Beruflich Dokumente
Kultur Dokumente
a) Identify and describe the negotiations. a) Was there a benefit & a detriment (Hamer v. Sidway)?
b) Identify and describe the essential terms (price, materials, b) Was this a bargained for exchange?
1) Is there a K? payment). c) Note both parties exchanged material, non-sham
c) Is there an offer? (does it inivte assent) promises.
d) Is there an acceptance? (is assent given)
2) Do we need an We have a framework for Promissory Estoppel; We have flow charts for all
alternate means of else.
recovery?
We have us a chart
Bilateral K
There is a preference to read contracts as
bilateral.
- Both sides make promises for future action
- Cannot be revoked after acceptance w/o
breach
Unliateral K
- Offeror makes offer to exchange a promise of
future performance w/ the ACTUAL performance of n3. p71; courts are now using
the offeree being the only valid means of unilateral contract as a basis to
acceptance. enforce liability on offeror when no
- Offeror cannot revoke after substantial promissory acceptance was invited
performance (modern rule) or required.
Acceptance
a) Can be in any manner sufficient to show agreement. 2-204(1)
Can be silent if such was a practice of the parties in the past
Common law rules
2) Std. b) The any manner any medium provision can be contracted out 3) Consideration
govern.
Acceptance of per 2-206(1) but must be "unambiguously indicated in terms"
c) Need not determine a precise time
d)
Met. No.
Step 3) If neither party knew nor should have known
what the other meant, then look to what a reasonable
? recovers per person would have thought.
? wins; no K nor
promissory - Is an interpretation unreasonable, ie one of the parties
PE.
estoppel. would clearly be operating w/o a profit on this?
Parol Evidence Framework
Overall: Remember, the first time you address a topic, give a
Tip Off: When the fact pattern includes thorough evaluation. Afterwards, only briefly check them off unless
negotiations with a specific term which is ? ? question is begging deep analysis.
ambiguously put into the contract, which
then causes an issue:
b) Identify and describe the essential terms (price, materials, b) Was this a bargained for exchange?
1) Is there a K? payment). c) Note both parties exchanged material, non-sham
c) Is there an offer? (does it inivte assent) promises.
d) Is there an acceptance? (is assent given)
2 4 Corners Integration
1 Invoke the PE rule 3 R2K 210 Rule
a) Invoke "4 corners" approach
a) Explain PE rule is to "bar of Wilison. Thompson v. Libby.
2) Will terms not in the production of extrinsic evidence to a) Merger clause?
b) Are all essential terms b) All essential terms?
final document be contradict or supplement a final, fully included? "fully integrated on its
included AS TERMS. integrated agreement" c) If so, then probably fully integrated.
face" d) PE can STILL be used to " clarify
Invoke Parol Evidence b) We must discover if the agreement
Parol Evidence Shit
Promissory Estoppel
Framework a) Identify and describe the a) Was there a benefit & a detriment (Hamer v. Sidway)?
negotiations. b) Was this a bargained for exchange?
Tip off: There will be a claim 1) Why isn't b) Identify and describe the c) Note both parties exchanged material, non-sham
or deal which is either there a K? essential terms (price, materials, promises.
between family, friends, or an payment).
employee being terminated c) Is there an offer? (does it inivte
and is not completed. assent)
d) Is there an acceptance? (is Note the reason why this is either sham consideration or
1 PE Basics assent given) otherwise would not be a K
a) Promissory estoppel
permitted when a contract is 2 Was there a promise 3 Reliance
2) Promissory not made or valid a) Did the promise induce the reliance?
Estoppel b) Guided by R2K S 90 a) Identify the promise
b) The reliance was reasonable
c) List elements (promise, b) Note that it was a
because_______.
reasonable, foreseealble, manifestation of intent to
c) Reliance was foreseeable because _______.
detrimental, injustice act in a certain way"
d) Reliance was detrimental because _____.
Yes.
3. Was the performance " substantial" ? 2c. If the breach was failure to perform the
Jacob & Youngs v. Kent express condition, can substantial
- Was the performance only trivially different from full NOTE: Express conditions performance apply?
performance? are excellent ways to protect Probably not. Courts have a strong preference
- Was the omission done in good faith (ie innocent)? a party in a K. It is more than to not permit substantial performance. If it
likely she'll ask us to improve says by cable, better be by cable. If it says by
a K. Use express conditions telephone, better fucking be by telephone.
Yes. Trivial & Innocent Breach No. Non-trivial and/or bad faith breach
to accomplish this.
a) Identify and describe the negotiations. a) Was there a benefit & a detriment (Hamer v. Sidway)?
b) Identify and describe the essential terms (price, materials, b) Was this a bargained for exchange?
1) Is there a K? payment). c) Note both parties exchanged material, non-sham
c) Is there an offer? (does it inivte assent) promises.
d) Is there an acceptance? (is assent given)
If an advertisement has
something to do with it,
4) Is another theory Check check the bait and switch
relevant? Misrepresentation provision of offer and
acceptance.
Policy reasons
behind 207.
3) Is it included? Rejection of "last
shot" rule.
Implied Terms & Warranties
Warranties are mostly for goods in this class. Fucks with the UCC. (exception - common law house case)
Express Warranties UCC 2-313 All warranties Bayliner Warranty warning. If you're going to claim an object
- Does not need to be stated as a warranty is unfit for use STOP USING IT. Bayliner.
(1) Express warranties are created by the seller when:
(a) Any affirmation of fact or promise made by the seller to the buyer which
relates to the goods and becomes part of the basis of the bargain becomes an
express warranty that the goods will conform to the affirmation or promises. Quick rundown 2-313 Quick Rundown 2-315
(b) Any description of the goods which is made part of the basis of the bargain Express Fit 4 Particular Purpose
creates an express warranty that the goods shall conform to the description. 1. Did seller say it? 1. Does seller have reason to know
(c) Any sample or model which is made part of the basis of the bargain creates 2. It wasn't an opinion? of special purpose?
an express warranty that the whole of the goods shall conform to the sample or 3. Made part of basis of 2. Does sllr have reason to know
model. transaction? buyer will be relying on sllr's skill and
(2) It is not necessary to the creation of the warranty that the seller use formal 4. Not specifically recanted? knowledge for such?
words such as "warrant" or "guarantee" or that he even intends to make a 3. Did seller modify or disclaim?
warranty; BUT a mere affirmation of the value of the goods or a statement
"purporting to be the seller's opinion" does not create a warranty. Quick rundown 2-314
Notes: Implied Merchantibility Disclaimers Quickie 2-316
3. No particular reliance on the fact need be shown here. TO REMOVE a fact 1. Does merchant usually sell Exprss: Mst be consistent
from the agreement, the seller must clearly affirm that it is to be taken out of these kinds of goods? Mrchntbly: Spoken or written;
consideration. 2. Would a normal prsn objct? conspicuous if written
4. "No warranty" clauses are generally ineffective; unless they are otherwise 3. Is good fit for ordinary Part. Purp: MUST both writing & conspic.
consistent per UCC 2-316(1). But will be subject to parol evidence rule. purpose? M&PP: "as is" "with all faults" decisively
5. Technical specifications, blueprints, and the like can, if made part of basis of 4. Did seller modify? cancels implied warranties
deal AND CHECK TIEBREAKERS BELOW
Incapacity: Can be brought either as aff. cause of action OR aff defense. Voidable not Void
Minority/Infancy: A minor's Ks are voidable; not automatically Mental Incapacity/" Incompetency" (Burden is on ? to prove incompetence)
void. Term is "rescission"
Step 1) Test, whether the person involved had sufficient mental ability to know what
Old Rule: Benefit Rule Mod. Benefit he or she was doing and the nature & consequences of the transaction?
1)Contracts are (Min 1) Rule (Cur Maj)
voidable, not void - Upon - Rcvry of prchs
2) Can be rescission, price minus "use" Step 2) Did the other party know, or have reason to know of, incompetency OR
disaffirmed either recovery of AND minus took unfair advantage of the incompetent (ie std fraud whch incomp coulndt knw)?
before OR after purchase price "depreciation" -From common law duty of good faith in formation & perf.
majority reached, if minus the while in
w/n rsnbl time minor's "use" possession Yes, bad faith. No, good faith, no reason to know.
FULL PRCHS PRC
Money lost without If other party had no reason to know and
Exceptions: benefit to the incompetent made K fully in good faith, then K ceases to
-Necessaries: Not voidable, to prevent merch frm not selling party need not be be voidable when the prt perf. makes it such
(recvry based on restitution, not K, theory) restored. (But benefits do) that parties cannot simply be restored to
-Tortious misrepresentation of age: If merch attmpts to find age R2K 15(2). previous position.
and minor lies (rcvry based on tort, not K, theory)
Duress - Physical Duress = VOID. (Simple.) Economic Misrepresentation R2K 164 - Unconscionability UCC 2-302; R2K 208
Duress = VOIDABLE (only rarely passes muster). K VOIDABLE ,if; Ks are UNENFORCEABLE
1) Fraduelent or material Notes
Old " Wiliston" Rule misrepresentation; AND - Uncscblty is an absence of meaningful choice on the
1) Party alleging economic duress must show that he has - Does not need to be part of one of the parties together with terms whcih
been victim of a wrongful or unlawful act or threat; AND intentinoal misrep, so long as are unrsnbly favrbl to other party. -Req consideration
2) Such act or threat must be one which deprives the civtim misrep is "material" of all the terms in a K, not just failure to read.
of his unfettered free will. - An opinion is not a - ALWAYS a matter of law for judge.
misrepresentation. - RK2 literally adopts and cites UCC, just use UCC
- Wrecklessly false and note this if for non-goods.
R2K 175-176 & Totem Elaboration asseritions; made as true Elements
Marine Tug & Barge 1) Wrongful ? unlawful (though without knowledge of veracity (1) Procedural unconscionability; AND
1) one party involuntarily unlwfl is sffcnt). Inclds immoral (not tech. fraud, but considered Absence of meaningful choice by wronged party.
accepted the terms of & bad faith, ie delib. withld of so for this) ie little or no bargaining power.
another via wrongful acts; payment (2) Substantive unconscionability.
2) circumstances 2) A lawsuit to recover is NOT 2) Justifiable reliance Terms unreasonably favorable to other parties
permitted no other considered a reasonable - Ex if dance studio could Corbin's Test: Are the terms "so extreme as to appear
alternative; AND alternative due to dire financial prove that Mrs. Syester never unconscionable according to the mores and business
3) the wrongful acts straits- No alt also means thought she could actually be a practices of the time and place."
induced the transaction financial hardship would occur. professional dancer it would not ie. Walker-Thomas Furniture: Even if party had paid off entire
have been jstfbl reliance. amount of old consigned item, it was automatic collteral if a
single payment was missed on a new consigned item.
Promissory Estoppel R2K 90 Promise for Benefit Recieved R2K 86 Unjust Enrichment / Restitution / Quantum Meruit
Harvey v. Dow (Family) - PE has historitcally been aka Material Benefit Rule Webb v. McGowin Commerce Partnerships v. Equity
used to enforce familial agreements initially Very much a minority rule, but address anyway 4 Elements req.
backed by altruism rather than vlbl cnsdrtin. "Where the promisee cares for, improves, and (1) ? has conferred a benefit on ?
Katz v. Danny Dare (Cmrcl Emp Pnsn) - In preserves the property of the promisor, though (2) Consent prong; both
modern context, PE's principal application is done w/o his request, it is sufficient (a) Knowledge - ? has knwldg of benefit
protection of unbargained-for reliance on consideration for the promisor's subsequent (b) Acceptance - ? has acctp &/or retained benefit
commercial promises agreement to pay for the service, because of the (3) Unjust - Circumstances are such that it would be
Aceves v. U.S. Bank, N.A. - Dickheads on house material benefit received" inequitable for the ? to retain benefit without paying fair
loan. value.
Elements (1) Material benefit received by ?
(1) Promise - Need not be an express promise, (2) ? subsequently made ? a promise to
can be implied so long as it still meets the compensate for this previous benefit (essentially
'reliance' tests. reverse consideration) Determining Injustice - Sub-Contractors
(2) Reliance, three pronged; both (3) Injustice would result from the (1) Subcontractor had exhausted all remedies against
(a) Reasonable - ? 's reliance on ? 's promise non-enforcement of the promise. the general contractor and still remained unpaid; AND
was not unreasonable or based off an insincere (2) the owner had not given consideration to any person
statement CANNOT BE A MERE GIFT OR GRATUITY for the improvements furnished by the subcontractor
(b) Foreseeable - ? 's reliance on ? 's promise Note: Some statutes just consider this a valid
was foreseeable under the circumstances when contract but waive the retroactive consideration
they were made. prohibition. NY does this.
(Rsnbl & Frssbl = involves a definite &
substantial change of position which would not
have o/w occurred)
(c) Detrimental - ? 's reliance has led it to
either incurr loss or substantially improve the
property which they were promised. Would the
result be "unjust & inequitable?" If so, PE should
apply. In the context of employment, change of A contract theory is almost always preferred, as these alternate theories are only approved in roughly
position satisfies; even if higher salary, this does 10-20% of cases. Not a very good shot for a client.
not mean that the salary = proper compensation
for stress.
??
Damages
Which is best when?
Expectation Damages Best? Expectation damages are BEST in a breach where the contract would otherwise have been profitable for a party and they are unable
to suitably mitigate. Can only be claimed by the non-breaching party ---> If a contract would be un-profitable or mitigation is extensive then this may not be the
best option for a party. Instead, restitution damages would be a better option; reliance damages could be attempted b/c of burden shift.
Reliance Damages Best? If anticipated profits are too speculative, reliance damages are best. Still does not permit recovery of unprofitable venture but this at least
shifts the burden of proof on speculative profits to the breaching party. Seek to return to "ex-ante" position.
Restitutionary Damages Best? These are best when a loss on the transaction is guaranteed or the breaching party seeks to re-coup some of the value of its
expenses prior to breach.
Specific Damages Best? When the contract is either for a unique good or service, unavailable in any other way by any other non-party, and it would not be unjust to
apply the remedy as such.
2) Remedies At Law Note: K's are entitled to equitable remedy; promissory Shared Factors of Damage Calculation
estoppels are too. Foreseeability, Certainty, Causation of Damages + Mitigation
- Frssblty: Either "arising naturally" from the breach as would have
Expectation Damages - Claimed by non-breaching party been in contemplation of both parties at time of breach. OR if the
Purpose: To give plainitff what he would have received if the K was completed. damages arise from special circumstances, these MUST have been
This is common law. SEE UCC 2-708 for goods. communicated by both parties when the K was formulated,shwn in K.
(1) in cntmplt @ time of K; (2) type of loss, not manner, frssbl; (3)
Calculation of Expectation Damages E = Vl + Ol - Ca - La frssblty focuses on brchng prty; (4) cn b objctv "reason to know;" & (5)
E : Expectation Damages mst be a "probable" result of breach
Vl: Value Loss - Difference between the value to the injured party of the Certainty: "Reasonably calculable;" merely "speculative" not counted.
performance and what was actually received. Ex expected profits. Lost profits require expert testimony. Only recover net, not gross profits.
For land: Vl is the difference b/w the fair market value and the K price. The Causation: Prox cause.
second sale can be used as evidence of the FMV. MITIGATION: Failure to mitigate is an affirmative defense, the
For employment: If eqv. services not avail. then breaching party is employer/ breaching party must prove both availability of comprable
responsible for the more expensive replacement. substitute AND lack of reasonable dilligence on non-breaching party
Ol: Other Loss = Incidental Damages + Consequential Damages
(Incidental Damages) - Costs incurred post breach in attempt to avoid loss.
Ex broker fees to find sub. buyer Losses on Collateral Contracts Figured Under OL Florafax rules
(Consequential Damages) - Damages caused directly by the breach. (1) Loss must be w/n contmplation of parties @ time of K
RULES: (a) damages must be reasonably foreseeable by breaching prty (2) Loss must flow directly or proximately from the breach
(b) harm need be measurable w/ reasonable certainty (3) Loss is capable of reasonably accurate measurement
(c) duty to mitigate has been accounted for
Jacob & Youngs (wrong pipes): When incidental damages far outweigh the Reliance Damages - Claimed by the non-breaching party
value loss, breach unintentional, & consequences trivial, courts will be reluctant Purpose: To prevent waste and return non-breacher to "ex-ante."
to enforce them. Instead, will enforce 'diminution in value'
Ca: Cost Avoided - Reduction by savings from unspent resources. Rd = Money spent - money paid - probable loss - mitigation (losses
La: Loss Avoided - Savings which result from mitigation of damages. must be proved by D)
DUTY TO MITIGATE: Loss Avoided should be calculated as losses which - Subject to the certainty, foreseeability, causation, and mitigation principles.
could be mitigated; since a party has the duty to mitigate those damages which - Only for "necessary" reliance damages, not incidental. Must be necessary
it can. EXCEPTION: The burden is on the breaching party to show that the for performance of the non-breaching party's obligations. Only applies to
damages could be mitigated in the frist place. "wastes," reliance damagess which are otherwsie still beneficial are not
For employment, a person need not accept inferior work if it is offered. recoverable. ---- These are basically just costs incurred without net profit.
The permissibility of pre-judgment interest: COSTS ACTUALLY INCURRED - not the market value.
Damages must be "luquidated sum" meaning that both (a) the amount due and - **Burden that the venture would not have been profitable falls on the
(b) the date on which originally due, are fixed/certain/ascertainable by calcultn. defendant as an affirmative reduction of this value. HOWEVER, at least this
is better for a potentially unprofitable venture to try this, since the D may fail
to meet the burden.**
3) Equitable Remedies Avaliable both for standard contracts and per se equitable claims
Restitutionary Damages - CLAIMED BY EITHER PARTY Specific Performance - Claimed by non-breaching party
Purpose: To restore value of a benefit that the D has unjustly retained. Purpose: Precisely compel performance when other remedies are inadqt.
ResD = Value of benefit retained Must meet requirements; considered an extreme remedy
- Must meet reqs. of Unjust Enrichment (ie expenditure justifiable, (1) Insufficiency of Monetary Damages (Inadequacy + Impracticality)/ AND
reasonable, and leaving D with unjust benefit) (a) Inadequacy - Sub matter of K is rare enough that money cannot remdy
- Where reliance would only pay for costs incurred, Restitutioary damages (land or a Picasso)
can acquire the market value of the service. Includes Cost of performance + (b) Impracticality - Would be impossible or very difficult to calculate
value of labor/reasonable profit. damages or a market value replacement.
-However, could also be lower than reliance damages if the expenditure does (2) Equity considerations - Would it be unjust to compel performance? ie if a
not result in a large benefit to the owner. houseowner breaches b/c of severe illness, it would be unjust to evict
- Often based on market value but can be based on the net value of (3) Practical Considerations - Would the court have to supervise the
recipient's net gain. K price is not an upper limit on this. performance? How will the court know it is done properly?
NOTE: rarely, if ever, compel performance of personal service Ks