Is there a K?

Mutual Assent
Expressions of intentions communicated between people
Reasonable meaning of actions/words
Requires
Indefinite Test
Incomplete Test
Honest impression of
Vague terms
Intent to K
agreement
Missing terms
Intent to be bound
**Objective manifestation
Terms let for future
Adequate terms for
of assent (RPS)
resolution
compliance
Subjective manifestation of
If so vague, cant tell if
True commitment
assent
perf/breach -> no K
Ok if:
Intent ascertained +
Fixed duties
Valid Offer? Manifestation of intent to be bound
Material: price, quantity, subject matter, audience
Required
Consider
Not
Clear (obj: reasonable OFEE
Uni/Bi
Prelim negotiation
would interpret as offer)
CP/CD/UT
RF: Quote/Price/Info/Bid
Definite (most material terms)
Context
future intent to enter k
Explicit
Circumstances
Invitation to bid
Intent to commit*
Language
PQ/Ad (unless*)
Specific terms*
Audience*
Jest (unless believable)
Nothing left to negotiate
Opinion
Common understanding
Auction w reserve
Irrevocable Offers:
Option K (csn to keep open),
Firm offer (said it would stay open, Sale/purchase of goods, merchant, authenticated, 90 days)
Reliance on O (sometimes/rare circ)
Valid Acceptance? A final and unqualified manifestation of assent to the terms of an offer
Required
Consider
Not
No PoA
Knew of offer
Uni/Bi
withdrawn ((in)directly)
Right to accept
CP/CD/UT
CO
PoA (still effective)
Context
Rejection
Definite
Language
Silent:
Lapse of time (nature of comm/transactions,
Unequivocal (~amb)
market condition, degree of urgency)
Reap ben +
Unconditional
capacity (OFOR)
opp to rej +
~change/add/qualify term
Revocation
shoulda known
Uni/bi
payment expected Failed condition
Reasonable or required
OR
manner
prior dealings
Unsolicited merchandise
context
Illegal
Mailbox
Rule
If
Except
Acceptance on dispatch
Send R b4 A + A arrives 1st, = Aed
O valid only upon
st
receipt
Rejection upon receipt
Send R b4 A + R arrives 1 = Red
OFEEs fault got messed
Must be as fast/faster way
Send A b4 R + R arrives 1st = Aed
up (improper dispatch)
to reply
(unless O relied on R)
Send A b4 R + A arrives 1st = Aed
Mirror image rule: CO if change material. If change is not material, master of the offer /last shot rule

No Pay
benefits thrust upon you
Nec to prevent harm
No reas to know party would have consented
Acted inofficiously
No intent to charge

Understood to be the same thing

Obligation to each other
Some value
Sufficient specificity

Not
Gift
Illusory
Pre Existing Duty
Easy to terminate
~commitment
Past acts
For value received
Conditional gift (w/o Ben to PROR
Love/affection
Sham/Nominal
Motive
Inadequacy

Modification
Requires
Accord + satisfaction
(agreement to change terms,
discharging previous terms)
CSN (unless SoG btwn
Merchents)
Before performance
*consider moral obligation

Except
Mutual Abandonment
Unanticipated circs
Fair/equidable
Voluntary

Never
Pre Existing Duty
Duress
Coercion
Extortion

Do the terms vary from the offer?

Yes: Sale of goods? Battle of forms.
Yes: Not sale of goods? Mirror Image rule.

To decide if ambiguity exists, Judge considers

4 Corners
Only what is within the 4c

Promissory Estoppel: (Conrad)

(clear & definite) Promise
PROR reas expects (/intends) PREE to act
PROR induced actual reliance
Justice req enforcement
*reliance/ooPocket + (lost opportunity)
Unjust enrichment: one should not profit from anothers expense.
Consider: benefit, motive, relationship
*restitution
Promissory Restitution: promise for benefit already received
Pederson
Drake

Is party trying to introduce evidence to add or change a term?

Parol Evidence Rule
Parol Evidence
Elements

Final
NOT integrated. simple, leave
shit out, leaves room for extra
evidence

Complete
says it supersedes all xxx,
complex, includes all material
terms, nothing else applies

Yes, if consistent
NO

NO
NO

Evidence about Adding a term

Evidence about changing a
term

PER Exceptions (can bring in):

Ambiguous term
Existence and contents of a collateral agreement
Problem with K formation
Subsequent negotiations and modifications
Whether partially or completely integrated
Subsequent modifications

If ambiguity exists, weigh:

Primary purpose of K
Ordinary language v in light of intent
Construed against drafter
o In accordance with intentions of the OFEE
Reasonable, lawful, effective
Negotiated/specific > Standard term
Express terms>C/P>C/D>U/T

Defenses (voidable due to)

Capacity

Duress:
( econ)

Misrepresentation:
Affirmatively,
expressively
tried to hide
didnt disclose
(duty: affect
material value)

Mistake: Belief not in

accord with the facts @
time of K formation
Uni/Mu: did one parties
mistake influence the
other parties decision?

Undue Influence

Benefit confirmed
Once was CSN
Drake +
Knowledge or appreciation of
Valuable benefit received
Moral obligation
benefit
PROR recognized benefit
Inequitable acceptance or retention
of benefit
*Promise in recognition of past benefit received + Nec to prevent injustice + ~gift + no enforce = Unjust E

Liberal
Circumstances
Context
Preliminary negotiations

NOT preliminary negotiations

(illegal)

Webb

Plain meaning
Circumstances
Context (what term usually
means)

NOT circs/context/prelim negs

Public Policy
(violation of)

Consideration alternative?

Promise to pay past debt

Promise to pay for service already received

K interpretation (what are the terms)

Consideration
Required
Bargain Theory (promise in exchange for a
return promise/performance)
Reciprocal inducement
OR
Benefit (to PROR) or
Detriment (to PREE) (didnt have to do or
forbearance)
Sought by PROR

Pay
beneficial services rendered +
party aware and volunt accepts +
expects payment (implied promise)

Voidable + Restitution
Required
Infant/Intox/Mental health
~Act in a reasonable manner
~Understand in reasonable manner the
nature of act + consequence
Weakened bargaining position
At moment K was made
Intended Force/Coercion/Threat
Manifestation of assent induced
External pressure deprived OFEE of
will/free agency
No reas way out of situation
(Lack of adequate alt) (subj)
(Wrongful/illegal conduct (un=
bargaining power))
Lies about/being sure of/ basis for fact
Not readily observable
Reasonable investigation
Likely to induce RP into K (material)
Or
Intent to induce (fraud)
Induced into K by misrep
Would affect RP decision (sub/obj)
Reliance was reasonable
Basic Assumption
Acted with Reasonable Care
Material
__________________________________
Uni: Enforcement unconscionable OR
other party knew of mistake
Mutual: who should assume loss?/does
K need to be rescinded
Legislation unenforceable
PP goals > interest in enforcement
Pub interest
Public service? Practically nec?
Unfair bargaining adv?
Waives rights in AK?

Unfair persuasion
Abuse of relationship
Dominate party benefits
Induced by influence into something
OFEE wouldnt have done

Close relationship +
Reas confident person would only act in
manner consistent with ones welfare

Consider
Cant show psychosis -> treat
like normal person

Shouldnt expect to withstand

that kind of pressure
Assent not truly voluntary

Relationship (3P inclu)

Relative intelligence/exp.
Reasonable investigation
Nature (state of mind of
misreper)
Importance of fact + effect on
assent

Assumption of risk
Risk allocated by agreement?
Aware of limited knowledge?
Reas to think risks assumed?
Truthfulness of parties
NOT:
Error in judgment
Value that shoulda been known
Str of policy affect on future
policy
Exculpatory agreements?
Adhesion ks?
Service to public
Seriousness of misconduct?
Pol strength (leg/jud decis)?
Capacity
Presumption rule (1 dominate
party benefits)

Last Resort Defenses

Bad Faith
Every K imposes upon
each party a duty of
good faith + fair dealing

Unconscionability
(substantive)
(procedural)
Fairness

Evading spiri of transaction

Lack of diligence
Abusing right to adequate assurance of
performance
Willfully rendering only partial
performance
Failing to mitigate other ps damages
Abusing privilege to terminate K
Failing to cooperate
King w/o intent to perform
Abusing bargaining power
Not disclosing material facts
Strong/gross/manifestly unequal
Nature of terms excessively
disproportionate/absurdly unfair
Shocks conscious
Unfair formation

REMEDIES

Did party know of others

limitations?
Adhesion K
Absence of meaningful choice
Hid terms?

Did the contract specify agreed remedies? Is the specification valid? use this,
disregard chart (but it wont be)
Agreed Remedies Enforceable only if:

reasonable accurate determination of damages

reasonable forecast of harm

no other adequate remedy

*Pro: control risk, save expenses from litigation.
*Con: may over compensate, no penalty. No under compensate,
encourage breach
What May be included in damages?
MUST PROVE:
Proximate Cause to breach +
Sufficient certainty of damages (*Speculative amounts NOT granted.)

Enforceability

1.

Statute of frauds apply? There must be a writing signed by a party against whom enforcement is
sought, which describes the material terms of the agreement.
If X, then MUST be in writing.
Executor
Pay off anothers debt
(unless main purpose to benefit self)
Marriage
Sale of Interest of Land
Performance ends after at least one year

Exceptions
UCC
Full perf by both parties
Seller conveys prop
Buyer performs some act explainable only by K
existence
PE
Waived SoF

Are there conditions?If not fulfilled, K ~ enforcable

Implied K terms & provisions

Implied in fact/law. (in-fact: what parties wanted/ in law: what cts want)
Interdependence, typical order of performance expected,
Gap fillers

Express conditions

performance depends on uncertain event + what parties intended + occurs

during performance stage. if not met: waiver or terminated.

Commercial Sat Claw

Personal taste Sat Claw

Commercial value/quality/utility: objective standard RPS

Subjective standard URPS

Expectation

position party would have been in

if it had received the full
performance promised
Cost to complete
OR
Diminution if
Perf complete
Partial breach
Redoing would be econ waste
*prevents breacher from gaining
windfall

Repudiation
Nonperformance
Later performance
Incomplete/faulty performance
Failure to act in good faith in performance
Wrongfully rejecting the other parties performance

consider

Remedy
damage

Aggrieved

Substantial Performance
Partial
Omission/deviation
doesnt impair structure as a
whole
Not material
What would be an adequate
remedy
Trivial + innocent
Inadvertent,
Performance OR
Cost of completion or
correction/ difference in
value UNLESS unfair

must allow completion and

pay - remedy

~Substantial
Material
Seriously fucks with
benefit reasonably
expected from K
Compensation avail
extent deprived of
benefit reas expected
intent of k
Chance breacher will
cure
BF?
Cost of completion
OR correction

Performance
Total
Material breach that has
not been cured in a
reasonable time
Aggregate of
circumstances
Serious defects in
performance
Obligor indicates wont
cure?
Cost of completion OR
correction

2.
Reliance
put the aggrieved party back into
the position it would have been in
had there been no K.
3.
Restitution
Placing parties at status quo
to avoid unjust enrichment.
*Includes breacher (for part perf)

4.

Equity

Damages Inadequate/Indefinite

Suspend/withhold
performance while
awaiting future
performance
DOES NOT allow
cancelation of K,
unless in language of
K or time is of
essence

Right to cancel K

Is a party discharged from duty to perform as a result of impossibility,

Impracticability, or frustration? K ~enforceable
Impossibility
Cant perform
Not claimants fault
Assumption of
nonoccurrence
Unforeseeable
Discharged of duty

Impracticability
Impractical to perform
(expensive/difficult)
Without fault of party
Unanticipated
Assumption of non-occurrence
Duty discharged.
If not: pay for damages OR
render performance

Prove:
Causation,
Amount (some uncertainty, NO speculation)
Reasonable expense
Foreseeable natural consequences
Incidental: extra cost due to dealing with
breach
EX: money/time lost from looking for
substitute. Shipping faulty goods back to seller

Remedy: $ that allows performance to

happen. Consider: unreasonable economic
waste

Breach type?
Type
Required

Indirect:

consequential: natural, foreseeable,

reasonable losses because of circumstances
EX: lost profit ,customers, business volume

Breach performance ~match terms and conditions specified

Direct: Gives injured party the equivalent of

full performance (cost to complete* vs
reasonable market value to complete)

Frustration
Assumption of non-occurrence
Unforeseeable
Neither partys fault
(nearly) Destroys value of
performance/purpose of K
If req met
Must allow completion and pay OR
Duty discharged

Formula: (Promised received )+ indirect

loss cost avoided loss avoided.
EX: Promissory Estoppel
Remedy: out of pocket and lost opportunity
reas expenses.
USE WHEN:
K unenforceable
Performance excused.
Remedy: benefits conferred must be restored
though $$
Specific performance
Prohibitory injunction
Specific restitution (give it back)

Reasonable mitigation and avoidance considerations:

Burden on breaching party.

Reasonably avoidable?

Some grace aggrieved party will not exercise perfect judgment

Alternative opportunity must be comparable and similarly situated substitute.

* Punitive/P&S: not typically awarded unless egregious/nature of k involves emotion
Does defendant have offsetting damages or CC? (even if minor breach)?
X damages Ds offsetting damages/CC