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Contracts
St. Louis University School of Law
Walsh, Nancy M.

Intro
Contract – A promise or set of promises that the law will enforce
Promise – a commitment as to the happening or non-happening of some future event. Not all are legally enforceable
Enforcement – an award of damages or some other order by a court of law
Consideration – An exchange of promises, which is necessary for an enforceable contract
Nudum pactum – naked promise; a single-sided promise that is not enforceable under traditional principles of contract law
Scope of the UCC
Article 2 – Applies to transactions in goods
Goods – UCC 2-105(1) – all things (including specially manufactured goods) which are moveable at the time of identification to the contract for sale
Sale – UCC 2-106(1) – the passing of title from the seller to the buyer for a price
Hybrid transactions

Predominant factors test – looks at transaction as a whole to determine whether its predominant purpose was the sale of goods or the provision of a service

a. Pass v. Shelby Aviation
1. Examine the language of the parties’ contract
2. The nature of the business of the supplier of the goods and services
3. The reason the parties entered into the contract (what each bargained to receive)
4. The respective amounts charged under the contract for goods and for services

Gravamen test – looks to the portion of the transaction upon which the complaint is based, to determine if it involved goods or services.

a. Anthony Pools v. Sheehan
1. Pool installed with diving board. Used Gravamen to focus on the diving board only, and it said the board was a sale of goods although the whole transaction was predominately a service contract

Implied warranty
UCC 2-314 (SEE HANDOUT P.465)
Exclusion or Modification of Warranties
UCC 2-316 (SEE HANDOUT P.466)
I. Damages for Breach of Contract
$ to remedy a legal wrong
1. Expectation interest – profit lost by breach – put promisee in position as if promise had been made and performed
2. Reliance – repay expenses paid for – put promisee in position as if promise had not been made
3. Restitution – makes promisee’s benefits null – pay back what was lost in upholding the damages – put promisor in position as if promise had not been made
Tort – Duty: use reasonable care; Damages: compensatory and punitive
Contract – Duty: Terms of contract (what is promised), strict liability; Damages: restitution, reliance, expectation
Reliance similar to compensatory b/c put promisee in position where they would have been if deal not made
Reliance and Expectation sometimes overlap
· Nurse v. Barnes
o Rented for 10l for 6 months, worth 20l a year. Def changed mind and said couldn’t use their mills at all. Thus 500l damages given, b/c plaintiff had bought 500l of iron to use on the mills. This is ok b/c of loss of stock. Special damages – reliance damages.
· Tongish v. Thomas
o Selling sunflower seeds. Market price changed in favor of seller, to seller breached in order to sell for a higher price to s

ntract which one of them has broken, 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 i.e. according to the usual course of things, from such breach of contract itself, or such as may reasonably be supposed to have been in the contemplation of both parties, at the time they made the contract, as the probable result of the breach of it.
· 2 modes of interp: tacit agreement test, or simply forseeing the full damage of breach (forseeable or agreed upon beforehand)
Morrow v. First National Bank of Hot Springs
· Bank said they would call man about when the boxes he had paid for were available
· But this promise was not a tacit agreement (and furthermore it should not be upheld b/c there is no consideration and therefore no contract)
· Must look also at the business itself, what do they do – Bank is not in business of insuring items in people’s houses
· Tacit-agreement test – Proof that both notice was given of special circumstances and that the defendant implied or expressly consented to bearing the risk of these damages
Martinez v. South Pacific Trans