made in preparation for performance or in performance (i.e. before and after breach)...

.minus any loss the breacher can prove with reasonable certainty the injured party would have suffered if the contract had been performed (e.g. if the movie Reed was suppose to be in would've lost money it would've been subtracted from Anglia's reward) C. Liquidated Damages Terms written into contract that calculate damages should a breach occur. For a liquidated damages clause to be valid... 1.) damages must be difficult to ascertain; and 2.) the clause must be a reasonable estimate of damages (per day, per item, etc.) or it will be struck down as a "penalty" clause Example: Contract to remove all the tress in backyard. Liquidated damages clause in K says: "$500 if all tress are not removed" -- this is not a reasonable estimate of damages, its more of a "flat fee" b/c if one tree is left = $500if 18 tress are left = $500 (i.e. not a reasonable estimate)must be something like a $500 PER TREE. (creates a more reasonable estimate) "in terrorem" 'In order to frighten'. That is, if the liquidated damages clause intends to frighten the party entering into the contractit will be considered a penalty clause, which is not enforceable. D. Consequential/Special Expenses or losses beyond general damages that PL would never have incurred but for the breach Extra element beyond Expectation and Reliance.they have to be foreseeable Example: A guy hired to build a McDonalds for $150,000he walks off the job before its finishedthe new person that is hired to finish the job requires $180,000. Consequently, McDonalds now has to open 9 days later than anticipated (lost 9 days worth of profit) Expectation Damages: [goal of expectation damages is to put the PL in the position if the K were fulfilled] So, what is needed to complete the job?-->$30,000 Consequential Damages: Profit lost from opening 9 days later because of the breach. HOWEVER, the damages would

have to foreseeable--here, its foreseeable that there would be lost profit of 9 days. Are the damages reasonably certain here? Probably, because it's McDonald--a huge franchise, not a new business-who could easily show, with certainty, that there was X amount of profit was lost from 9 days being closed. AM/PM Franchise Association v. Atlantic Richfield Co. 1990. AM/PM is a convenient store that suffered losses because Atlantic (gasoline supplier) sold AM/PM gas that didn't conform with its warranties. Customers of AM/PM experienced poor engine performance b/c of the shoddy gas and eventually stopped going to AM/PM stores. As a result, the grocery sales of AM/PM declined as well. AM/PM sued for consequential damages divided into three types of losses. Loss of Primary profits: Difference between what the buyer would have earned from reselling the goods had there been no breach and what was actually earned after the breach. (Here, it was the sales that would have occurred had AM/PM not been sold shoddy gasoline) Loss of Secondary profits: The sales of the grocery Loss of Good Will profits: Reputation damages (i.e. the word spread that AM/PM sold bad gas) UCC calls these "Incidental Damages" (VERY similar to consequential)only difference is that their directly related to the subject of the K that was breached and usually does not require foreseeability. Example: John has a contract to sell his car (goods) to Fred for $10,000. Because they had a contract, and John was sure he'd have the $10,000, John agreed to buy Bill's motorcycle for $6,500. Fred backs out at the last minute and doesn't pay John the money. John now has to detail the car, re-advertise in the newspaper, store it in a garage, etc. which totals $700. Consequential Damages: $6,500 for the K with Bill Incidental Damages: $700 Consequential: Anything above and beyond that was affected b/c of the K that was breached (e.g. another contract affected)

Incidental: Anything directly related to the subject of the K that was breached Avoidability Any damage that could've been avoided (i.e. mitigated) .won't be recoverable. Example: If a seller breaches and doesn't sell goods to you.you'd have to go get a cover/substitute to mitigate any losses that would have occurred (i.e. you can't just allow the damages to add up without making a good faith effort to try and mitigate losses) Example: If an employee, X, is wrongfully terminated and can no longer pay their billsbefore they just sit at home and think, "I'll just sue for all these bills adding up". X has a duty to try and get another job ASAP. Thus, mitigating or avoiding damages. Parker v 20th Century-Fox Film. 1920. Substitute employment has to be comparable or substantially similarly to the job that was deprived. So if a similar job was offered and turned down.that will be taken out of the damages awarded--i.e. all the money that could've been made will be subtracted UCC 2-604 & 2-709 deal with avoidability and continuing performance: Completing/continuing performance after the breach could be considered avoiding/mitigating if its reasonable. (i.e. completed product has more value than if it was salvaged/scrapped) Example: John is building a dog house for Susie. When all John has left to do is put the roof on, Susie tells him to stop. Here, if John finishes the dog house anyway, he'll be able to resell it for more money as a completed dog house, rather than if he stopped and left the dog house without a roof and salvaged it as scrap wood/metal. Punitive Damages: Only recoverable if the conduct constituting the breach is also a tort for which punitive damages are recoverable. Breach of contract as well as negligence: Wedding photographer not having film in the camera Cremating the wrong body Delivering wrong body for funeral

E. Restitution (remedy) Putting the breacher in the position he was in before the contract was entered into. Part performance under control of the breacher Seeking the unjust enrichment of the breacher (i.e. money the breacher should not be able to keep) "Money paid to the breacher by the non-breacher" Elements are: 1.) Benefit conferred on DEF 2.) at PL's expense 3.) unjust for D to keep it Breaching party can still sue.but ONLY for restitution. Example: John has a contract with Hannah to buy one of her pregnant dog's puppies. There's a liquidated damages clause of $100 incase John changes his mind. John already gave Hannah $500 as a down paymentbut eventually changed his mind and didn't want the puppy b/c he can't afford a dog now. Even though John breached, Hannah has his down payment (unjustly enriched) John would be entitled to $400 (b/c $100 was liquidated damages) Restitution is recoverable in... 1.) Implied-in-Fact Contract: type of expressed contract 2.) Implied-in-Law Contract: not a true contract (but payment is just) Quasi-Contracts-- (where courts make a contract) Example: Two friends Jim and Bill are partying, Jim passes out from alcohol poisoning so Bill takes Jim to the E.R. Eventually, Jim wakes up, goes home, and everything is fine. A month later, the hospital sends Jim a bill for $500 because of the treatment he received in the E.R. Jim believes he doesnt have to pay, because there was never a contract and he didn't sign anything. Here, the courts would make a contract (i.e. quasi-contract) because it would be unjust for him to not pay the hospital because of the benefit he received. Quantum Meruit--services contract (reasonable value of services at the place and time of the K)

Quantum Valebant--value of property delivered to another F. Specific Performance (remedy) When damages alone cannot make the PL whole

V. STATUTE OF FRAUDS