I.

Express contract A. Formed by language, oral or written II. Contract implied in fact A. Expressions of assent through conduct III. Contract implied in law (quasi-contract) A. No pre-existing bargaining, either expressed or implied B. Content of obligation comes from fair market value C. Someone can confer a benefit on you with your knowledge & consent (non-gratuity) D. Promissory restitution 1. Material benefit 1) Three beasts of Contracts a) Breach of contract b) Promissory Estoppel c) Restitution Unjust Enrichment (Quasi-Contracts)

THE FIRST BEAST BREACH OF CONTRACT 1. Mutual Assent- Parties can express mutual assent to a contract either by a. signing a final written contract b. engaging in conduct sufficient to establish the existence of an agreement c. engaging in an effective offer and acceptance d. Objective Theory for Intenti. What a reasonable person in the position of the other party would conclude that his objective manifestations of intent meant 2. Identify Offer a. Offer- manifestation of enter into a bargain, so made as to justify another person in understanding that his assent to that bargain is invited and will conclude the bargain. In determining whether a given communication meets this definition, courts will typically look at four factors 1. Language of the communication a. Courts will employ an objective, rather than a subjective test: b. They will ask what a reasonable person in the position of the parties would have understood the words or conduct to mean, rather than what the parties subjectively intended by their words or conduct. ii. Advertisement- advertisements are typically construed as solicitations of offers rather than offers in the U.s 1. Exception- to "bait-and-switch ads," or offers that are made not to sell an advertised product at an advertised price but rather to draw customers in to a store to sell them other similar products that are more profitable to the advertiser. a. Although normally ads do not constitute offers, Izadi v. Machado Ford makes an exception because any reasonable person would think that an advertiser does indeed commit itself to selling on a first-come-first-served basis b. Bait-and-switch offer which is made not in order to sell the advertised product a the advertised price, but rather to draw the

customer to the store to sell him another similar product which is more profitable to the advertiser c. The more inquiries that are required, the more likely a court will view communication as merely preliminary negotiations NOT amount to an offer 2. Its history 3. Its specificity a. An offer cannot be conditional and require further assent by the accepting party b. Price quote is not an offer c. Terms of a contract are reasonably certain if they provide a basis for determining the existence of a breach & for giving an appropriate remedy 4. Its directedness 3. Check For Acceptance a. Acceptance- is the offeree s manifestation of assent to terms thereof made by the offeree in a
manner invited or required by the offer i. Acceptance by performance requires that at least part of what the offer requests be performed or tendered and includes acceptance by a performance which operates as a return promise ii. Acceptance by a promise requires that the offeree complete every act essential to the making of the promise iii. An offer may be accepted only be a person in whom the offeror intended to create a power of acceptance

4. Check for Acceptance Prior to termination of power to accept a. Termination by counteroffer/rejection i. Qualified acceptance- Battle of the forms- what terms become part of the contract ii. Last Shot Rule- Common Law- when the parties exchanged written proposals, the rule gave an unwarranted advantage to the party who fired the last-shot (COUNTER OFFER), that is, the party who sent the last written proposal 1. A contract is never formed through the forms until someone performs 2. Assumes the parties are reading & understanding all parts of the contracts iii. Mirror Image rule (common Law) 1. a reply to an offer which purports to be an acceptance but contains additions, limitations, or other modifications is a rejection of the offer & constitutes a counter-offer a. Under common law, acceptance must be a mirror image of original form. Qualified acceptance acts as a counter-offer. This is not much less limiting than the last-shot rule. 2. UCC 207a. Unless the additional or different terms are not material and the offeror does not object to them, then the purported acceptance is an acceptance & additional/different term become part for the contracts

i. Provides in 2-207 that document can constitute an acceptance even though it states terms additional to or different from those offered or agreed upon 1. Abolishes common law- mirror-image rule 2. Qualified acceptance is acceptance unless the acceptance is expressly made conditional on assent to the additional or different terms 3. Between Merchants a. Additional terms proposed in the acceptance can become part of the contract in certain circumstances if the other party (the offeror) merely remains silent b. Exceptions i. Expression of acceptance does not form a contract if it is expressly made conditional on assent to the additional or different terms ii. They offer expressly limits acceptance to the terms of the offer, iii. Materiality- They materially alter it, or the new term materially alters the contract iv. Objection- Notification of objection to them had already been given or is given within a reasonable time after notice of them is received v. [not used if both parties contain the magic words expressly limiting acceptance to the terms of the offer] c. Shrink Wrap terms- Terms are inside the box of the goods i. Dickered terms- expressed and negotiated ii. Booklet- standard form d. Clickwrap terms- you click a box saying you have read and accepted the terms e. Browsewrap- attempt to claim that simply by engaging in certain performance you are expressing performances of the website

4. Between one Merchant and a regular buyer

a. The only way an additional term can become part of the contract is if the offeror explicitly assents to it 5. Knockout Rule a. The conflicting clauses knock each other out of the contract, so that neither enters the contract. b. Instead a UCC Gap Filler provision is used if one is relevant, otherwise c. the common law controls d. Example Buyer sends a purchase order for 1,000 bikes with a clause that these will not be defective for a year. Seller then send confirmation except with a complete disclaimer of warranties. Buyer makes no response. Bikes are defective. Buyer sues who wins? Buyer, warranties clauses knock each other out, and UCC Gap filler (or common law) applicable is 2-314 implied warranty of merchantability 6. Contract by Parties Conduct a. Conduct by both parties which recognize the existence of a contract is sufficient to establish a contract for sale although the writings of the parties do not otherwise establish a contract i. In such case, the terms of the particular contract consist of those terms on which the writings of the parties agree, together with the default rules of UCC b. Not a counteroffer- if buyer or seller inquire regarding the possibility of different terms, a request for a better offer, or a comment on the terms of the offer b. Termination by Lapse of time i. Mailbox Rule- an acceptance in some circumstances will be treated as effective as soon as dispatched by the offeree 1. Exception- will not apply however, if the offeror has stated (express or by implication) that he must receive the acceptance for it to be effectivethe offeror is the master of the offeror 2. Does not apply to the exercise of options 3. Modified mailbox rules place the risk of non-arrival on the offeree ii. Rejections are often effective upon receipt by offeror c. Termination By revocation of the offer

i. If offeree takes a definite action inconsistent with keeping the offer open & the offeree receives a reliable communication about this information ii. Bases for Irrevocability 1. Option contract a. Must be supported by consideration 2. Unilateral contracts a. Promise for a return performance- promise to pay completion of an act b. Promisor is incentivizing performance without any obligation from promisee to perform c. Offer can only be accepted through complete performance d. Acceptance & Consideration occurs simultaneously e. An offer is freely revocable before its been accepted EXCEPT when the offeree begins the invited performance or tenders a beginning of it f. Creates an option contract- promise to keep the offer open for a reasonable period of time g. Petterson v. Pattberg reveals the inequality allowing promisor to revoke when promise takes actions to accept i. If restatement 45 were in play, this promise would have been irrevocable ii. Revocation occurs when offeror takes an action inconsistent with the promise & the offeree receives word of this 3. Promissory estoppel doctrine for offers applying to construction cases a. An offer that the offeror should reasonably expect to induce action or forbearance of a substantial character on the part of the offeree before acceptance and which does induce such action or forbearance is binding as an option contract to the extent necessary to avoid injustice i. this rule is almost never going to apply because its not usually reasonable for someone to rely on a mere offer before accepting; typically an offer alone will give no rise to liability ii. exceptions when promisee relies n the offer, but its unreasnobale for one to accept prior to relying on the promise iii. includes certain construction contracts where one must rely on the offer but cannot yet accept it 1. see Drennan 2. Rule is very limited (Berry v. Knoch) 4. Restatement: offer is binding if writing is signed by the offerer, recites a purported consideration for the making of the offer & proposes an exchanges on fair terms within a reasonable time (formality requirement)

a. Only minority of jurisdictions use this rule b. Berryman doesnt succeed by merely following this provision 5. UCC 2-205 (Firm Offers): an offer by a merchant to buy or sell goods in a signed writing which by its terms gives assurance that it will be held open is not revocable for lack of consideration, during the time stated or if no time is stated for a reasonable time, but in no event may such period of irrevocability exceed 3 months, but any such terms of assurance on a form supplied by the offeree must be separately signed by the offered (another formality requirement) a. no consideration b. princess cruise line rule: when the predominate purpose of a maritime or land-based contract is the rendering of services rather than the furnishing goods, the UCC is inapplicable, and courts must draw on COMMON LAW doctrines when interpreting the contract 5. Termination by death of offeror a. Communications that do not constitute offers i. Opinions about future results ii. Statements of intention iii. Invitations to submit a bid iv. Advertisements, catalogs and mass mailings 1. Contracts with bait and switch (IZADO)- offers that are made not sell an advertised product at an advertised price but rather to draw customers in to a store to sell them other similar products that are more profitable to the advertiser 6. Consideration a. Consideration- Promise is supported by consideration if and only if there is a return promise that is a benefit to promisor or detriment to promisee (historical test) b. Must be bargained for (added in penny case)-> test used in restatement i. There is a return promise performance that is "bargained for " ii. Bargained for= (i)sought by original promisor in exchange for original promise + iii. (ii) given by promisee an exchange for a promise c. Exchanging promises of future performance is sufficient consideration d. Example of rich man offering tramp a coathe is not interest in getting him to go into store, so this is not a consideration because there is no reciprocal conventional induction i. No bargaining when giving a gift e. Restriction of family members activities for a certain amount of cash is sufficient consideration (Halmer v. Sidway), but promise must be conditional on something, otherwise is just a gift f. PAST CONSIDERATION IS NO CONSIDERATION g. Promises cannot be illusory or optional for consideration h. Relative values of consideration is not important- need not be equal i. Purposes served by consideration

i. Evidentiary Function- evidence of the existence & purport of the contract in the case of controversy ii. Cautionary Function- acts as a check against inconsideration actions & cautions one to the full legal effects of making a contract iii. Channeling Function- serves to mark or signal an enforceable promise; creates a bright line test j. Cases where there is no consideration i. Inadequacy ii. Nominal consideration ($1 dollar example) iii. FIND OTHERS k. Check direction 7. REMEDY: EXPECTATION DAMAGES 8. Moral Obligation Doctrine (exception where promise is enforceable even without consideration) a. Promise (waiver/promise not to raise a defense) b. To fulfill a prior first beast contractual obligation c. That has become unenforceable or inoperative because of some defense d. Is enforceable even without any new consideration e. Ex. Minority reaching majority to affirms a contract- no new consideration required Interpretation/Construction 1. 2. Interpretation (identify parties mutual assent) vs. Construction (legal effect of contract not indicated by assent) Subjective Approach a. Peerless case- 2 ships names peerless one leaving October and one in Decemberno consensus or meeting of the minds & therefore no binding contract Objectivist Approach a. Criticizes subjectivist approach for making the enforcement of contracts too difficult b. Allows fairness- a speaker should expect his words to be understood in accordance with normal usage Modified Objective Test a. Where one party knows or has reason to know what the other party means by certain language and the other party does not know or have reason to know of the meaning attached to the disputed language by the first party, the court will enforce the contract in accordance with the innocent partys meeting i. Responsibility for knowing the others party intended meaning Process of Interpretation a. Dickered language of the contract i. (BRING IN LATIN PHRASES AS APPROPRAITE) ii. The meaning of a word in a series is affected by others in the same series (NOSCITUR A SOCIIS) iii. a general term joined with a specific one will be deemed to include only things that are like the specific one; leads to a restrictive interpretation (EJUSDEM GENERIS)

3.

4.

5.

b.

c. d.

e.

f.

iv. If one or more specific items are listed, without any more general or inclusive terms, other items although similar in kind are excluded (EXPRESSIO UNIUS EXCLUSIO ALTERIUS) v. Interpretation that makes the contract valid is preferred to one that makes it invalid vi. If a written contract contains a word or phrase which is capable of 2 reasonable meanings, the interpretation that is less favorable to the party who drafted the contract is preferred. This favors the party of lesser bargaining power, who has little or no opportunity the terms of the contract & accepts one drawn by the stronger party (CONTRA PROFERENTEM) vii. Every term of the contract should be interpreted as a part of the whole viii. The principal apparent purpose of the parties is given great weight in determining the meaning to be given to manifestations of intention ix. A specific provision is an exception to a general one x. Hat Handwritten or typed provisions control printer provisions xi. Interpretation or construction that favors the public interest is preferred xii. PREFER INTERPRETATIONS that are not VERy LoPPsided (valid, effective, reasonable, legal, consistent with parties purpose, consistent with public policy) Course of performance i. Action of the parties in carrying out the contract ii. A single instance does not constitute a course of performance Course of Dealings i. Relations between the parties prior to signing the contract Trade Usage i. Trade is defined in UCC as Any practice or method of dealing having such regularity of observance in a place, vocation, or trade as to justify an expectation that will be observed with respect to the transaction in question ii. A usage need not necessarily be practiced by members of the party own trade or vocation to be binding if its so commonly practiced in a locality that a party should be aware of it (nanakuli v. shell) iii. Full recognition is available for new usages & usages currently observed by great majority of decent dealers iv. If both parties to a contract are members of the same trade, both should be bound by usage of the trade even if one of the parties didnt know of the usage UCC states that performance, usages, and prior dealings are important enough to be admitted always, even for a final & complete agreement; only if they cannot be reasonably reconciled with the express terms of the contract are they not binding on the parties Boilerplate Language of Contract i. Reasonable expectations of parties trumps boilerplate language ii. Contracts of Adhesion

6.

1. A party who adheres to the other partys standard term does not assent to a term if the other party has reason to believe that the adhering party would not have accepted the agreement if he had known that the agreement contained the particular terms 2. Requirements a. Must be a form contract (standard form) b. Must be drafted by the superior party c. Must be on take-it-or-leave-it-basis 3. In such cases we will distinguish between boilerplate language and the language the parties mutually assented to PAROL EVIDENCE RULE a. If a contract is fully integrated, then parol (oral/not within the 4 corners of the document; contemporaneous or prior) evidence is inadmissible for 2 purposes i. To vary or contradict terms of final contract ii. To add/supplement terms of final contract iii. To completely negate, but admissible if only qualifying- Nanakuli b. But is admissible for every other purpose (if relevant) i. Disambiguate ii. show fraud, duress or all other standard defenses iii. for agreement made after the execution of the writing 1. to establish subsequent agreement or modification 2. if this is happening contemporaneously, courts will be skeptical in admitting this iv. to establish oral condition precedent to effectiveness of the contract as a whole 1. a condition is not a promise- something not certain to occur, but if does occur, it would give rise to an obligation express condition v. to reform a contract for mutual mistake vi. evidence introduced to establish a collateral agreement between the parties- different subject matter in object of exchange c. Process of determining whether Parol Evidence is admissible i. Is integration complete or partial? 1. Judge first considers the offered evidence and if he finds that the contract language is reasonably susceptible (or ambiguous) to the interpretation asserted by its proponent, the evidence is admissible to determine the meaning intended by the parties ii. Is the parol evidence consistent with what was written? iii. Was the parol agreed to by both parties? (jury determination) d. Where parties have deliberately put their engagements into writing without any uncertainty as to the object or extent of such engagement, it is presumed that the whole engagement of the parties & the manner & the extent of their undertaking was reduced to writing (Thompson v. Libby) e. 4 corners approach- determine finality by looking solely at the written document f. Restatement allows judge to consider extrinsic evidence first and then decide whether contract is ambiguous; some courts will not allow extrinsic evidence to uncover a latent ambiguity

7.

g. Merger Clause- standard in contracts that states the writing is intended to be final and complete all prior understanding are deemed to have been merged into or superseded by the final writing h. Parol Evidence might be admitted when it is completely different agreement that would neither supplement nor change the original agreement (doesnt work in Thompson) Implied obligation of Good Faith a. Construction- applies to all contracts b. Good Faith requires not merely honest, but also the observance of reasonable commercial standard of fair dealing in the trade i. some states have retained the minimal standard of honesty in fact at least for parties who are not merchants c. Should include i. Fully disclosing material facts ii. Substantially performing without knowingly deviating from specifications iii. Refraining from abuse of bargaining power iv. Acting cooperatively v. Acting diligently to mitigate the other partys damages vi. Acting with reason & not arbitrarily vii. Interpreting contract language fairly viii. Accepting adequate assurances

JUSTIFICATION FOR NON-PERFORMANCE 1. Breach of Contract a. Nonperformance of a duty that becomes due b. Performance is not due if non-performance is justified c. Partial breach is not a justification; must wait until end to sue for damages Justifications a. Prior Material Breach i. Can stop performance until cured ii. Can also sue at end for damages iii. Jacobs & Youngs v. Kent- not using reading pipes not a material breach because there was substantial performance iv. Circumstances significant in determining whether a failure is material 1. The extent to which the injured party will be deprived of the benefit which he reasonably expected 2. The extent to which the injured party can be adequately compensated for the part of that benefit of which he will be deprived 3. The extent to which the party failing to perform or to offer to perform will suffer forfeiture 4. The likelihood that the party failing to performance or to offer to perform will cure his failure, taking account of all the circumstances including any reasonable assurances

2.

5. The extent to which the behavior of the party failing to perform or to offer to perform comports with standard of good faith and fair dealing- was failure to perform willful? v. Even a minor deviation will give the other party a right to recover damages for nonperformance, but the damages may be negligible vi. Other test for Materiality (MINORITY) 1. Whether breach operated to defeat the bargained-for objectives of parties 2. Whether breach caused disproportionate prejudice to the nonbreaching party 3. Whether custom and usage consider such a breach to be material 4. Whether the allowance of reciprocal nonperformance will result in the accrual of an unreasonable and unfair advantage b. PRIOR TOTAL BREACH i. Can stop performance ii. Can terminate the contract immediately iii. Can sue immediately for damages iv. Can seek an alternative contract v. Circumstances significant in determining when remaining duties are discharged 1. See those for prior to material breach 2. The extent to which delays hinders substitution 3. Extend to which time is of the essence vi. Sackett v. Spindler- prior material breach ripened into total breach c. ANTICIPATORY REPUDIATION i. Before one performance becomes due he decides not to perform ii. Treat as total breach as long as you can find a material repudiation of the contract iii. Requires a clear manifestation of an intent not to perform the contract on the date of performance. This intention must be a definite and unequivocal manifestation that he will not render the promised performance when the time fixed for it arrives iv. A suggestion for modification DOES NOT amount to repudiation v. Conduct can amount to an anticipatory repudiation but performance must be a practical impossibility vi. The effect of a statement constituting a repudiation is nullified by the retraction of the statement if notification of the retraction comes to the attention of the injured party before he materially changes his position in reliance on the repudiation or indicates to the other party that he considers the repudiation to be final vii. Truman Flatt v. Schupf- ambiguous intent over whether the plaintiff would perform, but even if it had been anticipatory repudiation, the plaintiff retracted the repudiation I a timely manner before defendants had materially changed positions or suggested that the repudiation was final d. REASONABLE GROUND FOR INSECURITY i. Can make a demand for adequate assurance of performance

ii. Adequate assurance must occur within a reasonable time, UCC says not to exceed 30 days iii. If this is not met, you can treat it as total breach iv. For something short of anticipatory repudiation, you can work under reasonable grounds for insecurity v. Hornell Brewing v. Spry - One party may demand assurances from another party when there are reasonable grounds for insecurity regarding that partys performance and the demanding party may suspend its performance until it has received such assurances. e.

Non-Occurrence of Express Condition

i. Express Condition 1. Event not certain to occur a. Event not certain to occur b. Which must occur in order for a duty to arise ii. Test: 1. Was there an express condition on this duty? a. Conditions agreed to and imposed by the parties themselves b. Ambiguities will be construed against express conditions c. Does this condition protect defendant so that defendant can raise its nonoccurrence as a justification?-conditions usually meant to protect one party over the other 2. Then it must be construed strictly a. Must be literally performed; substantial performance is not enough b. Unless non-occurrence (justification) was excused/ unless there is a reason non-performance is not justified by the non-occurrence i. WAIVER 1. Intentional relinquishment of known right 2. That must be non-material 3. Through actions or oral confirmation to suggest waiver ii. ESTOPPEL 1. Intentional relinquishment of known right and 2. Consideration or prejudicial reliance 3. [if condition is material, can try this] iii. PREVENTION 1. Party has some control over occurrence of condition and 2. Fails to make good faith efforts to ensure condition arises iv. AVOIDANCE OF FORFEITURE 1. There must be forfeiture and 2. Non-occurrence of condition must be nonmaterial

3. Interpretation as a means of reducing the risk of forfeiture cannot be employed if the occurrence of the event as a condition is expressed in unmistakable language 4. The Restatement says to the extent that the non-occurrence of a condition would cause disproportionate forfeiture, a court may excuse the non-occurrence of that condition unless its occurrence was a material part of the agreed exchange 5. A tenant or mortgagor should not be denied equitable relief from the consequences of his own neglect or inadvertence if a forfeiture would result

DEFENSES
1. Basic rule for defenses a. Party may void contract for ___ if i. Basic elements ii. Never affirmed/ratified with capacity iii. Consideration must be fully restored b. Policy behind defenses i. Through To engage in a contract parties should 1. Have rational capacity to determine what is in best interests 2. To conform actions to judgments 2. Procedural defenses a. MINORITY i. Policy question 1. Capacity to understand contract & consequences 2. Vulnerability of miunor & concner for explotation 3. Taking away minors ability to use promises as a tool? ii. Minority may void contract if 1. Underage at the time of signing 2. Never affirmed with capacity a. Expressly b. Indirect through a guardian c. Implicitly through conduct that does not disaffirm within reasonable time after reaching majority 3. Regardless of whether full consideration can be restored iii. What can defendant do in response? 1. Argue for set-off deduction

a. If contract is fair and not overreaching, defendant can deduct for use or depreciation i. Fair- substance of agreement itself ii. Overreaching- procedure of negotiating into contract 2. argue for restitution for necessaries 3. if minor lies about age, defendant can sue in torts for fraud iv. Dodson v. Shrader- The court must balance protection of minors with interests of business people who could then not safely deal with minors. A system which allowed a minor to disaffirm a contract when an item became worn out and get his whole purchase price back would lead to concorruption of young people and encourage habits of trickery and dishonesty. b. MENTAL INCAPICTY i. Party may void contract for mental incapcacity if 1. Unable to understand the nature & consequences of the transaction (cognitive incapacity) or 2. Unable to act in a reasonable manner in the transaction & the other party knew/had reason to know of the condition (volitional capacity) 3. Never affirmed with capacity a. Express b. Implied c. Indirect- through a guardian 4. Consideration must be fully restored a. Exceptions: if other party has actual knowledge of incapacity, contract is overreaching or contract is unfair b. If exception exist to restoring consideration, there is no argument for defendant to set-off deduction because it requires no bad faith/overreaching in contract ii. Contract is voidable if a party has reason to know because of intoxication that the other person is unable to either understand the transction or act in a reasonable manner c. DURESS i. Wrongful or improper threat 1. Threat of illegal/criminal or tortuous conduct 2. Threat of criminal prosecution 3. Threat to breach contract in bad faith 4. Threat to bring civil suit in bad faith (include threat to sue for breach of contract) ii. No reasonable alternatives 1. Remember to identify actual harm threatened when determining reasonableness of alternatives 2. Possible reasonable alternatives: the availability of legal action party have created the financial hardship ion if that court presents a viable option, alternative sources of goods/services when there is a

threat to withhold such things, and toleration if the threat involves only a minor vexation iii. Actual inducement- causality (substantially contributes to decision) iv. Contract is void if made under coercion involving a physical threat v. Totem v. Alyeska Economic duress, wouldnt pay up unless plaintiff settled for a less amount way lower than FMV 1. Contracts made under economic udress are demed voidable rather than void 2. Most courts require that the party have created the financial hardship in addition to taking advantage of the other partys dire circumstances d. UNDUE INFLUENCE i. Persuasion that tends to be coercive in nature, which overcomes the will without convincing the judgment ii. Do take into account the susceptibility of plaintiff iii. Elements of over-persuasion 1. Insist demand that the business be finished at once 2. Extreme emphasis on undue consequences of delay 3. Use of multiple persuaders by the dominate side against a single party 4. Absence of third-party advisers 5. Statement that there is no time to consult financial advisers or attorneys e. MISREPRESENTATION i. Statement of Fact 1. May include statements made recklessly or negligently with respect to truth of statement 2. Vs. opinions wher one expresses a belief without certainty 3. When can a statement of opinion be actionable? a. When the person is giving it doesnt actually believe what theyre saying b. When there is a special relationship of trust between parties c. When one is an expert on the subject d. Age/susceptibility of plaintiff ii. That was false iii. And a material element iv. Reasonable reliance v. Causes entry into contract vi. Syester v. Banta - A party to an agreement may rescind such agreement and recover damages if the agreement was fraudulently entered into. In order to successfully assert a claim of fraud, all elements of the claim must be met. vii. Tort recovery v. Breach of contract recovery 1. Benefit of punitive damages 2. Include above elements a. Knowledge of falsity

b. Intent to deceive c. And causes harm (instead of causing one to enter contract) 3. Can be sued for misrepresentation and non-disclosure f. NONDISCLOSURE i. Elements 1. Omission of statement of fact 2. That was true 3. And a material element 4. Reasonable reliance 5. Causes entry into contract ii. Duty to disclose 1. Necessary to prevent a previous assertion from being fraudulent/material 2. Disclosure would correct a mistake of the other party as to a basic assumption on which that party is making the contract and if nondisclosure amounts to a failure to act in good faith and in accordance with reasonable standards of fair dealings 3. Disclosure would correct a mistake of the other party as the contents or effects of a writing evincing or embodying an agreement in whole or part 4. The other person is entitled to know the fact because of a relationship of trust and confidence between them iii. Where the seller of a home knows facts materially affecting the value of the property which are not readily observable and are not known to the buyer, the seller is under a duty to disclose them- termite case g. STATUE OF FRAUDS i. If applicable, contract will be unenforceable 1. Basic provisions a. Goods i. UCC requires goods in excess of $500 to be in writing b. Services i. One-year provision- a contract that is not to be performed/completed within one year from the making thereof ii. Exceptions 1. Lifetime contracts- possible to fully perform within a year 2. If it possible to be performed within a year (no matter how unlikely), does not apply, even if the probability is low c. Land i. All land ales must have a written agreement 2. Implausible contract rules a. Executor-administrator clause promise by executor/administrator to answer for decendents obligation

b. Surveyorship provision- promise to answer for the debts of another i. Must be made to creditor not debtor ii. Does not release debtor in exchange iii. No economic advantage 3. Check if requirements are met a. Writing i. Must reasonably establish identify the subject matter of the contract ii. Must establish either contract was formed or offered by signing party iii. States with reasonable certainty the terms of the unperformed promises in the contract iv. Crabtree v. Elizabeth Arden 1. Linking doctrine- memorandum need not be in one document- can be pieced together from separate writings a. Must be one signed writing b. Must relate to same subject matter or transaction c. Must be some evidence of acquiescence (lower stand of proof than signature) d. Some courts (minority) insist that signed writing refer to unsigned writing e. More popular position is that a sufficient connection between papers is established simply by a reference to the same subject matter or transaction f. Restatement just states that one of the writings must be signed and that other writings clearly indicate that they relate to the same transaction b. Signature i. By or on behalf of person charged ii. Signature may be any symbol made or adopted with the intent, rea, or apparent, to authenticate a document 4. Check if exceptions to statue of frauds a. Promissory estoppel like exception- a promise which the promisor should reasonably expect to induce action or forbearance on the part of the promisee and which does cause action or forbearance is enforceable notwithstanding the statute of frauds if injustice can only be avoided by

enforcement of the promise. The remedy granted for breach is to be limited as justice required. 5. Exception for reciprocal/mutual 3. SUBSTANTIVE DEFENSES a. Unconscionability i. Procedural Unconscionability 1. Unfair in the process 2. May refer to lack of choice by one party or some defect in the bargaining process ii. Substantive Unconscionability 1. Fairness of the terms of the resulting bargain 2. Is the barging VERy LoPPsided (valid, effective, reasonable, legal, consistent with parties purpose, consistent with public policy) 3. Look at standard market patterns/prices- is price excessive? iii. Majority test requires both procedural & substantive on a sliding scale iv. Requires absence of meaningful choice on the part of one of the parties together with contract erms which are unreasonably favorable to the other party v. UCC considers these factors 1. Whether the consumer is likely to default 2. Whether the consumer will receive substantial benefit from the transaction 3. Gross disparity between the contract & market price 4. And whether seller has knowingly taken advantage of a consumers bargaining impairment due to mental impairment, lack of education or similar factors vi. Williams v. Walker Thomas Furniture Case 1. Procedural- taking advantage of people with a lack of eduaciton & ability to understand contract terms 2. Substantive- contract terms were counterintuitive, creating an increase of risk for the consumer as they had shown trustworthiness that they could pay off previous items

THE SECOND BEAST PROMISSORY ESTOPPEL 1. Promise a. Statement of intention so made to induce another person to believe they are undertaking a commitment b. Can be based on conduct as well as an express promise (Wright v. Newman- child support case) 2. That induces action or forbearance 3. That the promisor reasonably expected to induce action or forbearance 4. And that injustice can be avoided only by the enforcement of the promise

a. Detrimental reliance 5. The remedy granted for breach may be limited as justice requires a. Reliance damages 6. Commonly occurs in these special cases a. Family contracts i. Focus on interest of children b. Charitable subscriptions i. Importance of charities ii. Enforceable with promise & consideration or reliance iii. Courts are quite liberal in construing these elements in order to be favorable toward charitable subscriptions iv. Although typically in promissory estoppel cases, the remedy may be limited as justice requires, courts frequently still apply expectation to these cases v. Restatement 90(2) eliminating the requirement for an induced action or forbearance; basically making any promise enforceable 1. Many courts, including decision in king have been reluctant to adopt this restatement standard, but instead they typically stretch to find either consideration or reliance c. Employee pension plans i. Social welfare, retirement policies d. The THIRD BEAST- RESTITUTION/UNJUST ENRICHMENT
1. No-preexisting bargaining, either expressed or implied 2. Conferral of benefit (enrichment) a. Only entitled to restitution when one has conferred a benefit on another by way of part performance or reliance 3. Under circumstances in which retention would be unjust 4. Remedy a. Give item or fair market value of item back 5. Arises when a. Gift exchanges creates an obligation to reciprocrate i. Presumption against the legal right to receive payment for a gift you give someone; we want to force people to go to the first beast & engage in selfinterested bargaining first 6. When someone is entitled to restitution a. He acted unofficiously and with intent to charge therefor, and i. Officiousness- intervention in anothers affairs when there are not justified circumstances

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ii. Non-gratuitous/professional activity b. The things or services were necessary to prevent the other from suffering serious bodily harm or pain, and c. The person supplying them had no reason to know that the other would not consent to receiving them if mentally competent, and d. It was impossible for the other to give consent or because of extreme youth or mental imparimetn, the others consent would have been immaterial i. Consent is not always possible in certain cases when something is necessary to prevent the other from suffering serious bodily harm or pan or the person is mentally incompetent or too young to cosnet (allows for restitution when something is beneficial to a person who is unable to consent or in dire need) Can get restitution also for preserving another things/property if a. He was lawful b. It was reasonably necessary that the services be rendered or expenditures incurred before it was possible to communicate with the owner by reasonable means c. He had no reason to believe that the owner did not desire him so to act d. He intended to charge for such services or retain the things as his own if the identity of the owner were not discovered, and e. The things have been accepted by the owner Can get restitution when youve exhausted remedies for other & other owner has not paid anyone for servies (see Commerce v. Equity- subcontractor could recover from owner when the owner had not paid general contractor & subcontractor had exhausted remedies against the general contactor) Courts refuse to allow recovery for non-professionals for losses involved in rescues A party is not barred from restitution for the reason that the contract us unenforceable because of the statute of frauds (or any other of the standard defenses) unless the statute provides otherwise or its purpose would be frustrated by allowing restitution MATERIAL BENEFIT RULE i. Promissory restitution- if a person was subject a legal obligation that has become unenforceable (because of passage of time, or some other reaction) a subsequent promisor to honor or receive the legal obgliation will be enforceable at law ii. a promise made in recognition of a benefit previously received by the promisor from the promisee is binding the extent necessary to prevent justice iii. A promise is not binding 1. If the promisee conferred the benefit as a gift or for other reasons the promisor has not been unjustly enriched (ruling out officious intermeddling) or 2. To the extent that the value is disproportionate to the benefit (fair market value) iv. Used in cases where one agrees to pay after having life saved v. Not all courts agree with material benefit rule Expectation damages

i. The reasonable value to the other party of what he received in terms of what it would have cost him to obtain it from a persons in the claimants position or ii. The extent to which the others partys property has been increased in value or his other interests advanced

CONTRACTUALISM ABOUT CONTRACTS THEORIES

1. Public Policy 1. Problem not with the process but with the terms that result from the process 2. 3 Tensions in Contract Law a. Why do we allow for the enforcement of purely executory contracts (obligations are all in the future/have not been performed at all, with no reliance)? And why do we give out expectation damages (and to a lesser extent specific performance) for breach of such a contract? Why do we not allow for more than expectation damages (i.e. punitive or liquidated damages) or less? b. Why centrality of the consideration doctrine? Why do we limit enforcement of contracts? What about all the puzzling exceptions to consideration? c. Why tension between deference to voluntary assent and policing for fairness? 2. 3 Theories for Contract Law a. Promise Theorists holding people to promises is a respect for their autonomy & freedom of will 1) Moral obligation to keep promises doesnt explain why we cant choose remedies when one does breach a contract 2) Morality of promise keeping has no need for a limitation on contracts that only have bargained-for consideration 3) Dont want the government to interfere with ability to use promises as tools no policing for fairness b. Efficiency Theorists contract law is about maximizing good consequences & the utility of goods; want Pareto efficiency, where at least one person is better off & no one is worse off 1) We should assume that a voluntary agreement, if enforced, will be conducive to the welfare of both parties (& Pareto efficient/superior); allows for an efficient breach as long as someone can pay for recovery for the damages, they are free to breach; using specific performance or other remedies deters some people from moving to a Pareto superior state of affairs (better off after a breach)

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Maximizing human welfare/efficiency want to maximize use of contracts, but there are some good reasons to require consideration for certain cases (i.e. unilateral) 3) Explanation for voluntary assent but not for a principle of fairness. Duress and fraud are the only defenses used by efficiency theorists. But the problem with this is that it assumes people are perfectly rational and have sufficient information to make decisions. This isnt practical because of class distinctions and the asymmetry of information. Contractualist Theorists comes out of social contract theory; based on Rawls theory that people are rational utility maximizers put behind the veil of ignorance who will want to maximize equality, not knowing their own particular situation 1) People would consent to expectation damages because people know that if they are the victim of breach they will still get the monetary value (essentially equal as fulfilling the contract) 2) You dont ordinarily be bound by a rule unless youve given full consideration of using the promise as a too 3) Voluntary assent allows people to regulate their own contracts, but if things are egregiously unfair, we can fix it. Asymmetrical information creates a need for all other voidable defenses. Gross asymmetries in knowledge & rational capacity to determine whats in ones best interests should be remedied by the courts 2)