BLAW 2nd Exam

Tort Law

a civil wrong distinct from a crime, and the primary goal is to compensate victims rather than punish wrongdoers. Tort law encompasses negligence, intentional acts, and strict liability.

The eggshell plaintiff rule

“You take the victim as you find them.”

If a defendant causes a small injury, but the plaintiff has a pre-existing condition that makes the injury much worse, the defendant is still liable for all the resulting harm.

Example:

You lightly push someone → they fall → because of a fragile skull, they suffer a severe brain injury.

You cannot argue: “I didn't know they were that fragile.”

You're still liable for the full extent of the injury.

Easy memory trick:

Eggshell = fragile person

“You break the egg, you pay for the whole mess.”

Tort action

is a civil action (rather than a criminal action) in which one person brings a suit of a personal nature against another. The STATE is not a party (state is only a party to a criminal proceeding), and the judgment may impose damages (NOT jail time).

Tort vs Criminal Law

A CRIME is an act so reprehensible that it is considered to be a wrong against society as a whole, so the STATE PROSECUTES the criminal, who may receive jail terms,

fines, or both. Most CRIMES also involve tort actions to compensate the victim, but the commission of a tort is not always a crime. (Need the requisite STATE OF MIND for a criminal prosecution.)

Tort law protected interests

• Personal safety

• Freedom of movement

• Property

• Some intangibles, including privacy and reputation

Compensatory damages

Purpose: Make the plaintiff whole.

Two main types:

Special damages → actual financial losses

Medical bills

Lost wages

Property damage

Future medical expenses

General damages → harder-to-measure losses

Pain and suffering

Emotional distress

Loss of enjoyment of life

Loss of companionship

Memory: Compensatory = COMPENSATE the victim.

Punitive damages

Punitive damages

Purpose: Punish the defendant and deter similar behavior.

Usually available when the defendant's conduct is especially reckless, malicious, or intentional, rather than merely negligent.

Example: A company knowingly sells a dangerously defective product and ignores repeated warnings.

Memory: Punitive = PUNISH.

Intentional torts

Intentional torts, such as assault, battery, and false imprisonment, require deliberate actions by the defendant. Intent is the key element distinguishing these torts from negligence, where the harm results from carelessness rather than intent

Intentional Torts Against Persons

1. Assault and Battery

2. False Imprisonment

3. Infliction of Emotional Distress

4. Defamation

5. Invasion of Privacy

6. Business Torts

Assault

An intentional, unexcused act that creates in another person a

reasonable apprehension or fear of immediate harmful or

offensive contact is an assault.

Actual contact is NOT necessary. The interest protected is

freedom from having to expect harmful or offensive contact.

The completion of the act that caused the apprehension, if it

results in harm, is a BATTERY.

Battery

A battery is an unexcused, harmful, or offensive

physical contact intentionally performed. The contact

can be to any part of the body or anything attached to

it. The contact can be made by some force that the

defendant sets in motion. Plaintiff may also be

compensated for emotional harm.

Defenses to Assault & Battery

1. Consent.

2. Self-Defense (reasonable force)

3. Defense of Others (reasonable force)

4. Defense of Property.

False imprisonment

False imprisonment is the intentional confinement or

restraint of another person WITHOUT JUSTIFICATION.

The interest protected is the freedom to move without

restraint.

Confinement can be by physical barriers, physical

restraint, or threats of physical force. Moral pressure or

threats of future consequences are NOT sufficient.

Intentional Infliction of Emotional Distress

Intentional infliction of emotional distress is an act that

amounts to extreme and outrageous conduct resulting in

SEVERE emotional distress to another.

The focus in an emotional distress suit is usually on the

NATURE of the act—a single indignity or annoyance may

NOT be enough, but repeated annoyances, coupled with

threats, may be.

Defamation

Wrongfully hurting another’s REPUTATION is defamation.

Doing so orally is slander.

Doing it in writing or in a form of communication that has

the potentially harmful qualities characteristic of writing

(pictures, signs, statues, and films) is libel.

Damages for Libel

Because libelous statements are written, can

be circulated widely, and are typically a

result of deliberation, general damages are

PRESUMED. Showing an actual injury is NOT

required.

Damages for Slander

Because slanderous statements have a

temporary quality, special damages must be

PROVED. Proof of injury—an actual

economic loss—is required.

Slander per se (Exceptions for Proof)

statements that are considered so damaging that the plaintiff doesn't have to prove actual economic damages.

Easy exam memory: “Disease, Job, Crime”

You can remember the 3 exceptions as:

Disease → Job → Crime

Disease — Saying someone has a loathsome disease

Includes STDs and, under your course material, mental illness.

Job/Profession — Saying someone committed improprieties in their profession or trade

Example: “That accountant falsifies his clients' tax returns.”

Crime — Saying someone committed or was imprisoned for a serious crime

Example: “He was convicted of robbery.”

Exam shortcut

Slander + Disease, Job, or Crime = no need to prove actual damages.

Memory phrase:

“Disease, Job, Crime = Damages automatically.”

Defenses against Defamation

Defenses always includes the truth. Other defenses are:

• A privilege (for example, statements made by judges during a

trial), which may be qualified, or absolute.

• The lack of actual malice (knowledge of falsity or reckless

disregard for the truth), as to statements made about in the

press about public figures.

Public figure defamation

Who is a Public Figure? Those who exercise substantial

governmental power or are otherwise in the public limelight.

ACTUAL MALICE TEST is needed to prevail: Public Figures must

show “actual malice”, i.e., the statement was made with either

knowledge of falsity or reckless disregard for the truth.

Invasion of Privacy

There are Four (4) tortious acts that constitute Invasion of Privacy:

1. Misappropriation

2. Intrusion into an Individual’s Affairs or Seclusion

3. False Light

4. Public Disclosure of Private Facts

Misappropriation

Using a person’s name or picture or

other likeness for commercial purposes without permission.

The issue usually arises when the name or photograph of a

famous person is used WITHOUT consent in an

advertisement or other promotional activity.

Appropriation of Identity: The use of one person’s name or

likeness by another, without permission and for the benefit

of the user, is appropriation. This is not limited to the

appropriation of name or likeness. An individual’s right to

privacy includes the right to the exclusive use of his or her

identity. The use of a person’s name may be enough to

impose liability.

Commercial Benefit Requirement

The name, likeness, and other indicia of a

person's identity are used "for the purposes

of trade”. It does NOT ordinarily include the

use of a person's identity in news reporting.

The Newsworthiness Defense

Publication or broadcast of names and

pictures in news reports of political, social

and entertainment events. Example: the use

of a picture on the cover of a book or

magazine if the subject is a newsworthy

event or reasonably related to a newsworthy

subject inside the publication.

Intruding into an Individual’s Affairs or Seclusion

For example, invading someone's home or searching someone's

personal computer without authorization.

• invading someone’s home

• illegally searching someone’s belongings

• eavesdropping by wiretap

• unauthorized scanning of a bank account

• compulsory blood testing

• window peeping

False light

Publishing information that places a person in a

false light. DISTINGUISH: defamation protects a

person's public reputation, WHILE false light

remedies the victim of a false statement for his or

her emotional distress.

Defamation = FALSE information

False light = FALSE impression

Think:

Defamation → damages your reputation

Someone says/posts something false about you

It harms how other people think of you

Example: “Jake stole money from the company.” → People think Jake is a thief.

False light → creates a misleading impression

Something may be technically true, but presented in a way that gives a false/misleading impression

Focus is on how you are portrayed, not necessarily your reputation.

Example: A newspaper publishes Jake's photo next to an article about criminals, making it look like Jake is one of them.

Memorize it this way:

DEfamation = DEstroy reputation

FALSE light = FALSE impression

Public Disclosure of Private Facts

Occurs when a person gives publicity to a matter

that concerns the private life of another, a matter

that would be highly offensive to a reasonable

person and that is NOT of legitimate public concern.

This wrongful disclosure of private facts MUST actually

be public in nature.

• Also there is no liability when a defendant merely gives

further publicity to information that is already public.

• For a fact to be private, person must show that (i) they

actually expected a disclosed fact to remain private,

and (ii) society would recognize this expectation of

privacy as reasonable

Fraudulent misrepresentation

A person intentionally makes a false statement, the other person reasonably relies on it, and that reliance causes them harm.

5 elements to remember: F-L-R-R-D

False statement of material fact

Knowledge that it's false (or reckless disregard)

Intent to make the other person rely on it

Reasonable reliance by the victim

Damages resulting from the reliance

Example

A seller says: “This car has never been in an accident.”

They know that's false → you believe them → you buy the car → you suffer financial loss.

NEED Statement of Fact

Rule: Fraudulent misrepresentation generally requires a false statement of fact, not just an opinion.

Example:

“This is the best product!” → Opinion/puffery, usually not fraud.

“This product was tested by 1,000 customers.” → Statement of fact.

Exception

An opinion may be relied on if the person giving the opinion has superior knowledge about the subject.

Memory:

FACT = Fraud

OPINION = Usually no fraud

Puffery = Seller’s exaggerated talk → usually NOT fraudulent misrepresentation.

Abusive or Frivolous Litigation

Generally, each of us has the right to sue when we have been

legally injured. BUT….not abuse the process.

Right Not to Be Sued: Persons have a right NOT to be sued in

the absence of a legally just and proper reason.

Torts related to abusive litigation include malicious prosecution

(suing out of malice without probable cause) and abuse of

process (using a legal process in an improper manner or to

accomplish a purpose for which it was not designed).

Intentional Torts Against Property

A wrong against property is a wrong against the individual who has legally recognized rights with regard to the property. The

law categorizes property as:

Real property

Land and things permanently attached

thereto.

Personal property

Things that are movable.

Trespass to land

occurs when a person, WITHOUT

permission, enters another’s land, or causes anything or

anyone to enter the land, or remains on it, or permits

anything to remain on it.

Defenses against Trespass to Land: A complete defense

to a charge of trespass exists if the trespass is warranted,

as when one enters to help another in danger. Another

defense is that the so-called owner did not have rights to

the property.

Trespass Criteria, Rights, and Duties

• Harm to the land is NOT required, but if NO harm is

done, usually only nominal damages are recoverable.

• Of course, reasonable intrusions are permitted—

aircraft can fly over privately owned land.

• Trespassers include guests who are asked to leave. A

trespasser is liable for property damage.

• A trespasser assumes the risks of the premises (unless

the owner laid a TRAP to injure a trespasser or had a

DUTY TO WARN of dangers on the property).

Trespass to Personal Property

Intentional interference with another’s use or enjoyment of

personal property WITHOUT consent or privilege.

When an individual unlawfully harms another’s personal

property or otherwise interferes with the owner’s right to

exclusive possession and enjoyment, trespass to personal

property occurs.

The tort may entail acts of damage, dispossession, or

BOTH—anything that diminishes the condition, quality, or

value.

Conversion

When a person wrongfully possesses or uses the personal

property of another as if the property belonged to them,

conversion occurs. Conversion is a trespass to personal

property so SERIOUS that a converter can be forced to buy the

property.

DISTINGUISH:

• Unlawfully taking property is trespass.

• Unlawfully retaining it is conversion.

Believing one is entitled to the property is NOT a defense!

Someone who buys stolen goods is guilty of conversion, even if he

or she did not know the goods were stolen.

Unintentional Torts: Negligence

IMPORTANT: Without the creation of a RISK, there can be NO

negligence.

Under negligence theory, a tortfeasor neither wishes to bring about

the consequences of an act nor believes that they will occur. The

actor’s CONDUCT merely creates a risk of the consequences.

Foreseeable: The risk must be foreseeable—that is, it must be such

that a reasonable person would anticipate it and guard against it. In

determining whether the conduct creating the risk was reasonable,

courts consider the nature of the possible harm.

• A very slight risk of a dangerous explosion might be unreasonable.

• A distinct possibility of burning one’s fingers on a stove might be

reasonable.

Four-Step Analysis to Negligence

1. Duty

Defendant owed Plaintiff a duty of care;

2. Breach

Defendant breached that duty;

3. Causation

Defendant’s breach caused the injury;

4. Damages

Plaintiff suffered legal injury.

Duty of Care & Breach

Failing to exercise reasonable care is potentially

tortious conduct.

The failure may be an ACT (setting fire to a

building) or an OMISSION (neglecting to put

out a fire); it may be intentional or careless;

it may be unavoidably dangerous.

Whether conduct is unreasonable depends on a

number of factors:

(i) the nature of the act, (ii) the manner in

which the act is performed, (iii) the nature of

the injury, (iv) whether the activity causing

the injury was socially useful, and (v) how

easily the injury could have been guarded

against.

Measuring Duty - The Reasonable Person Standard

Note: This is an OBJECTIVE test!

Duty is measured by a standard of reasonableness. The

measure is objective—how would a reasonable person act in

the SAME circumstances?

The answer DEFINES the duty: A reasonable person would

exercise reasonable care. An individual with knowledge, skill,

or intelligence superior to that of an ordinary person has a

higher standard of care in light of those capabilities.

Test used: What would a reasonable person in my

circumstances do in this situation?

The Special Cases: Landowners & Professionals

Landowners

Business firms that invite persons onto their premises usually

have a duty to exercise reasonable care to protect their

business invitees against foreseeable risks that the owner

knew or should have known about. OBVIOUS RISKS are an

exception, but risks that are obvious to an owner may not be to

another party, such as a child.

Duty of Professionals

Professionals may owe higher duty of care

based on special education, skill or

intelligence. Breach of duty is called

professional malpractice.

Causation

The breach of the duty of care MUST have caused the harm for which recovery is sought. There must be (1) causation in fact

and (2) the act must be the proximate cause of the injury.

a) Causation in Fact

If an injury would not have occurred

WITHOUT the breach, there is causation in

fact. Causation in fact can usually be

determined by the but-for test: “But for the

wrongful act, the injury would not have

occurred”.

b) Proximate Cause

Proximate cause is a question NOT of fact

but of law and policy: Is the connection

between an act and an injury STRONG

enough to justify imposing liability? Were

the injuries foreseeable?

Injury Requirement & Damages

Without an injury (loss, harm, wrong, or invasion of a

protected interest), there is NOTHING TO RECOVER.

The purpose of damages is to compensate injured

parties.

To discourage especially reprehensible behavior,

however, punitive damages may be awarded.

Assumption of risk

Assumption of risk requires that the injured person

knew of the risk and voluntarily assumed it.

• Defense can be used for actual participants, as well as

spectators and bystanders.

• Assumption of the risk can be express or implied.

Exception: The assumption of risk doctrine does NOT apply in

emergency situations.

Superseding Cause

A unforeseeable, intervening act that breaks

the causal link between defendant’s act and

plaintiff’s injury, relieving defendant of liability.

A superseding intervening force breaks the

connection between a wrongful act and an

injury.

Comparative vs. Contributory Negligence

Comparative: Plaintiff’s recovery is reduced by their % of fault.

Contributory: Plaintiff’s own negligence can completely bar recovery.

Memory:

Comparative = % reduced

Contributory = Can’t recover

Exam trigger:

“Plaintiff is 20% at fault and gets 80% of damages” → Comparative.

In a few states, contributory negligence ABSOLVES the

tortfeasor COMPLETELY, if the injured person failed to

exercise reasonable care. In most states, comparative

negligence REDUCES the amount of the tortfeasor’s

liability, if the injured person failed to exercise reasonable

care. REVISIT: Most states have replaced contributory

negligence with the doctrine of comparative negligence.

Res Ipsa Loquitur

Latin: “the thing (ACCIDENT) speaks for itself”

Negligence may be inferred (and a defendant MUST prove that

he or she was NOT negligent), if the event causing damage or

injury is one that ordinarily does not occur in the absence of

negligence (train derailments or falling elevators).

The injury must be caused by something within the exclusive

control of the defendant, and it must NOT have been due to

any act on the part of the injured party.

• Facts and circumstances create presumption of negligence

by Defendant.

• Burden of proof shifts to Defendant to show he was NOT

negligent.

“Danger Invites Rescue” Doctrine

If a person commits an act that endangers another,

the person committing the act will be liable for any

injuries the other party SUFFERS, as well as any

injuries suffered by a THIRD PERSON attempting to

rescue the endangered party.

Good Samaritan Statutes

Most states have Good Samaritan statutes,

under which persons who are aided

voluntarily by others CANNOT sue them for

negligence.

Strict Liability

Liability without needing to prove negligence or fault.

Memory:

“Danger = Liability.”

Abnormally Dangerous Activities

Rule: Strict liability applies when an activity has a serious risk of harm that reasonable care cannot eliminate.

Example: Using explosives

Memory:

“Too dangerous to make completely safe = Strict liability.”

Wild Animals

Rule: A person who keeps a dangerous wild animal is strictly liable for harm caused by the animal.

Memory:

“Wild + dangerous = You pay.”

Products

Rule: Manufacturers can be strictly liable for injuries caused by a defective or unreasonably dangerous product, even without negligence.

Examples:

Manufacturing defect

Design defect

Inadequate warning

Memory:

“Defective product → Manufacturer pays.”

Exam Shortcut

Strict Liability = No need to prove fault

Wrongful interference

Contractual Relations

Rule: Someone intentionally causes a party to break an existing valid contract.

Elements:

Valid contract between 2 parties

Third party knows about the contract

Third party intentionally causes a breach

Memory:

“Contract + Know + Cause breach.”

Example:

A and B have a contract. C knows about it and convinces B to break it.

Interference with contractual relations

Important: C must actually cause the breach. Simply benefiting from the broken contract isn't enough.

Prospective Business Advantage

Rule: Someone wrongfully interferes with a future business opportunity.

Unlike an existing contract, there isn't necessarily a definite contract yet.

Memory:

Contract = Already have it

Prospective = Might have it

Example:

A competitor intentionally uses wrongful tactics to prevent a business from getting a likely customer.

Competition vs. Predatory Behavior

Normal competition = Generally allowed

Predatory/wrongful interference = Can create liability

Memory:

“Compete = Okay. Sabotage = Not okay.”

Defense: Bona Fide Competition

Rule: Legitimate competition is a privileged/permissible interference, even if it causes someone to lose a contract.

Exam Shortcut

Existing contract + intentionally cause breach → Contractual interference

Future business opportunity + wrongful interference → Prospective advantage

Legitimate competition → Defense

Disparagement of Property

Disparagement of Property

Rule: False statements about someone's product or property that cause economic harm.

Memory:

“False statement + Property + Money loss.”

Slander of Quality

Rule: False statement saying someone's product isn't what they claim it is.

Example:

“This company's watches are fake—they aren't actually gold.”

Must prove actual damages.

Memory:

QUALITY = Product quality

Slander of Title

Rule: False statement that denies or casts doubt on someone's ownership/title to property, causing financial loss.

Example:

“Jake doesn't actually own that house.”

Memory:

TITLE = Who owns it?

The Tort Law System and Tort Reform

The Tort Law System

The tort law system has been criticized as

encouraging trivial and unfounded lawsuits,

excessive damage awards, and costly changes

in response (such as physicians’ ordering

unnecessary tests).

Tort Reform Legislation

At the federal level, the Class Action Fairness Act shifted

jurisdiction over cases (involving large numbers of plaintiffs

and large amounts of potential awards) to the federal

courts. At the state level, about half of the states have

limited damages—or banned punitive damages—especially

in medical malpractice cases

Contract

A contract is a legally binding agreement between two or more

parties that creates mutual obligations enforceable by law. A

contract is based on a "promise" for a promise (or a promise +

performance) which is a manifestation of the intention to act or

refrain from acting in a specified way.

Elements of a Valid Contract

For a contract to be valid and enforceable, it must contain the following essential elements:

Offer and Acceptance:

One party must make a clear and definite offer, and the other must accept it unequivocally. Acceptance must mirror the terms of the offer exactly—a principle known as the mirror image rule.

Consideration:

There must be something of value (bargained-for-exchange) between the parties. Consideration can also be a promise to perform a certain action or refrain from doing something. It can be as small as a ‘peppercorn.’ NOTE: Distinguish a contract from a gift.

Mutual Intent to be Bound:

Both parties must INTEND to make the agreement legally binding. NOTE: Preliminary negotiations or advertisements are NOT considered offers but invitations to negotiate.

Capacity:

The parties must have the legal capacity to enter a contract.

NOTE: This generally excludes minors, mentally incapacitated individuals, and intoxicated people—they are void or voidable.

Legality:

The contract's purpose must be lawful. Contracts for illegal activities are void and unenforceable. Contracts can also become illegal and voided, when law change.

Genuine Consent:

The agreement must be entered into freely, without duress, undue influence, fraud, or mistake.

Types of Contracts

Express Contracts:

Formed by explicit written or spoken language expressing the agreement and its terms.

Implied Contracts:

Established by the parties' actions rather than explicit words, indicating a mutual intent to contract.

Bilateral Contracts:

Involve mutual promises between two parties.

Unilateral Contracts:

Involve a promise by one party in exchange for an act by the other party.

Void Contracts:

Agreements lacking one or more essential elements, rendering them unenforceable.

Voidable Contracts:

Valid contracts that one party may choose to void, often due to issues like lack of capacity.

Offer termination

Offers can be terminated by:

Revocation: The offeror withdraws the offer before acceptance.

Rejection: The offeree declines the offer.

Counteroffer: The offeree proposes a new offer, terminating the original

offer.

Lapse of Time: The offer expires after a reasonable period.

Operation of Law: Events such as death or illegality terminate the offer.

Offer acceptance

Acceptance must be:

• Unconditional: No new terms are introduced.

• Unequivocal: Clear and unambiguous.

• Communicated: Acceptance must be conveyed to the offeror using an appropriate method.

Mirror Image Rule

Under the common law, an

acceptance must match the terms

of the offer exactly—it must be the

"mirror image" of the offer—to

form a contract.

Any change: A reply that adds, deletes, or changes a term is not an acceptance; it is

a rejection and a counteroffer.

Original offer ends: The counteroffer terminates the original offer, so the offeree

can no longer accept it.

Mere inquiries: A request or question ("Would you take less?") is not a

counteroffer and does not end the offer.

Battle of the forms: When parties exchange conflicting forms, the "last shot"

doctrine applies—the last form sent before performance generally governs.

UCC contrast: For the sale of goods, UCC § 2-207 relaxes the rule; an acceptance

with additional terms can still form a contract.

Last Shot Rule

The last form sent before performance controls the contract terms.

Often associated with common-law analysis.

Last form = “Last shot wins.”

Meeting of the Minds

A contract requires mutual assent: both

parties must agree to the same terms, in

the same sense, at the same time. This

"meeting of the minds" is shown

through offer and acceptance.

Objective theory of contracts: Courts look at what the parties

said and did, as a reasonable person would understand it—

not at their secret, unexpressed intentions.

Lucy v. Zehmer (Va. 1954): Zehmer claimed his written

promise to sell his farm was a joke. Because his words and

conduct reasonably appeared serious, the contract was

enforced.

Misunderstanding: If the parties attach materially different

meanings to a key term and neither knows or should know of

the other's meaning, there may be no meeting of the minds.

Raffles v. Wichelhaus (1864): Two ships named "Peerless"

sailed months apart; each party meant a different ship, so no

contract was formed.

Consideration

Consideration is the value exchanged between parties

and is a fundamental element for a contract's

enforceability. It can be a benefit to the promisor or a

detriment to the promisee. Courts generally do not

assess the adequacy of consideration.

Modification Requires New Consideration

Under the common law, a

modification of an existing contract

is a new promise, so it must be

supported by new consideration to

be enforceable.

One-sided changes fail: If only one party's obligations change (for example,

the price goes up while the work stays the same), the modification is generally

unenforceable.

Mutual changes succeed: If both parties take on new or different obligations,

there is fresh consideration and the modification binds.

Unforeseen circumstances: Under Restatement (Second) § 89, a modification

may be enforced without new consideration if it is fair and equitable in light

of circumstances the parties did not anticipate

Pre-Existing Duty Rule

A promise to do (or the actual doing

of) something one is already legally

obligated to do is NOT consideration

for a new promise.

Capacity and Legality

Parties must have the legal capacity to contract. Contracts with minors are typically voidable at the minor's option.

Certain contracts CANNOT be disaffirmed by minors, such as those for necessities or statutory exceptions like

student loans.

A contract must have a lawful purpose. Contracts involving illegal activities, such as committing a crime or tort, are

void.

Exculpatory clauses that release a party from liability for wrongful acts may be deemed unenforceable if they violate

public policy. They are generally enforceable for extreme sports and racing.

Genuine Consent

Contracts must be entered into with genuine consent. Factors affecting consent include:

• Misrepresentation: False statements that induce a party to enter the contract.

• Fraud: Intentional deception to secure unfair gain.

• Duress: Threats that coerce a party into contracting.

• Undue Influence: Exploitation of a position of power over another party.

Statute of Frauds

Certain contracts must be in writing to be enforceable, as stipulated by the Statute of Frauds. These typically include:

• Contracts for the sale of land.

• Contracts that cannot be performed within one year.

• Promises to pay the debt of another.

• Contracts made in consideration of marriage.

Parole Evidence Rule

When the parties put their agreement in a final written form, evidence of prior or contemporaneous oral or written agreements cannot be used to contradict or vary the terms of the writing.

Integration: The rule applies only if the writing was intended as the final

expression of the agreement. A merger (integration) clause—"This is the

entire agreement"—is strong evidence of this.

Full vs. partial integration: If the writing is complete and exclusive, even

consistent additional terms are barred; if only partially integrated, consistent

additional terms may be shown.

Exceptions: Parole evidence is admissible to clarify ambiguity, or to prove

fraud, duress, mistake, or illegality.

Also allowed: Evidence of later modifications, of a condition precedent to the

contract taking effect, and of trade usage or prior dealing to interpret terms

Example: A written, fully integrated lease states rent of $2,000 per month. The tenant cannot introduce evidence that the

landlord orally promised, before signing, to charge only $1,800.

Performance and Discharge

Contracts can be discharged through:

• Performance: Fulfillment of contractual obligations.

• Breach: Failure to perform as specified, which can be material or immaterial.

• Agreement: Mutual consent to terminate or modify the contract.

• Operation of Law: Circumstances such as impossibility or illegality.

Remedies for Breach

When a breach occurs, the non-breaching party may seek remedies, including:

Damages:

• Compensatory: To cover direct losses.

• Consequential: To cover indirect and foreseeable losses.

• Liquidated: Pre-determined damages specified in the

contract.

Equitable Remedies:

• Specific Performance: Court order requiring performance as

specified.

• Rescission: Cancellation of the contract.

• Reformation: Modification of contract terms to reflect true

intent.

Third-Party Rights

Assignments: Transfer of contractual rights to a third party.

Delegations: Transfer of contractual duties to a third party.

Third-Party Beneficiaries: Individuals who, although not a party to the contract, stand to benefit from it and may have enforceable rights.

Promissory Estoppel

Simple definition:

Promissory estoppel allows a court to enforce a promise even without consideration when someone reasonably relied on the promise and would suffer an injustice if it wasn't enforced.

Think:

“You made a promise → I relied on it → now you can't fairly take it back.”

Example:

A company promises an employee, “If you move to Texas for this job, we'll give you a $10,000 relocation payment.”

The employee moves to Texas relying on that promise. The company then refuses to pay.

Even though the employee may not have given traditional consideration for the promise, a court may enforce it because the employee reasonably relied on the promise.

Unconscionability

Simple definition:
Unconscionability means a contract is so extremely unfair or oppressive that a court may refuse to enforce it.

Think:

“This deal is WAY too unfair.”

Example:
A company gives a consumer a contract with extremely one-sided terms that the consumer had essentially no meaningful ability to understand or negotiate, while the company gets almost all the benefits.

A court may decide the contract—or certain terms—are unconscionable and refuse to enforce them.

Choice of law in a contract

Specifies which jurisdictions law will apply if the parties go to litigation over the contract

Implied-in-Fact Contract

Simple definition:
A contract that is not explicitly stated, but the parties’ actions/conduct show that they intended to make a contract.

Think:

“We never said it, but our actions show we agreed.”

Example:
You sit down at a restaurant, order a meal, eat it, and then pay the bill.

You never explicitly say, “I agree to pay for this meal,” but your actions show that you and the restaurant understood the agreement.

Quasi Contract - Implied in law contract

Simple definition:
A court-created obligation that is imposed even though there is no actual contract, to prevent one person from being unfairly benefited at another person’s expense.

It’s technically not a true contract.

Think:

“No contract, but it wouldn’t be fair to let you keep the benefit for free.”

Example:
A doctor provides emergency medical treatment to an unconscious person who cannot consent.

Conflicting terms under UCC

1. Knockout Rule

Definition:
The conflicting terms cancel each other out, and the UCC’s gap-filler rules provide the replacement term.

Example:

• Buyer: “Delivery on December 1.”

• Seller: “Delivery on December 15.”

Both terms conflict → both are knocked out.

The UCC supplies a reasonable delivery term.

Memory:

Conflict = Knock them OUT

2. Fallout Rule

Definition:
The conflicting term falls out of the contract entirely.

The court doesn’t automatically replace it with the other party’s term.

Example:

• Buyer: “Delivery December 1.”

• Seller: “Delivery December 15.”

Both delivery terms conflict → the delivery-date terms fall out.

The contract remains, but neither December 1 nor December 15 controls.

Memory:

Fallout = The conflicting term FALLS OUT

Important: The exact treatment can vary by jurisdiction; some courts use the knockout rule instead.

3. Treat Like Additional Terms

Definition:
The conflicting term is treated like an additional term under UCC § 2-207.

Instead of automatically knocking both terms out, the court asks whether the term should become part of the contract using the rules for additional terms.

Example:

Buyer:

“Delivery December 1.”

Seller:

“Delivery December 15.”

The seller’s December 15 term is treated like an additional term, and the court applies the § 2-207 rules to determine whether it becomes part of the contract.

UCC: What term must be specified?

Quantity is the only term that generally must be specified for a contract for the sale of goods under the UCC.

Why?
The UCC can fill in many missing terms, such as price, delivery, and payment, but it needs to know how much is being bought/sold.

Goods under UCC

Are tangible and movable

A contract for a sale of minerals

(including oil and gas) is a contract

for a sale of goods.

A sale of growing crops or timber to be CUT is a

sale of goods regardless of who severs them.

Money and intangible items are not tangible

goods

Sales under UCC

A sale is “the passing of TITLE from the

seller to the buyer for a PRICE”.

 The price may be payable in money,

goods, or services.

Open terms under UCC

A sales or lease contract will not fail for

indefiniteness even if one or more terms are

left open, as long as:

(1) the parties intended to make a contract and

(2) there is a reasonably certain basis for the

court to grant an appropriate remedy.

If the quantity term is left open, a court will

have no basis for determining a remedy

Written Confirmation Rule — UCC

This is an exception to the Statute of Frauds for contracts between merchants.

Simple idea

Two merchants make a sales or lease agreement orally.

Normally, the UCC Statute of Frauds requires a writing for certain transactions.

But the Written Confirmation Rule can satisfy the writing requirement when:

1. Both parties are merchants

2. They make an oral agreement

3. One merchant sends the other a written confirmation within a reasonable time

4. The receiving merchant doesn’t object in writing within 10 days

If those conditions are met, the confirmation can satisfy the Statute of Frauds against the merchant who received it

Statute of Frauds under UCC

The UCC requires for the enforceability of a contract for a sale

of GOODS (when the price of the goods is $500 or more or for

a LEASE for payments of $1,000 or more) to be

………..signed by the party against whom enforcement is

sought

Acceptance under UCC

Generally, acceptance of an offer to

buy or sell goods may be made in

1. any reasonable manner, and

2. by any reasonable means

Example: acceptance may be by either:

1. a prompt shipment of goods, or

2. a promise to ship

When acceptance by PERFORMANCE is reasonable, “an offeror who is not notified

of acceptance within a reasonable time

may treat the offer as having lapsed before

acceptance”.

Modification with non merchants

Non-merchants: when one party or both parties is NOT a merchant.

If the modifications are not conditional, and

ONLY one of the parties is a merchant, the

contract is formed according to the terms of

the ORIGINAL OFFER.

Consideration under UCC

The UCC requires NO consideration for an

agreement modifying a contract.

 Of course, modification must be sought

in “good faith”.

Exceptions to the Statute of Frauds under UCC

A contract otherwise subject to the Statute of Frauds will be enforceable DESPITE THE ABSENCE OF A WRITING if—

a) The contract is for specially manufactured goods for a particular buyer and the seller has substantially started to manufacture the goods.

b) An oral contract for a sale or lease of goods is enforceable to the extent of performance.

c) The party against whom enforcement of a contract is sought admits that a contract for sale was made, but only to the extent of the quantity admitted.

Magnuson-Moss Warranty Act:

Regulates

written warranties on consumer products

Warranty Disclaimer

Statement that negates express and implied

warranties

Rules for disclaiming implied warranties

 “As is” disclaimer  Makes it clear to the buyer that there are no

implied warranties disclaims all implied warranties

 Disclaimer of the implied warranty of

smerchantability

Specifically mentions the term merchantability for

the implied warranty of merchantability to be

disclaimed

 Disclaimers may be oral or written

Disclaimer of the implied warranty of fitness for a

particular purpose

 Contain general language, without specific use of

the term fitness

 Disclaimer has to be in writing

Implied Warranty of

Merchantability

Sold or leased goods are fit for the ordinary

purpose for which they are sold or leased, as well

as other assurances

 Unless properly disclosed

Does not apply to sales or leases by non-

merchants or casual sales

Standards required to be met  Goods must be fit for the ordinary purposes for

which they are used

Implied Warranty of Fitness

for a Particular Purpose

 Arises when a seller or lessor warrants that the

goods will meet the buyer’s or lessee’s

expressed needs

 Applies to both merchant and nonmerchant

sellers and lessors

Sales of goods by non owners under UCC

Stolen goods

 Void title: Situation in which a thief acquires no

title to goods he or she steals

▪ Real owner can reclaim the goods from the

purchaser or lessee who purchased or leased

goods from a thief

Fraudulently obtained goods

 Voidable title: Title that a purchaser has on

goods obtained by fraud, a check that is later

dishonored, or impersonation of another person

Risk of Loss

Article 2 of the UCC allows:  Parties to a sales contract to agree among them

who will bear the risk of loss if the goods subject

to the contract are lost or destroyed

UCC mandates who will bear the risk of loss if the

parties do not have a specific agreement  Shipping terms: Terms in sales contracts that

stipulate which party bears the risk of loss of the

goods during shipment 12 - 51 © 2016 by Pearson Education, Inc

Identification of Goods

Distinguishing of the goods named in a contract

from the seller’s or lessor’s other goods

 Seller or lessor retains the risk of loss of the

goods until he or she identifies them in a sales or

lease contract

UCC 2-401(1) and 2-501 prevent title to goods

from passing from the seller to the buyer unless

the goods are identified in the sales contract

Open terms under UCC

Major term of a sales or lease contract left open

Examples

 Open price term  Open payment term

 Open delivery term  Open time term

 Open assortment term

Article 2A (Leases)

 Article of the UCC that governs leases of goods

 Directly addresses personal property leases

 Establishes a comprehensive uniform law

covering the formation, performance, and default

of leases in goods

Lessor: Person who transfers the right of

possession and use of goods under a lease

 Lessee: Person who acquires the right to

possession and use of goods under a lease

The firm offer rule under ucc

The Firm Offer Rule

A merchant’s offer can be irrevocable without consideration

The Scope of Article 2 · The Sale of Goods 14

T H E R U L E

If a merchant gives assurances in a signed writing that an offer will remain open, the

offer is irrevocable, WITHOUT CONSIDERATION, for the stated period of time—or, if

no definite period is specified, for a REASONABLE PERIOD (neither period to exceed

three (3) months).

A Merchant

The offer is made by a merchant

to buy, sell, or lease goods.

A Separate Signed

Writing

The merchant assures the other

party in a separate writing that

the offer will be held open.

Strict Liability

Liability regardless of intent or reasonable care

The Scope of Article 2 · The Sale of Goods 39

T H E R U L E

A defendant may be liable regardless of intent or the exercise of reasonable care. Liability does not depend

on privity of contract. Strict liability is imposed as a matter of public policy.

What Must Be Shown

It need not be shown why or how a product became

defective, but it must be shown that at the time of the

injury, the product’s condition was essentially the same as

it was in the hands of the manufacturer or seller.