UCC Provision Elaboration/Common Law Differentiation 1-107: GF applies. Under CL, Accord (offer to accept something new and different) and Satisfaction (Acceptance) required there e more than !ust a mutual agreement (signed and in GF) to terminate the contract"must e a new and different consideration, otherwise, the pree#isting dut$ is %iolated. A & S is still %alid under the CL (ta'e this instead of this). 1-201: Signed also means electronic signatures an$thing an$thing that can reasonal$ reasonal$ authenticate authenticate that it came from a particular particular source. 1-203: A failure to perform or enforce in GF, a specific dut$ or oligation, constitutes a reach. Also consider consider *+(option to accelerate at will must e done in GF (eere) 1-205: /mportant during interpretation (ring in e#trinsic facts, parol e%idence). Course of dealing is more important than usage of trade, ecause the former shows how the parties treated the contract in the past. 1-207: Under the CL A & S conditional chec' scenario, scenario, the UCC 0reser%ation 0reser%ation of rights1 is not %alid ecause ecause an 0earl$ earl$11 full pa$ment is %alid (ased (ased on new & different consideration). consideration). 2-104: 2erchant3 A person who deals in goods or holds himself out as ha%ing 'nowledge and s'ill aout the goods. 2-105: Goods3 All things mo%ale (must e identified identified & e#isting"not e#isting"not a 0future good1 a present sale of a future good is a contract to sell) other than mone$ & in%estment securities. 0Goods1 includes unorn animals, growing crops, and things that can e se%ered from realt$ (timer). Also co%ers tangile cop$rights. 2-106: Contract3 Limited to the present or future sale of goods. Sale3 4assing of title from seller to u$er for a price. FORMATION OF A CONTRACT 2-201: Under the CL S5F, the following must e in writing3 ) e#ecutor6admin. of a will promises to pa$ damages out of his own poc'et, +) a promise to guarantee the det of another, 7) sale of land (part$ to e charged is seller in 89), :) an$ agreement incapale of eing performed within a $ear (must specif$ a time or it will e considered within within S5F, no matter how unli'el$). unli'el$). 5ther e#ceptions listed ao%e. ;ememer, for those contracts required in writing, a sufficient connection etween multiple documents that include the material t erms & the part$ to e charged (person agai nst whom the contract is sought to e enforced) is sufficient. 2-202: 8he UCC is roader than the CL as long long as there is no integratio integration n clause clause,, course course of dealin dealings gs and usage of trade trade can e used used for interpretation. Compare CL, Lath3 /f there is a written agreement, the ailit$ of the parties to %ar$ the terms of the 0: corners1 with an$ prior or contemporaneous agreements is limited. /f 7 conditions are met, contemporaneous or pre*e#isting agreements ma$ e admissile. 8he agreement must () in form e a collateral one (related ut different) (+) it must n ot contradict e#press or implied pro%isions of the written contract and (7) it must e one that parties would not ordinaril$ e e#pected to emod$ in the writing. An integration clause would eliminate this e#ception (ma'es acceptance a mirror image of offer offer not fa%ored fa%ored in consumer consumer setting). /f no integration clause, a court will determine whether the contract contract was intended intended to e the full understanding understanding etween etween the parties (can find full or partial). partial). ;ememer, ;ememer, if an agreement was made after6susequ after6susequent ent the final integration, integration, the agreement agreement is a 0modification1, which is not su!ect to the parol e%idence rule. /nstead, ma'e sure the modification is supported $ consideration and there are no S5F %iolations. See elow. 2-204: ut ma$ %iolate S5F. 2-205: Under CL, an ordinar$ offer can e re%o'ed, retracted, or e#pire through time (mere nundum pactum) howe%er, an offer supported $ consideration (or estoppel) is irre%ocale during the stated period. 2-206: Under CL, acceptance must mirror the offer, or else it is a counter*offer which can then e accepted or re!ected $ the original offeror. 2-207: See ao%e6elow. 2-208: See ao%e. 2-209: Under CL, there must e consideration consideration for a modification modification.. Under the UCC, as long as it is signed $ oth parties and done in GF and there are no S5F %iolations, no consideration is required for the modification.
???????????????????????????????????????????????????????? ??????????????????????????? ?????????????????????????????????????????????????? ????????????????????? 5!ecti%e percei%ed manifestation manifestation to e ound is all that 1t !"M"!T"R: M#T#A$ M#T#A$ A!!"NT: A!!"NT: 5!ecti%e matters. OFF"R: An offer is an e#pression of present willingness of an intention to e ound that ound that is () definite, lea%ing nothing open to negotiation and (+) enales a reasonale person to elie%e he can conclude a argain simpl$ $ sa$ing $es (power of acceptance). Generall$, the offer must include the ) su!ect matter of the proposed argain, +) the price, and 7) the quantit$ in%ol%ed (this (this one must alwa$s e present present). ). ACC"%TA 8he gene genera rall rule rule is accept must e ACC"%TANC": NC": 8he acceptanc ancee as well as revocatio revocation n must communicated to e effecti%e. 9otice of acceptance is alwa$s essential when an offer calls for a return promise from the offeree. @here an offeror offeror requests an act, the act performed performed ecomes the requisite requisite o%ert manifestation of assent if done intentionall$ (no notice required part performance ma'es an offer irre%ocale if full performance completed within a reasonale time). 8he mailo# rule is the e#ception "whene%er an a cceptance is specified to e made $ post or return letter or an&t'ing that specifies it eing place d out of the possession of the offeree ac' to the offeror, when that occurs, acceptance is effecti%e on dispatch. dispatch. CO#NT"R OFF"R!: For contracts other than the sale of goods, goods, CL dictates that an acceptance that does not 0mirror1 the offer ($ different or additional terms) is in%alid. /t simpl$ ecomes a counter*offer that destro$s the initial offer and which can then e accepted or re!ected. (ATT$" OF FORM! 2-207: Loo' for an e#change of forms. 8wo wa$s we can perform a contract under +*+3 ) oral con%ersation and then memorandum +) e#change of non*identical forms "where "where the parties agree on certain terms (e.g., price, qualit$ of steel) the terms remain, ut where the$ donBt agree (reach of warrant$, doing awa$ with damages) we treat them as proposals for additional terms. Additional terms are terms are part of the contract unless ) the offer e#pressl$ limits acceptance to the terms of the offer +) the additional additional terms materiall$ alter it or 7) the offeror offeror notifies the offeree within a reasonale reasonale time that he o!ects to the additional additional terms. )"F"CTI*" A+R""M"NT!: 2ista'ee is A+R""M"NT!: 2ista' where where an e#pressio e#pression n is susceptil susceptilee to two reasonale meanings, meanings, and each part$ understands understands the e#pression e#pression differentl$ differentl$ the offeror offeror offers one thing, the offeree e#presses his assent to another.
CON!TR#CTION OF CONTRACT! 2-302: 8he court ma$ refuse to enforce the contract, enforce it without the unconscionale clause, or limit it to a%oid a certain result. 2-305: Under the CL, the contract is proal$ not enforceale unless $ou can show an appropriate mechanism. Under the UCC, if the parties intended it to e that wa$, it can e that wa$. /n such a case, the open price must e a reasonale price (consider +*++*+-). ). 2-306: 8hese contracts normall$ would not e enforceale ecause of mutualit$ of oligation, ut are under the CL and the UCC ecause of GF. An agreement $ $ either the seller or the u$er for exclusive dealing imposes oligation by the seller to use best dealing imposes unless otherwise agreed an oligation efforts to promote their sale.1 sale.1 2-312: 8itle efforts to supply the goods and $ the u$er to use est efforts con%e$ed shall e good free of securit$ interests. 2-313: #press warranties are created $ description, statement, sample, or model cannot e#clude e#press warranties under +*7D. 2-314: 8he good that is sold must e re*sellale. re*sellale. 2-3 consumer conte#t, an e#press repudiation of this 2-315: 15: /mportant in a consumer warrant$ warrant$ is in%alid in%alid must e fit to ser%e its purpose. 2-316: 2-316: See ao%e. (R"AC, R"%#)IAT R"%#)IATION ION AN) ".C#!" /nier nitin 2-601: /f the goods of deli%er$ fail in an$ respect to conform to the contract, the u$er ma$ a) re!ect or ) accept the whole, and c) accept an$ unit or units and re!ect the rest. 2-602: ;e!ection ;e!ection of goods must e within a reasonale reasonale time after their deli%er$ and u$er must seasonal$ notif$ the seller. 2-603: Eu$er must follow reasonale instructions of the seller regarding re!ected goods u$er entitled to reimursement for caring and or selling (if perishale or su!ect to rapid decline in %alue) them. 2-606: See ao%e. 2-609: /mportant 8his tells how to put a merchant on notice that the goods do not compl$ the effect is 0to o# them into repudiation.1 2-610 2-611: /mportant @hen a promisor repudiates a contract, the in!ured part$ can3 ) treat the repudiation as an anticipator$ reach and immediatel$ see' damages for reach of contract, there$ terminating the contractual relation etween the parties (either +*7 or ), ), +) or he can treat the repudiation as an empt$ threat, wait until the time for performance arri%es and e#ercise his remedies for actual reach if a reach does in fact occur at such time. owe%er, if the repudiation is retracted prior to the time of performance, then the repudiation is nullified and the in!ured part$ is left with his remedies, if an$, in%ocale at the time of performance. Mi Nte: 2ere e#pression of dout as to inailit$ to perform is not enough anticipator$ repudiation must e unequi%ocal the remed$ is 0assurance1 in this situation. 2-615: 8he 'e$ to e#cuses is forseeailit$ if it is, then it is going to e difficult to e#cuse it. !"$$"R R"M")I"! 2-702: R"M")I"! 2-702: Upon disco%er$ of insol%enc$, seller ma$ refuse deli%er$ e#cept for cash including pa$ment for all goods or ma$ reco%er all goods upon demand within da$s of rece ipt if pa$ment was made on credit. 2-703: See Ao%e. 2-708 2-709: @here the seller has an nimite numer of goods (unli'e (unli'e a piece of land which is unique, cannot cannot e duplicated), duplicated), he should ha%e the enefit enefit of eer& argain he recei%es (ecause of loss of %olume). 8he reco%erale damages in the case of a contract are such as ma$ reasonal$ e within the contemplation of the parties. Leases of land and apartments fall under this section as well. 2-710: amages for transport, stopping deli%er$, care of goods after reach (#"R R"M")I"! 2-711: R"M")I"! 2-711: Eu$er can co%er or see' specific performance. See Ao%e6elow. 2-713: See Ao%e6elow. 2-715: 2-715: /ncidental damages in%ol%e an$ e#penses incurred in inspection, receipt, transport, transport, or care of an$ goods rightfull$ re!ected. Consequential Consequential damages include an$ loss resulting resulting from requirements that the seller at the time of contracting has reason to 'now and which could not e co%e co%ere red d $ co%e co%err or other otherwi wise se and and an$ in!ur in!ur$ $ resu result ltin ing g from from an$ rea reach ch of warr warran ant$ t$..
??????????????????????????????????????????????????????????????????? ?????????????????????????????????????????????????????? ????????????? @here e#press conditions are in%ol%ed, wai%er is associated with the following recurring fact patterns, aptl$ illustrated $ insurance contracts3 1 4laintiff insured has not satisfied an e#press conditio condition n that notice notice will will e gi%en within within 7 da$s after a co%ered co%ered accident, accident, ut efendant efendant insurer, with full 'nowledge, elects to process the claim rather than to den$ pa$ment. Eecause of the 0election 0election 1 after the condition condition has failed, failed, the insurer insurer cannot thereafter thereafter insist insist upon the conditio condition. n. 2 /mmediatel$ after the accident, efendant insurer tells plaintiff insured not to worr$ aout the 7 da$ notice condition. ;el$ing on this, 4laintiff sumitted the notice :> da$s of the accident and defendant refused to process the claim. 8he condition is wai%ed ecause 4laintiff materiall$ changed (estoppel (estoppel)) his position in reliance of defendantBs representation. 3 After the plaintiff has sustantiall$ performed the contract, the defendant insists that it will not insist upon a non*material condition. 8he condition is wai%ed without 0election1 or 0estoppel.1 2ore roadl$, when one part$ has promised or represented that he will not insist on e#press conditions, 0wai%er1 ecomes a !udicial de%ice where an agreed modification cannot e found. A contract term that prohiits a non*written modification can e wai%ed without a writing under CL and ma$e under UCC +*+. ;A! TO +"T ( CON)ITION!: #ceptions3 #ceptions3 ) ) /s it an independe independent nt promise promise disguised disguised as a condition conditionHH +) /s the contract di%isileH di%isileH (howe%er, (howe%er, the presumption is that it is a whole contract and not di%isile) di%isile) +) Sustantial performance (GF requires the pa$or to use reasonale discretion"must not e illusor$) 7) Iuantum 2erit (ut the part$ must recei%e the ene enefit fit that the$ e#pected e#pected)) :) 2odificat 2odification ion & @ai%er @ai%er >) conditio condition n precedent does not wor' with laor contracts (unless contracted) and #cuses3 /mpracticailit$ (an e%ent that the parties did not contemplate would occur, the occurrence of which completel$ pre%ents performance)3 e#isting (0letBs go to the world trade center toda$1) & super%ening (0we oo'ed in Jul$ +1) Force 2a!eure (contract for specific instances), and Frustration of 4urpose (could do it, ut the purpose for the agreement is gone was the foundation foundation of of the e%ent the contractH). 2ar'et fluctuations are no e#cuse (unless contracted). A di%isile contract is
Re<rmatin i =re) prompt n otice of the error is gi%en. An a pparent argain will not e enforced if found too indefinite. owe%er, if the contract is indefinite ut there is an intention to e ound (alwa$s consider GF), the courts might fill in the gaps (UCC or otherwise). So, if something is missing 0inside the o#1 $ou can loo' 0outside the o#1 for price (if totall$ silent), pricing mechanisms (for a 0fair share of the profits1), and time (a reasonale time). CON!I)"RATION: Consideration is aout () argained for e#change (in the instant or future) that results in either (+) a enefit or a detriment (in the instant or future) for one part$ or the other (courts will not loo' at the adequac$ or attempt to reform consideration). /f one of these elements does not e#ist, then no consideration. @hen $ou ha%e a situation where $ou oth go in with honest e#pectations of some enefit, and the enefit does not happen, there is still consideration. Stated differentl$, if oth parties ased a promise or forearance on a ona fide question (and thus leading to a argained for e#change), although it might e%entuall$ e found that there was no fact question at all, then the contract ma$ e enforced on a GF claim and consideration is gi%en. %R"".I!TIN+ )#T: %en though there is a argained for e#change for the susequent contract, there is no enefit6detriment for that contract ecause the$ want to pa$ K for something the$ alread$ had a pree#isting dut$ to do (which was a contract to pa$ ). 8o ma'e the susequent contract inding, the$ should ha%e said, 0@ell, we are ha%ing a hard time and cannot pa$ the rent, so we will pa$ the rent earl$ or wash the floors.1 8o impose liailit$ on a susequent contract, a (different) enefit6detriment must arise to constitute a %alid and independent consideration. As long as there is something new and different, that is all that is required. M#T#A$IT OF O($I+ATION>+OO) FAIT,: An illusor$ promise is a statement that has the form of a promise, ut is not a real promise in sustance. A real promise limits oneBs future options whereas an illusor$ promise is an apparent commitment with a 0free wa$ out.1 #ample3 0@e ha%e a contract for + $ears, ut / can terminate it at an$time.1 GF can ma'e an otherwise illusor$ contract enforceale ecause oth parties are e#pected to use their est efforts (real estate, e#clusi%e dealings contracts). Also consider GF in L5/Bs and condition precedents if $ou promise to do something and $ou do not (ring it to the E5 for re%iew), then $ou ha%e reached the dut$ of GF. MORA$ O($I+ATION: Generall$, moral oligation is not a %alid consideration. owe%er, it ma$ e inding if there is a pree#isting oligation that has ecome inoperati%e as a result of positi%e law such as dets incurred $ infants, the S5F, S5L, and an'ruptc$. 8here had to ha%e een at one time a pree#isting legal oligation such as one implied at law or an e#press agreement that is now arred. An e#press promise thereafter will reaffirm the oligationM /n other words, if $ou sa$ / will repa$ that credit card det after the$ decide not to collect an$more, then $ou are morall$ ound to repa$ the amount 2aterial Eenefits ;ule3 @here the defendants ha%e recei%ed something from the promisee of %alue in the form of mone$ or other material enefits under such circumstances as to create a moral oligation to pa$ for what the$ recei%ed, and later promise to do so, there is consideration for such promises. 8he circumstances must e such that it is reasonal$ to e supposed that the plaintiff e#pected to e compensated in some wa$. #3 An uncle gi%es his nephew mone$ for a legal education, and e#pects him to come ac' to town to wor'. At the end of the schooling, the nephew sa$s / am not coming ac' ut /Bll reimurse $our mone$, ut doesnBt. 8his agreement, ased on that earlier moral oligation, which materiall$ enefited $ou, is a perfect e#ample of the material enefit rule. "!TO%%"$: 4romissor$ estoppel states that a promise (a future one) is inding if the person who made it could reasonal$ e#pect another to rel$ upon it in a sustantial wa$, and the promisee did rel$ on it. 8he promisor is estopped from den$ing the e#istence of a contract, e%en though it is not formulated in the normal wa$. 8he %ital principle of equitale estoppel is that he who $ his conduct (statement of an e#isting fact or past fact or conduct that one sees"not a promise) leads another to do what he would not do otherwise ha%e done (ma'es them change their position), shall not su!ect such person to loss or in!ur$ $ disappointing e#pectations upon which a cted. A*OI)ANC": /f the contract is good (sufficient terms, consideration or its sustitute, it is in writing if it needs to e), ut the court will not enforce the contract, it is called a%oidance. 7 reasons3 ) something wrong with the parties (infant, temp. incapacitated, incompetent, drun') +) defects in the argaining process (mista'e, fraud), or 7) impermissile terms in the contract (unconscionale, illegal). Fraud is an intentional and willful (mens rea) misrepresentation made to decei%e which causes the offeree to change their position. ou can also ha%e constructi%e fraud (law$er, accountant, etc) where an$ representation made, e%en if not made with willful intent, is not made with great care and is considered to e fraud. Undue influence is (usuall$ happen with elderl$, diminished capacit$, doctor6patient situation) where the$ are going to rel$ on an$thing $ou sa$. 8here is no dut$ to disclose6fraud if information was open to e%er$one (and $ou did not in%estigate). 8here is a dut$ to disclose when ) disclosure is necessar$ to pre%ent a pre%ious assertion from eing false +) disclosure would correct a mista'e of a asic assumption of the other part$ and 7) the other person is entitled to 'now ecause of a relationship of trust etween them. FORMATION $I!T: oes the offer (definite, nothing open to negotiation, acceptor simpl$ can sa$ $es) cross trac's with acceptance (timel$, efore re%ocation, proper form, no de %iation from offer unless UCC) to form an agreementH /f so, does an$ material defect happen efore or e#actl$ at (ut not after) the intersection of offer and acceptance that destro$s the contract3 fraud, illegalit$, 2/S8AN, capacit$, or undue influenceH Finall$, as' if there is an$ glue (consideration, estoppel, GF) that can ind the trac's and ma'e it enforceale. 2n !"M"!T"R: I$$"+A$IT: Alwa$s can raise illegalit$
where a whole performance is di%ided into two sets (or more) of partial performance, each part of each set eing the agreed e#change for a corresponding part of the set of performances to e rendered $ the other promisor if pa$ments ha%e een made in the past, the attleground will e on whether the pre%ious pa$ments were merel$ con%enient times for pa$ment. Foreseeailit$ eliminates all e#cuses, including mista'e, impracticailit$, and frustration of purpose"ut not force ma!eure (ecause $ou foresee acts of nature, stri'es, etc., ut $ou contract $ sa$ing 0/ am e#cused from performance if.1 8he cutting edge of GF is whether or not there is a dut$ of GF to modif$ the contract in light of changed circumstances (an$thing under D>). 4roal$ not. Dunbar case: 8he defendant is a !oer6wholesaler he actuall$ owns the commodit$ and then resells it to the ultimate u$er (important in asserting warranties). ifferentl$, a ro'er will not ta'e title he will arrange the sale ut does not own the commodit$"consequentl$, all the ris' passes completel$ $ him. /n this case the defendant6!oer sa$s / will suppl$ $ou with K tons. A !oer can e long or short"it !ust depends what the price is (speculation)3 long ($ou contract for the sale and $ou ha%e plent$ of the commodit$) and sometimes $ou might e short (ha%e less or none at all at the time of contracting). 8he defendant6!oer names the manufacturer3 the usual run from a particular compan$. 8his is 'e$ if had not done that, he was asolutel$ short. E$ naming the manufacturer it ecame a condition precedent3 / ha%e to get it from this manufacturer, and if / canBt ecause the$ didnBt produce enough, / am e#cused. Unfortunatel$, the condition was not e#pressl$ stated in the contract the$ argue that it is implied and lose. Eottom line3 name the sourceM +OO) FAIT,: 8hree times we ha%e GF3 ) formation (negotiating), +) termination (agreements, emplo$ees), and 7) $ou eere iretin in condition precedent during contract performance. 8he est e#ample of doing something not in a GF manner is to do something which %iolates the honest e#pectations of the parties. 8he urden falls on the part$ claiming protection under the condition precedent. Reid/John Deere: *+- A term pro%iding that one () part$ or his successor in interest ma$ accelerate pa$ment Oat willO or Owhen he deems himself insecureO shall e construed to mean that he shall ha%e the power to do so onl$ if he in GF elie%es that the prospect of pa$ment is impaired. 8he urden of estalishing lac' of GF is on the part$ against whom the power is e#ercised. 8he UCC ma'es clear that acceleration under section *+- ma$ not e e#ercised at the Owhim or capriceO of a part$ the GF standard is intended to cur the possiilit$ of ause. A detorPs proof that the prospect of pa$ment was not, in fact, impaired will not alone pre%ent enforcement of an insecurit$ clause if the creditor had reasonale grounds to elie%e that it was. /n the asence of material e%idence of a lac' of GF, a part$Ps reasonale, honest elief will suffice. 5ther material factors include 'nowledge of the insecure circumstances at the time of contracting, his 'nowledge of facts that contradict the negati%e information acquired, the nature and %alue of the collateral, an$ deceit or outrageous conduct in the course of the whole transaction, including repossession, an arupt departure from an estalished course of dealing, e.g., Reid. 8he Oinsecurit$ clauseO in John eere and ;eid was an after*the*fact defense, not an honest*in*fact moti%ation. ;eid in%ol%ed a demand note (immediate compliance), where GF does not appl$ ecause its %er$ nature permits call at an$ time without reason. ow did the court get around this and manage to find there was a dut$ of GFH Eecause the demand note had default pro%isions. 8hus, it was not a demand note at all if there is a pro%ision that sa$s that the note can e called on demand, ut other language which tal's aout reser%ed discretion or default (conditions that said he would e 0in default if1, which laors against the fact it was a demand clause which could e e#ercised at the an'Bs whim)"then $ou ris' the chance that it will e con%erted into some other t$pe of contract. T"RMINATION ? +OO) FAIT,: 8wo t$pes3 mutual termination (under UCC as long as the$ agree in GF (and signed) to mutuall$ terminate, no new consideration required, * applies to all transactionsM CL still requires consideration) unilateral termination3 while there is a presumption that emplo$ment is terminale at will, that presumption ma$ e superseded $ a contract, e#press or implied, which limits the emplo$erPs right to discharge the emplo$ee"if $ou start adding conditions to emplo$ment (similar to ;eid), $ou egin to laor against an emplo$ee at will status. (R"AC,: See +*D6D. 8he non*reaching part$ has no dut$ to co%er or mitigate if he does not accept the repudiation and waits for performance. /f he does accept it, he must mitigate or co%er. /n the e%ent he waits for an AC8UAL reach, the u$er must co%er and sue for direct damages or reco%er the difference etween the contract price and the mar'et price. McDonalds case !ros!ective inabilit" to !erform# /nstead of repudiating the contract outright, 2conalds deems itself 0insecure1 to performance. /nsecurit$ must e stated in writing to the other part$ that $ou are worried that the$ cannot perform. @hat happens thenH ou ha%e shifted the urden to them. 8he$ ha%e a reasonale time, up to 7 da$s, to con%ince $ou that the$ can perform, and if the$ cannot, $ou ha%e o#ed them into repudiation. ;ememer, $ou cannot pretend to e worried"in other words, GF applies. ou can pro%e $our insecurit$ $ ringing in an e#pert. Plotnic$ case: SellerBs e#cuse here, if an$, must e found in reasonale apprehension 0insecurit$1 as to the future of the contract engendered $ u$erPs eha%ior. A failure to pa$ timel$ one installment, when there is a whole histor$ of a failure to pa $ one installment and also a histor$ of a failure to ship on time ( a series of wai%ers), does not ecome a material reach when one part$ sues on that asis. A material reach goes to the heart of the contract. )AMA+"!: 8$pes of compensator$ damages3 is e@=etatin /ae ntrat amage interet , which is his interest in ha%ing the enefit of his argain $ eing put in as good as a the court will not 'nowingl$ aid an illegal transaction if plaintiff cannot open his case without position as he would ha%e een in had the contract een performed. is reiane interet, which showing illegalit$, the court will not assist him. #3 An electrician that wires $our house ut has is his interest in eing reimursed for loss caused $ reliance on the contract $ eing put in as no license the contract is illegal & %oid howe%er, argue un!ust enrichment6quantum merit good a position as he would ha%e een in had the contract not een made, or his retittin (reasonale %alue of ser%ices rendered). Agreements eforehand to limit the liailit$ of interet , which is his interest in ha%ing restored to him an$ enefit that he has conferred on the inherentl$ dangerous products or harm caused intentionall$6rec'lessl$ are not enforceale e%en other part$. ifferentl$, reiin and re<rmatin are used when contracts are not %alidl$ if technicall$ %alid. 9on*compete co%enants (emplo$ment & sale of usinesses) the latter is formed. 8he general rule is that puniti%e damages6mental anguish are not allowed in contracts often enforced e%en if road in geograph$ & time (negotiated consideration). 8he former often (unless it was foreseeale). /n cases of fraud, it comes down to what the intent was at the time %iolates pulic polic$ (limits li%elihood). owe%er, emplo$ers ha%e rights to proprietar$ the performer made the statements (usuall$ during formation) if he later decides to de%iate from information (customer lists, patented tech.). Courts will uphold these co%enants if ) the$ are the contract, it is not fraud ut ad faith. Dama%es for breach or re!udiation b" Pa"or: /n order limited in duration & +) geograph$ (consider emplo$er co%erage). 89 uses GF approach3 court to get damages, $ou need to pro%e them with reasonale certaint$ (e.g., 4< anal$sis). /f $ou are rema'es & limits to GF e#pectations of oth parties. %ARO$ "*I)"NC": 4arol e%idence will representing the seller, $ou want to communicate that $ou will e se%erel$ in!ured if the deal e admitted i< & an 'w ) there was another agreement (consider Lath), +) interpretation is does not go through this will solidif$ e#pectation damages. 8he measure of damages for the needed ecause of amiguit$ (face or wording), or 7) for showing fraud, illegalit$, duress, reach of an agreement to purchasereal propert$ is the difference etween the contract price and mista'e, or lac' of consideration. 8hese are all wa$s to tr$ to %ar$ 0the o#.1 Under the UCC the fair mar'et %alue on the date of the reach (C4*2<). &ew Era case: Ser%ice Contracts3 %ersion, prior course of dealings is 'e$ a contract is alwa$s construed against the drafter #3 if Contract damages Q Contract 4rice (C4) R Cost of Completion (also less an$ pa$ments alread$ an amiguit$ in an insurance adhesion contract, the court will test the meaning of the polic$ made). /n this case, he was not entitled to contract damages ecause the whole !o was a according to the insuredBs reasonale e#pectation of co%erage. CON)ITION!: 9ot all promises condition precedent thus, he could onl$ sue in quantum meruit (reasonale %alue of ser%ices put are conditions, ut all conditions are promises, the occurrence or non*occurrence which must in"which is reall$ restitution). ou can onl$ get quantum meruit6restitution $ pro%ing that occur ) efore a part$ has a dut$ to perform (e.g., get financing) or +) releases6e#tinguishes a there was a enefit estowed upon the other part$. Also see loss of %olume ao%e. Dama%es for part$ from its dut$ to perform under a contract (e.g., fi# the roof or no pa$ment). Conditions can breach or re!udiation b" Performer: 8he general rule in cases of fault$ construction is that the e e#press or implied (e.g. implied notice). 8o identif$ a condition, loo' for terminolog$ that measure of damages is the mar'et %alue of the cost to repair (co%er) the fault$ construction the attempts to allocate ris's etween the parties differentl$, a promise is a promise to restrain or dimunition in %alue, used in Jacos & Nent, onl$ applies when there has een sustantial perform some designated act. /f the promise is dependent (m$ promise to paint is contingent on performance on the part of the performer and the error is small and insignificant. Cneentia $ou pro%iding supplies"if / donBt perform m$ promise, $ou donBt ha%e to perform $our )amage 3 Four asic elements3 ) were the losses a foreseeable consequence of the reach at promise) it is a condition (with the longest promise going first) if the$ are mutual promises the time of contracting ( prior course of dealings), +) could damages ha%e een mitigated $ (irrespecti%e of who is supposed to go first) to e performed at the same time (one is selling purchasing sustitute goods, 7) can damages e pro%ed with reasonale certaint$, and :) if propert$ and another u$ing one is conditioned upon the other ut must happen at same time) it profits are too speculati%e, can the$ reco%er reliance e#pendituresH Consequential damages flow is a condition and third, if promises are independent of an$ oligation, then it is a promise and from a reach as a result of the u$erBs particular circumstances (in the ordinar$ course or in not a condition and an error6omission results in damages, not an e#cuse of performance. Courts special circumstances). ou must communicate the special circumstances put them on noticeM will tend to construe something as a promise if there is serious dout as to whether it is a 8$picall$, consequential damages consist of lost profits howe%er, lost profits are reco%erale promise or a condition (potential for egregious forfeiture) howe%er, promises in general onl$ if the loss could not e reasonal$ pre%ented $ co%er or otherwise (hard for new (especiall$ in a series) are almost alwa$s construed as dependent ecause a part$ should not e usinesses to pro%e). (A) FAIT, ? !%"CIA$ R"$I"F: Consider the ad faith u$er case forced to pa$ out his mone$ unless he can get that for which he stipulated the general rule is full (u$er competes with her own real estate agent), the not ad u$er case (if $ou operate 0short1, performance or no pa$ment (e.g., if m$ promise to uild K is independent of $our dut$ to pa$, it is foreseeale $ou might not e ale to perform), and the 4enoil case, intentional interference $ou would ha%e to pa$ e%en if / did not finish the !o) ultimatel$, it depends on the intention of with a contract (7rd part$ will e liale for trele damages). Contract damages are the norm in the parties and how the contract is drafted. CON)ITION! )IFF"R FROM ;ARRANTI"!: contracts, ut sometimes $ou can get an in!unction, which is an order $ the court to do A warrant$ is an independent promise $ou are promising that something will e in a certain something or not (e.g., specific performance). /n order to get this, $ou must show special and condition. In Re Carter : a sale of a usiness was 0warranted1 to e in a certain condition (if it unique circumstances (tomato case). Specific performance is una%ailale for personal ser%ices was not in a certain condition, damages could e ta'en from an escrow). owe%er, there was contracts, ut $ou can pre%ent them from doing the !o elsewhere (@olf). Liquidated damages also a condition precedent that stated that if and when a u$er elected to consummate a sale, it will usuall$ e upheld unless the$ are %iewed as penalt$. 3r %ART INT"R"!T!: Assignment wai%ed its right to the warrant$. 8he seller won. CON)ITION! ;AI*"R! ? of contractual rights is presumed. Consider the ris' of the assignment (might cause in%alidation MO)IFICATION!: Since a condition is a term of the contract, it can e deleted or modified $ ecause it %aries promisor ris'). 4ersonal ser%ice contracts are not assignale. Contracts ma$ a susequent agreement etween the parties. /f, howe%er, the condition is a material part of the limit assignments (restricti%e co%enants) 8$pes of assignment3 ) A6; (common, car loan, agreed e#change, the agreement must satisf$ the usual requirements for an enforceale wages) & +) A64 (unusual, Fitro$ case). Anti assignment clauses are %alid ut unusual modification, including, on occasion, consideration (ser%ices or sale of land requires something (4ainter6Allusen case). 3r %ART ("N"FICIARI"!: An$time the parties agree that a 7rd new and different, ut not the sale of goods3 +*+). /t is asserted, howe%er, that a condition can part$ is the intended eneficiar$ of the agreement, that third part$, whether the$ are aware or e e#cused $ conduct $ one part$ to the contract which falls short of an agreed upon unaware of the original contract, ma$ enforce the agreement. As long as there was an intention to modification (put it in the contract, onl$ argue wai%er if $ou ha%e to). A word used to descrie enefit some person or some class, the eneficiar$ does not ha%e to e named. this situation is wai%er , which is defined as 0the %oluntar$ relinquishment of a 'nown right.1