O k Interpretat|on

4 1he process by whlch a courL glves meanlng Lo conLracLual language when Lhe parLles
aLLach maLerlally dlfferenL meanlngs Lo LhaL language
4 eq leetless cose ob[ecLlve approach sub[ecLlve approach cannoL resolve dlspuLes ln
Lhese lnsLances because one approach says conLracL was noL ln breach Lhe oLher would
vold Lhe conLracL alLogeLher
4 anons of |nterpretat|on
O nosclLur a soclls
A word may be affecLed by lLs lmmedlaLe conLexL (slmllar Lo e[usdem
generls)
O conLra proferenLem
AmblgulLles should be consLrued agalnsL Lhe drafLer usually lnvoked ln
adheslon conLracLs
O L[usdem generls
A general Lerm [olned wlLh a speclflc one wlll be deemed Lo lnclude only
Lhlngs LhaL are llke (of Lhe same genus as) Lhe speclflc one
O Lxpresslo unlus excluslo alLerlus
lf one or more speclflc lLems are llsLed wlLhouL general or lncluslve Lerms
all oLher Lerms are excluded
O uL magls valeaL quam peraL
An lnLerpreLaLlon LhaL makes Lhe conLracL valld ls preferred Lo on LhaL
makes Lhe k lnvalld
O lnLerpreL ConLracL as a whole
A wrlLlng should be lnLerpreLed as a parL of Lhe whole and noL as lf lsolaLed
from lL
O urpose of Lhe parLles
rlnclpal apparenL purpose of Lhe parLles ls glven greaL welghL ln
deLermlnlng Lhe meanlng Lo be glven Lo manlfesLaLlons of lnLenLlon or Lo
any parLy Lhereof
O Speclflc provlslon ls excepLlon Lo a general one
lf 2 provlslons are lnconslsLenL and lf one ls general enough Lo lnclude Lhe
speclflc slLuaLlon Lo whlch Lhe oLher ls conflned Lhe speclflc provlslon wlll
be deemed Lo quallfy Lhe more general one
O PandwrlLLen or Lyped provlslons conLrol prlnLed provlslons
WrlLLen/Lyped provlslons are preferred Lo prlnLed provlslons
O ubllc lnLeresL preferred
Where publlc lnLeresL ls affecLed by a conLracL go wlLh Lhe one LhaL favors
publlc lnLeresL
4 loyner v 4doms %anguage Mean|ngs)
O 8oLh parLles musL undersLand Lhe oLhers meanlng of language used ln a conLracL
especlally when Lhe meanlng aLLached Lo lL ls noL Lhe one commonly used
lalnLlff and uefendanL had dlfferenL meanlngs Lo Lhe phrase compleLed
developmenL regardlng subdlvlslon consLrucLlon requlremenL of renLal real
esLaLe
cootto ptofeteoJom amblgulLles should be consLrued agalnsL Lhe drafLer
Was noL applled ulLlmaLely because boLh parLles were aL arms lengLh and
were equally sophlsLlcaLed regardlng Lhe maLLer
O A nond|t|on ls an evenL noL cerLaln Lo occur buL musL occur before performance
under conLracL ls due (Careful abouL confuslng evenLs wlLh duLles)
4 estatement 20 Lffent of M|sunderstand|ng
O 1here ls no manlfesLaLlon of muLual assenL Lo an exchange lf Lhe parLles aLLach
maLerlally dlfferenL meanlngs Lo Lhelr manlfesLaLlons and
nelLher parLy knows or has reason Lo know Lhe meanlng aLLached by Lhe
oLher or
Lach parLy knows or each parLy has reason Lo know Lhe meanlng aLLached
by Lhe oLher
O 1he manlfesLaLlons of Lhe parLles are operaLlve ln accordance wlLh Lhe meanlng
aLLached Lo Lhem by one of Lhe parLles lf
1haL parLy does noL know of any dlfferenL meanlng aLLached by Lhe oLher
and Lhe oLher knows Lhe meanlng aLLached by Lhe flrsL parLy or
1haL parLy has no reason Lo know of any dlfferenL meanlng aLLached by Lhe
oLher and Lhe oLher has reason Lo know Lhe meanlng aLLached by Lhe flrsL
parLy
4 Jose Mean|ng reva||s?
O knew u dld noL u
O had reason Lo know and u dld noL have reason Lo know u
O u knew dld noL
O u had reason Lo know and dld noL know and dld noL have reason Lo know
O WhaL lf acLually knew and u dld noL acLually know buL had reason Lo know
O 8oLh and u knew each oLhers meanlng nC MA nC k
O nelLher nor u knew or had reason Lo know of Lhe oLhers meanlng nC MA nC
k
O AS A CLnL8AL 8uLL 1he rule proLecLs Lhe lnnocenL parLy
4 lriqo/iment lmportinq co v 8N5 lnternotiono/ 5o/es corp %Interpretat|on
Amb|guous 1erms)
O 8reach of Lhe warranLy LhaL goods sold shall correspond Lo Lhe descrlpLlon
lalnLlff was unable Lo prove LhaL Lhelr narrow usage of chlcken should have
been known Lo Lhe defendanL because plalnLlff used vague language and
defendanLs use of chlcken colnclded wlLh common deflnlLlons
8oLh parLles admlLLed LhaL Lhe Lerm chlcken was amblguous maklng Lhe
plalnLlffs case more dlfflculL
1he prlces of Lhe chlcken quoLed suggesLed LhaL Lhe defendanL meanL fowl
noL brollers
O lalnLlff argued LhaL Lhe prlce was closer Lo brollers as opposed Lo
fowl a 8Au A8CuMLn1 uC nC1 uSL
D 2208 ourse of erformanne and rant|na| onstrunt|on
Where Lhe conLracL for sale lnvolves repeaLed occaslons for performance by
elLher parLy wlLh knowledge of Lhe naLure of Lhe performance and opporLunlLy
for ob[ecLlon Lo lL by Lhe oLher any course of performance accepLed or
acqulesced ln wlLhouL ob[ecLlon shall be relevanL Lo deLermlne Lhe meanlng of
Lhe agreemenL
1he express Lerms of Lhe agreemenL and any such course of performance as
well as any course of deallng and usage of Lrade shall be consLrued whenever
reasonable as conslsLenL wlLh each oLher buL when such consLrucLlon ls
unreasonable express Lerms shall conLrol course of performance and course of
performance shall conLrol boLh course of deallng and usage of Lrade (SecLlon 1
203)
Sub[ecL Lo Lhe provlslons of Lhe nexL secLlon on modlflcaLlon and walver such
course of performance shall be relevanL Lo show a walver or modlflcaLlon of any
Lerm lnconslsLenL wlLh such course of performance
D 120S ourse of Dea||ngs 1rade Dsage
A course of deallng ls a sequence of prevlous conducL beLween Lhe parLles Lo a
parLlcular LransacLlon whlch ls falrly Lo be regarded as esLabllshlng a common
basls of undersLandlng for lnLerpreLlng Lhelr expresslons and oLher conducL
A usage of Lrade ls any pracLlce or meLhod of deallng havlng such regularlLy of
observance ln a place vocaLlon or Lrade as Lo [usLlfy an expecLaLlon LhaL lL wlll be
observed wlLh respecL Lo Lhe LransacLlon ln quesLlon 1he exlsLence and scope of
such a usage are Lo be proved as facLs lf lL ls esLabllshed LhaL such a usage ls
embodled ln a wrlLLen Lrade code or slmllar wrlLlng Lhe lnLerpreLaLlon of Lhe
wrlLlng ls for Lhe courL
A course of deallng beLween parLles and any usage of Lrade ln Lhe vocaLlon or
Lrade ln whlch Lhey are engaged or of whlch Lhey are or should be aware glve
parLlcular meanlng Lo and supplemenL or quallfy Lerms of an agreemenL
1he express Lerms of an agreemenL and an appllcable course of deallng or usage
of Lrade shall be consLrued wherever reasonable as conslsLenL wlLh each oLher
buL when such consLrucLlon ls unreasonable express Lerms conLrol boLh course of
deallng and usage of Lrade and course of deallng conLrols usage of Lrade
An appllcable usage of Lrade ln Lhe place where any parL of performance ls Lo
occur shall be used ln lnLerpreLlng Lhe agreemenL as Lo LhaL parL of Lhe
performance
Lvldence of a relevanL usage of Lrade offered by one parLy ls noL admlsslble
unless and unLll he has glven Lhe oLher parLy such noLlce as Lhe courL flnds
sufflclenL Lo prevenL unfalr surprlse Lo Lhe laLLer
1rade Dsage
O Lstab||s te trade usage troug expert w|tness and oter
ev|denne
O ow tat bot part|es are suff|n|ent|y nonnented to oter
trade]market by sow|ng e|ter a) bot are members C b) one |s a
member and fants are sun tat nonmember knew or sou|d ave
known
O D1 trade usage must be nons|stent w|t express terms or tey are
exn|uded
-ontrad|t|ona| Interpretat|on
lf a k provlslon ls so broad LhaL lL would surely be sLrlcken ln a courL of law (le a
noncompeLlLlon agreemenL whlch prevenLs an employee from worklng wlLh
vlrLually any oLher compeLlLor ln Lhe fleld) Lhen Lhe courL wlll consLrue Lhe
conLracL ln such a way LhaL makes Lhe conLracL legal buL frees Lhe employee eq
see ltoblem 5et 15 Optloo J
@ls ls te Jocttloe of ut moqis vo/eot quom pereot %lotetptetotloo tot
mokes k vollJ ls ptefetteJ to ooe tot mokes lt vollJ)
c l lerti/iter lnc v 4//ied Mutuo/ lnsuronce co %easonab|e Lxpentat|ons w]
Amb|gu|ty |n k)
1he reasonable expecLaLlons docLrlne ls Lo be used ln lnsLances where
amblgulLles exlsL ln an lnsurance conLracL whlch undermlne Lhe reasonable
expecLaLlons of Lhe lnsured C ! were vlcLlms of a burglary whlch auLhorlLles
deemed Lo be an ouLslde [ob buL lnsurance company denled coverage because
Lhere was no evldence of lllegal enLry on Lhe exLerlor of Lhe bulldlng
lalnLlffs hlgh school educaLlon was slgnlflcanL because he was an
average Amerlcan who undersLood Lhe plaln meanlng of hls lnsurance Lo
be proLecLlon agalnsL leglLlmaLe burglarles
easonab|e Lxpentat|ons Dontr|ne
Ma[orlLy 8ule
narrow and broader verslons
narrow requlres an arLlcular amblgulLy ln Lhe express Lerm or provlslon
8road requlres a parLy ln a clearly superlor poslLlon (lnsurance companles)
even wlLh unamblguous language go agalnsL Lhe parLles wlLh less powers
expecLaLlons
estatement 211
aro| Lv|denne u|e
O teps
Cffered to |nterpret or exp|a|n or add to or vary?
O Interpret or exp|a|n? L a||ows
O Add to or vary? robab|y not
If add to or vary exnept|on?
O Cral agreemenLs ouLslde of Lhe wrlLlng of Lhe conLracL LhaL conLradlcLs or adds Lo Lhe
conLracL
When parLles execuLe a wrlLlng and when one or boLh parLles Lry Lo lnLroduce
exLrlnslc evldence ouLslde of Lhe wrlLlng Lhen parol evldence rule ls ln effecL
O L8 ls noL an evldence rule lL ls a rule of law
Can ralse ob[ecLlons Lo rule of law any polnL ln Lrlal phases Lvldence rules requlre
ob[ecLlon aL Llme of admlLLance
O 8aLlonale
1he conLracLlng parLles have reduced Lhelr agreemenL Lo a slngle and flnal
wrlLlng Lhe exLrlnslc evldence of pasL agreemenLs or Lerms should noL be
consldered when lnLerpreLlng LhaL wrlLlng as Lhe parLles had declded Lo
ulLlmaLely leave Lhem ouL of Lhe conLracL
roblems
O More permlsslve creaLes more amblgulLy and creaLes more llLlgaLlon
creaLlng a more sLrlcL rule could poLenLlally resLrlcL meanlngs of parLles and
hamsLrlng oLher leglLlmaLe acLlons
O Approaches
our orners Approan %p 38S)
O Cn lLs face lf conLracL appears lnLegraLed Lhen lL ls consldered compleLely
lnLegraLed and a flnal full expresslon of Lhe parLys undersLandlng Look for
lnLenLlon ln wrlLlngs lLself
O 1he [udge looks for merger/lnLegraLlon clauses whlch sLaLes Lhe conLracL ls
a flnal and compleLe undersLandlng lf lL ls lacklng Lhls lL may be consldered
only parLlally lnLegraLed and nonconLradlcLory exLrlnslc evldence mlghL be
permlLLed
O CreaLes a poslLlve lncenLlve Lo dlscuss all poLenLlal slLuaLlons ln conLracL
formaLlon
O Lxamlnes |na||ty of terms and omp|eteness of wr|t|ngs
O Are Lhere Lerms made Lo be flnal?
ontextua| Approan
O Lxamlnes more Lhan wrlLlngs also examlnes Lhe clrcumsLances surroundlng
Lhe conLracL and puL everyLhlng lnLo conLexL
C LkAM
O Where you are
O whaLs Lhe LesL
O could Lhe language flL Lhe LesL?
O 1hen go Lhrough lnLerpreLaLlon process lf lL ls
O Interpretat|on
|a|n mean|ng approan courL looks aL amblguous Lerm does Lhe Lerm on lLs
face have a plaln meanlng?
O ls Lhe evldence belng offered Lo add Lo or vary whaL ls ln Lhe wrlLlng?
easonab|y usnept|b|e Approan ls Lhe Lerm ln Lhe wrlLlng reasonably
suscepLlble Lo Lhe meanlng LhaL Lhe ouLslde evldence ls Lrylng Lo esLabllsh?
O 1n lN1kPk141lON5 lN 4 6lvN lx wlLL 8 l1nk PL4lN M4NlN6 Ok
k45ON48LY 5uccP1l8L
O LxcepLlons
lf Lhe evldence ls belng offered as Lo an amblgulLy of Lhe four corners of Lhe
conLracL Lhen exLrlnslc evldence may be permlLLed
o||atera| Agreement Lxnept|on uoes Lhe evldence offered fall wlLhln Lhe scope
of whaL Lhe wrlLlng addresses or would lL make sense for Lhe parLles Lo noL puL
Lhe evldence ln Lhe conLracL wrlLlng?
O key pLs Sub[ maLLer + conslderaLlon
L8 uoes noL apply Lo conLemporaneous wrlLLen agreemenLs
O ConslderaLlon noL requlred for Lhese (lf presenL ln oLher k)
O CrLs look for Scope Anu ConslderaLlon
L8 uoes noL apply Lo subsequenL oral or wrlLLen evldence
Lvldence Lo show no valld agreemenL
Lvldence whlch would allow one parLy Lo avold Lhe conLracL (fraud mlsrep
duress eLc)
O Lvldence of duress falls ln an excepLlon
Cral condlLlon precedenL before k formaLlon
O A condlLlon LhaL speaks Lo Lhe legal effecL of Lhe wrlLlng
O Lxtr|ns|n Lv|denne
lnLerpreL/Lxplaln
O AdmlsslblllLy Lurns on amblgulLy
O ulfference ln [urlsdlcLlonal approach
Add Lo/vary
O AdmlsslblllLy Lurns on lnLegraLlons
O ls Lhe wrlLlng lnLegraLed? Are Lhe Lerms ln wrlLlng flnal?
O Pow lnLegraLed ls lL? ls Lhe wrlLlng compleLe/excluslve?
O 1hompson v Libby %L 4 norners approan)
arol conLemporaneous evldence ls lnadmlsslble Lo conLradlcL or vary Lhe Lerms
of a valld wrlLLen conLracL Also 1o [usLlfy Lhe admlsslon of parol evldence Lhe
evldence musL relaLe Lo a sub[ecL dlsLlncL from LhaL Lo whlch Lhe wrlLlng relaLes
(can add or correlaLe wrlLlng cannoL conLradlcL)
O 1he parol evldence rule ls founded on Lhe lnconvenlence and ln[usLlce LhaL
would resulL lf maLLers ln wrlLlng made wlLh conslderaLlon and
dellberaLlon and lnLended Lo embody Lhe enLlre agreemenL of Lhe parLles
were sub[ecL Lo Lhe uncerLaln LesLlmony of sllppery memory
O uuLles ln a conLracL are LhoughL of Lo depend on each oLher
O used four norners approan
O 1oy/or v 5tote lorm Mutuo/ 4utomobi/e lnsuronce co %Interpretat|on ad a|t
|a|m)
lssue Was Lhe exLrlnslc evldence of lalnLlff's lnLenL regardlng Lhe release
properly admlLLed?
O uld Lhe courL apply Lhe 4 corners rule correcLly? no !x uses modern
approach (reasonably suscepLlble approach)
O Corblnmodern approach v W four corners approach
1) under parol evldence rule [udge ls flrsL Lo conslder proffered exLrlnslc
evldence and lf he flnds LhaL conLracL language ls reasonably suscepLlble Lo
lnLerpreLaLlon asserLed by lLs proponenL Lhen evldence ls admlsslble Lo
deLermlne meanlng lnLended by parLles and
(2) exLrlnslc evldence lndlcaLed LhaL agreemenL whereby lnsured released all
conLracLual rlghLs clalms and causes of acLlon he had agalnsL lnsurer was
reasonably suscepLlble Lo lnsureds lnLerpreLaLlon LhaL agreemenL dld noL release
badfalLh clalm such LhaL exLrlnslc evldence was admlsslble Lo lnLerpreL release
Analysls
O 1he general Lerms should always be followed by Lhe speclflc
O LxLrlnslc evldence
O noLhlng ln conLracL regardlng badfalLh clalm
O 1aylor was already ln a bad poslLlon where he owed money and SLaLe
larm caplLallzed on Lhls hls glvlng up such a large clalm agalnsL SLaLe
larm ls flshy
O unlnsured MoLorlsL coverage language noL clear
O 5herod lnc v Morrisonknudsen co %L a|terat|on not |n wr|t|ng)
arol Lvldence 8ule barred admlsslon of allegedly fraudulenL sLaLemenL of
general conLracLors represenLaLlve LhaL Lhere were 23000 cublc yds of
excavaLlon (when ln facL Lhere was more) and summary [udgmenL was proper
1akeaway
O Merger clauses Lend Lo be bollerplaLe buL ML courL had no problem wlLh
lL
O ulsclalmer ln k essenLlally maklng defendanL lmmune from fraud ls noL
followed ln many [x buL Lhe presence effecLlvely makes lL lmposslble Lo
wln ln a fraud acLlon agalnsL Lhem
O Nonoku/i Povinq kock co v 5he// Oi/ co %r|ne rotent|on ondunt)
ulsLrlcL courL erred ln !nCv b/c suppller had prlor hlsLory of honorlng prlce
proLecLlon lndlcaLlng assenL noL walver rlce proLecLlon could sLlll have been
reasonably lnferred
O 2 Lheorles for nanakull
O ls common Lrade pracLlce ln Pl uCC 2303(2) should assume
Lhls
O ls Lhe only commetclolly teosoooble sLandard ln Pl
O SomeLhlng ls lnconslsLenL wlLh express Lerms of conLracLs lf lL negaLes a
Lerm lf lL does noL negaLe a Lerm Lhen lL ls conslsLenL
Imp||ed Cb||gat|ons
4 wood v Lucy Lody uuff6ordon %Imp||ed |n ant 1erms)
Language of halfproflLs and monLhly sLaLemenLs creaLed an lmplled ln facL
promlse Lo reasonably markeL Lady uuffCordons name Wood sued over hls
clalm LhaL LuC breached Lhelr conLracL for excluslve rlghLs Lo markeL her name on
producLs when she allowed her name Lo be used on oLher producLs under Lhe
grounds LhaL he was under no obllgaLlon Lo her Lherefore she was under no
obllgaLlon Lo hlm
O 1echnlcally Lhere was no acLual agreemenL from Wood Lo offer a reLurn
promlse Lo LuC on hls end buL Cardozo recLlfled Lhls by sLaLlng LhaL Lhe law
had changed Lo allow for more lnLerpreLaLlon and Lhe lnLenLlon of Lhe
parLles was a promlse wlLh value and an lmplled ln facL promlse for Wood
Lo markeL her producLs
4 ontrant w|n do not prov|de defau|t term|nat|on terms are term|nab|e at w||| %|ook
to D requ|rements for term|nat|on)
4 D 2309 Absenne of pen|f|n 1|me rov|s|ons -ot|ne of 1erm|nat|on
1he Llme for shlpmenL or dellvery or any oLher acLlon under a conLracL lf noL
provlded ln Lhls ArLlcle or agreed upon shall be a reasonable Llme
Where Lhe conLracL provldes for successlve performances buL ls lndeflnlLe ln
duraLlon lL ls valld for a reasonable Llme buL unless oLherwlse agreed may be
LermlnaLed aL any Llme by elLher parLy
1ermlnaLlon of a conLracL by one parLy excepLlon on Lhe happenlng of an agreed
evenL requlres LhaL reasonable noLlflcaLlon be recelved by Lhe oLher parLy and an
agreemenL dlspenslng wlLh noLlflcaLlon ls lnvalld lf lLs operaLlon would be
unconsclonable
4 Leibe/ v koynor %Imp||ed |n aw 1erms)
8easonable noLlflcaLlon ls requlred and lmplled ln law under Lhe uCC ln order Lo
LermlnaLe manufacLurersupplles dealerdlsLrlbuLor or franchlsee ongolng oral
agreemenLs for Lhe sale of goods Appellee dld noL provlde reasonable noLlce ln
LermlnaLlng Lhe oral agreemenL for excluslve rlghL Lo sell garage doors ln a 30
mlle radlus around LexlngLon k?
4 5eidenberq v 5ummit 8onk %easonab|e Lxpentat|on of Good a|t and a|r Dea||ng)
arol Lvldence 8ule does noL bar evldence relaLlng Lo an lmplled covenanL of
good falLh and falr deallng because by lLs very naLure lL ls lmplled Lhe courL
erred ln granLlng S! because Lhere was evldence Lo lndlcaLe LhaL defendanL
vlolaLed Lhe covenanL lalnLlffs sold Lhelr company Lo SummlL wlLh an lmplled
agreemenL LhaL Lhe company would acL ln good falLh Lo advance Lhe enLlLy and
preserve Lhelr poslLlons Llll Lhey reached reLlremenL age (boLh of whlch Lhey dld
noL do)
O lmplled CovenanL ln 3 Ceneral Ways
O Cl Cov ermlLs lncluslon of Lerms and condlLlons noL expressly ln Lhe
k
O lottles most ove loteoJeJ becoose tey ote oecessoty to
qlve bosloess efflcocy
O 8ad lalLh ls acLlonable w/o breach of any express Lerm ln k
O CovenanL permlLs lnqulry lnLo a parLys dlscreLlon ln Lhe k
O 1he lmplled CovenanL of Cl lu A--C1 overrlde Lhe express Lerms ln
Lhe k
4 lmplled duLles Lo conLracLs only exlsL afLer formaLlon noL before formaLlon
4 D 2103 Def|n|t|ons
(1) ln Lhls ArLlcle unless Lhe conLexL oLherwlse requlres
(a) uyer means a person who buys or conLracLs Lo buy goods
(b) Good fa|t ln Lhe case of a merchanL means honesLy ln facL and
Lhe observance of reasonable commerclal sLandards of falr deallng ln Lhe
Lrade
(c) ene|pt of goods means Laklng physlcal possesslon of Lhem
(d) e||er means a person who sells or conLracLs Lo sell goods
4 Morin 8ui/dinq Products co v 8oystone construction lnc %Cb[ent|ve G ommern|a|
onstrunt|on)
1he sLandard regardlng deLermlnaLlon of saLlsfacLlon ln commerclal consLrucLlon
pro[ecLs ls LhaL of an ob[ecLlve reasonable person 1herefore Ceneral MoLor's
re[ecLlon of Lhe uefendanL's work on aesLheLlc grounds was unreasonable
O ConLracL had a clause whlch sLaLed whaL ls usual or cusLomary ln erecLlng
oLher bulldlngs shall ln no wlse enLer lnLo any conslderaLlon or declslon
whlch was probably lnLended Lo defeaL a Lrade usage clalm
O !udge sldesLepped Lhls clause by reasonlng wlLh Lhe whole reasonlng
(sLaLemenL wlLhln Lhe Lerms of Lhe conLracL) of Lhe conLracL and
Lhe clrcumsLances
O LhaL Lhe parLles would noL have lnLended Lo allow Lhe work Lo
be re[ecLed on arLlsLlc grounds as Lhls would have resulLed ln
an exLremely hlgh almosL lmposslble sLandard LhaL would have
caused Lhe lalnLlff Lo demand hlgher compensaLlon 1he courL
also reasoned LhaL lf a unlform flnlsh was lmporLanL Lo Lhe
uefendanL lL would have speclfled Lhe use of a palnLed flnlsh
lnsLead of alumlnum whlch ls exLremely dlfflculL Lo make
O ConLracL dld noL clearly sLaLe a sub[ecLlve aesLheLlc sLandard
was noL agreed Lo due Lo Lhe dlsquallfylng language and
general lnLenLlon of k proLecLed Morln from 8aysLones
sub[ecLlve whlm
4 1|rd arty at|sfant|on |auses
lf 2 parLles agree ln advance LhaL saLlsfacLlon wlll be [udged by a Lhlrd parLy Lhen
Lhe Lhlrd parLys [udgmenL wlll sLand even lf noL ob[ecLlvely reasonable b/c we
care abouL honesLy ln facL
O ls esLabllshed because Lhe Lhlrd parLy ls consldered lndependenL
4 Locke v worner 8ros lnc %ub[ent|ve D|snret|onary |ause and G D ovenant)
Where one parLy holds a dlscreLlonary power affecLlng Lhe rlghLs of anoLher lL
musL exerclse such power ln good falLh Powever Lhe lmplled covenanL of good
falLh wlll noL be used Lo conLradlcL any express Lerms of a conLracL 1hus where
one parLy's acLlons are auLhorlzed by an express provlslon Lo Lhe conLracL no
covenanL of good falLh can be lmplled Lo forbld such conducL
1he CourL held LhaL lalnLlff lnLroduced sufflclenL evldence Lo call lnLo quesLlon
wheLher uefendanL ln exerclslng lLs dlscreLlonary power Lo refuse Lo develop a
movle wlLh lalnLlff dld so wlLh good falLh 1hey furLher held LhaL lalnLlff
lnLroduced sufflclenL clrcumsLanLlal evldence Lo show LhaL uefendanL had no
lnLenL Lo honor Lhe agreemenL aL Lhe Llme Lhe agreemenL was enLered lnLo
O When Lhere ls an e|ent|ve r|gt no covenanL of Cl and lu When
d|snret|onary r|gt lmplled covenanL of Cl and lu wlll govern
O LlecLlve rlghLs are rlghLs were |t |s not |n quest|on LhaL a parLy has
compleLe freedom Lo acL MD1 L LA 1nLL I A CML1L
A-D D-L11LLD nCIL
4 Good a|t a|r Dea||ng
O Look Lo splrlL of Lhe bargaln ls one parLy galnlng or loslng dlsproporLlonaLely wlLh
respecL Lo Lhe conLracLual agreemenL?
4 uonohue v ledero/ xpress corp %AtJ||| Lmp|oyment w|t G D)
no lmplled duLy of good falLh and falr deallng applles Lo LermlnaLlon of a pure aL
wlll employmenL conLracL
O 1he AppellaLe CourL held LhaL Lhere ls no lmplled duLy of good falLh and falr
deallng wlLh respecL Lo employmenL aLwlll conLracLs excepL where Lhe
LermlnaLlon LhreaLens clear publlc pollcy
O 1he CourL furLher held LhaL excepL where an employee handbook ls
expllclLly lncorporaLed lnLo Lhe Lerms of an employmenL conLracL an
employer ls under no conLracLual duLy Lo adhere Lo such guldellnes
O 1he CourL held LhaL excepL for when an employee ls under a legal
obllgaLlon Lo do so LermlnaLlon for whlsLle blowlng ls noL a vlolaLlon of
publlc pollcy |ear examp|es of pub||n po||ny v|o|at|ons are (1) requlrlng
employee Lo commlL a crlme (2) prevenLlng an employee from complylng
wlLh sLaLuLorlly requlred duLy and (3) when sLaLuLe prohlblLs dlscharglng
such employee
O 1he CourL flnally held LhaL AppellanL's bare allegaLlon LhaL he performed
superlor work for Appellee was lnsufflclenL Lo esLabllsh addlLlonal
conslderaLlon
4 Lmp|oyment AtJ|||
O Defau|t |s term|nab|e at w||| un|ess a nase ar|ses were s|gn|f|nant nap|ta|
|nvestments ave been made %sun as dea|erd|str|butor manufanturerse||er
re|at|ons|p)
O ub||n o||ny Lxnept|on
Can be found ln sLaLuLe or a sLrong publlc safeLy lmperaLlve
AddlLlonal ConslderaLlon Lo overcome aLwlll presumpLlon (eg cosJollot
v Metcy nosp of llttsbotq)
O Cashdollar ls an excepLlon noL Lhe rule
O Jarrant|es
4 D 2313 Lxpress Jarrant|es
O Seller need noL lnLend Lhe warranLy expressly [usL has Lo ln words achleve Lhe
equlvalenL of a warranLy or guaranLee
4 D 2314 Imp||ed Jarranty of Mernantab|||ty
O MerchanLs of goods have an lmplled warranLy as Lo Lhe quallLy of Lhe goods Lhey
deal ln
O SLandard
ass wlLhouL ob[ecLlon ln Lhe Lrade
llL for Lhe ordlnary purpose for whlch such goods are used
4 D 231S Imp||ed warranty of f|tness for a part|nu|ar purpose
O lf a buyer relles on a sellers advlce Lhen only need Lo show goods do noL flL Lhe
buyers purpose LhaL was made known Lo Lhe seller no need for a defecL
4 D 2316
O When confllcL beLween express warranLy and Lerms of k sLarL by lnLerpreLlng Lo
be conslsLenL wlLh each oLher Lhen express Lrumps
4 Jarrant|es asson|ated w|t |easeo|ds and new omes %not nover|ng)
4 8oy/iner Morine corp v crow %Imp||ed Jarrant|es)
O (1) manufacLurer made no express warranLles regardlng boaLs speed capablllLles
!usL relled on lnformaLlon from brochure whlch sLaLed whaL Lhe boaL ls
capable of achlevlng ln ldeal clrcumsLances
O (2) purchaser falled Lo prove breach of lmplled warranLy of merchanLablllLy and
1he record conLalned no ev|denne of te standard of mernantab|||ty |n
te offsore f|s|ng boat trade
-or d|d te renord nonta|n any ev|denne support|ng a nonn|us|on tat a
s|gn|f|nant port|on of te boatbuy|ng pub||n wou|d ob[ent to purnas|ng
an offsore f|s|ng boat w|t te speed napab|||ty of te 3486 1ropy
onvert|b|e
O (3) purchaser falled Lo prove breach of lmplled warranLy of flLness for parLlcular
purpose urchaser of flshlng boaL sued manufacLurer for breach of express
warranLles and lmplled warranLles of merchanLablllLy and flLness
Crow used boaL for over 830 hours (lncludlng malnLenance) and wenL on
several flshlng Lrlps wlLh lL
Pe was also unable Lo esLabllsh LhaL Lhe boaL was noL flL for hls purposes
when Lhls lnformaLlon facLored lnLo hls clalms
lurLhermore Lhe lnformaLlon he was glven when he purchased Lhe boaL
was found Lo be mere puffery noL an acLual vlolaLlon whlch ls noL lllegal
O Avo|d|ng Lnfornement Innapan|ty arga|n|ng M|snondunt Dnnonsn|onab|||ty and ub||n
o||ny
4 Innapan|ty
O uodson v 5hroder %M|nor seek|ng esn|ss|on est|tut|on)
(1) mlnor could noL recover amounL acLually pald wlLhouL reasonable
compensaLlon Lo vendor for Lhe use depreclaLlon and wlllful or negllgenL
damage Lo Lhe arLlcle whlle ln mlnors hands so long as Lhe conLracL was
falr and reasonable Lhere was no undue lnfluence or overreachlng and
mlnor had acLually pald money on Lhe purchase prlce and Laken and used
Lhe arLlcle purchased and (2) quesLlon of any overreachlng on Lhe parL of
Lhe seller and Lhe falr markeL value of Lhe properLy reLurned was a quesLlon
for Lhe Lrler of facL
Mlnor purchased a Lruck from auLo sellers wlLhouL any dlscusslon of age
afLer a few moLhs Lhe mlnor falled Lo replace a parL whlch had worn
Lhrough AfLer a whlle long of drlvlng w/ worn parL englne blew up Seller
refused Lo refund money and a week laLer Lhe Lruck was also hlL by a hlL
andrun drlver whlle parked ouL fronL of mlnors parenLs house
Cn remand 1C musL deLermlne
O Was Lhere any overreachlng by Lhe adulL?
O WhaL was Lhe falr markeL value of Lhe Lruck (aL varlous polnLs)?
O uld mlnor conLrlbuLe Lo Lhe depreclaLlon of Lhe Lruck by drlvlng lL
afLer mechanlc warned of problem?
O WhaL was Lhe exLenL of damage from Lhe hr accldenL? WhaL was
Lhe falr markeL value when mlnor flrsL Lrled Lo reLurn Lruck?
O urrent Approan for M|nor|ty and Vo|dab|||ty
Any k enLered lnLo by a mlnor ls voldable aL Lhelr elecLlon
O 1hls elecLlon may be exerclsed aL any polnL durlng Lhe mlnorlLy or
wlLhln a reasonable Llme afLer Lhey reach Lhe age of ma[orlLy
Dpon d|saff|rmanne wat appens?
O 1radlLlonal 8ule
O Mlnor noL llable for anyLhlng Lhey have used or for any
depreclaLlon ln value
O LxcepLlons
O MlsrepresenLaLlon of age by mlnor Ma[ Approach
mlnor may dlsafflrm buL ls llable only for anyLhlng LhaL
cannoL be resLored mlnorlLy approach k canL be
dlsafflrmed
O necessarles Ma[ Approach mlnor may dlsafflrm k
buL ls llable ln resLlLuLlon for Lhe reasonable value of
whaL has been consumed and cannoL be resLored
Some courLs say LhaL a conLracL for necessarles cannoL be
dlsafflrmed
O Mlnor as clalmanL (cash v credlL)
O Mlnors don'L undersLand credlL glven large
lenlency
O new Pampshlre 8eneflL 8ule
O Cregon 8ule
O 1he mlnor ls enLlLled Lo a full refund of Lhelr purchase prlce
wlLh deducLlon for Lhe mlnors use of Lhe conslderaLlon
recelved under Lhe k or for Lhe depreclaLlon or
deLerloraLlon of Lhe conslderaLlon recelved
O estatement 1S Menta| Innapan|ty
%1)%a) nogn|t|ve
%1)%b) vo||t|ona|
est|tut|on
O Less generous for menLal lncapaclLy Lhan for mlnors unless
overreachlng acLlon on oLher parLy person asserLs Lhe defense ls
responslble Lo replace all beneflLs recelved
O 1otem Morine 1uq 8orqe lnc v 4/yesko Pipe/ine 5ervice co %Lnonom|n Duress
e|ements)
Lconomlc uuress exlsLs where (1) wrongful LhreaL (one parLy lnvolunLarlly
accepLed Lhe Lerms of anoLher) (2) clrcumsLances permlLLed no oLher
alLernaLlve and (3) such clrcumsLances were Lhe resulL of coerclve acLs of
Lhe oLher parLy (causaLlon) 5ome jotlsJlctloos tepolte o ptotest by te
coetceJ potty
O 1oLem presenLed a case whlch lf proved would be enough Lo susLaln
a verdlcL of economlc duress agalnsL Alyeska when Alyeska dld noL
make paymenLs lmmedlaLely Lo 1oLem and forced Lhem Lo seLLle ln a
release agreemenL for subsLanLlally less Lhan was owed due Lo 1oLem
belng on Lhe verge of bankrupLcy
O Cld sLandard of duress was a LhreaL of (1) harm Lo person or (2)
harm Lo properLy (3) ln clrcumsLances where Lhe wlll of Lhe person
lnduced was overcome raLher Lhan LhaL of a reasonably flrm person
O ollcy shlfLed Lo beyond physlcal harm on Lhe grounds LhaL
Lhere was a need ln Lhe law Lo recognlze and correcL
lnequlLable or unequal exchanges beLween parLles of
dlsproporLlonaLe bargalnlng power and a greaLer wllllngness Lo
noL enLer lnLo agreemenLs whlch were enLered lnLo under
coerclve clrcumsLnaces
O Odoritti v 8/oomfie/d 5choo/ uistrict %Dndue Inf|uenne)
undue lnfluence exlsLs whenever Lhere resulLs LhaL klnd of lnfluence or
supremacy of one mlnd over anoLher by whlch LhaL oLher ls prevenLed from
acLlng accordlng Lo hls own wlsh or [udgmenL and whereby Lhe wlll of Lhe
person ls overborne and he ls lnduced Lo do or forbear Lo do an acL whlch
he would noL do or would do lf lefL Lo acL freely (If w||| as been
overnome aga|nst [udgment nonsent may be resn|nded)
O lalnLlff consenLed Lo reslgnaLlon from Leachlng poslLlon afLer a
personal vlslL from school superlnLendenL afLer Lhe plalnLlff was
charged wlLh homosexual conducL sulL was laLer dlsmlssed and
plalnLlff aLLempLed Lo regaln hls posL
O antors of overpersuas|on
O ulscusslon of LransacLlon aL an usual or lnapproprlaLe Llme
O ConsummaLlon of Lhe LransacLlon durlng LhaL Llme
O lnslsLenL demand LhaL buslness be flnlshed aL once
O LxLreme emphasls on unLoward consequences of delay
O 1he use of mulLlple persuaders by Lhe domlnanL parLy agalnsL a
slngle servlenL parLy
O Absence of advlsers Lo Lhe servlenL parLy
O SLaLemenLs LhaL Lhere ls no Llme Lo consulL Lhe flnanclal
advlsers or aLLorneys
4 arga|n|ng M|snondunt
O M|srepresentat|on
A k ls voldable by an lnnocenL parLy who [usLlflably relles on a maLerlal
mlsrepresenLaLlon made by anoLher 1he represenLaLlon need noL be
fraudulenL lL ls enough lf Lhe mlsrepresenLaLlon would lnduce a reasonable
person Lo agree or Lhe mlsrepresenLlng parLy knows LhaL Lhe
mlsrepresenLaLlon would make Lhe parLlcular person agree
estatement 164%1) If a partys man|festat|on of assent |s |nduned by
e|ter a fraudu|ent or a mater|a| m|srepresentat|on by te oter party
upon w|n te ren|p|ent |s [ust|f|ed |n re|y|ng te nontrant |s vo|dab|e
O L|ements
O M|srepresentat|on
O An asserLlon of facL LhaL ls false
O Cplnlon See 168 169
O nondlsclosure see 161
O raudu|ent C Mater|a| %estatement 162)
O raudu|ent |f lL ls ln facL false and Lhe maker knows Lhls
O Mater|a| |f maker knows LhaL Lhe false represenLaLlon
made would lnduce Lhe reclplenL lnLo bargalnlng or ls
llkely Lo do so
O ust|f|ab|e e||anne
O 8ellance needs Lo be [usLlfled cannoL have had an oppLy
Lo lnspecL or lf oppLy presenL was [usLlfled ln noL flndlng
Lhe mlsrepresenLaLlon
O J|n |ndunes assent
O 8elylng parLy says yes Lo Lhe agreemenL
O uoes noL have Lo be Lhe sole lnduclng facLor [usL need Lo
credlbly say lL affecLed Lhe declslon slgnlflcanLly
5yester v 8onto %a|e of Dnneeded erv|nes)
O ConLlnually selllng servlces Lo a cusLomer who nelLher needs nor uses
Lhem by falsely Lelllng Lhe cusLomer LhaL she can become a
professlonal consLlLuLes fraud uefendanL sold 68 year old woman
$30000 worLh of dance lessons by conLlnually promlslng her she
could become a professlonal wlLh Lhelr help
ni// v lones %Duty to D|sn|ose)
O |rnumstannes J|t A Duty to d|sn|ose
O ulsclosure ls necessary Lo prevenL a prevlous asserLlon from
belng a mlsrepresenLaLlon or from belng fraudulenL or maLerlal
O ulsclosure would correcL a mlsLake of Lhe oLher parLy as Lo a
baslc assumpLlon on whlch LhaL parLy ls maklng Lhe conLracL
and lf nondlsclosure amounLs Lo a fallure Lo acL ln good falLh
and ln accordance wlLh reasonable sLandards of falr deallng
O ulsclosure would correcL a mlsLake of Lhe oLher parLy as Lo Lhe
conLenLs or effecL of a wrlLlng evldenclng or embodylng an
agreemenL ln whole or ln parL
O 1he oLher person ls enLlLled Lo know Lhe facL because of a
relaLlonshlp of LrusL and confldence beLween Lhem
O 8uyers purchased a home from sellers buL noLlced a rlpple ln a wood
sLep on Lhe floor and was Lold lL was waLer damage noL LermlLes
AfLer purchaslng Lhe home Lhey learned lL was LermlLe damage and
Lhe house had had LermlLe problems Lwlce before wlLh a loL of
evldence lndlcaLlng Lhe sellers mlghL have even lnLenLlonally Lrled Lo
conceal Lhe LermlLe evldence
e||ers typ|na||y are not afforded tese protent|ons to te degree tat
buyers are benause |t max|m|zes son|a| ut|||ty by promot|ng te wea|t of
son|ety and te free f|ow of goods to te|r most produnt|ve use
4 Dnnonsn|onab|||ty %ubstanne of arga|n)
O wi//ioms v wo/ker1homos lurniture co %Inequa||ty of arga|n|ng ower)
Where Lhere ls lnequallLy ln bargalnlng power beLween a seller and buyer
and Lhere ls an absence of meanlngful cholce for one parLy ln a conLracL
whlch has Lerms LhaL unreasonably favor Lhe oLher parLy Lhen
unconsclonablllLy ls presenL
Wllllams was a dlvorced moLher of 7 llvlng off of a $218 a monLh welfare
check 1he seller was a doorLodoor furnlLure sales company and sold her
several pleces of furnlLure under a conLracL provlslon whlch sLaLed And
all paymenLs now and hereafLer made by purchaser shall be credlLed pro
raLa on all ouLsLandlng leases bllls and accounLs essenLlally glvlng Lhe
seller Lo replevy oll furnlLure whlch ls sLlll owed money for lf a paymenL ls
mlssed even lf Lhe buyer had pald off Lhe falr value of Lhe lLem because Lhe
debL was spread over all lLems noL each lndlvldually
O L|ements
rocedural
O Absence of meanlngful cholce on Lhe parL of one of Lhe parLles
SubsLanLlve
O Cn Lerms whlch are unreasonably favorable Lo Lhe oLher parLy
O r|ne as term |n quest|on
estatement 79
O If te requ|rement of nons|derat|on |s met tere |s no add|t|ona|
requ|rement of
A ga|n advantage or benef|t to te prom|sor or a |oss
d|sadvantage or a detr|ment to te prom|see or
Lqu|va|enne of te va|ues exnanged or
mutua||ty of ob||gat|on
O 4d/er v lred Lind Monor %Vo|d for ubstant|ve Dnnonsn|onab|||ty)
ln some [urlsdlcLlons (WA lncluded) conLracL provlslons may be volded for
subsLanLlve unconsclonablllLy alone procedural unconsclonablllLy need
noL be demonsLraLed
Adler enLered lnLo an employmenL agreemenL wlLh lLM provldlng for a
blndlng arblLraLlon agreemenL
1he courL found Lhe arblLraLlon agreemenL Lo be
unconsclonable lf on remand Lhe Lrlal courL found Lhe cosLs of
arblLraLlon Lo be unreasonably prohlblLlve Lo Adler
lurLhermore Lhe courL also found Lhe 180day llmlLaLlon
provlslon Lo be subsLanLlvely unconsclonable because lL would bar
Adler from pursulng oLher admlnlsLraLlve acLlons and because lL
could bar dlscrlmlnaLory clalms LhaL flrsL began ouLslde of Lhe
llmlLaLlon agreemenL
Pe saL on Lhe arblLraLlon agreemenL for a week Lhe courL
concluded he had meanlngful opporLunlLy Lo conslder Lhe agreemenL
and Lherefore hls rlghL Lo [ury Lrlal was walved (CourLs favor allowlng
arblLraLlon ln Lerms of agreemenLs where lL ls reasonable)
4 ub||n o||ny
O eason|ng
AlLhough slLuaLlons may arlse where Lhe process of conLracL formaLlon ls
unLalnLed a conLracL may sLlll be unenforceable because Lhe conLracL lLself
elLher vlolaLes or runs dlrecLly conLrary Lo some publlc pollcy 1hey are
ofLen sald Lo be unenforceable due Lo lllegallLy buL lL also exLends
beyond provlslons LhaL are lllegal
O vo//ey Medico/ 5pecio/ists v lorber %estr|nt|ve ovenant on Lmp|oyment)
An employer may noL lmpose a resLrlcLlve covenanL ln a docLors
employmenL conLracL when Lhe covenanL exLends for an unreasonable
amounL of Llme and/or blankeL prohlblLlon of pracLlclng medlclne wlLhln a
large deflned LerrlLory
ur larber enLered lnLo an employmenL conLracL w/ a hosplLal whlch had a
resLrlcLlve covenanL whlch prohlblLed hlm from pracLlclng medlclne for 3
years wlLhln a 3 mlle radlus of any hosplLal owned by Lhe employer
8ecause of ls speclalLy ln medlclne lL was unreasonable Lo
expecL hlm refuse pracLlclng wlLh compeLlLors for 3 years as lL would
vlolaLe AMA pollcy whlch sLrongly dlscourages such agreemenLs ln
Lhe medlcal professlon
lurLhermore alLhough vMS has a leglLlmaLe lnLeresL ln
proLecLlng Lhelr cusLomer base Lhe personal relaLlonshlp beLween a
docLor and paLlenL affecLs Lhe exLend of LhaL lnLeresL vMS never
Lralned l Lherefore vMSs lnLeresLs are ouLwelghed by oLher facLors
1he courL of appeals revlsed Lhe agreemenL Lo ellmlnaLe unreasonable
provlslons buL Lhls appllcaLlon of Lhe blue pencll rule was lmproper
O onsequennes of -onperformanne Lxpress ond|t|ons Mater|a| rean and Ant|n|patory
epud|at|on
4 Lxpress ond|t|ons
O estatement 224 A condlLlon ls an evenL noL cerLaln Lo occur whlch musL
occur unless lLs nonoccurrence ls excused before performance under a conLracL
becomes due
O ond|t|ons renedent
CondlLlons whlch musL occur ln order Lo creaLe an absoluLe duLy Lo
perform LhaL ls Lhere ls no duLy owed unLll Lhe condlLlonal facL or evenL
occurs
A promlses Lo pay 8 $1000 lf 8 palnLs As house by !une 1
O ond|t|ons ubsequent
CondlLlons whlch Lhe occurrence Lhereof would exLlngulsh a prevlously
absoluLe duLy Lo perform
A agrees Lo work for 8 for one year unless A ls drafLed lnLo mlllLary
servlce
O ond|t|ons onnurrent
CondlLlons whlch have muLually dependenL performances LhaL are capable
of nearly slmulLaneous performance by Lhe parLles
A covenanLs Lo dellver wldges on !une 1 and 8 promlses Lo pay for Lhem
O Interpretat|on
art|es Intent Lhe lnLenL of Lhe parLles deLermlnes wheLher a parLlcular
provlslon ls a promlse or a condlLlon
antors ons|dered to Determ|ne Intent
Jords Dsed provlded lf when and so forLh usually
lndlcaLe LhaL a condlLlon ls lnvolved Words llke promlse agreed
eLc generally lndlcaLe a promlse was lnLended
ustom Common usage or undersLandlng may be
deLermlnaLlve
rotent|on of Lxpentann|es of te art|es uoubLful provlslons
are normally consLrued as promlses raLher Lhan condlLlons
(8esLaLemenL (Second) 227)
O unllaLeral condlLlons whlch are used Lo proLecL Lhe parLy
expecLed Lo perform lL buL are noL meL are only voldable by Lhe
condlLloned parLy
O Lxnuses
Ja|ver]Lstoppe|]L|ent|on
MaLerlal condlLlons cannoL be wa|ved musL have a
modlflcaLlon supporLed by conslderaLlon all oLher condlLlons can be
walved
O Walvers can be Laken back buL Lhe oLher parLy can use rellance
Lo esLopp Lhe parLy from Laklng lL back
O LlecLlon ls a nonreLracLable walver once you glve lL you can
noL Lake lL back
revent|on]rean A condlLlon wlll be legally excused lf Lhe parLy whose
duLy was condlLlonal wrongfully prevenLs or hlnders Lhe occurrence of Lhe
condlLlon
revent orfe|ture lf Lhe nonoccurrence of a condlLlon would cause
dlsproporLlonaLe forfelLure Lhe nonoccurrence may be excused unless Lhe
condlLlon was a maLerlal parL of Lhe agreed exchange
O orefe|ture
Oppenheimer co v Oppenheim 4ppe/ uixon co %pen|f|n ond|t|on
renedent)
Cenerally an express condlLlon precedenL musL be llLerally
performed An lmplled or consLrucLlve condlLlon usually arlses from
Lhe language of promlse and may be saLlsfled by subsLanLlal
compllance
O falled Lo show Lhe nonoccurrence of Lhe express condlLlon
should be excused because of forfelLure only clalmed LhaL u
walved or should be esLopped from enforclng Lhe condlLlon for
wrlLLen consenL for LenanL modlflcaLlons and LhaL aL any raLe
lL subsLanLlally complled by provldlng verbal consenL over Lhe
phone
O SubsLanLlal compllance ls lnappllcable Lo express condlLlons
lN4 keo/ty corp v cross 8oy che/seo lnc %e||ef from orfe|ture)
Where a LenanL would suffer a forfelLure he ls enLlLled Lo
equlLable rellef where Lhe defaulL has noL pre[udlced Lhe landlord
and lL ls a resulL of an honesL mlsLake
1he courL found LhaL Lhe uefendanL would have suffered
forfelLure slnce lL made subsLanLlal lmprovemenLs Lo Lhe properLy
1he courL also found LhaL Lhe uefendanL's fallure Lo renew Lhe
lease was due Lo mere forgeLfulness" and was noL an lnLenLlonal
aLLempL Lo explolL a flucLuaLlng real esLaLe markeL
1he courL found LhaL lL was unclear wheLher Lhe lalnLlff
suffered a pre[udlce from Lhe uefendanL's overslghL and Lherefore a
new Lrlal should be granLed
O Mater|a| rean
ubstant|a| erformanne
erformanne GL1 DLI-I1IC-
aranter|z|ng rean %estatement 241 242 %w||| be
prov|ded on exam st||| need to |earn))
O 1ota| or art|a|
O art|a| and mater|a|
O May noL LermlnaLe conLracL may sue on breach
musL fulflll duLles Lhough and lf commerclally
reasonable suspend your performance
O art|a| and |mmater|a|
O May noL LermlnaLe C8 suspend conLracL
O 1ota|
O Cnly polnL where LermlnaLlon of a conLracL ls ok
many parLles geL lnLo Lrouble because Lhey over
respond mlscharacLerlzlng a parLlal breach as LoLal
locob Younqs lnc v kent %omp|ete ubstant|a|
erformanne M|nor rean)
O Where compleLe performance ln accord wlLh conLracL
speclflcaLlons ls a condlLlon precedenL Lo paymenL and lf
subsLanLlal performance has been rendered a mlnor fallure Lo
perform wlll be excused lf Lhe omlsslon was Lrlvlal and noL
wlllful
O uamages for u should be measured by Lhe loss ln value (raLher
Lhan cosL of replaclng Lhe plpe)
O ! ? had enLered lnLo a conLracL wlLh kenL Lo supply all
plumblng be of a speclflc brand Powever only a small
porLlon was of LhaL brand because of negllgence ln
lnspecLlng Lhe plpes afLer Lhe flrsL shlpmenL was
dellvered 8ecause Lhere was no real dlfference ln Lhe
plpes Lhe courL deemed Lhe damages Lrlvlal and
furLhermore LhaL Lhe burden on ! ? would be Loo
subsLanLlal Lo [usLlfy awardlng damages Lo kenL
O Cardozo (paraphrased) lL makes sense Lo hold parLles
accounLable for express condlLlons lf lL ls sLaLed clearly 1hls
conLracL does noL have such clear Lerms due Lo lack of
language consLlLuLlng uslng oLher plplng as a breach
O Also Cardozo was Lrylng Lo prevenL conLracLlng parLles
for clalmlng breach for any mlnor devlaLlon desplLe
funcLlonallLy belng effecLlvely unalLered
O Cnce a parLy ls held llable for a breach Lhey are glven $$
as a remedy and are under no obllgaLlon Lo flx lL whlch
could resulL ln a wlndfall Lo kenL because Lhe plplng was
subsLanLlally equal Lo Lhe 8eadlng plplng
ardozos fantors for ubstant|a| erformanne %l Y v kent)
O LffecL of breach on nonbreachlng parLys expecLaLlons glven
Lhe purpose of Lhe k
O Lxcuse for devlaLlon/good falLh on parL of breachlng parLy
O lorfelLure suffered by breachlng parLy
O 8u1 Wlllful Lransgressor cannoL uLlllze Lhls docLrlne
O - 8e reasonable abouL followlng Lhlngs Lo Lhe 1 Lhlngs LhaL
maLLer wlll be proLecLed need Lo be speclflc of Lhose Lhlngs
and creaLe express condlLlons
O 8ullder can accounL for Lhese condlLlons by charglng a
premlum maklng sure Lhelr work ls done rlghL
O AbsenL communlcaLlon of lmporLance Cardozo may have
a sLrong polnL because wlLh many Lhlngs almosL good
enough ls golng Lo be reasonably good enough
5ockett v 5pind/er %ayment of Cne1|rd urnase r|ne)
O lL ls a LoLal breach when a buyer pays abouL oneLhlrd of Lhe
purchase prlce buL falls Lo pay Lhe balance 1he maLerlallLy of
Lhe breach deLermlnes wheLher lL ls parLlal or compleLe
O AlLhough had pald parL of Lhe purchase prlce u was
[usLlfled ln LermlnaLlng Lhe conLracL ln CcLober because
s offers Lo perform and hls assurances LhaL he would
perform were such LhaL lL was exLremely uncerLaln
wheLher acLually lnLended Lo compleLe Lhe conLracL
O u was a ma[orlLy owner of a newspaper company and enLered
lnLo a conLracL for $83000 wlLh for sLock ln Lhe company
only dellvered abouL oneLhlrd of Lhe agreed upon purchase
prlce and repeaLedly mlssed deadllnes/promlses/paymenLs
agreed upon Lhe u and us aLLorney
estatement 241 |rnumstannes |gn|f|nant |n Determ|n|ng
Jeter a a||ure |s Mater|a|
1he exLenL Lo whlch Lhe ln[ured parLy wlll be deprlved
of Lhe beneflL whlch he reasonably expecLed
1he exLenL Lo whlch Lhe ln[ured parLy can be adequaLely
compensaLed for Lhe parL of LhaL beneflL of whlch he wlll be
deprlved
1he exLenL Lo whlch Lhe parLy falllng Lo perform or Lo
Lffer Lo perform wlll suffer forfelLure
1he llkellhood LhaL Lhe parLy falllng Lo perform or Lo
offer Lo perform wlll cure hls fallure Laklng accounL of all Lhe
clrcumsLances lncludlng any reasonable assurances
1he exLenL Lo whlch Lhe behavlor of Lhe parLy falllng Lo
perform or Lo offer Lo perform comporLs wlLh sLandards of
good falLh and falr deallng
estatement 242 |rnumstannes |gn|f|nant |n Determ|n|ng
Jen ema|n|ng Dut|es are D|snarged
1hose sLaLed ln 241
1he exLenL Lo whlch lL reasonably appears Lo Lhe ln[ured
parLy LhaL delay may prevenL or hlnder hlm ln maklng
reasonable subsLlLuLe arrangemenLs
1he exLenL Lo whlch Lhe agreemenL provldes for
performance wlLhouL delay buL a maLerlal fallure Lo perform or
Lo offer Lo perform on a sLaLed day does noL of lLself dlscharge
Lhe oLher parLys remalnlng duLles unless Lhe clrcumsLances
lncludlng Lhe language of Lhe agreemenL lndlcaLe LhaL
performance or an offer Lo perform by LhaL day ls lmporLanL
enovery from rean est|tut|on and D|v|s|b|||ty
Dnder Many courLs wlll allow a breachlng conLracLor
Lo recover ln resLlLuLlon for Lhe reasonable value of lLs servlces
estatement 240 D|v|s|b|||ty
O lL musL be posslble Lo apporLlon Lhe performances of Lhe
parLles lnLo correspondlng palrs of parL performances
O lL musL be proper Lo LreaL Lhese palrs of Lhe parL
performances as agreed equlvalenLs
O ueslgned Lo proLecL Lhe expecLaLlons of Lhe
conLracLlng parLles proLecLs nonbreachlng parLy
from havlng Lo pay exacLly for whaL was promlsed
wlLh only a fracLlon of performance unless lL ls
apparenL LhaL Lhe beneflL recelved ls worLh roughly
LhaL same fracLlon of whaL full performance would
have been worLh
Ant|n|patory epud|at|on
1rumon L l/ott 5ons co v 5chupf
O Damages
4 Lxpentat|on Damages
O a|nu|at|ng Lxpentat|on Damages %see pg 8S0)
k for sa|e of |and %A) uyer reanes
D |oss |n va|ue + C A A
nere |oss |n va|ue k pr|ne market pr|ne and C |nn|denta|
nonsequent|a|
Conslder how much was Lo be pald Lhen cosL and Lhen
oLher Lhlngs llke Lhe Llme dlmenslon
esu|t se||er renovers for |oss |n va|ue |f and on|y |f market
pr|ne at t|me of brean |s |ower tan k pr|ne |f market pr|ne at t|me
of brean |s te same or |s |ger tan te k pr|ne ten te brean
by buyer does not nause a |oss |n va|ue to te se||er
estr|nt|ons ons|dered by ourts
oreseeab|||ty
Avo|dab|||ty
erta|nty
M|t|gat|on eqs %CCk D)
LACLPCLuL8
?ou are noL llable for Lhose damages you could have reasonably
avolded
1he exLenL of damages are llmlLed by reasonable cerLalnLy
Inn|denta| Damages
1ose damages tat onnur or nosts |nnurred to m|t|gate a |oss
onsequent|a| Damages
Damages
Market va|ue ls Lo be calculaLed aL Llme of breach
koesch v 8roy
nondicopped chi/drens ducotiono/ 8d v Lukostewski
An employer may recover damages for Lhe exLra salary lL has Lo
pay Lo replace an employee who breaches a conLracL by qulLLlng
uamages are measured by Lhe parLles expecLaLlons and ln an
employmenL conLracL case damages can lnclude Lhe cosL of
obLalnlng oLher servlces equlvalenL Lo LhaL promlsed buL noL
performed
8ecause mlLlgaLed lLs damages by hlrlng Lhe leasL expenslve
quallfled replacemenL avallable ls enLlLled Lo have Lhe beneflL of
Lhe bargaln resLored
over r|ne vs ontrant r|ne
4mericon 5tondord v 5chectmon %rean of onstrunt|on ontrant)
Where a parLy has subsLanLlally performed buL Lhe cosL Lo
compleLe ls sLlll hlgh Lhe oLher parLy may recover compleLlon cosLs
even when Lhe falr markeL value of Lhe properLy ls essenLlally
unaffecLed by Lhe lncompleLe work
1he general rule of damages for breach of a
consLrucLlon conLracL allows recovery for any damages LhaL are
Lhe dlrecL naLural and lmmedlaLe consequence of Lhe breach
and LhaL were wlLhln Lhe conLemplaLlon of Lhe parLles when
Lhe conLracL was made Jete te coottoctots petfotmooce
wos Jefectlve ot locomplete te teosoooble cost of
teplocemeot ot completloo ls te meosote

O oreseeab|||ty erta|nty and ausat|on
nod/ey v 8oxendo/e %oreseeab|||ty)
OA nonbreachlng parLy may noL recover damages for losses lL susLalns
buL whlch would noL ordlnarlly be expecLed
O normally damages are Lhose LhaL arlse naLurally from a breach
of Lhe conLracL
O ln addlLlon where Lhere are damages because of speclal
clrcumsLances Lhey wlll be assessed agalnsL Lhe defendanL only
where Lhey were reasonably wlLhln Lhe conLemplaLlon of boLh
parLles as belng Lhe probable consequence of a breach
O Slnce losL proflLs would noL ordlnarlly flow from us breach and
slnce Lhe speclal clrcumsLances were never communlcaLed Lo
u loss of proflLs should noL have been consldered ln esLlmaLlng
damages
erta|nty
Oneed Lo be able Lo calculaLe damages reasonably cerLaln
kockinqhom county v Luten 8ridqe co %M|t|gat|on of Damages)
Oln general Lhe llmlLaLlon on damages are unrelmbursed expendlLures +
neL proflL one cannoL plle on damages and Lhe nonbreachlng parLy
musL LreaL Lhe k as lf Lhere ls a breach A parLy may noL conLlnue
performance afLer noLlce of breach and recover Lhe full conLracL
amounL