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and 1906-1917. R. 17 Requirement of a Bargain: The formation of a contract requires a bargain in which there is a manifestation of mutual assent to the exchange and a consideration. R. 18 Manifestation of Assent: Manifestation of mutual assent to an exchange requires that each party either make a promise or begin or render a performance. R. 22 Mode of Assent Offer and Acceptance: The manifestation of mutual assent to an exchange ordinarily takes the form of an offer or proposal by one party followed by an acceptance by the other party or parties. A manifestation of mutual assent may be made even though neither offer nor acceptance can be identified and even though the moment of formation cannot be determined. R. 24 Offer Defined: An offer is the manifestation of willingness to enter into a bargain, so made as to justify another person in understanding that his assent to that bargain is invited and will conclude it. Comment: A proposal of a gift is not an offer within the present definition; there must be an element of exchange. Whether or not a proposal is a promise, it is not an offer unless it specifies a promise or performance by the offeree as the price or consideration to be given by him. It is not enough that there is a promise performable on a certain contingency. R. 25 Option Contracts: An option contract is a promise which meets the requirements for the formation of a contract and limits the promisor’s power to revoke an offer. R. 35 The Offeree’s Power of Acceptance: An offer gives to the offeree a continuing power to complete the manifestation of mutual assent by acceptance of the offer. A contract cannot be created by acceptance of an offer after the power of acceptance has been terminated in one of the ways listed in Section 36. R. 36 Methods of Termination of the Power of Acceptance: An offeree’s power of acceptance may be terminated by: 1. rejection or counter-offer by the offeree, or
McGlone Contracts Rstmt. And UCC
2. lapse of time, or 3. revocation by the offeror, or 4. death or incapacity of the offeror or offeree. In addition, an offeree’s power of acceptance is terminated by the non-occurrence of any condition of acceptance under the terms of the offer. R. 37 Termination of Power of Acceptance Under Option Contract: The power of acceptance under an option contract is not terminated by rejection, or by death or incapacity of the offeror, unless the requirements are met for the discharge of a contractual duty. R. 42 Revocation by Communication From Offeror Received by Offeree: An offeree’s power of acceptance is terminated when the offeree receives from the offeror a manifestation of an intention not to enter into the proposed contract. R. 43 Indirect Communication of Revocation: An offeree’s power of acceptance is terminated when the offeror takes definite action inconsistent with an intention to enter into the proposed contract and the offeree acquires reliable information to that effect. (see Dickinson v. Dodds). UCC 2-206 Offer and Acceptance in Formation of Contract: Unless otherwise unambiguously indicated by language or circumstances a. an offer to make a contract shall be construed as inviting acceptance in any manner and by any medium reasonable in the circumstances; b. an order or other offer to buy goods for prompt or current shipment of conforming or non-conforming goods, but such a shipment of non-conforming goods does not constitute an acceptance if the seller seasonably notifies the buyer that the shipment is offered only as an accommodation to the buyer. Where the beginning of a requested performance is a reasonable mode of acceptance an offeror who is not notified of acceptance within a reasonable time may treat the offer as having lapsed before acceptance. UCC 2-205 Firm Offers: 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 for lack of consideration during the time stated or if no time is stated for a reasonable time, but in no event may such period of irrevocability exceed 3 months; but any such term of assurance on a form supplied by the offeree must be separately signed by the offeror. R. 26 Preliminary Negotiations: A manifestation of willingness to enter into a bargain is not an offer if the person to whom it is addressed knows or has reason to know that the person making it does not intend to conclude a bargain until he has made a further manifestation of assent. R. 29 To Whom an Offer Is Addressed:
McGlone Contracts Rstmt. And UCC
The manifested intention of the offeror determines the person or persons in whom is created a power of acceptance. An offer may create a power of acceptance in a specified person or in one or more of a specified group or class of persons, acting separately or together, or in anyone or everyone who makes a specified promise or renders a specified performance. R. 33 Certainty: Even though a manifestation of intention is intended to be understood as an offer, it cannot be accepted so as to form a contract unless the terms of the contract are reasonably certain. The terms of a contract are reasonably certain if they provide a basis for determining the existence of a breach and for giving an appropriate remedy. The fact that one or more terms of a proposed bargain are left open or uncertain my show that a manifestation of intention is not intended to be understood as an offer or as an acceptance. UCC 2-204 Formation in General: 1. A contract for sale of goods may be made in any manner sufficient to show agreement, including conduct by both parties which recognizes the existence of such a contract. 2. An agreement sufficient to constitute a contract for sale may be found even though the moment of its making is undetermined. 3. Even though one or more terms are left open 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. UCC 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. In such a case the price is a reasonable price for delivery if: a. nothing is said as to price; or b. the price is left to be agreed by the parties and they fail to agree; 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 is not so set or recorded. 2. A price to be fixed by the seller or by the buyer means a price for him to fix in good faith. 3. When a price is left to be fixed otherwise than by agreement of the parties fails to be fixed through fault of one party the other may at his option treat the contract as cancelled or himself fix a reasonable price. 4. Where, however, the parties intend not to be bound unless the price be fixed or agreed and it is not fixed or agreed there is no contract. 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. UCC 2-308 Absence of Specified Place for Delivery: Unless otherwise agreed a. the place for delivery of goods is the seller’s place of business or if he has non his residence; but 3
UCC 2-309 Absence of Specific Time Provisions. 27 Existence of Contract Where Written Memorial Is Contemplated: Manifestations of assent that are in themselves sufficient to conclude a contract will not be prevented from so operating by the fact that the parties also manifest an intention to prepare and adopt a written memorial thereof. in a contract for sale of identified goods which to the knowledge of the parties at the time of contracting are in some other place. 65 Reasonableness of Medium of Acceptance: Unless circumstances known to the offeree indicate otherwise. without regard to whether it ever reaches the offeror. And UCC b. R. R. 2. Termination of a contract by one party except on the happening of an agreed event requires that reasonable notification be received by the other party and an agreement dispensing with notification is invalid if its operation would be unconscionable. R. 64 Acceptance by Telephone or Teletype: Acceptance given by telephone or other medium of substantially instantaneous two-way communications is governed by the principles applicable to acceptances where the parties are in the presence of each other. a medium of acceptance is reasonable if it is the one used by the offeror or one customary in similar transaction at the time and place the offer is received. 66 Acceptance Must Be Properly Dispatched: An acceptance sent by mail or otherwise from a distance is not operative when dispatched. unless it is properly addressed and such other precautions taken are ordinarily observed to insure safe transmission of similar messages. that place is the place for their delivery. R. Notice of Termination: 1. 63 Time When Acceptance Takes Effect: Unless the offer provides otherwise. R. The time of shipment or delivery or any other faction under a contract if not provided in this Article or agreed upon shall be a reasonable time. an acceptance is 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. 3. an acceptance under an option contract is not operative until received by the offeror. Where the contract provides for successive performances but is indefinite in duration it is valid for a reasonable time but unless otherwise agreed may be terminated at any time by either party. R. documents of title may be delivered through customary banking channels. a. 69 Acceptance by Silence or Exercise of Dominion: 4 . but b. but the circumstances may show that the agreements are preliminary negotiations. and c.McGlone Contracts Rstmt.
2. The conduct of a party is not effective as a manifestation of his assent unless he intends to engage in the conduct and knows or has reason to know that the other party may infer from his conduct that he assents. mistake. (see Hobbs v. Where an offer invites an offeree to accept by rendering a performance. R. Where because of previous dealings or otherwise.McGlone Contracts Rstmt. And UCC 1. or may empower the offeree to make a selection of terms in his acceptance. or b. 2. R. 54 Acceptance by Performance. Massasoit Whip Co. the contractual duty of the offeror is discharged unless a. 5 . Where an offeree fails to reply to an offer.). But if the act is wrongful as against the offeror it is an acceptance only if ratified by him. 30 Form of Acceptance Invited: 1. and the offeree in remaining silent and inactive intends to accept the offer. 19 Conduct as a Manifestation of Assent: 1. or other invalidating cause. no notification is necessary to make such an acceptance effective unless the offer requests such a notification. it is reasonable that the offeree should notify the offeror if he does not intend to accept. Where an offeree takes the benefit of offered services with reasonable opportunity to reject them and reason to know that they were offered with the expectation of compensation. Where the offeror has stated or given the offeree reason to understand that assent may be manifested by silence or inaction. the offer indicates that notification of acceptance is not required. b. The manifestation of assent may be made wholly or partly by written or spoken words or by other acts or by failure to act. or c. 3. c. In such cases a resulting contract may be voidable because of fraud. The conduct of a party may manifest assent even though he does not in fact assent. his silence and inaction operate as an acceptance in the following cases only” a. R. 2. Necessity of Notification to Offeror: 1. duress. an offer invites acceptance in any manner and by any medium reasonable in the circumstances. the offeree exercises reasonable diligence to notify the offeror of acceptance. 2. An offer may invite or require acceptance to be made by an affirmative answer in words. or by performing or refraining from performing a specified act. An offeree who does any act inconsistent with the offeror’s ownership of offered property is bound in accordance with the offered terms unless they are manifestly unreasonable. If an offeree who accepts by rendering a performance has reason to know that the offeror has no adequate means of learning of the performance with reasonable promptness and certainty. Unless otherwise indicated by the language or the circumstances. the offeror learns of the performance within a reasonable time.
2. a term which is reasonable in the circumstance is supplied by the court. 34 Certainty and Choice of Terms. And UCC R. an option contract is created when the offeree tenders or begins the invited performance or tenders a beginning of it. Acceptance of an offer is a manifestation of assent to the terms thereof made by the offeree in a manner invited or required by the offer. 205 Duty of Good Faith and Fair Dealing: Every contract imposes upon each party a duty of good faith and fair dealing in its performance and enforcement. Acceptance by performance requires that at least part of what the offer requests be performed or tendered and includes acceptance by a performance which operates as a return promise. R. 50 Acceptance of Offer Defined: 1. 32 Invitation of Promise or Performance: In case of doubt an offer is interpreted as inviting the offeree to accept either by promising to perform what the offer requests or by rendering the performance. Where an offer invites an offeree to accepts by rendering a performance and does not invite a promissory acceptance. R. CHAPTER 5 R. R. 2. Acceptance by a promise requires that the offeree complete every act essential to the making of the promise. 2. Part performance under an agreement may remove uncertainty and establish that a contract enforceable as a bargain has been formed. 3. R. 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. 204 Supplying an Omitted Essential Term: When the parties to a bargain sufficiently defined to be a contract have not agreed with respect to a term which is essential to a determination of their rights and duties. 3. as the offeree chooses. Action in reliance on an agreement may make a contractual remedy appropriate even though uncertainty is not removed. 45 Option Contract Created by Part Performance or Tender: 1.McGlone Contracts Rstmt. 6 . Effect of Performance or Reliance: 1. The terms of a contract may be reasonably certain even though it empowers one or both parties to make a selection of terms in the course of performance.
it is interpreted in accordance with the meaning attached by one of them if at the time the agreement was made a. it is interpreted in accordance with that meaning. UCC 2-306 Output. Words and other conduct are interpreted in the light of all the circumstances. Except as stated in this Section. Where the parties have attached different meanings to a promise or agreement or a term thereof. 2. that party did not know of any different meaning attached by the other. And UCC UCC 1-203 Obligation of Good Faith: Every contract or duty within this Act imposes an obligation of good faith in its performance or enforcement. 3. Requirements and Exclusive Dealings: 1. Comment: The parties to such contracts are held to have impliedly. neither party is bound by the meaning attached by the other. A lawful agreement by either the seller or the buyer for exclusive dealing in the kind of goods concerned imposes unless otherwise aggeed an obligation by the seller to use best efforts to supply the goods and by the buyer to use best efforts to promote their sale. R. and the other knew the meaning attached by the first party. Good faith in the case of a merchant means honesty in fact and the observance of reasonable standards of fair dealing in the trade. R. even when not expressly. 7 . 200 Interpretation of Promise or Agreement: Interpretation of a promise or agreement or a term thereof is the ascertainment of its meaning. UCC 2-103 Definitions and Index of Definitions: 1. and the other had reason to know the meaning attached by the first party. R. bound themselves to use reasonable diligence as well as good faith in the performance of the contract. 202 Rules in Aid of Interpretation: 1. that party had no reason to know of any different meaning attached by the other. 2. or b. and if the principal purpose of the parties is ascertainable it is given great weight. even though the result may be a failure of mutual assent. except that no quantity unreasonably disproportionate to any stated estimate or int eh absence of a stated estimate to any normal or otherwise comparable prior output or requirements may be tendered or demanded. 201 Whose Meaning Prevails: 1. Where the parties have attached the same meaning to a promise or agreement or a term thereof.McGlone Contracts Rstmt. A term which measures the quantity by the output of the seller or the requirements of the buyer means such actual output or requirements as may occur in good faith.
it is interpreted in accordance with that meaning. the manifestations of intention if the parties to a promise or agreement are interpreted as consistent with each other and with any relevant course of performance. where language has a generally prevailing meaning. 2. CHAPTER 9 R. such course of performance shall be relevant to show a waiver or modification of any term inconsistent with such course of performance.McGlone Contracts Rstmt. an act other than a promise. UCC 2-208 Course of Performance or Practical Construction: 1. Subject to the provisions of the next section on modification and waiver. Where an agreement involves repeated occasions for performance by either party with knowledge of the nature of the performance and opportunity for objection to it by the other. Unless a different intention is manifested a. or usage of trade. or 8 . technical terms and words of art are given their technical meaning when used in a transaction within their technical field. 3. A writing is interpreted as a whole. 4. To constitute consideration. but when such construction is unreasonable. 71 Requirement of Exchange. shall be construed whenever possible as consistent with each other. Where the contract for sale involves repeated occasions for performance by either party with knowledge of the nature of the performance and opportunity for objection to it by the other. as well as any course of dealing and usage of trade. 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. a performance or a return performance must be bargained for. any course of performance accepted or acquiesced in without objection shall be relevant to determine the meaning of the agreement. express terms shall control course of performance and course of performance shall control both course of dealing and usage of trade. 2. 3. The express terms of the agreement and any such course of performance. course of dealing. Wherever reasonable. Types of Exchange: 1. b. The performance may consist of a. nay course of performance accepted or acquiesced in without objection is given great weight in the interpretation of the agreement. 5. And UCC 2. and all writings that are part of the same transaction are interpreted together. 3.
Comment: Consideration requires that a performance or return promise be bargained for in exchange for a promise. The performance or return promise may be given to the promisor or to some other person. R. 86 Promise for Benefit Received: 1. Unless both parties know that the purported consideration is mere pretense. The law is concerned with the external manifestation rather than the undisclosed mental state: it is enough that one party manifests an intention to induce the other’s response and to be induced by it and that the other responds in accordance with the inducement. Comment: In the typical bargain. this means that the promisor must manifest an intention to induce the performance or return promise and to be induced by it. or b. It may be given by the promisee or by some other person. 2. A promise made in recognition of a benefit previously received by the promisor from the promisee is binding to the extent necessary to prevent injustice. to the extent that its value is disproportionate to the benefit.McGlone Contracts Rstmt. The fact that what is bargained for does not of itself induce the making of a promise does not prevent it from being consideration for the promise. 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. or b. if the promisee conferred the benefit as a gift or for other reasons the promisor has not been unjustly enriched. and the person furnishing the consideration need not inquire into the promisor’s motive. 2. if the modification is fair and equitable in view of the circumstances not anticipated by the parties when the contract was made. R. R. The promisor may have more than one motive. it is immaterial that the promisor’s desire for the consideration is incidental to other objectives and even that the other party knows this to be so. 89 Modification of an Executory Contract: A promise made modifying a duty under a contract not fully performed on either side is binding a. or destruction of a legal relation. a forbearance. A promise is not biding under subsection 1 a. the creation. 81 Consideration as Motive or Inducing Cause: 1. 4. or 9 . or c. to the extent provided by statute. Louisiana Civil Code 1760-1762 and 1847. modification. And UCC b. the consideration and the promise bear a reciprocal relation of motive or inducement: the consideration induces the making of the promise and the promise induces the furnishings of consideration. and that the promisee must manifest an intention to induce the making of the promise and to be induced by it.
or b. Mutuality of Obligation: If the requirement of consideration is met. Nor can a mere technical consideration support a modification in bad faith. 364 Effect of Unfairness: Specific performance or an injunction will be refused if such relief would be unfair because the exchange is grossly inadequate or the terms of the contract are otherwise unfair. and the extortion of a modification without legitimate commercial reason is ineffective as a violation of the duty of good faith. R. And UCC c. 347 Measure of Damages in General: The injured party has a right to damages based on his expectation interest as measured by 10 . advantage. The remedy granted for breach may be limited as justice requires. or c. 87 Option Contract: An offer is binding as an option contract if it is in writing and signed by the offeror. modifications made thereunder must meet the test of good faith imposed by this Act. UCC 2-209 Modification. a gain. and proposes and exchange on fair terms within a reasonable time. The effective use of bad faith to escape performance on the original contract is barred. 90 Promise Reasonably Inducing Action or Forbearance: A promise which the promisor should reasonably expect to induce action or forbearance on the part of the promisee or a third person and which does induce such action or forbearance is binding if injustice can be avoided only by enforcement of the promise. The test of good faith between merchants or as against merchants includes observance of reasonable standards of fair dealing in the trade. R. there is no additional requirement of a. Rescission. CHAPTER 2 R. 79 Adequacy of Consideration. R. disadvantage. 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. recites a purported consideration for the making of the offer. A charitable subscription is binding without roof that the promise induce action or forbearance. or detriment to the promisee. mutuality of obligation. equivalence in the values exchanged. CHAPTER 11 R. or benefit to the promisor or a loss.McGlone Contracts Rstmt. to the extent that justice requires enforcement in view or material change of position in reliance on the promise. and Waiver: An agreement modifying a contract needs no consideration to be binding… Comment: However.
transportation and care and custody of goods rightfully rejected. 3. The 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 as defined but less expenses saved in consequence of the seller’s breach. caused by the breach. Consequential damages resulting from the seller’s breach include a. 351 Unforeseeability and Related Limitations on Damages: 1. 2.McGlone Contracts Rstmt. 11 . UCC 2-713 Buyer’s Damages for Non-Delivery or Repudiation: 1. injury to person or property proximately resulting from any breach of warranty. And UCC a. any commercially reasonable charges. The measure of damages for non-delivery or repudiation by the seller is the difference between the market price at the time when the buyer learned of the breach and the contract price together with any incidental and consequential damages but less expenses saved in consequence of the seller’s breach. the loss in the value to him of the other party’s performance caused by its failure or deficiency. receipt. UCC 2-712 Cover: 1. less c. 2. any other loss. any cost or other loss that the promisee has avoided by not having to perform. UCC 1-106 Remedies to be Liberally Administered: The remedies provided shall 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 nor penal damages may be had except as specifically provided for. Failure of the buyer to effect cover does not bar him from any other remedy. R. including incidental or consequential loss. plus b. expenses or commissions in connection with effecting cover and any other reasonable expense incident to the delay or other breach. and b. After a breach 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. Damages are not recoverable for loss that the party in breach did not have reason to foresee as a probable result of the breach when the contract was made. UCC 2-715 Buyer’s Incidental and Consequential Damages: 1. any loss resulting from general or particular requirements and needs of which the seller at the time of contracting had reason to know and which could not reasonably be prevented by cover or otherwise. UCC 2-717 Deduction of Damages from the Price: The buyer on notifying the seller of his intention to do so may deduct all or any part of the damages resulting from any breach of the contract from any part of the price still due under the same contract. Incidental damages resulting from the seller’s breach includes reasonably incurred in inspection.
R. The injured party is not precluded from recovery to the extent that he has made reasonable but unsuccessful efforts to avoid loss. as a result of special circumstances. due allowance for costs reasonable incurred and due credit for payments or proceeds of resale. that the party in breach has reason to know. burden or humiliation. 352 Uncertainty as a Limitation on Damages: Damages are not recoverable for loss beyond an amount that the evidence permits to be established with reasonable certainty. A court may limit damages for foreseeable loss by excluding recovery for loss of profits. If the measure of damages provided above is inadequate to put the seller in as good a position as performance would have done then the measure of damages is the profit (including reasonable overhead) which the seller would have made from full performance by the buyer. 350 Avoidability as a Limitation on Damages: Damages are not recoverable for loss that the injured party could have avoided without undue risk. but less expenses saved in consequence of the breach. The measure of damages for non-acceptance or repudiation by the buyer is the difference between the market price at the time and place for tender and the unpaid contract price together with any incidental damages. by allowing recovery only for loss incurred in reliance. or otherwise if it concludes that in the circumstances justice so requires in order to avoid disproportionate compensation. 349 Damages Based on Reliance Interest: As an alternative to the measure of damages. less any loss that the party in breach can prove with reasonable certainty the injured party would have suffered had the contract been performed. If the breach caused no loss or if the amount of the loss is not proved. 346 Availability of Damages: 1. together with any incidental damages. R. The injured party has a right to damages for any breach by a party against whom the contract is enforceable unless the claim for damages has been suspended or discharged. Loss may be foreseeable as a probable result of a breach because it follows from the breach a. 12 . 2. or b. 3. 2. UCC 2-708 Seller’s Damages for Non-acceptance or Repudiation: 1. including expenditures made in preparation for performance or in performance. a small sum fixed without regard to the amount of loss will be awarded as nominal damages. in the ordinary course of events. And UCC 2. R. the injured party has a right to damages based on his reliance interest.McGlone Contracts Rstmt. beyond the ordinary course of events. R.
whichever is smaller. 3. a right to recover damages under the provisions of this article other than subsection 1. Where the seller justifiably withholds delivery of goods because of the buyer’s breach. his resale is subject to the law laid down in this Article on resale by an aggrieved seller (2-706). in the absence of such terms. 13 .McGlone Contracts Rstmt. in which case it is the sole remedy. b. 20% of the value of the total performance for which the buyer is obligated under the contract or $500. UCC2-719 Contractual Modification or Limitation of Remedy: 1. Where a seller has received payment in goods their reasonable value or the proceeds of their resale shall be treated as payment for the purposes of subsection 2. in connection with return or resale of the goods or otherwise resulting from the breach. 2. 4. care and custody of goods after the buyer’s breach. UCC 2-718 Liquidation or Limitation of Damages. and the inconvenience or nonfeasibility of otherwise obtaining an adequate remedy. And UCC UCC 2-710 Seller’s Incidental Damages: Incidental Damages to an aggrieved seller include any commercially reasonable charges. A term fixing unreasonably large liquidated damages is void as a penalty. or b. the amount to which the seller is entitled by virtue of terms liquidating the seller’s damages in accordance with subsection 1. expenses or commissions incurred in stopping delivery. 2. resort to a remedy as provided is optional unless the remedy is expressly agreed to be exclusive. the buyer is entitled to restitution of any amount by which the sum of his payment exceeds a. Damages for breach by either party may be liquidated in the agreement but only at an amount which is reasonable in the light of the anticipated or actual harm caused by the breach. Subject to sections 2 and 3. and b. the difficulties of proof of loss. in the transportation. Where circumstances cause an exclusive or limited remedy to fail of its essential purpose. remedy may be had as provided in this act. 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 recoverable damages 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. The buyer’s right to restitution under subsection is subject to offset to the extent the seller establishes a. buit if the seller has notice of the buyer’s breach before reselling the goods received in part performance. the amount or value of any benefits received by the buyer directly or indirectly by reason of the contract. Deposits: 1.
The buyer has a right of replevin for goods identified to the contract if after reasonable effor he 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. the injured party is entitled to restitution for any benefit that he has conferred on the other party by way of past performance or reliance. or other relief as the court may deem just. 14 . CHAPTER 3 Louisiana Civil Code 1986-1988. or b. R. R. 371 Measure of Restitution Interest: If a sum of money is awarded to protect a party’s restitution interest. 2. 355 Punitive Damages: Punitive damages are not recoverable for a breach of contract unless the conduct constituting the breach is also a tort for which punitive damages are recoverable. Subject to the Rule in Section 2.McGlone Contracts Rstmt. R. 2202-2205 UCC 2-716 Buyer’s Right to Specific Performance or Replevin: 1. The judgment for specific performance may include such terms and conditions as to payment of the price. R. Specific performance may be ordered where the goods are unique or in other proper circumstances. And UCC 3. 356 Liquidated Damages and Penalties: 1. The injured party has no right to restitution if he has performed all of his duties under the contract and no performance by the other party remains due other than payment of a definite sum of money for that performance. damages. it may as justice requires be measured by either a. 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. on a breach by nonperformance that gives rise to a claim for damages for total breach or on a repudiation. 373 Restitution when Other Party is in Breach: 1. the reasonable value to the other party of what he received in terms of what it would have cost him to obtain it from a person in the claimant’s position. 3. A term fixing unreasonably large liquidated damages is unenforceable on grounds of public policy as a penalty. the extent to which the other party’s property has been increased in value or his other interests advanced. Consequential damages may be limited or excluded unless it is unconscionable. 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. 2.
24. Contract was revocable and was revoked by indirect communication. Hargadine. 2. OUTLINE FOR CONTRACTS Common Law Contracts for Civil Law Students Professor David Gruning. Objective Theory of Assent: 1. under the manifested assent of the parties. It is only such intention as the words or acts of the parties indicate. 374: Restitution in Favor of Party in Breach: 1. 37. B. To the extent that. The law imputes to a person an intention corresponding to the 15 . he cannot then accept an offer. 42. 18. cannot either make a contract or prevent one from arising. 43 C. See Restatement 17 & comment. Dickinson v. If a party justifiably refuses to perform on the ground that his remaining duties of performance have been discharged by the other party’s breach. the party in breach is entitled to restitution for any benefit that he has conferred by way of part performance or reliance in excess of the loss that he has caused by his own breach. Offer and Acceptance: A. 36. Dodds: When a party learns that the other party has rescinded his consent to the contract.McGlone Contracts Rstmt. 35. See UCC 2-206 and 2-205 D. that party is not entitled to restitution if the value of the performance as liquidated damages is reasonable in the light of the anticipated or actual loss caused by the breach and the difficulties of proof of loss.: To constitute a contract there must be a meeting of the minds of the parties and both must agree to the same thing in the same sense. 22. and that is essential to making an agreement. The inner intention of parties to a conversation subsequently alleged to create a contract. And UCC R. There is no existence of the same mind. 25. Embry v. McKittrick Dry Goods Co. a party’s performance is to be retained in the case of breach. Spring 2000 I.
2. 29. 3.S. it is not such an offer as can be turned into an agreement by acceptance. See Restatement 26. See UCC 2-204. 2-308. v. this knowledge prevents such words or other acts from being operative as an offer or acceptance. It judges his intention by his outward expressions and excludes all questions in regard to his unexpressed intention. Harsh: If a proposal is nothing more than an invitation to the person to whom it is made to make an offer to the proposer. The courts do not like to force parties into a contract. The conduct of a party is not effective as a manifestation of his assent unless he intends to engage in the conduct and knows or has reason to know that the other party may infer from his conduct that he assents. And UCC reasonable meaning of his words and acts. 2-305. U. 33. Braunstein: If either party knows that the other does not intend what his words or other acts express. Offer: 1.McGlone Contracts Rstmt. 2. See Restatement 19 5. 4. Nebraska Seed Co. Lucy v. 2-309 16 . Doubts arising from ambiguity of language are resolved in favor of the latter. The mental assent of the parties is not requisite for the formation of a contract. his undisclosed intention is immaterial except when an unreasonable meaning which he attaches to his manifestations is known to the other party. v. E. If the words or other acts of one of the parties have but one reasonable meaning. Zehmer: Look to the outward expression of a person as manifesting his intention rather than to his secret and unexpressed intention. 27 3.
Thoelke: An acceptance is effective when the letter is deposited in the mail. 5. Morrison v. iv. And UCC 4. iii. Llewellyn: Contract valid upon receipt because only in a few cases does acceptance go awry. Inc. b. v. Ball-Co Manufacturing. Acceptance: 1. Mailbox Rule: a. ii. Empro Manufacturing Co. Any partial performance by one party that the party disclaiming the contract accepted. it is more likely that offeror 17 .McGlone Contracts Rstmt. 4 Factors to determine that parties do not intend to be bound without a formal writing: i. Whether all essential terms of the contract have been agreed to.: Intent must be determined solely from the language used when no ambiguity in its terms exists. Parties may decide for themselves whether the results of preliminary negotiations bind them. Whether parties expressly reserve right to be bound only when written agreement is signed. but they do this through their words. If offeror hears nothing. F. The complexity and magnitude of transaction is such that a formal writing would be expected. and it is better because the owner would be in a contract that he does not know exists. c. Langdell: Contract valid at receipt because the hardship is on the buyer.
And UCC would check on the offeree to see if he is still interested. Carlill v. The offeree will not check that acceptance is received. 32 d. e. important. Crook v.: conduct which imports acceptance or assent is acceptance or assent in the view of the law. See Restatement 30. Carbolic Smoke Ball Co. 66 2. b. revocable offers are effective upon transmission. 65. is as well referable to one state of facts as another. c. whatever may have been the actual state of mind of the party. See Restatement 63. 64.: If the offeror shows by his language and the nature of the transaction that he does not expect and does not require notice of the acceptance apart from notice of the performance. Cowan: The rule that filing an order completes the contract. Acceptance by Performance and Unilateral Contracts: a. and does not operate to hold him to his offer. he will assume the contract exists. Massasoit Whip Co. d. b. Previous trade or custom or usage is 18 . Corlies & Tifft: Where the act uninterpreted by concurrent evidence of the mental purpose is accompanying it. Acceptance by Silence: a. Hobbs v. is confined to unconditional and specific orders. there is a valid offer.McGlone Contracts Rstmt. it is no indication to the other party of an acceptance. White v. Louisiana Civil Code: Irrevocable offers and options are effective upon receipt. See Restatement 69 3.
: If an offer for a unilateral contract is made. enforce contract if reasonably certain formula for remedy. Art. Inc. Support for filling gaps: Contra perferentum: interpreting ambiguity against one who writes the contract. And UCC e. within a reasonable time. or. both parties to such a contract are bound to carry it out in a reasonable way. See Restatement 34. the duty of immediate performance of which is conditional on the full consideration being given or tendered within the time stated in the offer. Louisiana C. Illusory Promises: 1. Interpreting Assent: A. 204 page 433-434. the offeror is bound by a contract. See Restatement 45 and 50 p. The obligation of good faith and fair dealing towards each other 19 . f. Petersen v. Agreements to Agree: 1. 2. v. 422-23. United States Radiator Co. v. 1975: It is within the power of the obligor to decide if he is bound to contracts under a potestative condition. 2. Sun Printing & Publishing Assn. and part of the consideration requested in the offer is given or tendered by the offeree in response thereto.: The terms of a contract must be reasonably enforceable in order to form a contract. See UCC 2-204(3).McGlone Contracts Rstmt. if no time is stated therein.: In supply or production contracts. Remington Paper & Power Co. II. Ray-Hof Agencies. B.C. New York Central Iron Works Co.
3. trade usage.McGlone Contracts Rstmt.: In interpreting a contract consider dictionary/ terms of art. 465-468. Lady Duff-Gordon: A promise may be lacking. Edelstein & Frigalment Importing Co. An example of bad faith is using the terms of the contract for speculative purposes. except that no quantity unreasonably disproportionate to any stated estimate or in the absence of a stated estimate to any normal or otherwise comparable prior output or requirements may be tendered or demanded. trade custom. and the parties understand it in different ways. Eastern Air Lines. 3. legislation. and yet the whole writing may be instinct with an obligation. The Bargain Theory of Consideration: 20 . Lucy. imperfectly expressed in order to form a contract. Raffles v. 4. 201. such output or requirements are allowed as may occur in good faith. And UCC is implied in every contract of this character. Oswald v. Consideration: A. 2474.: In requirements contracts. v. there cannot be a contract unless one of them should have been aware of the other’s understanding. 449 C. pattern of practice. BNS International Sales Corp. III. Inc. See UCC 2-306 p. Wood v. Wichelhaus 2. 4. v. See Restatement 200. 5. 202 and UCC 1-205 and 2-208 p. Allen: When any of the terms used to express an agreement is ambivalent. LA CC Art. Weinberg v. Gulf Oil Corp. Obligation of means – use reasonable means to make money. Interpreting Assent Subjectively or Objectively: 1.
detriment. Moral Consideration: 1. A performance or return performance 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. and preserves the promisor. Moore v. improves. Mills v. See Restatement 24. 2. D. to cases where at some time or other a good or valuable consideration has existed. it is sufficient consideration for the 21 . 3. McGowin: Where the promisee cares for. and do not mean that what was done as a mere favor can be turned into a consideration at a later time by the fact that it was asked for. Webb v. A waiver of any legal right at the request of another is sufficient consideration. Otterbein University: A promise to pay an existing debt will not be sufficient consideration as there was already an obligation to pay the debts. And UCC 1. To constitute consideration.McGlone Contracts Rstmt. though done without his request. or benefit to the one party. or loss suffered by the other. Elmer: A contract for services rendered is limited to cases where the request implies an undertaking to pay. or some forbearance. Past Consideration: 1. C. Sidway: A valuable consideration may consist either in some right. is to be limited in its application. Hamer v. Wyman: A moral obligation is a sufficient consideration for an express promise. B. 2. a performance or a return promise must be bargained for. Johnson v. 71. interest. 81 page 666-668. Distinguish Bargains form Gratuitous Promises: 1.
Adequacy of Consideration: 1. 686. although the other party has completed the contract in reliance upon it. both because of the materail benefit received. and thereby coerces a promise from the other party to the contract to pay him an increased compensation for doing that which he is legally bound to do. or detriment 22 . 3.v. See Restatement 89 and UCC 2-209 p. v. Bighenti: Where the subsequent agreement imposes upon the one seeking greater compensation and additional obligation or burden not previously assumed. F. And UCC promisor subsequent agreement to pay for the service. If the requirement of consideration is met. E. 3. 697-698. there is no additional requirement of a gain. Stilk v. See Restatement 86 p. Alaska Packers Assn. Contract Modification and the Preexisting Duty Rule: 1. or benefit to the promisor ro a loss. is valid and binding upon the parties. The promise cannot be legally enforced although the other party. 4. Myrick: A contract to do that which one is already bound to do for more money is unenforceable for lack of consideration. Domenico: The party who refuses to perform. Brian Construction and Development Co.McGlone Contracts Rstmt. The doctrine of promissory estoppel will not apply. the agreement. disadvantage. advantage. 2. supported by consideration. takes an unjustifiable advantage of the necessities of the other party.
And in the absence of fraud makes the promise enforceable without it. Promissory Estoppel: A. And UCC to the promisee or equivalence in the values exchanged.: Forbearance to press a claim. The defense of want of consideration is not available in an action. Inc. not being made frivolously. 2.McGlone Contracts Rstmt. or mutuality of obligation. Family Promises: Ricketts v. Dyer v. See Restatement 95 and UCC 2-203 p. 724-725. Scothorn: Equitable estoppel is the effect of the voluntary conduct of a party whereby he is absolutely precluded. against another person who in good faith relied upon such conduct and has been led to change his position for the worse. The seal takes the place of proof of consideration. Promises to Convey Land: Greiner v. National By-Products. Pretended exchanges will not be enforced. Contracts Under Seal: 1. both at law and in equity. Greiner: A promise which the promisor should reasonably expect to induce action of forbearance of a definite and 23 . Promissory Estoppel as a Substitute for Consideration: 1. The Intention to be Legally Bound: A. from asserting rights which might perhaps have otherwise existed. IV. 2. The fact that the claim is ill-founded is not in itself enough to prevent forbearance from being a sufficient consideration for a promise. may be a sufficient consideration even though the claim is wholly ill-founded. 2. or a promise of such forbearance. The claim must be asserted in good faith. V.
Star Paving Co. the duty of immediate performance of which is conditional on the full consideration being given or tendered within the time stated or a reasonable time. 7. aPromises of a Pension: Feinberg v. Promissory Estoppel as an Alternative to Breach of Contract: 24 .: If an offer for a unilateral contract is made. Functions of Consideration or Promissory Estoppel: i. and part of the consideration requested in the offer is given or tendered by the offeree in response thereto. Charitable Subscriptions: Allegheny College: Promise of money to a college treated as consideration not promissory estoppel. 4. 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. ii. Pfeiffer Co. And UCC substantial character on the part of the promisee is binding if injustice can be avoided only be enforcement of the promise.: See Restatement 90 above. Construction Bids: Drenan v. 5. Merely acting in justifiable reliance on an offer may serve as sufficient reason for making a promise binding. the offeror is bound by a contract. 3.McGlone Contracts Rstmt. iii. 6. Formality Caution Channeling B. The bid creates an option contract that cannot be revoked by the offeror if the offeree uses it in his bid for the job.
Goodman v. Damages usually include reliance and restitution damages. Red Owl Stores. if the promise was such to induce action or forbearance. Action in reliance upon a supposed promise creates no obligation on an individual or corporation whose only promise is wholly illusory. they should be only such as in the opinion of the court are necessary to prevent injustice. And UCC 1. Where damages are awarded in a promissory estoppel instead of specifically enforcing the promisor’s promise.: The court must determine if the promise is one which the promisor should reasonably expect to induce action or forbearance of a definite and substantial character on the part of the promise. Reserve Life Ins. there can be no reliance. C. 25 . and if injustice could be avoided only by enforcement of the promise. Blatt v. Presley: Since the promisee had learned prior to there be a legally enforceable agreement constituting her reliance that the defendant would not honor that promise. 2.: There must be a real promise to be enforced. Alden v. Dicker: Justice and fair dealing require that the one who acts to his detriment on the faith of another’s actions should be protected by estopping the party who has brought about the situation from alleging anything in opposition to the natural consequences of his own course of action. 2.McGlone Contracts Rstmt. Modern Application and Limits of Promissory Estoppel: 1. Hoffman v. Spooner v. University of Southern California: In order to apply the doctrine of promissory estoppel. there must be some type of promise to induce action on the part of the promisee. Co. If there is no promise. Inc. 3. such reliance is not reasonable and would not entitle her to invoke promissory estoppel.
and such other damages as could be reasonably anticipated by the parties as likely to be caused by the vendor’s failure to keep his 26 . or delay in performance). including gains prevented and losses sustained. VI. 3. Damages are the preferred common law remedy. Deprives the promisor of any benefit received in the course of the transaction. McGee: “Hairy hand case. Article 1994 states that an obligor is liable for the damages caused by his failure to perform a conventional obligation (nonperformance.McGlone Contracts Rstmt. Expectation: Puts the promisee in the position in which the promisee would have been had the promise been performed. and the actual value at the time of the sale. The Civil Law prefers specific performance. Restitution: Put the promisor back in the position in which the promisor would have been had the promise not been made. Reliance: Put the promisee back in the position in which the promisee would have been in had the promise not been made. Three Damage Interests: 1. B. Cohen v. Damages: A.: Promissory estoppel will only apply when it will avoid injustice. Article 1995 limits damages only to the loss sustained by the obligee and the profit of which he has been deprived. 2. defective performance. Hawkins v. C. Article 1986 states that specific performance shall be awarded unless it is impracticable.” The measure of the vendee’s damages is the differences between the value of the goods as they would have been if the warranty as to the quality had been true. And UCC 4. Cowles Media Co.
Hooker & Sons v. F. put him in as good a position as he would have been in had the contract been performed. to the extent possible. 27 . D. The loss in value to him of the other party’s performance caused by its failure or deficiency. The market theory of damages discourages the breach of contracts and promotes a more efficient market. Restatement 347: Damages are measured by: 1. In this case. And UCC agreement. Tongish v. Any cost or other loss that the promisee has avoided by not having to perform. plus 2. less 3. E. including incidental or consequential loss caused by the breach. and could not by reasonable care on the part of the vendee have been avoided. the measure of damages for nondelivery or repudiation by the seller is the difference between the market price at the time when the buyer learned of the breach and the contract price together with any incidental and consequential damages but less any expenses saved in consequence of the seller’s breach. Thomas: Under UCC 2-713. The application of the general theory of expectation theory rewards the seller for breaching the contract. but it did allow the reimbursement of the manager’s salary since the court determined that he could have spent his time on other projects if there was no contract with defendants.: Contract damages are ordinarily based on the injured party’s expectation interest and are intended to give him the benefit of the bargain by awarding him a sum of money that will. as they would have been incurred regardless of whether the contract was breached.McGlone Contracts Rstmt. Roberts Cabinet Co. the court refused to allow damages for storage costs. Any other loss.
and thus known to both parties. Foreseeability of Harm: a. which they would reasonably contemplate.: General damages are awarded only if injury were foreseeable to a reasonable man. 28 . and special damages are awarded only if actual notice were given the carrier of the possibility of injury. would be the amount of injury which would ordinarily follow from a breach of contract under these special circumstances so known and communicated. v. the damages which the other party ought to receive in respect of such breach of contract should be such as may fairly and reasonably be considered either arising naturally from such breach of contract itself. there can be no damages. the damages resulting from the breach of such a contract. When the special circumstances are not communicated to the party in breach. The court held that a machine in this case is reasonably foreseeable to result in lost profits as compared to a lost mill shaft in Hadley that required actual notice to the breaching party in order to produce damages. Three Limitations to Damages: 1. Hadley v. And UCC G. Hector Martinez and Co. or such as may reasonably be supposed to have been in the contemplation of both parties. as the probably result of the breach of it. Baxendale: Where two parties have made a contract which one of them has broken. b. Southern Pacific Transportation Co.McGlone Contracts Rstmt. at the time they made the contract. If the special circumstances under which the contract was actually made were communicated by the plaintiffs to the defendants.
Chicago Coliseum Club v. Locke: The defendant can have damages reduced if he can prove that it is more likely than not that the plaintiff would have had a loss on the contract had it been performed. First National Bank of Hot Springs: Minority rule. Reed: The court allowed the plaintiff to recover those costs incurred before the formation of the contract upon a showing that the defendant should reasonably have known that those expenses would be lost if the contract were broken. Morrow v. Anglia Television v. 2. Such knowledge must be brought home to the party sought to be charged under such circumstances that he must know that the person he contracts with reasonably believes that he accepts the contract with the special condition attached to it.” Plaintiff must prove more than the defendant’s mere knowledge that a breach of contract will entail special damages to the plaintiff.McGlone Contracts Rstmt. And UCC c. Certainty of Harm: a. Defendant should have known that at the very least. The court only allowed those damages for the expenses incurred after the formation of the contract. Mistletoe Express Service v. the plaintiff expected to break even on the contract. 29 . It must also appear that the defendant at least tacitly agreed to assume responsibility. The “tacit agreement rule. b. adopted in Arkansas and first by Justice Holmes. c. Dempsey: Compensation for damages for breach of contract must be established by evidence from which a court or jury are able to ascertain the extent of such damages by the usual rules of evidence and to a reasonable degree of certainty.
the obligor may demand that damages be reduced. burden. 3. Parker v. The injured party is not precluded from recovery to the extent that he has made reasonable but unsuccessful efforts to avoid loss. Restatement 346: Plaintiff is entitled to recover those expenses of his initial investment despite the fact that they were incurred in the absence of an enforceable promise. or. 20th Century Fox: The measure of recovery by a wrongfully discharged employee is the amount of salary agreed upon for the period of service. Rockingham County v. so far as he can without loss to himself. c. b. d. the employee’s rejection of or failure to seek other available 30 . or substantially simiar. to that of which the employee has been deprived. And UCC d. mitigate the damages caused by the defendant’s wrongful act. or humiliation. less the amount which the employer affirmatively proves the employee has earned or with reasonably effort might have earned from other employment.: A plaintiff cannot hold a defendant liable for damages which need not have been incurred. Avoidability of Harm: a. Restatement 350: Damages are not recoverable for loss that the injured party could have avoided without undue risk.McGlone Contracts Rstmt. LA CC 2002: Obligee must make reasonable efforts to mitigate damages. the plaintiff must. When an obligee fails to make these efforts. Luten Bridge Co. The employer must show that the other employment was comparable.
Damages and the Civil Code: a. A term fixing unreasonably large liquidated damages is unenforceable on grounds of public policy as a penalty. Article 2006: Nullity of the principal obligation renders stipulated damages clause null. Neri v. 3.McGlone Contracts Rstmt. The stipulation gives rise to a secondary obligation for the purpose of enforcing the principal one. Penalty Clauses: 1. b. e. The nullity of the stipulated damages clause does not render the principal obligation null. H. b. instead of two sales. UCC §2-719: Generally damages may be stipulated in a contract. Liquidated Damages vs. 2. Resort to a remedy as provided is optional unless the remedy is expressly agreed to be 31 .: Loss profit rule. Retail Marine Corp. Article 2005: Parties may stipulate damages. §366: 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. And UCC employment of a different or inferior kind may not be resorted to in order to mitigate damages. Restatement: a. A retail seller can obtain the loss profit on a sale that he had to make to a subsequent buyer since he only made one sale. §355: Punitive damages are not recoverable for a breach of contract unless the conduct constituting the breach is also a tort for which punitive damages are recoverable.
remedy may be had as provided in this act. Once the clause is determined to be reasonable. Kemble v. settling the amount of damages. And UCC exclusive. Where circumstances cause an exclusive or limited remedy to fail of its essential purpose. It saves the expense and difficulty of bringing witnesses to that point. in which case it is the sole remedy. The court established a three-part test: a. such an agreement fixes that which is almost impossible to be accurately ascertained. Wassenaar v. In many cases. Farren: There is nothing illegal or unreasonable in the parties. Did the parties intend to provide for damages or for a penalty? b.McGlone Contracts Rstmt. in consequence of the nonpayment of a very small sum. the more likely the stipulated damages will appear reasonable. by their mutual agreement. uncertain in their nature. But that a very large sum should become immediately payable. 32 . at any sum upon which the may agree. the doctrine of mitigation of damages is not applicable to determine the damages awarded the nonbreaching party. and that the former should not be considered as a penalty appears to be a contradiction. Is the injury caused by the breach one that is difficult or incapable of accurate estimation at the time of the contract? The greater the difficulty of estimating or proving damages. the damages should not be reduced at trial by an amount that was earned or could have been earned. 5. Consequential damages may be limited or excluded unless the limitation or exclusion is unconscionable. 4. Towne Hotel: Where the stipulated damages clause is a valid provision for liquidated damages.
the courts usually conclude that the parties’ original expectations were unreasonable. And UCC c. If the damages provided for in the contract are grossly disproportionate to the actual harm sustained. 33 . Are the stipulated damages a reasonable forecast of the harm caused by the breach? Looking at the stipulated damages clause form the perspective of both the time of contracting and the time of the breach.McGlone Contracts Rstmt.