Formation

___ UCC or ___RS ___Construction K __Writing ___ No Writing __Gratuitous Agreement= offer + Acceptance Contract=agreement w/ enforceable promise Offeror-power of offer a. accept/promise (bilateral) b. accept/performance (unilateral) c. indifferent Offer-objective (average reasonable person believe entering contract) a. b. c. d. e. f. g. Uncertain terms/no offer Certain terms/offer Requirements (all)/offer Missing terms/no offer Misunderstanding/jokeoffer (unless other party knew) Future offer/no offer Price quote/no offer (unless actually bid)

Policing Bargain/Defenses
DEFS/POLICING BARGAIN a. Capacity 1. Intoxication-cant comprehend 2. Mental 3. Minors-minor disaffirm only must give back consideration (Necessity exception) b. Duress (improper threat & no reasonable alternative) c. Undue Influence (factors-time, place, imm. acceptance , multi persuaders, emphasize consequences, no advisor and no time to consult) d. Misrepresentation 1. Negligence 2. Material fact 3. Relied Upon 4. undiscoverable puffing allowed generally e. Non-Disclosure/Conceal 1. false statement 2. Half-truth 3. prevention 4. fiduciary relationsp 5. confidence exist f. Mutual Mistake (material mistake-for what got not price) g. Pubic Policy 1. Non-compete 2. Exculpatory (when against policy, w/ public relationship-long term.) h. Unconscionable (standard form contract remedy) Terms must be oppressive one-sided (substantive) absent reasonable choice (procedural). i. Statute of Frauds Writing Requirement 1. Separate writings ok 2. All essential terms (except UCC) 3. Def signed/marked (except UCC)

Terms/Gap Filler
UCC 2-314 Implied Warranty-seller must be merchant 2-207-Battle of the Form a. Uses 2-104merchant deals in goods w/ expert knowledge b. Mode A=offer w/ definite & seasonable expression of acceptance. Can have different or additional terms. Contract. 1. Added termsproposals. 2. B/w merchantsadded terms part of contract unless (offer expressly limits, materially alter, timely objection). c. Mode B=counter-offer. Expressly conditioned on accepting varying terms. Shipment/performance defeats Mode B-then Mode C. d. Mode C-no contract but act as if one. Contract=agreed terms & UCC gap fillers. PAROL EVIDENCE Complete Integration no Partial Integrationadditional or collateral

Performance/Breach
UCC Perfect Tender Exceptions a. Seller right to cure if time b. Installment K-must have substantial defect c. Accept goods-must impair value Severable Contract-restitution quasi contract remedy-fairness Forfeiture allowed/Not severable: 1. Performance not tied to value 2. Construction K-forfeiture disallowed when materially enriched-reasonable value given Non-Performance Excuses 1. Other party breached 1st (can only repudiate for material breach) Delay repudiation factors (a) how material (b) ability to arrange substitute performance (c) was time of essence. 2. Anticipatory repudiation (unequivicalbe/unambiguous) a. Free to make other arrangements. b. treated as present breach can sue immediately. (except installment payments) c. Allowed for reasonable suspision of intent not to comply. d. Can ignore repudiation-only if sit idle-cant continue performance-duty to mitigate. (split in authority). 3. Assurance of Performance a. C/L-Could w/h performance when perspective failure of performance. Not breachremedy to walk away. b. UCC-reasonable grounds for insecurity-send writing- can suspend performance until receive assurance. After

Damages
1. Specific Performance A. Equity remedy when money damages inadequate B. Real Estate C. Construction built to suit D. Unique sale of goods E. No on service contract 2. Punitive Damages A. Breach/Fiduciary B. Rarely Awarded for K 3. Liquidated Damages A. Reasonable compensatory damages B. Not allowed/punitive 4. Injunctive relief-only when damage award inadequate.

5. Lost Expectation
Damages a. Loss bargain=loss in value-cost avoided value received. b. Loss of Bargain=profit + cost of reliance (cost incurred) value received + other loss. c. Cover damage= substitute cost-contract price + other loss. A. Costs avoided exclude fixed overhead costs. B. Other loss=

Mistake & Offer-usually offer Exceptions a. Material Mistake b. Enforcement unconscionable c. Other knows of mistake d. Contractor Bids Advertisement/Auctions-Not offer Exceptions a. offeree/quantity both

b.

stated Firm offers

OFFER TERMINATION a. Rejection (but not terminated if take under further advisement. b. Lapse reasonable time. (RSP) c. Face to face-end of discussion d. Direct/Indirect Revocation e. Death (offeree/offeror) REVOCATION EXCEPTION a. Option Contract (part performance or payment on unilateral contract)Brooklyn Bridge Hypo b. Option w/ consideration c. Irrevocable w/ consideration (tokens allowed) d. Firm Offer (UCC, merchant, consideration, writing only) e. Offeratory Estoppel RS87(2) ACCEPTANCE By offerree only Unilateral Acceptance-must be offered. Begin performance= option contract. Accept when fully perform. No notice required unless cant learn promptly w/ certainty performance. Bilateral-Accept when promise or begin performance. Notice required by promise/performance.

Exceptions 1. Oral Renewal 2. Agent approved 3. Reliance (RS 139) (Factors-pg ___) Types a.. Sale goods $500+ 1. writing/not all terms 2. Quantity not price needed 3. Signed by Defendant 4. Exceptions (special manufactured goods begun production, fail to denyconfirmation, pay/accept goods) 5. Confirmation b/w merchants if no objection in 10 day-affirmed. b. Transfer/Lease +1 year 1. Exception-partial perform (pay price, possess land, material improvement-2) c. Contract +1 year 1. (exceptions-performable w/I year, one side full performance, life employment) d. Surety 1. (exceptions-Joint liability, indemnity to borrower-not lender, 3rd party beneficiary, primary benefit rule). e. Promise for marriage f. PR personal pay estate debt LACK /CONSIDERATION GET-promise/act/forbearance Claim invalid-ok-if no bad faith Gratitutious-no consideration Not GET (Pre-existing duty, illusory promise, bad faith assertion of invalid claim) Conditional promise-no illusory Pre-existing Duty Exception 1. Add something-valid 2. NY-rescinded doctrine 3. Insolvent/but pay part debt 4. Unanticipated but fair result 5. Cancels 1st K-enter 2nd 6. Agree PE-doubt/dispute 7. One side fully performed

agreements OK NY-objective-look at K- (majority view, natural and probable) CA-subjective-look at evidence (modern trend/Restatement/ & Traynor rule) EXCEPTIONS 1. Fraud/Mutual Mistake (reformation) 2. Ambigious Terms 3. For Defense 4. Trade usage consistent w/ express terms. Merger Clause-only evidence GAP FILLING Supply reasonable terms

A. Good Faith/Fair Dealing Mandatory Term B. % Lease-best efforts (exceptsubstantial minimal rental only good faith) C. Unspecified Time 1. Notice of termination 2. Time recoup investment 3. Indefinite OK of Ked for 4. Employment K-terminate at will (except-against public policy). D. Trade usage-

reasonable time-30 day lmtdamages OK. c. RS-same UCC-but no writing required no 30 day lmt (courts reluctant to use) 4. Doctrine of Impossibility a. Perish of person or thing b. UCC destruction/goods c. Big Surprise d. Unexpected contingency, risk not allocated (expressed nor implied) performance impracticable. e. More expensive-generally not impossible. (unless severe) f. Objective Standard- unique situation-no excuse. g. General risk allocation k terms-generally no good. h. Judicial, Statutory and unexpected acts of gvtm-ok. i. No K-risk allocation rely on market fluctuation. j. Lose key employee-ok k. judge can consider judicial equitable adjustment. l. Cancel wedding-risk on bride not dressmaker. m. Partial frustration-not enough. 5. Conditional Language a. Exceptions-excused (1) condition-waiver (unless material-can retract b/4 condition time expires w/ time to comply unless relied upon), (2) cause failure-prevention. b. Time must be of essence c. Futile acts not required d. No substitute requirement e. DUTY ONLY-remedy damages. Conditional-remedy breach. Look at terms in K. f. Satisfaction Conditionpersonal taste=good faith Commercial utility=reasonable

consequential/incid ental C. Loss Volume Seller (no substitute considered) D. Losing contractsome give lost expectation some give restitution except when fully performed get K price. d. Limitations A. Reasonably certain B. No domino effect C. Expected Profitnew business (must prove) D. Duty to Mitigate (Accept old job backdont have to if degrade or humiliatereasonableness test) E. Unforeseeable Consequential Damages (i.e. lost profits) unless K party knew. Unique and not natural. 6. UCC/Good A. When buyer breaches- and made down payment seller can charge $500 or 20% restock fee. B. Dont have to halt production if reasonably belief can sell-even if wrong. C. Buyer Damages 1. Cover-K price + incidental and consequential 2. Market price

Notice exceptions-contract dispenses or only suggests method Indifferent-accept when begin. Acceptance/Shipment UCC. Promise to ship or shipment of conforming/non-conforming goods unless accommodation. Silent-Acceptance a. accept know compensation expected b. know silence consent c. previous dealings=consent Mailbox Rule Communication valid when received (exception acceptance valid when sent). OFFEREE REJECTS B/F ACCEPTED a. Counter-offer b. Conditional Acceptance (exception when dont add/change terms- accept if dont get better bid) c. Additional terms/Mirror Image Rule. If Performance Last Shot Doctrine. (EXCEPTION UCC-2-207-GOODS). Preparation vs. Performance a. Factors (1) extent activity in response to offer (2) definiteness and substantiality of activity (3) extent to which activity benefits offeror.

8. Accord & Satisfaction (agreed on substitute) 9. Good faith dispute/payment in range. 10. Marriage promise not PED UCC/GOODS/Consideration Requirements ok-good faith Exclusive dealing ok-best effort Modification dont need cons. EMPLOYMENT/considerat. Promise/employ not GET Time/Promotions=consideration Exception-competition at times Employee Handbook-no consideration needed-binding Consideration/Exceptions 1. Moral obligation-rare 2. Moral obligation invalid by law but reaffirmed. 3. Promissory Estoppel RS90 a. Expect to induce/forebear b. does induce/forebear c. justice only be enforcement d. remedy limited as justice requires. 4. Restitution a. Benefit conferred b. Unjustly enriched c. restitution award allowed reimburse cost/increased value Exceptions (gratitudous, intermeddler, rescue-unless costly/burden or professional

usually both parties in trade. Hierachy-express terms, course of dealings, course of performance, course of dealings, trade usage Constructive Conditions 1. Absent payment terms-work substantially performed b/4 any payment due. 2. Delay repudiation factors (a) how material (b) ability to arrange substitute performance (c) was time of essence. 3.

g. 3rd party approval-subjective (not reasonable-objective) h. Cant prevent condition (cant interfere w/ sole source, but more scarce/expensive not preventive) 6. Mutual Mistake-must be material mistake on basic assumption w/ no allocation/risk. (also one party mistake). a. Bear risk when (a) agreement allocates risk (b) go forward w/ limited knowledge (c) court finds reasonable. b. Promise achieve result-must overcome obstacles. c. No consequential damages but restitution for benefit conferred. d. Gambling/assume risk 7. Frustration of Purpose BREACH VS. FORFEITURE 1. Mutual/independent=breach 2.Conditional/dependant=forfeiture 3. Mutual same time conditionsbreach. FORFEITURE/CONDITIONAL Courts prefer duty/damage award 1. No right to cure w/o reliance 2. Include unstated defect in evidence unless Def. relied on notice. 3. Exception-substantial performance doctrine-requires good faith. RS & waiver 4. No substantial performance for material defects-factors (a) extent got what bargained for (b) extent can be compensated for damages for breach (c) ability to cure failure (d) failing partys good faith/fair dealings. Breach Remedy-seek diminution in market (big breaches) or cost to complete (little breaches).

(when learn/breach) K price + incidential + consequential cost avoided. 3. Buyers choice 1 or 2. D. Seller Damages 1. Market price (at time/place of tender) K price + incidential cost avoided. 2. K price allowed when cant reasonably find cover. 3. Lost Volumeprofit + incidential. 4. NO consequential dmgs. 7. Reliance-put in same position as if no K ever. Restitution-value of benefit conferred.

8.