What is governing this contract?

1. Sale of Goods? UCC 1-205 (Movable) + Supplemented by Restatement under UCC 1-103
2. Sale of services or real property? Restatement.
3. Mixed goods/services? Both.

Formation - Was a contract validly formed?

1. Was there an offer?
a. If UCC, was it a firm offer? (signed by merchant to be held open for limited amount of time not over 3
months) UCC 2-205
b. Was it an option contract (need consideration)? Rest § 25 - limits power to revoke
c. Was it a valid offer? (Reasonble terms to exchange something of value)
i. Are the terms reasonably certain? Rest. §33
ii. Is there an invite to accept? Rest. §32
2. Was the offer terminated?
a. If so, how? (Rejection, lapse of time (reasonable standard), death, incapacity)? (Rest. §43 - action
inconsistent) (Rest. §62 - revoke)
b. Was there a counteroffer? (Rest. §50)
3. Was valid acceptance given? That is required. (Rest. §§17 and 71).
a. Oral? Written? Silence? Performance?
b. Did it mirror the offer (if restatement?)
c. Was it a negotiation? Rest. §26; Owen v. Tunison
d. Was it an ad? Lefkowitz
e. If UCC - Under 2-207 - did it reject express and essential terms?
f. Did the parties agree to the same thing? (Mutual Assesnt) Rest. §50; Oswald v. Allen
4. Was there an intent to be legally bound? Rest. §24; Lucy v. Zehmer
a. How was it stated?
b. If no intent = invalid contract Rest. §26; Owen v. Tunison
5. Was their consideration? (Rest. §§17 and 71).
a. Was does each side give? Promise, Act, or forbearance Hamer v. Sidway .
i. Is it a unilateral contract or bilateral contract?
b. Was it only a gift? Kirksey v. Kirksey (gratuitous and not enforceable - no consideration. But argued
both sides - just conditional gift, I guess)
c. Illusory Promise?
i. Does not commit to anything. Unenforceable. Strong v. Sheffield
ii. Is it a satisfaction clause? Must be In good faith Mattei v. Hopper
iii. Is it lacking explicit terms? Can be okay if implied. Wood v. L. Duff Gordon
d. Were there and modifications? Rest. §73
i. Is it allowed? Alaska Packers; Rest. §89 (got rid of pre-existing duty rule); Watkins and Son v.
Caring
1. If goods - UCC 2-209 - can modify as needed
2. Was it from unforeseen circumstances? OK.
3. Did they alter terms sufficientle? OK.
4. Was it for goods? No consideration is required.
ii. Was there a threat or economic duress? Austin Inst. v. Loral (threat in itself not duress)
e. IF NO CONSIDERATION
i. Promissory estoppel? Rickets v. Scothorn; Rest. §90
1. Promise?
2. Reasonably expecting to induce?
3. Justified reliance on the promise? Basically equivalent to consideration
 4. Will this avoid injustice?
ii. If it meets elements - K is enforceable
iii. OR if chairty - §90(2) - Enforceable if elements proven under which a "charitable subscription - But
Maryland National Bank
6. Are there any defenses to contract formation?
a. Statute of Frauds Rest. §110
i. Which category?
1. One year - C. R. Klewin, Inc
2. If for goods - UCC 2-201
ii. Is there a writing? - Enforceable if yes. Rest. §131
1. Multiple Writings can make deal if signed - Crabtree v. Elizabeth Arden Sales Corp
2. Is there an argument to made that it is not?
iii. Was there part performance?
1. If so - can be enforced without writing. Beaver v. Brumlow
b. Mistake
c. Illegality
d. Incapacity
e. Unconsionability
i. Is it an unfair K? Rest. §208; UCC 2-302
1. Absence of meaningful choice? Williams v. Walker-Thomas
2. Uneven bargaining power? Williams v. Walker-Thomas;
ii. Also - can be unconscionable price; Stoll v. Xiong
f. Duress
i. What caused the duress? Rest. §175
1. Improper threat? If no alternatice.
2. Economic Stress? If no alternative. Austin Instrument, Inc. v. Loral Corp
g. Fraud/Misrepresentation
i. Was acceptance induced by untrue assertion?
1. Was intent to deceive? Rest. §162
2. Was it justified?
a. Untrue assertion? Rest. §159
b. Concealment? Only if could not have inspected. Swinton (Caveat Emptor)
c. Nondisclosure? Kannavos
d. Fraudulent? To induce party? Vokes; Rest. §159
3. Was it material?
4. Was it just puffery?

What are the terms of contract?

1. Are there missing terms? Rest. 204; Rest. 202(5); UCC 1-303
a. Price? UCC 2-305
b. Quantity?
c. Duration?
d. Place of deliver? UCC 2-308
e. How should the court interpret these terms? Can look beyond four courners - Frigaliment
i. Courts can fill in the gaps Rest. 202
ii. Hurst v. W.J. Lake & Co - Trade Usage
2. Are any of the terms indefinite? Rest. § 202, Nanakuli/UCC §2-208
a. Formatlistic v. Realist Approach - words cannot specifiy everything
b. Can void depending on if essential terms
 i. Court may establish a meaning
ii. Rest. § 202, Nanakuli/UCC §2-208
1. Text itself, course of performance, course of dealing, trade usage, Contra preferntum (Rest.
206)
3. Are any of the terms ambiguous?
a. If for goods UCC 1-303: Course of performance, court of dealing, and trade usage; Hurst v. W.J. Lake &
Co - Trade Usage
b. Parties have same meaning? Ok. Rest. 201(1)
c. Parties have different meaning?
i. If there is a common, obvious meaning - use it Rest. 202(3)(a)
ii. Can be void for lack of mutual assent. Rest. 201(2) ; Raffles
4. Parole Evidence Rule? Look at chart.
a. Common Law: Fully Integrated - cannot contradict - final statement Rest. 209, Rest. 210,
b. UCC: Partially inegrated - can expand on K UCC 2-202
c. Is there extrinsic evidence before the written agreement?
d. Allowed if about essential term - Masterson v. Sine; (Mistake) Bollinger v. Central
e. Should it be excluded or included? Rest. 215
i. Cannot be inconsistent w/ terms Rest. 213
ii. Needs to be within scope
iii. Does it clarify an ambiguous term? Support unenforceability? Help determine remedy? Rest. 214 -
unless it contradicts - Rest. 215
5. Are there any conditions? Rest. 224
a. Have they been met?
i. If no - not enforced. Luttinger v. Rosen
ii. Why not?
b. It was met?
i. Was it timely? Must be met timely. Internatio-Rotterdam, Inc.
c. Would it be an injustice to not enforce?
i. If yes - Peacock
6. Are there anty warranties?
a. What kind?
i. Is there an explicit guarantee? - Express ? Or just puffery? UCC 2-313
ii. Is it implied from merchant?
1. IWOM UCC 2-314 Koken
2. IWFPP UCC 2-315 Lewis v. Mobil Oil Corporation
iii. Is it disclaimed with plain and clear language? UCC 2-316 South Carolina Electric
iv. Could the buyer have examined the goods? UCC 2-316
7. Interpretation of Terms
a. Contra Preferentum (go against the drafter; Reserve Realty) (Rest. 206)

Have the terms of the contract been performed or has there been a breach?
1. Did the party perform?
a. In time? Kingston v. Preston
2. Did someone fail to honor the contract?
a. Was the breach material? Rest §241:
b. What did the injured party lose?
i. Did they lose faith in other side’s ability to perform? Anderson; Van Halen Example
ii. Was there substantial performance? Jacob & Youngs v. Kent
3. When did breach occur?
 a. Was it an anticipatory repudiation or has the party actually failed to perform?
4. Was it done in bad faith? Rest. §205; UCC 1-304; UCC 1-201
a. Dalton - reasonable expectation to perform
b. Can be preempted - Northwest, Inc.
c. Cannot take opportunistic advantage. Market Street
d. Profits over everything (uber alles) is not OK. Bloor
5. Delivery of Goods?
a. Perfect tender?
i. Does the seller have time to amend? OK to fix.
1. UCC 2-508: Cure by Seller of Improper Tender or Delivery; Replacement; Bartus v.
Ricardi
ii. Did buyer reject or accept?
1. UCC 2-603: Merchant Buyer’s Duty as to Rejected Goods
2. UCC 2-605: Waiver of Buyer’s Objections by Failure to Particularize
What are the remedies?
1. Damages
a. What are the losses?
i. Were any losses avoidable?
ii. Were any losses not foreseeable?
iii. Were losses certain?
2. What kind of damages should be awarded?
a. Did the injured party have reasonable expected benefits pre-breach?
i. Expectation (Default) Hawkins v. McGee; Rest. 347
1. Loss in value + incidental lost - loss avoided = Expectation Damages
ii. Market Value? Peavyhouse
b. Did the injured part rely on K but can’t prove lost profits?
i. Reliance (original place pre-K)
1. Loss incured
c. Did either party get a benefit in the breach unjustly?
i. Restitution (Unjust enrichment)
1. Must have partial performance
d. Did the parties put damages in the K?
i. Liquidated? (Named in contract) UCC 2-718; Rest. 356
e. Should parties get profits taken away?
i. Disgorgement US Naval
ii. Generally no punitive K in contract law White v. Benkowski
f. Under UC
i. Tongish v. Thomas; UCC 2-713
ii. Neri UCC 2-708
3. Is specific performance appropriate? Morris v. Sparrow
a. Is it a contract for personal services? Not appropriate remedy.
b. Specific performance appropriate when answer is yes to all of the following:
i. Are other damages not appropriate?
ii. Are terms of K definite enough?
iii. Would enforcement not be too burdensome?
c. Are the goods unique? Appropriate. UCC 2-716
Additional:
- Freedom to K
- Arguello v. Conoco, Inc; 42 U.S.C. § 1981
- Charity v. Denny’s Inc.
Governing Law
The Common Law governs contracts for services/real estate. This contract was for_________ Thus, the common law controls.
involves the sale of

The UCC governs contracts for the sale of goods. Goods are defined as movable objects. This contract involves the sale of
__________,. Because _______are goods, the UCC will govern this contract.

The issue is whether there is a valid contract. There are three requirements of a valid contract: offer, acceptance, and
consideration.

Firm offer?
Under the UCC firm offer rule, a signed, written offer to buy or sell goods that expressly states it will remain open is irrevocable
for the stated period of time. The firm offer rule applies when the seller is a merchant and the offer is in writing and signed by him.

Acceptance
An acceptance is an agreement to be bound by the terms of the offer.

Under the common law, the acceptance must mirror the offer.
Under the UCC, however, any seasonable assent to the offer is a valid acceptance

Consideration
To be valid, the contract must be supported by consideration. If there is no consideration, the contract is not enforceable.
Consideration is a bargained-for exchange of legal detriment or benefit. Here, the contract is/is not supported by consideration.
_______ offered _________. In exchange, _______ agreed to _______.

Statute of Frauds
A contract might not be valid because of some Defense to formation, such as the Statute of Frauds, Mistake, Illegality, Incapacity,
Unconscionability, or Duress/Fraud.
The Statute of Frauds requires certain contracts to be in writing signed by the party sought to be bound to be enforceable. For
instance, contracts for the sale of goods over $500 have to be in writing, as do contracts in contemplation of marriage. Here
_______, thus the statute of frauds is applicable.

Parol Evidence Rule

When the parties to a contract express their agreement in a final writing, other written or oral expressions, made prior to or
contemporaneous with the writing, are inadmissible to alter the terms of the writing. Parol evidence is admissible to interpret the
terms of a contract where there is an ambiguity or for other exceptions.

Contract Modifications
Modifications are valid under common law so long as there is consideration provided. Under the UCC modifications are valid
between merchants without consideration so long as they enter into the modification in good faith.
Here, _________. Therefore, ________.

Express Conditions
Express conditions must be strictly complied with and complete performance is required. If ________ did not comply with
_________, _________ breached its agreement with _________ unless performance is excused or discharged.

Breach
A breach occurs when one of the parties to a contract does not perform and that performance was not excused. In this case,
_________ breached/did not breach by ________ when _________.