governs contracts for the sale of goods between merchants 

the k must be in wrting and signed by the party charged to be enforceable. 

provides evidentiary function. 

sale of goods greater than $500, consideration of marriage, cannot be completed in less than one year, sale of land

if part performance has been rendered the plaintiff can recover for the value of benefits conferred 

or

Promissory estoppel when the promise reasonably induces reliance. 

must be unqualified or it is a counter offer that terminates the original offer. 

this does not apply to mere inquiries/proposals or the addition of immaterial terms. 

Terms need not be read to be effective unless the terms are unconscionable. 

The UCC - says after having the opportunity to inspect and no rejection to new terms it is a valid acceptance. 

1. was there a timely expression of acceptance? - no = no k

2. Was the acceptance expressly conditioned on new terms? - yes = no k

3. if the acceptance is not conditional, the new terms constitute proposals for the new k and dont become part of it unless it is between merchants. 

4. if btwn merchants the non-conditional terms become part of the k even though they were not agreed to unless the offer expressly limits terms of the offer, constitutes a material alteration, or the offeror objects within a reasonable time. 

5. If no acceptance anc performance has occurrred terms have to be defined with UCC gap fillers (reasonable) that KNOCK OUT conflicting terms. 

ther is no contract if both parties attach different material meanings to the terms of the contract. 

(price, quantity, quality, delivery terms)

Are when the offeror should reasonably expect the offeree to be induced to act to his detriment so it is binding as an option contract. 

The UCC - gives assurance that a signed writing will be held open and not revocable for a lack of consideration during the stated time. 

CL - terms are reasonably certain if the existence of breach can be probed and there is a basis of giving an appropriate remedy. 

UCC - uses gap fillers (reasonable time, etc)

generally applies to the admittance of oral, and/or written evidence of prior or contemporaneous oral agreements not included in the final expression. 

RULE - if the parties intended the writing to be the final agreement, it supercedes antecedent and contemporaneous oral agreements

PER Analysis

1. Total Integration?

2. Partial Integration?

3. Exceptions?

1. Is the writing a total integration? Meaning, is it complete as to subject matter/final agreement and not just a memo? 

2. Is there a merger clause that is not vague or boilerplate (lack  of specificity)?

3. If it is complete as to subject matter is it a partial integration such that it doesnt represent a complete statement of the agreement between the parties? 

4. collateral agreemnents - relate to the contract but are collateral in nature, they can come in if they are not contradictory - (explicitly contradictory or in absence of reaosnable harmony) - and would naturally be made separately. 

5. Exceptions (CP, Grounds for invalidation, Ambiguities)

PER - Exceptions

(part 5 of the analysis)

Condition Precedent - CP's must be satisfied before the contract is binding, therefore parol that goes to establish CP is always allowed. 

Any ground for invalidating a k - is always allowed. (fraud, sham, joke, lack of consideration, mistake, miusunderstanding, etc.)

Ambiguities - are terms capable of more than one meaning and parol will be allowed in to show meaning. (traditionally - 4 corners > reasonable interpretation > prior negotiations determine ambiguity)

The UCC always allows course of dealing or trade usage to supplement the contract. 

Breach - Condition v. Promise

Condition (not to) = Rescission

Promise (to) = Damages

THE LAW ABHORS FORFEITURE

1. if the whole deal depends on it, it is proably a condition

2. if it is material, it is probably a condition

3. usage and custom are relevant

4. If there is a strong likelihood of non-fulfillment then it is more likely a promise. 

5. The law abhors forfeiture.

Condition Precedent 

v. 

Condition Subsequent

UCC Acceptance of Goods 

(within Conditions)

Excusing Non-performance of Conditions 

Purpose fulfilled

The court abhors forfeiture unless the conditon is material to the bargain. 

Performance is excused when the defendant's actions fulfill the purpose of the condition or non fulfillment of the conditon does not cause material prejudice. 

(written notification required - but oral notification was sufficient)

is the time of performance material to the bargain or is it simply a convenient time for tender. 

This clause can be easily waived. 

This is when someone detrimentally relies on assurances that the condition has been waived. 

Conditions can be revived when they are waived for estoppel and the reason for reliance ends. 

is the voluntary relenquishment of a known or existing right  or privilege. 

A waiver can be implied and the conduct amounting to a waiver typically invites reliance. 

Breach

Anticipatory Repudiation

is when tender is excused because of one party's repudiation of the k before the performance date. 

The repudiation must be definite and unequivocal because there is still time to perform

If the other party can't perform then you dont have to perform but you must request assurances before refusing to tender or you could end up in breach. 

Breach

UCC - Antiicipatory Repudiation 

The UCC allows the AR to be retracted before the next performance is due unless there has been reliance. 

The aggrieved party may wait for a reasonable amount of time for performance, resort to any remedy for breach, and suspend their own performance. 

Breach 

Anticipatory Repudiation

Tender

Conditions of Satisfaction

Third Party Satisfaction

Conditions of Satisfaction

Two Party Satisfaction

Determining who Breached

Order of Performance 

dependent or independent condition determines which party is in breach. Minimization of risk/extension of credit is an important concern here. 

1. the law prefers simultaneous performance - but when that is impossible one party's performance becomes the condition precedent for the other party's tender or performance. 

2. The UCC says that when one party's performance is completed over time, tender of delivery is condition to the buyer's duty to accept and pay, and tender of payment is condition to seller's duty to render and complete any delivery. 

Determining who Breached

Tender

Tender is the offer to perform with the present ability to do so. 

1. The UCC says tender of delivery requires the seller to hold conforming goods and give the buyer notice to take delivery. 

2. Excused - when you can demonstrate the other party cannot perform.

Determining who Breached

Divisible Contracts

are treated as a series of separate contracts where each party's performance of an installment is condition precedent to the other party's subsequent performance. 

1. The UCC says all goods must be tendered in a single delivery unless otherwise agreed to. 

Determining who Breached

Sellers Alternatives to when there is a Defective Performance in an Installment Contract

Seller can sue on the whole contract when failure is substantial and imperative. 

1. The UCC says to request assurances (and treat as AR if not given) and buyer must pay for goods accepted and any goods that cant be resold through reasonable efforts. 

2. The UCC action for price says the buyer must pay for goods accepted and any goods that cannot be resold through reasonable efforts. 

3. The UCC says if you sue on installments you reinforce the whole contract. 

The buyer can pay for the goods accepted, reject those that fail to conform, or revoke acceptance if the goods are defective. 

Request assurances reasonable under the circumstances. 

If goods are destroyed without fault of either party then the cotract is void. 

Substantial Performance

What is Material?

Common Law

1. Deprivation of reasonably expected benefit. 

2. Adequacy of compensation for loss (trivial defect)

3. Part Performance - closer to full the less likely to be breach

4. Likelihood of cure of Breach

5. willfullness of breach

6. Delay in performance if it significantly deprives the other party of the expected benefit of the k. 

Subatantial Performance

What is Material? 

UCC

Perfect Tender - says the buyer can reject goods if they fail to conform to the obligations of the contract in any respect. 

Qualifiers

1. must act in good faith

2. course of performance can show tender has not always needed to be perfect. 

3. sellers have the right to cure

4. Liquidated damages will provide restitution if payments of goods exceed damage by breach.

5. limitation of liability

6. Must be rejection in a reasonable time.

7. must state defect that justified rejection.  

Defenses

Competency to Contract

Voidable Contracts

PTB

Defenses

Competency to Contract

Incompetent Parties

PTB

voidable if at the time of contracting the party is unable to understand the nature and consequences of the transaction. Or is unable to act ina reasonable manner and the other party has reason to know of his condition.

BOP - on the allegedly incompetent party

Remedy - if the k is avoided return money, property, or value of services rendered unless incompetence was taken advantage of. 

Defenses

Revisions of Contractual Duty - Modifications (PTB)

Pre-existing Duty Rule

is that doing what you are already legally obligated to do is not new/good consideration. 

1. Part payment of debt is not good consideration unless the amount is honestly disputed. 

Unliquidated (disputed) = binding

Liquidated (undisputed) = not binding because there is no dispute over how much money is owed. 

Defenses

Revisions of Contractual Duty - Modifications (PTB)

Pre-existing Duty Rule

UCC

The UCC dispenses with the PDR by not requiring new consideration when modifications are made in good faith. 

Defenses

Revisions of Contractual Duty - Modifications (PTB)

Ways around the Pre-existing Duty Rule

Defenses

Unconscionable Equality

PTB

Serious imbalance of exchange

Procedural Impairments - like lack of meaningful choice, fraud, duress, coercion, undue influence, sharp practices, subjective weakness, fiduciary relationships. 

UCC - harsh oppressive terms 

Substantive Problems - harsh oppressive terms (unfair surprise, hidden terms) 

Grubstake - unequal exchange of money is viewed as an investment. (50 now for 5000 later)

Remedy - rescind, delete clause, modify

Defenses

Assent to Standardized Forms

PTB

There is a common law duty to read contracts of adhesion, but if terms are hidden then it is inadequate notice. 

Standardized Forms - the offeree had the duty to read them and the offeror has the duty not to mislead the offeree. 

1. reasonable expectations of the parties 

2. Terms must be reasonably brought to offerees attention

3. Not bound to the terms the offering party had reason to know you wouldn't assent to. 

is unlawful conduct by one person that overcomes the free will of another and therefore renders the transaction involuntary. 

The coercion must originate with the person recieving the benefit. 

looks at whether the exercise of free will was precluded, possession of neeful goods threatened, goods withheld to force bargain, and at the remedy and available options. 

1. threat to quit performance

2. goods unobtainable from another source

3. remedy of an action for breach would not be adequate compensation. 

occurs when a relationship exists justifying the party's assumption that the other wouldnt act inconsistently with his welfare. 

Undue susceptibility of the vulnerable person, and excessive pressure by the dominant person. 

1. Was there fraud or overreaching? 

2. Was the risk assumed by the party trying to avoid the k? If yes then no rescission. If no then go on. (allocation of risk to party trying to rescind?)

2a. The UCC offers an implied warranty of fitness for particular purpose.

3. Does the risk go to a fundamental assumption of the contract? 

3a. Fundamental assumption of the k. 

3b. Promisor not excused for no material mistake. 

3c. exception is for clerical errors

do not result in rescissions of contracts when the mistake was not known of or taken advantage of by other party. 

Mistaken bidders get rescissions when the price is inadvertently low. 

is an explicit promise or guarantee by the seller that goods will have a certain quality. 

Remedy - is rescission and possible lost expectancy

Express Warranty

The UCC

turns on the intentions of the buyer, and whether the mistake is reasonably discovered by the buyer. 

The UCC says goods shall be merchantable for the sale with respect to goods of that kind. 

buyers generally have a duty to make reaosnable inspection of their purchases but a failure to disclose can come from; 

half truths/misleading misreps

positive concealment

failure to correct past stmnt

fiduciary relationship

failure to correct mistake

Justification of Nonperformance

Impossibility

Justification of Nonperformance

Impossibility

Subject Matter Destroyed

if it is detroyed before the risk of loss has passed to the buyer then the k is discharged. 

The UCC - allows the buyer to accpet goods for a lesser value. 

Justification of Nonperformance

Impossibility 

Property and Construction Ks

if property is specifically referred to in the contract, and destroyed then the k is discharged. 

whoever has possessory interest at the time bears the risk. (builder vs. repairman)

Justification of Nonperformance

Failure/Unavailability of Means of Performance

UCC

Justification of Nonperformance

Assumption of the Risk

Justification of Nonperformance

Commercial Impracticability

is extreme unreasonable increase in costs.

How much more expensive will it be if party performs?

Was the risk foreseeable? 

Where is the risk allocated? 

How material is the item at issue? 

Justification of Nonperformance

Frustration of Purpose

is when an event occurs that eliminates the purpose for entering into the k although not rendering it impossible. 

1. supervening event

2. not reasonably foreseeable at the time the k was made. 

3. Purpose of the k known to both parties at the time of contracting.

4. Supervening event totally destroys purpose of the k.

Justification of Nonperformance

Personal Service Ks

Justification of Nonperformance

Supervening Illegality

Justification of Nonperformance

The UCC Excuse by Failure of Presupposed Conditons

as far as the seller assumes the risk, a delay in delivery is not breach if performance becomes impracticable. 

However, the seller must give seasonable notice of non delivery or delay to buyers and make reasonable accomodations where production affects sellers capacity to perform. 

Damages

Generally

where the parties have formed a legally enforceable contract the purpose is to give the plaintiff the benefit of th bargain. 

The UCC wants to put the aggreived party in the same position as if the party had already performed. 

money damages sufficient to put the party in the position he would have been in had the k been performed. 

constuction ks - cost of completion as long as it is not economic waste. 

The measure of expectation damages must be foreseeable. 

Reliance Damages

Special Damages

are losses incurred by reliance on the contract without the corresponding gain. 

1. Must be certain to recover. 

2. No reliance and expectancy.

3. Reliance given when expectancy is against PP. 

4. Must be reasonably foreseeable at the time of the k to be recoverable. 

5. duty to mitigate damages. 

undo unjust enrichment of the defendant. 

Can be offered with reliance.

SP is when the court grants an injunction that requires completion of the contract as written. 

The threshold test it whether money damages are adequate. 

TPB

Intended Beneficiaries

TPB

Incidental Beneficiaries

TPB

Vesting of Rights

TPB

Defenses

Assignment

K rights are Assignable Unless

1. materially changes the duty of the obligor. 

2. increases the burden or risk of obligor.

3. impairs obligors chance of return performance.

4. reduces the value of the k to the obligor.

5. prohibited by statute or PP

6. provision in the k prohibits assignment.

Assignment

Non assignable Rights

1. Personal service ks - lawyers

2. insurance ks - are particular to parties.

3. credit - is particular to a parties creditworthiness.

4. future rights - are not assignable

Assignment

Formalities

There must be clear words of assignment that show a manifested intent to transfer rights to the assignee. 

There must also be an adequate description of what is being assigned. 

There must be acceptance by the assignee.

Gratuitous assignments are revocable unless they are in writing, signed and delivered or the assignee detrimentally relies on it.

where an obligor appoints his duties under a k to a third party. A delegator is still responsible/liable for the duty. 

the obligor can delegate his duty unless the obligee has a substantial interest in the obligor performing.