Contract Outline

Contracts Decision Tree

Overall Outline: classification of K, elements of a valid K, Special writing rules, 3rd parties & K’s, Discharge [damages/equitable remedies, U.C.C art.2

Approaching a K:

→ decide if it’s a common law contract [catch all w/ Service and Land] OR if it’s a U.C.C art. 2 contract [goods]

+ If it’s a U.C.C. art. 2 → does it matter ? - oftentimes it does not: the same rules that apply to a common law can also apply to a U.C.C art. 2

• Sometimes there IS A DIFFERENCE → U.C.C Exceptions

  • Offer

    • does it involve one & it’s a sale of goods?

      • Ask if it’s a gap-filling situation [time, $, delivery]

        Note: can gapfill for everything including the amount IF there is a prior dealing or industry standard

  • Firm Offer

    • super narrow & specific

      • Has to be from a merchant, must be open for a given period, must be in WRITING & Signed

        Note: if it doesn’t meet any of these then it’s not a firm offer

        Difference: U.C.C art.2 → firm offers Under Common Law → the offer is revocable at any time before acceptance

    • Acceptance

      • agree to the terms

        Difference: Under Common Law → mirror rule U.C.C art. 2 → exception to the mirror rule between merchants [along as it’s immaterial ex: price]

    • Consideration

      • a thing of VALUE is exchanged

        Difference: U.C.C art. 2 → exception to the pre-existing duty rule

        - merchants sometimes change things in a K, and the modification becomes part of the K Under Common Law→ Once a K is made any modifications are NOT ENFORCEABLE w/out giving ADDITIONAL CONSIDERATION [even if another party agrees to it]

    • Amount over $500

      • Goods v.s service

        Difference: Under Common Law → no $ amount that triggers a statute of fraud

        - ex: you can buy a $1000 ticket on the phone [it’s a service]

        U.C.C art. 2 → Goods over $500 trigger a statute of fraud: it must be in writing

        • Workaround/Exception: sign a receipt, Confirmation letter, specially manufactured goods

      • Substantial Performance vs. Perfect Tender

        • is it good enough?

          • Under Common Law → is it good enough > then you did your part

            U.C.C art. 2 → perfect tender rule > it has to be perfect

            Exceptions: 1. right to cure 2. accept 3. substitute of carriers [UPS vs FedEx] 4. Impossibility. 5. Intsallment [long-term relationships]

          • if a seller sends non-conforming goods they have to let you know ASAP so that you have the right to cure [accept or send back]

    ***Common Law is picky on every detail EXCEPT substantial law → b/c it’s hard to determine if it’s [enough/perfect] whereas with good you can***

    Other times it matters if it’s U.C.C art. 2

  • Special situation

    • good is dealing with title & risk of loss

      Ex: Viscount/duke title [property

  Other Classifications of K’s:

• Express: oral → spoken or written

• Implied: imply it reasonably

  • ex: paying for your meal at a restaurant

• Quasi: equity/morality

• Bilateral: exchange of promises

• Unilateral: a promise for an act

  • ex: I promise Ruben a smooch if he gets me a milkshake

• Executed: finished, done. completed

• Excusatory: continuing, unfinished

• Unenforceable: statute of frauds, statute of limitations, bankruptcy

• Voidable: lack of genuineness accent [the injured party can go & get out of the K, or it goes against public policy]

• Valid: offer, acceptance, consideration

  - plus capacity, genuineness of assent, and valid

For everything else

Elements of a valid K: offer, acceptance, consideration

• Consideration → Hammer v Sidway

  • doing something you are not legally or contractually required to do

    • Ex: go to school

  • agreeing to refrain from something you are legally or contractually allowed to do

    • Ex: drinking after 21+

• Things that look like consideration but are NOT:

  • Pre-existing duty rule, Moral consideration, Illusory promise, Past consideration [creates HDC]

Special writing rules: statute or frauds and parole evidence

• statute of frauds: did it need to be in writing/ Land? Over a year? Paying the debt of another?

• Parole Evidence: orally say something before signing a contract

3rd parties & K’s: third party appears

• are they intended or incidental beneficiary

  • Intended → much bigger claim

  • Incidental → only sue if there’s detrimental reliance

• Assignment & Delegation

Discharge of K’s assortment of rules

• Accord & Satisfaction

• Performance

• Breach

  → Damages & equitable remedies: can sue for compensatory damages, consequential damages [incidentals] specific performance, rescission restitution [give the $ back], reformation [rewrite K], Quantimeirum [what is owed], Injunction [STOP]

  • Recognize a conditional precedent: this condition must be satisfied before you get the thing you want

    Ex: have to pass a drug test before you get the job