UCC and Restatement Codes
Issue Spotters: 1) Was there a contract? 1) Formation 1) Consideration 2) Offer/acceptance/Rejection 3) Option Contract 4) Limited and Indefinite promise
2) Is the agreement legally enforceable? 1) Was there consideration? Is it grounded in the past? If so was a material benefit received? 2) Chapter 5- unconscionable? Impossible? Capacity? Duress? 3) What are the terms of the K? 1) PE Rule 2) Interpretation/ misunderstanding 3) How was it accepted? 4) Is there a 2-207 issue? 5) Was there a modification or waiver? 6) Is there a condition of satisfaction? 4) Did each of two people do what they agreed to do? 1) Was there a breach? 2) Was there waiver/condition/ express condition? Condition of satisfaction? Was condition waived or excused? 3) Was breach material or immaterial? 5) Is there any excuse (duress, incomplete performance, mistake, etc)? 1) Infancy, incapacity, duress, economic duress, unconscionability, public policy 2) Was there an assumption of risk that that party bore? 6) What are the legal consequences of making a contract and not doing what was agreed to? 1) Damages: Expectation 1) UCC Buyer or seller breach/remedies 2) Liquidated damages clause 2) Limitations: 1) Foreseeable, certain, mitigation 3) Reliance 4) Restitution 1) Quantum Meruit 5) Promissory estoppel
A usage of trade applicable in the place in which part of the performance under the agreement is to occur may be so utilized as to that part of the performance. If it is established that such a usage is embodied in a trade code or similar record. (2) course of performance prevails over course of dealing and usage of trade. Agreement is read in commercial context. duress. means honesty in fact and the observance of reasonable commercial standards of fair dealing §1-303 Course of Performance. coercion. or usage of trade must be construed whenever reasonable as consistent with each other. mistake. (b) Unless displaced by the particular provisions of [the Uniform Commercial Code]. the interpretation of the record is a question of law. Applicability of Supplemental Principles of Law. course of dealing. and other validating or invalidating cause supplement its provisions.208. and may supplement or qualify the terms of the agreement. the principles of law and equity. bankruptcy. -course of dealing refers to conduct PRIOR to agreement -Course of performance is after or under the agreement -customs must still be reasonable (but being used commercially means prob is reasonable)
. (e) Except as otherwise provided in subsection (f). vocation. Course of Dealing and Usage of Trade a) A “course of performance” is a sequence of conduct between the parties to a particular transaction that exists if: (1) the agreement of the parties with respect to the transaction involves repeated occasions for performance by a party. or trade as to justify an expectation that it will be observed with respect to the transaction in question. (b) A “course of dealing” is a sequence of conduct concerning previous transactions between the parties to a particular transaction that is fairly to be regarded as establishing a common basis of understanding for interpreting their expressions and other conduct. and usage of trade. and (3) course of dealing prevails over usage of trade. fraud. including the law merchant and the law relative to capacity to contract.no lay dictionary reading of a contract. The existence and scope of such a usage must be proved as facts. (f) Subject to Section 2. may give particular meaning to specific terms of the agreement. §1-304 Obligation of Good Faith Every contract or duty within [the Uniform Commercial Code] imposes an obligation of good faith in its performance and enforcement.209 and Section 2A. accepts the performance or acquiesces in it without objection. a course of performance is relevant to show a waiver or modification of any term inconsistent with the course of performance. (g) Evidence of a relevant usage of trade offered by one party is not admissible unless that party has given the other party notice that the court finds sufficient to prevent unfair surprise to the other party. Construction of [Uniform Commercial Code] to Promote Its Purposes and Policies. misrepresentation. and (2) the other party. §2-104 (1) Definitions: “Merchant” (1): “Merchant” means a person who deals in goods of the kind or otherwise by his occupations holds himself out as having knowledge or skill peculiar to practices or goods involved in the transaction or to whom such knowledge or skill may be attributed by his employment of an agent or broker or other intermediary who by his occupation holds himself out as having such knowledge or skill Chapter 1: The Legally Enforceable Promise
Satisfaction clause . (d) A course of performance or course of dealing between the parties or usage of trade in the vocation or trade in which they are engaged or of which they are or should be aware is relevant in ascertaining the meaning of the parties' agreement. If such a construction is unreasonable: (1) express terms prevail over course of performance. estoppel.Provisions 1-103. §1-201 (20) General Definitions: (20) “Good Faith” except as otherwise provided in Article 5. course of dealing. principal and agent. the express terms of an agreement and any applicable course of performance. (c) A “usage of trade” is any practice or method of dealing having such regularity of observance in a place. with knowledge of the nature of the performance and opportunity for objection to it.
the aggrieved party may: (a) for a commercially reasonable time await performance by the repudiating party. the aggrieved seller may: 1) Withhold delivery of such goods 2) stop delivery of any bailee (One to whom Personal Property is entrusted for a particular purpose by another. ****cover happens at the end of a commercially reasonable time .expectation damages are preferred remedy . according to the terms of an express or implied agreement.no punitive damages. even though aggrieved party has notified the repudiating party that it would await the latter's performance and has urged retraction.704).Start with all available remedies then see if limited by facts of case .Can be modified or limited by 2-719 .703 or Section 2. Anticipatory Repudiation.) 3) look at S2-704 for goods still unidentified 4) resell and recover (S2-706) 5) recover damages 6) cancel
. then in respect to whole contract or whole undelivered balance. only compensation
Official comment: 1) purpose is to make clear that aggrieved parties may resort to own remedies or suspend own performance while he negotiates with or awaits performance by the other party ***But if he waits performance beyond a commercially reasonable time he cannot recover resulting damages which he should have avoided.includes failure to pay as well as non acceptance
§2-703 Seller’s Remedies in general (Laundry List) If buyer breaches. or (b) resort to any remedy for breach (Section 2. (1) If either party repudiates the contract with respect to a performance not yet due the loss of which will substantially impair the value of the contract to the other. and (c) in either case suspend performance or proceed in accordance with the provisions of this Article on the seller's right to identify goods to the contract notwithstanding breach or to salvage unfinished goods (Section 2.
Notes . Remedies to Be Liberally Administered. the bailor.711).Can involve breach of part of whole delivery .Provision § 1-305. § 2-610. (b) Any right or obligation declared by [the Uniform Commercial Code] is enforceable by action unless the provision declaring it specifies a different and limited effect. (a) The remedies provided by [the Uniform Commercial Code] must be liberally administered to the end that the aggrieved party may be put in as good a position as if the other party had fully performed but neither consequential or special damages nor penal damages may be had except as specifically provided in [the Uniform Commercial Code] or by other rule of law.
due allowance for costs incurred and due credit for payments or proceeds of resale. No need for proof of past profits. (2) If (1) is inadequate to put seller in as good a position as before the breach. and on any terms. proof of a substitute market may be made under the section on determination and proof of market price. the notification of sale must state the place where the goods are located and provide for their reasonable inspection by prospective bidders. §2-708 Seller’s Damages for Non-Acceptance or Repudiation (no resale) (KP . then measure is loss of profit plus incidentals. (4) If the resale is at public sale: (a) only identified goods may be sold unless there is a recognized market for a public sale of futures in goods of the kind. (c) if the goods are not to be within the view of those attending the sale.Provision § 2-706 Seller’s Resale Including Contract for Resale: (cover) (KP-RP + ID.711(3). but every aspect of the sale including the method.ES (1) Measure of damages for non-acceptance or repudiation is dif b/c MP and KP plus incidentals (see S2-710) less expenses saved in consequence of the buyer’s breach. but it is not necessary that the goods be in existence or that any or all of them have been identified to the contract before the breach.MP) + ID . (6) The seller is not accountable to the buyer for any profit made on any resale. place and terms must be commercially reasonable. A person in the position of a seller (Section 2. (b) it must be made at a usual place or market for public sale if one is reasonably available and except in the case of goods which are perishable or threaten to decline in value speedily the seller must give the buyer reasonable notice of the time and place of the resale. The resale must be reasonably identified as referring to the broken contract. repudiates or when seller reclaims goods -Also right to resale if buyer unjustly attempts to revoke goods and seller reclaims them. Sale may be as a unit or in parcels and at any time and place. plus incidentals -Right to Resale if buyer effectively rejects. resale may be at public or private sale including sale by way of one or more contracts to sell or of identification to an existing contract of the seller. Where the sale is made in good faith and in a commercially reasonable manner the seller may recover the difference between the resale price and the contract price together with any incidental damages allowed under the provisions of this article 2-710 but less expenses saved in consequences of the buyer’s breach (2) Except as otherwise provided in subsection (3) or unless otherwise agreed. time. -In all cases can get incid.707) or a buyer that has rightfully rejected or justifiably revoked acceptance must account for any excess over the amount of the buyer's security interest under Section 2. the seller must give the buyer reasonable notification of an intention to resell. (5) A purchaser that buys in good faith at a resale takes the goods free of any rights of the original buyer even if the seller fails to comply with one or more of the requirements of this section. the seller may resell the goods concerned or the undelivered balance thereof. but if S doesn’t reclaim go to 2-709 -Market and current prices indicate whether action was commercially reasonable -Public sale is usually by auction -Time for resale is reasonable time after buyer’s breach
Seller MP-KP (volume seller) -In the event that there is no evidence available of the current market price at the time and place of tender.
. (3) If the resale is at private sale. (No buyer equivalent)
Related Cases Neri
Notes -Difference between resale price and contract price. -If (1) inadequate.cost to dealer/manufacturer). manner.ES) (1) Under the conditions stated in section 2-703 on seller’s remedies. and (d) the seller may buy. lost profits determined by (list price.
The net proceeds of any such resale must be credited to the buyer. Action for the Price. (2) If the seller sues for the price. transportation. (3) On rightful rejection or justifiable revocation of acceptance a buyer has a security interest in goods in the buyer's possession or control for any payments made on their price and any expenses reasonably incurred in their inspection.710. cost of return or resale of goods from breach. must have part payment or expenses incurred
Buyer . However. Buyer’s Procurement of Substitute Goods: (1) After a breach within the preceding section the buyer may “cover” by making in good faith and without unreasonable delay any reasonable purchase of or contract to purchase goods in substitution for those due from the seller (2) A buyer may recover from the seller as damages the difference between the cost of cover and the contract price together with any incidental or consequential damages under Section 2. a seller that is held not entitled to the price under this section shall nevertheless be awarded damages for nonacceptance under Section 2. -The requirement that the buyer must cover “without unreasonable delay” is not intended to limit the time necessary for him to look around and decide as to how he may best effect cover. (1) When the buyer fails to pay the price as it becomes due. not consequential damages Buyer . (b) obtain specific performance or obtain the goods by replevin or similar remedy under Section 2. together with any incidental damages under Section 2. but less expenses saved in consequence of the seller's breach. care and custody of goods after breach.Provision § 2-709.
Notes Seller.610).706).715. if resale becomes possible. § 2-711.Duty to mitigate The test of proper cover is whether at the time and place the buyer acted in good faith and in a reasonable manner. the seller may resell them at any time prior to the collection of the judgment. and (b) of goods identified to the contract if the seller is unable after reasonable effort to resell them at a reasonable price or the circumstances reasonably indicate that such effort will be unavailing. (3) Failure of the buyer to effect cover within this section does not bar the buyer from any other remedy. -Cover is important for both merchant and consumer buyers
.502.Buyer in breach and (1) (a) buyer has goods (ie has not paid) 2-709(1)(b) seller still has goods
Seller . Buyer's Remedies in General.For subsection 3 to apply.712 as to all goods affected whether or not they have been identified to the contract. transport. (1) Where seller fails to make a delivery or repudiates or the buyer rightfully rejects or justifiably revokes acceptance then with respect to any good involved and with respect to the whole if the breach goes to the whole contract (2-612). the seller may recover.713.716. the price: (a) of goods accepted or of conforming goods lost or damaged within a commercially reasonable time after risk of their loss has passed to the buyer. Buyer's Security Interest in Rejected Goods.708. the seller must hold for the buyer any goods that have been identified to the contract and are still in the seller's control. care and custody and may hold such goods and resell them in a like manner as an aggrieved seller (Section 2. the buyer may cancel and whether or not he has done so may in addition to recovering so much of the price as has been paid: (a) cover and have damages under Section 2. §2-712 “Cover”. (b) recover damages for nondelivery under Section 2. (3) After the buyer has wrongfully rejected or revoked acceptance of the goods or has failed to make a payment due or has repudiated (Section 2. (2) Where the seller fails to deliver of repudiates the buyer may also: (a) recover identified goods under Section 2.limited to incidental. §2-710 Seller’s Incidental damages (incidental damages): Incidentals include: commercially reasonable charges like expenses of commissions in stopping deliv. receipt. and payment of the judgment entitles the buyer to any goods not resold. and it is immaterial that hindsight may later prove that the method of cover used was not the cheapest or most effective.
Related Cases Acme Mills. (1) Specific performance may be decreed if the goods are unique or in other proper circumstances.Provision § 2-713 Buyer’s Damages for Non-Delivery or Repudiation (MP-KP) 1) Damages for repud by seller is the difference between MP when buyer learned of breach and KP together with incidental and consequential damages. In the case of goods bought for personal. but not only factor . McGee
Buyer. or other relief as the court may deem just. expenses or commissions in connection w/cover or other reasonable expenses from delay caused by breach. Buyer's Right to Replevin. even if the seller had not then repudiated or failed to deliver
Hawkins v.Good Delivered) 1) Where buyer has accepted goods and given notification. Specific Performance. (2) Consequential damages: (loss from general or particular requirements and needs known by seller which could not be prevented by cover. injury to person or property resulting from breach of warranty): (a) loss resulting from general or particular requirements and needs of which seller at time of contracting had reason to know and of which could not reasonably be prevented by cover or otherwise. he may recover damages for any non-conformity of tender the loss resulting in ordinary course of events from seller’s breach determined in any manner which is reasonable. 2) MP determined as place of tender or place of arrival. (2) The decree for specific performance may include such terms and conditions as to payment of the price.UNiqueness is imp. or make case for specific performance -buyer must deduct from his damages any expenses saved as a result of the breach. reasonable charges. family or household purposes. unless special circumstances show proximate damages of a different amount. (3) The buyer has a right of replevin or similar remedy for goods identified to the contract if after reasonable effort the buyer is unable to effect cover for such goods or the circumstances reasonably indicate that such effort will be unavailing or if the goods have been shipped under reservation and satisfaction of the security interest in them has been made or tendered.Goods Delivered)
§ 2-714 Buyer’s Damages for Breach in Regard to Accepted Goods (Good warranted.this applies when buyer does nothing . Missouri Furnace (if installment contract MP-KP for every day that delivery is expected)
Notes Buyer MP-KP . Buyer (Goods Warranted. transportation and custody of rejected goods. 2) Measure of damages for breach of warranty is difference at time/place of acceptance b/n the value of goods accepted and the value they would have had if they had been as warranted. but less expenses saved. damages. 3) In a proper case any incidental and consequential damages can be recovered §2-715 Buyers incidental and Consequential Damages (Incidentals plus consequential) (1) Incidental damages: expenses from investigation.place for measuring damages is the place of tender (or the place of arrival if the goods are rejected or their acceptance is revoked after reaching their destination) and the crucial time is the time at which the buyer learns of the breach. -Can use spot sale price if no market price available. receipt. and (b) injury to person or property proximately resulting from any breach of warranty § 2-716. the buyer’s right of replevin vests upon acquisition of a special property.typically available only with very unique goods Output and requirements contracts involving a particular or peculiarly available source or market present today the typical commercial specific performance situation .Don’t forget about negative and affirmative covenants Comment 2: inability to cover output/ require Ks
An unreasonably small amount would be subject to similar criticism and might be stricken under the section on unconscionable contracts or clauses. In this case go to UCC remedies (comment 1) -If proposing something as the sole remedy that has to be clearly expressed (comment 2) -can limit consequence damages.See R2k 356 if not sale of goods
Parties can contract to limit damages -minimum adequacy of remedies must be available -remedy parties come up with cannot be unconscionable. by virtue of terms liquidating the seller’s damages in accordance with subsection (1) (b) in the absence of such terms. in which case it is the sole remedy. as by limiting the buyer's remedies to return of the goods and repayment of the price or to repair and replacement of non-conforming goods or parts. Contractual Modification or Limitation of Remedy.Provision §2-718 Liquidation or Limitation of Damage. (1) Subject to the provisions of subsections (2) and (3) of this section and of the preceding section on liquidation and limitation of damages. their value or the proceeds of their resale is treated as payment for purpose of subsection (2)) but if seller knows about buyer breach before reselling goods received in part performance. but cannot be unconscionable
Market measured at time breach is first learned of.
Related Cases Neri v. (3) Evidence of a relevant price prevailing at a time or place other than the one described in this Article offered by one party is not admissible unless and until he has given the other party such notice as the court finds sufficient to prevent unfair surprise. the amount or value of benefits received by the buyer directly or indirectly by reason of contract (4) If seller has received payment in in goods. (3) Consequential damages may be limited or excluded unless the limitation or exclusion is unconscionable. § 2-719. any damages based on market price (Section 2-708 or Section 2-713) shall be determined according to the price of such goods prevailing at the time when the aggrieved party learned of the repudiation. A term fixing unreasonably large liquidated damages is void as a penalty. whichever is smaller (3) Buyer’s restitution under subsection (2) is offset to extent that seller establishes a. (1) If an action based on anticipatory repudiation comes to trial before the time for performance with respect to some or all of the goods. Limitation of consequential damages for injury to the person in the case of consumer goods is prima facie unconscionable but limitation of damages where the loss is commercial is not. Proof of Market: Time and Place. 20% the value of the total performance which buyer is obligated to under contract or $500. (2) Where circumstances cause an exclusive or limited remedy to fail of its essential purpose. (2) If seller justifiably w/h delivery b/c of buyer’s breach. . Deposits. difficulty of proof of loss. and (b) resort to a remedy as provided is optional unless the remedy is expressly agreed to be exclusive. (a) the agreement may provide for remedies in addition to or in substitution for those provided in this Article and may limit or alter the measure of damages recoverable under this Article. (2) If evidence of a price prevailing at the times or places described in this Article is not readily available . the price prevailing within any reasonable time before or after the time described or at any other place which in commercial judgment or under usage of trade would serve as a reasonable substitute for the one described may be used. § 2-723. not possible) of finding an adequate remedy.
Notes A term fixing unreasonably large liquidated damages is expressly made void as a penalty. (1) Damages for breach by either party may be liquidated in the agreement but only at amount reasonable by measure of harm (anticip OR actual) caused by breach. or inability (inconvenient. then resale is subject to conditions of S2-706 (resale by an aggrieved Seller).
. buyer is entitled to restitution in amount by which sum of his payment exceeds: (a) Amount entitled to seller. right to recover damages under provision of article other than by (1) b. remedy may be had as provided in this Act. making any proper allowance for the cost of transporting the goods to or from such other place. Retail Marine Corp.
Angell (funeral case). McGowin -law cannot force people to do what they should but are not legally bound to do -idea is to protect people from benefit unjustly thrust on them Subsequent promise for necessaries/life saving can be enforced.Provision 2nd Restatement § 356 Liquidated Damages and Penalties (1) Damages for breach by either party may be liquidated in the agreement but only at an amount that is reasonable in the light of the anticipated or actual loss caused by the breach and the difficulties of proof of loss. It may be given by the promisee or by some other person Restatement 2nd of Contracts §81 Consideration as Motive for Inducing Cause 1) The fact that what is bargained for does not of itself induce a promise does not prevent it from being consideration for the promise 2) The fact that a promise does not of itself induce a performance or return promise does not prevent the performance or return promise from being consideration for the promise Restatement 2nd of Contracts §86 Promise for Benefit Received. can’t be more than the value of the benefit conferred. Congregation Kadimah. (2) A term in a bond providing for an amount of money as a penalty for non-occurrence of the condition of the bond is unenforceable on grounds of public policy to the extent that the amount exceeds the loss caused by such non-occurrence.
. Diamond Jim Mills v. 1) Promise made in recognition of a benefit previously received by the promisor from the promisee is binding to the extent necessary to prevent injustice. modification. Chapter 2: Grounds for Enforcing Promises Provision
Notes -restatement liquidated damages clause. Where liquidated benefit. Schnell v. Sidway. -helpful when hard to estimate actual damages
Related Cases Hamer v. 2) A promise is not binding under section 1 if: a) the promisee conferred the benefit as a gift or for other reasons the promisor has not been unjustly enriched or b) its value is disproportionate to the benefit
Earle v. -penalties are unenforceable on grounds of public policy. A term fixing unreasonably large liquidated damages is unenforceable on grounds of public policy as a penalty. Wyman. Can decide liquidated damages beforehand so long as not punitive. or destruction of a legal relation 4) the performance or or return promise may be given to the promisor or to some other person. 3) The performance may consist of: (a) An act other than a promise (b) a forbearance (c) the creation. a performance or a return promise must be bargained for 2) A performance or return promise is bargained for if it is sought by the promisor in exchange for his promise and is given by the promisee in exchange for that promise. Nell (nominal)
Notes Consideration/bargained for exchanges Focus on manifestation of intention rather than on intent Bargain can’t be false pretense
Restatement 2nd of Contracts §71 Requirement of Exchange. 86(1) Enrichment of one party b/c of unequal exchange can be enforced if bargained for. Webb v. Type of Exchange 1) To constitute consideration.
can be revoked before tender is exchanged -Difference b/c prep to perform and actual performance
. Kirksey. but whether forbearing party thinks it is valid
Related Cases Drennan v. or (b) is made irrevocable by statute. competence. an option contract is created when the offeree tenders. Hodkins (2) Petterson v. Restatement 2nd of Contracts §87: Option Contract (1) An offer is binding as an option contract if it (a) is in writing and signed by the offeror. (2) The offeror’s duty of performance under any option contract so created is conditional on completion or tender of the invited performance in accordance with the terms of the offer. 2) A charitable subscription or a marriage settlement is binding under subsection (1) without proof that the promise induced action or forbearance.
Related Cases Seavy v. (2) An offer which the offeror should reasonably expect to induce action or forbearance of a substantial character on the part of the offeree before acceptance and which does induce such action or forbearance is binding as an option contract to the extent necessary to avoid injustice. measurability of damages.Provision Restatement 2nd of Contracts §90 Promise Reasonably inducing Action or Forbearance.listing a sub is not the same as accepting a bid (1) Explicit (2) Implicit Nominal consideration is still sufficient to create option for larger sum (but must be on fair terms) -87 (2) is called detrimental reliancemust be substantial & foreseeable -Factors influencing remedies: formality. 1) A promise which the promisor should reasonably expect to induce action or forbearance on the part of the promisee or a third party and which does induce act or forbearance is binding if injustice can be avoided only by enforcing the promise.
. Duncan v. promissory estoppel . Kirksey v. Scothorn
Notes Reliance on a promise. and proposes an exchange on fair terms within a reasonable time. or begins the invited performance. if a gift promise. Star Paving. assumption of risk by offeree. recites a purported consideration for the making of the offer. Drake. commercial and social context. Black
Restatement 2nd of Contracts §74 Settlement of Claims 1) Not asserting or surrendering a claim or defense which proves to be invalid is not consideration unless: a) the claim is doubtful because of uncertain facts or b) the forbearing party believes the claim or defense may be determined to be valid (good faith) 2) The execution of a written instrument surrendering a claim or defense by one who is under no duty to execute it is consideration if said execution is bargained for even though he is not asserting the claim or defense and believes that no valid claim or defense exists.note that even if detriment.consideration of dropped lawsuit must
be in good faith and must be based in reality to be valid. Pattberg
Notes Offer for unilateral K may be withdrawn at any time prior to performance . Ricketts v. Brackenbury v. not enforceable
. or tenders a beginning of it. -Don’t look at whether claim is valid. The remedy granted for the breach may be limited as justice requires. Chapter 3: Contract Formation Provisions Restatement 2nd of Contracts §45 Option Contract (1) Where an offer invites and offeree to accept by rendering a performance and does not invite a promissory acceptance.
or (b) that party has no reason to know of any different meaning attached by the other. (3) Even though one or more terms are left open. Lady Duff (UCC provision is codification of this case) Levy (Bread crumbs)
Restatement 2nd of Contracts §20 Effect of Misunderstanding (1) There is no manifestation of mutual assent to an exchange if the parties attach materially different meanings to their manifestations and (a) neither party knows or has reason to know the meaning attached by the other. or (b) each party knows or each party has reason to know the meaning attached by the other. Restatement 2nd of Contracts §36 Methods of Termination of the Power of Acceptance (1) An offeree's power of acceptance may be terminated by (a) rejection or counter-offer by the offeree. (Open terms) §2-205 Firm Offer An offer by a merchant to buy or sell goods in a signed writing which by its terms gives assurance that it will be held open is not revocable.Sudden expansion not ok.
Related Cases Southwest Enginerering v. (2) An agreement sufficient to constitute a contract for sale may be found even though the moment of its making is undetermined. an offeree's power of acceptance is terminated by the non-occurrence of any condition of acceptance under the terms of the offer.reasonably foreseeable figure.Output=seller. Requirements and Exclusive Dealings 1) A term which measures the quantity of the output of the seller or the requirements of the buyer means such actual output or requirements as may occur in good faith. -Do not need consideration to be binding -Authentication by writing is essence Interpreting “good faith”: .” . . and the other has reason to know the meaning attached by the first party. or (c) revocation by the offeror.Exclusive dealing. Raffles v.Provisions §2-204 Formation in General (1) A contract for sale of goods may be made in any manner sufficient to show agreement. (2) The manifestations of the parties are operative in accordance with the meaning attached to them by one of the parties if (a) that party does not know of any different meaning attached by the other. §2-306 Output.
Embry. but normal expansion is ok . during the time stated or if no time is stated for a reasonable time. or (b) lapse of time. 2) A lawful agreement by either the seller or the buyer for exclusive dealing in the kind of goods concerned imposes unless otherwise agreed an obligation by the seller to use best efforts to supply the goods and by the buyer to use the best efforts to promote their sale. Wichelhaus
Davis v. (2) In addition. Martin Tractor Co. except that no quantity unreasonably disproportionate to any stated estimate to any normal or otherwise comparable prior output or requirements may be tendered or demanded. . for lack of consideration. Jacoby
.part of formation of option contract. including conduct by both parties which recognizes the existence of such a contract. parties must be reasonably diligent .“A shut-down for lack of orders might be permissible when a shutdown merely to curtail losses would not. but in no event may such period of irrevocability exceed three months. a contract for sale does not fail for indefiniteness if the parties have intended to make a contract and there is a reasonably certain basis for giving an appropriate remedy.General solicitation/ad does not make an offer. requirement= buyer -Mutual assent must be looked at objectively by the court -20(2)(b) is called comparative fault -Look at did one party have REASON to know
Notes . or (d) death or incapacity of the offeror or offeree.Not all terms have to be defined for contract to be valid -Conduct can make a contract GAP FILLERS
Moulton v. and the other knows the meaning attached by the first party. but any such term of assurance on a form supplied by the offeree must be separately signed by the offeror. Kershaw
: seller’s exemption beyond his reasonable control. Restatement 2nd of Contracts §63 Time when Acceptance Takes Effect : Unless the offer provides otherwise. failure of presupposed conditions/ proration under those circumstances. context. but limits the power so that a letter or telegram of acceptance started after the sending of an otherwise effective rejection or counter-offer is only a counter-offer unless the acceptance is received by the offeror before he receives the rejection or counter-offer. limiting remedy in reasonable manner -If no answer received w/n reasonable time can assume that inclusion has been assented to. (a) an acceptance made in a manner and by a medium invited by an offer is operative and completes the manifestation of mutual assent as soon as put out of the offeree's possession. not plain language -court doesn’t have to determine ambiguous language to allow parol evidence? -test for section (b). Luria (written agreement final) Notes -final on some matters. (b) they materially alter it. clause involving seller power to cancel when buyer fails to pay any invoice. Written confirmation and offer and acceptance. then no parol evidence. (3) Conduct by both parties which recognizes the existence of a contract is sufficient to establish a contract for sale although the writings of the parties do not otherwise establish a contract.
. Between merchants such terms become part of the contract unless: (a) the offer expressly limits acceptance to the terms of the offer. -language used in com.email is effective when received. -Com (6): knockout rule. In such case the terms of the particular contract consist of those terms on which the writings of the parties agree. standard credit terms (if w/n industry practice and don’t limit credit bargained for). alt. (2) The additional terms are to be construed as proposals for addition to the contract. a) by course of dealing or usage of trade or course of performance b) by evidence of consistent additional terms unless the court finds the writing to have been intended to complete and exclusive statement of the terms of the agreement Related Cases Frigaliment (admissible for ambiguous term). -Com 4: Things that materially alter the K: clauses negating standard warranties. would this have been in the final integration? if it wasn’t. providing for inspection by the sub-purchaser. clause requiring complaints be made in time materially shorter than customary in trade -Clauses which do NOT mat. without regard to whether it ever reaches the offeror. tele activty PE allowed) . unless acceptance is expressly made conditional on assent to the additional or different terms. clauses placing reasonable time frame for complaints. or (c) notification of objection to them has already been given or is given within a reasonable time after notice of them is received. interest on overdue invoices. guaranties of 90% or 100%.
-Two situations dealt with here. Thoelke
Mailbox rule .Repudiation is invalid when it is mailed after acceptance has been mailed
Morrison v. together with any supplementary terms incorporated under any other provisions of this Act.Provisions Restatement 2nd of Contracts §40 Time When Rejection or Counter-Offer Terminates the Power of Acceptance Rejection or counter-offer by mail or telegram does not terminate the power of acceptance until received by the offeror. not transmitted -Still applies when delayed or lost in transit -Doesn’t matter if can still retrieve letter from post office
Chapter 4: Identifying the Bargain Provision §2-202 Final Written Expression: Parol or Extrinsic Evidence Terms with respect to which the confirmatory memoranda of the parties agree or which are otherwise set forth in a writing intended by the parties as a final expression of their agreement with respect to such terms are included therein may not be contradicted by evidence of any prior agreement (oral or written) or of a contemporaneous oral agreement but may be explained or supplemented.
Notes . Hatley (commercial. but (b) an acceptance under an option contract is not operative until received by the offeror. does not mean final on all maters.
§2-207 Additional Terms in Acceptance or Confirmation (1) A definite and seasonable expression of acceptance or a written confirmation which is sent within a reasonable time operates as an acceptance even though it states terms additional to or different from those offered or agreed upon.
the parties intend not to be bound unless the price be fixed or agreed and it is not fixed or agreed . Unconscionable Contract or Clause. there is no contract. (c) The seller must notify the buyer seasonably that there will be delay or non-delivery and. -wrongful interference to price fix is like a repudiation
Related Cases Williams v. the other may at his option treat the contract as canceled or himself fix a reasonable price.Courts have common law power to determine if statutes are unconscionable . of the estimated quota thus made available for the buyer.Judges determination . Walker-Thomas Furniture
Notes .Provision §2-615 Excuse by Failure of Presupposed Conditions (Commercial Impracticability) Except so far as a seller may have assumed a greater obligation and subject to the preceding section on substituted performance (a) Delay in delivery or non-delivery in whole or in part by a seller who complies with paragraphs (b) and (c) is not a breach of his duty under a contract for sale if performance as agreed has been made impracticable by the occurrence of a contingency the non-occurrence of which was a basic assumption on which the contract was made or by compliance in good faith with any applicable foreign or domestic governmental regulation or order whether or not it later proves to be invalid. the court may refuse to enforce the contract. (4) Where however. He may so allocate in any manner which is fair and reasonable.Basic test: so one-sided that it is unconscionable in comm. (b) Where the causes mentioned in paragraph (a) affect only a part of the seller's capacity to perform. or (b) the price is left to be agreed by the parties and they fail to agree. posted prices.commercial standards if merchant. Chapter 5: Policing the Bargain Provision
Related Cases Robert v. Lynns Ice Co. and effect to aid the court in making the determination. he must allocate production and deliveries among his customers but may at his option include regular customers not then under contract as well as his own requirements for further manufacture.
Notes -increased cost alone does not excuse performance . embargo.price fixing MUST be done in good faith .Circumstances are important -Public policy also matters here Procedural: No meaningful choice Substantive: Unfair terms
§ 2-302. market price -Sometimes third party judgement is essential to the determination of the price.
. crop. or (c) the price is to be fixed in terms of some agreed market or other standard as set or recorded by a third person or agency and it is not so set or recorded. when allocation is required under paragraph (b). (3) When a price left to be fixed otherwise than by agreement of the parties fails to be fixed through fault of one party . (1) If the court as a matter of law finds the contract or any clause of the contract to have been unconscionable at the time it was made . Excused seller must fulfill contract to extent that it can -modern allocation of risk
Can be gap filling position -provisions exists because so many remedies a K shouldn’t fail b/c of indefiniteness -need to determine if was intent to K . In such a case the price is a reasonable price at the time for delivery if : (a) nothing is said as to price. §2-305 Open Price Term (1) The parties if they so intend can conclude a contract for sale even though the price is not settled. future seller or buyer’s given price. this applies Same if spec source is contemplated. (2) When it is claimed or appears to the court that the contract or any clause thereof may be unconscionable the parties shall be afforded a reasonable opportunity to present evidence as to its commercial setting. or it may enforce the remainder of the contract without the unconscionable clause or it may so limit the application of any unconscionable clause as to avoid any unconscionable result. local crop failure. -does not apply when risk is assumed -crop failure is excused if it is the failure of a spec. (2) A price to be fixed by the seller or by the buyer means a price for him to fix in good faith. But no excuse unless seller did all possible to make sure source would not fail. causing huge increase in cost or prevents seller from getting necessary supplies -if source of supply is exclusive.must be due to something else unforeseen -this is more about war. context . purpose. In such a case the buyer must return any goods already received or if unable so to do must pay their reasonable value at the time of delivery and the seller must return any portion of the price paid on account. unforeseen shutdown of major sources of supply.
Cognitive and compulsion test.201) must be satisfied if the contract as modified is within its provisions. modern trend is towards compulson
. (4) Although an attempt at modification or rescission does not satisfy the requirements of subsection (2) or (3) . but it is evidence of good faith
.Provision § 2-209. In such a case a court may grant relief as justice requires. Rescission and Waiver. executory (not performed fully by either party). Clark v. it can operate as a waiver.
Related Cases Moon Motor Lodge .1(b) is compulsion . (3) The requirements of the statute of frauds section of this Article (Section 2. West
Notes -R2K 89 -Spotting modification issues: Look for original K. (change from common law pre-existing duty rule?) (2) A signed agreement which excludes modification or rescission except by a signed writing cannot be otherwise modified or rescinded. (2) Where the contract is made on fair terms and the other party is without knowledge of the mental illness or defect. . but except as between merchants such a requirement on a form supplied by the merchant must be separately signed by the other party.subsection (1) -Consideration is not necessary. agree to change the duties of at least one f the parties -Good faith applies here.1(a) is cognitive .Many decisions look at ability to return families to the status quo . Restatement 2nd §15 Mental Illness or Defect (1) A person incurs only voidable contractual duties by entering into a transaction if by reason of mental illness or defect (a) he is unable to understand in a reasonable manner the nature and consequences of the transaction. the power of avoidance under Subsection (1) terminates to the extent that the contract has been so performed in whole or in part or the circumstances have so changed that avoidance would be unjust. unless the retraction would be unjust in view of a material change of position in reliance on the waiver. (5) A party who has made a waiver affecting an executory portion of the contract may retract the waiver by reasonable notification received by the other party that strict performance will be required of any term waived. (1) An agreement modifying a contract within this Article needs no consideration to be binding. Modification. or (b) he is unable to act in a reasonable manner in relation to the transaction and the other party has reason to know of his condition.