Contracts Big Picture

Threshold: Which law governs? Common Law or UCC?

Step One: Formation

Offer + Acceptance = Mutual Assent
Offer Acceptance Mutual Assent + Consideration = Contract
Requirements: Common Law
1. INTENT TO BE BOUND
MIRROR IMAGE RULE
Consideration Defenses
2. TO DEFINITE TERMS UCC Acceptance to Formation
3. COMM. TO OFFEREE ADD. & DIFFERENT TERMS Benefit or Detriment
Bargained-for Exchange STATUTE OF FRAUDS
Termination: Methods MISTAKE (MUTUAL
ADEQUACY IRRELEVANT
PROMISE; PERFORMANCE OR UNILATERAL)
1. LAPSE OF TIME NO PAST CONSID.
PRE-EXISTING DUTY AMBIGUITY
2. REVOCATION Modes
ILLUSORY PROMISES ILLEGALITY
3. REJECTION (includes AUTHORIZED OR REAS.
INCAPACITY
COUNTEROFFER) Promissory Estoppel
4. OPERATION OF LAW
Mailbox Rule UNCONSCIONABLE
Consideration Substitute
EFFECTIVE AT DISPATCH FRAUD, DURESS

Step Two: Performance

Contract Terms Excuse of Condition Discharge of Duty
WRONGFUL PREVENTION BY PERFORMANCE
Interpretation & Construction
VOLUNTARY DISABLEMENT IMPOSSIBILITY, ETC.
CUSTOM & USAGE, COURSE OF DEALING
ANTICIPATORY REPUDIATION MODIFICATION
Parol Evidence Rule ACTUAL MATERIAL BREACH MUTUAL RESCISSION
IF K CLEAR AND UNAMBIG., NO EVID. WAIVER & ESTOPPEL NOVATION OR SUBST. K
OF PRIOR OR CONTEMP. AGREEMENTS IMPOSSIBILITY, ETC. ACCORD & SATISFACTION
SUBSTANTIAL PERFORMANCE LAPSE, STATUTE OF LIMIT.
Modification
C/L: CONSID. REQ. UCC: GOOD FAITH OK
MAY NEED TO SATISFY SOF
Breach
Third Parties Breach = Failure to Discharge an Absolute Duty

Third Party Beneficiaries Material Breach vs. Substantial Performance

INCIDENTAL or INTENDED; DONEE or CREDITOR FACTORS: BENEFIT RECEIVED, ADEQUACY OF DAMAGES,
EXTENT OF PARTIAL PERFORMANCE, HARDSHIP TO
Assignment, Delegation, Novation BREACHING PARTY, NEGLIGENCE OR WILLFULNESS

Step Three: Remedies

Damages for Breach
Compensatory Damages
QUASI-CONTRACT = NO REAL K
BENEFIT OF BARGAIN; MUST BE CERTAIN
EXPECT. MEASR.; RELIANCE IF UNCERTAIN
Consequential Damages
MUST BE REAS. FORESEEABLE AT TIME OF K
Liquidated, Incidental & Nominal
BUT NO PUNITIVE UNLESS NON-ECON.
Defendant's Duty to Mitigate
APPLIES TO ALL CONTRACTS
Restitution
UNJUST ENRICHMENT OF DEF.
MAY GO TO PARTY IN BREACH
Specific
Performance
EQUITABLE REMEDY
REMEDY @ LAW INADEQUATE
REAL PROPERTY IS UNIQUE
Rescission
EQUITABLE REMEDY
COURT ORDERS K CANCELED
GROUNDS: MISTAKE, MISREP.
EQUITABLE DEFENSES APPLY
Reformation
EQUITABLE REMEDY
COURT ORDERS K MODIFIED
GROUNDS: MISTAKE, MISREP.
EQUITABLE DEFENSES APPLY

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