Contracts

R2d §45 Option contracts: (1) Where an offer invites an offeree to accept by __ _ __ and does not invite a __ __, an option contract is created by __ __ or __

rendering a performance, promissory acceptance, part performance, tender

R2d §45: (2) The offeror’s __ of performance under any option contract so created is conditioned on __ or __ of the invited __ in __ with the terms of the offer.

duty, completion, tender, performance, accordance

R2d §87(2): 1. An offer is binding as an option contract if it:

a) is in __ and __ by the offeror, recites a purported __ for the making of the offer, and proposes an __ on fair terms within a __ __; or

b) is made __ by statute 

writing, signed, consideration, exchange, reasonable time, irrevocable 

R2d §87(2): 2. Option by reliance: An offer which the offeror should ___ expect to induce ___ or ___ of a substantial character on the part of the offeree before ___ and which does induce such or forbearance is ___ as an option contract to the extent necessary to avoid ___.

reasonably, action, forbearance, acceptance, binding, injustice

R2d §90: A promise which the promisor should reasonably expect to induce __ or __ on the part of the promisee or a __ person and which does induce such action or forbearance is __ if __ can be avoided only by __ of the promise. The remedy for breach may be limited as __ requires

action, forbearance, third, binding, injustice, enforcement, justice

R2d §90: Promissory Estoppel Elements:

1. Promisor __ expects __

2. Promisor __ __ in the __ way

3. __ necessary to prevent __

reasonably, reliance, actually relies, expected, enforcement, injustice

Charitable Subscriptions (R2d §90(2)): Charitable subscriptions and marriage settlements are binding without proof that the promise __ __ or __

induced action, forbearance

UCC §2-201 (Statute of Frauds): (1) Except as otherwise provided in this section a contract for the sale of goods for the price of $__ or more is not __ by way of action or defense unless there is some __ sufficient to indicate that a contract for sale has been made between the parties and signed by the party against whom enforcement is sought or by his authorized agent or broker.

A writing is not insufficient because it __ or __ states a term agreed upon but the contract is not enforceable under this paragraph beyond the __ of goods shown in such writing.

500, enforceable, writing, omits, incorrectly, quantity

UCC §2-201 (Statute of Frauds): 2. Between __ if within a reasonable time a writing in confirmation of the contract and sufficient against the sender is received and the party receiving it has reason to know its __, it satisfies the requirements of subsection (1) against such party unless written notice of __ to its contents is given within __ days after it is received.

merchants, contents, objection, 10

UCC §2-201 (Statute of Frauds): 3. A contract which does not satisfy the requirements of subsection (1) but which is valid in other respects is enforceable:

(a) if the goods are to be __ __ for the buyer and are not suitable for sale to others in the ordinary course of the seller’s business and the seller, before notice of __ is received and under circumstances which reasonably indicate that the goods are for the buyer, has made either a substantial beginning of their manufacture or commitments for their procurement; or

(b) if the party against whom enforcement is sought __ in his pleading, __ or otherwise in court that a __ for sale was made, but the contract is not enforceable under this provision beyond the quantity of goods admitted; or

(c) with respect to goods for which __ has been made and accepted or which have been received and __.

specially manufactured, repudiation, admits, testimony, contract, payment, accepted

UCC §2-205 (Firm Offers): An offer by a merchant to buy or sell goods in a __ __ which by its terms gives assurance that it will be be __ __ is __ __, for lack of __, during the time time stated or if no time is state for a reasonable time, but in no events may such period of irrevocability exceed __ months; but any such term of __ on a form supplied by the offeree must be __ signed by the offeror.

signed writing, held open, not revocable, consideration, three, assurance, separately

i. UCC §2-207 — Battle of the Forms

1. “A __ and __ expression of __ or a written confirmation which is sent within a reasonable time operates as an acceptance even though it states terms __ to or __ from those offered or agreed upon, unless acceptance is __ made __ on __ to the __ or __ terms.”

definite, seasonable, acceptance, additional, different, expressly, conditional, assent, additional, different 

§2-207(2): “The additional terms are to be construed as __ for __ to the contract. Between merchants such terms become part of the contract unless:

(a) the offer __ __ acceptance to the terms of the offer; or

(b) they __ __ it; or

(c) __ of __ to them has already been given or is given within a __ __ after notice of them is received.”

proposals, addition, expressly limits, materially alter, notification, objection, reasonable time

§2-207(3): “Conduct by both parties which recognizes the __ of a contract is __ to establish a contract for sale although the writings of the parties __ __ otherwise establish a contract. In such case the terms of the particular contract consist of those terms on which the writings of the parties __, together with any __ terms incorporated under any other provisions of this Act.”

1. Comment 3: Terms that __ __ the contract do not become part of it unless expressly agreed to.

2. Comment 4: “A material alteration is one that would ‘result in __ or __ if incorporated without express awareness by the other party.’ Hardship is a __, not a criterion. An alteration is material if consent to it cannot be presumed.”

3. Comment 5: Examples of terms that are not material alterations include __ clauses reflecting trade usage or minor variations in delivery terms.

existence, sufficient, do not, agree, supplementary, materially alter, surprise, hardship, consequence, standard

What Law Governs (UCC vs. Common Law): UCC Article 2 applies to transactions in ___ defined as ___, ___ items identified at the time of contracting

goods, movable, tangible

A merchant is a person who deals in __ of the kind or otherwise by his __ holds himself out as having __ or __ __ to the practices or goods involved in the __

goods, occupation, knowledge, skill peculiar, transaction

__ __ governs all non-goods contracts:

Common law

Hybrid contracts use the predominant purpose test; if the predominant purpose is services, ___ law applies; if goods, ___ governs

common, UCC

Objective theory of assent: Assent is determined by ___ ___, not ___ ___

outward manifestation, secret intent

Agreement requires a manifestation of ___ ___

mutual assent

Bargain is an agreement to exchange ___ or ___

promises, performances

Preliminary negotiations (Restatement (Second) §26): Statements showing __ to deal do not manifest __ to be __

willingness, intent, bound

An offer is a __ of __ to enter a __, so made as to __ the offeree in understanding that their __ to the __ is __ and will __ it

manifestation, willingness, bargain, justify, assent, bargaining, invited, conclude

A manifestation is not an offer if the addressee __ or has __ __ __ the speaker does not __ to be __ without further __

knows, reason to know, intend, bound, assent

 Requirements for a Valid Offer
1. __ to be __ (objective standard)
2. __ to an __ offeree
3. Contains terms __ to identify the __ of the __

Intent, bound, Communicated_, intended, sufficient, nature, exchange

UCC Offer Principles

• §2-204: a contract for sale of goods may be formed in any __ sufficient to show __, including __

• §2-206: unless __ indicated otherwise, offers invite __ in any reasonable manner

manner, agreement, conduct, unambiguously, acceptance

Lapse and Termination (offer-based)

• Offers lapse after the stated __ or, if none stated, after a __ __ 

• __ or __ of the offeror __ the offer before acceptance

time, reasonable time, death, incapacity, terminates

Acceptance is a __ of __ to the __ of the offer made by the offeree in a manner __ or __ by the __

manifestation, assent, terms, invited, required, offer

Forms of Acceptance

• By __: offeree completes every act __ to making the promise (R2d §50(3))

• By __: offeree __ part or all of what the offer __ (R2d §50(2))

• Unless otherwise indicated, an offer invites acceptance in any __ __ and __ (R2d §30(2))

promise, essential, performance, renders, requests, reasonable manner, medium

Notice Requirements

• Acceptance by performance generally does not require __ unless offeror __ it (R2d §54)

• If offeror has no reasonable means to __ of performance, offeree must make reasonable effort to __ or acceptance is __ (R2d §54(2))

• Acceptance by promise requires reasonable __ to __ the offeror or that the offeror receive the acceptance __ (R2d §56)

notice, requests, learn, notify, ineffective, diligence, notify, seasonably

• Mailbox rule: acceptance is effective upon __ unless offer provides __ (R2d §63)

• Exception: acceptance of __ contracts is effective only upon __ (R2d §63(b))

dispatch, otherwise, option, receipt

 Limits on What Counts as Acceptance

• Offeree must accept in the manner __; actions __ with acceptance or merely __ do not constitute acceptance

• Requests for __ are not acceptance

• Acceptance must be __ (variations made handled in “Acceptance Varying Offer”)

invited, inconsistent, preparatory, clarification, unequivocal

UCC Acceptance Principles

• §2-206: Unless __ indicated otherwise, an offer invites acceptance in any reasonable __ and by any reasonable __

• __ of goods or a promise to ship may operate as acceptance (conforming or nonconforming), unless __ goods are clearly __ as such

unambiguously, manner, medium, Shipment, accommodation, identified

Termination of the power of acceptance

• By __ (Restatement (Second) §38)

•  By __

  • Direct: offeror’s manifestation of intent not to enter the contract terminates the offeree’s power when received

  • Indirect: power terminates when offeree receives reliable information that the offeror has taken definite action inconsistent with an intent to enter the contract

•  By __

  • An offer lapses at the time stated or, if none stated, after a reasonable time

• By __ or incapacity (Restatement (Second) §48)Death or legal incapacity of the offeror terminates the power of acceptance, even if the offeree is unaware

• By non-occurrence of a __ of acceptance

  • If the offer prescribes a condition that must occur before acceptance, failure of that condition terminates the power of

    acceptance

rejection, revocation, lapse, death, condition

Option contract limits on termination
Option contract (Restatement (Second) §25): an offer kept open by consideration is not terminated by rejection, revocation, counteroffer, or death unless the contract terms provide otherwise

• Restatement (Second) §37: the normal terminating events do not end the offeree’s power of acceptance under an option contract

•  __ __ of a unilateral contract creates an option contract that makes the offer temporarily irrevocable

• __ may make an offer irrevocable under Restatement (Second) §87(2)

Part performance, Reliance

UCC §2-205 firm offer rule

Merchant’s __ offer assuring it will be held open is not __ for the stated time (or reasonable time ≤ _ months)

signed, revocable, 3

Mailbox rule

• Acceptance is effective on __ unless the offer specifies otherwise

• Acceptance under an option contract is effective only upon __

dispatch, receipt

 Mirror image rule (common law)

An acceptance must mirror the terms of the offer; any deviation constitutes a __

counteroffer

A counteroffer is an offer made by the offeree to the offeror __ to the same matter but proposing __ terms, and it __ the offeree’s power of acceptance

relating, substituted, terminates

Conditional acceptance (Restatement (Second) §59)
A reply that __ to accept but is __ on the offeror’s __ to __ or different terms operates as a __, not an acceptance

purports, conditioned, assent, additional, counteroffer

An acceptance that requests a change or addition to the terms is still an acceptance unless it is made __ on __ to the __ terms

conditional, assent, additional

A request for ___ or ___ regarding terms does not constitute a counteroffer and does not ___ the power of acceptance

clarification, suggestion, terminate

UCC §2-207 (Battle of the Forms)
Governs situations where acceptance contains ___ or ___ terms

additional, different

UCC §2-206(1)(b): nonconforming shipment

• Shipment of ___ goods operates as ___ unless accompanied by ___ that the shipment is offered only as an ___

• If identified as an accommodation, it is a ___, not acceptance

nonconforming, acceptance, notice, accommodation, counteroffer

Last-shot rule (contrast principle)

• Under common law, the ___ set of terms sent before performance ___ if performance proceeds despite ___ forms

• Under UCC, §2-207 displaces the last-shot rule and provides a ___ framework for resolving differing terms

last, governs, differing, separate

Essential terms must be reasonably certain to determine breach and select a remedy

• Essential terms (common law): ___, ___, ___, ___, ___, ___ ___ (Q-TPPPS)

• Indefiniteness → no contract; courts won’t supply essential terms at common law

  • If terms are left open, may indicate no intent to be bound

quantity, time, parties, price, place, subject matter

UCC approach to definiteness )more liberal)

UCC 2-204: Contract does not fail for indefiniteness if ___ to contract + reasonably ___ basis for remedy

• Missing terms can be supplied by UCC ___ (price, delivery, time, payment)

• Quantity is generally required unless:

  • ___ contract (all output of seller)

  • ___ contract (all buyer’s needs)

  • (UCC §2-306 governs these exceptions)

intent, certain, gap-fillers, output, requirements

If contract is too indefinite (UCC):

• __ contract formed

• But fallback liability possible (__ __, __, __)

No, promissory estoppel, restitution, misrepresentation

• Analytical steps (UCC requirement of definiteness) 

  1. Identify __ terms for the transaction
  2. Determine whether terms are reasonably __
  3. Determine if intent to be __ exists despite __
  4. If no contract → evaluate __ or __ alternatives

essential, certain, bound, gaps, reliance, restitution

Consideration requires a __-for __ (each side gives or promises something because the other side gives or promises something).

bargained, exchange

No requirement of benefit/detriment if __ exists (modern rule).

Peppercorn consideration valid if __ (__ ≠ real consideration).

bargain, genuine, sham

A contract requires __ __ + __, except for special rules (§§82–94).

mutual assent, consideration 

R2d §71 – Requirement of Exchange

• Performance or return promise must be __ for (sought by promisor, given by promisee in exchange).
  

• A performance or return promise is bargained for if it is sought by the promisor in __ for his promise and is given by the promisee in exchange for that promise

bargained, exchange

Performance may be: __, __, or creation/modification/destruction of a __ __.

act, forbearance, legal relation

Adequacy of Consideration

If consideration exists, no additional requirement of __ to promisor, equivalence, or mutuality.

benefit

Pre-Existing Legal Duty Rule

A performance that is already __ required is __ consideration unless it __ in more than a pretense of a bargain

legally, not, differs

Material Benefit Rule (exception to past consideration rule)

• A promise recognizing a __ conferred benefit is __ (consideration) only to avoid __.

• Not binding if conferred as __, if no unjust enrichment, or if __

previously, binding, injustice, gift, disproportionate

Valid Consideration

• __-for performance

• __ of a legal right

• Changes to legal __

• __ promises (non-illusory)

Bargained, forbearance, relations, return

Not Consideration

• __ consideration (unless §86 applies)

• __ obligation (unless §86 applies)

• Conditional __

• __ promises

• Performance of existing __ duty (unless additional performance)

Past, Moral, gifts, Illusory, legal

Illusory vs. Real Promises

• Promise must actually __ freedom of action.

• Illusory if promisor retains unfettered __ (e.g., “if I feel like it”).

• Requirements (buyer buys all requirements) or output (seller sells all its output) terms are not illusory when governed by __ obligations.

restrict, discretion, good-faith

Promissory estoppel = promise that the promisor should reasonably expect to ___ ___ or ___, and that does induce such action or forbearance, is ___ if enforcement is necessary to avoid ___

induce action, forbearance, binding, injustice

Promissory estoppel Elements

1. Promisor reasonably expects __

2. Promisor actually relies in the __ way

3. __ necessary to prevent __

reliance, expected, enforcement, injustice

Promissory estoppel may enforce a promise even if __ is absent

consideration

if the “promise” is too __, promissory estoppel does not apply

indefinite

When promissory estoppel applies instead of consideration: When no bargained-for exchange exists but the promisor should reasonably expect __

reliance

• Purpose & Nature of restitution 

  • Restitution is not promise-based; liability is imposed to prevent __ __ when no enforceable contract exists.

  • Operates through ___ (contract implied in law).

  • Remedy aims to restore the value of the benefit ___, not ___.

unjust enrichment, quasi-contract, conferred, expectation

Precontractual liability

• Liability arising during negotiations when no __ has yet formed or terms remain __

• Doctrines filling the gap: promissory estoppel, reliance-based option contracts, preliminary agreements, restitution, and certainty/indefiniteness boundaries.

contract, unsettled

Pre-existing duty rule (R2d §73)

• Performing (or promising to perform) a legal duty already owed is __ ___.

  • But a similar performance is consideration if it differs from what was required by the duty

not consideration

SOF Analysis Steps
1. Is there a contract?

2. Is the contract within SOF?
3. If yes → Is there a __ that satisfies SOF?

4. If no → Does an __ apply?

writing, exception

Categories Within SOF (Restatement §110 + UCC) (SLLY-G)

1. __

•  Surety = person liable for another’s debt.

  • –  Principal = debtor

  • –  Obligee = creditor.

  • –  Main Purpose Exception: not within SOF if promisor’s leading purpose is their own pecuniary benefit.

2. ___contracts

   • R2d §125: promise to transfer, buy, or create an interest in land is within SOF.

   • Includes rights/privileges/powers relating to real property (R2d §127).

   • Short-term leases (< 1 year) generally excluded.

3. Contracts Not Performable Within __

4. Contracts Not Performable Within One __

   • 1-year period runs from formation → full performance.

   • If any promise by either party cannot be fully performed within 1 year → SOF applies.

   • Judicial narrowing:

     • “Not to be performed” read as not performable.

     • If performance is theoretically possible within a year → NOT within SOF

     • Unilateral contracts not within SOF (performance = acceptance).

5. Sale of __ ≥ $500 (UCC §2-201)

Suretyship, Land, Lifetime, Year, Goods

UCC Statute of Frauds – §2-201

• K for SOG ≥ $500 unenforceable unless writing:

  • Indicates __ for sale,

  • __ by party to be charged,

  • __ term MUST appear (need not be accurate, but limits recovery to a amount specified).

•  “Signed” includes any symbol intended to authenticate (UCC 1-201(b)(37)).

contract, Signed, Quantity

UCC Exceptions

• Merchant’s __ Rule – §2-201(2)

  • Between merchants, a confirming memo satisfies SOF unless written objection within 10 days.

• __ Manufactured Goods – §2-201(3)(a)

  • Goods custom-made, not suitable for others, and seller has made substantial beginning.

• __ Admission – §2-201(3)(b)

  • Admission of the existence of a contract in pleadings /testimony /other statements satisfies SOF.

• __ Performance – §2-201(3)(c)

  • Payment made/accepted OR goods received/accepted.

  • Only enforceable for the portion performed; if goods are non-apportionable → whole K enforceable.

Confirmation, Specially, Judicial, Part

If one party __ performs, 1-year rule does NOT bar enforcement of others’ promises. Can enforce it against others.

fully

Promise which promisor should reasonably expect to induce action or forbearance which does induce the action is __ notwithstanding SOF

enforceable

Minority Incapacity

• Modern required age: __

• Apparent age or other party’s awareness is __.

R2d §14

• Minor incurs only __ contractual duties until 18.

• Voidable by any manifestation of unwillingness to be bound, even if minor received __ or part of other party’s performance.

Necessities Exception

• “Necessary” is relative to minor’s and parents’ situation.

• Society prefers minors to contract when they have no provision from parents.

Ratification & Restitution

• Can be ratified by minor by:

  • Action or conduct, OR

  • Failure to disaffirm within a reasonable.

  • Any manifestation of willingness to be bound.

• Restitution:

  • Minor who disaffirms may recover payments but must return any goods/tangible benefit remaining

  • Not responsible for depreciation or loss in value.

  • Not accountable for received services.

18, irrelevant, voidable, all

Mental Incapacity
R2d §15 — Cognitive + Volitional Tests

• Cognitive Test (narrow):

  • Unable to __ nature/consequences of transaction.

• Volitional Test (broad):

  • Unable to __ __ in relation to the contract, AND other party knew or had reason to know.

Ratification & Restitution

• Contract __ only by the incapacitated person.

• Power of avoidance can be lost by __.

• Restitution:

  • Mentally incompetent person (MIP) must make restitution of benefits received only to extent __ or applicable under equity.

  • If incompetent and seller knew, courts are more protective of MIP.

understand, act reasonably, voidable, ratification, remaining

Duress (economic or physical)

•  A contract is voidable when __ is induced by a __ __ that leaves the victim with no __ __ .

• Threat of __ __ is generally not duress unless used in bad faith.

assent, wrongful threat, reasonable alternative, lawful action

Economic duress (business transactions)

Requires:

• __ threat (improper pressure; may include bad-faith withholding).

• No __ __ (e.g., no other source of supply).

• Ordinary breach remedy __.

Wrongful, reasonable alternative, inadequate

• Effect of duress

  • Contract is __ by the victim.

  • Victim may rescind the contract and seek __

voidable, restitution

Undue influence focuses on the __ between the parties and makes the contract __

relationship, voidable

A contract is voidable if a party’s assent is induced by unfair persuasion by someone who:

• (a) has a __ __ OR

• (b) has a relationship of __ and __ with the victim.

dominant relationship, trust, confidence

Misrepresentation = __ not in accord with the __

assertion, facts

To establish misrepresentation, the plaintiff must establish (1) a misrepresentation, which is an assertion not in accord with facts, (2) that is either __ or __, (3) that the recipient __ on the misrepresentation, and (4) reliance was __.

fraudulent, material, relied, justified

A misrepresentation is fraudulent if made with __ to __.

A misrepresentation is material when it would likely have __ a reasonable person to enter the contract or the misrepresentation was __ to induce that particular recipient to enter the contract

intent, deceive, induced, likely

Concealment = __ act intended to __ another from learning a fact

Affirmative, prevent

Substantive unconscionability refers to unfairness in the __ themselves, indicated by overly __, one-sided conditions

terms, harsh

Procedural unconscionability refers to unfairness in the __ __ itself, indicated by __, unfair surprise, unequal bargaining power, lack of meaningful __

bargaining process, oppression, choice

Adhesion contract = when a party with __ bargaining power offers a standardized contract, leaving the __ party with no option to negotiate (take it or leave it contract)

superior, weaker

Mistake = __ not in accord with the __ at the time the contract is formed

belief, facts

Unilateral mistake = __ party is mistaken; the __ is not

One, other

A contract is voidable by the mistaken party when:

1. There is a mistake by one party at the time of contract,
2. Concerning a __ __ on which the contract was made,
3. The mistake has a __ effect on the agreed exchange,
4. The mistaken party does not __ __ __ of mistake under §154, and either:

• Enforcement would be __, or

• The other party __ of or caused the mistake

basic assumption, material, bear the risk, unconscionable, knew

Mutual Mistake

A contract is voidable when:

1. Both parties share the same mistaken belief,

2. The mistake concerns a __ __ on which the contract was made,

3. The mistake has a __ effect on the agreed exchange,

4. The __ affected party does not bear the __ of the mistake

basic assumption, material, adversely, risk

If the parole evidence rule applies, it excludes __ or __ oral agreements or writings.

prior, contemporaneous

Modern / Restatement Approach to PER

Step 1: Is there a writing which is a “final expression of the terms of the agreement”?

• Final expression = __ __.

• If no such writing, PER ≠ apply.

• If there is such writing, it is an __ agreement (IA)

  • If K integrated, prior agreements which contradict = __.

  • Whether an IA exists must be determined before applying PER.

Step 2: If K is IA, is K partially integrated (PI) or completely integrated (CI)?

• Must be determined prior to PER (R2d §210(3)).

• Completely integrated

  • If adopted as complete and __ statement of terms.

  • If CI, __ evidence of consistent additional terms is barred.

• Partially integrated

  • If adopted as __ than complete.

  • Evidence of consistent additional terms = __.

agreed terms, integrated, inadmissible, exclusive, extrinsic, less, admissible

Determining Complete Integration (CI)

• Traditional Approach (Mitchell v. Lath)

  • Must be determined solely from the __ of agreement.

  • Oral/collateral agreement must be one parties would not ordinarily __ in writing.

• Modern Approach (R2d §210)

  • Writing cannot prove its own completeness; courts may consider __ bearing on intent.

  • A K is not CI if writing omits a consistent additional term “naturally __.”

• Merger clauses

  • Highly persuasive of __ to complete integration

face, expect, context, omitted, intent

PER & Ks for Sale of Goods (SOG) (UCC)

UCC §2-202 – Final written expression

• Terms may not be __ by prior agreement, but may be explained or supplemented:

• By evidence of __ additional terms, unless court finds writing intended as __/exclusive (akin to Modern/Restatement Approach)

contradicted, consistent, complete

Types of Unclear Language

• Vagueness → __ at margins; __ terms. Ex: "reasonable time"

• Ambiguity → two or more plausible __. Ex: "you should only bring wine or beer and dessert"

unclear, flexible, meanings

Plain Meaning Rule
Step 1: Court decides if language is ambiguous (question of law).

• Four Corners (NY, majority) → ambiguity determined from __ alone; no extrinsic evidence to determine ambiguity.

• Reasonable Susceptibility (California, minority) → court may use __ evidence to determine whether ambiguity exists.

Step 2: If ambiguous, extrinsic evidence is __ to determine meaning.

text, extrinsic, admissible

Extrinsic Evidence (Contextual Sources)
Admissible (under UCC and modern CL) to explain or supplement, not contradict:

• Course of dealing

  • Relevant only when parties to a K have dealt with each other in __ transactions of _ occasions

• Course of performance

  • Conduct while performing the K __ to making the K

• Usage of trade

  • __ practice or method of a dealing in a place, vocation, or trade

similar, previous, subsequent, Regular

Implied-in-fact terms → inferred from parties’ __ or shared __.

conduct, understanding