Contracts outline I. Offer & Acceptance A. Intent to Contract 1. Objective Theory of Contracts. a.

mental intentions of parties are irrelevant (i) though objective theory dominates subjective e ements more free y considered b. the acts manifesting assent must be done either intentionally or negligently c. the objective manifestations of intent of the party shou d be vie!ed from a "# vantage point (i) use the Reasonable Person Standard/Test $!hether a "# in position of # !ou d conc ude that % had made a commitment &. 'ubjective Intent a. if the other party has some (ind of specialized knowledge that !ou d set off a reason as to !hy the objective method shou d not be used (i) it !ou d not be fair to protect a party !ith objective intent if they a ready had some sort of (no! edge that gave them actua (no! edge that the entire act !as not egitimate ). Court has said that a. price disparity does not necessari y mean there is no intent to * b. just because a person is e+cited does not mean there !as no intent to * ,. The Offer 1. intent (objective) &. terms (definite) ). communications -. Offers %istinguished from 'tatements that are not offers a. e+pressions of opinions & predictions (i) expression of an opinion is not a promise. and not an offer $statements made by physicians / dr. not iab e in * for fai ure to ive up to s(i s of co eagues (!ou d be tort) $use "#' $ oo( for !ords of guarantee $ oo( at surrounding circumstances (ii) advertisement is not an offer (genera ru e) $if something is an obvious jo(e / not an offer $ads. cata ogs. circu ars / genera y not offers $ads. genera y. are inviting you to ma(e an offer to the person advertising $order form / mere notice & so icitation for offer / creates no po!er of acceptance in the recipient b. offers distinguished from #re iminary 0egotiations and #rice 1uotations (i) inquiry is not an offer $must distinguish b2t offers and invitations to make an offer $use the "#' $ oo( at the language $ oo( to see if there are other offers besides the #3s offer $if D is only selling !" thing #piece of property$ there can only be !" contract (ii) price quote is not an offer $genera y. invite an offer $can be if they have certain additional characteristics $use "#' 4. Auctions a. auctions are situations !here you can have offers and acceptances b. there are t%o types of auctions (i) auction %ith reserve5 se er sets a price that is the minimum he !i accept (ii) auction %ithout reserve5 there is no minimum price set

$under contract law. auctions are deemed to be !ith reserve un ess they say !ithout c. !hen you put an item up for auction %ithout reserve you are making an offer d. !hen you put an item up for auction %ith reserve you are inviting people to make an offer e. no matter !hat (ind of auction you have the bidder can !ithdra! bid before the drop of the hammer but !hen that is done the ne+t highest bid does not automatica y become the highest bid the auction starts again 6. Offers vs. #re iminary 0egotiations a. #re iminary 0egotiations $ any communication prior to the operative offer in the case b. some of the important factors in determining !hether a comm. is an offer or not (i) ans!er to in7uiry / more i(e y to be an offer (ii) !ords used / are they !ords genera y assoc. !ith promise or are they noncommitta 8 (iii) are terms detai ed or on y fe! terms inc uded8 %o they inc ude 7uantity27ua ity8 (iv) se ectivity of communication / is person ma(ing comm. a so comm. !ith others8 (v) does case invo ve rea property or goods8 Cts are ess i(e y to interpret message about rea property as an offer than a simi ar message about goods (vi) re ationship of parties (vii) surrounding circumstances / e+5 is dr. treating in an emergency situation8 (viii) usages of the trade. prior practices of the parties (9course of dea ing:) C. Intent to ;emoria i<e 1. Three Scenarios on &ntent to 'emoriali(e a. parties !ho express intent but do not %ish inter into ) until there is something in %riting b. parties !ho make it clear there is a ) and that they are bound but there may be something in %riting *ust for the sake of convenience c. the middle ground !here things are unclear / one party thin(s one thing. the other another &. +our +actors to Determine ,hether Parties &ntend to be -ound nly -y +ormal Signed ,riting 1. !hether there !as an expressly reserved right on y to be bound by !riting &. !hether there !as any partial performance that !as accepted by the party c aiming no * ). !hether a the essential terms of ) have been agreed upon -. !hether !e usually have !ritings in agreements i(e this ). if there is a discrepancy as to the intent of the parties as to !hether to be bound !ith forma record or agreement. courts may be interested in the fo o!ing 7uestions5 (1) The e+tent to !hich an e+press agreement has been reached on a terms to be inc uded8 (&) Is the * one !hich usua y is put in !riting or other!ise recorded8 ()) =hether or not the subject matter of the * needs forma detai s8 (-) %oes the * need a !riting for fu e+pression8 (4) Are there fe! or many detai s8 (6) Is the amount in 7uestion arge or sma 8 (>) Is this a common or unusua *8 (?) %id either party ta(e action in preparation for performance during negotiation8 %. Indefiniteness 1. ;ateria Terms / such as@ subject matter. price. payment terms. 7uantity. 7ua ity. duration. the !or( to be done. etc a. do not have to be perfect b. an essential term has to be reasonable certain / !hich is re ative c. !hen there is an essential term in a * it has to be reasonab y certain and if it is not. then you have not formed a * &. Three Tpes of &ndefiniteness a. !here the parties purport to agree on a materia term but have eft it indefinite (i) the performing party can recover the reasonab e va ue of services under the quasicontractual standard (ii) the parties can a so cure the indefiniteness by their subse7uent condut b. !here parties are si ent as to a materia term (i) sometimes a certain standard can reso ve the prob em (ii) a so oo( at prior dea ing b2t the parties $cou d he p a ct. to reasonably infer outcome (iii) sometimes the court rejects to use the idea of a gap filler (!here they fi in the gap in the *) because there is no !ay to find !hat the intent of the parties !as

c. !here parties agree to agree ater as to an essentia term (i) traditiona vie!5 agreeing to ater agree ma(es a * void / no * is formed (ii) modern vie!5 agreeing to ater agree is O* / depends on jurisdiction A. The Acceptance 1. Bni atera & ,i atera * a. .nilateral / on y one party ma(es a promise and so it is the party subject to ega ob igation (i) an accepting an offer by performing
made a time is , Example: A says to , 9If you run the ,oston ;arathon and finish I !i pay you C1.DDD.:A has as(ed , to perform. but not for a commitment to perform. A has unilateral contract. If , does accept. it is by actually performing. but at no actua y bound to perform. If , does perform. there is then a contract.

(ii) no commitment is sought from the performer / on y the performance itse f / no performance E doesn3t have to get paid b. -ilateral / a * !here both parties have made promises / both subject to ega ob igations
promise2commitment. return promise. Example5 A says to ,. 9If you promise to run in the ;arathon and finish the race I promise to pay you C1.DDD.: A3s offer re7uests to , to ma(e a commitment. If , ma(es the then both parties are then bound. A bi atera contract arises !hen , ma(es the

c. Reverse/.nilateral / the offeree ma(es the on y promise

the that money Example5 I have my house insured and I pay 'tate Farm a ot of money every year as(ing for their promise to pay if my house burns do!n. I have made the offer because I have purchased Insurance / I have acted. done a behavior / given money. and !hat I !ant in return for is a promise that my house !i be ta(en care of in case of an accident.

$I have made no promise to 'tate Farm. I have acted and !hat I !ant in e+change is a promise form 'tate Farm that if my house burns do!n they are going to pay for it $In this case the * is made if the other party ma(es the promise to pay if my house burns do!n &. *no! edge of an Offer a. in genera . to accept an offer must kno% about the offer. must intend to accept the offer ). Objectivity2Objective Intent a. oo( at !hether it oo(s i(e offeree is accepting an offer regardless of his in%ard motivation -. ,asic Idea of Acceptance a. definition5 a vo untary act of the offeree !hen offeree e+ercises po!er given to them by offeror b. !hen trying to decipher 9did he accept8: focus on the ob*ective / the out%ard behavior 4. =ho Can Accept an Offer8 a. un ess an offer is directed to the %orld at large it may on y be accepted by the person to !hom it is directed 6. Acceptance by 'i ence and Conduct a. express ) / an offer. acceptance. a terms spe ed out a rea * b. implied in fact ) / promise from conduct. terms not e+press y aid out but imp ied from facts in situation a rea * c. implied in la% / 97uaisi$(: / has to be some type of benefit of services and it has to be accepted not a rea * / but there is an ob igation by a! (i) the court. in the interest of justice and fairness. says that in law a * !as made / someone has performed services for someone d. si ence in a bi atera * / norma y you need to comm. Acceptance b2c si ence does not E * e+ception5 the conduct of parties / someone !ho is si ent may have a duty to spea( (to not accept) if their si ence is mis eading due to past conduct F. =hen ;ay An Offer Goo(ing to a Bni atera * 0o Gonger ,e "evo(ed8 1. #artia #erformance a. c assica vie!5 in a BC offer may be revo(ed at any time before complete performance of act re7uested by offeror b. modern 2prevai ing vie!5 in BC once the offeree begins to perform$offer becomes irrevocab e (i) e+ception5 mere preparation is not enough. on y if offeree actually starts to perform &. 9;ai bo+ "u e: / purpose is to (no! !hen the offeree made the return promise so offeror can3t revo(e a. genera y. acceptance effective !hen sent regard ess of !hether it reaches offeror

(i) e+ceptions app y5 (do not apply if earlier re*ection arrives before later acceptance ) $offeror provides other!ise (master of the offer)@ $acceptance is not made in manner & by medium invited by offeror@ or $e+ception to acceptance under an option ) (effective upon receipt by offeror) b. genera y. revocation is effective !hen received by offeree c. genera y. re*ection or counter/offer is effective !hen received by offeror (i) instead. an acceptance sent after an other%ise effective re*ection/counter offer 5 (a) operates on y as a counter$offer if offeror receives it after the ear ier sent rejection or counter offer@ A0% (b) operates as an acceptance if offeror receives it before the ear ier$sent rejection or counter$offer d. Acceptance on Ans!er 2 Revocation (or Rejection) on Receipt e. #arties in the #resence of One Another (i) acceptance is on y effective !hen I hear it unless its my o!n fau t for not hearing it f. te ephone treated i(e mai H. Termination of a "evocab e Offer & Acceptance Iarying from Offer 1. C assica Iie! on Time Frames and "easonab e Time &. 'econd Iie! on Time Frames and "easonab e Time / 'aid that offeror can choose to accept someone3s ater tendering of an offer by !aving the time restraint a. treats time not as part of the formation but as a condition to the acceptance ). Third Iie! on Time Frames and "easonab e time $if an acceptance is ater but fa s !2i a reasonable time then burden is bac( on offeror to say they abso ute y do not agree to that and if the offeror does not then they are bound to upho d the * !ith the buyer -. %eath of an Offeror and Gega y Incapacitated Offerors a. genera y. po%er to accept terminates !hen offeror dies or becomes legally incapacitated 4. "evocation a. revocable offer may be revo(ed at any time prior to acceptance (i) most obvious !ay for offeror to terminate po!er of acceptance 6. Acceptance Iarying from Offer a. the acceptance must exactly mirror (even trivia y) the offer / anything e se E counter/offer J. Option Contracts SYNONYMOUS !"# !RR$%O&A'($ O))$RS 1. !hen consideration has been paid for the purpose of ho ding a * open it is an Option * &. Option *s must be supported by consideration a. once you have option * supported by consideration irrevocable II. Consideration A. =hat Is Consideration8$something of value given in bargained/for/exchange !hen parties intend e+change 1. The Three Parts of Consideration a. the promise b. either promisee suffers a detriment O" promisor incurs a benefit c. the first & parts must be re ated by a bargained/for/exchange (offeror ma(es promise so other party !i suffer detriment or he !i have benefit) &. ;otive and #ast consideration are both not consideration for a * ). Conditions to a Hift are not consideration a. no bargained$for$e+change in a gift -. ;i+ of ,argain and Hift a. se ing something at a discount for a friend. even though the motive is the friendship. the court !i enforce the * because there is a bargain invo ved 4. 'urrendering of an Inva id C aim a. C assic vie!5 if you3re not really giving anything 0 no consideration b. ;odern vie!5 if someone. in good faith. be ieves they have a c aim on someone. the surrendering of that c aim !i be deemed consideration ,. #re$A+isting %uty "u e / app ies to formation and modification of *s 1. Pre/"xisting Duty Rule / an agreement modifying a * is not supported by consideration &+1 a. one of the parties does2promises to do something he is a ready ega y ob igated to do@ O"

look at

that promises

b. one of the parties refrains2promises to refrain from doing something not even ega y priv. to do &. #ast Consideration Is 0ot 'upport for a 0e! #romise a. !ays to get around this5 (i) rescind o d * and ma(e ne! * (ii) ma(e more detriment (iii) ;odern vie!5 even !2o ne! * or ne! detriment can find a * !2 a ne! promise to be binding !ith an .nanticipated Circumstance 1. parties vo untari y agree to the modification &. promise modifying origina * made before * is fu y performed on either side ). under ying circumstances that prompted change !ere unanticipated by parties -. the modification is fair and e7uitab e (a itt e broad. though) ). Accord & 'atisfaction a. 2ccord is an offer to give or accept a stipu ated performance in the future in satisfaction or discharge of the ob igor3s e+isting duty p us an acceptance of that offer (i) the performance of this stipu ated performance is the satisfaction (ii) offer of accord must make it clear that the offeror is seeking complete discharge (iii) must be supported by consideration b. Three 3uestions to ask about 2ccord 4 Satisfaction (i) have the parties a ready gone through process of offer2acceptance8 (ii) has there been satisfaction8 (e+5 has the chec( been cashed8) (iii) !as the accord2satisfaction supported by consideration8 Kes E binding * -. Consideration in ,i atera *s and ;utua ity of Ob igation a. in a bi atera ( (promises going both !ays) must be detriment2benefit supporting each promise (i) once there is promises going both !ays there is enforceabi ity going both !ays (ii) in a bi atera * if you promise me you3re going to run the marathon I can enforce your promise to run it and you can enforce me paying you but only if there is consideration going both %ays (iii) in the bi atera the consideration has to be going both !ays. but the consideration does not have to be ' out there / it can be i*plied not e+press and u can the good ,ait- require*ent to determine if it %as there b. ;utua ity of Ob igation (i) better thought of as mutua ity of consideration (ii) in a uni atera * there is no mutuality of obligation b2c offeree has not been bound to do anything@ even if he starts to perform he does not have to comp ete the performance (iii) bi atera * is void !2o mutua ity of ob igation c. Termination at =i *s (i) C assica vie!5 !hen one of the considerations2detriments are Tat= no * formed (ii) ;odern vie!5 !hen one of the considerations2detriments are Tat= if there is a reasonab e amount of notice in a termination at !i then it is fair d. Covenants not to Compete (i) !here there is a C0TC there shou d be a bargained/for/exchange (ii) must oo( at consideration / !hat did the emp oyee receive8 The emp oyer8 e. I usory #romise (i) a real promise imits one3s future options compared to one3s options before promise (ii) illusory promise does not imit one3s future options / is an apparent commitment actua y eaves a 9free !ay out: (iii) ;odern vie!5 not to oo( at i usory promises too c ose y / more concerned !ith !hat happens !hen one party doesn3t !ant to fo o! through and then i usory can be used against them f. Consideration 'upp ied by Imp ied #romises (i) an implied promise is a !ay to get around an illusory promise by inc uding into the agreement that other!ise seems i usory the re7uirement of good faith or g. Conditiona #romise (i) a promise that the on y re7uires the promise to perform if a specific condition occurs

reasonab eness

(i) not illusory and constitutes valid consideration b2c the promisor has imited his future option b2c if the condition does occur he has to perform h. "e7uirements *s and Output *s (i) in a typica requirements contract buyer expressly agrees to buy a of his re7uirements of a stated good from the se er !ho agrees to se that amount to the buyer (ii) output5 se er agrees to se a of his output of a certain item to buyer and buyer agrees to but that output from the se er (i) in the re7uirement * the consideration is in the surrender of the buyer3s privi ege to purchase e se!here III. ;ora Ob igation and Consideration A. =e ta ( about ;ora Ob igation as a substitute for consideration / ho!ever. most courts are going to ho d that moral obligation is not consideration ,. C assic (minority) Iie!5 a promised based on ;.O. or past consideration is unenforceable unless it is5 1. a promise to pay a prior debt &. promissory restitution5 promise to pay for a benefit previous y received ). ega ob igation is discharged by a! (e+5 statute of imitations) and yet the person promise to pay -. a promise to pay an ob igation that !as voidab e due to fraud and yet the person promises to pay 4. a promise that is ora . a though norma y unenforceab e may be deemed enforceab e C. ;odern Iie!5 a promise based on ;.O. is enforceable 1. if the promise is based on material benefit that !as previously conferred by the promise upon the promise it is enforceab e II. #romissory Astoppe / designed to assis the party !ho relied on the promise A. LMD of the "estatement "lements of Promissory "stoppel 1. Kou need a promise &. the promisor shou d reasonab y e+pect to induce action or forbearance ). the action has to be of a definite2substantia character -. the promise must be !hat actua y induces the action 4. if the promise is not enforced there !ou d be injustice ,. #art & of the "estatement $a charitab e donation (or marriage agreement) is binding !2o proof that the promise induced action or forbearance (N- to part 1) C. =hat LMD App ies to 1. the present tendency is to use the doctrine as a substitute for consideration in cases of gratuitous promises in just about any case !here a of the e ements for #.A. are present &. donations are an addition to promissory estoppe for pub ic po icy reasons %. ;odern Iie! of #.A. 1. the inc usion of part & to part 1 of LMD@ and &. N) to part 1 is not inc uded C. C assic Iie! of #.A. is just part 1 of LMD I. Conditions. #erformance and ,reach (OOO'ee Jandout M2&> / intro to e+press2constructive conditions) $condition defined1 an act or an event other than a apse of time !hich un ess the condition is e+cused must occur before the duty to perform an act arises A. The 0ature and Affect of A+press Conditions. The Time C assification of Conditions 1. express condition / an e+press state*ent in t-e . !hich provides that either5 1. a party to the * does not have a duty to perform unless some even or state of the !or d occurs2fai s. O" &. if some event or state of the !or d occurs or fai s to occur. the ob igation of a party to perform one or more of his duties under the * is suspended or terminated ). i, /ou -ave an e+press condition it *ust be strictl/ per,or*ed 0 do e+actl/ w-at it sa/s (Audette v.Lunion) &. constructive condition / a ega ese ( a! jargon) / ho! the court !i oo( at responsibi ities of the parties and figure out if someone has breached or not

1.if there is no e+press condition this is ho! the courts determine ho! the parties have to perform and !hat they have to perform &. not a spelled out1e+press condition 0 a condition i*plied b/ law to do justice substantial co*pliance ). conditions precedent to performance / has to happen before 1. the idea of something that occurs before the duty to perform can arise not condition to forming a * -. conditions concurrent to performance / has to happen at the same time 1. neither party is ob iged to perform un ess and unti the other party tenders performance &. e+5 A contracts to se car to , for C1Dg. * states that both price and car are to be e+changed on Pu y 1. Tender of each performance by each party is an i*plied condition concurrent to per,or*ance b/ t-e ot-er party3s ob igation to perform / if , fai s to tender price on Pu 1 A3s duty to de iver car does not arise and vice versa 4. conditions subsequent to performance / has to happen after (rare. bi<arre) 1. the idea is that it is a condition !hich !ou d e+cuse performance after the right to performance has a ready happened / e+5 after 1 year of the fi ing of the notice. you can no onger sue (Inman v. Clyde) &. most common e+amp e is an insurance po icy ,. %oes the Contract Create an A+press Condition. A #romise. or ,oth8 1. e+press conditions in a contract s-ape per,or*ance because they are spelled out &. e+press conditions imp ied in fact $ they are c ear y e+press buy they (ind of messed up in the !ords and court fi s it in a. compare that to the idea of a contract implied in fact / a rea * and nobody dotted the t3s and crossed the I3s but !e (ne! it !as a rea * and not a remedy by the court (7uasi$*) ). e+press conditions must be strict y performed C. Constructive Conditions are about sorting out breaches. rights. and iabi ities (in bilateral contracts) 1. it is nothing more than a court imposing and imp ying a responsibi ity onto a party to perform at a c certain time in a certain manner. in a certain !ay because they thin( either a. the parties !ou d have done it if they had time to thin( about it or b. this is simp y because this is the fair !ay to do it &. A condition the parties have not e+press y agreed upon but !hich a court !i impose on parties under their duties in the * a. so !hat !e3re oo(ing at no! is sorting out these rights and responsibi ities and if there is nothing in the * that does it the courts !i do it themse ves ). Substantial Performance ( aco! " #oungs) a. to (no! if someone has substantia y performed 1. reasonable expectation of the benefit (the homeo!ner !anted a good 7ua ity pipe) $ho! much of the !or( has the non$breaching party gotten8 (essentia y. homeo!ner got a of it b2c pipe is so simi ar) &. ho% great is the forfeiture (the detrimeint to the breaching party) ). %ill damages alone compensate the non/breaching party8 (can !e ma(e the house good by paying him the difference bet!een !hat the price of the pipes !ere8 / yesQ) -. good faith/bad faith8 4. is there an economic %aste fix8 -. in a constructive condition. because !e are ta (ing about bilateral contracts !e3re ta (ing about & promises to be performed / the fai ure of one party to perform may have an effect on the other party to perform a. even if there is no e+press condition the court in the interest of fairness and justice may go ahead and construct a condition 4. the courts have come up !ith the idea that you have to substantially perform if you substantially perform you may not have e+act y performed. may not have done everything e+act y the !ay you !ere supposed to / you3re going to be he d responsib e for it ,BT its not going to ARCB'A the other party / a the other party !i be ab e to do is ho d you iab e for any damages that that immaterial breach caused / does not mean the orther party gets out of having to pay at a

6. if the first party has not substantially performed 0 they have materially breached and if they have materially breached the other party has t!o choices 1) cance and get out of * and get tota damages@ O" &) et you continue !ith the * and sue for the partia damages

%. Gess Than 'ubstantia #erformance5 1uasi Contractua "ecovery 1. ru e5 if you3re the breaching party and if you conferred a benefit onto the nonbreaching party you are entit ed to the va ue of that benefit and you are a so going to be re7uired to pay the tota damages that the breach has caused. you may not come out in the b ac( but you get some (ind of offset (Lancellotti) a. !hatever the va ue is that the non$breaching party has because you performed. that is !hat you !i be entit ed to A. "ecovery ,y a #arty in %efau t5 Divisibility. &ndependent Promises5 and Separate Contracts 1. Divisibility / the court actua y ta(es a contract and divides it to ma(e it more fair for both parties F. =rongfu #revention and 0on$Cooperation 1. you cannot hinder or delay the first promise from being performed a. if you are the second party and your promise does not have to happen unti the first promise to perform happens and you stop the first promise from happening you !i not be off the hoo(. you cannot do that &. you have to et a of these promises happen in good faith a. you cannot !rongfu y prevent the first promise from happening and then be e+cused from performing the second promise H. =aiver. Astoppe and A ection 1. if parties do not put dates in a contract then time is not of the essence and performance has to happen in a reasonab e time &. !hat is time is of the essence8 a. it means that both of the parties in the * have made an agreement as to !hen they are going to perform and if they don3t perform at that time there are going to be conse7uences and those conse7uences are going to be enforced ). ho! to reinstate time being of the essence 1. you have to be c ear that you !ant to reinstate time of the essence &. it has to be reasonab e / has to give the other party a reasonab e amount of time to perform ). ,aiver of Conditions a. !hen !e ta ( about !aiver !e have the party for !hom the condition is meant to benefit waiving it and if the condition is meant to benefit you you can !aive anything you !ant / and if you do it before the condition is due it is in fact ca ed a !aiver $any condition can be %aived as long as it %as to be in 6 .R benefit and it had yet to occur b. once you have %aived it can you reinstate it88 1. if there is a condition that you have !aived and !ant to reinstate you can on y reinstate it if it is immaterial you cannot try to go bac( and reinstate something the court !ou d find to be material c. time is of the essence / materia or immateria 8 Can it be !aived8 $court !i interpret that narro! y $court !i rare y find it to be materia / but it is possib e -. "lections / the idea of election is very c ose y re ated to breaching a material condition the party !ho is not breaching has the po!er to do that a. if there has been an immaterial breach $ parties have to elect to continue and sue for damages b. once you have elected after the failure you can no onger ta(e it bac(Q 4. "stoppel / !rongfu prevention a. if you have a party that concea s a fact and the other party re ies on it to their injury then the party that has done the misrepresentation can3t enforce something based on that misinterpretation J. "e ief from Forfeiture

1. +orfeiture $ mere y another !ay of e+cusing a condition that has to happen a. more of an e7uitab e remedy !here the ct. may decide to e+cuse a condition b2c of an unfair resu t that !ou d occur if they didn3t $the court !i say yes there !as a condition but !e are going to e+cuse that condition b2c !e thin( it !ou d be ine7uitab e / a bad resu t / if !e did not e+cuse the condition extreme $even if it is agreed upon !y the parties the court may sti find it to be unfair b. common$ a! ru e5 a condition may be excused if its requirement may cause forfeiture ($urger %ing)

I. Conditions of 'atisfaction 1. &estern 'ills v. (fau $ ct. divided the idea of satisfaction into & separate categories5 $sub*ective standard / if something is in good taste or judgment. the promisor is the one !ho can judge if they are satisfied $this is a narro! category $ob*ective standard / invo ving uti ity. fitness. and va ue $!ou d a "# consider the finished product to be satisfactory P. #rospective Fai ure of Condition and ,reach by "epudiation $you have a party that says they !ont do it or thin( they !ont do it before they even have to do it $b2c it is an anticipatory breach you do not have to sit around and due nothing until the date comes $Court said # cou d5 (1) sue immediate y or (&) !ait unti the time !hen the act !as to be done. sti ho ding it as prospective y binding for the e+ercise of this option !hich may be advantageous to the innocent party and cannot be prejudicia to the !rongdoer $if you have a good reason to be ieve the other partying !ont be performing5 1. re7uired to A'* FO" A''B"A0CA / 9are you sti going toS: a. if you3re under the BCC (has to be sa e of goods) and you as( for assurances5 A+15 Kou say 9are going to se me that car: and he says 90o: $code a o!s you to immediately treat it as an 2nticipatory -reach A+&5 he says Kes I am $you must be ready !i ing and ab e to buy that car on the c osing date $if he then does not go through !ith it CA0 'BA TJA0 for damages b. under CO;;O0 GA= $A+ 15 you say are you going to sho! up for !or( on ?21 and she says KA'5 $you have to be ready !i ing and ab e to have a job for her and be ready to pay her b2c you have as(ed for assurances and you have gotten them $A+ &5 if in response to the 7uestion of assurance and she says 0O5 $! T 2! 27-7 $I can suspend my performance $ I do not have to be ready !i ing and ab e to perform on that day b2c you3ve been to d by her she is not going to sho! $if she sho!s up any !ay and you3re not ready !i ing and ab e to perform the court !i no! give ;A a reasonab e time in !hich to perform $%hen you8re told ! all you can do is suspend your performances but you still have to be %aiting *ust in case 1. 2nticipatory -reach $the repudiation has to be anguage used !hich under a fair reading is interpreted that he !i 0OT sho! CGAA" stmt $!hen !e have an A, there are a fe! things you can do5 1. sue for material breach / b2c !hen !e have something that meets that substantia . positive statement the court !i find that there is a breach most common scenario is an immediate suit $$$$a so have other options (not re7uired)$$$$ &. you can urge them to perform and if they still do not you can then sue

the II. Anforcement "emedies A. %amages 1. Henera #rincip es a. purpose of * damages is to you are putting the person !ho did not breac- in a position ,orward !here they !ou d have been had the other party not breached b. reasonably foreseeable $ !hen t!o parties enter a * the breaching party is on y iab e for damages that are foreseeab e ('adley v. $axendale) $courts !i a!ard genera damages that are reasonabl/ ,oreseeable $does ! T include5 attorney fees and trave e+penses ()ader v. *tephenson) c. efficient breach $ purpose y breach if there is a benefit to the one breaching even after paying the damages to the damaged party d. general damages (+ru!er v. *,) -ews Co.) $ the damages that are reasonab y foreseeab e natura y arising from the breach that the parties considered in entering into the * general damages court is a !ays going to start in a!arding general damages e. reliance / e+penditures made in reliance of %3s promise f. !hen a!arding damages courts !i first go to general damages and second they !i go to reliance / so as to at east re ieve the damaged party from being 9in the ho e g. OOOOO%amages Overvie! Jandout 1D2&6OOOOO $'arket 9alue / the usua standard !e may oo( to ta ( about the va uation $the sum of money that a !i ing buyer !ou d pay to a !i ing se er $ho! to prove it5 bring in evidence pub ications (*,,). e+pert opinions $in the case of goods $ have to oo( at the purpose of the actua * $Duty to 'itigate Damages / duty to get off your butt and do something if you are non$breaching party $not an affirmative duty to get up and do something / more i(e an absence of a right to recovery for a the damages that have accrued $burden is on the breaching party to prove the fai ure of the non$breaching party to do that &. Amp oyment Contracts $!hen an emp oyee is !rongfu y discharged basica y $ emp oyee entit ed to the sa ary that !ou d have been payab e during the remainder of the term reduced by the income that the emp oyee has earned. !i earn. or cou d earn !2 reasonab e di igence during that une+pired term $if emp oyee does get another job it !i reduce their damages from the emp oyer !ho !rongfu y fired them $!hat happens if an emp oyee breached the *8 $emp oyer3s recovery is the additiona mar(et cost of getting substitute for the ost emp. ). 'a es of Hoods or "ea ty $there is the o d "nglish ru e and the modern 2merican ru e $"nglish Rule5 buyer cannot recover from the oss of the bargain a you can get is your costs of the tit e. the do!n payment. e+penses $if the se er (ne! / bad faith / then the se er might be iab e for more $2merican Rule5 gaining in popu arity / buyer is entit ed to get their oss of their damage / to put them in the position they !ou d be in if the contract had not been breached $there is a sp it among the states b2t Ang ish ru e and American trend is 2merican rule $purchase money mortgage / !hen someone !ho is se ing you !hatever you buy is ending you the money to buy it $court in .onovan v. $achstadt said if you cou d sti buy the same amount of house !ith the same amount of money ,BT if it is going to cost you more. if you are not going to be ab e to get as much house !ith this origina amount of money then you have suffered damage $!hen you have damages in rea estate first you !i ta ( about specific performance : it !i a !ays be the first remedy a buyer sees b2c they !ant ct. to compe the sa e of and to go through

). you can %ait unti the c osing date but I better be oo(ing for a ne! buyer at that time. because if you don3t and you3re trying to argue that you have undergone damages courts !i say you messed up

$!hen cannot have specific performance the damages of the breach must be ca cu ated -. Construction Contracts $the point is to app y the same general damages doctrine and seeing ho! it p ays out in each of these different contractua re ationships $contractor remedies if the o!ner breaches5 $if contractor did no !or( the contractor is entit ed to the profit they !ou d have made on that job $ca cu ate5 !hatever * price is ;I0B' cost to perform $if there !as a delay caused by o!ner3s breach $contractor is entit ed to the additional costs $if the o!ner breaches after the contractor had a ready started partia performance $contractor !i get the total unpaid price / !hatever is eft to be paid on the * ;I0B' !hat it !ou d have cost to finish the project $o!ner remedies if contractor breaches5 $a though there is a ot of criticism that the a!ard is very generous / o!ner is genera y entit ed to damages needed to fi+ !hat is !rong 4. #unitive %amages