UCC and Restatement Codes:

Issue Spotters:
1) Was there a contract?
1) Formation
1) Consideration
2) Offer/acceptance/Rejection
3) Option Contract
4) Limited and Indefinite promise

2) Is the agreement legally enforceable?

1) Was there consideration? Is it grounded in the past? If so was a material benefit received?
2) Chapter 5- unconscionable? Impossible? Capacity? Duress?

3) What are the terms of the K?

1) PE Rule
2) Interpretation/ misunderstanding
3) How was it accepted?
4) Is there a 2-207 issue?
5) Was there a modification or waiver?
6) Is there a condition of satisfaction?

4) Did each of two people do what they agreed to do?

1) Was there a breach?
2) Was there waiver/condition/ express condition? Condition of satisfaction? Was condition waived or excused?
3) Was breach material or immaterial?

5) Is there any excuse (duress, incomplete performance, mistake, etc)?

1) Infancy, incapacity, duress, economic duress, unconscionability, public policy
2) Was there an assumption of risk that that party bore?

6) What are the legal consequences of making a contract and not doing what was agreed to?
1) Damages: Expectation
1) UCC Buyer or seller breach/remedies
2) Liquidated damages clause
2) Limitations:
1) Foreseeable, certain, mitigation
3) Reliance
4) Restitution
1) Quantum Meruit
5) Promissory estoppel
General /Definitions
 Provisions Notes

1-103. Construction of [Uniform Commercial Code] to Promote Its Purposes and Policies; Applicability of Supplemental Principles of Law.
(b) Unless displaced by the particular provisions of [the Uniform Commercial Code], the principles of law and equity, including the law merchant and the law
relative to capacity to contract, principal and agent, estoppel, fraud, misrepresentation, duress, coercion, mistake, bankruptcy, and other validating or
invalidating cause supplement its provisions.

§1-201 (20) General Definitions: Satisfaction clause

(20) “Good Faith” except as otherwise provided in Article 5, means honesty in fact and the observance of reasonable commercial standards of fair dealing

§1-303 Course of Performance, Course of Dealing and Usage of Trade - no lay dictionary
a) A “course of performance” is a sequence of conduct between the parties to a particular transaction that exists if: reading of a
(1) the agreement of the parties with respect to the transaction involves repeated occasions for performance by a party; and contract.
(2) the other party, with knowledge of the nature of the performance and opportunity for objection to it, accepts the performance or acquiesces in it without Agreement is read
objection. in commercial
(b) A “course of dealing” is a sequence of conduct concerning previous transactions between the parties to a particular transaction that is fairly to be regarded as context.
establishing a common basis of understanding for interpreting their expressions and other conduct. -course of dealing
(c) A “usage of trade” is any practice or method of dealing having such regularity of observance in a place, vocation, or trade as to justify an expectation that it refers to conduct
will be observed with respect to the transaction in question. The existence and scope of such a usage must be proved as facts. If it is established that such a usage PRIOR to
is embodied in a trade code or similar record, the interpretation of the record is a question of law. agreement
(d) A course of performance or course of dealing between the parties or usage of trade in the vocation or trade in which they are engaged or of which they are or -Course of
should be aware is relevant in ascertaining the meaning of the parties' agreement, may give particular meaning to specific terms of the agreement, and may performance is after
supplement or qualify the terms of the agreement. A usage of trade applicable in the place in which part of the performance under the agreement is to occur may or under the
be so utilized as to that part of the performance. agreement
(e) Except as otherwise provided in subsection (f), the express terms of an agreement and any applicable course of performance, course of dealing, or usage of -customs must still
trade must be construed whenever reasonable as consistent with each other. If such a construction is unreasonable: be reasonable (but
(1) express terms prevail over course of performance, course of dealing, and usage of trade; being used
(2) course of performance prevails over course of dealing and usage of trade; and commercially means
(3) course of dealing prevails over usage of trade. prob is reasonable)
(f) Subject to Section 2- 209 and Section 2A- 208, a course of performance is relevant to show a waiver or modification of any term inconsistent with the course
of performance.
(g) Evidence of a relevant usage of trade offered by one party is not admissible unless that party has given the other party notice that the court finds sufficient to
prevent unfair surprise to the other party.

§1-304 Obligation of Good Faith Satisfaction clauses

Every contract or duty within [the Uniform Commercial Code] imposes an obligation of good faith in its performance and enforcement.

§2-104 (1) Definitions: “Merchant”

(1): “Merchant” means a person who deals in goods of the kind or otherwise by his occupations holds himself out as having knowledge or skill peculiar to
practices or goods involved in the transaction or to whom such knowledge or skill may be attributed by his employment of an agent or broker or other
intermediary who by his occupation holds himself out as having such knowledge or skill
Chapter 1: The Legally Enforceable Promise
 Provision Related Cases Notes

§ 1-305. Remedies to Be Liberally Administered. - expectation damages are preferred remedy

(a) The remedies provided by [the Uniform Commercial Code] must be liberally administered to the end that the - no punitive damages, only compensation
aggrieved party may be put in as good a position as if the other party had fully performed but neither
consequential or special damages nor penal damages may be had except as specifically provided in [the Uniform
Commercial Code] or by other rule of law.
(b) Any right or obligation declared by [the Uniform Commercial Code] is enforceable by action unless the
provision declaring it specifies a different and limited effect.

§ 2-610. Anticipatory Repudiation. Official comment: 1) purpose is to make

(1) If either party repudiates the contract with respect to a performance not yet due the loss of which will clear that aggrieved parties may resort to
substantially impair the value of the contract to the other, the aggrieved party may: own remedies or suspend own performance
(a) for a commercially reasonable time await performance by the repudiating party; or while he negotiates with or awaits
(b) resort to any remedy for breach (Section 2- 703 or Section 2- 711), even though aggrieved party has notified performance by the other party
the repudiating party that it would await the latter's performance and has urged retraction; and ***But if he waits performance beyond a
(c) in either case suspend performance or proceed in accordance with the provisions of this Article on the seller's commercially reasonable time he cannot
right to identify goods to the contract notwithstanding breach or to salvage unfinished goods (Section 2- 704). recover resulting damages which he should
have avoided.
****cover happens at the end of a
commercially reasonable time

§2-703 Seller’s Remedies in general (Laundry List) - Can be modified or limited by 2-719
If buyer breaches, then in respect to whole contract or whole undelivered balance, the aggrieved seller may: - Start with all available remedies then see if
1) Withhold delivery of such goods limited by facts of case
2) stop delivery of any bailee (One to whom Personal Property is entrusted for a particular purpose by another, - Can involve breach of part of whole
the bailor, according to the terms of an express or implied agreement.) delivery
3) look at S2-704 for goods still unidentified - includes failure to pay as well as non
4) resell and recover (S2-706) acceptance
5) recover damages
6) cancel
 Provision Related Cases Notes

§ 2-706 Seller’s Resale Including Contract for Resale: (cover) (KP-RP + ID- ES) Neri -Difference between resale price and
(1) Under the conditions stated in section 2-703 on seller’s remedies, the seller may resell the goods concerned contract price, plus incidentals
or the undelivered balance thereof. Where the sale is made in good faith and in a commercially reasonable -Right to Resale if buyer effectively rejects,
manner the seller may recover the difference between the resale price and the contract price together with repudiates or when seller reclaims goods
any incidental damages allowed under the provisions of this article 2-710 but less expenses saved in -Also right to resale if buyer unjustly
consequences of the buyer’s breach attempts to revoke goods and seller reclaims
(2) Except as otherwise provided in subsection (3) or unless otherwise agreed, resale may be at public or private them, but if S doesn’t reclaim go to 2-709
sale including sale by way of one or more contracts to sell or of identification to an existing contract of the -Market and current prices indicate whether
seller. Sale may be as a unit or in parcels and at any time and place, and on any terms, but every aspect of the action was commercially reasonable
sale including the method, manner, time, place and terms must be commercially reasonable. The resale -Public sale is usually by auction
must be reasonably identified as referring to the broken contract, but it is not necessary that the goods be in -Time for resale is reasonable time after
existence or that any or all of them have been identified to the contract before the breach. buyer’s breach
(3) If the resale is at private sale, the seller must give the buyer reasonable notification of an intention to resell.
(4) If the resale is at public sale:
(a) only identified goods may be sold unless there is a recognized market for a public sale of futures in goods of
the kind;
(b) it must be made at a usual place or market for public sale if one is reasonably available and except in the case
of goods which are perishable or threaten to decline in value speedily the seller must give the buyer reasonable
notice of the time and place of the resale;
(c) if the goods are not to be within the view of those attending the sale, the notification of sale must state the
place where the goods are located and provide for their reasonable inspection by prospective bidders; and
(d) the seller may buy.
(5) A purchaser that buys in good faith at a resale takes the goods free of any rights of the original buyer even if
the seller fails to comply with one or more of the requirements of this section.
(6) The seller is not accountable to the buyer for any profit made on any resale. A person in the position of a
seller (Section 2- 707) or a buyer that has rightfully rejected or justifiably revoked acceptance must account for
any excess over the amount of the buyer's security interest under Section 2- 711(3).

§2-708 Seller’s Damages for Non-Acceptance or Repudiation (no resale) (KP - MP) + ID - ES Seller MP-KP (volume seller)
(1) Measure of damages for non-acceptance or repudiation is dif b/c MP and KP plus incidentals (see S2-710) -In the event that there is no evidence
less expenses saved in consequence of the buyer’s breach. available of the current market price at the
(2) If (1) is inadequate to put seller in as good a position as before the breach, then measure is loss of profit plus time and place of tender, proof of a
incidentals, due allowance for costs incurred and due credit for payments or proceeds of resale. (No buyer substitute market may be made under the
equivalent) section on determination and proof of
market price.
-If (1) inadequate, lost profits determined by
(list price- cost to dealer/manufacturer). No
need for proof of past profits.
-In all cases can get incid.
 Provision Related Cases Notes

§ 2-709. Action for the Price. Seller- Buyer in breach and

(1) When the buyer fails to pay the price as it becomes due, the seller may recover, together with any incidental (1) (a) buyer has goods (ie has not paid)
damages under Section 2- 710, the price: 2-709(1)(b) seller still has goods
(a) of goods accepted or of conforming goods lost or damaged within a commercially reasonable time after risk
of their loss has passed to the buyer; and
(b) of goods identified to the contract if the seller is unable after reasonable effort to resell them at a reasonable
price or the circumstances reasonably indicate that such effort will be unavailing.
(2) If the seller sues for the price, the seller must hold for the buyer any goods that have been identified to the
contract and are still in the seller's control. However, if resale becomes possible, the seller may resell them at any
time prior to the collection of the judgment. The net proceeds of any such resale must be credited to the buyer,
and payment of the judgment entitles the buyer to any goods not resold.
(3) After the buyer has wrongfully rejected or revoked acceptance of the goods or has failed to make a payment
due or has repudiated (Section 2- 610), a seller that is held not entitled to the price under this section shall
nevertheless be awarded damages for nonacceptance under Section 2- 708.

§2-710 Seller’s Incidental damages (incidental damages): Incidentals include: commercially reasonable Seller - limited to incidental, not
charges like expenses of commissions in stopping deliv, transport, care and custody of goods after breach, cost of consequential damages
return or resale of goods from breach.

§ 2-711. Buyer's Remedies in General; Buyer's Security Interest in Rejected Goods. Buyer
(1) Where seller fails to make a delivery or repudiates or the buyer rightfully rejects or justifiably revokes - For subsection 3 to apply, must have part
acceptance then with respect to any good involved and with respect to the whole if the breach goes to the payment or expenses incurred
whole contract (2-612), the buyer may cancel and whether or not he has done so may in addition to
recovering so much of the price as has been paid:
(a) cover and have damages under Section 2- 712 as to all goods affected whether or not they have been
identified to the contract;
(b) recover damages for nondelivery under Section 2- 713;
(2) Where the seller fails to deliver of repudiates the buyer may also:
(a) recover identified goods under Section 2- 502;
(b) obtain specific performance or obtain the goods by replevin or similar remedy under Section 2- 716;
(3) On rightful rejection or justifiable revocation of acceptance a buyer has a security interest in goods in the
buyer's possession or control for any payments made on their price and any expenses reasonably incurred in their
inspection, receipt, transportation, care and custody and may hold such goods and resell them in a like manner as
an aggrieved seller (Section 2- 706).

§2-712 “Cover”; Buyer’s Procurement of Substitute Goods: Missouri Furnace Buyer - Duty to mitigate The test of proper
(1) After a breach within the preceding section the buyer may “cover” by making in good faith and without cover is whether at the time and place the
unreasonable delay any reasonable purchase of or contract to purchase goods in substitution for those due buyer acted in good faith and in a reasonable
from the seller manner, and it is immaterial that hindsight
(2) A buyer may recover from the seller as damages the difference between the cost of cover and the contract may later prove that the method of cover
price together with any incidental or consequential damages under Section 2- 715, but less expenses saved in used was not the cheapest or most effective.
consequence of the seller's breach. -The requirement that the buyer must cover
(3) Failure of the buyer to effect cover within this section does not bar the buyer from any other remedy. “without unreasonable delay” is not
intended to limit the time necessary for him
to look around and decide as to how he may
best effect cover.
-Cover is important for both merchant and
consumer buyers
 Provision Related Cases Notes

§ 2-713 Buyer’s Damages for Non-Delivery or Repudiation (MP-KP) Acme Mills, Buyer MP-KP
1) Damages for repud by seller is the difference between MP when buyer learned of breach and KP together with Missouri Furnace - this applies when buyer does nothing
incidental and consequential damages, but less expenses saved. (if installment - place for measuring damages is the place
2) MP determined as place of tender or place of arrival. contract MP-KP of tender (or the place of arrival if the
for every day that goods are rejected or their acceptance is
delivery is revoked after reaching their destination)
expected) and the crucial time is the time at which
the buyer learns of the breach.
-Can use spot sale price if no market price
available, or make case for specific
performance
-buyer must deduct from his damages any
expenses saved as a result of the breach.

§ 2-714 Buyer’s Damages for Breach in Regard to Accepted Goods (Good warranted- Good Delivered) Hawkins v. Buyer (Goods Warranted- Goods Delivered)
1) Where buyer has accepted goods and given notification, he may recover damages for any non-conformity of McGee
tender the loss resulting in ordinary course of events from seller’s breach determined in any manner which is
reasonable.
2) Measure of damages for breach of warranty is difference at time/place of acceptance b/n the value of goods
accepted and the value they would have had if they had been as warranted, unless special circumstances show
proximate damages of a different amount.
3) In a proper case any incidental and consequential damages can be recovered

§2-715 Buyers incidental and Consequential Damages (Incidentals plus consequential) Buyer
(1) Incidental damages: expenses from investigation, receipt, transportation and custody of rejected goods,
reasonable charges, expenses or commissions in connection w/cover or other reasonable expenses from delay
caused by breach.
(2) Consequential damages: (loss from general or particular requirements and needs known by seller which could
not be prevented by cover; injury to person or property resulting from breach of warranty):
(a) loss resulting from general or particular requirements and needs of which seller at time of contracting had
reason to know and of which could not reasonably be prevented by cover or otherwise; and
(b) injury to person or property proximately resulting from any breach of warranty

§ 2-716. Specific Performance; Buyer's Right to Replevin. Buyer- typically available only with very
(1) Specific performance may be decreed if the goods are unique or in other proper circumstances. unique goods
(2) The decree for specific performance may include such terms and conditions as to payment of the price, Output and requirements contracts involving
damages, or other relief as the court may deem just. a particular or peculiarly available source or
(3) The buyer has a right of replevin or similar remedy for goods identified to the contract if after reasonable market present today the typical commercial
effort the buyer is unable to effect cover for such goods or the circumstances reasonably indicate that such specific performance situation
effort will be unavailing or if the goods have been shipped under reservation and satisfaction of the security - UNiqueness is imp, but not only factor
interest in them has been made or tendered. In the case of goods bought for personal, family or household - Don’t forget about negative and
purposes, the buyer’s right of replevin vests upon acquisition of a special property, even if the seller had not affirmative covenants
then repudiated or failed to deliver Comment 2: inability to cover output/
require Ks
 Provision Related Cases Notes

§2-718 Liquidation or Limitation of Damage; Deposits. Neri v. Retail A term fixing unreasonably large liquidated
(1) Damages for breach by either party may be liquidated in the agreement but only at amount reasonable by Marine Corp. damages is expressly made void as a
measure of harm (anticip OR actual) caused by breach, difficulty of proof of loss, or inability (inconvenient, not penalty. An unreasonably small amount
possible) of finding an adequate remedy. A term fixing unreasonably large liquidated damages is void as a would be subject to similar criticism and
penalty. might be stricken under the section on
(2) If seller justifiably w/h delivery b/c of buyer’s breach, buyer is entitled to restitution in amount by which sum unconscionable contracts or clauses.
of his payment exceeds: - See R2k 356 if not sale of goods
(a) Amount entitled to seller, by virtue of terms liquidating the seller’s damages in accordance with
subsection (1)
(b) in the absence of such terms, 20% the value of the total performance which buyer is obligated to under
contract or $500, whichever is smaller
(3) Buyer’s restitution under subsection (2) is offset to extent that seller establishes
a. right to recover damages under provision of article other than by (1)
b. the amount or value of benefits received by the buyer directly or indirectly by reason of contract
(4) If seller has received payment in in goods, their value or the proceeds of their resale is treated as payment for
purpose of subsection (2)) but if seller knows about buyer breach before reselling goods received in part
performance, then resale is subject to conditions of S2-706 (resale by an aggrieved Seller).

§ 2-719. Contractual Modification or Limitation of Remedy. Parties can contract to limit damages
(1) Subject to the provisions of subsections (2) and (3) of this section and of the preceding section on liquidation -minimum adequacy of remedies must be
and limitation of damages, available
(a) the agreement may provide for remedies in addition to or in substitution for those provided in this Article -remedy parties come up with cannot be
and may limit or alter the measure of damages recoverable under this Article, as by limiting the buyer's remedies unconscionable. In this case go to UCC
to return of the goods and repayment of the price or to repair and replacement of non-conforming goods or parts; remedies (comment 1)
and -If proposing something as the sole remedy
(b) resort to a remedy as provided is optional unless the remedy is expressly agreed to be exclusive, in which that has to be clearly expressed (comment 2)
case it is the sole remedy. -can limit consequence damages, but cannot
(2) Where circumstances cause an exclusive or limited remedy to fail of its essential purpose, remedy may be had be unconscionable
as provided in this Act.
(3) Consequential damages may be limited or excluded unless the limitation or exclusion is unconscionable.
Limitation of consequential damages for injury to the person in the case of consumer goods is prima facie
unconscionable but limitation of damages where the loss is commercial is not.

§ 2-723. Proof of Market: Time and Place. Market measured at time breach is first
(1) If an action based on anticipatory repudiation comes to trial before the time for performance with respect to learned of.
some or all of the goods, any damages based on market price (Section 2-708 or Section 2-713) shall be
determined according to the price of such goods prevailing at the time when the aggrieved party learned of the
repudiation.
(2) If evidence of a price prevailing at the times or places described in this Article is not readily available , the
price prevailing within any reasonable time before or after the time described or at any other place which in
commercial judgment or under usage of trade would serve as a reasonable substitute for the one described may
be used, making any proper allowance for the cost of transporting the goods to or from such other place.
(3) Evidence of a relevant price prevailing at a time or place other than the one described in this Article offered
by one party is not admissible unless and until he has given the other party such notice as the court finds
sufficient to prevent unfair surprise.
 Provision Related Cases Notes

2nd Restatement § 356 Liquidated Damages and Penalties -restatement liquidated damages clause.
(1) Damages for breach by either party may be liquidated in the agreement but only at an amount that is Can decide liquidated damages beforehand
reasonable in the light of the anticipated or actual loss caused by the breach and the difficulties of proof of loss. so long as not punitive.
A term fixing unreasonably large liquidated damages is unenforceable on grounds of public policy as a penalty. -penalties are unenforceable on grounds of
(2) A term in a bond providing for an amount of money as a penalty for non-occurrence of the condition of the public policy.
bond is unenforceable on grounds of public policy to the extent that the amount exceeds the loss caused by such -helpful when hard to estimate actual
non-occurrence. damages

Chapter 2: Grounds for Enforcing Promises

Provision Related Cases Notes

Restatement 2nd of Contracts §71 Requirement of Exchange, Type of Exchange Hamer v. Consideration/bargained for exchanges
1) To constitute consideration, a performance or a return promise must be bargained for Sidway, Focus on manifestation of intention
2) A performance or return promise is bargained for if it is sought by the promisor in exchange for his promise and is Congregation rather than on intent
given by the promisee in exchange for that promise. Kadimah, Bargain can’t be false pretense
3) The performance may consist of: Schnell v. Nell
(a) An act other than a promise (nominal)
(b) a forbearance
(c) the creation, modification, or destruction of a legal relation
4) the performance or or return promise may be given to the promisor or to some other person. It may be given by the
promisee or by some other person

Restatement 2nd of Contracts §81 Consideration as Motive for Inducing Cause Earle v.
1) The fact that what is bargained for does not of itself induce a promise does not prevent it from being consideration for Angell
the promise (funeral case),
2) The fact that a promise does not of itself induce a performance or return promise does not prevent the performance or Diamond Jim
return promise from being consideration for the promise

Restatement 2nd of Contracts §86 Promise for Benefit Received. Mills v. -law cannot force people to do what they
1) Promise made in recognition of a benefit previously received by the promisor from the promisee is binding to the Wyman, Webb should but are not legally bound to do
extent necessary to prevent injustice. v. McGowin -idea is to protect people from benefit
2) A promise is not binding under section 1 if: unjustly thrust on them
a) the promisee conferred the benefit as a gift or for other reasons the promisor has not been unjustly enriched or Subsequent promise for necessaries/life
b) its value is disproportionate to the benefit saving can be enforced. 86(1)
Enrichment of one party b/c of unequal
exchange can be enforced if bargained
for.
Where liquidated benefit, can’t be more
than the value of the benefit conferred.
 Provision Related Cases Notes

Restatement 2nd of Contracts §90 Promise Reasonably inducing Action or Forbearance. Seavy v. Reliance on a promise, promissory
1) A promise which the promisor should reasonably expect to induce action or forbearance on the part of the promisee or Drake, estoppel
a third party and which does induce act or forbearance is binding if injustice can be avoided only by enforcing the Kirksey v. - note that even if detriment, if a gift
promise. The remedy granted for the breach may be limited as justice requires. Kirksey, promise, not enforceable
2) A charitable subscription or a marriage settlement is binding under subsection (1) without proof that the promise Ricketts v.
induced action or forbearance. Scothorn

Restatement 2nd of Contracts §87: Option Contract - listing a sub is not the same as
(1) An offer is binding as an option contract if it accepting a bid
(a) is in writing and signed by the offeror, recites a purported consideration for the making of the offer, and proposes an (1) Explicit
exchange on fair terms within a reasonable time; or (2) Implicit
(b) is made irrevocable by statute. Nominal consideration is still sufficient
(2) An offer which the offeror should reasonably expect to induce action or forbearance of a substantial character on to create option for larger sum (but must
the part of the offeree before acceptance and which does induce such action or forbearance is binding as an option be on fair terms)
contract to the extent necessary to avoid injustice. -87 (2) is called detrimental reliance-
must be substantial & foreseeable
-Factors influencing remedies: formality,
commercial and social context,
assumption of risk by offeree,
competence, measurability of damages.

Restatement 2nd of Contracts §74 Settlement of Claims Duncan v. - consideration of dropped lawsuit must
1) Not asserting or surrendering a claim or defense which proves to be invalid is not consideration unless: Black be in good faith and must be based in
a) the claim is doubtful because of uncertain facts or reality to be valid.
b) the forbearing party believes the claim or defense may be determined to be valid (good faith) -Don’t look at whether claim is valid, but
2) The execution of a written instrument surrendering a claim or defense by one who is under no duty to execute it is whether forbearing party thinks it is
consideration if said execution is bargained for even though he is not asserting the claim or defense and believes that valid
no valid claim or defense exists.

Chapter 3: Contract Formation

Provisions Related Cases Notes

Restatement 2nd of Contracts §45 Option Contract Drennan v. Star Offer for unilateral K may be
(1) Where an offer invites and offeree to accept by rendering a performance and does not invite a promissory acceptance, an Paving, withdrawn at any time prior to
option contract is created when the offeree tenders, or begins the invited performance, or tenders a beginning of it. Brackenbury v. performance
(2) The offeror’s duty of performance under any option contract so created is conditional on completion or tender of the Hodkins (2) - can be revoked before tender is
invited performance in accordance with the terms of the offer. Petterson v. exchanged
Pattberg -Difference b/c prep to perform and
actual performance
 Provisions Related Cases Notes

§2-204 Formation in General Southwest - Not all terms have to be defined for
(1) A contract for sale of goods may be made in any manner sufficient to show agreement, including conduct by both parties Enginerering v. contract to be valid
which recognizes the existence of such a contract. Martin Tractor -Conduct can make a contract
(2) An agreement sufficient to constitute a contract for sale may be found even though the moment of its making is Co. GAP FILLERS
undetermined.
(3) Even though one or more terms are left open, a contract for sale does not fail for indefiniteness if the parties have
intended to make a contract and there is a reasonably certain basis for giving an appropriate remedy. (Open terms)

§2-205 Firm Offer Moulton v. - part of formation of option contract.

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 Kershaw - General solicitation/ad does not
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 make an offer.
may such period of irrevocability exceed three months, but any such term of assurance on a form supplied by the offeree -Do not need consideration to be
must be separately signed by the offeror. binding
-Authentication by writing is essence

§2-306 Output, Requirements and Exclusive Dealings Feld, Lady Duff Interpreting “good faith”:
1) A term which measures the quantity of the output of the seller or the requirements of the buyer means such actual output (UCC provision - reasonably foreseeable figure.
or requirements as may occur in good faith, except that no quantity unreasonably disproportionate to any stated estimate is codification - “A shut-down for lack of orders
to any normal or otherwise comparable prior output or requirements may be tendered or demanded. of this case) might be permissible when a shut-
2) A lawful agreement by either the seller or the buyer for exclusive dealing in the kind of goods concerned imposes unless Levy (Bread down merely to curtail losses would
otherwise agreed an obligation by the seller to use best efforts to supply the goods and by the buyer to use the best efforts crumbs) not.”
to promote their sale. - Sudden expansion not ok, but
normal expansion is ok
- Exclusive dealing, parties must be
reasonably diligent
- Output=seller, requirement= buyer

Restatement 2nd of Contracts §20 Effect of Misunderstanding Embry, Raffles -Mutual assent must be looked at
(1) There is no manifestation of mutual assent to an exchange if the parties attach materially different meanings to their v. Wichelhaus objectively by the court
manifestations and -20(2)(b) is called comparative fault
(a) neither party knows or has reason to know the meaning attached by the other; or -Look at did one party have
(b) each party knows or each party has reason to know the meaning attached by the other. REASON to know
(2) The manifestations of the parties are operative in accordance with the meaning attached to them by one of the parties if
(a) that party does not know of any different meaning attached by the other, and the other knows the meaning attached by
the first party; or
(b) that party has no reason to know of any different meaning attached by the other, and the other has reason to know the
meaning attached by the first party.

Restatement 2nd of Contracts §36 Methods of Termination of the Power of Acceptance Davis v. Jacoby
(1) An offeree's power of acceptance may be terminated by
(a) rejection or counter-offer by the offeree, or
(b) lapse of time, or
(c) revocation by the offeror, or
(d) death or incapacity of the offeror or offeree.
(2) In addition, an offeree's power of acceptance is terminated by the non-occurrence of any condition of acceptance under
the terms of the offer.
 Provisions Related Cases Notes

Restatement 2nd of Contracts §40 Time When Rejection or Counter-Offer Terminates the Power of Acceptance - Repudiation is invalid when it is
Rejection or counter-offer by mail or telegram does not terminate the power of acceptance until received by the offeror, but mailed after acceptance has been
limits the power so that a letter or telegram of acceptance started after the sending of an otherwise effective rejection or mailed
counter-offer is only a counter-offer unless the acceptance is received by the offeror before he receives the rejection or
counter-offer.

Restatement 2nd of Contracts §63 Time when Acceptance Takes Effect : Morrison v. Mailbox rule
Unless the offer provides otherwise, Thoelke - email is effective when received,
(a) an acceptance made in a manner and by a medium invited by an offer is operative and completes the manifestation of not transmitted
mutual assent as soon as put out of the offeree's possession, without regard to whether it ever reaches the offeror; but -Still applies when delayed or lost in
(b) an acceptance under an option contract is not operative until received by the offeror. transit
-Doesn’t matter if can still retrieve
letter from post office

Chapter 4: Identifying the Bargain

Provision Related Cases Notes

§2-202 Final Written Expression: Parol or Extrinsic Evidence Frigaliment -final on some matters, does not mean final on all maters.
Terms with respect to which the confirmatory memoranda of the parties agree or which are otherwise set (admissible for -language used in com. context, not plain language
forth in a writing intended by the parties as a final expression of their agreement with respect to such ambiguous -court doesn’t have to determine ambiguous language to
terms are included therein may not be contradicted by evidence of any prior agreement (oral or written) term), Hatley allow parol evidence?
or of a contemporaneous oral agreement but may be explained or supplemented. (commercial, -test for section (b), would this have been in the final
a) by course of dealing or usage of trade or course of performance tele activty PE integration? if it wasn’t, then no parol evidence.
b) by evidence of consistent additional terms unless the court finds the writing to have been intended to allowed) ,
complete and exclusive statement of the terms of the agreement Luria (written
agreement
final)

§2-207 Additional Terms in Acceptance or Confirmation -Two situations dealt with here. Written confirmation and
(1) A definite and seasonable expression of acceptance or a written confirmation which is sent within a offer and acceptance.
reasonable time operates as an acceptance even though it states terms additional to or different from -Com 4: Things that materially alter the K: clauses
those offered or agreed upon, unless acceptance is expressly made conditional on assent to the additional negating standard warranties, guaranties of 90% or 100%,
or different terms. clause involving seller power to cancel when buyer fails
(2) The additional terms are to be construed as proposals for addition to the contract. Between to pay any invoice, clause requiring complaints be made
merchants such terms become part of the contract unless: in time materially shorter than customary in trade
(a) the offer expressly limits acceptance to the terms of the offer; -Clauses which do NOT mat. alt.: seller’s exemption
(b) they materially alter it; or beyond his reasonable control, failure of presupposed
(c) notification of objection to them has already been given or is given within a reasonable time after conditions/ proration under those circumstances, clauses
notice of them is received. placing reasonable time frame for complaints, providing
(3) Conduct by both parties which recognizes the existence of a contract is sufficient to establish a for inspection by the sub-purchaser, interest on overdue
contract for sale although the writings of the parties do not otherwise establish a contract. In such case invoices, standard credit terms (if w/n industry practice
the terms of the particular contract consist of those terms on which the writings of the parties agree, and don’t limit credit bargained for), limiting remedy in
together with any supplementary terms incorporated under any other provisions of this Act. reasonable manner
-If no answer received w/n reasonable time can assume
that inclusion has been assented to.
-Com (6): knockout rule.
 Provision Related Cases Notes

§2-615 Excuse by Failure of Presupposed Conditions (Commercial Impracticability) Robert v. -increased cost alone does not excuse performance - must
Except so far as a seller may have assumed a greater obligation and subject to the preceding section on Lynns Ice Co. be due to something else unforeseen
substituted performance -this is more about war, embargo, local crop failure,
(a) Delay in delivery or non-delivery in whole or in part by a seller who complies with paragraphs (b) unforeseen shutdown of major sources of supply, causing
and (c) is not a breach of his duty under a contract for sale if performance as agreed has been made huge increase in cost or prevents seller from getting
impracticable by the occurrence of a contingency the non-occurrence of which was a basic assumption necessary supplies
on which the contract was made or by compliance in good faith with any applicable foreign or domestic -if source of supply is exclusive, this applies Same if
governmental regulation or order whether or not it later proves to be invalid. spec source is contemplated. But no excuse unless seller
(b) Where the causes mentioned in paragraph (a) affect only a part of the seller's capacity to perform, he did all possible to make sure source would not fail.
must allocate production and deliveries among his customers but may at his option include regular -does not apply when risk is assumed
customers not then under contract as well as his own requirements for further manufacture. He may so -crop failure is excused if it is the failure of a spec. crop.
allocate in any manner which is fair and reasonable. Excused seller must fulfill contract to extent that it can
(c) The seller must notify the buyer seasonably that there will be delay or non-delivery and, when -modern allocation of risk
allocation is required under paragraph (b), of the estimated quota thus made available for the buyer.

§2-305 Open Price Term Can be gap filling position

(1) The parties if they so intend can conclude a contract for sale even though the price is not settled. In -provisions exists because so many remedies a K
such a case the price is a reasonable price at the time for delivery if : shouldn’t fail b/c of indefiniteness
(a) nothing is said as to price; or -need to determine if was intent to K
(b) the price is left to be agreed by the parties and they fail to agree; or - price fixing MUST be done in good faith - commercial
(c) the price is to be fixed in terms of some agreed market or other standard as set or recorded by a third standards if merchant, posted prices, future seller or
person or agency and it is not so set or recorded. buyer’s given price, market price
(2) A price to be fixed by the seller or by the buyer means a price for him to fix in good faith. -Sometimes third party judgement is essential to the
(3) When a price left to be fixed otherwise than by agreement of the parties fails to be fixed through determination of the price.
fault of one party , the other may at his option treat the contract as canceled or himself fix a reasonable -wrongful interference to price fix is like a repudiation
price.
(4) Where however, the parties intend not to be bound unless the price be fixed or agreed and it is not
fixed or agreed , there is no contract. In such a case the buyer must return any goods already received or
if unable so to do must pay their reasonable value at the time of delivery and the seller must return any
portion of the price paid on account.
Chapter 5: Policing the Bargain
Provision Related Cases Notes

§ 2-302. Unconscionable Contract or Clause. Williams v. - Courts have common law power to
(1) If the court as a matter of law finds the contract or any clause of the contract to have been unconscionable at the Walker-Thomas determine if statutes are unconscionable
time it was made , the court may refuse to enforce the contract, or it may enforce the remainder of the contract without Furniture - Judges determination
the unconscionable clause or it may so limit the application of any unconscionable clause as to avoid any - Basic test: so one-sided that it is
unconscionable result. unconscionable in comm. context
(2) When it is claimed or appears to the court that the contract or any clause thereof may be unconscionable the parties - Circumstances are important
shall be afforded a reasonable opportunity to present evidence as to its commercial setting, purpose, and effect to aid -Public policy also matters here
the court in making the determination. Procedural: No meaningful choice
Substantive: Unfair terms
 Provision Related Cases Notes

§ 2-209. Modification; Rescission and Waiver. Moon Motor -R2K 89

(1) An agreement modifying a contract within this Article needs no consideration to be binding. (change from common Lodge , Clark v. -Spotting modification issues: Look for
law pre-existing duty rule?) West original K, executory (not performed
(2) A signed agreement which excludes modification or rescission except by a signed writing cannot be otherwise fully by either party), agree to change
modified or rescinded, but except as between merchants such a requirement on a form supplied by the merchant must the duties of at least one f the parties
be separately signed by the other party. -Good faith applies here- subsection (1)
(3) The requirements of the statute of frauds section of this Article (Section 2- 201) must be satisfied if the contract as -Consideration is not necessary, but it is
modified is within its provisions. evidence of good faith
(4) Although an attempt at modification or rescission does not satisfy the requirements of subsection (2) or (3) , it can
operate as a waiver.
(5) A party who has made a waiver affecting an executory portion of the contract may retract the waiver by reasonable
notification received by the other party that strict performance will be required of any term waived, unless the
retraction would be unjust in view of a material change of position in reliance on the waiver.

Restatement 2nd §15 Mental Illness or Defect Ortefiele - Cognitive and compulsion test.
(1) A person incurs only voidable contractual duties by entering into a transaction if by reason of mental illness or
defect - 1(a) is cognitive
(a) he is unable to understand in a reasonable manner the nature and consequences of the transaction, or - 1(b) is compulsion
(b) he is unable to act in a reasonable manner in relation to the transaction and the other party has reason to know of his - Many decisions look at ability to return
condition. families to the status quo , modern trend
(2) Where the contract is made on fair terms and the other party is without knowledge of the mental illness or defect, is towards compulson
the power of avoidance under Subsection (1) terminates to the extent that the contract has been so performed in whole
or in part or the circumstances have so changed that avoidance would be unjust. In such a case a court may grant relief
as justice requires.