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I. DETERMINE WHICH LAW GOVERNS - Common Law or UCC (Sale of Goods)
II. CONTRACT FORMATION
Offer – 1) outward manifestation, undertaking or commitment to enter a contract, (2) certainty and definiteness
of terms, and (3) communication to an identified offeree tat signals acce!tance would seal te deal" (#ds,
catalogs, !rice tags, auctions, are not offers $ut reward offers are offers)"
%s te offer still ali&e'
a" Lapse of time, eat! or i"#apa#it$ %. Re&e#tio" %$ offeree (counter( conditional acce!tance( additional
terms) #. Optio" #o"tra#t (offer, !romise to kee! offer o!en for s!ecific !eriod, consideration, mecanism
to enforce) . Firm #o"tra#t '(CC )-)*+, (offer made $y mercant, signed $y mercant and e)!ressly
states $y its terms tat it will $e eld o!en" *o more tree monts) e" Re-o#atio" %$ offeror (unless o!tion
w+ consideration or detrimental reliance)" ,unctional e-ui&alent rule a!!lies for re&ocation" .)ce!tion/
$etter means of communication a&aila$le
A##epta"#e – Mirror ima.e r/0e 'C1L, – manifestation of assent to te terms of an offer in a manner
!rescri$ed or autori0ed in te offer
a" 2i0atera03 full !erformance, start !erformance, !romise, mailed acce!tance
$" ("i0atera03 full !erformance (1nce offeree $egins !erformance, o!tion contract is created and offeror may
c" Mai0%o4 r/0e '%i0atera0 #o"tra#ts o"0$,/ #cce!tance effecti&e u!on dis!atc unless offeror asked for actual
recei!t as acce!tance" 1fferor may not re&oke offer after acce!tance is dis!atced"
d" (CC Re&e#ts C1L Mirror Ima.e R/0e/ can acce!t $uyer2s offer $y si!!ing nonconforming goods" Under UCC, tis is $ot an acce!tance and a
$reac" 3owe&er, if seller communicates tat it is an accommodation, te si!ment is a counter4offer"
e" (CC Re&e#ts C1L 5Last S!ot Do#tri"e5/ Unless acce!tance is e)!ressly made conditional on assent to additional or different terms, non4conforming
acce!tance is effecti&e, and forms contract" #dditional terms are tose tat address new area not addressed $y offer( different terms cange an e)isting
f" Ie"tit$ of parties3 %f consumer, different or additional terms are mere !ro!osals for addition to contract"
g" If mer#!a"t, aitio"a0 terms %e#ome part of #o"tra#t /"0ess 1) offer e)!ressly limits acce!tance to its own terms, 2) offeror re6ects to different
terms witin a reasona$le time, and te 3) additional terms materially alter te contract" 7aterial alteration/ 8arranty disclaimers, canges to course of
dealing, sortening of deadline materially alters contract"
" %f different terms, knockout rule is used, and different terms are knocked out (7a6ority 9ule) or different terms are merely !ro!osals (7inority rule)"
i" Writte" #o"firmatio" %et6ee" mer#!a"ts / #dditional terms $ecome !art of te contract unless tey materially alter te contract or o!!osing !arty
re6ects tem witin reasona$le time" :ifferent terms are mere !ro!osals tat te oter !arty is free to acce!t or re6ect"
6" S!ri"76rap #o"tra#ts / %n consumer transactions, tese terms are mere !ro!osals tat customer can acce!t or re6ect or if te consumer retains te goods,
tey a&e acce!ted te offer on mercant2s terms"
Co"sieratio" – must e)ist on $ot sides of te ;" <argained for legal detriment or promissor$ estoppe0/ !romise, reasona$le, detrimental and
foreseea$le reliance, enforcement necessary to a&oid in6ustice"
8atc for illusory !romises tat lea&e !erformance to discretion of anoter !arty" Gratuitous !romises are not enforcea$le due to want of consideration"
.)ce!tion/ 8ritten !romise to !ay a de$t or !ay for a =material $enefit5 conferred on te !romisor"
III. DEFENSES TO FORMATION OF CONTRACT
Stat/te of fra/s – $y statute, certain agreements must $e e&idenced $y writing and signed $y te !arty against wom enforcement is sougt" *ecessary
$ut not sufficient for enforcement of ;" M8LEGS – 7arriage, >ear, Land, .)ecutor, Guarantor, Sale of Goods for ?@AA or more" 8ays to satisfy/
a. 8riting signed $y !arty against wom enforcement is sougt, sufficient to indicate tat contract was made wit -uantity term"
b. Ser&ice ;s/ full !erformance" Lifetime contracts for em!loyment also not go&erned $y S1, due to !ossi$ility of deat"
c. Guaranty !romise does not a&e to $e in writing if guarantor is !rotecting is own interest (main !ur!ose doctrine)
d. UCC S1, / 1" *eed assigned writing, signed $y !arty against wom enforcement is sougt, -uantity term (unless out!ut or re-uirements contract)"
e. 7ercant2s confirmation o&ercomes UCC S1, (signed confirmation is sufficient against sender w+ written confirmation of contract, sent witin
reasona$le time of formation, and recei&ed $y reci!ient w+o o$6ection)"
f. Budicial esto!!el –in court admission
g. Cartial !erformance i"e" in te real estate conte)t court may find !artial !erformance if full or !art !ayment( !ossession and+or im!ro&ements" Ceck
for di&isi$le contract"
h. Su$stantial reliance $y seller of s!ecially manufactured goods
*o real writing re-uirement $eyond memo wit identity of te !arties, nature and su$6ect of transaction, essential terms"
#lternati&e $asis for enforcement/ -uasi contract (were one !arty $estows !romise u!on anoter in connection wit oral contract, te aggrie&ed !arty
may reco&er te &alue of ser&ices conferred) or !romissory esto!!el"
1ter defenses to formed contracts/ I"#apa#it$ (7inors may enter into ;, $ut &oida$le at o!tion of minor and must re!ay for necessaries( can ratify at
ma6ority), I"#apa#it$ (%f tere is ad6udication of mental incom!etence, contracts are &oid), Misreprese"tatio" (misstatement of material fact wit
wrongful state of mind or witout scienter), Fra//0e"t No"is#0os/re (:2s silence wen tere is duty to disclose), D/ress (a manifestation of intention
to inflict arm on a !erson wic is wrongful in nature and !erson as no reasona$le coice $ut to succum$ to treat( ; is &oid if !ysical coercion is
used), ("/e i"f0/e"#e (were one !arty uses unfair !ersuasion and te oter is &ulnera$le to suc !ersuasion( ; is &oida$le at o!tion of aggrie&ed
!arty)( ("#o"s#io"a%i0it$ (!rocedural and su$stanti&e unconsciona$ility)( 9/%0i# 9o0i#$ (were te su$6ect of ; is !roi$ited $y law, formed to commit
crime, would constitute a tort or &iolate certain &alues and freedoms designated $y state)"
IV. CONTRACT TERMS
(CC Defa/0t R/0es for Sa0es of Goo3 1" .)!ress warranty, 2" 8arranty of Ditle, 3" 8arranty of 7ercanta$ility (goods are fit for ordinary !ur!ose,
only a!!lies if seller is mercant), E" 8arranty of ,itness for a Carticular Cur!ose (*o need for seller to $e a mercant)" :efense/ !ri&ity, e)amination of
goods (no im!lied warranties on o$&ious defects), disclaimers (e)ce!t e)!ress warranty)"
Missi". Terms3 ,or UCC/ Crice (reasona$le !rice at time ; was made), Dime (reasona$le time), Clace of deli&ery (seller2s !lace)" ,or C+L, missing !rice
term – reasona$le &alue of ser&ices rendered
(CC O%0i.atio" of .oo fait! a" fair ea0i". : 3onesty in fact and o$ser&ance of reasona$le commercial standards
I"terpreti". am%i./o/s 0a"./a.e/ 1$6ecti&e meaning trum!s su$6ecti&e unless one !art as reason to know te oter2s su$6ecti&e understanding or te
!arties a&e te same su$6ecti&e understanding" Dy!ically, am$iguous terms construed against te drafter"
1ut!ut ;/ <uyer agrees to !urcase all
9e-uirements ;/ Seller agrees to su!!ly te
$uyer wit re-uirements of $uyer2s good
Defe"ses to ; formatio"3
S1,, %nca!acity, 7inority,
7isre!resentation can $e used as a sield
(a&oidance), or sword (rescission and
reliance damages), :uress,
Unconsciona$ility, Undue influence, Cu$lic
Dis#!ar.e from ;/ 7utual mistake,
%m!ossi$ility, %m!ractica$ility, ,rustration
<y agreement/ 9escission, #ccord and
Satisfaction, #ntici!atory re!udiation
9aro0 E-ie"#e R/0e/ were !arties e)!ress teir agreement in a final writing, oter written or oral e)!ressions, made !rior to or contem!oraneously wit
te writing, are inadmissi$le to &ary te terms of te writing" Dwo -uestions to ask/ 8at is te !ur!ose of te e&idence $eing introduced and does it relate
to a term in a contract, wic is integrated'
1" 7erger clause/ =8riting contains com!lete and entire agreement of te !arties5 (com!letely integrated contract)
2" Carol e&idence is always admissi$le to e)!lain or inter!ret te terms of written contract" %n order to su!!lement terms of a written contract, !arol
e&idence is only admissi$le if te contract is not fully integrated" Carol e&idence ne&er admissi$le to contradict terms of a contract tat is integrated"
3" Carol e&idence rule does not a!!ly/ 1" S/%se</e"t a.reeme"ts, 2" Co00atera0 a.reeme"ts (agreement $etween !arties entirely distinct from te
contract at issue), 3" Atta#7s o" -a0iit$ of 6ritte" a.reeme"t i"e" failure of an oral condition !recedent to te agreement, mistake, duress, fraud,
illegality, a$sence of consideration, E" Reformatio" (!roof $y clear, con&incing e&idence of an antecedent, &alid agreement), @" No 6ritte" #o"tra#t
=. Mista7e i" i"te.ratio" '#0eri#a0,, >. Reso0-e am%i./ities ?. If #o"tra#t is o"0$ partia00$ i"te.rate.
UCC .)ce!tion/ Drade usage, course of dealing, and course of !erformance can su!!lement e&en a com!letely integrated agreement"
I"terpretatio" of terms/ Conduct can also $e source of contract terms" Course of !erformance + course of dealing + custom and trade usage used to fill
ga!s and resol&e am$iguity" .)!ress terms go&ern, $ut course of !erformance can esta$lis a wai&er or modification of e)!ress terms"
V. 9ERFORMANCE, MODIFICATION AND E@C(SE
a" (CC 9erforma"#e O%0i.atio"s / 8en does seller fulfill o$ligation' Si!ment contract/ 8en goods are turned o&er to carrier (,1< Seller)"
:estination contract/ 8en goods are tendered at a !articular destination !oint (,1< <uyer)" 9ule/ %f ; is silent, it is si!ment contract, and risk of loss
!asses to $uyer wen goods are turned o&er to carrier" <uyer2s o$ligation/ Dender !ayment, ins!ect goods, co&er risk of loss"
%n non4carrier cases, were seller is a mercant, risk of loss !asses to $uyer only wen $uyer as goods !ysically in is !ossession
$" 7odification/ Under C+L, !romise to increase com!ensation for duties already owed under e)isting ; unenforcea$le due to lack of new consideration
(!re4e)isting duty rule)" .)ce!tions/ M/t/a0 moifi#atio" if !erformance is different from one re-uired( /"foresee" #ir#/msta"#es render !erformance
more $urdensome tan reasona$ly antici!ated at formation of contract" UCC a$olises tis rule in fa&or of =good fait5 modification"
c" :iscarge of duty due to faulty assum!tions/ m/t/a0 mista7e ($ot !arties a&e made a mistake in assenting to facts), /"i0atera0 (were only one !arty
is mistaken a$out material fact, no e)cuse unless serious error or te oter !arty know of te mistake), impossi%i0it$ (must $e o$6ecti&e and not known to
!arties at time of contracting), impra#ti#a%i0it$ (contingency causing im!ractica$ility is unforeseen, not assumed $y contract, and increase in cost of
!erformance is far $eyond wat eiter !arty antici!ated), and fr/stratio" of p/rpose (!arty2s !rinci!al !ur!ose in entering te contract is frustrated(
su$stantial frustration and non occurrence of te e&ent leading to frustration was a $asic assum!tion of contract)
d" :iscarge of duty $y agreement/ 1" Res#issio" 4 !ermissi$le wile $ot !arties are mid !erformance 2" A##or a" Satisfa#tio" (su$stituted
!erformance) %f accord is not satisfied, te oter !arty can reco&er on eiter original or accord" 3" A"ti#ipator$ rep/iatio"3 (!arty issues definiti&e
statement indicating it would commit $reac or &oluntary act renders !arty una$le to !erform" %n suc cases, te oter !arty can demand assurance in
writing and if not ade-uately assured witin reasona$le time, $ring an action" Carty wo re!udiates can retract at any time $efore te oter acts in reliance
of re!udiation, acce!ts it or commences a suit" E" Moifi#atio"/ su$stituted agreement @" No-atio"/ same !erformance, different !arty" #ll !arties agree"
e" Cerformance" T$pes of #o"itio"s/ !recedent, concurrent or su$se-uent #*: e)!ress, im!lied or constructi&e" 8it e)!ress conditions, failure of
condition discarges !arty from !erformance" Strict com!liance is re-uired" %f satisfaction is $asis, must $e =onest and good fait"5 8en !ossi$ility of
$reac not addressed $y e)!ress condition, courts can treat it as eiter material $reac &ersus su$stantial $reac" See if te contract is di&isi$le in analysis"
%nstallment contract/ Can only re6ect if tere is su$stantial im!airment" <uyers can re&oke te goods after acce!tance if su$stantial im!airment"
UCC e)!ress and im!lied conditions/ Under te perfe#t te"er r/0e, te terms of a contract for te sale of goods are enforced e)actly" <uyer can re6ect
goods and notify seller witin reasona$le time and sue for $reac, acce!t goods $ut can still seek damages for nonconformity, acce!t !art and re6ect !art"
VI. REMEDIES : Mo"etar$ ama.es /"er CL - E4pe#tatio", Re0ia"#e, Restit/tio" a" Li</iate Dama.es
a" Compe"sator$ ama.es – standard measure is $ased on an e4pe#tatio" i"terest" #ggrie&ed !arty entitled to te amount tat will restore im to te
!osition e would a&e $een in ad te contract $een fully !erformed" 7ust $e #ertai" in teir nature and not s!eculati&e" D/t$ to miti.ate. Limitations/
cost e)ceeds market &alue of !erformance, damages unforeseea$le or can $e mitigated. I"#ie"ta0 ama.es – Costs incurred in dealing wit $reac"
$" Co"se</e"tia0 ama.es – foreseea$le to a reasona$le !erson at te time of formation" *ot general e)!ectation damages"
c" Re0ia"#e ama.e3 a&aila$le if e)!ectation damages are too s!eculati&e" 9estores !arty to !re4contract !osition"
d" Restit/tio" a" /"&/st e"ri#!me"t/ were ; fails, te non4$reacing !arty may reco&er in -uasi4contract to reco&er &alue of $enefits conferred,
!re&alent in medical !rofession" 9romissor$ estoppe03 e)!ectation, reliance and indi&iduali0ed damages
e" Spe#ifi# performa"#e/ .-uita$le remedy were monetary damages are inade-uate (e"g" real estate, uni-ue art)" *ot a&aila$le for ser&ice contracts"
Ne.ati-e i"&/"#tio"s are anoter ty!e of e-uita$le remedy !roi$iting $reacing !arty from taking !articular action i"e" in em!loyment setting"
f" Li</iate ama.es/ Carties are free to include among te terms of teir contract a li-uidated damages clause designed to !ro&ide for damages of teir
own coosing in te e&ent of $reac" Cro&ision is unenforcea$le if it is a !enalty" Dest/ :amages too difficult to forecast, and a reasona$le forecast"
7onetary damages under UCC" Se00erAs remeies3 %f seller as resold, damages are difference $etween contract and resale !rice( if not resold, ten
contract and market !rice" # lost &olume seller reco&ers !rofits from lost sale $ut needs to sow tat tey would a&e made te sale to $ot $reacing
$uyer and resale $uyer" 2/$erAs remeies/ if te $uyer co&ers $y !urcasing re!lacement goods, damages are difference $etween contract !rice and co&er
!rice" <uyer and seller2s damages would $e reduced $y e)!enses a&oided $ecause of te $reac"
VII. THIRD 9ART8 REMEDIES : THIRD 9ART8 2ENEFICIARIES, ASSIGNMENT OF CONTRACT, DELEGATION OF D(T8
8eter tird !arty $eneficiary as standing to enforce contract" First restateme"t3 Creditor $eneficiary/ wen !romisee seeks !erformance from
!romisor to satisfy an o$ligation owed to tird !arty" :onee $eneficiary/ wen !romisee seeks !erformance from !romisor in order to make a gift of
!erformance" Se#o" restateme"t3 intended $eneficiaries (rigt to secure enforcement from $reacing !romisor $ut as no rigt against te !romisee)
and incidental $eneficiaries (no rigt to seek enforcement of contract)" Cromisor can assert any defense e would a&e ad against !romisee"
Ri.!t to s/e -ests wen 1" DC <eneficiary $rings suit on matter, 2" DC <eneficiary canges !osition in reliance of contract, 3" DC <eneficiary manifests
assent to contract and E" 8ere DC rigts a&e &ested under e)!ress terms of contract"
#ssignment/ Dransfer of a rigt to recei&e !erformance under a contract" #ssignor/ !arty to contract wo transfers rigts to anoter (#ssignee, wo is not
!arty to te contract $ut can enforce it)" 1$ligor – te oter !arty to te contract" C+L $ars assignment tat su$stantially canges duties of o$ligor"
General rule/ #ll rigts are assigna$le e)ce!t for 1" %f te assignment would materially alter te risk to or o$ligations of anoter !arty, 2" 8en te o$ligor
as a !ersonal interest in rendering te !erformance in -uestion to te o$ligee (assignor) and not a tird !arty, 3" 8en it would &iolate a!!lica$le law or
!u$lic !olicy, E" 8en assignment is !roi$ited or in&alidated under contract" %f rigt to assign is !roi$ited and assignee didn2t know, e can still sue"
Consideration is not re-uired $ut gratuitous assignments can $e re&oked" 8o can sue wom' #ssignee can reco&er from o$ligor" #ssignor for
consideration cannot reco&er from o$ligor" 1$ligor as same defenses against assignee as against assignor (Cayment, modification effecti&e)
:elegation of duties/ 1ccurs wen tird !arty agrees to satisfy a !erformance o$ligation owed $y one of te !arties to te contract" #$sent no&ation, a
delegation does not relie&e delegator from is o$ligations under te contract and o$ligee can sue te delegator if delegatee fails to deli&er" #ll contractual
actions are delega$le unless !erformance in -uestion is !ersonal and wen te contract !roi$its delegation"
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