CONTRACTS III. WHAT ARE THE TERMS OF THE K?

Interpretation: done by the custom and usage in trade/industry, or course of dealing between the parties; judges 4-corners, or plain meaning. Mistaken/Ambiguous Terms: extrinsic allowed; construed against the drafter; negotiated ctrls. Parol Evidence Rule: limits prior writings to affect the written K prevents fraud. Partial integrations allow no contradictions. Total integrations allow no contra or additions. Ancillary or subsequent writings are not barred. Modification: C.L. required additional consideration; UCC, no consideration needed so long as in modification done in good faith.

V. HAVE TERMS BEEN PERFORMED?

Conditions: be aware of conditions precedent, concurrent (exchanged same time), and subsequent. Excuse of Conditions: hindrance, waiver Discharge: terms of K may be discharged due to Impossibility through death or physical incapacity, illegality, or destruction of the subject matter Impracticability an unanticipated extreme and unreasonable difficulty. Frustration of Purpose, Rescission, or Novation an agreement by all parties to extinguish K duties between original parties and replace them with a new K, or done by accord and satisfaction Breach: total / material breach means that the non-breaching party is entitled to cancel the K and recover damages. A partial breach means that the non-breaching party may not cancel the K, but may recover damages.

IV. 3rd PARTY RIGHTS AND DUTIES

3 Party Beneficiaries: arises when theres a direct undertaking by the promisor to the 3rd party, or when theres an intent on the part of the promisee to benefit the 3rd party. When Rights Vest: intended / not incidental Delegators Liability: the delegator can be sued if delegatee breaches. Assignors Rights: extinguished upon an effective assignment or w/ consideration. Assignment of Rights: generally valid unless they materially alter the obligors duty or risk, or unless they are prohibited by law. The obligor may have defenses against the assignee. Delegation of Duties: permitted except where prohibited by the K, or where the duties involved personal judgment and skill, or where the delegation would change the obligees obligations. The obligee may sue the delegator and delegatee.
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VI. REMEDIES FOR BREACH

Duty to Mitigate: avoidable damage non-recov. Damages: should be compensatory (not punitive) and give the non-breaching party expectation damages (benefit of the bargain). Reliance (pre-K situation), or Restitution (pay back benefit received). Consequential damages are available only if foreseeable. Hadley v. Baxendale. Liquidated Damages: put into a K when actual damages are difficult to calculate at the time of K formation; amount must be a reasonable forecast of likely damages; no punitives. Specific Performance/Injunction: limited Quasi-K Relief: when no actual K, recover value of benefits conferred.