LAW SCHOOL ESSENTIALS – CONTRACTS - …s3.amazonaws.com/mythm-vids-prod/LSE.Geis.Contracts.pdfLAW SCHOOL ESSENTIALS – CONTRACTS . PROFESSOR GEORGE S. GEIS . ... Dickinson v. Dodds

LAW SCHOOL ESSENTIALS – CONTRACTS PROFESSOR GEORGE S. GEIS

UNIVERSITY OF VIRGINIA SCHOOL OF LAW

CHAPTER 1: INTRODUCTION

A. My Goal

• Get contract law into your DNA • This means two things:

1. You know the basic structure of the law and are comfortable going with a “common sense” answer when it is correct.

2. You have a “DNA twitch” when a rule is triggered that defies common sense.

Don’t fall for the tricks! Recognize the “close-call” situations

B. Three Basic Questions

1. Has an enforceable contract been __________________________________________________?

2. Has the contract been ____________________________________________________________ (or is the performance _________________________________________________)?

3. What are the _________________________________ for _______________________________?

C. What is a Contract?

• A contract is a ________________________________________________________ with ________________________________________________________________________.

• Best definition: a ________________________________________________________________. • Look for an agreement plus a special legal basis for enforcing the promise (e.g., bargained-for

_____________________________________________________).

Example 1: I promise to give you $1,000 next week. You say, “OK, I accept.” Is this a contract? _________________________________________________________________________________________________________________________________.

D. Gateway Issue – Which universe are you in?

1. Two Universes

o The law of contracts and sales spans two _________________________________________:

Universe One

• The ____________________________________________________ • We are in this universe whenever a contract deals with real estate or

_________________________________________________.

Example 2: You hire me to mow your lawn. Is this contract governed by the common law? __________________________________________________.

Universe Two

• Article 2 of the ____________________________________________ • We are in this universe whenever a contract deals with _______________________. • Article 2 of the UCC applies to all parties who enter into a goods contract, not just

merchants.

Example 3: You agree to buy 5 dozen pencils from Staples. Is this contract governed by common law? _________________________________________.

• We do not care about Revised Article 2 of the UCC.

o It is not the law anywhere.

o The law is often the same in both universes but there are a few key differences that will sometimes arise.

2. Mixed Contracts

o Contracts that have elements of both ______________________________________ and ______________________________________________.

Example 4: You agree to purchase a hot water heater from Boilermaker Inc. for $1,000. As part of the deal, Boilermaker promises to install the hot water heater in your home. Is this contract governed by the UCC? ___________________________________.

o Rule #1: The “all or nothing” rule

Mixed contracts must fall into one universe or the other.

• Limited exception: if the agreement is divided into two mini-contracts, called a _________________________________________ contract, then each of those mini-contracts can be in a separate universe.

2 | © 2014 Themis Bar Review, LLC | Law School Essentials – Contracts

Example 5: You agree to purchase a hot water heater from Boilermaker Inc. for $950. As part of the deal, Boilermaker promises to install the hot water heater in your home for an additional $50. Is this latter installation part of the deal governed by the UCC? _________________________________________________________________________________________________________________________________.

o Rule #2: The “predominant purpose” rule

In order to figure out which universe you are in for a mixed contract, you have to look at the main reason for entering into the contract.

• Ask: Does the good or service part of the contract play a bigger role?

Example 6: You commission the famous artist Andy Warhol to paint your portrait for $1 million. Does the UCC apply? _________________________________________________________________________________________________________________________________.

Example 7: You commission my mother-in-law, Mickey, to paint your portrait for $10. Does the UCC apply? _______________________________________.


CHAPTER 2: FORMATION OF CONTRACTS: OFFER

A. Formation of Contracts

• Four big topics:

1. Agreement process (_______________________ and _______________________________)

2. __________________________________________________________

3. __________________________________________________________ to contract formation

4. Statute of Frauds

• Mnemonic: “All Contracts Don’t Stink.” (ACDS)

B. Agreement Process

Exam Tip 1: This is a topic that law professors love to test.

• A contract is typically created by an _______________________________________________. • Can be broken down into the __________________________________________ and

________________________________________________________. • Offer – “Will you go to the football game with me?” • Acceptance – “Sure.” • Counteroffer – “How about we go skating instead?”

o After a counteroffer, the process starts over.

C. Offer

1. Definition

o An offer is a manifestation of a willingness to enter into an agreement by the offeror that creates a ___________________________________________________________________ in the offeree.

o “Animalizing” the process

Think of the offer as a caterpillar – cute, fuzzy, but fragile. Once it is accepted, then the caterpillar turns into a beautiful butterfly – you have a

contract.

2. Creating a Legal Offer

o Offer and acceptance are governed by the ________________________________________.

Outward appearances of words and actions are what matters, not secret intentions. Key question: whether the offeror displays an objectively _________________________

to be bound.


Example 8: I offer to sell you my Jeep Wrangler for $5,000 but I have my fingers crossed behind my back and in my mind I’m thinking, “Of course I don’t mean it; no way I’ll ever sell the Jeep to you.” If you say “OK,” do we have a contractual agreement? _________________________________________________________________________________________________________________________________.

Look for situations involving ______________________________ or __________________________________________.

Example 9: You see me on the side of the road with the hood of my Jeep Wrangler open and wires pulled out everywhere. I kick the side of my Jeep and yell, “I’d sell this stupid junker for $5!” You yell back, “I ACCEPT.” Do we have a contractual agreement? _________________________________________________________________________________________________________________________________.

Expressions of opinion

Example 10: We are talking causally in the law school parking lot, when I lean against my Jeep Wrangler and ask you, “how much do you think this old thing is worth?” You reply (generously), “I don’t know, maybe about $10,000.” I say, “OK, I accept.” Do we have a contractual agreement? _________________________________________________________________________________________________________________________________.

o The offer must usually be directed to a ___________________________________________.

Example 11: You hear that there are a bunch of good deals to be had on Wall Street. So you walk down through the trading pit, saying “I accept…I accept…I accept.” Do you have any contracts with the stock traders? _________________________________________________________________________________________________________________________________.

Limited exception: contest offers or reward offers where someone promises something to anyone who accomplishes a certain task.

Example 12: I’ve lost my pet cat, “Monster,” and I take out a newspaper advertisement promising $100 to anyone who finds my cat by this Friday. You see the ad, find Monster, and come by my house on Thursday to collect the reward. Do we have a contractual agreement? _________________________.

o How specific must an offer be?

At common law, all __________________________________________________ must be covered in the agreement.

• Typically means the parties, subject, price, and quantity


The UCC is _________________________________________________.

• The law is more willing to “plug the gaps” and find a contract even though the agreement leaves out a few key terms.

• Generally, you only need to identify the _________________________________, the ___________________________, and the ______________________________ under the UCC.

• Important: The _______________________ DOES NOT normally need to be stated.

Example 13: Beth offers to pay Seth $50 every week to wash her car each Saturday for the next year. Is this deal covered by the common law? ________________________________________________________________. Is it a valid offer? _________________________________________________.

Example 14: Beth offers to pay Seth a “fair price” every week to wash her car for the next year. Is this a valid offer? _________________________________________________________________________________________________________________________________.

Example 15: Bob offers to buy 500 windshield wiper blades next week from Sue for $5 each. Is this deal covered by the common law? _______________________________________________________________. Is it a valid offer? __________________________________.

Example 16: Bob offers to buy 500 windshield wiper blades next week from Sue for a fair price. Is this a valid offer? __________________________.

Example 17: Bob offers to buy windshield wiper blades next week from Sue for a fair price. Is this a valid offer? ________________________________________________________________.

Example 18: Bob offers to buy “all the windshield wiper blades that I need for the next 10 years” from Sue at a fair price. Is this a valid offer? ________________________________________________________________.

Requirements contracts and output contracts

• The quantity is not explicitly specified but, nevertheless, they are sufficiently definite enough to count as an offer.

• Requirements contract – “I don’t know how many I need over the next X years, but I promise to ____________________________________ of them from you.”

• Output contract – “I don’t know how much I will be able to make or produce over the next X years, but I promise to ______________________________ of it to you.”

• These are legally binding contracts.


o A valid offer must give the __________________________________________________ to the other side.

Ask: Could the purported offeree simply say “I accept” and know that they have __________________________________________________ the deal?

Two common fact patterns:

• ________________________________________________________ are preliminary communications that still reserve a final round of approval with the speaker.

o May not confer a power of acceptance to the other side

• _________________________________________________ are usually understood as _________________________________________________________________.

o Exceptions: (1) ___________________________________________________ and (2) advertisements that are very specific and leave nothing open to negotiation, including how the acceptance can occur.

Example 19: I tell you that “you had better decide fast if you want to buy my house, as I expect to have a ton of offers next week.” You say, “I accept.” Is this a contract? _________________________________________________________________________________________________________________________________.

Example 20: I place an advertisement in the paper promising “to sell my 1994 Jeep Wrangler for $5,000, first come, first served.” You show up at my house waving a check and say “I accept.” Is this a contract? ________________________________________________________________.


CHAPTER 3: OFFER (CONT’D)

A. Terminating the Offer (“Squashing the Caterpillar”)

1. Revocation

The offeror revokes the offer by ____________________________________________________ to the offeree.

Example 21: I offer to sell you my house for $100. A split second later I yell, “I revoke.” Is there a squashed caterpillar? _________________.

Example 22: I offer to sell you my house for $1 million. A day later I decide that I don’t want to move and mutter to myself in my office “Forget it. I revoke that offer.” Is there a squashed caterpillar? _________________________________________________________________________________________________________________________________.

2. Constructive Revocation

o The offeree learns that the offeror has taken an action that is absolutely inconsistent with the continuing ability to contract.

o Called a _________________________________________________________________ o Dickinson v. Dodds

Example 23: I offer to sell you my house for $1 million. A day later you are talking with Mickey and learn that she bought my house that morning for $1.1 million. You run to my house waving a check and say, “I accept.” Is this a contract? _______________________________.

Example 24: I offer to sell you my house for $1 million. A day later you are talking with Mickey and learn I offered to sell her my house that morning for $1.1 million. You run to my house waving a check and say, “I accept.” Is this a contract? ___________________.

Example 25: I offer to sell you my signed contracts textbook for $100. A day later you are talking with Mickey and learn that she bought my signed contracts textbook for $100. You run to my house waving a check and say, “I accept.” Is this a contract? __________________________________________________.

3. Rejection

The __________________________________________________ rejects the offer.

Example 26: I offer to sell you my Jeep for $5,000. A split second later you yell, “NO … I mean YES!” Is there a squashed caterpillar? ______________.


4. Counteroffer

o The _____________________________ makes a __________________________________.

Example 27: I offer to sell you my Jeep for $5,000. A split second later you say, “I offer to buy it for $4,500.” I remain silent. Ten seconds later you say, “OK, OK… I’ll buy it for $5,000.” Is there a contract? ________________________________________________________________.

o Be careful to distinguish a counteroffer from a mere counter-inquiry or indecision.

Example 28: I offer to sell you my Jeep for $5,000. A split second later you say, “Maybe not, I better check my bank balance.” I remain silent. Ten seconds later you say, “OK, OK … I’ll buy it for $5,000.” Is there a contract? ______________.

5. Death

o An offer will be terminated when the ______________________________________ dies. o Note: The death of one party after the contract has been made does not normally terminate

the contract.

6. Lapse of Time

If a ________________________________________ amount of time passes, the offer is destroyed.

Example 29: I offer to sell you 1000 barrels of oil for $100 each. You remain silent, and I never revoke. Five years later, when the price of oil has jumped to $500, you call me up and accept. Is there a contract? _________________.

B. Revival of an Offer

Even if an offer is squashed, the _____________________________________ can always throw out a new offer with the exact same terms as before (called revival).

C. Irrevocable Offers (“The Caterpillar’s Power Shield”)

1. In General

Example 30: I offer to sell you my house for $1 million and I promise, promise, promise not to revoke this offer for a week. Five minutes later, I say, “Never mind…I revoke the offer.” Can you still accept? _________________________________________________________________________________________________________________________________.

In a few circumstances, the caterpillar is going to be protected – there is going to be something else going on that makes the offer irrevocable.


2. Irrevocable Offers – Four Ways

1. The offeree can buy an ________________________________________________.

Example 31: I offer to sell you my house for $1 million. You also pay me $100 in exchange for a promise that I will not revoke this offer for a week. Five minutes later, I say, “Never mind…I revoke the offer.” Can you still accept? ________________________________________________________________. What if the $100 will go toward the purchase price? ________________________________________________.

2. A ________________________________________ in the UCC can make a __________________________________ to buy or sell goods – think of it as a “binding free option.”

A merchant is someone who _______________________________________________ in the type of goods at issue.

• In other words, a _____________________________________________________.

A firm offer has to be _________________________________, contain an ___________________________________________________ not to revoke, and must be ____________________________ by the ___________________________________.

A firm offer lasts for either (1) as long as stated in the firm offer or (2) for a reasonable time period not to exceed ____________________________________.

Example 32: I offer to sell you a contracts textbook for $100 and I promise via a signed writing not to revoke this offer for a week. Five minutes later, I say, “Never mind…I revoke the offer.” Can you still accept? ______________________________________________________________.

Example 33: Your law school bookstore offers to sell you a contracts textbook for $100 and it promises via a signed writing not to revoke this offer for a week. Five minutes later, it says, “Never mind…I revoke the offer.” Can you still accept? _________________________________________________________.

Example 34: Your law school bookstore offers to sell you a contracts textbook for $100. Five minutes later, it says, “Never mind…I revoke the offer.” Can you still accept? ______________________________________________________.

Example 35: Your law school bookstore offers to sell you a contracts textbook for $100 and it promises via a signed writing not to revoke this offer for a week. Ten days later you stop by the bookstore to accept the offer. Can you still accept? _________________________________________________________________________________________________________________________________.


3. A ___________________________________________ offer to contract cannot be revoked by the offeror if the offeree has ____________________________________________________.

This arises from a promise that requests acceptance by an ________________________ of the promisee instead of a return promise by the promisee (which is called a _________________________________________________ contract).

Example of unilateral offer – Example 12 above

Example 36: “I promise to pay you $1,000 if you promise to paint my house.” Unilateral or bilateral offer? ________________________________________.

Example 37: “I promise to pay you $1,000 if you paint my house.” Unilateral or bilateral? _____________________________________________________.

Since a unilateral offer can only be accepted by performance, it does not seem fair to allow the promisor to revoke once the promisee starts the performance and is trying to accept.

• The law gives the offeree the right to finish.

Example 38: I promise $10,000 to the winner of a swim race to Alcatraz Island. The swimmers dive off the dock and are going strong toward the island. When they’re about half way, I stand up on Fisherman’s Wharf with my bullhorn and yell, “I REVOKE!” Can the winner of the race insist on the prize? _________________________________________________________________________________________________________________________________.

Note: The offeree does not have to _______________________________________ performance and can stop at any time.

Example 39: You are swimming in the Alcatraz race, but you get really tired and swim to a boat. Can I sue you for breach of contract? ________________________________________________________________.

4. An offer cannot be revoked if the offeree ______________________________________ and _____________________________________________________________________ on an offer in a foreseeable manner.

Look especially for a general contractor – subcontractor context.

Example 40: A builder who is bidding on a law school building project receives an offer from a subcontractor to supply all the carpet for $20,000. Armed with this knowledge, the builder offers to renovate the building for $100,000. Before the law school accepts the bid, the subcontractor calls to revoke its carpet offer. Can the GC builder still accept the carpet offer from the subcontractor? _________________________________________________________________________________________________________________________________.


CHAPTER 4: ACCEPTANCE

A. In General

• An acceptance is a manifestation of a willingness to enter into the agreement by the offeree. • Governed by the ______________________________________________________________ • Famous phrase: “The offeror is master of the offer.”

o The offeree must accept the offer according to the rules of the offer.

Example 41: I offer to sell you my Jeep for $50 and state that in order to accept this offer, you must spring into a handstand, walk across the room to me, and sign this piece of paper. You look at me funny, just stand there, and say, “I accept.” Is there a contract? ____________________________.

o Related concept – unilateral and bilateral offers

The offeror gets to decide which type of offer to make and the offeree must play by the offeror’s rules.

Example 42: “I promise to pay you $1,000 if, and only when, you paint my house.” You say, “I accept.” Is there a contract? ____________________________________________________________.

Example 43: Bob sends a letter to Sue, reading, “please ship me 500 windshield wiper blades next week for $5 each.” Sue mails back a letter: “I accept.” Unilateral or bilateral offer? _________________________________. Is there a contract? ________________________________________________________________. If there is any ambiguity between a unilateral or bilateral offer, you can accept in either reasonable manner.

Example 44: Bob sends a letter to Sue, reading, “please ship me 500 windshield wiper blades next week for $5 each.” Sue ships 500 wiper blades the next day. Is there a contract? ___________________________________.

o What if the seller tries to accept but ships the wrong goods?

Important: The UCC treats this as an _________________________________________ plus a ___________________________________________.

Example 45: Bob sends a letter to Sue, reading, “please ship me 500 Bosch windshield wiper blades next week for $5 each.” Sue ships 500 Sloshed wiper blades the next day. Is there a contract? ______________________________.


B. Other Specific Rules About Acceptance

• The offer has to be specifically directed to the person trying to accept it.

o Refer to Example 11

• Even with an “open-to-all” reward offer, you must ___________________________ about the offer in order to accept it.

Example 46: I’ve lost my pet cat, “Monster,” and I take out a newspaper advertisement promising $100 to anyone who finds my cat by this Friday. You never see the ad, but find Monster roaming near my house and return the cat to me. Later, you learn about the reward offer and come by to collect. Do we have a contractual agreement? _________________________________________________________________________________________________________________________________.

• Like with revocations, you must generally ___________________________________________ your acceptance to the other side for it to be effective.

Example 47: You offer to buy my contracts textbook for $50. I say, “I’ll think about it.” That night, while I’m alone brushing my teeth, I say to myself, “That’s a good offer…I should really accept that offer...In fact, I do accept that offer right now…I accept!” The next morning you call me up and revoke the offer. Is there a contract? _________________________________________________________________________________________________________________________________.

C. Mailbox Rule

• Deals with the __________________________________ of when an acceptance becomes ________________________________________________.

• When there is a delay between sending an acceptance and when an acceptance is received, the law must make a tough choice:

o Is the communication effective when sent or when it is actually received?

• Mailbox Rule: an acceptance sent by mail is valid when the letter is _______________________.

o Does not apply if the offeree sends something else first, such as a ________________________________ or a _______________________________________

o Only applies to _______________________________________________________ o Does not apply to _____________________________________________________ o Unclear whether it applies to other types of media (e.g., ____________________________,

e-mails, instant messaging)


Example 48: I send you an offer. You mail back your acceptance. I call you before I receive your letter and I revoke my offer. Is there a contract? ________________________________________________________________.

Example 49: I send you an offer. You mail back your acceptance. The letter gets lost and never shows up. Is there a contract? _______________________________________________________________.

Example 50: I send you an offer. You mail back your acceptance. You change your mind and call me up before I receive your letter to reject the offer. Is there a contract? ______________________________________________________.

Example 51: I send you an offer. You mail back a rejection. You change your mind and mail back an acceptance a few hours later. Both letters arrive at my house on the same day. Is there a contract? _______________________________________________________________. You do not get the protection of the Mailbox Rule – you sent the rejection first.

D. Acceptances without Communication (by Silence)

Exceptions to the requirement that you must communicate your acceptance to the offeror:

• Unilateral ____________________________________ or _______________________________; • Unilateral offer where the parties are geographically close, such that the offeror will clearly see

that performance is occurring; • Past history where ___________________________ serves as acceptance, such that the offeree

should reasonably ________________________________ the offeror if she does not accept; or • The offeror says that acceptance must come via silence and the offeree intends to accept the

offer by silence.

Example 52: I’ve lost my pet cat, “Monster,” and I take out a newspaper advertisement promising $100 to anyone who finds my cat by this Friday. You see the ad, find Monster, and come by my house on Thursday to collect the reward. Can you get the money even though you never communicated your acceptance to me? ____________________________.

Example 53: Mickey buys her weekly keg of beer by calling up Pabst on Monday and leaving a message requesting delivery on Friday. On Monday, she leaves her message as usual but Pabst does not deliver the keg that Friday. Distraught, Mickey asks if she has a contract for this keg? ________________________________________________________________.

Example 54: I offer to sell you my Jeep for $500,000, saying, “you may accept this offer by remaining silent for five seconds.” You stare at me but don’t say a word. After five seconds pass, do we have a butterfly? _______________________________________________________________.


E. Implied-in-Fact Contracts

• Notion that you can communicate acceptance without ________________________________ or ________________________________________________.

• You can communicate acceptance by __________________________________________ or ___________________________________________.

Example 55: I walk into “Cheap Cuts,” a popular haircut franchise where the service offerings and prices are posted above the cash register. The energetic receptionist offers to put my name in, and I sit down to wait. A haircutter comes forward to call my name; I follow and she cuts my hair. When I walk toward the exit, the receptionist tells me that I owe them $15. Must I pay even though I never said a single word? ___________________________________.


CHAPTER 5: COUNTEROFFER AND UCC 2-207

A. Counteroffer at Common Law

• The common law universe uses the _____________________________________________ rule. • The terms in the acceptance must match the terms of the offer __________________________,

or it is not an acceptance; it is a ____________________________________________________.

o A counteroffer kills the offer.

• Treat ____________________________________ acceptances as another form of counteroffer.

o Look for words such as if, only if, on the condition that, etc.

Example 56: I offer to mow your lawn on Saturday for $50. You say, “OK, if you come over on Sunday.” Do we have a contract? _________________________________________________________________________________________________________________________________.

B. UCC 2-207

1. In General

o The UCC is more forgiving for acceptances that do not match the terms of the offer exactly. o Replaces the mirror image rule with ___________________________________________

Just because there is a contract, however, DO NOT assume that all of the terms in the purported acceptance are going to govern that relationship.

It does not matter whether the parties are ______________________________ for this first part of 2-207 (whether a technical counteroffer can still count as an acceptance).

Example 57: I run a business on the side: Geis’s Chainsaws. You send me a purchase order requesting a chainsaw for $400. On the back of this form is an indemnification provision saying, “seller agrees to indemnify buyer in the event of a lawsuit.” I send back a confirming memo that is exactly the same as the purchase order, except for a provision on the back saying, “buyer agrees to indemnify seller in the event of a lawsuit.” What is the most likely outcome? _______________________________________________________________. It is possible that a dispute arises and one of us tries to back out of the deal. Imagine that after the forms are exchanged, the market price for Geis’s Chainsaws skyrockets and they are selling for $1,000. I no longer want to be bound by our contract. First, is there a contract? Second, if there is a contract, what is the indemnity term, if any, that governs our contractual relationship?


2. UCC 2-207(1)

Text of 2-207(1): A definite and seasonable expression of acceptance [or a written confirmation] which is sent within a reasonable time operates as an acceptance even though it states terms additional to or different from those offered or agreed upon, unless acceptance is expressly made conditional upon assent to the additional or different terms.

Example 58: You send a purchase order requesting acceptance of your chainsaw offer by this Friday. I send back my confirming memo two weeks later. Is there a contract? _______________________________________________.

Example 59: You send a purchase order. I send back a timely confirming memo that says, “Thanks, but I no longer sell chainsaws; however, I have a hand saw which you can have on the exact same terms.” ________________________________________________________________.

Example 60: You send a purchase order. I send back a timely confirming memo saying, “OK, on the condition that you agree to indemnify me against a lawsuit for harm arising from the chainsaw.” Do we have a contract? _______________________________________________________________.

Example 61: Same facts as Example 60, but my acceptance letter has a bunch of terms on the back, all of which matches yours, except “buyer agrees to indemnify seller against a lawsuit for harm arising from the chainsaw.” Do we have a contract? ___________________________________________.

3. UCC 2-207(2)

o Just because a slightly different acceptance makes a butterfly (contract), it does not mean that that the new term in the acceptance will control. It might control but must look at 2-207(2).

o The new term will only come in if the following are all true:

Both parties are __________________________________________________________; The new term does not _____________________________________________ the deal; The initial offer did not ____________________________________________________

acceptance to its terms; and The offeror does not ____________________________________________ within a

reasonable time to the new term.

o Very difficult for the new term(s) in the acceptance to govern the contract.

Example 62: Same facts as Example 61. Is my indemnity term part of the contract? _______________________________________________________.

Example 63: Does the answer change if the buyer is Lowe’s? ________________________________________________________________.


4. The Knock-Out Rule

o Drafting ambiguity in UCC 2-207 o Notice the language of UCC 2-207(2) – it says “additional terms” but it does not say

“additional or different terms.”

Some courts have said the drafters just forgot to include “different.”

• These courts use the same analysis whether it is an additional or different term.

Some courts have said that the drafters were __________________________________ of the difference between an additional term and a different term.

• An additional term can still count as an acceptance but there is no way a different term will come in under 2-207(2).

Some courts apply the “_____________________________________________” rule.

• The courts will knock-out both of the terms and go back to the UCC gap filler provisions.

5. UCC 2-207(3)

o What happens if there is not a real contract but the parties still act as if there is an agreement?

o In that case, 2-207(3) gives parties a ___________________________: only the terms that both parties agreed upon in the writing will become part of the contract; all the other terms will drop out and be supplied by the UCC default rules.

6. Earlier Agreement Followed by Written Confirmation

o 2-207 also governs the situation where two parties have a contract, usually a _____________________________________________, upfront and a party sends over a confirming memo with additional terms that go further than the earlier agreement. Do these terms come in?

o Bad news: the statute makes no sense.

2-207(1): [A definite and seasonable expression of acceptance or] a written confirmation which is sent within a reasonable time operates as an acceptance [even though it states terms additional to or different from those offered or agreed upon, unless acceptance is expressly made conditional upon assent to the additional or different terms.]

o So if you see this fact pattern (early agreement + written confirmation with new terms), just work through the same steps as above for 2-207(2) – decide whether the new terms will come in. But recognize that the new terms will very rarely come in.


CHAPTER 6: CONSIDERATION

A. General Nature of Bargained-For Consideration

• Consideration means a deal where parties are exchanging promises that involve a _______________________________________________ or a ___________________________.

• You can quickly determine whether there is a problem related to consideration by asking the following questions:

o Who is making the promise that needs to be supported by the law (the _______________________)? The other side is the ______________________________.

o Is there a ____________________________________________ to the promisor or a _______________________________________ to the promisee?

o Was this _____________________________________________________? Did one side make a promise in order to induce the other side to make a reciprocal promise?

Example 64: I promise to pay you $1,000 if you promise not to watch the next season of “American Idol.” You do not watch the show, but I refuse to pay you the money. Who is the promisor? ______________. Who is the promisee? ______________. Did I benefit from the exchange of promises? ________________________________________________________________. Did you incur a legal detriment, even though not watching the show is good for you? _______________________________________________________. So is there bargained for consideration? ____________________.

• The key: Not doing something that you are legally entitled to do can count as a legal detriment. • Watch out for gift promises and ____________________________________________ gifts.

o You may not have bargained-for consideration.

Example 65: Every year for Christmas, Mickey gives me a tacky tie, and I give her an ugly sweater. Can she sue me this year if I refuse to give her a present? ________________________________________________________________.

Example 66: I promise to give you my Jeep if you come to my house to pick it up. Is there bargained-for consideration? ____________________________________________________________________________________________________________. This is a conditional gift.

B. A Few Tricks

1. Adequacy of Consideration

o A court does not need to stamp “fair price” on every contract. o The pretense of consideration does not count.


Example 67: I promise to sell you my Jeep for $1. Is there bargained-for consideration? __________________________________________________.

2. _______________________________________________ Promise

o A promisor must clearly commit to the deal or there is no consideration.

Example 68: You promise to buy my Jeep for $5,000 on December 1st “if you feel like it.” Is there bargained-for consideration? ___________________.

o To determine if a promise is illusory, ask whether there is a way for the promisor to ____________________________.

o __________________________________________ contracts

Not illusory Real contracts with consideration

Example 69: I promise to pay Mickey $500 if she paints a portrait of my family that meets my satisfaction. She says OK. Is there bargained-for consideration? _________________________.

o __________________________________ and _____________________________________ contracts (see Example 18) are not illusory promises.

There is a way to breach.

3. ____________________________ Consideration

Past consideration ______________________________ consideration.

Example 70: You are trying to win a race to Alcatraz when the sharks start to circle. I swing my boat over to pick you up. Grateful, you promise to pay me $500 for the rescue. Is there bargained-for consideration? ______________________________________________________________.

4. Settlement of a Legal Claim

Promising not to sue someone can count as consideration as long as there is (1) an _________________________________________________ in the validity of the claim and (2) a ___________________________________________________ for that belief.

C. Contract Modification and the Preexisting Duty Rule

Exam Tip 2: Law professors like to test on this issue.

1. Common Law

o Has historically followed the preexisting duty rule o Rule: A promise to do something that you are already _______________________________

to do is NOT consideration.


Example 71: You rent an apartment from Slumlord for one year, rent is $2,000 a month. Later that year, you start running short on cash, and you both agree to modify the rent to $1,500 per month. Can Slumlord sue you at the end of that month for the extra $500? ______________________________________. There is no bargained-for consideration for the modification contract.

o There are some exceptions and there has been a modern change.

Example 72: Same facts as Example 71, except you agree to re-rent the apartment for another year when the rent is lowered to $1,500 per month. Can Slumlord sue you at the end of that month for the extra $500? ________________________________________________________________.

Example 73: Same facts as Example 71, except Slumlord’s sister, Slumlady, agrees to cover $500 of your monthly rent if you stay in the apartment. Is there bargained-for consideration? _________________________________________________________________________________________________________________________________.

2. UCC

o Does not follow the preexisting duty rule o Ask: Whether a modification has been made in ____________________________________

If so, it will be binding even without __________________________________________.

Example 74: Mickey contracts with Pabst to buy her weekly keg of beer for $75. Later in the week, Pabst calls back to say there is a worker shortage that week, and it can’t get her the beer unless she pays $100 so Pabst can outsource delivery. Mickey says, “OK charge what you must, I need my beer.” Is the price modification binding? ____________________________________________.

Example 75: Same facts as Example 74 but Pabst knows that Mickey will do anything for her beer. On Friday morning, Pabst calls to say, “you better pay us $1,000 or we won’t deliver your keg.” Mickey says, “OK charge what you must.” Is the price modification binding? ____________________________________.


CHAPTER 7: CONSIDERATION SUBSTITUTES

A. Promissory Estoppel (Reliance)

• Reliance can arise when one party makes a promise and the other party relies on that promise to take some action.

• Look for three key elements:

1. A promise is made that would reasonably be expected to induce _____________________________________________________________;

2. The promisee does take ______________________________________________________ in reliance on that promise; and

3. ____________________________________________ can only be avoided by enforcement of the promise.

Example 76: Grandpa Moneybags promises to pay his granddaughter Katie $100,000 next month so she doesn’t have to work anymore. Katie quits her job. Is this bargained-for consideration? _________________. Does grandpa nevertheless have to keep his promise? ________________________________________________________________.

• Note: _____________________________________ do not normally need to prove detrimental reliance (element 2) when pursuing the reliance theory to collect on a charitable gift promise.

• Reliance is sometimes used as an ___________________________________________________ in the general contractor-subcontractor context.

o See Example 40

B. Quasi Contract

• Sometimes called a contract “implied-in-law.” • Think about a situation where you would have made a contract if you could have, but you

couldn’t for some reason, or look for a situation where one party has conferred a benefit on the other side under circumstances where it would be fair for the party to repay that benefit.

• Elements:

1. Did the plaintiff confer a _______________________________________________________ to the defendant?

2. Did the plaintiff reasonably expect to get _____________________________?

3. Would it be ________________________________ to let that defendant keep the benefit without paying?


Look for whether there was an ______________________________________________ the benefit, or there was a good reason why the other side did not have an opportunity to accept or decline the benefit.

Example 77: I am teaching away for this Themis course when I suddenly grab my chest and keel over with a heart attack. A student rushes out to hire a doctor, who saves my life. Later, that student asks me to pay her back for the doctor’s fee. Must I? _________________________________________.

Example 78: I hear about his cool thing called quasi contract and rush over to paint your house while you are taking your contracts exam. When you come home, I stick out my hand and demand a reasonable payment for the paint job. Will I recover? ______________________________________________.

• Quasi-contract damages are sometimes as justice requires to the _________________________ of the benefit conferred.

C. Moral Obligation Plus Subsequent Promise

• A few jurisdictions have some case law suggesting that a moral obligation plus a subsequent promise to pay can be binding.

• Normally, this would be _______________________________ consideration and not binding.

Example 79: Recall the facts of Example 70. You are trying to win a race to Alcatraz when the sharks start to circle. I swing my boat over to pick you up. Grateful, you promise to pay me $500 for the rescue. Is there bargained-for consideration? ______________. Might I argue moral obligation if you later refuse to pay me $500? ____________________________________.

D. The Seal

• Historically, a seal acted as a consideration substitute. • Does the seal act as a consideration substitute in most jurisdictions now? _______________.


CHAPTER 8: DEFENSES TO CONTRACT FORMATION

Seven defenses you should know:

1. _____________________________________________________

2. Incapacity

3. _____________________________________________________

4. _________________________________________, Misrepresentation, and Nondisclosure

5. Duress

6. _____________________________________________________

7. Unconscionability

A. Misunderstanding

• Each party attaches a different meaning to the same words. • You must show:

o The parties used a ___________________________________________ that is open to two or more _________________________________________________ interpretations;

o Each side attaches a _____________________________________________________ to the term; and

o Neither party ____________________________ or _________________________________ of the confusion.

Example 80: I verbally contract to sell you a bike for “twelve fifty.” You think I’m trying to unload the bike by selling it for $12.50. I think you recognize that this is a rare edition bike and you are willing to pay $1,250. Do we have a contract? ___________________________________________________.

Example 81: Same facts as Example 80 except I know you would never pay $1,250 for the bike and you must think the price is $12.50. Is there a contract? _________________. For how much? ________________________________.

B. Incapacity

• Who lacks the capacity to make a contract?

o _____________________________________, typically under the age of ________________ o ________________________________________________________ - two standards:

1. Cannot understand the _______________________________________ and ______________________________________________ of your actions


2. Cannot act in a __________________________________________________ in relation to the transaction and the other side ___________________________________________.

o A ______________________________________________________________ person, and the other side knows it.

• What happens if you make a contract with someone who lacks capacity?

o The contract is deemed ___________________________________________________.

The incapacitated person can ____________________________________ the contract.

o For necessities, the party who lacks capacity must still pay ___________________________ for the necessities, not necessarily the contract price.

Includes food, clothing, and shelter

o A party lacking capacity can _________________________________ the deal by keeping the benefits of the contract after capacity is obtained.

Example 82: Amelia is age 16 but looks much older. She buys a used airplane for $5,000. The wings fall off as she pulls away from the dealer’s lot. Can Amelia get her money back? ________________________________________.

Example 83: Same facts as Example 82, except the plane flies OK. Amelia turns 18 and continues to use the plane. Can she get her money back now? ________________________________________________________________.

Example 84: Same facts as Example 82 except Amelia is now 32 and takes LSD prior to buying the plane. She has no idea what she is doing, but witnesses say she seemed perfectly lucid while negotiating and buying the plane. Can Amelia get her money back? ________________________________________________________________.

C. Mistake

1. In General

A mistake is a belief that is not in accord with a _______________________________________.

Example 85: Mickey contracts with her stock broker to buy a share of Google stock for $500. When the price drops to $400 the following month, can she get out of the deal by saying, “I made a mistake; I thought the price was going to go up?” __________________________________.

2. Mutual Mistake

o Affects both parties o The adversely affected party can ____________________________ if the following are true:

There is a mistake of _____________________ existing at the time the deal was made;


It relates to a __________________________________________________ of the contract and has a material impact; and

The impacted party did not _______________________________________________ of mistake.

Example 86: We are walking along a trail when I lean down to pick up a shiny rock. “Wow,” I say, “look at that diamond. I’ll sell it to you for $10,000.” You agree and pay me the money but are sad to learn later that the rock is plain quartz. Can you get out of the contract? ________________________________________________________________.

Example 87: Same facts as Example 86, except I say, “Wow look at that shiny rock; I wonder what it is. Well, whatever it is, I’ll sell it to you for $10,000.” Can you get out of the contract? _________________________________________________________________________________________________________________________________.

3. Unilateral Mistake

o Mistake by one party o Harder to assert as a defense o The adversely affected party has to prove all the elements of mutual mistake, plus either

that:

The mistake would make the contract ________________________________________; or

The other side ____________________________________, had reason to know of, or _________________________________________ the mistake.

Example 88: Mickey decides to move to an annual purchasing model for her beer kegs and solicits 25 brewers for offers. Twenty-four of the brewers quote her prices in the $100,000 to $120,000 range. But one brewer makes a mistake about the quantity of kegs she lists and quotes a price of $10,000 for the year’s supply. Can Mickey snap up the last deal and bind them to a contract for $10,000? _______________________________________________________________.


CHAPTER 9: DEFENSES TO CONTRACT FORMATION (CONT’D)

A. Fraud, Misrepresentation, and Nondisclosure

1. Misrepresentation and Fraud

o A misrepresentation is a statement at the time of contracting that is ___________________.

It can either be intentional (called _______________________________________) or accidental.

o To assert this defense, the party must show:

1. A misrepresentation of a ___________________________________________________;

2. Must be __________________________ or ____________________________________; and

3. Must be made under circumstances where it is __________________________________ to ____________________________________ on the misrepresentation.

Example 89: Before buying my Jeep Wrangler for $3,000, you ask me how the car runs. I say, “It’s a great car.” In actuality it only runs on four out of six cylinders and the radiator leaks. Can you get out of the contract? ________________________________________________________________.

Example 90: Same facts as Example 89 except you ask me if the car runs OK, and I say “yes,” knowing that it has all the mentioned problems. Can you get out of the contract? _______________________________________________.

Example 91: Same facts as Example 90 except I don’t know about these problems. Can you get out of the contract? ________________________________________________________________.

Example 92: Same facts as Example 91 except the only thing wrong with the car is that the cigarette lighter doesn’t work. Can you get out of the contract? ________________________________________________________________.

o Fraud in the execution: you trick someone into signing something that they do not even know was a contract.

Example 93: You’re walking down the street when you run into Dave Matthews. You ask for his autograph and then laugh when he hands back the paper. If you show that he just signed a contract promising to play music at your birthday party for just a $100 fee, is Dave bound? ________________________________________________________________.


2. Nondisclosure

o Closely related to misrepresentation o You are remaining quiet – not making a misstatement or saying something that is not true. o You rarely need to tell the other side everything about what it is you are contracting about. o Watch out for _______________________________________________________________.

Example 94: I’m selling my house, but I have a very bad termite problem. I hide the ripples in the floor with carpets and put plants on the damaged stairways. You buy the house but soon learn of the termite infestation. Can you get out of the contract for nondisclosure? ______________________________.

B. Duress

• An improper _________________________ that deprives a party of making a meaningful choice to contract.

• Look for situations where there is __________________________________________________.

o One party makes threats to induce another party to enter into a contract or modify a contract.

Example 95: Pabst threatens to breach a contract with Mickey to sell her beer unless Mickey agrees to extend the contract for another year at double the price. Mickey has exhausted her credit with every other brewer and feels that she has no choice but to accede to this threat. Is Mickey bound for the next year? _________________________________________________________.

• _____________________________________________________: a party puts very intense sales pressure on another party (often someone who is weak-minded or susceptible to high-pressure sales tactics).

C. Illegality

• Illegal contracts are _____________________________________________________________. • Note: A contract that is entered in _____________________________________________ of an

illegal act, but is not itself illegal, will be enforced.

Example 96: Tony Soprano agrees to pay Paulie $10,000 to knock off Artie? Legally binding as a contract? _______________________________________.

Example 97: Same facts as Example 96. Paulie hires a taxi to drive him over to Artie’s restaurant to carry out the job. Can Paulie claim an illegality defense to avoid paying the cab driver? ________________________________________.

• Typically the law will leave parties where they stand.

o Modern trend: allow less guilty parties to get their money back.


Example 98: Same facts as Example 96 except Tony pays Paulie the $10,000 upfront. If Paulie refuses to perform, can Tony get the money back? __________________________________________.

• Contracts against _____________________________________________ will not be enforced.

o E.g., a broad exculpatory agreement or a promise to pay someone for divorcing her spouse.

D. Unconscionability

1. Procedural Unconscionability

o A defect in the bargaining process itself o Look for a hidden term or ______________________________________________ (lack of a

meaningful choice).

2. Substantive Unconscionability

o A “rip-off” in some term or terms of the contract o Note: Some jurisdictions require both procedural and substantive unconscionability before a

deal will be struck down; some only require one or the other.


CHAPTER 10: STATUTE OF FRAUDS (SOF)

A. In General

• It is a barrier that some contracts must meet in order to become legally binding contracts. • The goal of the SOF is to prevent false assertions about a contract that was never really created.

Example 99: I walk up to you one day and say, “I’m so glad that you agreed to sell me your house for just $50,000.” You stare at me puzzled and reply, “Who are you? We’ve never met.” I laugh and say, “See you in court.” Will I win the lawsuit? ________________________________________________________.

• Always ask two questions:

1. Does the SOF apply to this transaction?

2. If so, has the SOF been ______________________________________________?

• Typically, the SOF requires a __________________________________ signed by the __________________________________________, or some performance.

B. Is the Contract in “SOF World”?

• The SOF only applies to a few types of contracts:

o _________________________________________ - a contract made in consideration of marriage;

o _________________________________________ - a contract promising to guarantee the debt of someone else;

o _________________________________________ - a contract that, by its terms, cannot be performed within one year of its making;

o _________________________________________ - has special SOF rules that apply for goods contracts for a price of __________________________ or more; and

o _________________________________________ - a contract for the sale of an interest in real property.

Mnemonic: “Mr. SOUR” or “M. SOUR”

Example 100: Mickey buys beer on credit from Pabst, promising to pay $499 at the end of the month for her five kegs. Pabst sues her at the end of the month for failure to pay. Are we in SOF world? ________________________________________________________________.

• The “One Year” rule is interpreted very narrowly – the question is whether there is no possible way that the contract can be performed within a year.

Example 101: I verbally contract with the mayor of Charlottesville to build an exact replica of the Egyptian pyramids at the edge of town for $50 billion.


Are we in SOF world? _________________________________________________________________________________________________________________________________.

Example 102: I verbally contract with the mayor of Charlottesville to manage all city elections through 2020 for $50. Are we in SOF world? ________________________________________________________________.

C. Has the SOF been Satisfied?

Two main ways to satisfy the SOF: (1) by ______________________________________________ or (2) by ________________________________________________________.

1. Service Contracts – Common Law

a. Performance

______________________________________________________ of a service contract by either side satisfies the SOF.

Example 103: William Shatner verbally agrees to hire Spock to build a house on Enterprise Acre estate; in exchange Shatner will provide “charm lessons” to Spock for the next three years. Is this contract in SOF world? _______________. Spock builds the house, but Shatner refuses to provide the lessons, asserting an SOF defense. Is Shatner right? ________________________________________________________________.

_____________________________________________________________ of a service contract will not satisfy the SOF.

b. Writing

A writing signed by the party against whom the contract is being enforced will satisfy the SOF.

You do not need both signatures on the writing. The writing does not need to be a formal contract. It has to cover the fundamental facts:

• Indicate that a contract has been ___________________________________; • Identify the _____________________________________________________; and • Contain the _________________________________________________ of the deal.

2. UCC

a. Writing

A signed writing will satisfy the SOF under the UCC. Requirements differ slightly:


• No need to mention the ________________________________________ • Must mention the _________________________________________________ sold

What if you make a mistake and list the wrong quantity?

• Contract is only enforceable under the SOF for the quantity mentioned in the signed writing.

Example 104: Mickey verbally contracts with Pabst to buy 100 kegs of beer for $75 each. Later, Pabst sends her a signed confirmation order stating that the parties agree to contract for 50 kegs of beer (no price is listed). Even later, Pabst asserts a SOF defense and refuses to sell Mickey any beer. Can Mickey satisfy SOF? ___________________________________________________________.

b. Performance

_____________________________________________________________ on a goods contract will satisfy the SOF, but only for the quantity that has been ______________________________________ and _________________________________.

Example 105: Same facts as Example 104 except there is no confirming memo. Mickey changes her mind and decides to order some kegs of Fat Tire beer. Later, Pabst delivers 25 kegs to Mickey, and she eagerly stores the kegs in her basement. Can Pabst satisfy SOF? _______________________________________________________________. Is Mickey contractually obligated to buy the other 75 kegs? ______________________________________________________________.

c. Custom Made or Specially Manufactured Goods

Exempted from the SOF A maker can satisfy the SOF as soon as it makes a

__________________________________________________________________ toward the manufacturing of the goods.

Example 106: I contract verbally with Crooks Brothers to buy 100 white dress shirts with “GSG” monogrammed on the pocket for $10,000. Crooks Brothers sends me the shirts but I change my mind and send the shirts back. Can I assert a SOF defense if Crooks Brothers sues for the $10,000? ________________________________________________________________.

d. ________________________________________________________

A judicial admission, such as a statement in a pleading or during testimony, satisfies the SOF under the UCC.


e. Failure to Object

The failure to object to a confirming memo within _______________________________ will satisfy the SOF, but only if both parties are _______________________________________.

Example 107: Mickey verbally contracts with Pabst to buy 100 kegs of beer for $7,500. Later, Pabst sends her a signed confirmation memo with all material terms. Mickey has changed her mind, crumples up the memo and throws it in the corner. Ten days later, does Pabst satisfy the SOF? ________________________________________________________________.

Example 108: Same facts as Example 107 except the buyer is now Whole Foods. Ten days later, after the memo arrives at Whole Foods, does Pabst satisfy the SOF? _________________________. Even though there is no signed writing by Whole Foods? ___________________________.


CHAPTER 11: PERFORMANCE OF THE CONTRACT: PAROL EVIDENCE RULE

A. Performance of the Contract

• Four big topics:

1. __________________________________________________________________

2. __________________________________________________________________

3. __________________________________________________________________

4. ____________________________________________ of performance obligations

• Mnemonic: “Pizza With Crawling Escargot.” (PWCE)

B. Parol Evidence Rule (PER)

1. In General

o The first step in deciding whether a party has performed is figuring out what the agreement entails.

o Rationale for PER: If the parties have reduced their agreement to a comprehensive writing, then earlier statements or writings about that transaction are not going to be part of that agreement.

The PER will bar those earlier pieces of evidence from coming in.

o Look for a ___________________________________________________ that the court finds is a ________________________ agreement – earlier _________________________ or ________________________________ statements about the same deal will not come in.

o Does the parol evidence rule apply to later written or verbal statements about the deal? ________________________________________________________________.

o Does the parol evidence rule apply to earlier written documents? ____________________.

2. Integrated Writing

o Gateway inquiry: Have the parties created an integrated writing?

This is a comprehensive writing – full and final expression of the parties’ agreement.

o A court may decide that the writing is completely integrated, partially integrated, or not integrated.

Complete integration – the contract expresses __________________________ terms of the agreement.

Partial integration – there is a written and final writing, but some terms may not have been included.


• The parties may be able to bring in earlier evidence if it relates to a term not dealt with in the partially integrated writing.

o Distinguishing between an agreement that is not integrated from one that is fully or partially integrated:

One powerful piece of evidence is whether that writing contains a ________________________________________________________.

• If so, many courts will stop inquiry and deem the writing integrated.

Example 109: Disney signs a contract with Hugh Grant to make a movie for $2 million. It contains the following language right above the signature line: “This is the entire agreement between the parties. No representations or promises have been made save for those set out in this memorandum.” Hugh later argues that Disney had verbally promised to provide a free house in Beverly Hills while he was filming and they did not. Can he introduce this evidence? ________________________________________________________________.

Example 110: Same facts as Example 109 except Hugh argues that during the meeting but after the written contract was signed, they verbally agreed that $2 million was not enough and that he would get $3 million. Disney later sent a check for $2 million. Can Hugh introduce this evidence? ________________________________________________________________.

Courts may ask whether, under the circumstances, an extrinsic term of the agreement would ______________________________________________________________ from the writing.

• If so, it does not violate the PER and can be introduced as evidence if it does not contradict the writing.

The UCC is more forgiving: presumes that a writing is, at most, only a ____________________________________ integration, unless the parties would have “certainly” included the disputed term in the writing.

Example 111: Same facts as Example 109 except Hugh argues that Disney verbally offered him, prior to signing, a sequel part for $5 million. Can he introduce this evidence? _________________________________________________________________________________________________________________________________.

3. Circumstances the PER Does Not Bar Evidence

o The PER does not bar evidence relevant to a defense against ____________________________________________________________.


o Even if a writing is totally integrated, a party can always introduce evidence of a ________________________________________________________________.

Example 112: Same facts as Example 109 except Hugh now argues that Disney verbally offered, prior to signing, to sell him a season pass to Disneyland for $1000. Can he introduce this evidence? _______________________.

o Even if a writing is totally integrated, a party can still introduce evidence of a prior communication that is designed to interpret an ____________________________________ in the agreement.

Example 113: Same facts as Example 109 except the parties disagree over which movie Hugh will make. Disney believes that Hugh will make “The Lone Ranger.” Hugh claims that they had verbally agreed he would make “Oz the Great and Powerful.” Can Hugh introduce this evidence? ________________________________________________________________.

4. PER v. SOF

o If the question does not have a signed writing, think ______________________________. o If the question does have a signed writing, along with an earlier discussion of the deal, think

_______________________________.


CHAPTER 12: WARRANTIES AND CONDITIONS

A. Warranties

1. In General

o A warranty is a ______________________________________ about a term in the contract that explicitly _________________________________________ to the party making the promise.

Example 114: I agree to sell you my Jeep for $5,000 but we don’t discuss any other term. If the wheel falls off as you drive away, can you get out of the deal? ________________________________________________________________. What if I include a warranty that the Jeep will run fine for the next 1,000 miles? ____________________________________.

o You can _______________________________________________ all warranties.

Use of the phrase “as is.”

2. UCC – Three Warranty Issues

a. Express Warranty

A promise that affirms or describes the goods that becomes a ___________________________________________________________.

The use of a ________________________ or ______________________________ creates an express warranty that the goods sold will be like the sample.

Example 115: You walk into an AutoZone store to buy some hubcaps. The clerk shows you some floor samples that are bright gold and says, “These are our best model.” You buy that model of hubcaps, but find they are an ugly yellow when you pull them out of the box. AutoZone has breached an _______________________________________________________________.

b. Implied Warranty of Merchantability

Only triggered when the seller is a _____________________________________, dealing in the goods at issue.

The merchant makes an implied warranty, unless disclaimed, that the goods are going to be fit for _______________________________________________________________.

Example 116: You walk into an AutoZone store to buy some polish for your hubcaps. The clerk waves you over to aisle 12 where you pick up a can of hubcap polish. When you spray it on your hubcaps, they turn an ugly yellow color. AutoZone has breached an ______________________________________________________________.


Example 117: You walk into an AutoZone store and the clerk tells you that their delivery van is for sale. You buy it, but it breaks down the next day. Has AutoZone breached the implied warranty of merchantability? ________________________________________________________________.

Can a merchant disclaim this warranty? ______________________________________.

• Look for very ______________________________________________ language.

c. Implied Warranty of Fitness for a Particular Purpose

Triggered whenever the buyer relies on the seller’s ______________________________ in picking out a type of good that is going to be used for a ________________________________________________.

The seller makes an implied warranty, unless disclaimed, that the goods will satisfy the special purpose.

Example 118: Same facts as Example 116 except you can’t decide between three different types of hubcap polish. You ask the clerk which one is right for your aluminum alloy hubcaps, and he picks up a can and says, “THIS is the brand you want.” When you spray it on your hubcaps, they turn an ugly yellow color. AutoZone has breached an ________________________________________________________________.

Can a non-merchant extend this warranty by implication? _______________________________________________________________________.

Can the warranty be disclaimed? ____________________________________________.

B. Conditions

1. In General

o A condition is a way to shift risk by stating that one party’s contractual obligations are only going to “kick in” if some ____________________________________________ does or does not take place.

o Conditions are very strict.

Example 119: Your rich and eccentric Aunt Antoinette promises you $5,000 if you pass your contracts exam on the express condition that you don’t spend any time studying. You spend six hours with the Themis Law School Essentials lecture and easily pass the exam. Must your aunt pay you the $5,000? _________________________________________________________________.

o Conditions can be either be _________________________ or ________________________.

Most important implied condition is the _______________________________________________________________________.


2. Express Conditions

o Created by _________________________________________ in the contract o Look for words such as “only if,” “provided that,” “on the condition that,” or “only in the

event that.” o Express conditions must be strictly satisfied unless the condition is

_______________________________________________.

Example 120: Mark contracts to work for The Egg House for 10 weeks building a new henhouse for the chickens. The parties agree that Mark will get $10,000 for building the house, along with a bonus of $5,000 awarded on the condition that he shows up every day for work. Mark finishes the henhouse, but doesn’t come to work for the last two days in week 10 because he is really sick. Can Mark collect the $5,000 bonus? ________________________.

o You can write a ________________________________________ condition into a contract.

Preferred approach: use an _______________________________________ standard of satisfaction.

• If a reasonable person would be satisfied with the performance, then the condition has been met.

____________________________________________ standard for satisfaction: contracts involving aesthetic taste, such as art or tutoring services.

• The party to be satisfied can still breach if they are satisfied in their mind but claim they are not satisfied.

Example 121: I promise to pay Mickey $500 if she paints a portrait of my family if the painting meets with my satisfaction. She says, “OK.” After she is finished, the portrait is revealed and all the art critics rave over the masterpiece but I hate it. Must I pay Mickey the $500? ________________________.

o How is an express condition excused?

The party receiving the protection of the condition may __________________________ the condition by words or conduct.

Example 122: You agree to buy my Jeep for $5,000 on the express condition that you can get a car loan for this amount at an interest rate of 10% or less. You can only get a loan for 12% but you still want to buy the Jeep. If you waive the financing condition, must I sell you the Jeep? ______________________. Can I waive the financing condition? _______________________________.


A condition will also be waived if the other party ________________________________ with or hinders the occurrence of the condition.

• Good faith standard

Example 123: Same facts as Example 122 but you decide that you don’t want the Jeep after all. So you refuse to provide any documentation to the bank considering your loan and tell the loan officer that you’re a lazy deadbeat. Is the financing condition waived? ____________________________________.


CHAPTER 13: CONDITIONS (CONT’D)

A. Implied Conditions and the Constructive Condition of Exchange (CCE)

CCE – one party’s performance is going to be conditioned on the other side carrying out its performance.

Example 124: You agree to buy my Jeep for $5,000 next Friday. That day we meet, but I refuse to sign over the pink slip. Do you have to pay me the $5,000? _________________________________.

B. Common Law

• The CCE does not need to be satisfied ____________________________________________.

o Different than express conditions

• Doctrine of __________________________________________________________________

o A party will satisfy the CCE as long as substantial performance has been made. o This means as long as there is no _______________________________________________,

you will be deemed to have satisfied the CCE.

What is a material breach? Fact question, but think of it as ______________________________________________.

Example 125: Shaquille O’Neal hires me to build him a house. I build the doorways all at standard height (6’6”) instead of the 8’ listed in the contract. Substantial performance? ___________________________.

o Substantial performance only works to satisfy the CCE as long as the failure is not ___________________________________________.

Example 126: I hire you to build the Geis tower, a 150-story building in Charlottesville for $100 billion. When you finish, I’m conducting the final walkthrough and notice that the lobby walls are made of marble from North Carolina, not marble from Virginia, as called for in the contract specs. Can I avoid paying you the $100 billion? _____________________________.

Example 127: Same facts as Example 126 but our contract includes the following express condition: “Geis’s payment obligation under this contract is expressly conditioned on the use of Virginia marble in the lobby.” Must I pay the $100 billion? _____________________________________________________.

o Can the non-breaching party recover damages for the deficiency? _______________.

Typically measured as the cost to complete performance Sometimes, the diminution in market value will be used to measure damages.


o Can a breaching party who fails to satisfy the CCE get paid anything? ___________________________________________________________________________.

o Can a breaching party who fails to satisfy an express condition get paid in quasi contract? __________________________________________________________.

o Divisibility: If a contract is clearly ______________________________________________, then it will be divided up for the purpose of determining substantial performance.

Example 128: Mickey contracts with Best Buy to install a kegerator in each of the 20 rooms in her house for $2,000. If Best Buy only installs five kegerators before it abandons the job, is this substantial performance? ________________________________________________________________.

Example 129: Same facts as Example 128 except Mickey agrees to pay Best Buy $100 for each of the 20 kegerators. If Best Buy only installs five kegerators before it abandons the job, can it collect anything on the contract? ______________________________________________________.

C. UCC

• Requires ________________________________________________________ • Two main obligations:

o Perfect ___________________________________________ o Perfect ___________________________________________

Example 130: Mickey contracts for 500 pints of Fireball whiskey for $5,000. Fireball only sends Mickey 495 pints. Is this perfect tender? _______________. Mickey can reject all of the whiskey.

• If the seller fails to transfer perfect goods and some time is left on the contract, or if the time is up but the seller reasonably thought the buyer would accept the goods, then the buyer has to give the seller a _______________________________________________________.


CHAPTER 14: EXCUSES

A. Impossibility and Impracticability

• A contract that is impossible can no longer be performed. • An impracticable contract can only be performed with real difficulty. • Common fact patterns:

o Performance becomes __________________________ after the contract has been formed; o The ______________________________________________ of the contract is destroyed; or o In a services contract with a special person, the performing party ______________________

or becomes _________________________________________________________. o BUT, something that just makes the performance more ______________________________

than was expected will not normally excuse performance.

Look for something that hinders the _________________________________________.

Example 130: Mickey contracts with a local tavern, The Whiskey Jar, to bartend for one year in exchange for free drinks. If “Prohibition II” is passed outlawing alcohol consumption in Virginia, must Mickey perform this contract? _______________________________________________________________.

Example 131: You contract to reroof my house for $10,000, but before you can perform, my house burns down. I insist that our contract requires you to rebuild my house and then reroof it. Am I right? __________________________.

Example 132: You contract to dig a wine cellar for me for $10,000. After you start performing, you hit some big rocks and realize that it will cost you twice as much to finish the job, resulting in a loss on the contract. Are you excused from performing? _____________________________________________________.

• Look for an ____________________________________________________________ where the nonoccurrence of that event was a basic assumption of the contract, and the party seeking to discharge was not ____________________________________________.

B. Death

• Dying _________________________________ normally excuse liability on a contract that has already been made.

• The ___________________________________ of the deceased will usually be liable.

Example 133: Old Man Jones finds out that he only has a few more months to live. So he goes out and borrows $1 million from a bank and invests the money in jewelry. When he dies, is his debt contract with the bank excused? _____________________________________.


• Ask whether there is something special about the person performing on the contract, such that it makes no sense to continue if they die.

Example 134: You hire the Rolling Stones to play your birthday party next month for $1 million. If, sadly, Mick Jagger dies before the big date, can the rest of the band show up and play for the $1 million? ____________________. Likewise, you can’t make the band perform.

C. Frustration of Purpose

• Performance can still occur but something has happened to undermine the entire reason for the creation of the contract.

• Note: Very rare – event must be extreme and the risk cannot have been previously allocated to one of the parties.

Example 135: You are excited for the season opener of your favorite football team’s game, especially after paying $2,000 for season tickets. You sit down 20 rows up on the 50 yard line, when right before kick-off, a tall man in an Abe Lincoln hat sits down in front of you. He refuses to remove the hat and you can’t see the game. Can you get out of your contract for the football tickets? ________________________________.

Example 136: You rent an apartment in Chicago at $5,000 for one day because it has a prime view of Wrigley Field and the Cubs are scheduled to play in the World Series that afternoon. The game is unexpectedly cancelled one day before due to an earthquake. Is performance excused due to impossibility? ____________________________. What about frustration of purpose? _____________________________________________.

D. Modification or Cancellation

• Can both parties agree to walk away from a contract? __________________, as long as there is some _____________________________________________ remaining from each side.

• If one side has fully performed under the contract, there is no ____________________________________________________ for the modification.

Example 137: I contract to sell you my Jeep for $5,000. We meet to swap the money for the pink slip but both of us want to back out. Can we just say forget it? _____________________________________________________________.

Example 138: I contract to paint your house for $5,000. After I finish the job, we agree to rescind the deal. Is this valid? ___________________________________________________________.


CHAPTER 15: REMEDIES: ANTICIPATORY REPUDIATION AND EXPECTATION DAMAGES

A. Remedies

• ____________________________________________________ repudiation • ____________________________________________________ damages

o Expectation damages o Reliance damages o ___________________________________________ damages o Liquidated damages o ___________________________________________ damages

• Equitable Remedies

o Specific performance o Injunctions

B. Review of Constructive Condition of Exchange (CCE)

1. Common Law

o Failure to _________________________________________________ perform on the contract means that the CCE is not satisfied.

The other side can ________________________________________ its performance obligation on the contract.

o It is not permissible to withhold performance if the other side has substantially performed.

You might be entitled to something for the breach.

2. UCC

o The normal rule is _____________________________________________________. o The seller must strictly perform all of their obligations or be in breach.

C. Anticipatory Repudiation

• Issue: What are your remedy options when the other side says they are not going to perform on the contract (repudiates) before performance is due? Do you still have to perform and see if they really do breach?

Example 139: I hire you to build the Geis towers, a 150-story building in Charlottesville for $100 billion by Dec. 31. On July 31, when you’re about half-way finished with the project, I let it slip that I’m broke and never going to pay you the money. Do you have to keep working on the tower? ________________________________________________________________.


• The non-breaching party has two options:

1. Treat the repudiation as a breach and sue immediately for damages; or

2. ____________________________________ the repudiation, demand ________________________________________________, and see what happens.

Example 140: Same facts as Example 139. If you decide to sue me for money damages, must you wait until Dec. 31, or can you sue on July 31? _____________________________________________________________.

• A party can ____________________________________ its repudiation as long as the other side has not commenced a lawsuit for breach or acted in ____________________________________ on that repudiation by changing its position.

• What if you are unsure if the other side has repudiated?

o UCC – reasonable grounds for _____________________________________ about the other side’s performance allows a party to demand an ___________________________________________________________________________.

If the questionable party fails to respond within a _______________________________, the other party can treat it as a repudiation.

Example 141: I agree on Jan. 1 to buy 100 white shirts from Crooks Brothers for $1,000. Half the money is due on Feb. 1; the balance and the shirts are due Mar. 1. In the middle of January, I see a news expose about financial trouble at Crooks Brothers and they fail to return my phone calls. I send a letter demanding adequate assurance of performance on Jan. 15. If they say, “Don’t worry, we’re almost done with the shirts,” must I make the $500 Feb. 1 payment? ____________________________. What if Crooks Brothers does not respond? ____________________________________________________.

D. Expectation Damages

• Normal way to calculate damages • Goal: Put the party in the exact same economic position they would be in if the contract

________________________________________________________ as promised. • Measured by comparing the value of the performance __________________________________

versus the value of the performance ________________________________________________.

Example 142: I hire you to build the Geis towers, a 150-story building in Charlottesville for $100 billion. You never start the project and tell me you are breaching the contract. What are my expectation damages if I hire a replacement builder for $110 billion? _________________________________.


Example 143: Same facts as Example 142, but the replacement builder only costs $80 billion. What are my expectation damages? _________________. Do I have to pay you the $20 billion? _______________________.

• UCC universe – work through this basic formula to determine any expectation damages question.

Example 144: Buyer breach. Mickey contracts with Pabst to buy a keg of beer for $100. Mickey repudiates the contract, and Pabst sells the keg to a liquor store for $80. What are Pabst’s expectation damages? _______________________.

Example 145: Buyer refusal to pay. Mickey contracts with Pabst to buy a keg of beer for $100. Mickey gets the keg but breaches the contract by refusing to pay. The current price for a keg of Pabst has risen to $110. What are Pabst’s expectation damages? _____________________________.

Example 146: Seller breach. Mickey contracts with Pabst to buy a keg of beer for $100. Pabst fails to deliver the keg, and Mickey has to buy her keg from Blatz for $120 (called “covering”). What are Mickey’s expectation damages? ______________. When Pabst refuses to deliver, can Mickey buy a keg of Utopia Beer for $25,000 and sue Pabst for $24,900? _______________________________________________________________.

Example 147: Seller breach. Mickey contracts with Pabst to buy a keg of beer for $100 (paid up front). When Pabst delivers the keg, it is only half full but Mickey is desperate to get her drink on and keeps the half keg. It can be shown that a half keg of Pabst costs $60 at the corner liquor store. What are Mickey’s expectation damages? ______________________________________.

Example 148: Same facts as Example 147. Can Mickey send the keg back instead? ________________________________________________________.


CHAPTER 16: EXPECTATION DAMAGES (CONT’D)

A. Limits on Expectation Damages

Three major limits on the calculation of expectation damages:

1. Expectation damages have to be proven with ______________________________________.

Example 149: Tronald Dump decides to run for President and agrees to pay CNN $5 million for 10, 30-second advertising slots. CNN forgets to run the ads. Dump argues that but for this breach, he would have been elected president and sues for the four-year salary of the president. Can he get this as expectation damages? _____________________________________________.

Common fact patterns involve brand new or unproven business ventures which have difficulty proving what their lost profits would be.

2. Unforeseeable consequential damages are _________________________________________ unless the breaching party had some reason to know about the possibility of these incremental damages.

Distinguish two types of damages:

• ____________________________________ damages are the types of losses almost anyone would be expected to incur if there was a breach.

o Include _____________________________________ damages, such as the cost of storing rejected goods, finding a new buyer, or finding a replacement vendor.

• _______________________________________________ damages are losses that are unique or special to this plaintiff.

Example 150: I hire FedEx to deliver Super Bowl tickets to a buyer on eBay for $20. FedEx refuses to honor the contract, and I have to pay UPS $50 for rapid delivery to get the tickets there in time. I also use up $5 in gas driving to the UPS store. What are my expectation damages against FedEx? ______________________________________________________________.

Example 151: Same facts as Example 150 except I cannot get another carrier to deliver the tickets in time and as a result the buyer doesn’t pay me the $2,000 ticket price. Since I bought the tickets for $200, can I sue FedEx for my lost profits of $1,800? ________________________________________________________________.

Example 152: Same facts as Example 150 except I also provide FedEx with the exact details of my transaction. Can I now recover my lost profits? __________________________________________.


3. Doctrine of ________________________________________________

A breached-against party has to take reasonable steps to try to reduce the damages from breach.

Example 153: I agree to pay you $10,000 to fix my roof, which has major holes (I tell you this). You breach the contract. Option 1: I can sit in my bed and ring up the cash register every time it rains. Option 2: I can hire someone else to come in and fix my roof. Can I sit in my bed and ring up the cash register every time it rains? ____________________________________________________.

What happens if a party refuses to mitigate?

• Damages will be calculated as if you did mitigate. • Defendant bears the burden of ____________________________ that mitigation

did not occur.

Example 154: Same facts as Example 153, but I don’t hire a new roofer for several months. My oriental carpets (worth $25,000) are ruined from rain and snow. Eventually, I hire another roofer to do the job for $12,000 and sue you for $25,000 + $2,000 = $27,000. Should I receive this amount? _____________________________________________________. What is my recovery if you can show there was another roofer able to do the job for $9,000 at the time you told me of the breach? ________________________________.

Mitigation must be reasonably similar to the original contract.

Example 155: Shirley MacLaine contracts with MGM to make a movie entitled “Bloomer Girl” (a “progressive” movie about women’s liberation) for $10 million. MGM decides not to make the movie, but offers her a replacement part for $10 million in a country western, “Big Country, Big Man.” If MacLaine refuses to take the part, can MGM argue that she has failed to mitigate, such that expectation damages are zero? __________________________________.

B. A Few Special Problems Involving Expectation Damages

1. ________________________________________________________ Profits

o Arises when the paying party breaches o The selling party needs to mitigate against that breach by selling the goods to another. o If the seller is a ______________________________ who is in the business of selling this

type of product all the time, then expectation damages may seem to undercompensate the seller for breach because he would have tried to sell the incremental product again anyway.

The seller can try to argue for lost volume profits.

Example 156: Outrigger contracts to sell Mickey a speedboat for $15,000 (which cost Outrigger $10,000 to buy from the manufacturer). The following


week Mickey repudiates the sale. The very next day, Tronald Dump walks in to buy the same boat for $15,000. Mickey argues that Outrigger’s damages are zero because it fully mitigated her breach with the sale to Dump. Is she right? _________________________________________________________________________________________________________________________________. If Outrigger does get LVP, how should these be calculated? ___________________________________________________________.

2. __________________________________________ Performance – Construction Contract

o If the paying party breaches in a partially completed building contract, can the builder continue to finish the job? _________________________________, this would run counter to mitigation principles; they would be running up damages.

o Formula: Expectation damages = ___________________________________________ minus the amount _____________________________________________ minus the amount that would be needed to finish the job

Example 157: I hire you to build the Geis tower, a 150-story building in Charlottesville, VA, for $100 billion, with $10 billion due each month. You start the project, and I pay you for the first three months. After that, I tell you that I’m repudiating the contract and won’t pay another dime. You had expected to build the tower for $85 billion (netting a $15 billion profit), but have only spent $45 billion thus far. Can you recover the $70 billion balance on the contract price? _____________________________. What should you get? ______________________________________________________________.

3. Economic Waste and Diminution in Market Value Damages

o Situation where the performing party is breaching o The normal measure of expectation damages is the cost to complete the job.

Example 158: I hire you to build the Geis tower, a 150-story building in Charlottesville, VA, for $100 billion, with $10 billion due each month. You start the project, and I pay you for the first three months, and then you repudiate the contract. I have to pay someone else $80 billion to finish the tower. How much can I recover from you under expectation damages? ________________________________________________________________.

o Sometimes using “cost-to-complete” damages will dramatically overcompensate the plaintiff.

Example 159: I hire you to build the Geis tower, a 150-story building in Charlottesville, VA, for $100 billion. When you finish I’m conducting the final walkthrough and notice that the lobby walls are made of marble from North Carolina, not marble from Virginia (as called for in the contract specs). I sue you for breach and demand $20 billion (to tear it down) plus $100 billion (to rebuild


it with the right marble). Should I get the $120 billion in cost-to-complete damages? _______________________________________________________.

o In that situation, courts would likely award the diminution in market value.

How much lower is the market value of what I got versus what I wanted? Note: the breaching party must normally have acted in an ________________________

and ________________________________________________ manner for diminution in market value damages.

Example 160: Same facts as Example 159. If you can show that your use of North Carolina marble was unintentional, what damages must you pay for the breach? _______________________________________________________.


CHAPTER 17: RELIANCE, RESTITUTION, LIQUIDATED, AND PUNITIVE DAMAGES; SPECIFIC PERFORMANCE; FINAL REVIEW

A. Reliance Damages

• Goal: Put the party in the same economic position that they would be in if the contract had _________________________________________________________.

• Reliance Damages = Groundhog Day Damages • Ask: What loss has the plaintiff incurred that would have never taken place but for this breach of

contract?

Example 161: Recall the facts of Example 149 where Tronald Dump decides to run for President and agrees to pay CNN $5 million for 10, 30-second advertising slots. CNN forgets to run the ads. Dump cannot recover the 4-year salary of the president. Can he get anything under reliance damages? ________________________________________________________________.

• A party cannot recover both ________________________________________________ and _____________________________________________ damages.

o Plaintiff must elect one or the other

B. Restitution Damages

• Goal: Give the plaintiff an amount equal to the economic benefit that the plaintiff has conferred onto the defendant.

• Often close to reliance damages

Example 162: Owen Wilson pays $50,000 to Dr. Plastic, a famous surgeon who promises to “make Wilson’s nose perfect.” Wilson also incurs $20,000 in hospital costs related to this procedure. Dr. Plastic botches the job, and Wilson sues for restitution damages. What does Dr. Plastic owe Wilson? _____________________________________________________.

Example 163: Same facts as Example 162 but Wilson sues for reliance damages. What does Dr. Plastic owe Wilson? _____________________________________________________________.

Example 164: Same facts as Example 162 but Wilson sues for expectation damages. How would these be calculated? ________________________________________________________________________________________________________________________________.

C. Liquidated Damages

• These will only be in place if the parties have specifically provided for liquidated damages in their contract.


• Liquidated damages are set out as an explicitly negotiated amount that will be due upon breach. • Key Issue: Courts are wary about awarding punitive liquidated damages.

o Courts will only award liquidated damages if:

The amount of liquidated damages was _______________________________________ at the time of contracting; and

The actual damages for breach would be ______________________________________ and difficult to _________________________________________.

Example 165: Same facts as Example 162 but Wilson and Dr. Plastic agreed that the doctor would pay Wilson $500,000 if the operation was a failure. Will these liquidated damages be enforced? _______________________________. What if the liquidated damages were $50 million? ______________________.

D. Punitive Damages

• Almost never allowed in contract law • Don’t worry about them unless you see a breach that also seems like a tort (such as fraud).

E. Specific Performance and Injunctions

• These remedies are only awarded when money damages are deemed _____________________________________________.

• Specific performance is mainly available for ________________________________ transactions.

Example 166: Hugh Grant contracts to buy a Napa Valley winery for $25 million. If the seller breaches, can Grant get specific performance? ________________________________________________________________.

• Specific performance is presumptively unavailable for contracts involving ____________________________________________________________.

Example 167: Hugh Grant contracts to make a movie with Disney for $3 million. If Grant breaches, can Disney get specific performance, forcing Grant to act in the movie? ______________________________.

Example 168: Same facts as Example 167. Can Disney get an injunction prohibiting Grant from acting in another Hollywood movie for the next three months? _______________________________________________________.

• Specific performance may be available for unique goods like art or custom made items if money damages would be deemed inadequate.

Example 169: You purchased the original “Saturday Night Fever” dance floor in an auction, but the seller refuses to perform on the contract. Can you get specific performance? _______________________________________.


F. Final Review

1. WHICH UNIVERSE?

o Common Law o UCC Article 2

2. THE BIG THREE QUESTIONS IN CONTRACT LAW

o Has an enforceable contract been formed? [All Contracts Don’t Stink]

Agreement Consideration Defense Statute of Frauds

o Has the contract been performed? [Pizza With Crawling Escargot]

Parol evidence rule Warranty Condition Excuse

o What are the remedies for breach?

Anticipatory repudiation Money damages Specific performance

3. HOT TOPICS FOR TESTING

o Offer and acceptance o UCC 2-207 o Revoking an offer o Consideration – benefits and bargaining o Modification and preexisting duty rule o Statute of Frauds o Parol evidence rule o Warranties o Conditions and the CCE o Calculating money damages

GOOD LUCK ON THE EXAM!!!

[END OF HANDOUT]


Documents

LAW SCHOOL ESSENTIALS – CONTRACTS - …s3.amazonaws.com/mythm-vids-prod/LSE.Geis.Contracts.pdfLAW SCHOOL ESSENTIALS – CONTRACTS . PROFESSOR GEORGE S. GEIS . ... Dickinson v. Dodds