1. Which law governs?

a. Was it a sale of a movable goods, in which case the UCC governs, and if not, common law
governs. The facts here indicate…
2. Who are the parties: Who is suing whom for what? What do both parties want?
3. Is there a contractual obligation?
a. To form a valid contract there must be mutual assent (offer and acceptance) and consideration.
b. K : need mutual assent and consideration
i. Was it implied in fact?
1. inferred from parties’ conduct in whole or in part. P gets expectation damages
ii. Was there an offer? An offer is a manifestation of willingness to enter into a bargain so
as to justify another person in understanding that his assent to the bargain is invited
and will conclude it (Restatement 2nd Contracts 24 (24))
1. Do they want a contract or opportunity/invite to enter into a contract? 24,26
2. Did offeror send it out as a form letter, or send to a specific person? meant for
preliminary negotiations, intention to be bound? did not give rise to offer so did
not have opp for acceptance? (Lonergan)
3. Does offeree have reason to believe it was an offer?
4. Certainty: he state the essential, definite terms and the price?? 33
a. Ads are invitations but rewards programs are offers bc invite
performance – (Sateriale)
b. Did offeror benefit from part performance?
5. can offeree only accept by the sought after performance?
a. Then unliteral. If exchange of promises it is bilateral
6. Offer – 2-204 and 2-206
a. generally formation under UCC. – loosely governed, can be formed in
many ways. Consistent with common law
b. 2- 305 – concerns what terms are specified in contact – price terms are
open under UCC. Market value used in those circumstances.
iii. Option contract – is promise to keep an offer open, conditioned upon completion
1. Cannot revoke or modify
2. Option contracts with consideration – accepted by tendering performance –
Cook v. caldwell says SUBSTANTIAL performance (45)
a. But offeror’s duty is conditional upon completion of invited performance
3. makes offers irrevocable AND CANNOT MODIFY THEM, to hold open without
consideration or reliance for 3 months– UCC 2-205
4. MAILBOX RULE DOES NOT APPLY TO OPTION CONTRACTS, IT NEEDS TO BE
RECEIVED TO BE ACCEPTED
iv. Was there Revocation? 42, 43 – indirect communication
1. Unambiguous land or conduct inconsistent with intent to contract. Freely
revocable ANYTIME PRIOR TO ACCEPTANCE if offeror has promised to keep it
open as long as offeree finds out from offeror or 3rd party.
2. Unless : began performance/ Option contract w/ sep consideration keep it open
3. makes offers irrevocable – UCC 2-205
v. Was there acceptance? An acceptance is a manifestation of assent to the terms of the offer.
1. If no offer, nothing ot accept on time – Lonergan
2. Master of offer grants the offeree power of acceptance
a. 30 By performance, or promise, unless stated it invites in any manner
then tendering performance is acceptance 62
b. Can be express or implied – as long as complies with terms of offer

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 c. 69 - Can be silent acceptance if offeree takes the benefit, or have previous
understanding that remaining silent is assent
3. Has to know about the offer at time of acceptance, can’t say performance counts
as acceptance after you performed and after you learned about the offer.
4. If an agent acting in scope of authority accepts, it is imputed to his principal
5. Mirror image rule : If it does not mirror offer, it is a rejection and counter offer
6. You have duty to read before you sign (Eurice)
7. 63- Mailbox rule : it is considered accepted at the time offeree send it, not at the
time it is received. Lonergan
vi. Agreement to agree later : like oral conversation that result in a written contract later
1. Whether parties intend to be bound
2. Walker v. keith – court decline to fill in gap or enforce agreement if no
mechanism to determine the rest of the terms like formula
3. Different than formal contract – need to note specific method or formula to
determine future K terms ; not enforceable if didn’t agree on standard
4. Show intent to be bound: with timing, commitment language, cancellation clause,
definiteness/detail of prices/goals.
5. Formal contract contemplation: Quake principles of enforceability, if parties
intend to reduce their agreement to writing:
a. Agreement usually in writing, detailed, how much money concerned,
requires formal writing, negotiation indicate formal doc contemplated?
6. Are they bound to work TOWARDS a contract rather than enforce this one?
vii. Was there rejection?
1. Everything except acceptance has to be received to be effective
2. Can take actions inconsistent with acceptance
viii. Was there a counter offer?
1. Normile if not mirror image – changing payment/deposit/interest rate
2. 59 - Qualified or conditional acceptance terminates OG offer and power to accept
OG offer and creates counter offer
ix. ACCEPTANCE OR COUNTER OFFER Under UCC 2-207 additional terms in acceptance
1. Rolling approach avoids 2-207 all together by saying consumer opening and
retaining the terms is acceptance.
2. 2-207(1) : this was acceptance because it indicated assent, even though
contained add’l terms. If not because under Klocek approach, go to 2-207(3)
a. acceptance or counteroffer? Allow offeree to add additional terms unless
acceptance is conditioned on offeror’s assent to the additional terms
3. 2-207(2) : if it was an acceptance but different terms, what terms control?
a. If both merchants, then additional terms become part of K UNLESS
b. 1. Offeror expressly limits acceptance to the terms of the offer
c. 2. If additional terms materially alter the deal: surprise/hardship
d. 3. Offeror objects to new terms in reasonable time
4. 2-207(3) : under Klocek approach, counteroffer, never a K, but parties perform
like there is a K so compare the overlapping terms and those become the new
agreement.
a. If first one was not acceptance, this counter offer could still be accepted
x. Battle of the forms? KLOCEK APPROACH –
1. Two forms with different elements, do they have an agreement? Between
merchants UCC 2-207
2. not on seller’s preferred terms, up to consumer to decide if applicable or not
xi. Was there objective Mutual assent?
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 1. Handshake is an objective manifestation of assent -
2. offer read as reasonable person would read it or HAD REASON TO KNOW; intent
is irrelevant (Lucy v. Zehmer joke – ignorant party’s meaning prevails.
3. Both the offer and acceptance must be stated in a way that makes it clear to
another reasonable person that the parties have reached an understanding as to
the terms of the agreement.
4. 20/201 if asymmetry had reason to know– ignorant party’s meaning prevails.
5. 20 -If parallel ignorance or awareness – neither party prevails, no MA (Peerless)
6. Mutual assent– 2-206
xii. Another requirement for a contract is Consideration, under R71 defined as a bargain for
exchange of something sought. a performance or return promise
1. Must be bargained for exchange – doesn’t require negotiation (Pennsy)
a. Can’t be something they were obligated to do already, has to be extra
2. What was sought in exchange for this promise?
a. Can be performance, forbearance, promise,
b. Exact motive is not essential – is there a real deal?
c. can be given to/from other parties than promisor/promise
d. Consideration is checked as a box.
e. Berryman v. kmoch – wanted to pay $10 for option contract for opp to
buy land, but he never paid the $10 so no option –was consideration
requested, so preparing to buy the land was not sufficient consideration
f. Hamer –a promise of money in return for promise give up drink smoke
3. Not consideration
a. Sham consideration Dougherty “this is consideration” not it was a gift
b. past consideration – consideration must be intended as part of this
exchange and past actions cannot include this promise like check for past
actions -Plowman ,
c. nominal – I don’t want this consideration it’s a gift plus a dollar
d. illusory, I may do it I may not, theres a chance that I will
4. preexisting duty rule
a. need new consideration for each modif unless unforeseen circumstances
or it materially alters parties’ duties to constitute consideration
5. Not concerned with adequacy unless grossly inadequate 71 and the Dohrmann
your fortune for your last name being my son’s middle name
xiii. Shrink-wrap
1. Layered/rolling/Easterbrook – sellers and courts prefer this
a. Seller is the offeror – retention of packaging with terms and conditions
is acceptance by buyer. Overlook previous terms of K before offer
b. Terms are not addition bc in package when received an accepted
after reasonable amount of time - that’s the offer
c. Defontes v. Dell – accepting product means accepting terms under 2-204
conduct by both parties recognize existence of contract, and returning it
constitutes a rejection
d. Dye v tamko – agents retaining them on behalf of principal is acceptance,
there ewere big letters on each wrapped shingle, opening them and
keeping for 30 days is acceptance
2. Klocek nonlayered – consumers prefer BUT MINORITY approach to shrinkwrap
a. Buyer is the offeror when they place the order, seller accepts when
accepts payment or shipped the good.

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 b. Terms bundled with shipment are additional bc come after transaction
finalized. – anything not on website is a proposal!
xiv. Browse-wrap
1. Long v. Provide commerce: KEY FACTORS: Adequate notice of proposed terms?
Meaningful op to review the terms? Indication that specific action will assent to
those terms? Action by user to assent? - click wrap he had to click on it!!
2. Specht bright line test: reasonably prudent user would see terms and
understand assenting to them
c. Promissory estoppel
i. Do you have an offer?
1. Free to revoke/withdraw before accept
2. Accepted Offer not meant to become a promise until consideration is received,
but can still rely on, sub can withdraw bid at anytime under K rules, PE can be
used DEFENSIVELY - Baird
3. Contractor/SC usage – 87(2) Drennan – OFFENSIVE: OFFEROR RELIED
a. Reasonable reliance that promisor expects is irrevocable for certain
period of time – GC rely on SC bid to prepare it’s own bid
ii. If no offer, REST. 90(1)
1. Was there a promise? Explicit or implied by conduct like in Harvey help her
build the house and pick out documentation
a. Pop cones - Promise to negotiate in good faith, promise to inform of
material changes – BUT ALSO EXPLICIT INSTRUCTION DO NOT RENEW
LEASE” lead to reliance. Series of assurances deal will be struck
b. in Aceves with the loan – made a promise to negotiate towards a solution,
she relied and LOST HER CHANCE at a different solution
c. pop cones – “don’t worry, we’ll work this out soon” and then did not
2. Could promisor reasonably expect promise to induce reliance?
3. Was the actual reliance to the promisee’s detriment
4. Does justice require enforcement of the promise? Like in Katz where he could
not engage in fulltime job bc he gave iit up in reliance on pension, give up right to
continue employment
iii. Was it a charitable pledge? 90(2) just need to show probability of reliance king
iv. PE enforce assurances made during K negotiations if parties don’t end up forming K,
harder to establish reasonableness of reliance though
d. Restitution?
i. Implied in law/ Quasi contracts –
1. general rule of K do not apply to them.
2. obligation crated by law without regard to either party’s assent. Rest on legal
fiction of justice and unjust enrichment
ii. Non-promissory restitution?
1. Did P confer a benefit on the D?
2. D has knowledge of benefit, accepts and retains it
3. Would be inequitable for defendant to retain benefit without paying fair price
4. Exhaustion of remedy – go to GC before going to the boss (Commerce v. Equity)
5. Were benefits part of contract or emergency rescuers? Does D benefit itself/have
an interest?
a. Acted unofficously with intent to charge after, necessary to prevent
others from suffering harm or pain, did not know person would not
consent, impossible for consent bc impaired – PELO
iii. Promissory restitution 86
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 1. Promise based on previous and recognized material benefit from P to D?
a. (Mills it was the dad who promised but benefit was to the son)
2. Enforcement necessary to prevent injustice?
3. Moral obligation sufficient if
a. If you promise to pay for prior action it is effect of promisor request for
that action and serves as functional equivalent of consideration
b. Webb saved Mcgowin form death/bodily harm to his own harm so
McGowin agreed to pay him stuff
4. I want to void my contract. How do I do it?
a. Do you have a K? 110 Is it under the SOF? – affirmative defense
i. Is it under one of the categories that mandates writing:
1. Executor/admin/ Suretyship/ Marriage
2. Conveyance of Land
3. Cannot be completed within one year must be written
4. Sale of goods $500 or 500 quantity
ii. If within, comply with statutory writing requirement? Does not have to be K itself
1. Can use PER – must contain essential terms and signature, several writings ok
2. §131 – 1. Reasonably identifies the subject matter of contract, 2. indicates that a
K was made between parties or offered by signer to the other party; 3. And
states with reasonable certainty the essential terms of the unperformed
promises in the contract
a. Crabtree the payroll cards pieced together contained the essential terms
3. §134 - Need signature of party to be charged with enforcement– symbolic
signatures are fine
iii. If within and not sufficient writing is there an exception?
1. 129 part performance for paying for land
2. Part performance can only be explained by existence of a contract – beaver v.
Brumlow had poured concrete foundation, built deck, had electric install, even
though did not meet writing requirements only had verbal agreement
3. If you can’t establish an R90, its hard to establish a 139 PE exception to SOF –
can apply to K’s (Alaska v. Rice- clear and convicing evidence of promise stand in
for absence of writing, requires substantial reliance. See outline for factors
page 12
b. Was it an agent acting for a principal?
c. Is there something wrong with the terms?
i. AMBIGUOUS? Principles of interpretation - SEE OUTLINE FOR DETAILS page 12
1. Text oriented
a. Resolve ambiguity against person who drafted agreement (Joyner v.
Adams)
2. Intent oriented – chicken case
3. Extrinsic evidence of intent – see UCC
a. Course of performance,
b. course of dealing – did one party accept it in a previous contract?
c. trade usage –one party not have as much trade knowledge – chicken case
4. Principles not related to intent
5. Favor public interest
ii. Parol evidence – 213 on prior agreement , 214 on negotiations
1. what is level of integration? : Complete, Partial, or not. Can use PE to determine
a. Thompson v. libby classical approach don’t use PE to tell level 4 corners
b. Taylor v. State Farm- use the evidence to tell the level of integration
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 2. What is the permissible use? NOT for any complete and final terms
3. What are the exceptions?
a. Does not cover what invalids the contract – lack of consideration, fraud,
duress, illegality (Sherrod – can use fraud exception if it doesn’t concern
subject of contract bc completely integrated
b. Does not cover agreements after final agreement
iii. Implied obligation of good faith:
1. No party should unreasonably frustrated purpose of K (Seidenberg – sold stocks
to bank who let the profits tumble so did not get bonuses – bad faith)
a. When contract does not provide a term necessary to fulfil party expect
i. Implied terms : tailored default by courts what you would’ve
added. reasonable effort is implied (wood lady duff)
b. When bad faith serves as pretext for exercise of K right to terminate
i. Look at nature of alleged breach and commercial context
c. When K expressly provides party with discretion regarding performance
i. Like satisfaction clause – MORIN GM Wall
ii. Satisfaction of obligor is about functionality – objective 228
2. Output contracts – see page 14
3. To show bad faith have to show that D intended to harm or is actining in
violation of commercial reasonable standard. – locke v. warner just obligated to
review her stuff not obligated to produce it.
d. Was there something wrong with the bargaining process?
i. Duress – 174-176
1. Assent induced by physical compulsion with no reasonable alternative : K void
2. Assent induced by economic compulsion/improper threats with no reasonable
alternative: K voidable
a. Economic duress: going to go bankrupt and not its own fault (totem)
b. Threats of crimes or torts or criminal prosecution
c. Bad faith threats of lawsuits
d. Threats which breach duty of good faith under existing K
e. Threats which are malicious/ intended to only to hurt other party
ii. Undue influence 177 (Odirizzi –teacher forced resign threat publicity, at home, night)
1. unfair persuasion or excessive pressure, + either domination or confid relation
2. no reliance required
3. Markers: inapp, time location, pressure to sign now, no access to advisors
4. remedy: UI by other party: voidable // UI by 3rd party: voidable unless other
party didn’t know, acted in good faith AND relied on transaction
iii. Misrepresentation 162
1. Elements:
a. Misrep of existing fact (Syvester – you’re gonna be an Olympic dancer)
b. fraudulent intent or materiality of misrep
c. justifiable reliance
d. that induces recipient assent
2. opinion can be misrep
3. nondisclosure is misrep if (Hill v. Jones – termites, covered it up)
a. D has knowledge of material fact and fails to disclose, P relied on D to
communicate those facts, and P sustained damages as result of nondis
b. Consider intelligence of parties, relationship, manner info was acquired,
fact discoverable, materiality, active concealment
4. Park 100- Fraud – misrep with bad intent, reasonable reliance and loss
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 5. remedy: rescission avoid enforcing K OR restitution
iv. unconscionability : 208 at time K was formed
1. procedural : lack of meaningful choice (Walker furniture)
a. consider relative sophistical of parties – Higgins drafted by tv defendant
b. adhesion K not guaranteed bad but is factor - Higgins
2. substantive: unfair one-sided terms
a. only binds one side? )Higgins children – only “I agree”
b. uCC: is it a common clause or term? Fairness in light of commercial
background and needs?
3. Remedy: may enforce K without unconsc term, or limit applic of uncons term
4. Unconscionability - 2-302 factors
5. I don’t want to do what I agreed. How can I avoid performance?
a. Was there a mistake about the facts? 151-154
i. Mutual mistake means K is voidable/up for reformation if
1. Both parties mistaken about basic assumption – Lenawee septic tank
2. Mistake had a material effect on performance
3. Effect was adverse to the party claiming mistake
4. Party claiming mistake did not bear the risk
ii. Unilateral mistake means K is voidable if
1. All 1-4 elements but for one party - BMW mistakenly sent it to collection
2. PLUS any of the following
a. Mistake makes enforcement unconscionable
b. Or other party had reason to know of mistake
c. Or mistake was other party’s fault
iii. When does party bear the risk?
1. 1. K allocates the risk 2. Party knew they had limited knowledge about risks but
proceeded anyway 3. Court assigns risk
b. Have circumstances changed?
i. 261 Impracticability means non-performance is excused if
1. Extreme and unreasonable difficulty in completing performance
2. Difficulty was caused bc an event happened that contradicted a basic assumption
of the K
3. Difficulty couldn’t have been prevented by reasonable diligence
4. Party seeking to avoid performance did not bear the risk
5. NOT IMPRACTICABLE IF
a. Parties could have foreseen, parties allocated the risk in the K like market
changes (hemlock), party asking for rescission is at fault
ii. 262,3,4 Impossibility – means non-performance is excused if
1. Performance is actually impossible like death/incapacity of necessary person or
destruction/deterioration/nonexistence of necessary thing
iii. 265 Frustration of purpose means non performance is excused if
1. Principal purpose of K can no longer be satisfied, nonoccurrence of supervening
event was basic assumption of K when made. So if can still use a shed to hold
chemicals just not one specific one, not frustration – mel frank
iv. Clauses excusing nonperformance for changed circumstances can be effective as long as
they are specific enough
c. Can you modify contract? 89, 73
i. YOU need new consideration unless changed circumstances and the modification is fair
and equitable (Alaska packers – can’t just request more money for the same obligation
ii. SOF : Each modification is a new K so check to see if the SOF applies
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 iii. Good faith and fair dealing?
1. Unreasonable request to modify can be bad faith
2. Unreasonable refusal to negotiate can be bad faith
iv. Satisfaction
1. Offer lesser performance as modification. If other party accepts, then they’ve
released the first party from all further obligations
v. Modification of K - 2-209 - not required new consideration to be binding
6. Consequences of nonperformance. What now?
a. Did an express condition fail? “until” “unless “upon completion of” “if”
i. If yes – EFFECT: party it protects can discharge its duties but cannot sue for damages
ii. Excuse or waiver? (Enxco)
1. Temporary Impracticability, disproportionate forfeiture, prevention , waiver
iii. Waiver of condition 84
1. Protected party can waive condition – if both conditioned then either can invoke
nonoccurrence as grounds for own nonperformance
2. Waiver can be retracted unless
a. There was consideration for the waiver – it was another K
b. Or the other party relied – PE
b. If cannot establish express condition, Was there a breach of promise?
i. Has the breaching party substantially performed?
1. Yes – it fully performed – then other side must perform
2. 240 Yes – breach is partial at most unless repudiation, can only sue for damages
but still has to perform.
3. 241, 242 No, breach is material or total
4. Material: can suspend performance to see if cured, can sue for damages
a. How much nonbreaching party is deprived of value from K – Jacob and
young wanted that specific kind of pipe but would have to redo house and
not worth it, same utility as pipe in house
b. Likelihood breaching party will cure breach – give them opp to cure –
stockholder case
c. Whether breaching party acted in good or bad faith
d. Whether suspending K will cause forfeiture for breaching party
5. Total: duties are discharged, can sue for damages
a. If breaching party failed to cure within reasonable time – sackett v.
spindler, multiple checks bounce and not gonna be able to pay
b. If on time performance was important – of essence, clear language in K
ii. Is there repudiation 250 ? just need definite act (buying different plot of land – Truman)
/statement to make it unambiguous
1. 251 – failure to give assurance may be treated as repudiation
2. Yes – EFFECT: total breach, discharges other parties’ duties and can sue for
damages 253
3. Can retract until 256 Other party gives notice they’re making it as final Or other
party materially relies on repudiation
7. I want my damages!
a. You should consider all three types of damages where appropriate, while recognizing
that the plaintiff can recover only the most favorable one.
b. Expectation – from after K form and breach but before completion
c. 347 ED:
i. LV to him of the other party’s performance caused by failure
ii. + any other loss including consequential loss caused by breach
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 iii. – any cost or loss he has avoided by not having to perform
iv. Almost always insufficient for real property
v. Actually expected – they expected Luka and her price, did not bargain for extra service
of new teacher so damages measured against that.
vi. Special case: Construction: LVP either (American standard)
1. Cost of completion K for personal use
2. Diminution in market value K for commercial use – preferred
vii. Consequential damages – caused by the breach
1. 351 FOS – were damages reasonably FOS when K was formed?
a. Hadley special circmstnc need awarenss or else not held to that standard
b. GTW knew florafax would lose bellerose as a client when GTW breached
2. 352 Certainty: are damages reasonably certain or too speculative?
3. Causation: can you show but-for and prox cause?
4. If contract excludes them then no consequential damages awarded
viii. Mitigation – stop damages from flowing – p must make reasonable efforts (Luten bridge
stop working bc create greater damages after repudiation )
1. Employment contracts see outline
ix. Cannot recover with exceptions: Attorney fees, punitive damages, ED
d. Alternatives
i. 349 Reliance – from after K form but before breach
1. What did P do because of K? fallback for when cant prove expectation with
reasonable certainty bc not certain profits (HighTower) deduct any loss P would
have suffered with reasonable certainty if K was performed
a. Easiest: part performance : must be able to prove (Toyota – guy bought
plot of land bc promised “youre our dealer” and then no K)
b. Middle : prep for performance, FOS to D that P would do this
c. Hardest: foregone opportunities D must have reason to know of amount
ii. 373 Restitution
1. K is no longer relevant, how did D benefit from K?
a. FMV of services provided OR if exceeded FMV, then actual amount
b. D can also argue restitution to lower damages
c. Most applicable WHEN SOF makes it unenforceable, voidable bc of
mistake/misrepresentation, discharged due to change circumstances
(Algernon Blair-navy construction)
iii. 359 Specific performance
1. Adequacy – Only if damages ordered would not be adequate to protect the
interests of injured party
2. Definiteness –
a. Difficulty of proving damages with certainty 360
b. Difficulty in procuring a suitable substitute (City stores – one side argues
all land is the same, its not unique, other side argues each mall is unique)
c. Cant do for services because make them indentured servant
3. Unfair hardship to D/3P considered 364