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Contracts
University of Dayton School of Law
Dickinson, Martin

Contracts Outline

I. Is there a common law = services or UCC = goods contract
II. Remedies for breach
a. Damages
i. Reliance (restatement only)
1. Put the injured party in the position they were in before the contract.
2. Used when
a. It is impossible to measure the plaintiffs expectation interest accurately, or
b. The plaintiff recovers on a promissory estoppel theory
ii. Restitution (restatement only)
1. Put the breaching party in the position they were in before the contract (limited to the benefits conferred on him by the injured party)
2. Used when
a. A non-breaching plaintiff has partially performed, and the restitution measure is greater than the contract price, or
b. A breaching plaintiff has not substantially performed, but is allowed to recover the benefit of what he has conferred on the defendant.
3. Seller fails to make delivery or buyer rightfully rejects, and if the breach goes to the whole contract, the buyer may cancel and whether or not he does so, may recover so much as he has already paid
a. Cover and have damages whether or not they have been identified
b. Recover damages for non-delivery
i. Difference between market price at the time when the buyer learned of the breach and the contract price together with incidental and consequential damages
4. If goods have been identified, recover them
5. On rightful rejection of acceptance, buyer has a security interest in goods in his possession or control for payment made on their price and any expenses incurred in their inspection, receipt, transportation, care
iii. Expectation (restatement and UCC)
1. Put the injured party in the condition they would have been in, had it worked
2. Measure of Damages (in general)
a. Subject to the limitations
i. Damages are not recoverable for loss that the infjured party could have avoided without undue risk, burden or humiliation.
b. The injured party has a right to damages bases on his expectation interest as measured by a right to damages based on his expectation interest as measured by
i. The loss in the value of the other party’s performance caused by its failure or deficiency, plus
ii. Any other loss, including incidental or consequential loss, caused by the breach, less
iii. Any cost of other loss that he has avoided by not having to perform
3. Damages = Cover $ – Contract $ + Incidental and consequential damages + amount already paid
4. Section of UCC 1-7 / This is the only remedy under UCC
a. Cover: After a breach, buyer may cover by making in good faith and without unreasonable delay any reasonable purchase of or contract to purchase goods in substitution for those due from the seller
i. The buyer may recover from the seller as damages the difference between the cost of cover and the contract price together with any incidental or consequential damages, but less expenses save

formance
i. Specific performance may be decreed where the goods are unique or in other proper circumstances
ii. The decree for specific performance may include such terms and conditions as to payment of the price, damages, or other relief as the court may deem just
iii. The buyer has a right of replevin for goods identified to the contract if after reasonable effort he is unable to effect cover for such goods or the circumstances reasonably indicate that such effort will be unavailing or if the goods have been shipped under reservation and satisfaction of the security interest in them has been made or tendered.
III. Definition
a. A contract is a promise or a set of promises for the breach of which the law gives a remedy, or the performance of which the law in some way recognizes as a duty
b. UCC: Statute that deals with the sale of goods (binding)
c. Restatement: Applies to non-goods contracts (persuasive)
IV. Contracts
a. Output Contract: Agree to buy/sell all output
b. Requirement Contract: Agree to buy/sell all input needs
c. Option Contract: Holds the offer open (must have consideration)
d. Competitive Bid Contract