Contracts

ROADMAP

my analytical plan starts by first evaluating:

what law governs, having determined what law governs, i will look for

was a contract formed, having found a contract, i will look for

defenses that block the enforcement of the contract, if no legal defenses are found I will determine

what are the terms, having identified the terms, I will determine
whether there was a breach of the contract. if a breach is found, i will then determine
whether there are any legal excuses that will excuse the breaching party. If there is no legal excuse, I will determine

whether there are any remedies. if it is determined that there was not a contract formed, i will determine any

alternative theories to either enforce the agreement or look for relief

now I will begin with dispute 1 between x and x; and i will apply my analytical plan beginning with what law governs this dispute.

What law governs

Common law governs all contractual disputes unless the dispute is otherwise governed by a statute. to determine what law governs, the most efficient way is to do an article 2 statutory analysis. the statute that will be utilized is UCC article 2.

Article 2 Scope Analysis

Article II governs “(1) transactions in (2) goods.” 2-102. There are two elements and both are necessary. I will first see if there is a transaction, then I will look for a good.

Transaction

transaction is not defined in the code, however, courts have generally taken transaction to mean "contract for sale". contract for sale is defined in §2-206 to mean "present sale". sale is further defined in the same section to mean the passing of title from seller to buyer for a price. therefore a transaction is (1) an agreement for (2) the passing of title (3) from seller to buyer (4) for a price. there are four elements and all are necessary.

an agreement, i.e., a meeting of the minds about the same thing at the same time (or mutual assent)

passing of title, i.e., transfer of ownership from seller to buyer with no expectation of getting it back

from seller to buyer, i.e., from the person with the title to the person who wants the title

for a price, i.e., an amount payable by money, service, or property

I will now look for a good in the fact pattern.

Good Rule Statement

a good is defined in §2-105 as (1) things which are (2) moveable (3) at the time of identification of the contract. There are 3 elements and all are necessary.

things, i.e., tangible and touchable item (including those that are manufactured)

moveable, i.e., not fixed to land

at the time of identification, i.e., when the contract is made for existing and identified goods

What law governs Conclusion Statement

Now that I have found both a good and a transaction, I can preliminarily say that Article 2 governs this dispute. However, before I can conclusively say Article 2 governs this dispute, I must determine if there are any non-goods in the fact pattern. If there are any non-goods, the transaction is a mixed transaction and I must apply the predominate purpose test to determine whether UCC or common law governs this dispute.

Predominate Purpose Test

The predominate purpose test is a totality of the circumstances test that uses (1) the language of the contract (2) the nature of the business of the supplier (3) the intrinsic value of the agreement (4) gravamen of the complaint and (5) the intensity of the labor on the good compared to time spent on the services.

There are five factors, none are dispositive, the direction in which they lean heaviest will determine how we categorize this dispute.

the language of the contract, i.e. the communication between the offeror and the offeree

the nature of the business of the supplier, i.e. what the supplier specializes in

the intrinsic value of the agreement, i.e. how much money was allocated

the gravamen of the complaint, i.e. where the complaint arises,

the intensity of the labor, i.e. was there more time spent on goods or services.

having determined that the predominant purpose of the transaction is goods, I can now conclusively say that the UCC governs this dispute. Having determined what law governs, I will now determine if a contract was formed

Was a Contract Formed

A contract is a promise or a set of promises for the breach of which the law gives a remedy as determined by the UCC. A promise is a manifestation of the intention to act or refrain from acting in a specified way, so made as to justify a promisee to understand that a commitment has been made. A contract must have mutual assent and consideration. Mutual assent is a meeting of the minds of the parties about the same thing at the same time and is evidenced by (1) an offer and (2) 3 an acceptance. The court will use the objective theory of interpretation test to analyze words (oral and written), conduct, and context from the perspective of a reasonable person in the position of the hearer. I will first look for an offer, then an acceptance, and then consideration. If all three are present, then I can reasonably conclude that a contract was formed. I will now begin my analysis and apply the objective theory test to each communicative event.

Offer

An offer is the (1) manifestation (2) of willingness to (3) enter into a bargain (4) so made as to justify (5) to another person (6) in understanding that their assent to that bargain is invited (7) and will conclude the deal now. There are seven elements and all are necessary.

manifestation, i.e., tangible and perceived expression of words, oral or written, conduct, and context
willingness, i.e., present intent to conclude the deal now
enter into a bargain, i.e., an exchange of this for that
justify, i.e., sufficient detail for the court to provide remedy if there has been a breach
another person, i.e., the specific another to whom the speaker is speaking
assent invited, i.e., an invitation to say yes or no
conclude the deal, i.e., the offeror has said everything that needs to be said to the offeree
Now that I have identified the offer within the event, I will need to also consider the event when identifying the acceptance

Offer Communicated

An offer is communicated when it was received, actually; i.e. the offeree is aware of receipt or constructively; i.e. there is evidence that the acceptance was received, by the offeree.

Acceptance Conclusion Statement

An acceptance is a (1) manifestation of (2) unequivocal assent (3) to the terms thereof (4) made by the offeree (5) in the manner invited or required by the offeror. There are five elements and all are necessary.

manifestation, i.e., tangible and perceived expression shown through words (oral or written), conduct, and context

unequivocal assent, i.e., an agreement to the same bargain proposed by the offeror without any conditional or stipulating language

by the offeree, i.e., the targeted another who holds the power of acceptance

to the terms, i.e., to all the material terms of the offer specified by the offeror without adding or changing anything

in the manner required, i.e., the mode of acceptance by the offeror

I have now identified mutual assent as evidenced by offer and acceptance. I will now look for if the acceptance was communicated.

Acceptance Communicated

Now that I have found an acceptance, I will now look to see if acceptance was communicated.

An acceptance is communicated when it was received, actual, i.e. the offeror is aware of receipt or constructive, i.e. there is evidence that the acceptance was received, by the offeror.

Having determined that acceptance is valid, I can now conclude that there was mutual assent between the parties as evidenced by an offer and an acceptance. I will now look to see if the final element of consideration has been met to determine if a contract has been formed.

Consideration

Consideration is a (1) bargained for (2) legal detriment. There are two elements and both are necessary

Bargain For

A performance or return promise is bargained for is (1) induced by the original promise and (2) the promisor is aware of the promise. There are two elements and both are necessary.

inducement, i.e. to motivate the party to give something of value to the other or to take an action

awareness, i.e. to be cognizant of, anticipate, request, or rely upon the promise

Legal Detriment

A legal detriment means agreeing to do something you are not legally required to do or forbearing from doing something you have a legal right to do. To identify legal detriment, the courts apply a three-step process: First, the courts see if the promisor was seeking a legal detriment, i.e. loss or harm from the promisee. If there is no detriment, the courts look to see if the promisor was seeking a legally recognized selfish benefit for themselves. If there is no benefit, then the courts will see if either party agreed to do something that they were not otherwise legally obligated to do or if they forbore from doing something that had a legal right to do.

Here, x incurred a legal detriment because x

Was a Contract Formed Transition Conclusion

I have concluded that a valid contract was formed between x and x, as the elements of offer, acceptance, and consideration have been satisfied. Having established this, I will now analyze whether any legal defenses may prevent the enforcement of this contract

ANY DEFENSES BLOCKING THE ENFORCEMENT OF THE CONTRACT?

A defense is a behavior at the time of the forming of the contract that allows the parties to disavow the contract. The defense of statute of frauds applies. §2-201(1) states that a contract of $500 or more is unenforceable unless there is sufficient writing that a contract for sale has been made and signed by the party against whom enforcement is sought. the only required term is quantity and no contract shall be enforced outside of said quantity.

What are the Terms Rule Statement

When interpreting a contract, one must look at the document as a whole from the perspective of an objective person. To determine the terms of the contract, courts will look at the (1) express terms, (2) implied terms, (3) statutory supplied terms under the UCC, and (4) court-supplied terms. I will analyze each of the terms within the contracts by category, beginning with the express terms.

Express terms

Express terms are those which express the parties’ intention either orally or in writing to be the final expression on those terms.

Express Terms A.1: Was there an Integration?

An integrated agreement is a writing intended to represent the final expression of an agreement. A writing is integrated when it constitutes the (1) final expression of (2) one or more terms of the (3) agreement.

final written expression, i.e., a term that is in black and white on a record (paper or electronic)

one or more terms, i.e., some or all

agreement, i.e. the bargain of the parties in fact, as found in their language or inferred from other circumstances, including course of performance, course of dealing, or usage of trade

Having determined the writing was integrated, I will now identify what those integrated terms were.

Express terms A.2: what are the integrated terms?

The integrated terms of the agreement are x because they were agreed upon in the writing.

Integrated terms are promises and conditions made by either party to the contract.

Here, the terms of x were written into the record because

Having found the terms that were integrated, I will now determine if there’s a term outside the integration that one of the parties is trying to argue a part of the contract.

Express terms A.3: is there a term outside of the integration?

A term outside of the integration is any term that is introduced prior to or during contract formation. Terms (1) outside the integration may be (2) written or oral that (3) were negotiated and agreed upon by both parties.

outside the integration, i.e. not in the record, is/is not present because.

written or oral, i.e. by one of the party’s with ink or the equivalent

negotiated and agreed upon by both parties, is/is not present because.

Having found that there’s a term outside the integration that one of the parties is trying to argue is a part of the contract, I will now determine when that term was supposedly agreed upon to determine if it is Parol Evidence.

Express terms A.4: When was the term agreed upon? (Parol Evidence Step 1)

The Parol Evidence Rule is used to determine whether extrinsic evidence was intended to be part of an original written agreement. Thus it only comes into play when there is an integration. Parol evidence is extrinsic evidence ( i.e., oral or written evidence) prior to or during the agreement formation. Extrinsic evidence from after the agreement is considered to be contract modification.

Outside written terms are considered parol evidence when they are introduced pre-contract formation. Outside oral terms are considered parol evidence when they are introduced pre-contract formation or at the time of contract formation. There are three ways a term can possess legal significance in a contract. The first way is through (1) terms prior to the contract, (2) terms added during the time of the contract, (3) terms added after the contract.

Here terms were/were not introduced…

prior to the formation of the contract = before there was mutual assent and consideration

during the time of contract and oral = while forming mutual assent and consideration not in writing

during the time of contract and in writing = while forming mutual assent and consideration integrated on paper

after a contract has been formed = after the parties integrated their terms in writing with mutual assent and consideration

Having determined that the outside term is/is not parol evidence, I now need to determine what effect this term will have on the integrated agreement if introduced.

Express Terms A.5: What is the effect of the parol evidence (Parol Evidence Step 2)

The ability of a party to introduce an outside term depends on the effect this term will have on the contract. A term contradicts when it is in direct conflict with the express terms of the contract. A term adds when it brings something new to the contract that was not expressly written. Finally, a term explains when it clarifies ambiguities that otherwise were not expressly clear within the contract.

Here, express term x attempts to introduce x. This term will add because

Having determined that the outside term adds to the integrated agreement, I will now determine the relevant Parol Evidence rule

Express Terms A.6(1) : What is the relevant Parol Evidence rule - ADD

Before I can determine whether the outside terms can be added to the contract, I must first determine whether the contract is fully or partially integrated.

To determine if an agreement is fully integrated, courts look at the totality of the circumstances weighing various factors including: (1) merger/integration clauses, (2) the extent of the negotiations between the parties, (3) the sophistication of the parties, (4) disclaimer clauses, (5) the involvement of lawyers in the formation of the contract, (6) material terms that would have ordinarily been included in the contract, and (7) whether the parties would have normally agreed on an additional term, but it is absent from the agreement.

merger/integration clauses = clause stating the agreement is complete and exclusive

the extent of the negotiations = multiple drafts or detailed bargaining

the sophistication of parties = experienced or legally savvy parties

disclaimer clauses = denies reliance on outside terms

involvement of lawyers = important terms buried in small print

ordinarily be included = contract drafted or reviewed by counsel

absent from the agreement = term like arbitration usually written down

Having determined that the contract is fully/partially integrated, I will now apply the corresponding parol evidence rule.

Express Terms A.6(2): Add - Parol Evidence Rule

A term adds to the contract by supplementing something new to the integrated agreement that was not expressly written. Terms relating to the course of performance, course of dealings or usage of trade may always be added. §2-202(a). However, a consistent additional term may be added by parol evidence only if there is partial integration but not if there is a full integration. §2-202(b).

Express terms transition C

Therefore, in the contract between x and x, the outside term may be introduced to the jury because x

Implied Terms

Implied terms are those inferred from the particular circumstances of the parties, implied by the court, and implied by statute. They are based on the unspoken understanding and expectations that each party brings to the transaction.

A: Here, x terms are implied by circumstances in this agreement because

Custom = When a custom or usage is established, in absence of expressed provisions to the contrary, it is considered a part of a contract and binding on the parties though not mentioned therein, the presumption being that they know of and contracted with reference to the custom or usage.

Course of Performance = Where the contract involves repeated occasions for performance by either party, the course of performance is relevant to the meaning of the contract.

Course of Dealing = A court may look at the sequence of conduct concerning previous transactions between the parties to explain the contract.

Usage of Trade = A court may look at a practice or method of dealing that regularly occurs in a particular trade, place, or vocation. When a custom or usage is established, in absence of expressed provisions to the contrary, it is considered part of a contract and binding on the parties though not mentioned therein because it is presumed that they know of and contracted with knowledge of customs or usage.

Court Supplied Terms

The court may supply certain terms as is the following:

Best Efforts = Must use best efforts to supply goods (seller) and promote the sale (buyer).

Good Faith = All contracts require honesty in fact.

Constructive Conditions = A condition that was not agreed upon by the parties, but that is supplied by the court to ensure fairness. This condition must occur before the performance would arise. Whoever has the longest performance has to perform first.

Statutory Terms “Gap Fillers”

Under the UCC, statutory supplied terms are encoded by statute and can be gap fillers, i.e., default rules to supply missing terms, or implied terms evidenced by the experiences of the parties or established by statute.

Here, the statutorily supplied terms of the agreement are: §1-304 /§1-201(b)(20) - Good Faith/Definition of Good faith. §2-301 - General Obligations of Parties. §2-307 - Delivery in Single Lot. §2-308(a) - No Specified Place Delivery. §2-309(1) - Absence of Specified time. §2-310(a) - Time of Payment.

What are the terms? BIG C

Thus, the terms of the contract are x because of x. There are x express terms, x implied terms, x statutorily-supplied terms, and x court-supplied terms, because

Was there a breach?

A breach occurs when a party fails to perform as promised within a given contract. The consequences of the breach will depend on the timing and the magnitude of the breach. There are two types of breaches: (1) actual and (2) anticipatory

actual = where a party fails to perform when performance is due

anticipatory = party indicates in advance that they will not perform.

Are there any Legal Excuses?

The occurrence of changed circumstances may make a contract impossible or impracticable to perform or may frustrate the purpose of the contract. Where the non-occurrence of an event was a basic assumption of the parties in making the contract and neither party has assumed the risk of the event occurring, contractual duties may be excused.

Because there are no legally recognized excuses x is applicable to the contract, x is responsible to perform, and thereby not excused for their breach of conduct.

What remedies are available?

Since there was a breach, the aggrieved party is entitled to x because x

The goal of remedies is to put the aggrieved party in the position that would have been if the contract had been fully performed. The aggrieved party’s right to general damages are limited by (1) reasonable foreseeability of the damages, (2) reasonable certainty of the damages, (3) and mitigation. The damages must be reasonably foreseeable to the parties at the time of contracting or at the time of breach. Damages are generally foreseeable when they are foreseeable to reasonable people similarly positioned or special/consequential when they are foreseeable because at the time of contracting, the breaching party knows or should have known that in the event of breach no substitute performance was readily available thus aggravating the damages. The fact of loss and its amount must be proved with reasonable certainty. Speculative or difficult to prove damages may prevent the aggrieved party from recovering general damages. Damages that could have been avoided by reasonable efforts cannot be recovered as general damages.

Are there any alternative theories that provide relief - Promissory Estoppel

(1) A promise (2) made by the promisor (3) who should reasonably expect promisee to take action (4) which did in fact induce action or forbearance (5) resulting in loss or harm(detriment) (6) which enforces the promise to the extent necessary to avoid an injustice. The promise must, in fact, in the promissee’s action or forbearance. The enforcement of the promise is necessary to avoid injustice. The remedy may be limited as justice requires.

a promise, i.e. a guarantee.

Made by the promisor, i.e. a guarantee created by the person who is the master of the promise.

Reasonably expecting the promise to take action, i.e. prompting the promise to move on the promise given.

Inducing in fact action or forbearance, i.e creating an act on the part of the promisee.

Resulting in loss or harm (detriment), i.e. a loss of the ability to do something or have something.

Enforces the promise to the extent necessary to avoid an injustice, i.e. applying the intention to act so as to not create an unjust act.