WhenDoestheUCCapply?

Appliestoallsaleofgoodscases,orwhensaleofgoodspredominatestheagreement
(hybridcontract)
1. Goodsallthingswhicharemoveableatthetimeofidentificationofthecontractforsaleotherthanthe
moneywhichisbeingpaid
2. FactorstodetermineifsaleofgoodsPredominantFactorTest
Amountofcostgoingtoeachpart
Termsofthegood
Termsinthecontractbuyerseller
UCCGeneralDefinitions
Agreement(1201(3))thebargainofpartiesinfactasfoundintheirlanguageorbyimplicationfromother
circumstances
Contract(1201(11))thetotallegalobligationwhichresultsfromthepartiesagreementasaffectedbytheAct
andanyotherapplicableruleoflaw
o Ex.Gapfillersdonotneedtobeintheagreementtobeincluded

AGREEMENTPROCESSINTENTTOCONTRACT

Objectivev.SubjectiveTheoryofContracts
(SeeLucyv.Zehmersaleoffarmonreceipt)
Subjectiveconsidersindividualautonomyandintent Objectivepartiesintentisjudgefromanobjective
perspectivesooutwardmanifestationsofintent(asheld
thelawinLucy)whatmattersishowyourappear
NOTE:Standardofinterpretation(dominant)reasonableunderstandingtestwhatareasonablepersonintheposition
oftheotherpartywouldunderstandtheagreementtomean
ObjectivemanifestationofintentBUTconsidersthespecialknowledgeofthecontractingparty

PresumptionofIntendingNoLegalConsequences
Thesetypesofagreementsaregeneralnotheldtobecontracts(unlessexplicitlymadeso)
SocialEngagementsagreementtotakeawalkortoattendaparty
AgreementsWithinaMarriageBalfourv.Balfouragreementwithinamarriagetoprovidethewifewitha
monthlyallowancedoesnotconstituteabindingcontract

ArePreliminaryNegotiationsBindingsKsFourFactors
1.Didthepartiesexplicitlysaythereisnocontract?
2.Partialperformance?showsthepartiesthoughttheywerebound
3.Wereallessentialtermsagreedupon?(Indefiniteness)
4.Thecomplexityandmagnitudeofthetransaction

1
 THEOFFER
RequirementsforanOffer
1.Manifestationofpresentcontractualintent?(languageofcommitment)
2.Werethetermsdefiniteandcertain?(statedthesubjectmatter,priceanddelivery)
Showsthatthiswasnotjustapreliminarystageinnegotiations
Thepointisthatitisanexpressionofcommitmenttoabargain,sothatwhenthereisacceptancetherewillbeaK

Advertisement
ExpressionofOpinionor Generally
Prediction
HopesandEstimates
Intention
StatementsofWishes, NOTpromisesoroffers
Hopes,orDesires
InvitationtoMakeanOffer
PriceQuotationforReal Similartoadvertisementwhensenttomanypeople
Property/Goods
Promisev.NonCommittalExpression
WhenAD=invitationforoffers
The#ofpeopleanadisintendtoreachismuchgreaterthantheavailabilityofthe
product,and
Thereisnofirstcome,firstservelanguageornumberavailable
SeeLeonardv.Pepsico,IncPepsiadNOTanofferbecause(1)Thecommercial
wasONLYANADanddoesnothavethefeaturestomakeanADanoffer(also
becauseoftongueincheckattitudeofcommercialanddoesnotsatisfySOF)
WhenAD=offer
Adisclear,definiteandexplicitandleavesnothingopenfornegotiation
o Limit#ofOfferees(listspecificqtyandpossiblyspecificqty/person)
o ClearaboutwhotheofferitgoingtoFirstCome,FirstServed
OpinionsareNOTpromises
StandardtoDetermineIfOpinion=Promise
WhetherareasonablepersoninthepositionofthePwouldconcludethattheD
madeapromiseormerelystatedanopinion
Doctor/Patient
GenerallyNOTlookedatasanoffer,butratherandopinionorexpressionof
reassuranceneedcertainlevelofassuringlanguage
o BUTSEEHawkinsv.McGeeadoctoruseofstronglanguageofexpress
promisethathecanmaketheboyshad100%perfectconstitutesanoffer
o ANDSEESullivanv.OConnorplasticsurgeonpromisingacertainoutcome
canbeheldliableforbreachifthereisclearproofofexpresspromisetoperform
inaspecificway
Generally
EstimatesareNOTpromises
o ExceptionsEstimatesmadewiththeIntentToDeceive,purposefully
lowFraud
ThewordestimateisNOTconclusiveincertaincontextscanmeanoffer
Estimatemaybebindingonatheoryofequitableestoppel
StandardtoDetermineIfEstimate=Promise
Areasonablepersonwouldconcludethatthepartywhoisgivinganestimateis
promisingtodothejobforthepricenamed(sameasabove)
IntentionlanguageImgoingtosellmycarfor$450
Statement/letterofintent:
Typicallyviewedanoncommittalstatements,preliminarytoaK
BUTsometimescourtsmayfindacommitmentsusceptibletounpredictable
interpretation
RealProperty
SeeLonerganv.Scolinickadinpapertosellpropertywithsubsequent

2
 correspondenceregardingsaledoesNOTCONSTITUTEaKbecausetherewas
nounequivocalintenttocreateabindingagreementinthewriting
Goods
SeeFairmountGlassWorksv.CrudenMartinWoodenware,Co.whena
communicationinvitesoffers,theresponsewillmorelikelybeconsideredan
offerunderthereasonableinterpretationtest

3
 Indefiniteness
Indefinitenesssomeevidenceofintentnottocontract
1. Themoretermsthatareomittedinanagreementthemorelikelyitisthatthepartiesdonotintendtocontract
2. Relatestotheagreementafteryouhaveanagreementyouconsiderwhetheritfailsfromindefiniteness

ViewsofIndefiniteness
CommonLaw 1. DoPartiesIntendtobeBound?
2. AreMaterialTermsReasonablyCertain?
a. SeeThreePossibilitiesBelow
UCC(2204(3)) Eventhough1+termsareleftopenacontractforsaledoesnotfailforindefinitenessif:
1. ThePartiesIntendtobeBound(QofFact)
2. ThereisaReasonablyCertainBasisforGivinganAppropriateRemedy(QofLaw)
Gapfillers
ExampleSouthwestEngineeringCo.vMartinTractorwhereaKissilentastotermsof
payment,thelawwillimplyaspartoftheagreementthatpaymentsbemadeatthetimeofdelivery
SeverabilityUCC IfpartieswouldStillIntendtobeBoundEVENifIndefiniteIssueswereSevered,thenthecourt
canfindaKfortheagreedtermsanddroptheIndefiniteprovision
SeeEcklesv.Shannonwherethereisaquestionofseverabilitytheintentoftheparty
thatstandstogainfromtheindefiniteprovisionshouldbeconsideredclosely

TypesofIndefinitenessCommonLaw
1.PurporttoAgree Generally
NOgapfillersavailableKisvoid
RemedyQuasiKRestitution
o PrecoversunjustenrichmentofD(requireslesscertaintythanK)
Curemaybecuredby(1)conduct,or(2)agreement
ItisanIssueofInterpretation
LookatExtrinsicEvidenceandWritingb/wParties
CourtsprefertofindKoverQuasiK
SeeFairmountthetermcarloads,interpretedusingextrinsicevidence
2.Silence NoTermAtAll
IFthereinanintenttoK=Aninvitationforthecourttoincludethetermtheparties
wouldhaveintended
WaystoAddMaterialTerm
o Impliedfromsurroundingcircumstances
o SuppliedbyacourtusingGapFillers
Ex.Durationreasonabletime
TermsneedstobebasedonsomeobjectivecriteriaReasonabletime/price
Employment(silenceastodurationofemployment)AtWillEmploymentis
Presumed,EXCEPT:
1. ActualemploymentK
2. ImpliedinFactKpersonnelmanual
3. FiringisAgainstPublicPolicyTortofWrongfulDischarge(SeeWagenseller
v.ScottsdaleMemorialHospitalfiringanemployeefornotparticipatingin
inapprop.activity=badreason)
4. BreachofImpliedCovenantofGFandFDusedoverthepublicpolicy
becauseattorneyswilltrytoarguethatitisabroaderstandardthatcoversany
kindoffiringwithoutcause
a. Courtswillsayno,atwillemploymentdoesnotreq.cause
3.Agreetoagree TraditionalRuleCourtswillnotimplythetermsSOifusuallyendsupwithaVOID
CONTRACT
Materialtermsaretoovagueandindefinitetobeenforced

4
 IndefinitenessUCC
GeneralProvision TheRule
2204(3) Evenifoneormoretermsareleftopen,KdoesNOTfailforindefinitenessIF:
1. PartieshaveintendedtomakeaK,and
2. Thereisareasonablycertainbasisforgivinganappropriateremedy
Whenusegapfillers?
Wherepartiessilent
Wherepartiespurportedtoagree
Wherepartiesmadeanagreementtoagree
SpecificProvisions Placeofdeliverysellersplaceofbusiness/residence
TimeforShipmentorDeliveryreasonabletime
Timeofpaymentattimeandplacewherethebuyeristoreceivethegoods

ConsiderWhenFillingintheGap
1. Theintentionoftheparties
2. Thenatureandpurposeofthecontract
3. Goodfaithandfaildealings
4. Reasonableness
NOTE:#1isthebasisformostgapfillers

AgreementtoAgreev.AgreementtoNegotiate
AgreementtoAgree CommonLaw
Voidfromindefinitenessnogapfillersallowed
SeeJosephMartinJr.Deliv.Scheumacheracontractthatonlydictatesthatthe
partiesmustagreeisnotcertainandspecificenoughtoallowthecourttoimposethe
missingterms
UCC/Modern
Courtcanputingapfillerswhenthepartiesshowintenttobeboundandcannotagree
totheterms
Remedy
1. Specificperformance/injunctiongapfillersguidewhomustdowhat
2. Damageslooktoseewho,ifanyone,breachedthedutytonegotiateingood
faithnecessaryinordertoassignblame/whoshouldpaywho
Togetdamagessomeonemustbeinthewrong
Agreementto View1:
NegotiateinGood Agreementtonegotiateholdnolegalsignificance=unenforceable
Faith View2:
Basisforpromissoryestoppelclaim
Mustshowthereliancethatwasmadeontheagreement
ThepromisetonegotiatemustbedefinitethesejurisdictionwillnotallowforPEfor
animpliedpromisetonegotiate
SeeCopelandv.BaskinRobbins,USA
UCCandRest.2d
Onceyouhavecompletedthegoodfaithnegotiation,whetherthereisanagreementor
not,thereisnofurtherobligation
CourtswillNOTimplywhatthepartieswouldhaveagreedupnogapfillers

5
 Remedy
o Reliancedamages(mostcourts)youwillneedtoshowreliance,sotheanalysis
endsuptobesimilartothepromissoryestoppel
o Expectationdamagesnotreallyappliedbecauseitwouldrequirethecourttosay
whatthepartieswouldhaveagreedupon,andthecourtsareNOTgoingtodothis

6

UnilateralKOnlyonepartymakesapromisetoperformandthereforeonlythispartyissubjecttoalegalobligation
AcceptancebyPerformance
BilateralKBothpartiesmakepromisestoperform
AcceptancebyPromise
WereTheyInvitedtoAccept?
DoTheyHaveKnowledgeofthe
Offer?
MannerofAcceptance(PromisetoPerformORPerformance)CommonLaw
1.AmbiguousastoManner
2.ExplicitlyStatesBothManners
MannerofAcceptanceUCC(SaleofGoodsOnly)+Rest.2d
1.Ambiguous/Indifferent
(UCC2206(1))
2.OfferorisVERYclearaboutthe
manner
TheAcceptance
WhoisAcceptingtheOffer?
Youmustbeinvitedtoacceptinordertohavethepowerofacceptance!
o Onlythepersonwhowasgiventheoffercanaccept
PurportedacceptancebyonewhowasNOTinvitedtoacceptacceptance,
BUTmaybeanoffer
UnilateralContract
Offereemusthaveknowledgeoftheofferinordertorecover
1. Rest.1stknowledgebeforestartofperformance
2. Rest2ndknowledgebeforeperformanceiscomplete
BilateralContract
No,ifanoffereeacceptsanofferwithoutreadingitheisstillboundbecause
areasonablepersonintheofferorspositionwouldrelyonthepromise
Onlyonepossiblemannerofacceptance
o Offerorismasterofferorhas1specificmannerofacceptanceinmind
Presumptionofacceptancebypromiseprovidesgreaterprotectionforthe
parties
Bothareacceptable
Strongpresumptionofindifference
EVENiftheofferorsaysIpromiseifyoupromisenotclear
enoughthattheofferorisONLYlookingforacceptancebyprom
Acceptancecanbeinanyreasonablemanner:
1. Promise
2. Performance
3. Beginningofperformance(2206(2))createsaBiK
a. Requiresnoticewithinareasonabletime
i. Offerorunlikelytoknowofbeginningofperf
ii. Notice=condition,notpartofperformance
b. NoticeNOTreceivedw/inreasonabletimetheoffermay:
i. Treatitasiftheofferlapsedbeforeacceptance,or
ii. Waivethecondition
c. ReasonableDiligenceinsendingnoticeisenoughdoNOT
needactualreceiptofnotice(Rest.2nd)
Reasonablenessamannerthatindicatescommitment
Promptnessrequiredpromiseorpromptperformance
Performancefarinthefutureshowsofferorwantspromisewithin
areasonabletimetodothework
Mustacceptinthemannerstated
Offerorremainsmasteroftheoffer
Ex.BrokersandRewardOffersstillclearlyseekingperformanceonly
7
 AcceptancebyPromiseONLY(BilateralK)
Promisemustbecommunicatedto
theofferorNOTICE
UnilateralKTrick
WaystoAcceptanOffertoaBilateralK
1. Expresspromise
2. Impliedinfactpromise
o Beginperformance
Inpresenceofofferor(w/knowledgetheyarepresent)
Mustbeobviousthatitsbeingdoneforperformance
Knowledgeofthescopeofworkisimportantto
determinewhetherbeginningofperformisa
commitmenttocompletethewholeK
3. Completeperformancewithinsettimeforacceptance
o Offerorintendsacceptancebypromise
o Fullperformancewithintimeofacceptance
NOTE:Notanissueundermodernviewthatgenerallyallows
acceptancebyperformanceORpromise
Exceptions
1. Offerorcandisposeofnoticerequirementthecommunicationisfor
thebenefitoftheofferorSOhecandisposeoftherequirementifhewants
(ex.contractcanbesignedatyourhomeoffice)
2. Theofferitselfcandispenseofthecommunicationrequirementmatter
ofinterpretation
Sellersendsbuyernonconforminggoods
Commonlawthenonconforminggoods=Sscounteroffer
Neveracauseofactionforbreach
Brejects=nocontract
Bacceptance=acceptanceofcounteroffer
o ReverseUnilateralContract
ModernView(UCC)commonlawviewisabusiveoftheB
Sendingnonconforminggoods=SsacceptanceofBsoriginalofferand
abreachoftheK
IfthebuyeracceptsthegoodsliableforpriceBUTcanbringsuitfor
breach/damages
IfthebuyerrejectsheisNOTliableforpaymentANDcanbringsuit
forbreach/damages
ExceptionifSgivesseasonablenoticetoBthatnonconforminggoodsaregoing
tobesentasanaccommodationsonly=NObreach
Mustbenoticebeforeshipment

AcceptancebyPerformanceONLY(UnilateralK)
Offercanberevokedupuntilbeginningofperformance
Performancemustbe RoleofInvoluntaryAct
avoluntaryact Maybeaconditionprecedenttoofferorsdutytoperform
o SeeCarlillv.CarbolicSmokeBall,Co.usingtheballwasthevoluntaryact
BUTgettingthefluwasaCP
Onceperformanceiscomplete
NOrevocation,eveniftheCPhasnotyetoccurred
WhennotimeissetfortheCPreasonabletime

8
Requirements 1. KnowledgeofOffer
o Rest.1stknowledgebeforestartofperformance
o Rest2dknowledgebeforeperformanceiscomplete
2. IntenttoAccepttheOffer
o Whenperformanceisambiguouswithrespecttointent
Rest.1stSubjectiveTest,looktoperformerstestimonyforintent
Rest.2dObjectiveTest,PresumptionofIntentunlessevidencetothe
contrary
o DoesNOTneedtobesolereasonforperformance
Notice ClassicView(minority)
Noticeonlyrequiredwhenaskedfor
ModernApproach(Majority,Rest.1st+2d)Requiredinlimitedcircumstances
WhenNoticeisRequired
o Offereehasreasontobelievethatofferorwillnotlearnofperformancewith
reasonablepromptnessandcertitude
DutyofOfferorDischargedUnless:
1. Offereeexercisereasonablediligencetonotifytheofferor,OR
Reasonablediligenceprompt,properlyaddressed,etc
2. Theofferorotherwiselearnsofperformancewithinareasonabletime,OR
3. Theeofferorexpresslyorbyimplicationindicatesthatnoticeisnotnecessary
SaleofGoodbyAdOffermakesunilateralofferforsaleofgoods
byADimpliedlywaivesnoticeofacceptance,ifthepurposeistosell
asmanyproductsaspossible(muststillgivenoticeofifC/Poccurs)
NOTE:Duringthewindowbeforereasonabletimehasexpiredbothpartiesare
bound(45)
Noticetreatedas:
Halfofcasespartofacceptance
Halfofcases(Rest.2d)C/Ptoofferorsdutytoperform
Beginningof MajorityView(Rest.1st+2d45)
Performanceofa Makesofferirrevocable
UniK o BecomesanOptionContractforofferee
o MerePreparationisNOTenough
OfferorisNOTboundtoperformyet,butCANNOTrevoketheoffer
OfferorBreachsamedamagesascalculatedforbreachedbilateralagreement
o Offereemustprovereadiness,willingnessandabilitytoperform,butforthe
repudiation
Performancerequirescooperationofofferorandcooperationwithheldtenderof
performanceistheequivalentofpartperformance
MinorityView(NYLaw)
OfferorisNOTbounduntilfullperformance

AcceptancebySilence
GeneralRuleSilencedoesnotgiverisetoanacceptanceofanofferorcounteroffer

1.Partiesagreetoallow
acceptancebysilence
2.PatternofDealingWithout
AcceptancebySilence
TwoPossibleWays
1. OffereeexplicitlymakeshissilenceanacceptanceIfyoudonthearfrom
mybyTuesday,IacceptcancreatebindingK
2. OfferorauthorizesoffereetoacceptbysilenceIfIdonthearfromyouby
Tuesday,Iassumeyouaccept
a. TraditionalViewSilenceisnotapromise,noK
b. Rest.2ndOfferorcannotenforceK,butoffereecanagreebysilence
RuleWhenthereisacourseofdealingsitisreasonableforStoconcludethatBs
9
 Speaking silenceisanacceptance
Rest.2dthetestiswhetherareasonablepersoninSspositionwould
concludethatsilencewasacceptance
SeeHobbsv.MassasoitwhereSsentBskinsmanytimesthatwereaccepted
withsilence,cannotbesilentandreject
3.Presumptionofpayment Acceptancebysilenceif:
1. Partytakesthebenefitoftheofferedservice,and
2. Partyhasreasontoknowcompensationisexpected,and
3. Partyhasreasonableopportunitytoobject
TheStandard
ObjectiveTestwhetherareasonablepersoninthesamesituationwould
thinkcompensationwasexpected
Remedy
Resultsinapromisetopayreasonablevalue
o Wouldotherwisebeunjustenrichment
o Requiresactualbenefit
ExceptionFamilialRelationships
Presumptionofgratuity
Thosewillbloodrelationoraffinity(married,gf/bf,livinginsamehousehold)
donothavereasontobelievecompensationisexpected
Presumptioncanberebuttedeitherexplicitlyorimplicitly
o Showthereisnoconnectionthatwouldwarrantpresumption
o SeeWilhoitev.Beckthoughshelivedinthehousetherelationship
didnotimplyfamilialgratuity
DoNOTneedtoshowactualbenefit

AcceptancebyConductConductmanifestingapromise
Kimpliedinfactordinarycourseofdealingandcommonunderstandingshowamutualintentiontocontract

ClassicCaseSellerSendsUnsolicitedMerchandisetoBuyer
CommonLaw Ifbuyerexercisesdominionandcontrolovermerchandise
SEECHARTBELOW
39UnitedStatesCode GeneralRule
Cantreatunsolicitedproductsasgiftandyoucanretain,use,discardordispose
Doesnotapplytoeverything
PurposeCorrectinganunfairoutcomeunderthecommonlaw
Exceptions
PriorDealingsSeeaboveinAcceptancebySilence
Legitimatemistakendelivery

AcceptancebyConduct
(ExerciseofDominion)

AcceptanceSellercantreatconductasacceptance OR TortORQuasiK/Restitutionappliesonlyto
sueforstatedprice(ontheideathatitwillbe unjustenrichmentcases
similartothereasonablevalue) 10 Reasonablevalue
Ifdominionamountstoacceptancethere
Ifaskingpriceismanifestlyunreasonableseller
canONLYberecoveryofunderacceptance
islimitedtoTortorQuasiK
WhatistheAcceptableMediumofAcceptance?
PrescribedMedium
NonPrescribedMedium
PartiesinthePresenceofEachOther
Offerorspecifiesonemeansattheonlyacceptablemeansofacceptance
IfoffereeusesprescribedmediumapplyMBR(below)
Courtsarereluctanttointerpretlanguageascallingforaprescribedmediumof
acceptance
o Evenifamediumofacceptanceisstatedintheofferthetendencyisto
holdthattheofferorhasmerelysuggested,ratherthanprescribed
Iftheoffereeusesadifferentmediumofacceptanceconsideredacounteroffer
ONLYAPPLICABLEWHENTHEREISNOTAPRESCRIBEDMEDIUM
CommonLawAuthorizedmedium
Offerauthorizesthemeansofcommunicationusedintransmittingtheofferand
anyothermeanscustomaryatthetimeandplacereceived
Meansofoffer=meansofacceptance(orsimilar)
UCC+R.2ndReasonableMedium
Anyreasonablemediuminthecircumstances
Conceptofwhatisreasonableintendedtobeflexible
Acceptancebymailisordinarilyreasonablewhennegotiatingatadistance
Mustbereasonableinreferencetotimeex.requestoffaximpliesdesirefor
quickresponse
WhenisAcceptanceEffective?
EffectiveUponHearing
DoNOTapplyMBRb/citissubstantiallyinstantaneous2way
communication
Exception
OfferorisatfaultfornothearingAND
Offereedoesnothavereasontobelievethattheofferordidnothear
11

PartiesataDistance
TelephoneConversations
AlmostunanimousviewofscholarsPhoneconversations=same
rulesaspartiesinpresence
MajorityofCasesacceptancetakesplacewhenspokenbytheofferee
ratherthanwhenheardbytheofferor
IFtheoffereesaidIacceptedwithknowledgethatthereisabreakin
theconnect=NOK
Consideredsubstantiallyinstantaneous2waycommunication
EffectiveWhenSent,Why?MailboxRule(seebelow)
Theofferisrevocableuntilitisaccepted
SOwewanttoshortenthetimeofrevocability
NOTE:Irrevocableofferacceptanceeffectiveuponreceipt
Email
NOTinstantaneous2waycommunication
Splitintheviews
o MBRshouldbeapplicable
o Facetofaceshouldbeapplicable
OfferandRejection
EffectiveonReceipt

TheMailboxRule
Generally TheRule
Acceptanceiseffectivelycommunicatedwhenitisputoutofthepossessionof
theofferee(ex.intoapublicmailbox)
Theruleappliesevenifthecommunicationisdelayedorlostintransit
NOTE:OfferorcancontractouttheMailboxRule,butitisrare
Purpose
Atthispointtheofferee,havingsentanacceptance,shouldbeabletorelyonthe
existenceofaKandshouldbeprotectedagainstaninterveningrevocation
Requirements 1. PartiesareatadistanceDoesnotapplytosubstantiallyinstantaneoustwoway
communication
2. Mediumisreliable
a. Ex.thepostoffice
3. Mediummustbeauthorized(commonlaw)ORreasonable(modern,UCC,R.2d)
orprescribed
a. Ifimpropermediumseebelow
4. Mustusereasonablediligence
a. Properaddress,stamp,etc
b. Ifnotreasonablediligenceseebelow
Exceptions 1. TheofferisirrevocableEffectiveonreceipt
2. Theoffereehasreasontobelievethatofferorhasnotorwillnothearofthe
acceptance

12
 a. Ex.theoffereewatchesthemailboxblowup
3. Theofferprescribestheexclusiveplace,timeormediumofacceptance
a. NoKisformedunlessthetermsoftheKarefollowed
ReasonableDiligenceor TraditionalApproach
ProperMediumNOTUsed Acceptanceiseffectivewhenreceivedratherthanwhensent,providedthatthe
offerisstillopennegatesMBR
Restatement(2d)
Ifacceptancewassentandreceivedinatimelyfashion(despitethelackof
diligence)theMBRwillstillapply
o Althoughoffereeatfault,hisfaultcasednodelaynopunishment

OffereeSendsBOTHAcceptanceandRejection
RejectionSentTHEN MBRdoesNOTapply
AcceptanceSent SOwhicheverisreceivedfirstiseffective
Rejectionreceived,acceptancereceived=noK
o Acceptance=counteroffer
Acceptancereceived,rejectionreceived=K
AcceptanceSentTHEN MBRdoesapply
RejectionSent 1. Acceptancereceived,rejectionreceived=K
2. Rejectionreceived,acceptancereceived=split
a. SomeCourtsNoK
b. Rest.2dK
i. Otherwisetheoffereecouldspeculateattheofferorsexpenseby
seeinghowthemarketwent
ii. Iftheofferorisboundbythecommunication,soshouldthe
offeree
iii. BUTifofferorreliesontherejectionbeforereceivingthe
acceptanceoffereewillbeestoppedfromenforcingthe
agreement

MistakeinTransmissionbyIntermediary(NonAgent)
TotheDetrimentoftheOfferor
MajorityViewK,basedonmistakenvalue
ObjectiveTheoryofKtheoffereereadandunderstoodtheoffer
correctly
UNLESStheoffereehasreasontobelievethattherewasa
mistakeintheoffer
MinorityViewNoK(Bendersaysbetterrule)
ObjectivetheoryofKshouldonlyapplywhentheofferoriseither
negligentofmaliciousfault
NofaultofofferorhereSOnoK

TerminationofthePowerofAcceptance
LapseofTime Durationexplicitlystatedthatistheexpirationtime
WhentoStartCounting?Caneitherbeinterpretedinfavorofthe
offerororofferee
o MajorityStartcountingthedayafterreceipt
13

SuperveningIllegality
SuperveningDeathorLackof
Capacity
DeathorDestructionofaPerson
orThingEssentialtoPerformance
Revocation
DurationNOTstatedopenforreasonabletime(questionoffact)
Factorstoconsiderforreasonabletime
o Whetherthetransactionisspeculative
o Themanifestpurposeoftheofferor
o Rest.2ndwhetherornottheoffereeisactingingoodfaith
Terminationcanalsooccurfromthehappeningofanevent
Facetofaceconversation
Offerusuallylapseswhentheconversationisover
Canshowcontraryintentions
LateAcceptance
ClassicViewlateacceptance=counterofferthatcanonlybeaccepted
byacommunicatedacceptance
SecondViewtheofferormaytreatthelateacceptanceasanacceptance
bywaivingthelateness(Rest.2drejectsanduntenable)
ThirdViewiftheacceptanceislatebutsentisapossiblyreasonable
time,theofferorhasaburdentoreplywithinareasonabletime
o Noreply=K
R.2dViewifnotimeisstated,reasonabletimeruleapplies
o Iftheofferoracceptsanddoesnotobjecttolateness,thissilence
willbetakenintoaccountattrialtodeterminethequestionof
reasonabletime
AtthetimetheofferwasmadeitwaslegalTHENbecameillegal
OFOFFEROR
Death
Majorityviewtheofferisterminatedwhethertheoffereeknowsofthe
death/incapacityornot
Minorityviewtheofferisterminatedonlyiftheoffereeisawareofthe
death
UnilateralKterminatestheofferUNLESSofferhasbecome
irrevocablealready
Incapacity
MajorityView
o AdjudicationofIncapacity(totalincapacity)operateslike
death(samesplitasabove)
o NoAdjudication(mereincapacity)terminatestheoffer
ONLYiftheoffereeisorshouldbeawareofit
NOTthedutyoftheoffereetofindoutthemental
capacity
MinorityView
o WithorWithoutAdjudicationoffereeMUSThaveknownof
theincapacity
Protectsreasonableexpectations
Easierfortheofferortoinformofincapacity,than
offereetofigureitout
SeeSwift&Co.v.Smigel
OFOFFEREE
PreventstheoffereesrepresentativefromacceptingtheofferONLYtheofferee
mayaccept
Terminationifithappensbeforeacceptance
Knowledgeofoffereedoesnotmatter
TerminatedundertheimpossibilityofKdoctrine
Generally
Communicationfromtheofferortotheoffereethattheyarenotlonger
committedtotheoffer
14
 Typicallyeffectiveuponreceipt
Equalpublicityrule
Whenofferisdistributedtoanunknowngroupoffermayberevokedby
equalpublication
Ifidentityofsomeoffereesknownruledoesnotapply,notthebest
meansofinformingthem
Indirectrevocationanoffercanbeconsideredrevokedindirectlywhenthe
offereereceivesinfooftheofferorsconductindicatinghenolongerwishesto
makeanoffer.Infomustbe:
1. ObjectivelyTrue/Accurate
2. Reliable(fromareliablesource)offereemustinquiretoascertainthe
accuracy
NOTE:R.1stlimitedtosaleoflandandchattels,R.2dremovesall
limitations

RejectionORCounteroffersCommonLaw
Note:Rejection/Counteroffereffectiveuponreceipt
General Counteroffergenerally=rejection
SimilartoCounteroffersBUT 1. Counterinquiry
rejections 2. Commentonterms
3. Requestformodificationofanoffer
4. RequestformodificationoftheK
5. GrumblingAssent
6. Acceptance+separateoffer
7. FutureAcceptance
MirrorImageRule(disfavored) Thetermsanacceptancemustmirrorthetermsintheoffer
Iftheydonotmatchyouhaveacounteroffer
LastShotPrincipleThelastpersontosendtermsgettermsof
theK
o BandSsendnonidenticalformswithpreprintedterms
o BeforeBacceptsthegoodNOKb/cmirrorimagerule
NOTsatisfied
o AfterBacceptsthegoodsacceptancebyconduct
o Sellergenerallywinswithtermsoninvoiceofgoods

AcceptanceVaryingFromOfferUCC2207
OverviewDoesNOTapplyto AppliedtosaleofgoodscaseswithadditionalORdifferenttermsintheacceptance
oralofferANDoralacceptance thanintheoffer
offercanbeoral,acceptance Framework
MUSTbewritten Use(1)totelluswhetheraKisformedbasedoncommunicationofparties
IfcommunicationformsKUse(2)todeterminetermsofK
IfcommunicationdoesNOTformKUse(3)toseewhetherconduct
15

Subsection1Does 1. Definiteandseasonableexpressionofacceptance?
CommunicationofParties
WarrantaK?
Subsection2WhatArethe 1. AdditionalTerms
TermsoftheKFormed?
Subsection3DoParties AlthoughcommunicationofthepartiesdidNOTwarrantaK,conductmight
ConductFormaK?
Confirmations
RollingKTheoryEasterbrook
formedKandwhatthetermsofKshouldbe
a. DefinitedoesNOTdivergesignificantlyfromdickeredterms
i. Ex.Iwillbuyfor$5,000.Iacceptandpriceis$10,000.
ii. ThreeViews:
1. Yes.Untenableview.
2. No,significantdivergenceastodickeredterms
3. No,looktowhatareasonablecommercialofferor
wouldconclude
b. Seasonableacceptanceinatimelyfashion
c. IfYESgotoquestion#2
d. IfNONosubsection(1)K,butmaybeaKundersubsection(3)
2. Isacceptanceexpresslyconditionalonassenttotheadditionalordifferent
terms?
a. IfNOKexists,gotosubsection2
i. NOSeeDortonv.Collins&AikmanwhereaKsayssubject
tobutdoesnotexpresslystatethattheofferormustassentthe
KisNOTexpresslyconditionalofassent
b. IfYESCounteroffer,acceptancebyconduct?Gotosubsection3
a. NonMerchantsTermsconsideredproposalsforadditiontotheK
i. Needsactiveacceptance
ii. SilencedoesNOTactasacceptanceofterms
b. MerchantsIfMerchantissilentthetermsarepartofK,UNLESS(a)
(b)or(c):
(a) Theofferexpresslylimitsacceptancetothetermsoftheoffer
(b) Theymateriallyalterit;or(Note:arbitrationclauseat
commonlawwasaMT,nowdisputed)
(c) Notificationofobjectiontothemhasalreadybeengivenoris
givenwithinareasonabletimeafternoticeofthemisreceived
c. HowaBuyer/Offerorcanensurenonewterms
i. Use(a)ThetermsofthisKcannotbemodified,unless
signedbyus
ii. Use(c)Weherebyobjecttoanyadditionalordifferent
terms
2. DifferentTermsThreeViews
a. Proposaltomodify(CLbutthiswouldntcomeupunderCL)
b. Applysubsection(2)lookatmaterialalterations
i. Differenttermsalmostneveradopted
c. KnockOutRule(mostpopular)
i. KnockoutdifferenttermsandlooktoUCCforneutralterms
(likein(3))
SeeAcceptancebyConductabove
TermsofK
Termspartiesagreedupon,AND
SupplementarytermswillbetakefromUCCGapFillersneutralterms
(eliminatesLastShotPrinciple)
AKalreadyexists
ConfirmationissenttoconfirmthetermsoftheKthatalreadyexists
IFthereareadditional/differenttermsintheconfirmationreferto2207(2)to
determineifthetermswillapplytothecontract
TermsintheBoxTwoViews
S=offeror(oppositeofnormal)
16
 IfBdoesNOTreturntheitemwithinspecifiedtime,thereisacontract
fromSstermsinthebox
SeeProCDv.Zeidenbergacomputersoftwarepurchasermustobeythe
termsofashrinkwraplicense,iftheychoosenottoreturntheitem
SeeAlsoHillv.Gateway2000computerpurchasermustobeytermsin
thebox,orreturnwithinthereturnperiod
Apply2207 B=offeror
Termsinthebox,ifdifferent,arenotpartofKunlessagreeduponby
nonmerchantB
Lookto2207(2)&decidewhetheradditionaltermswillbecomepartof
theK
SeeKlocekv.Gateway

WaystoMakeanOfferIrrevocable
1. Consideration Paymentofconsiderationmakesofferirrevocableonstatedterms
Ex.Payastatedamounttohavetheofferremainopenandirrevocablefor
thedesignatedperiod
Ex.5yearlease+offertorenewpayrent=payingforconsideration
2. Statute UCC2205FirmOffer(SaleofGoodsONLY)
OfferisirrevocablewithoutconsiderationIF:
1. Theofferismadebyamerchant(offereedoesNOTneedtobea
merchant)tobuyorsellgoods
2. SignedWriting
3. Termsgiveassurancethattheofferwillbeheldopenclear
languagethatirrevocabilityisintended
4. Offerisirrevocablefortimestatedorreasonabletime,whenno
timestarted(bothnomorethanthreemonths)
NYGOL(NYGeneralObligationsLaw)
AppliestopartieswhentheofferorisNOTamerchant
Requires:Signedwritingthatstatesthattheofferiswillbeheldopen(do
notneedtoexplicitlysayfirmofferorirrevocable)
3. RecitalofPurported PurposeConsiderationcanvalidateanoptionif:
Consideration(R.2d) 1. Signedwriting,
2. Recitesapurportedconsiderationand
3. Proposesafairexchangewithinareasonabletime
NOTE:Purportedconsiderationnominal/shamconsideration
4. BeginningofPerformanceof ApplieswhenanoffercanONLYbeacceptedbyperformance
UniK(R.45) Thebeginningofperformancegivestheofferorsomethinghebargainedfor
actsasconsideration
5. PromissoryEstoppel SeeBelow

AcceptanceandRightofFirstRefusalIrrevocableOffers
AcceptanceofanIrrevocable
Offer
Acceptanceofan
OfferofIrrevocability
AcceptanceAfterPeriodof
Irrevocability
RightofFirstRefusal
Effectiveuponreceipt
DoNOTapplytheMBRbecauseofferordoesnothavetheadvantageof
revocability
Mustbedonewithinareasonabletime(unlessspecificallyspecified)
Offercanstillbeaccepteduntiltheofferexpiresorhasbeenrevokedbythe
offeror
SeeBeallv.Beall
OnlycomesintoplayIF:
1. Ownerdecidestoselltheproperty
2. Abonafidepurchaserwantstobuyit
17
 Partyhasarighttobuyitonthesametermsasthebonafidepurchaser
Acceptancemustbeunconditionaltoconstituteanacceptance

TerminationofIrrevocableOffer
PowerofacceptanceIS LapseofTime
terminatedby: Deathordestructionofapersonorthingessentialfortheperformanceofthe
offeredKtheoryofimpossibilityofperformance
SuperveningIllegalityimpossibilityofperformance
PowerofacceptanceisNOT Revocation(obviously)
terminatedby: Deathorsuperveningincapacityoftheofferor(unlessoorisessentialtoperf)
RejectionSplitinauthorities
o Earlierviewrejectionterminatedanirrevocableoffer
o ModernviewNOTterminatedbecause(usually)theoffereehaspaida
considerationforirrevocabilityandKrightsarenotgenerallylostbythe
rejectionofatenderedperformance
o CounterofferdoesNOTnormallyoperateasarejectionwheretheoffer
isirrevocableBUTapurportedacceptancethatvariesthetermsoftheoffer
isNOTavalidacceptance

18
 Consideration

UnilateralContracts

RequirementsofValidConsideration
PromiseeSuffersLegalDetriment
PromiseInducesDetriment
DetrimentInducesPromise
Definition
Do/promisetodowhatthepromiseewasnotlegallyobligatedtoOR
refrain/promisetorefrainfromlegalprivilege
ALWAYSwhattheofferee(promisee)givesintheagreementarrangement
Needeither:
DetrimenttopromiseeORbenefittopromisor
Promiseegivesthedetrimentinexchangeforthepromise
Promiseemustknowoftheofferedpromiseandmanifestanintenttoaccept
Inducingmustbeactualorapparent
Promisorbargainsforthedetriment
Thepromisormadethepromisebecausethepromisorwishestoexchange
it(atleastinpart)forthedetrimenttobeincurredbythepromisee
IfitsoNOTbargainedforgratuitouspromise
Stateofmindofferingstateofmind(ratherthanagiftmakingstateofmind)

PromisesthatareNOTBargainedFor
GratuitousPromises Thepromiseistomakeafuturegift,wherethepromisorasksforandreceivesnothing
inexchange
NOTlegallyenforceable
BUToncethegiftismade,thepromisorcannotrescindthegiftforlackof
consideration
PastConsideration PastConsiderationConsideration
Thepromiseehasalreadytakentheactionbeforethepromiseismade
ThepromisorcannotseektoinduceanactionthathasalreadyoccurredSOitis
NOTconsideration
BUTNYStatute
Pastconsiderationcanbeconsiderationif:
1. SignedWriting
2. Writingexpressesthepastconsideration

UnilateralKsandConsideration
ThirdPartyInvolvement Thebenefit/detrimentCANbefromathirdparty(notthepromisororpromisee)
Offereethepersonwhocanaccepttheofferandgiveconsideration/legal
detriment
o Eventhoughhemaynotbethesamepersonasthepromisee
AdequacyoftheDetriment LegaldetrimentdoesNOTneedtobeacertainsizetoconstitutedetriment
ImpactsbargainedforanalysisBUTsize(ifverysmall)canhelpdetermine
whethersomethingwasactuallybargainedfor
PurportedConsideration ShamconsiderationIfthepurportedconsiderationisnotactuallygivenover,butsaidto
begivenover,VIEWS:
Classic/MajorityViewbecauseitcanbeshownthattheconsiderationwas
nevergiventhereisNOK
MinorityView(Rest.2d,commerciallysounder)allowedinthecaseofoption
Ksandguarantees
o Whenyouhavea(1)signedwriting,(2)thatrecites
purported
considerationand(3)proposesanexchangeinfairtermswithina
19
 reasonabletime
o Bindingwithoutconsiderationnotgoingtopretendthereisactual
consideration
NominalConsiderationThepurportedconsiderationisactuallypaid,butitisclearly
NOTbargainedforb/citissonominal
Classic/MajorityViewDetrimentisclearlynotbargainedforpromiseis
unenforceable
Minority(Rest.2d)SeeShamConsideration
InvalidClaims Ifapartybelievesin,orisuncertainaboutthevalidityoftheclaim,shouldthe
surrenderofaninvalidclaimstillbenondetrimental?
1stRest.claimissufficientforlegaldetrimentifareasonablepersonwould
havebelievedtheclaimsANDitwasfiledingoodfaith(Feigev.Boehm)
Rest.2dclaimissufficientforlegaldetrimentiseithertheclaimwas
reasonableORingoodfaith

BilateralContract

PreExistingDutyRulewhereapersonperformsorpromisestoperformalegalobligation,orpromisestorefrainfrom
doingorrefrainsfromdoingwhatthepersonisnotlegallyprivilegedtodo,therepersonhasNOTincurreddetriment

ModificationofKandPreExistingDutyRule
ModificationofaK ONLYappliestoBiKsBiKcreatesthepreexistingduty
IfpartiesagreetomodifyanexistingKandthemodificationonlybenefitsoneside
Kisgenerallyunenforceablefromlackofconsideration
Ex.employeecontinuessamedutiesforhigherpay
ViewsofModification: PreExistingDutyRule,Majority(byfar)preexistingdutyruleDOESapplytoK
modifications
MinorityExceptionSuspendpreexistingdutyruleforKmodificationswhenthe
modificationismadeduetounforeseendifficulties(ex.priceincreases)
MinorityView
Nopreexistingduty
Rest.2dKcanbemodifiedwithoutconsiderationIF:
1. Kisnotfullyperformedoneitherside
2. Unanticipatedcircumstanceoccurs
3. Themodificationisfairandequitable
UCC22091(1)forSaleofGoods
Modifiedwithoutconsideration
NEEDgoodfaithmustbebothobjective(reasonable)ANDsubjective(honestin
fact)
NewYorkStatute
ModificationsANDDischarges
o Modifiedwithoutconsideration
o NEEDsignedwritingendorsingacheckisinsufficient
Recession ThreeStepProcess
1. OldK
2. RecessionAgreementvalidaslongoftheperformanceisnotcompleteoneither
side
3. NewK
NOTE:SomecourtsallowtheKofrecessionsandnewKtooccuratthesametime
(Schwartzreichv.BaumaBasch)

NoOralModificationClauses
CommonLaw NOMClausesmeansnothing
20
 Partiescanagreetoanythingtheywant
SOtheycanagreetorescindtheNOMclauseandthentheycanmodifyorally
NYStatute NOMclauseareenforceable
BUTcanactasawaiverofrightsundertheoriginalK,ifapartyreliesonan
oralmodification
UCC2209(NotModern) NOMclausesareenforceable
UCCallowsKmodificationwithoutconsiderationSOtheyallowforNOM
clausestoprotectpartiesfromfalseoralmodificationsclaims
NOMclausesneed:
Initialsignedwritingagreement
Statementintheagreementtoexcludemodificationexceptbysignedwriting
o JustsayingNOMmaynotbeenoughbecauseitallowsfor
modificationbyconduct
TomodifyNOMKneed:
Formsignedbybothparties
Anineffectivemodification(notinwriting):
CanactasawaiverofrightsundertheoriginalK,ifapartyreliesonanoral
modification

PreExistingDutyandThirdParties
A&BhaveaBiK,CcomesalongandmakesanoffertoA
inreturnforperformanceofthesamedutyAalreadyowestoB
ClassicView Generally
AgreementtoperformapreexistingdutytoathirdpartyisVOID
ConvinceNottoRescind
BUTifCconvincesAandBfromrescindingtheiragreementthereislegal
detrimentincurredbecausetheyhavethelegalrighttorescind
ModernView Csthirdpartypromiseisenforceable
(bothRestatements) Rationales
o Rest.1stThirdpartypromiseshouldbeenforcebecausethedutywas
owedtoB,notCtheBENEFITconferredtoCissufficient,evenwithout
detriment
o Rest.2dLesslikelihoodofduressorunfairpressureinthirdparty
scenariothanin2partyscenario
Exceptionifthepreexistingdutyisownedtothepromisorasamemberofthe
public

AccordandSatisfaction
Canbedischargedbyanyamountofmoneythepartiescanagreeon
Accord Agreementtogiveortoacceptastipulatedperformanceinthefuturein
satisfactionordischargeoftheobligorsexistingduty
Mustexplicitlyindicatethatitisanaccord
Satisfaction Performanceofthisaccord
A&SFactPatterns:
1.Undisputed,liquidateddebt: MajorityView:
Considerationisneededfordischargeofanobligation
Dowes$100 Partpaymentbyadebtorofanundisputedamountdueis
NOT
Dsend$50,sayspaidinfull detrimenttosupportapromisebythecreditortodischargetheentire
Ccashes amount(Foakesv.Beer)
Releasemustalsohaveconsideration
Waystocreateconsideration
o Partpaymentpriortoduedate
21

2.Goodfaithdisputeor FactPattern
unliquidated(uncertain)
Dpaysmorethanhethinkshe
owes
3.Goodfaithdisputeor FactPattern
unliquidated(uncertain)
Dpayswhathethinksheowes
4.ExecutoryAccord
5.Lawyer/clientrelationship
6.SeparateandDistinctKs FactPattern
RetentionofCheck
Protest
o Debtorgivesecurityinadditiontopartpayment
o Refrainsfrombankruptcyorinsolvencyproceedingswhichshe
wouldotherwiseemploy
o Arrangesacompositionagreement,inwhichseveralcreditors
agreetotakelessthanthefullamountduetothem
Minorityview(Rest.2d)
Noconsiderationneeded
PartpaymentisadischargeORacceptablewherethereareunforeseen
hardshipsforfullpayment
CclaimsDowes$100
DclaimsDowes$50
Dsends$75,sayspaymentinfull
Ccashes
Accordandsatisfactionsucceeds
ConsiderationPayingmorethanhethoughtheowed($25)
CclaimsDowes$100
DclaimsDowes$50
Dsends$50,sayspaymentinfull
Ccashes
Majorityviewgoodaccordandsatisfaction,treatedasifthereisconsideration
Policyreasonsfavoringthesettlementofdisputes
Explicitagreementtosettlethedebtinamannerthanlookslike#2
Seebelow
FactPattern
Lawyercollects$1000forhisclient
Lsends$900toclient,saypaymentinfull
Clientcashes,butwantstheother$100
Lsayshetookacommission
Clientthoughtitwasafavor
NoAccord
Lookslike#3,BUTthereisNOaccordhere
Thelawyerisafiduciaryagentofhisclientsotheissuewillbe
litigated
Sameasfactsas#3
BUTdebtismadeupofnumerousKswhicharedeemedtobeSeparate
andDistinct
DonlysendspaymentfortheKswhichareundisputedhopingto
dischargetheKsthataredisputedaswell,
NoAccordandSatisfaction
Thepaymentof1Kisnotconsiderationforthedischargeofanother
entirelyseparateanddistinctK
UCCsaysthatInstallmentKisconsideredasingleKandnot
separateanddistinctKs
Ifcheckisheldforanunreasonablelengthoftime,mostsayitisthesameas
cashing
CommonLaw
Protestingandthencashingprotestingdoesnotmatter
o ProtestissayingnosatisfactionBUTCsconductshows
agreementotherwiseitwouldbeconversion
o Chasnorighttothe$
22

NeedtobePromisingSomethingOtherThanPartPayment,orThereisNOCONSIDERATION
ExecutoryAccord
SubstitutedContract
Protestandretention
o Majoritysameasprotestingandcashing
o ButcouldmakeanargumentthatDcanstoppaymentoncheck,
sothereisnorealproblemcreatedbyCholdingthecheck
UCC1207OnlyimportantinNYLaw
(1) ApartywhogivesexplicitreservationofrightsisNOTboundbythe
proposedchangesamountowedevenifheperforms(cashesthecheck)
(2) DoesnotapplytoA&S
NYRuledidNOTaccept(2)
AppliestoA&S
ForSaleofGoodsandNonsaleofgoods
NOTE:ExplicitReservationcrossingofpaymentinfullisnotenough
Needlanguageofreservation
Ex.underprotestorwithoutprejudice
ExecutoryAccord+SubstitutedK
Botharebilateralcontracts
Definition
Anagreementthatanexistingclaimshallbedischargedinthefuturebythe
renditionofasubstitutedperformance
Onceperformedonbothsides=accordandsatisfaction
Modernviewgenerallyvalid
NYvalidityonlybystatutemustbeinasignedwriting
Ex.Ipromisetodischargethedebtyouowemeupondeliveryofyourcar,
ifyoupromisetodeliverthecarbyMonday
RighttoSueonOriginalDebt
Ifdebtormateriallybreaches,creditormay:
o CancelexecutoryaccordKandenforceoriginalclaim
o Enforcetheexecutoryaccord
NOTE:Duringperiodofwaitingforperformance,cannotrecoveron
originalK
Ifcreditorbreaches(refusestender),debtormay:
o Raisetheexecutoryaccordasadefenseagainstanactionbythe
creditorontheoriginalclaim,AND
o Bringclaimforspecificperformance
Definition
Anagreementthatoperatesasanimmediatedischargeofexistingclaim
uponreceiptofpromise
Ex.Ifyouwillpromisetodeliveryoucarwithin30days,Iwill
immediatelytreatthedebtyouowemeassatisfiedanddischarged
RighttoSueonOriginalDebt
IfbreachallclaimsmustbebroughtunderthesubstitutedK
CannotsueonoriginalclaimthewholepointisthatthenewKtookthe
placeoftheoldK
23

DistinguishingBetweentheTwo
UnilateralAccord
ExceptionssubstitutedKisunenforceable,void,orvoidable
Questionofintentionoftheparties
Wherenointentionexpressedpresumptionofanexecutoryaccord
Liquidatedandundisputedobligationpresumedthatthecreditordid
notintendtosurrenderpriorrightsunlessanduntilthenewagreementis
actuallyperformed
Ex.Ifyoudeliveryourcarw/inareasonabletime,Ipromisetodischargeyourdebt
TraditionalRuleCreditorcanrefusetenderwithoutanylegal
consequences
ModernRule(+NYbystatute)iftheofferisinwritingandsignedby
theofferorortheofferorsagent:
o DebtorcouldsuefordamagesforbreachoftheaccordOR,inthe
rightcase,forspecificperformanceoftheaccordbykeepingthe
tendergood

EnforceableSignedWritingsWithoutTrueConsideration
UNDERNYSTATUTE
1.Modifications(51103)
2.Discharges(51103)
3.PastConsideration(51105)
4.Release(15303)
5.Rewardforlostproperty(51113)
6.Makingoffersirrevocable(51109)

OldandNewDuress
DoctrineofEconomicDuress
WhenUsed
Duress
OldDuress
UsedtoonlyapplytothreatoflifeorlimbBUTwithmodificationsmade
tothepreexistingdutyruleduresschanged
NewDuress
NowapplicabletoeconomicduressthreattobreakaK
Requirements
1. Threatismadeinbadfaith
2. Noreasonablealternativebuttoagree
a. Afeasibleandpracticalmeansofavoidingtheconsequencesofthe
threat
b. Undulyburdensomeorriskyreasonablealternative
Ksignedundereconomicduressvoidable
IfapartyadherestoavoidableKtheycanobtainrestitution
1. Defenseforbreachofcontract
2. Basisforrecoveryofrestitution

ConsiderationinBiKandMutuality+IllusoryPromises
MutualityofConsideration BilateralK
NeedconsiderationonBOTHsidesofaBiK
o OtherwisetheKisvoid
ApromiseisconsiderationIFthepromisedperformanceisconsideration(if
thecontractwereUniK,wouldtheperformanceactasconsideration?)
UnilateralK
MutualityofconsiderationisNOTrequiredbecausethereisonlyapromiseon

24

MutualityofObligation
IllusoryPromises
ImpliedPromise
ConditionedonSatisfaction
TerminationProvisions
SuccessivePerformancesWith CommonLaw
NoStatedDuration
RequirementandOutput RequirementK
Contracts
oneside
Notnecessaryforacontract
Optioncontracts
Voidablecontracts
Unilateralcontract
Cannotserveasconsideration
Apromisethatdoesnotlimitthefreedomofthepromisor
Ex.IpromisetopayifIwantto
IsitanIllusoryPromise?
IntentofthePartiesisKey
IFcourtfeelspartiesintendedtobeboundtheywillfindarealpromise,even
ifitmeansaslightrestrictionoffreedom
ExclusiveDealingsK
Callsforpartiestoshareprofits,courtwillfindanimpliedpromisetouse
reasonableeffortstomakeaprofit
UCC2306(2)besteffortsrequirementinexclusivedealings,unless
otherwiseagreed
ObtainingFinancing
Wheresaleiscontingentofobtainingfinancing,courtfoundanimplied
promisetousereasonableeffortstoobtainit,duetointenttobebound
NOTE:WhereagreementisconditionedoneventsOUTSIDEofthepartiescontrol,
promiseisNOTillusory
RequiresagoodfaithORreasonableperson wouldbesatisfiedstandard(depending
ontypeofsatisfaction)
MoreBelow
Traditional
TerminationProvisionwithoutnotice=illusory
Withnoticeprovision=OK
UCC2309(3)
Viewsofrighttoterminateatanytime
o Noticenotmentionedgapfillerofreasonablenoticesupplied
o 20daynoticeisitunconscionable?Ifso,gapfillerofreasonable
notice
o Nonoticeisitunconscionable?Ifso,gapfillerofreasonable
notice.Ifnot,youwillhavetheillusoryproblem
NOTE:Unconscionablityinquiryoccursattimeoftermination
Reasonablenoticeis:
1. Reasonabletimetoseeksubstitutearrangement
2. Relianceamountoftimetorecoopinvestment
VoidBiKb/cofindefiniteness
UCC2309(2)
Gapfillervalidforareasonabletimeandcanbeterminatebyeitherpartyat
anytime
BuyerpromisestobuywhattheyNEED
BuyerMUSTbuyfromsellerwhentheneedtheproduct
NOpromisetoneedanyortousereasonableeffortstoneedit
OverdemandingBuyer
o Maximumcouldbeexplicit
o UCC2306(1)Ifnomaxisset,sellerisonlyboundtocomplywith
arequestthatis:
1. GoodFaithactualneed
2. Notunreasonablydisproportionateto
25
 a. StatedestimateOR
b. Normal/comparableprioroutput
UndermandingBuyer
o Minimumcouldbeexplicit
o UCC2306(1)Ifnomaxisset,sellerisonlyboundtocomplywith
arequestthatis:
1. GoodFaithONLYyoucangodowntozeroaslongasitis
ingoodfaith
ForgingaGoodUniKOutofa ManyoftheaboveresultinaVOIDBiKCourtsmaydothefollowingtopreserve
BadBiK theK:
IfApromisestodoXifCpromisetodoY
Butthereisnoconsiderationforthepromise
AfteronesidefullyperformscanconsideritanenforceableunilateralK
wheretheperformancewasconsiderationsfortheotherpartyspromise
TurnSingleBiKIntoaSeriesofUnilateralKs
InterpretoneBiKtobeaseriesofUniKs
Ex.AtWillEmployment
o Theagreement,sinceterminableatanymoment,isillusory
o BUTifyouworkforweek,youareentitledtothepayfortheweek
UniKwithperformance

26
 PromissoryEstoppel
**GotoONLYwhenapromisefailstheKanalysis**
Requirements 1. Promiseaclearanddefiniteoffer
2. Areasonableexpectationthattheofferwillinducerelianceintheotherparty
3. ActualandreasonablereliancebytheoffereeAND
4. InjusticecanbeavoidedONLYbyenforcementofthepromise
NOTE:Recoverylimitedtoexpensesincurredonreliance(Rest.2d)

Rest.1stReliancemustbedefiniteandsubstantial
Rest.2dJusticemustrequireenforcement
RestatementAdditions90 Allowsforcontingencyofreliancebyathirdpartyonapromise
CharitablesubscriptionORmarriagesettlementbindWITHOUT
considerationorproofofreliance
IrrevocableOffer Promissoryisoneofthewaystomakeanofferirrevocable

27
 ParolEvidenceRule
Whenweusethisrule WhenthelastexpressionisaWRITTENandbindingcontract
Ruletorestrictevidencefrombeingadmittedtoshowthatanagreementwas
somethinginadditiontothewrittencontract
TheTest: 1. Isthereintegration?Wasthewritingafinalexpression?
a. IfYESGotoQuestion#2
b. IfNOparolevidenceruledoesNOTapply
2. Isthewritingatotalorpartialintegration?Isthefinalwritingintendedto
containallterms?
a. IfPartialGotoQuestion#3
b. IfTotalparolevidenceisinadmissible
3. Isofferedtermconsistentwiththewriting?
a. Termisconsistentparolevidenceisadmissible
b. Termisinconsistentparolevidenceisinadmissible
Question#1Integration Thecrucialrequirementisthatthepartieshaveregardedthewritingasthefinal
embodimentoftheiragreement
TestsforQuestion#2Totalv. 1. Fourcornersthedocumentalone
Partial a. Noonefollowsthis
b. Totalintegrationunlessincompleteonface
2. CollateralKRule
a. CollateralAgreement=Partial
i. Thesideagreementcanstandonitsowntwofeet,independent
consideration,itsowncontract
ii. Thesideagreementisconsideredrelatedtobutseparatefrom
theintegratedwrittenagreement
b. CollateralPromise=Total
i. Thesideagreementisonlyapromiseononeside,cannotstand
onitsown
3. Williston(Rest.1st/Majority)Wouldreasonablepartieshaveincludedthis
termintheircontract?Orwouldithavebeennaturaltoexcludeit?
a. MergerclauseTotalintegration(exceptwherethedocumentis
obviouslyincomplete)
b. NaturaltoomitPartialIntegration
c. NaturaltoincludeTotalIntegration
NOTE:Usesobjectiveevidenceofintent
4. Corbin(trendtoward)Questionofintentoftheactualparties
a. Soweneedtolookatallrelevantevidencetodetermineintent
b. Underhisviewawritingisordinarilyonlyapartialintegration
5. UCC2202AnintegrationmayNOTbecontradictedbyanypriororanyoral
contemporaneousagreement
a. BUTitmaybeexplained/supplementedbyevidenceofadditional,
consistentterms
b. PresumptionWritingispresumedtobe
partial
integration
c. Presumptioncanbeovercomeif:
i. MergerClauseStatesthatawritingisafinal,completeand
exclusivestatementofallthetermsagreedon(partiesactually
intendedwritingtobeatotalintegration),OR
ii. Ifitscertainthatpartiessimilarlysituatedwouldhaveincludedthe
offeredterminthewriting
d. Courtshouldconsiderallrelevantevidenceinthisdetermination
6. Rest.2dCorbinsruleofascertainingactualintentshouldbeusedin
determiningwhetherthereisatotalorpartialintegration
a. BUTevenifthisdeterminesitisatotalintegration,consistent
28
 additionaltermsarestilladmissibleIF:
i. TheallegedagreementismadeforaseparateconsiderationOR
ii. Theofferedagreementisnotwithinthescopeoftheintegrated
writing,OR
iii. Theofferedtermsmightnaturallyomittedfromthewriting
b. BottomLineundertheRest.2ditisimpossibletohavemoreapartial
integration
Question#3Consistentv. Oneviewtobeinconsistentitmustbeatotalnegation
Inconsistent Otherviewabsenceofreasonableharmony
Timing PromisemadeBEFOREthewritingAppliesto:
OralAgreements
WrittenAgreements
PromisemadeATTHESAMETIMEasthewritingAppliesto:
OralAgreementsONLY
PromisemadeAFTERthewritingAppliesto:
Neitheritisamodification
SHAMAGREEMENTS ParolEvidenceRulesdoesNOTapplytoattemptstoshowthatancontractissham

Interpretation
Generally AscertainingthemeaningofaK
TwoMainProblems
IntroducingextrinsicevidencethatwillchangethemeaningofKissue
relatingtotheadmissibility
Subjectivev.Objectivedowecareaboutthepartiesintentions?
ViewsofInterpretation 1. PlainMeaningRuleMajorityrule
PlainmeaningisunambiguousIfawritingisplainand
unambiguousonitsface,itsmeaningmustbedeterminedfromthe
fourcornersoftheinstrumentwithoutextrinsicevidenceofanykind
o Exceptionobscure/technicalterms
PlainmeaningisambiguousEEisallowed
UseofEEtoshowthatatermisambiguousDividedissue
o Majoritybarevidencethatdemonstratesthatwhatappears
tobeaplainmeaningisactuallyambiguous
o MinorityadmitsEE
Problemmeaningofwordsvarydependingoncontextand
surroundingcircumstancesmatter
Condemnedbyacademics,theUCC,Rest.2dandanumberofcourts
2. WillistonsRulesObjectiveView
Rejectstheplainmeaningrule
Integration
o Meaningattachedbyreasonablyintelligentreaderknowing
allthecircumstancesofthecontract
o WhatCANNOTbeconsidered:
Whatthepartiessaidtoeachotheraboutmeaning
Whatthepartiessubjectivelybelievedthewriting
meantatthetimeofagreement
o Ifambiguousgotononintegrationanalysis
NonIntegration
o Unambiguousnonintegrationhasthemeaningthatthe
partymakingthemanifestationshouldreasonablyexpectthe
otherpartytogiveit(akareasonableexpectationstandard)
AdmissibilityAllextrinsicevidence,except
evidenceofsubjectiveintention
o Ambiguousnonintegration
29

Fault
TypesofExtrinsicEvidence 1. Backgroundofnegotiations
CourseofDealing,Courseof CourseofDealing
PerformanceandTradeUsage
Admissibilityallextrinsicevidence,including
subjectiveintention
SeeFAULT
3. Corbin
AdmissibilityAllrelevantextrinsicevidenceontheissueof
meaning,includingalwaysallowingsubjectiveintent
o Trialjudgemustdeterminewhethertheassertedmeaningis
onethelanguage,inlightofevidence,couldreasonablymean
AmbiguousseeFAULT
Rest.2dgenerallyinaccordwithCorbin
1. BothpartiesareinnocentNoContract
2. OnepartyisinnocentandonepartyisguiltyContractunderinnocentpartys
meaning
3. Bothpartiesareatfault
a. WillistonNoContract,noweighingoffault
b. CorbinContractofthepartywhoisLESSatfault
2. Whatpartiessaytoeachotheraboutthemeaning
3. Subjectiveintent
4. Courseofdealing/courseofperformance/tradeusage
DefinitionHowthesetwopartieshaveinteractedbefore
Howestablished?testimonyoftheparties/thirdpersons
UCC1205(4)
CourseofPerformance
Definitionhowthesetwopartieshaveactedaftertheagreementin
question
Howestablished?testimonyoftheparties/thirdpersons
UCC2208(2)
TradeUsage
Definitionanypracticeormethodofdealingobservedsoregularlyina
place/vocation/tradethatitisjustifiedtoexpectthatitwillbeobservedin
thetransactioninquestion
UCC1205(4)
HowTheyCanBeUsed:
Commonlaw
o Tradeusageoracourseofdealingmaynotbeshownto
contradicttheplainmeaningofthelanguage
ManycourtsContractmustbeambiguousbeforethis
kindofevidenceisadmissible
o Courseofperformancemaybeusedtoaddatermbecauseitis
afterthewritingandparolevidenceruledoesnotapply
Interpretationcanbeusedifareasonablepersoncould
attachthatmeaningtothemanifestation
UCC
o 2202evidenceoftradeusageandcourseofdealingarealways
admissible
o 2208evidenceofcourseofperformanceisalwaysadmissible
OrderofConsideration
1. ExpressTerms
2. CourseofPerformance
3. CourseofDealing
4. TradeUsage
NOTE:How/WhentoUse
ExpressTermspresentNOAMBIGUITYEEshouldnotbebroughtin
30

WhosMeaning?Standardsof NonIntegration(ClearPromisorandPromisee)
Interpretation
WhatConstitutes
Unconscionability?
UCC2302Unconscionability
tocreateanambiguity
ExpressTermshaveAMBIGUITYConsidertheEEintheaboveorder
1. Reasonableunderstandingtestfromthepositionofthepromiseeinmost
courts
2. ReasonableexpectationtestWilliston
a. Focusonthemeaningthatthepartymakingthemanifestation
shouldreasonablyexpecttheotherpartytogiveit
3. CorbinCombination
a. Reasonableunderstanding,providedthatthepromisorhad
reasonableexpectationofsuchanunderstanding
Integration
1. Objective
a. Reasonablyintelligentpersonreadingthewritingwiththe
backgroundoftradeuses,etcWilliston
b. PlainMeaningRule
i. IfJudgedecideswordingitselfshowstheplainmeaning
donotallowEE
ii. IfwritingisambiguousallowEE
2. Subjective
a. MutualStandard
i. BothpartieshavesamesubjectiveintentIdeal
ii. Ifthiscantbeproven,movetoIndividualStd
b. IndividualStandardSeeFAULT
Unconscionability
ProceduralUnconscionabilityUnfairsurprise
Burdensomeclausethatdoesnotcometotheattentionofapartyadhering
toaK
Whenstruckdown:
o IfareasonablepersonwouldnotexpecttofinditintheKandthe
reasonitwasnotnoticedwasitsburialinsmallprint,OR
o Theinabilityoftheadheringpartytocomprehendthelanguage
SubstantiveUnconscionabilityOppression
ProvisionsofaKthatareassentedtobutaregrosslyonesided
Whatresult?Eithervoidedormodifiedbythecourt
NOTE:WhereunconscionabilityisfoundthereistypicallyBOTHproceduralAND
substantive(butpossibletofindwithjustone)
Determinationtobemadebythecourt
AlotofflexibilityforthecourtsonhowtotreataKwithunconscionable
aspects
NOTE:Alsoappliedtononsaleofgoodscases
31

Definitions
ExpressConditionORPromise?
HowtoDealwithaExpress 3WAYSTOINTERPRET:TosailbyFeb.5sailsFeb6
ConditionORPromiseFailure:
TimeorExpressCondition? PaywhenPaidClauses
PerformanceStageofContract
Conditions
ConditionPrecedent
Aconditionisanactoreventthat,unlessexcused,mustoccurbeforea
dutytoperformapromisebecomesdue
TimingOccurwithintimestated,otherwisereasonabletime
BurdenOntheP
ConditionSubsequent
Aconditionisanactoreventthat,unlessexcused,operatestodischargesa
dutyofperformancethathasalreadyarisen
TimingOccurwithintimestated,otherwisereasonabletime
BurdenOntheD
VERYrare
NOTE:Excludeslapseoftime
TypicalConditionLanguage
Onconditionthat
Providedthat
If
Subjectto
TypicalPromiseLanguage
Iwill
Ipromise
Iwarrant
IfUnclear:
Usethenormalprocessesofinterpretation,usedtodeterminetheintentof
theparties
Ifintentcannotbedeterminedcourtwillpresumepromise
1. ExpressCondition
a. GeneralDescription
i. PartycreatedExpress(99%ofthetime)ORimplied
ii. Mustbeliterallycompliedwithmustperformtheexact
wordsoftheK
b. WhatResultofNonPerformance?
i. Kisextinguished
ii. CanwithholdperformanceonK
iii. CANNOTsueforbreachbecausethereisnoK
2. Promisetwoapproaches
a. AsuesBforrefusingtoaccepttheship
i. ConstructiveConditions(seemorebelow)DidA
substantiallyperformtheconstructivecondition?
b. BsuesAbecausetheshipsailedlate
i. Materialityofthebreach
1. MaterialBcan(1)cancelKforfailureof
constructivecondition,AND(2)suefortotalbreach
2. ImmaterialBmustperformandcanonlysuefor
partialbreach
3. ExpressCondition+ImpliedPromise
a. BcancancelK,regardlessofwhetherbreachinmaterial,AND
b. Bcansuefortotalbreach
32
ConstructionCases
ConditionPrecedenttoFormation
ofK
Definition
OrderofPerformanceinaBiK
MaterialBreach
GenKsaysitisanexplicitconditionprecedentanddutytopaydoesnot
existuntilitoccurs
SubKsaysitisjustatimeclause,whichapproximatewhenpaymentis
duemakesnotdifferencewhetherGenKispaidornot
TwoViews
Paywhenpaidmorecommoninterpretation
o NOTexpresscondition
o Reasonabletime
Payifpaidsomeseeasagainstpublicpolicy(NY)
o Usuallyonlyfoundif:languageofKshowsSubKagreestotake
responsibilityfornonpayment
IfCPisNOTsatisfiedthereisNOK
ConstructiveConditions
Courttakesapromiseandconstructsacondition
Constructedinbilateralcontractswherethepartiesexchangepromiseswith
theunderstandingthattherewillalsobeanexchangeofperformances
REQUIRESUBSTANTIALPERFORMANCE
OneSide=performanceovertime
NormalPaymentSubstantialperformanceofworkisaconstructive
conditionprecedenttothedutytopay
o Periodicpaymentsarenotimplied
Periodicpaymentsubstantialperformanceisaconstructivecondition
precedenttothefirstperiodicpayment,andthefirstperiodicpaymentisa
CCPtothenextstageofwork
Simultaneousperformancepossible(inwholeorinpart)
Eachdutyofperformanceisconstructivelyconditionedonconditional
tenderoftheother
Conditionaltenderpromisorsdemonstrationofreadiness,willingness,
andabilitytoperformthepromisedconditionontheotherpartys
reciprocaltender
Ex.Saleofpersonal/realproperty
Whenthisisrequired:
1. Sametimeisfixedfortheperformanceofeachpromise,or
2. Fixedtimestatedfortheperformanceofoneofthepromisesand
notimeisfixedfortheother,or
3. Notimeisfixedfortheperformanceofeitherpromise,or
4. Thesameperiodoftimeisfixedwithinwhicheachpromiseshall
beperformed
Ifapartyfailstoperform,mustdetermineifbreachwasmaterial
Ifmaterial
1. Partycansuspendperformance,andwaitareasonabletimefora
curetooccur(Rest.2d,commonlawgivesnorighttocure)
a. NocurecancelKandsuefortotalbreach
b. CurecannotcancelK,butsueforpartialbreach
c. Exceptiontimeisoftheessenceclauseno
requirementtowaitareasonabletime
d. Pmustshowhewouldhavebeenready,willingandable
toperformbutforthebreach
2. PartycanelecttocontinueKandsueforpartialbreach
Ifimmaterial(substantialperformance)
1. PartyCANNOTcancelK,butcansueforpartialbreach
DelayinPerformance
33

SubstantialPerformance
DeductionofDamagesSelfHelp Cananaggrievedpartywithholdpaymentfortheamountofdamages?
ThePerfectTenderRuleUCC2601
TheRuleGenerally
WhatCantheBuyerDoifThere Unlessotherwiseagree,ifthegoodsorthetenderofthedeliveryfailsinanyrespect
isNOTperfecttender?
Exceptionsto2601
Apartyneednotperformontheprecisedaystatedinthecontract
Reasonabledelaytotalbreach,Unreasonabledelay=totalbreach
TimeisoftheEssenceExceptionsstatedexplicitlyinthecontractor
impliedbythetypeofKitis(weddingdress)
o Anydelaywillconstituteatotalbreach
o Canasinglepartysetatimeoftheessencedate?Yes,IF:
i. Exactdateisstated
ii. Givereasonablenotice
iii. Unequivocal
RecoveryforMaterialBreachSeeBelowPerfectTender
Generally
Almostcompleteperformance
NOmaterialbreach
RemedyforSubstantialPerformer
WhereaKismadeforanagreedexchangeoftwoperformancesandoneis
renderedfirstsubstantialperformanceentitlesthefirstpartytorecover
fullyforperformance
o MINUSDAMAGESCostofcompletingomissionsand
correctingdefects(seemorebelow)
FromAggrievedPartysPerspective
1. Lookatthedonutdidhesubstantiallygetwhathebargainedfor?
2. Lookattheholehowimportantisthedefect?
3. Canthepartybecompensatedthroughpartialdamages
FromBreachingPartysPerspective
1. Willtheysufferaforfeiture?
2. Ethicalpositionofthebreachparty?
a. Wasthechangeopportunistic?OR
i. Evenifwillful,goodfaithorbadfaith?
b. Amistake,inadvertent?
UCC2717+somecasesYES
OthercasesNO,itisamaterialbreach
TheRule:
Buyerisfreetorejectthegoodsunlessthetenderconformsinevery
respecttothecontractnotonlyinquantity
o Appliesnotonlytoquantityandquality,butalsointhedetailsof
shipment
SubstantialperformancedoesNOTapplytosaleofgoods
But
Therearesomanyexceptionsandqualificationsfortheperfecttender
rule,thatitmaybemisleading
ManycourtsthatapplytheUCCfrequentlyapplythedoctrineof
substantialofperformancebecauseofalltheexceptionsto2601
toconfirmtothecontract,thebuyermay
(a) Rejectthewhole;or
(b) Acceptthewhole;or
(c) Acceptanycommercialunitandrejecttherest
1. UnlessOtherwiseAgreed
ExpresstermsoftheKmayrestricttheperfecttenderrule
Implicittermsfromtradeusage
Ex.Buyercantrejectthewhole,butmustallowsellertoreplacethe
defectiveitem
34
2. CureUCC2508(1)
WhenTimeforPerformancehasNOTExpiredifthetimefor
performancehasnotexpired,thesellerhasanunconditionalrightto
curebymakingaconformingdeliverywithintheKtime
o DisagreementRighttocuredefectsthatsubstantiallyimpair
thevalueofthegood
WhenTimeforPerformanceHasExpiredtocuremustsatisfy
twocondition:
i. Thesellerhasreasonablegroundtobelievetherewould
beacceptance(twosituations,seebelow),and
1. SellerKnowsofNonConformityseller
knows,butitisstillreasonabletoexpectacc
2. SellerDoesNOTKnowofNonConformity
Goodsshippedinasealedcontainerandnot
inspecteduntillater,reasonableforsellerto
believethegoodsareacceptable
ii. Thesellerseasonablynotifiesthebuyerofintentionto
cureandcureswithareasonabletime
NOTES:
o RepairisgenerallyNOTcure
o LatenessgenerallyCANNOTbecured
o Buyercancontractfornorighttocure
3. RejectionandAcceptanceUCC2606
BuyerspowerofrejectionofnonconforminggoodsdoesNOTlast
forever
RightofInspection(UCC2513)buyerhasarighttoinspectbefore
acceptanceatanyreasonabletimeandinanyreasonablemanner
Whentherighttorejectislost:
1. Oncethebuyeraccepts,or
2. Rejectionisnotmadewithinareasonabletimeafterdelivery
ortender
3. Buyerfailstoseasonablynotifytheselleroftheirrejection
(oncenotified,selleroftenhasarighttocure)
WaysaBuyerAcceptsGoods
1. Failingtomakeaneffectiverejectionacceptancebysilence
SeeBelow
2. ExpressAcceptance
Buyer,afterreasonabletimetoinspect,signifiesto
thesellerthatthegoodsareconformingORthathe
willtakeinspiteofnonconformity
3. Doinganyactinconsistentwiththesellersownership
Onlyacceptanceifthesellersoptstotreatitasan
acceptance
NOTE:Oncethereisacceptance,thebuyerhasadutytopaythe
statedpriceofthegood
RequirementForanEffectiveRejectionUCC2602
o NonMerchantsBuyermuststatealldefectsdiscoverable
byreasonableinspection
Buyermustgivepromptnoticeeveniftheseller
knowsoftheproblem
Allowssellertocureaccordingly
Reporteddefects=onlygroundsforrejection
Reasonabletime=timeitreasonablytakesto
inspect
Nopromptnoticeofbreachlosescausesof
actions
35
 o MerchantsWhenasellerrequestsinwritingafulland
finalstatement
ofalldefectsuponwhichthebuyerrejects,
buyercannotrelyonunstateddefectsthatreasonablycould
havebeendiscovered
Regardlessofwhethertheycouldhavebeencured
o Ifrejectioniswrongfulbuyerisliable
Ex.rejectionofconforminggoods
4. RevocationofAcceptanceRequirements:UCC2608
a. Thenonconformitysubstantiallyimpairsitsvaluetothebuyer
Speakstosubstantialperformanceormaterialbreach,NOT
perfecttender
Subjectivetest
Buyermustshowacceptancewas:
1. Onthereasonableassumptionthat
nonconformity
wouldbecured&ithasnotbeenseasonablycure,OR
2. Didnotdiscovernonconformityandacceptancewas
reasonablyinducedbythedifficultyofdiscovery
beforeacceptanceORbysellersassurances
b. Revocationwithinareasonabletime:
i. Afterthebuyersdiscoveredorshouldhavediscoveredthe
groundforrevocation,AND
ii. Beforeanysubstantialchangeinconditionofthegoodswhich
isnotcausebythedefect
c. RevocationgivestheBthesamerightsanddutiesaswithrejection
Mostcourtssellerhasnotrighttocureonarevocation
5. InstallmentContractsUCC2612
Perfecttenderdoesnotapplytoinstallmentcontracts
InstallmentBscannotrejectatendermerelybecauseitisnotperfect
WhenrejectionisjustifiedandKcancellationnonconformity
withrespecttooneormoreinstallmentssubstantiallyimpairsthe
valueofthewholecontract
o Materialbreach
WhenrejectionisNOTjustifiednonconformityofaninstallment
substantiallyimpairsthevalueonlyoftheinstallment
o BuyerMustAccepttheInstallmentIF(1)itcanbecured
and(2)thesellergivesadequateassuranceofitscure
o BUTbuyercanrejectifsellercannot/doesnotassurecure

RecoveryfortheMaterialBreacherRestitution
WhencanaMaterialBreacherRecover?
1.Restitution/QuasiContract RestitutionforPartyinBreach
TraditionalRuleNone
Rest.1stOnlyifnotwillful+deductdamages
o Willfulbadfaithbreach
Rest.2dAll
MajorityView
APwhodoesnotcompletehiscontractandcancelswithoutreason
CANNOTrecovertheamountthathehasbeendue
MinorityView(ModernTrend,Rest.2d)
ThedefaultP,cannotrecoveronthecontract,BUTcanrecoverundera
quasicontracttheoryforthereasonablevalueofserviceslessanydamages
sufferedbytheD
2.StatutoryRelief UCC2718(2)
Article2allowsdefaultingBtoobtainrestitutionofpaymentminuseither
36

3.Divisibility
4.IndependentPromises?
ExcuseofCondition+BreachofDutyofGFandFD
ExcuseofConditionGenerally
ExcuseofConditionby
Prevention,Hindrance,orFailure
toCooperate
BreachofDutyofGF&FD
Estoppel
Waiver
$500or20%ofthebuyersobligation(whicheverisless)
StateLaws
Moststatutesrequirethatworkersbepaidatperiodicintervals,andthat
accruedwagesbepaidwhenemploymentends
AllowsforrecoveryofpartoftheKprice,ifpartofthecontracthasbeen
substantiallyperformed
HowtoDetermineDivisibility?
1. CanKbedividedintopairsofperformanceandpartpayments?
Wouldthenonbreachingpartybewillingtopayforpart
performanceoftheKORwouldtheyonlybewillingtopayfor
thewholeperformance?
2. Arethesepairsagreedequivalents
IntentandInterpretationQuestion
CourtswillinterpretpartiesintentwhethertheyintendedtoviewtheK
asacollectionofKs
Eventhoughtheconditiondidnottakeplace,thePcanrecoverontheK,provided
itisprovedthatPpassedoneofthebellowstests
Onepartywrongfulactinhibitstheotherpartyfromsubstantiallyperforming
o Alwaysmustdeterminewhetheritwaswrongful
Mustshowcausation,twotest:
1. Traditionaltest(Rest.1st)butfor,partywouldhavebeenready,
willingandablebutforthewrongfulaction
2. Moderntest(Rest.2d)conditionisexcusedifthewrongfulconduct
substantiallycontributedtothenonoccurrenceoftheofcondition
burdenofproofontheD
Hindranceandfailuretocooperateshortoffullprevention
UCCandRest.2d
Thereexistsanimpliedcovenantofgoodfaithandfairdealinginevery
contractduringtheperformanceandenforcement,butnotnegotiations
ViolationofsuchadutyistreatedasabreachofK(usually)
Aboutfulfillmentofreasonableexpectations
Applieswhenaparty:
1. Misrepresentsorconcealsafact,and
2. Theotherpartyjustifiablyreliesonthedeception,and
3. Isinjuredbythereliance
SplitontheMisrepresentation
Traditionalviewmisrepresentingpartymusthaveknownitwasfalse
Modernviewinnocentmisrepresentationisokay
WaiveratFormationoftheK
Notatruewaiver
Oftenappearsininsurancecases,whentheKsaysonethingandthe
authorizedagentwaivesoneoftheconditions
o DifferentviewsaboutwhetherthePERbarsproofofthis
WaiverAfterContracting,requirements:
1. Theconditionmustbesolelyforthebenefitofthewaivingparty
37

ElectionWaiverAfterFailureof
Condition
DamagesUnderWaiver
ExcuseofConditionsInvolving
Forfeiture
OtherBasesforExcusing
Conditions
TwoPartySatisfaction
a. Becausethewaiverisunilateral
b. Conditionthatbenefitsbothpartiescanonlybeeliminatedbya
modification
i. Requiresmutualassent+consideration/statute/injurious
reliance
2. Thewaivermustbeofaimmaterialcondition
a. Becausewaiverisanexceptiontorequirementofconsideration,
sowedonotwanttotakeittoofar
b. Exceptionamaterialconditioncanbewaivediftheotherparty
haspromisedthattheconditionwilloccur(becausethereisstilla
causeofactionforbreachifthepromisedoesnotoccur)
WaiverAfterFormationandBeforeFailureofCondition
o Waivermaybewithdrawnormodifiedbeforethefailureof
condition,IFthewithdrawal/modificationdoesnotoperate
unfairly
Askhastheotherpartychangedpositioninrelianceon
thewaiver?
Partychoosestoexcusethefailureofcondition
HowtoWaive:
1. Expressly
a. NOTE:itiswisetoreservearighttodamages,toprevent
renunciationofthisright
2. ByConduct
a. Innocentpartycontinuestoperformafterfailureofcondition
b. Innocentpartyallowstheotherpartytocontinuetoperformafter
amaterialbreach
c. Acceptanceofadefectiveperformance(usually)
i. Requiresknowledgeoftheproblem
ii. Canwaivematerialconditionsunderthiscategory
ImmaterialBreach
Doesnotallowforcancellationofthecontract,anywayonlyactionfor
partialbreach
MaterialBreach
1. CancelKandsueformaterialbreach,or
2. ElecttocontinuetheKandsueforpartialbreach
Courtcanexcuseaconditionif:
1. Itisanimmaterialcondition
2. Itwillinvolveextremeforfeiture(Rest.1st)ordisproportionateforfeiture
(Rest.2d)
Courtbalancesequitiestodecide
Theethicalpositionofthepartywhoseekstohavetheconditionexcused
wastheconductwillful?
Theinjurysufferedbytheotherparty
Contrarytopublicpolicy
Unconscionable
Nodutytoreadtheparticularprovision
Impossibility
ConditionedonSatisfaction
ONLYexpresslyconditioned
Wherethereisdoubtorambiguitytothekindofsatisfactionneeded:
PreferredinterpretationisthattheKcallsforanobjectivelysatisfactory
performance
Whenexplicit,twotypesofsatisfaction
38

ThirdPartySatisfaction
1. Involvetaste,fancyorpersonaljudgment
a. Rejectionmustbeingoodfaithactuallydissatisfied
2. Involveutility,fitnessorvalue
a. Basicallyobjectivestandard
Almostalwaysrequirespersonalsatisfaction
Ex.AnarchitectButcannotbeapuppetfortheowner
MajorityViewsatisfactiononlyexcusedwherearchitectactsinbad
faith
MinorityView(NY)wherebuilderhassubstantiallyperformedarchitect
cannotwithholdapproval
o Reasonablesatisfactionrule
o Meanttoprotectagainstforfeiture

RepudiationProspectiveNonPerformance
Generally RelatestofuturenonperformanceoccursafterformationofK
Positivestatementthatyouwillperformatotalbreach
ThreeImportantQuestions:
1. Isthererepudiation?
2. AnticipatoryorPresentRepudiation?
3. Ifanticipatory,hasPfullyperformedatthetimeofrepudiation?
Repudiation Definition
Apromisorsunjustifiedstatement/actionpositivelyindicatingthatheor
shewillnotorcannotsubstantiallyperform
Threeactionsconstituterepudiation:
1. Astatementtotheobligeeindicatingthatthepromisorwillcommitatotal
breach
a. TraditionalViewthestatementmustbesounequivocalthatthe
intentnottobeboundbythetermsoftheKmustbebeyond
question
i. Notrepudiationifthepromisorstatesthatperformance
willbewithheldunlessaspecificconditionismet,even
thoughtheeventisnotlikelytooccur
b. ModernView(UCC+Rest.2d)thestatementmustbe
sufficientlypositivetobereasonablyinterpretedthatapartywill
notorcannotsubstantiallyperform
i. Languagethatamountstointentionnottoperformexcept
onconditionsthatgobeyondthecontractconstitutes
repudiation
2. Transferringorcontractingtotransfertoathirdpersonaninterestin
specificland,goodsorinanyotherthingessentialtosubstantial
performance
3. Anyothervoluntaryactthatrenderssubstantialperformanceofthe
promisorsdutiesimpossibleorapparentlyimpossible
PresentRepudiation
Actualnonperformance(breach)+repudiation(inoneofthethreeforms
above)
Rightsotherpartycanimmediatelysuefortotalbreach(evenwhere
repudiationisretracted)
o Mustshowtheywereready,willingandabletoperformonthe
date,butfortherepudiation
o Therearealsootheroptionsseebelow
AnticipatoryRepudiation(AnticipatoryBreach)
Nobreachhasoccurredyet
Pstillallowedtosueimmediatelyfortotalbreach(beforethelawdate)
sotheycanchangeposition
39
 o ExceptionWherethePhasalreadyfullyperformedandthe
onlyremainingdutyispayment,thePmustwaituntilthelawdate
tosue(Williston,Rest.1and2(243))
PossibleReponsestoRepudiationcomeswithadutytomitigatedamages
1. ChangePosition
2. CancelK
3. Bringimmediatesuitfortotalbreach
a. Mustshowwouldhavebeenready,willingandabletoperform
4. SuspendPerformance
a. DoesnotcutofDsabilitytoretractrepudiation
5. UrgeRetraction
a. TraditionalViewnotallowed,mitigationofdamagesproblem
b. Modern(UCC)allowed,foracommerciallyreasonabletime
NOTE:Cannotignoretherepudiationandproceedwithperformance
Wouldenhancedamages(generally)
Youcannotrecoverdamagesthatreasonablycouldhavebeen
avoided
WhatCanaSellerSueFor?
1. RegularSellerContractpricemarketprice
2. LostVolumeSellerLostprofits
UrgingRetractionofRepudiation
SeeAbove
Onceyouhaveasked,doyouhavetowaitforthemtodecide?NOyou
canstillcancelwhenever
RetractionofRepudiation
Rest.1stabilitytoretractrepudiationstoppedby
a. Changeofposition,or
b. Bringoflawsuit
Rest.2d+UCCsameasabove+cancellingcontract
Meresuspendingdoesnotbarretraction
ProspectiveNonPerformance StatementorConductdoesnotmeetthedefinitionsofRepudiation
ShortofRepudiation Cannottreatitasarepudiationbecausenonperformanceisnotcertain
Nomatterhowclearthatperformancewillnotoccur,thereisnobreach
RemedyofP
Rest.1st
o SeriousProspectiveNonPerformanceifyouhavereasonto
believetheywillcommitatotalbreach
Otherpartyisentitledtorelyontheseriousprospective
nonperformance
Rightscanchangeposition+bringalawsuitonlaw
date
o NotSeriousProspectiveNonPerformanceifyouhavereason
tobelievetheywillcommitapartialbreach
Noaddedrights,mustwaitforittobecomeserious
Rest.2d(NY)+UCC2609
o DemandforAssurancesifpartyhasreasonablegroundsto
believeotherpartywillcommitabreachofnonperformancethat
wouldgivepartyaclaimfortotalbreachpartymaydemand
adequateassuranceofdueperformance+suspendperformance
untilassurancesarereceived
UCCassurancesmustbeinwriting(notallUCC
courtsapplythisrequirementorRest.2d)
Failuretoprovideassuranceswithinareasonabletime
willbetreatedasarepudiationcansueimmediately
UCCreasonabletime<30days
40

Impossibility/ImpracticabilityofPerformance+FrustrationoftheVenture
Impossibility/Impracticability
Diligentefforttodemandassurances,withoutmaking
contact,issufficienttoallowcancellation/changeof
position
TraditionalTermImpossibility
Rulepromisorwhosepromisebecomeimpossibleduetotheoccurrence
ofanevent,throughnofaultofhisown,isnotinbreachfornon
performance
o Thewholekisdischarged
ModernTerm(Rest.2d,UCC)Impracticability
RuleSameasabove,butsomethingdoesnothavetobefullyimpossible,
butplaceagreatandunexpectedburdenontheparty
o GapTheorywhenabasicassumptiondoesNOToccur,thereis
agapinthecontractregardingwhattodointhatcase
ThreePartTest
1. Wasthere,contrarytoabasicassumptionofbothparties,an
unexpectedcontingency?
a. Destructionofthesubjectmatterorofthemeansofperformance
b. Deathorillnessofpersonessentialforperformance
c. Superveningillegalityorpreventionbylaw
2. Didthiseventmakeperformanceimpossible/impracticable?
3. Whoshouldincurtheriskoftheunexpectedcontingency?
a. NonperformanceisNOTexcusedif
i. Thepartyclaimingtheexcuseiscontributorilyatfault
fortheoccurrenceoftheevent,or
ii. Thereisacontractualtermallocatingtherisktothat
party
b. Thecourtwillgenerallybeallocatedtothepartyingclaimingthe
excuseif
i. Theeventwasreasonablyforeseeable,or
1. TraditionalViewforeseeabilityisenoughto
assumetheriskandnotgetthedefense
2. ModernViewforeseeabilityforno
necessarily=assumptionofrisk
ii. Normalbusinessunderstandingallocatedtherisktothis
party,or
iii. Suchanallocationseemsfair
ContractisDischarged
GenerallytheKisdischargedfromimpossibility
Ifonepartyalreadybestowedsomebenefitontheotherparty,theycould
getitbackinrestitution
BuilderNOTdischargediffireinthemiddleofproject
Repairerdischargediffire
Remedy
Wheretherehasbeenpartialperformance,andthen
impossibility/impracticabilityrestitutionforunjustenrichmentavailable
o Minorityviewrestitutionforreliancealso,unjust
impoverishment(ex.restitutionforburnt,unusedlogs)
PartialImpossibility
Mustperformonthepartthatispossibleandcanclaimimpossibilityonthe
rest
UCC
2613Iftheverythingthatwastobesoldwasdestroyed,thenon
performanceisexcusedif:
41
 1. HaveKforsaleofaspecificitem
2. Nofaultofeitherparty
2614MannerofPerformanceisImpossible/Impractical
o Ifmannerofperformanceisimpractical,Smustusecommercially
reasonablesubstitute
MustbeextremeandunreasonableAND
AltersthebasicnatureoftheK
o Ifoneisnotavailablethenapplygeneralexcuseof
impracticability
2615GeneralExcuseofImpossibility/Impracticability
o Seeabove
Frustration Defenseoffrustrationrequires:
1. Aneventthatfrustratesthepurposeofoneofthepartiesandthe
occurrenceofthiseventmustbethebasisonwhichbothpartiesentered
intothecontract;
2. Thefrustrationmustbetotalornearlytotal;
3. Thepartywhoassertsthedefensemustnot,expresslyorimpliedly,have
assumedtheriskofthisoccurrenceorbeguiltyofcontributoryfault

42
 Remedies
RemediesGenerally TypesofRemedies(344)
Expectation
Reliance
Restitution
JudicialRemediesAvailable(345)
Sumofmoneydueunderthecontractorasdamages
Specificperformanceorenjoiningitsnonperformance
Restorationofaspecificthingtopreventunjustenrichment
Sumofmoneytopreventunjustenrichment
Declaringtherightsoftheparties
AvailabilityofDamages(346)
Righttodamagesforanybreachbyapartyyouhaveanenforceable
contractwith,unlessdamagesaresuspended/discharged
TypesofRemedies:
1.Expectation Theinterestinhavingthebenefitofonesbargainbybeingputinasgooda
positionasonewouldhavebeeninhadthecontractbeenperformed(R.2)
MeasuresofExpectationDamages(347)
1. Thelossinthevaluetohimoftheotherpartysperformancecausedbyits
failureordeficiency,PLUS
2. Anyotherlossincludingincidentalorconsequentialloss,causedbythe
breach,MINUS
3. Costavoidedbynothavingtoperform
NOTE:Thisisavaluerule,NOTacostrulelossofvaluetotheparty,notthe
marketvalue
FormulaofExpectationDamages
ED=Lossinvalue(unpaidKprice)+Incidental/consequential
damagesCost/lossavoided
IncidentalDamagesdamagesawardedforlossesindirectly,butclosely,
attributedtoabreachtocoveranyexpensespaidoutbyaninnocentparty
topreventfurtherloss(ex.hiringagencytohelpfindajob)
ConsequentialDamagesspecialdamagesthatarenotwithinthevalue
ofthecontract,indirectresultofthebreachwhichtheselleratthetime
ofcontractinghasreasontoknow
o OnlyforBs,almostalways
WhereDisperforminginawayotherthanpaying$$damages
usuallybasedoncosttocorrect/complete(notlossinvaluetoownerif
thebuildingisneverfinished)
ValuetoOwnerisUnreasonablyDisproportionate
Pwillbeawardedthemarketvalue,nottheownervalue
WanttoavoidwindfalltotheP
WantPtobeinplaceoffullperformance,notbetter
SellersRemedies
Wherebuyerwrongfullyrejectsorrevokesacceptanceofgoodsorfailsto
makeapaymentdue,aggrievedsellermay,2703
(a) Withholddeliveryofsuchgoods;
(b) StopdeliveryofthegoodsunderSection2705;
(c) ProceedunderSection2704withrespecttogoodsunidentifiedto
thecontractorunfinished;
(d) ResellandrecoverdamagesunderSection2706;
(e) Recoverdamagesfornonacceptanceorrepudiationunder
(Section2708)orinapropercasetheprice(Section2709);
(f) Cancel.

43
 Individualsellingusedcarcanhasthatonecartosell,cangetdamages
through:
o MarketFormula(2708(1))differencebetweenKpriceand
marketprice,OR
o ResaleFormula(2706)differencebetweenKpriceandresale
price
Resale=substituteK
CardealercouldsellthatcarandonetoB2,lostvolumeseller,
damages:
o ProfitsellerwouldhavesamewithinitialK,2708(2)
o NOdeductionbasedonresaleofthecar
o NOTasubstituteK
BuyersRemedies
Wherethesellerfailstomakedeliveryorrepudiatesorthebuyerrightfully
rejectsorjustifiablyrevokesacceptance,thebuymaycancelandwhether
ornothehasdonesomayinadditiontorecoveringsomuchofthepriceas
hasbeenpaid:2711
(a) CoverandhavedamagesunderSection2712astoallgoods
affectedwhetherornottheyhavebeenidentifiedtothecontract;
(b) RecoverdamagesfornondeliveryorrepudiationunderSection2
713;
Wherethesellerfailstodeliverorrepudiatesthebuyermayalso
(a) Ifthegoodshavebeenidentifiedrecoverthemasprovidedunder
2502
(b) Inapropercaseobtainspecificperformanceorreplevythegoods
underSection2716
BuyersDamages
o MarketFormulasameasabove
Bgetsdamageswhenmarketgoesup(Sgetsdamages
whenmarketgoesdown)
o CoverFormulaafterabreachBmaycoverbymakingin
goodfaithandwithoutunreasonabledelayanyreasonable
purchase
Bmayrecoverfromthesellerasdamagesdifference
betweenthecostofcoverandthecontractprice+
incidental/consequentialdamages
2.Reliance Theinterestinbeingreimbursedforlosscausedbyrelianceonthecontract
bybeingputinasgoodapositionashewouldhavebeeninhadthe
contractnotbeenmade
RelianceisLimitedbyExpectationDamages
Ifrelianceislikelytobemorethanexpectation,Pwillwanttosuefor
reliancedamages
TheburdenonDtoprovelimitingexpectationdamages
WhatCanBeRecovered
Expendituresmadeinpreparationforperformance
Expendituresmadeinperformance
MINUSanylossthatthepartyinbreachcanprovewithreasonable
certaintytheinjuredpartywouldhavesufferedhadthecontractbeen
performed
3.Restitution ONLYavailablewhenbenefithasbeenconferred
Theinterestinhavingrestoredtohimanybenefitthathehasconferredon
theotherpartygrantrelieftopreventunjustenrichment
HowtoCalculate
Reasonablevalueofservicesrendered,goodsdelivered,orproperty
conveyed

44

LimitationsonDamages
Penalties+LiquidatedDamages
MINUSthereasonablevalueofanycounterperformancereceived,
irrespectiveofanyenrichment
MainPointsofRestitution
1. Mustbeatotalbreachorrepudiation
2. Notavailablefornonbreachingpartythathasfullyperformedandno
performancebytheotherpartyremainsdueotherthanpaymentofa
definitesumofmoney
3. Whereitisavailableseebelowforthevalueofservices
RestitutionforPartyinBreach
TraditionalRuleNone
Rest.1stonlyifnotwillful+deductdamages
Rest.2dAll
RestituteforNonBreachingParty
CALLTHISRESTITUTIONRECOVERY,NOTDAMAGES
Analternativeremedyforbreach/compensatorydamages
Restituteisnotalwaysanavailablealternativeonlywhenthereisatotal
breachorrepudiation
ThreeViewsforValueofServicesFocusonEffectofKprice
1. Kpriceisadmissibletoshowvalueofservices
a. Notconclusive
b. Verywellacceptedapproach
c. Rest.2d
2. Kpriceisaceilingforrecovery
3. Kpriceisconclusive
a. RecoverthepercentageoftheKthathasbeencompleted
1.ProveDamagesWithReasonableCertainty
Needtogivejuryabasistocalculatedamages
Mustproveamountwithreasonablecertainty(higherburdenthanTort)
2.Foreseeability(Rest.2d351)
Nodamagesforlossesthatthepartyinbreachdidnothavereasonto
foreseeasaprobablyresultofthebreachwhentheKwasmade
Lossmaybeforeseeablebecauseitfollowsfromthebreach:
o Intheordinarycourseofevents,or
Damagesconsideredtoarisenaturallyfromabreach
ofK
o Asaresultofspecialcircumstances,beyondordinary,thatthe
partyinbreachhadreasontoknow
AsJusticeSoRequireslimitdamagesforforeseeablelossifthecourt
concludesthatjusticerequiresthelimitationinordertoavoid
disproportionatecompensation
UCChasrelaxedtherequirementofforeseeabilityconsiderably,allowing
forconsequentialandincidentaldamages
3.MitigationAvoidableConsequences
ObligationtousereasonableeffortstomitigatedamagesBUTdonot
havetoactuallymitigate
EmploymentContextcomparableorsubstantiallysimilaremployment,
butnotinferior
o EmployeeONLYmustshowthepaymentthatisowed
o Employerprovefailuretomitigate,provetheavailabilityof
alternative,comparableemployment
MultipleKsatOncewhereaparty(ex.contractor)canhavemultiple
servicecontractsatonce,youdoNOTsubtractthevalueofanotherK
PunitiveDamages
Contractlawrarelyallowspunitivedamages
GeneralRuletogetpunitivedamagesforbreachofK,youneedan
45
 independenttortthatwouldwarrantpunitivedamagesonitsown
LiquidatedDamagesClause
Determinesinadvancewhatthedamagesforbreachwillbe
Iftoohighmaybestruckdownasagainstpublicpolicy
o PenaltyClausealiquidateddamagesclausethathasbeen
struckdown
CriteriaforValidLiquidatedDamagesClause
1. Intentpartiesmusthaveintendedtheagreedpaymentbeforthe
loss,ratherthanasapenalty
Modernviewcriteriafallingintodisfavor
2. Uncertaintytojustifywhythecourtcantjustsettheamount,
injurycausedbythebreachmustbedifficultorimpossibleto
estimateaccurately
3. Reasonabletheamountofdamagesintheclausemustbea
reasonableestimateoftheprobableloss
TraditionalViewreasonablenessinrelationtothe
anticipatedharmfromtimetheyagreed(asopposedto
actualharm)
ModernViewreasonableinrelationtoanticipatedOR
actualharm
Ifthereisnoactualharm?
Majoritydoesnotmatteraslongas
therewasanticipatedharm
Minority(R.2d)ifitisclearthat
thereisnoharm,liquidateddamages
doesnotapply
o TraditionalViewneedtomeetall
o ModernView(UCC2718+R.2d)donotneedtomeetall
criteriaperfectly,itisabalancing
NOTE:EmploymentcasesDONOTdeductwhenemployeegets
anotherjob
AccelerationClauses
Cansometimesbepenaltyclauses
SpecificPerformance Generallywillnotbegivenifdamagesaresufficienttocoverexpectation
interestofinjuredparty
FactorstoConsider(Rest.2d360)
1. Difficultyofprovingdamageswithreasonablecertainty
2. Difficultyofprocuringasuitablesubstituteperformancebymeansof
moneyawardedasdamages
3. Likelihoodthatanawardofdamagescouldnotbecollected
SaleofgoodsUCC2716(1)
WhenAvailableSpecificPerformanceavailable(1)wheregoodare
unique,or(2)inotherpropercircumstances
Expandstheopportunityforspecificperformance
Mostcommonareaofspecificperformancebecauselandisconsidered
uniqueanduncertaintytodeterminingmarketvalue

46
 StatuteofFrauds
Generally Certaintypesofcontractsmustbeevidencedbyawriting
MainQuestions
1. IstheKwithintheSOF?
2. IsthewritingsufficienttosatisfytheSOF?
3. DoyouhaveadoctrinethattakesthecaseoutoftheSOF?
4. AssumingKviolatesSOF,whatistheresult?
a. MajorityviewKisunenforceable(anaffirmativedefensethat
theDmustraise)
b. MinorityviewKisvoid
OneYearProvisions TheRule
IfbyitstermstheKcannotbefullyperformedwithinoneyearof
formationitmustbeinwriting
Purposes(ofallKformalities)
EvidentiarymeanttopreventagainstfalseclaimsofaK
Cautionarypeoplearemorelikelytobemoredeliberateandcautionary
whentheyareenteringintoawrittenK
ChannelingnotwellservedbySOF
RequirementstoFallWithinOneYearProvision
ByitstermsthetermsoftheKmuststatethatitcannotbeperformedin
ayear
o Nearlyimpossibletoperforminayear?doesnotmatter
HowtocountDay1=dayafterformation
o EmploymentcontractoneyearemploymentKstartingtheday
afterwouldnotfallingwithintheSOF
DeathofaParty
LifetimeLoopholeIwillworkforlifecoulddiewithinayear
o FilledbyNYandotherstates
ViewOneConsideredfullperformance
o KwillnotbewithinSOF
ViewTwoConsidereddefeasanceofK
o SOFapplies
PromiseNottoDoSomethingForMoreThanaYear
o Ex.5yearnocompetitionclause
o ViewOne(Rest.2d)thepurposeofthepromisenottodo
somethingisachievedondeathNoSOF
o ViewTwoitisanobligationforthatmanyyearSOF
TerminationProvisions
Ex.Oral2yearemploymentKwithrighttoterminatewith30daysnotice
Majoritytermination=defeasanceSOFapplies
Minoritytermination=alternativeperformanceNoSOF
NYViewwhenonlyonepartyhastherighttoterminate,dependson
whichpartyistheD
o Ex.Onlyemployercanterminate
o IfD=employerNoSOF
o IfD=employeeSOF
NOTE:Foraterminationonbreachclauseallusemajorityview
AlternativePerformances
IfoneoptionisoutsidetheSOFtheentireKisoutsidetheSOF
OptiontoExtend
MajorityNoSOF
MinoritySOF
NYViewSOFisDissubjecttothePsoptiontorenew
47
 UnilateralKs
AlljurisdictionsoutsideSOF,evenifcompletedmorethanoneyearfrom
makingofoffer
Wheretherehasbeenfullperformanceononeside
o MajorityNoSOF
o Minority+NYSOFsometimes,becausetheobligationofthe
otherpartymaycontinuewellbeyondayear
WritingNeeded AcceptableWritings
Contract
Note
Memo
Requirements
1. EvidencethataKhasbeenmadeORsignerhasmadeanoffer
a. Amounttoacknowledgementbythepartytobechargedthatheor
shehasassentedtotheK
2. Identityofthecontractingparties
3. Subjectmatter
4. Allessentialterms,andbywhomandtowhomthepromisesaremade
5. Signedbythepartytobecharged
a. Anymark,written,stampedorengravedplacedbyaparty
anywhereonthewritingwithintenttoassenttoandadoptthe
recordsasthepartysown
FormoftheRecord
WritingtherecorddoesnotneedtohavebeenmadetosatisfytheStatute
o Maybeareceipt,telegram,check,letter,etc
Electroniccommunicationmustsuitablymemorializeagreement
OralstipulationmadeincourtsatisfiesSOF,eventhoughnotsigned
SignedFaxsatisfiesSOF
Taprecordingsplit
Admissionsincourt,satisfies
ParolEvidence
ByPcannotbeusedtointroduceevidenceofessentialterms,whetheror
notthereisanintegration
o Consistentadditionalnonessentialoraltermsmaybeshownif
theparolevidenceruleallows
ByDmayintroduceevidencethatcomplieswiththePERtoshowthat
thememodoesnotreflectthetrueagreementandthereforethattheSOFis
notsatisfied
o WillshowSOFisnotsatisfiedifpartialintegration,
supplementedwithanessentialterm
PromissoryEstoppel
TakescaseoutofSOF
Voidv.Unenforceable Void
Restitutiondefinitelyavailable,nobreachpossiblebecauseKdoesnot
exist
Unenforceable
RealKexists,itisjustnotenforceable
Partybybeabreacherthereare3viewsonrestitutionforabreacher
SaleofGoodsUCC2201 AppliestoALLCONTRACTfor$500ormore
Contractforanumberofchattelshavinganaggregatevalueofmorethan
$500test=whetherthereisoneKorseveral
o UCCfavorsonecontract
WeakSOF
TwoMainConsequences
1. Doyouhavetocomplywithoneyearprovisiononasaleofgoodscause?
48
 a. OneviewYes,whenoverlappingprovisions,applythestricter
one
b. OtherviewNo,undertheUCCwewanttobeeasyonsaleof
goodscases
2. Promissoryestoppelapplicabilitytosaleofgoodscases
a. OneviewYes
b. OtherviewNo,somanyexceptionsalready
TheRecord
Requirements
1. ItmustevidenceaKforthesaleofgoods
2. Itmustbesignedanyauthenticationidentifyingthepartytobe
charged
3. Quantityterm
a. DONOTneedanyotheressentialterms
i. Extrinsicevidenceadmissibletoprove
missing/wrongterms
b. NOenforcementbeyondstatedquantity
c. Majority(almostall)needaquantityterm
d. Minoritydonotneed
e. ExclusivedealingsKimpliesquantityofbestefforts
BetweenMerchants2201(2)
Confirmation=SufficientforSOFif:
1. Betweenmerchants
2. Confirmationsufficientasagainsttheseller
a. MeetsthethreerequirementsoftheSOF,soShasno
SOFdefense
3. Receivedwithareasonabletime
4. Personreceivingithasreasontoknowitscontents
NOTE:BlosesSOFdefenseunlessheobjectswithin10days
shouldsaywehavenoK
ExceptionstoSOF2201(3)
1. GoodsaretobespeciallymanufacturedforthebuyerANDarenotsuitable
tosaletoothersintheordinarycourseofthesellersbusinessANDthe
seller,beforenoticeofrepudiationisreceived,makeseitherasubstantial
beginningoftheirmanufactureorcommitmentsfortheirprocurement
a. Requiresreliance
2. Thepartyagainstwhomenforcementissoughtadmitsinhispleading,
testimony,orotherwiseincourtthataKforsalewasmade
3. GoodsforwhichpaymenthasbeenmadeandacceptedORwhichhave
beenreceivedandaccepted
a. Receipt=physicalpossession,Acceptance=Bhasindicated
intentiontokeepthegoods
ModificationsUnderSOF2209(3)
CourtshavebeenmorestrictwithmodificationsthanwiththeoriginalK
Ifyouareincreasingquantitytermneednewmemo
Benderthinksthiswholethingisdumb
NYStatuteofFrauds Saysvoidbutistreatedasunenforceable
CanbeanoteORmemoORcontract
Mustbesigned(subscribed)bythepartytobecharged(D)

49