Contracts Outline

Contracts Outline

Fall 2017

Professor Coenen

Contract and Related Obligation: Theory, Doctrine, and Practice (American Casebook Series), 7th Edition, Summers, Hillman and Hoffman

ELEMENTS OF CONTRACT

Offer
Acceptance

Duration of Offers
Agreements to Agree and Indefiniteness

Consideration

Consideration
Forbearance
Mutuality

CAUSES OF ACTION

Promissory Estoppel
Unjust Enrichment
Implied-In-Fact Contract
Past-Benefit Promises
Obligation from Tort
Obligation from Form
Breach of Warranty
Statute of Frauds

REMEDIES

Expectancy
Reliance and Liquidated Damages
Restitution
Specific Performance and Option Contracts

DEFENSES

Duress and Modifications
Misrepresentation
Incapacitation and Public Policy Limits
Unconscionability
Parol Evidence Rule
Interpretation and Past Practice
Gap Fillers
Good Faith
Conditions

CESSATION

Mistake
Impossibility, Impracticability and Frustration of Purpose

Terms to Know

A fortiori Argument- drawing a conclusion that is more convincing or obvious than the one just drawn
Common Counts?
Executory Contract- a contract that is not yet fully performed- this impacts the remedy available
Illusory promise- a statement that promises something but doesn’t commit the promisor
Indemnity Clause- a clause in which one person agrees to shift potential costs from one party to the other
Quantum Meruit
Quasi-Contract
Unjust Enrichment
Restitution
Expectancy
Reliance
Discrete v. Reliance Agreements – Discrete- one or a few times; relational- extends into the future
Merger Clause- clause in a contract that says that this writing is a complete and total integration of the party’s agreement and therefore no other oral agreement can be proven
Collateral Contract-

Basic Contracts

Elements of Cause of Action for Breach of Contract

There has to be a breach
There has to be a contract

What is required of a contract (express or implied)?

Offer, acceptance, and consideration

Breaching party: you can recover damages when there is:

Substantial performance
Acceptance
Part of the promise/work has been done

When does Article 2 of the UCC apply?

When transactions in good are dealt with
So this does not involve services, real property, or intangibles like stocks but can be used

BUT – UCC is often applied by analogy to service contracts

In hybrid contracts when both the sale of goods and the performance of services are involved, the UCC is involved if the primary purpose of the contract is for the sale of goods

Theories of Obligation

Agreement with Consideration; Promissory Estoppel; Unjust Enrichment; Promises for Benefit Received; Tort; “Form”; Statutory Warranty

No punitive damages for breach of K White v. Benkowski (neighbor water pump case)
Three Types of Remedies Permissible:

Restitution – equal to the benefit conferred from D to P
Reliance – the position P would have been in had the agreement of promise not been made
Expectancy – standard measure of recovery- puts the plaintiff in the position that he would have been in without a breach

Sullivan v. O’Connor determined that expectancy or reliance measures are acceptable forms of remedies

Court- indicated a preference for reliance damages
The court didn’t have to pick between the two

ELEMENTS OF A CONTRACT

Offer

What’s an offer? a promise in exchange for performance by another party
Things that matter in an offer:

Purpose
Language- “I offer” or “I promise” – contract. “I am asking” and “I would consider”- negotiation
Willingness to be immediately bound
Terms: Subject matter, price, payment, quantity, quality, duration, work to be done

Except UCC §2-204(3) requires only an intent to be bound and a basis for a remedy

Identification of the offeree- it must be clear who the offeree is to constitute an offer
Relationship between the offeree and offeror

Things that evidence a contract:

Discussion/negotiation over the agreement
A signature from both parties
Details
Consideration
Reliance on the agreement
An existing relationship
In most cases: writing

Nature of Assent

Objective theory- whether or not there has been an acceptance of an offer is determined by how a reasonable person would interpret the first party’s intentions. It doesn’t matter what the other party’s intention was if it is different to the manifested intent and if the other party has no reason to know what the true intention was

Thus what you express is what matters
In contracts- generally words are used to express a known intent

Lucy v. Zehmer- objective interpretation of intent (aka doesn’t matter that in his mind he was kidding) is what matters in determining whether there is a contract

Things in this case that evidenced a K: napkin evidence mutual assent, words of the wife, etc.

Mirror Image Rule the acceptance must be the as the offer in order to be valid.

If there are additional terms- this is a rejection or a counter offer

EXCEPTION- UCC §2-207 – contract can be formed even if the offeree specifies new terms

2-207(2)- Non-material new term: part of the contract but the offeror gets time to object. 2-207(2)(b)- Material new term- not a part of the contrac