Key Terms. 3
Bargaining Process. 4
1. Offer: the penultimate. 4
2. Assent/ Acceptance. 6
3. Precontractual Liability:10
Consideration. 11
1. Historical view 11
2. Modern View 11
3. Sufficiency of Consideration. 12
4. Pre-Existing Duty Rule 13
5. Promises to make a gift or moral obligation. 13
6. Illusory Promises. 14
7. Implied Promises of Best Effort and Good Faith Dealing. 14
8. Enforceable Promises Without Consideration. 15
Policing the Bargain. 15
1. Distinction between void and voidable K.. 15
2. Incapacity 15
a. Minors: §14: K entered into by infant (usually 18) are generally voidable by minor party, even if party misrepresents age.15
b. Mental Impairment:16
c. Intoxication:16
d. Duress:16
e. Undue influence:17
3. Unfairness:17
4. Misrepresentation and Concealment17
5. Unconscionability and Adhesion K.. 19
6. Unconscionability:19
7. Mistake:20
Statute of Frauds. 21
1. Requirements:21
2. K within the statute of frauds: §110. 21
3. Signature:22
4. Avoidance of the Writing Requirement22
5. Equitable Estoppel:23
6. Promissory estoppel23
Parole Evidence Rule. 24
1. Definition 24
2. Cases. 25
Remedies. 25
1. Theories:25
2. Purpose:25
a. §344: Serve to protect one or more of the following interests of a promise:25
3. Remedies Available. 26
a. § 345: Judicial Remedies Available:26
b. § 357: Availability of Specific Performance and Injunction:31
c. § 346: Availability of Damages. 26
4. Measure of Damages. 26
a. § 347: Measure of Damages in General: The injured party has a right to damages based on his expectation interest measured by:26
b. § 359: Effect of Adequacy of Damages. 27
5. Quasi Contractual Theory. 27
7. Emotional Disturbance:27
a. §353: Generally excluded unless the breach also caused bodily harm or the K is such a kind that serious emotional disturbance was a particularly likely result27
8. Expectation damages:27
a. compensate the injured party for the benefit he would have received had the K not been breached, minus the amount he would have spent in performance of the K 27
9. Reliance damages:29
a. compensate the injured party for expenses or loss incurred in reasonable reliance on the K that was breached.29
10. Restitution:30
a. §370: compensates a party for the benefit conferred on the other party as a result of partial performance or reliance, aimed at preventing unjust enrichment.30
12. Liquidated damages:30
a. §356: at time K is formed, parties may agree to a fixed sum of money or set formula for setting damages in the event of a breach. Will be enforced if they reflect an honest effort to anticipate the harm caused by the breach 30
13. Incidental Damages:31
a. available under UCC provision for both buyers and sellers.31
14. Consequential damages 31
a. UCC §2-715, suffered by buyer due to seller’s breach include:31
15. Specific Performance/Injunction 31
16. Mitigation of Damages:32
17. Seller’s Remedies in Sales K:33
18. Buyer’s Remedies UCC §2-711. 34
Key Terms
1. Contract: §1: 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.
a. note e) remedies: damages, restitution, specific performance
b.K = Offer + Acceptance + Consideration
2. Promise: §2: 1)A promise is a manifestation of an act, or an intention to act in a certain way so made as justify a promise in understanding that a commitment has been made
a. not usually enforced if illegal, between family members
b.§4: May be stated in words (oral or written) or inferred wholly or partly from conduct
3. Agreement: §3: 1) Agreement is a manifestation of mutual assent on the part of two or more people
a. note a) K do not always require agreements
b. note b): manifestation of assent, may be made by words or other conduct
4. Bargain: §3: 2) Agreement to exchange promises, promises for a performance, or performances
a. c) include agreements which are not K (transactions)
b.e) K is not necessarily a bargain
5. UCC 2-102: Applies to transaction in goods
a. If not mentioned in UCC, may look to Restatement per
UCC §84-1-103
Goods: 2-105: goods mean all things which are moveable (other than money) and things in action
2-107: include growing crops, timber, or other things attached to realty and capable of severance without material harm
does not include: intangible rights such as intellectual property, investment securities, money which is the medium of payment for goods, minerals to be removed from land and are to be served by the buyer.
Sale: UCC 2-106: sale as the transfer of title for a price. K that involve both goods and service must be evaluated to see which constitutes the primary purpose of the K, with the secondary purpose being treated as incidental. If the primary function of the K is to pr
K)
d. if agreement at issue is the type of K that is usually committed to writing (no-K)
2. Patterson: freedom to K; freedom from K
3. §26: Preliminary Negotiations: A manifestation of willingness to enter into a bargain is not an offer if the person to whom it is addressed knows or has reason to know that the person making it does not intend to conclude a bargain until he has made a further manifestation of assent.
a. §27: If parties manifest intent of preparing and adopting a written K, circumstances may show agreements are preliminary negotiations.
b. determined by extent of agreement, customary to type of K, if formal writing is needed for full expression, similar transactions, if party takes preparation for performance
c. Owen v Tunison: buyer wrote seller asking if “would sell property for $6,000.” Language of would is general and is not an offer which person writing may be bound
4. §33: Certainty: Manifestations of intention cannot be accepted so as to form a K unless the terms of the K are reasonably certain…If one or more terms are left open or uncertain, it may show that a manifestation of intention is not intended to be understood as an offer or as an acceptance.
a. Harvey v Facey: Solicitor telegraphed owner of property for lowest cash price—answer paid. Owner telegraphed back price. Solicitor sued for specific performance. Court held a mere statement of the lowest price the vender would sell implied no K to sell at price to person making inquiry. No K unless explicit agreement between two parties exists.
5. Terms must be definite to indicate a contract
a. Toys v Burlington: Space in mall was stated in K to be renegotiated at later time. Word “renegotiated” held to be too loose term to be enforceable. But “prevailing rate within the mall” even though loose, held to be determinable and thus promise/K enforceable.
Seagrams: Promise to find alternative distributorship that costs the amount paid enforced- damages assessed at what owners would have been able to make on distributorship
