Contracts- Walsh (Fall 2007)
I. U.C.C. v. Restatement 2nd of Contracts
a. U.C.C.
i. Article 2-governs sale of goods… “goods”-all things which are movable at the time of the contract for sale
1. Pass v. Shelby Aviation TWO RULES to determine whether a contract was for the sale of goods
i. Gravaman Test: Looks to that portion of the transaction upon which the complaint is based to determine whether it was goods or services
ii. Predominant Factor Test: Looks at the transaction as a whole to determine whether its predominate purpose was the sale of goods or the provision of service
2. Custom Communications Engineering, Inc. v. E.F. Johnson Co.
-H: The court held that because this agreement b/w the two parties was a dealership or distributorship, the predominate purpose of which was not the “sale” of goods, but to provide a service facility for customers who have purchased these products, thus this agreement does not fall under Article 2 of the UCC.
J.O. Hooker & Sons v. Roberts Cabinet Co.
-H: The court held that although the transaction did involve a sale of goods, the dispute in the case actually involved the performance of services and the delegation of duties under a contract
-The court awarded expectation damages to the P, including the lost profit from the deal, and expense that P incurred in manufacturing that they were unable to mitigate
b. Differences
i. Article 2 is the law, greater force then precedent
ii. Restatement is persuasive secondary authority
c. §2 Promise (oral, written or inferred from conduct): a manifestation of intention to act or refrain from acting in a specified way so made as to justify a promise in understanding that a commitment has been made
i. Agreement: manifestation of mutual assent on part of 2+ people
ii. Bargain: agreement to exchange promises or to exchange a promise for a performance r to exchange performance
II. Damages
a. Expectation, Restitution, Reliance
i. §347:
1. Subject to the limitations stated in 350-353, the injured party has a right to damages based on his expectation interest as measured by:
a. The loss in the value to him of the other pa
i. Calculate lost earnings
ii. Emotional distress damages (usually can’t get in contract cases) for his lifetime of embarrassment and
iii. Incidental costs for having to visit doctors for years … consequential damages
iv. LT pain and suffering (ST not included bc would expect in surgery)
5. Tongish v. Thomas
a. “‘The court decides to award the difference in market value and contract price for the seeds ($10 per hwt) rather than lost profits ($.55 per hwt).
b. Damages for seller’s non-delivery
c. Want to encourage the initial contract by protecting the parties expectations
Reliance (Back to before there was a contract (reward costs incurred by honest party)
