Beruflich Dokumente
Kultur Dokumente
Assent
Offer Acceptance
Communication of
Manifestation By the To the Proper
Present Commitment of Present
offeree to terms Manner
Commitment
the offeror
Rule if doubtful
whether ONLY in
Advertisements, Requests for Letters of Intent
unilateral or the
Circulars, etc. Bids
bilateral? following
situations
Certainty of Terms
Required
If Offer is If Offer If Offer is
prescribes suggests silent re
manner manner manner
Subject Price
Parties Matter Quantity (Common Any Any
Law) Must comply reasonable reasonable
manner manner
Not Required (Use as Evidence of Contract)
Interpret language to
Time Place determine which
Elements
Good
Insufficiency
Faith
Like-Kind (items not Rip & Tear U.C.C.: No Pre-Existing
Nominal Contracts Duty Rule OR
Exchange capable of
being owned) (see U.C.C. § 1-103 Duress)
Reasonable
Efforts
OR
Reasonableness
Elements
See Restatements (Second) Uses
Contracts § 90
Measure of Damage
The court has the discretion to granting partial or full enforcement.
The remedy granted for breach may be limited as justice requires. In other
words, sometimes a party may be limited only to reliance damages.
Considerations:
Assumption of Risk 1. Marketplace
2. Parties Respective Risks
Legitimate 3. Competition
reasons to
threaten breach Contract allocates risk to a party
Examples OR
Party contracts knowing that she
has limited knowledge of the
Party has a facts (conscious ignorance)
Other party Change in good contract
breached Circumstances OR
defense
Court allocates the risk to the
Last Updated: 10 December 2008
party because it is just to do
Remedies
Measure Limitations
Rest (2d) § 347
1. Breach by Non-Performance?
Step 2: What damages might the plaintiff be entitled? 4P's: Put the Plaintiff in the Performance
Position
A. Breach by Non-Performance
(General Damages = Get - Give)
Property damage
Personal injury
Lost resale profits
Lost use profits (It must be reasonable to the seller/buyer that the item will be
resold)
Unauthorized damages: (1) punitive damages, (2) emotional distress, and (3) attorney
fees (unless specified in contract).
Avoidability
Foreseeability
Certainty
Breaching
Nature of Contract Type of Breach Measure of Damages
Party
Land
Non-Performance Buyer = K Price - FMV of Land
Purchase & Sale
Land
Non-Performance Seller = FMV of Land - K Price
Purchase & Sale
Employment for
Non-Performance Employer = K Price
Specific Term
Employment for
Non-Performance Employee = FMV of employee's services - K Price
Specific Term
1
Cost of Repairs (COR): captures what you lost; gets you where you were promised to be; more accurate,
except in economic waster cases
2
Diminution of Value (DIV): determined by expert witnesses (not as accurate)
Breaching
Nature of Damages Type of Breach U.C.C. § Measure of Damages
Party
BUYER'S BREACH BY NON-PERFORMANCE. All possible measures of seller's BOB damages for buyer's
non-performance: K - FMV, K - Resale $, Profit, K Price (only under extraordinary circumstances).
Benefit of the Bargain Non-Performance Buyer § 2-708(1) = K Price - FMV (OR:= Get - Give)
Coercive Equitable
Damages Restitution Liquidation (Agreed) Remedies
(see separate chart) Damages (Specific Performance)
(see separate chart)
Elements
(Two-Part Test
GR: Value of Substantive
the ∆'s gain at
of Validity)
Claim
π's expense. (Unjust Enrichment)
1. As an alternative to damages.
2. A losing contract.
4. To a party in breach.
Alternate to tort
Losing K
Restoration to party in breach (Value of defendant's gain) minus (Damages caused by breach, general damages)
Adequacy Discretionary
Requirement Considerations
Fairness of bargain.
Higher degree of
certainty.
Limitation
13th Amendment: It is against the 13th Amendment for a court to order an
individual to work for an employer for whom the individual does not wish to work.
Last Updated: 10 May 2009
PAROL EVIDENCE RULE
STEP 1: Determine if the PER applies to the evidence.
The PER ONLY applies to prior or contemporaneous oral evidence or prior written evidence for which there is no separate
consideration.
Is it oral or written? Was it made prior to, during or Was it for separate
after the making of the writing? consideration?
If the agreement is NOT integrated at all, STOP. The evidence is admissible. An agreement that is NOT
integrated at all does not bar ANY evidence.
1. Williston Two-Part Test (Narrow). NOTE: A merger clause creates an irrebuttable presumption of
complete integration. If no merger clause, then apply two-part test:
a. Look at the writing and analyze whether it was adopted as a complete, exclusive statement.
b. Look at the term at issue and analyze whether it was natural for the parties to have omitted it.
(Analyze the six Hatley naturalness factors on page 2 of the note-taking guide.)
2. Corbin All-Evidence Test (Broad). Look at the agreement, the term and all surrounding circumstances
and determine if the parties intended a complete integration.
* Merger clause is evidence of complete integration.
3. U.C.C. § 2-202. (Broad, like Corbin) Intent of the parties unless it is certain that parties similarly
situated would have included the term.
Reasonable Harmony Test: Courts look at what the Complete Negation Test: Evidence is consistent
parties have already agreed to and use as evidence to see as long as it does not completely negate any term
if any contradictions. (Narrow - bars more evidence) in the agreement. (Broad - bars less evidence)
Four Corners Rule: An agreement is ambiguous only if it P, G & E Rule: An agreement that is unambiguous
appears so on its face. (Narrow - bars more evidence) on its face can be shown to be ambiguous by
extrinsic evidence, so long as the agreement is
reasonably susceptible of the alleged meaning.
(Broad - bars less evidence)
If the evidence falls into any of the above categories, the evidence is admissible.
Categories of K
CONTRACT INTERPRETATION ISSUES
Ambiguities
1. Patent
2. Latent
(Ambiguity revealed
Grammatical only after learning
Problems Words or Conflicts Same as General Problems additional info)
(Sloppiness) Phrases with Among BUT
(e.g. commas, Multiple Terms Arise in Special Contexts 3. Gap in K
modifiers) Meanings
(Contract is silent or
incomplete regarding
an issue)
Creation of Creation of
Force
an an Time of the
NAME OF Express Constructive
Majeure Divisibility
Clauses Essence Clauses
CONTEXT Condition Condition
AND
1 2 3 4 5 6 7 8
Course of Course of Trade Usage Contra
Performance Dealing Interpreting Interpret the K Proferentem
Negotiations
(Parties must be in the Ks to make to reconcile
(Performance of between Public Policy
trade and usage is so them any
the K at issue and parties (Performance of prevalent that anyone inconsistencies
neither party has past Ks between in the trade would reasonable (Interpret against
objected) the same parties) know it.) the drafting party)
Express Constructive
Conditions Conditions
CREATION
RULES
1. Pay when Paid: Ambiguous— (In order of precedence)
must use the surrounding Rest. (2d) Contracts § 241 CC help courts determine
Magic K circumstances. 1. Extent non-breaching order of performance.
Words OR Interpretation 1. Follow stated or relative party did not get her essential
(See Page 2) Rules 2. Time is of the Essence dates. K benefit. 1. CC Precedent: second
* FOR EC: If something is of the party has no duty to perform,
essence, it is so central that without it 2. If parties can perform at 2. Extent non-breaching unless other party performs.
nothing important is left. the same time, they must. party can get damages to
Perfect Performance: Express * AGAINST EC: Boilerplate clause substitute for loss of the K 2. CC Concurrent: parties'
used by the parties to mean that time 3. "Work before pay." benefit. performances are due
conditions must perfectly occur, for is important BUT do not mean that if simultaneously—each must
example: performance is a day late, the contract 4. Courts consider the 3. Extent breaching party render/tender performance in
1. Happen when suppose to happen; is over. nature of the transaction. will have wasted time and order to claim a breach by
money. the other party.
2. Done in the correct manner
3. Satisfaction: Creates an express
condition. Standards to evaluate: 4. Likelihood breaching 3. Independent: Terms are
SUBSTANTIAL
* Fancy, Taste, or Judgment: made party will cure deficiencies. unconditional and parties
PERFORMANCE
in "good faith." must perform.
* Commercial Value: reasonable 5. Extent breaching party
EFFECT
person in determining satisfaction. acted in good faith.
1. If an insubstantial
(operative fitness or mechanical performance, then a
utility). material breach and CC
has not occurred.
2. If a substantial
performance, then NO
material breach and CC Last Updated: 10 May 2009
has occurred.
Express Condition Language Chart
(1) Language which all courts would (2) Language which all courts (3) Language about which
agree create express conditions: would agree do not create express reasonable lawyers could argue
conditions: either way:
╚ Afterwards
1. Conditional (-ed) on 1. Covenant 1. After
╚ Later
3. Pledge
╚ Expect
4. If
╚ Warrant
5. If and only if 2. As
6. On the condition that 3. As soon as
╚ Expect you to
7. Only if 5. Shall (or Shall Not) 4. Pay when paid
╚ Ought to
6. Time is of the essence
╚ Please (-ing)*
8. Upon
╚ Suffices (-ive)*
5. Swear 9. Upon receipt of payment
6. Time is of the essence 10. Warranty
╚ Although
10. Shall be a condition precedent to 7. Vow 11. When
Force Majeure
Nonoccurrence of Estoppel Prevention Impracticability / Clause
Waiver
a prior condition (Bad Faith) Impossibility
(Act of God)
GR: Condition GR: Beneficiary of a GR: Beneficiary of a GR: Beneficiary of a GR: Impracticability
due before the condition takes action EFFECT
condition condition causes the clause. Lists
condition at 1. If material part, then performance
intentionally gives up indicating an intent condition NOT to circumstances in
issue did not excused, remainder of K discharged.
the right to enforce not to enforce the occur, or otherwise which a party can
occur the condition. condition and that has breach her duty of avoid having to
2. If NOT material part, then that
action causes the good faith. perform the K without
performance is excused, remainder of K
other party to rely. penalty.
is NOT discharged
EFFECT EFFECT
Event makes
Occurrence is performance Nonoccurrence of Party had no fault in Party has not assumed
unforeseen event. impracticable (must event is basic the occurrence. the risk, unless:
radically change the assumption.
obligation).
Shell: ⅓x increase (33% increase) (finding K assigned the Event was Event was
increased cost is NOT excessive or risk foreseeable within the
unreasonable). party's control