Contracts Law Lecture Notes: Duress, Unconscionability, Parol Evidence, Conditions, and Breach

Comprehensive vocabulary flashcards covering the key cases, tests, and doctrines from contract law lecture notes, including duress, misrepresentation, unconscionability, public policy, UCC 2-207, parol evidence, interpretation, good faith, conditions, substantial performance, waiver, and divisibility.

Duress

An agreement induced by an improper threat or an act that a party did not have the legal right to do, leaving the victim with no reasonable alternative.

Reasonable Alternative (Duress)

A legal inquiry in duress doctrine that asks why the threatened party did not choose to sue rather than submit, evaluating whether litigation would fail to recover losses or prevent catastrophic injury.

Austin Instrument, Inc. v. Loral Corp.

A case finding economic duress where a contractor faced government deadlines, severe financial penalties, and blackballing, leaving them with no real alternatives when a subcontractor withheld parts.

Centech Group v. Getronicswang

A case confirming that duress cannot be established when a party has clear reasonable alternatives to capitulating to an improper threat.

Levine v. Blumenthal (Redux)

A dispute where a threat to breach was not made in bad faith or merely to inflict damage, and filing suit was deemed a reasonable alternative, precluding a duress defense.

Alaska Packers' Association v. Domenico

A classic case finding an improper threat when workers acted opportunistically in bad faith mid-season in Alaska, leaving the employer with no reasonable alternative because the fishermen had no money to satisfy a lawsuit.

Misrepresentation

A statement or assertion not in accord with the facts that induces a party to enter into a contract, rendering the agreement voidable.

Fraudulent Misrepresentation

A statement made that is knowingly false or stated with certainty when no factual basis for that certainty existed.

Material Misrepresentation

A misstatement of fact important enough to induce a reasonable person to enter into a contract; it renders the contract voidable even if not made fraudulently.

Justified Reliance

Entering into an agreement under an assumption induced by a misrepresentation, where that assumption was reasonable under the circumstances.

Jordan v. Knafel

A case demonstrating that an honest subjective belief negates fraudulent misrepresentation, and that opinions do not constitute actionable misrepresentations unless given by an expert exercising professional judgment.

Statute of Frauds

A doctrine requiring contracts to be evidenced by a writing to be enforceable, covering land interests, suretyships, transactions over $500$, and contracts not performable within one year.

Cognitive Test (Incapacity)

An incapacity standard asserting that a mental illness or defect prevented a party from understanding the nature and consequences of the contract.

Volitional Test (Incapacity)

An incapacity standard asserting that a mental illness or defect prevented a party from acting reasonably, and the other party had reason to know of the condition.

Swinton v. Whitinsville Savings Bank

A Massachusetts case applying caveat emptor ('buyer beware') in an arm's-length transaction, holding that a seller has no duty to disclose non-obvious termite damage absent misleading statements or affirmative concealment.

Weintraub v. Krobatsch

A case holding that a seller's failure to disclose a severe cockroach infestation, combined with deliberate concealment such as keeping the lights on, allows a buyer to rescind the transaction.

Stambovsky v. Ackley

A New York case creating an equitable exception to caveat emptor where a seller widely publicized a house as haunted, creating a reputation that diminished its value which the buyer could not have discovered through reasonable diligence.

Stroup v. Conant

A case establishing that if a buyer or tenant intends to use a leased property for an activity widely considered scandalous and controversial, they have an affirmative duty to disclose that use.

Williams v. Walker-Thomas Furniture Co.

A landmark case establishing that unconscionability requires both a lack of meaningful choice (procedural unconscionability) and contractual terms that are unreasonably favorable to one party (substantive unconscionability).

Contract of Adhesion

A standardized take-it-or-leave-it agreement offered by a party with superior bargaining power; subject to greater judicial scrutiny but not unconscionable per se without substantive injustice.

Jones v. Waffle House

A ruling affirming that unequal bargaining power alone is insufficient to establish unconscionability without demonstrable substantive unfairness in the contract terms.

Procedural Unconscionability

Unfairness in the formation of a contract, characterized by adhesion, lack of meaningful alternatives, high-pressure sales tactics, unfair surprise, or disparities in language and understanding.

Substantive Unconscionability

Unfairness inherent in the contractual terms themselves, evaluated by looking for unjustified asymmetries, oppression, or harsh results that shock the conscience.

Public Policy Defense

A doctrine permitting courts to void agreements that harm societal interests—such as contracts to commit torts, agreements restraining marriage, or illegal acts—even if both parties freely consented.

Exculpatory Clause

A contract provision in which a party releases another from liability; enforceable for ordinary negligence under common law, but void for intentional torts, crimes, or violations of public interest.

O'Callaghan v. Waller & Beckwith Realty Co.

A decision upholding residential lease exculpatory clauses for landlord negligence under traditional common law absent statutory prohibition.

Tunkl v. Regents of the University of California

A landmark California case holding that exculpatory clauses in hospital admission contracts are void as contrary to public policy when they affect an essential public interest.

Tunkl Test

A six-factor test evaluating whether an exculpatory clause violates public policy, placing the heaviest weight on whether the service is of great public interest and whether the party seeking relief had decisive bargaining power.

Noncompete Covenant (Three-Prong Test)

A standard enforcing employment noncompete agreements only if they are narrowly tailored to protect a legitimate business interest, not unreasonably burdensome to the worker, and not harmful to the public.

Edwards v. Arthur Andersen LLP

A California Supreme Court case strictly invalidating employee noncompete covenants under California statute, rejecting the common-law reasonableness approach adopted by states like Virginia.

Mirror Image Rule

A common-law contract doctrine providing that an acceptance must match the offer exactly, with any differing or additional terms operating as a counteroffer.

UCC 2-207

A statute abandoning the mirror image rule for sales of goods, treating a definite acceptance with different or additional terms as a valid acceptance rather than a rejection or counteroffer.

Between Merchants Rule (UCC 2-207)

The rule that additional terms in an acceptance automatically become part of the contract between merchants unless the offer expressly limited acceptance, the terms materially alter the deal, or objection is timely made.

Knockout Rule

A UCC rule applied when terms in exchange writings directly conflict, knocking both conflicting terms out of the contract and replacing them with UCC default gap-fillers.

Leonard Pevar Co. v. Evans Products Co.

A UCC 2-207 case establishing that confirmatory purchase orders containing additional material terms do not bind the recipient absent explicit acceptance or non-materiality.

Klocek v. Gateway, Inc.

A case confirming that when a consumer is a non-merchant, additional terms packaged inside delivered goods remain mere proposals that do not become part of the contract without express assent.

Parol Evidence Rule

A substantive rule providing that when parties express an agreement in a final integrated writing, evidence of prior or contemporaneous agreements is inadmissible to contradict that writing.

Integrated Writing

A written contract intended by the parties as a final expression of the terms it includes, barring prior or contemporaneous evidence that contradicts it.

Completely Integrated Writing

A writing intended as the complete and exclusive statement of the entire agreement, precluding both contradictory extrinsic terms and consistent additional terms.

Four Corners Approach

A textualist method of interpretation looking solely within the written document itself to decide whether it is integrated and clear, refusing extrinsic evidence if it appears complete on its face.

Merger Clause

A contractual provision explicitly declaring that the writing embodies the entire agreement between the parties, conclusively establishing full integration under the majority rule.

Gianni v. R. Russell & Co.

A Pennsylvania parol evidence case holding that an oral promise granting an exclusive tenant concession was inadmissible because the written lease fully addressed sales on the premises.

Nelson v. Elway

A Colorado case holding that an unambiguous merger clause negotiated by sophisticated commercial parties decisively bars extrinsic evidence of prior oral buy-sell agreements.

Textualist Approach

An interpretive philosophy holding that if written language is clear and unambiguous on its face, courts cannot consult extrinsic evidence to alter or introduce doubts about its meaning.

Contextualist Approach

An interpretive philosophy permitting courts to evaluate extrinsic evidence and context to uncover latent ambiguities and determine the parties' true mutual intent, even for seemingly clear terms.

W.W.W. Associates, Inc. v. Giancontieri

A New York textualist case establishing that extrinsic evidence cannot be admitted to create an ambiguity where the contractual text is plain and clear on its face.

In re Soper's Estate

A contextualist case illustrating that even an apparently unambiguous word such as 'wife' can have latent ambiguity when evaluated against surrounding factual circumstances.

Frigaliment Importing Co. v. B.N.S. International Sales Corp.

A contract interpretation case determining the meaning of 'chicken' by examining trade usage, dictionary definitions, price points, and regulatory classifications.

Nanakuli Paving & Rock Co. v. Shell Oil Co.

A UCC case holding that trade usage and course of performance concerning price protection could supplement a written 'posted price' term without being deemed a contradiction.

Interpretation Hierarchy (UCC 1-303)

The statutory priority scheme for resolving ambiguities under the UCC: Course of Performance $\gt$ Course of Dealing $\gt$ Usage of Trade.

Implied Covenant of Good Faith and Fair Dealing

A non-waivable obligation implied in every contract preventing parties from acting arbitrarily, abusing contractual discretion, or undermining the other party's bargained-for rights.

Dalton v. Educational Testing Service

A decision holding that contractual discretion must be exercised in good faith and not arbitrarily, requiring ETS to consider an examinee's submitted explanatory evidence.

Brunswick Hills Racquet Club, Inc. v. Route 18 Shopping Center Associates

A case finding a breach of good faith and fair dealing where a commercial landlord used evasive silence to cause a tenant's lease-option notice window to expire.

Condition

An uncertain event that must take place before a contractual duty becomes due.

Express Condition

A condition explicitly agreed to by the parties using specific language (such as 'if' or 'provided that'), requiring strict compliance to trigger or discharge a duty.

Constructive Condition

A condition implied and imposed by courts by operation of law in the interest of fairness, such as concurrent performance in sales of goods.

Ordinary Condition

An uncertain event triggering or extinguishing a duty that neither party is under an affirmative legal obligation to bring about.

Promissory Condition

A contractual term operating both as an express promise and a condition precedent; failure to perform both discharges the other party's obligation and gives rise to an action for breach.

Kingston v. Preston

An English case holding that mutual contractual covenants are dependent, making full performance of a covenant a condition precedent to the counterparty's duty to perform.

Goodison v. Nunn

A case setting forth the constructive condition that promises to pay money and convey land are dependent and mutually concurrent, requiring tender of both simultaneously.

Substantial Performance

An equitable doctrine holding that if a party fulfills the core purpose of a contract with only minor, non-material deviations, they are entitled to the contract price minus damages for the defect.

Material Breach

A substantial failure of performance that frustrates the central purpose of the agreement, excusing the non-breaching party from its return duties.

Maxton Builders, Inc. v. Lo Galbo

A New York case confirming that express contractual conditions must be strictly complied with according to their terms, and are not subject to the substantial performance doctrine.

Jacob & Youngs, Inc. v. Kent

A Cardozo opinion holding that installing an equivalent brand of pipe (Cohoes instead of Reading) was an unintentional, trivial defect constituting substantial performance, limiting recovery to the difference in market value rather than the cost of replacement.

O.W. Grun Roofing & Construction Co. v. Cope

A case holding that installing an unsightly, streaked roof was a material breach rather than substantial performance because aesthetics and uniform appearance were essential to the bargain.

Perfect Tender Rule (UCC 2-601)

The UCC rule allowing a buyer to reject goods, accept goods, or accept part and reject part if the goods or tender fail in any respect to conform to the contract.

Waiver of Condition

The voluntary and intentional surrender of a condition to performance; can be retracted before reliance unless supported by fresh consideration.

Clark v. West

A case holding that an author's sobriety was an incidental condition rather than the core consideration of a writing contract, allowing the condition to be waived by the publisher without fresh consideration.

Prevention Doctrine

The rule that a party cannot rely on the non-occurrence of a condition if their own bad-faith conduct or hindrance prevented the condition from occurring.

Cantrell-Waind & Associates, Inc. v. Guillaume Motor Inns, Inc.

A case applying the prevention doctrine to excuse a condition where a party deliberately evaded and hid from buyers in bad faith to cause an option deadline to expire.

Divisible Contract

An agreement wherein performance is divided into distinct parts with apportioned consideration, enabling recovery for completed segments despite non-performance or breach of other parts.

Gill v. Johnstown Lumber Co.

A case finding a timber driving agreement divisible by log and category, granting recovery for lumber actually delivered to the destination while denying compensation for lost logs.

Britton v. Turner

The majority rule allowing an employee who willfully breaches an employment agreement before completion to recover the reasonable market value of services rendered under quantum meruit, offset by damages.

Stark v. Parker

The minority rule holding that a party who willfully abandons an entire contract prior to full completion is barred from receiving any compensation for partial performance.