Approaching Exam Questions
– Call of the question
– Parties involved (who can sue whom)
– Law (Which contract laws apply?)
o UCC
o Contract Formed
§ Offer
§ Acceptance
§ Consideration
§ Mutual Assent
o Statute of Frauds
o Inconsistent Terms
o Promissory Estoppel
o Remedies
o Policy
– Facts (Applied to the analysis of law)
– Policy (How/why this plays out in the court system)
GENERAL PRINCIPLES
– Tortious Interference with a Contract
o Under MD law, a plaintiff claiming intentional interference with contractual relations generally must establish that:
§ A contract existed between plaintiff and third party
§ Defendant knew of the contract
§ Defendant intentionally induced the third party to breach or otherwise rendered performance of the contract impossible
§ Interference was wrongful or without justification
§ Contract was subsequently breached or terminated by the third party
§ Plaintiff suffered damages as a result
UCC ARTICLE 2 SALE OF GOODS
– UCC 2-105 defines goods as:
o All things movable at the time of identification to a contract for sale
o Future goods, specially manufactured goods, unborn young animals growing crops
o Excludes information that is not incorporated into a tangible product
– Merchants and Article 2 (Article 2 still applies, some special standards apply when dealing w/ merchant)
o UCC 2-104(1) defines merchant as:
§ A person that deals in goods of the kind or otherwise holds itself out by occupation as having knowledge or skill peculiar to the practices or goods involved in the transaction or to which the knowledge or skill may be attributed by the person’s employment of an agent or broker or other intermediary that holds itself out by occupation as having the knowledge or skill
– Duty of Good Faith in Article 2
o UCC 1-304
§ Every contract or duty within the UCC imposes an obligation of good faith in its performance and enforcement
· Merchant held to higher standard, must be honest in fact and observe reasonable commercial standards of fair dealing in the trade
– What to do when there is a contract for goods and services
o 2 Tests (It is possible for a state to adopt both)
§ Gravamen Test (MD)
· Looks to that portion of the transaction upon which the complaint is based, to determine if it involved goods or services
· Where consumer goods are furnished as part of a commercial transaction, they retain their character as consumer goods after completion of the performance, and if a defect in the goods causes monetary loss or personal injury, Article 2 should apply to that claim, even if it would not apply to the transaction as a whole
· Policy
o Protecting consumers from defective products would be undermined by applying the predominant purpose test, because it would preclude such protection where defective goods were supplied as part of a service
§ Predominant Purpose Test (Majority)
· Looks at the transaction as a whole to determine whether its predominant purpose was the sale of goods or the provision of a service
· The party seeking application of the UCC bears the burden of proof to show that the predominant purpose of the contract was the sale of goods
· Factors to consider:
o Language of the parties
o Nature of the business
o Reason why parties entered into the contract
o Respective amounts charged for goods and services
CONTRACT FORMATION
Offer
– 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
– Elements
o Assent/Intent to enter into a bargain
§ Can be oral/written/implied
§ Objective
– Definiteness
o No K if: indefinit
pecified by offer
· If no time specified, “reasonable time” based on circumstances
§ Revocation of the offer (any time before acceptance as long as it is communicated or learned)
– Offer can only be accepted by the person to whom it is addressed
o There must also be knowledge of the offer
o 3rd party may not accept an offer not directed to him
o Not even where 3rd party buys business that had a prior offer open
o When offer is directed at a group of people:
§ Any person learning of the offer has power to accept
§ Acceptance by one person terminates the power of every other person to accept
– Silence as Acceptance
o Generally not a valid acceptance, but there are exceptions:
§ Where offeree (1) takes benefit of offered services (2) with reasonable opportunity to reject them, and (3) had reason to know they were offered with expectation of compensation
§ Where offeror (1) Terms of offer indicate that assent may be manifested by silence, AND (2) offeree intends to accept by silence
§ Where because of previous dealings or otherwise it is reasonable that the offeree should notify the offeror if he does not intend to accept
· Ex. Monthly delivery of wine
o Purpose of the Rule
§ Protect the offeree from imposition (enforced duty)
o Hardships on the offeror
§ An offeror who invites acceptance by silence assumes a risk of uncertainty
§ If the offeree wishes to accept by remaining silent, they may rely on this as a valid acceptance, since it was authorized by the offeror
