CONTRACTS – KETTLE – ESSAY CHART

STEP 1: FORMATION (Threshold Question: UCC or Restatement?) (OFFER + ACCEPTANCE = MUTUAL ASSENT) (MUTUAL ASSENT + CONSID = K)
BiL: offer invites accept. by return prom. R 2nd 30(2) offer invites by perform./ prom. offeree chooses & beginning is a return promise R 2nd 62
UniL: offer can be accept. by perform. if MOO specifies R 2nd 53, beginning perform. is not accept. if offeree notif. offeror of non-accept. R 2nd 53 (2), notif. not necessary unless MOO requests R 2nd
54.
IIL/ Quasi K: (1) benefit on D by P (2) apprec. by D of benefit (3) accept. of benefit [Bailey v. West, court found no quasi K where benefit was officiously conferred on West]
Output/ Req. K: a term which measures quantity by the output of the seller or the reqs. of the buyer means such actual output or reqs. as may occur in good faith UCC 2-306 [ McMichael v. Price,
sand case, K was enforceable b/c good faith that McMichael could/would sell was understood at time of K ]
Offer (intent to be bound, to definite terms, comm. to Acceptance (must be definite and unequivocal) Consideration (benefit or detriment; bargained for
offeree) R 2nd 24 “acceptance of an offer is a manifestation of assent to the terms exch.)
Termination: 1. Lapse of time, 2. Revocation, 3. Rejection thereof made by the offeree in a manner invited or required by Adequate: Once req. met, no req. of adequacy R 2nd 79 [Hamer
(includes Counter-Offer) 4. Offeree dies the offer” R 2nd 5(1); “unless otherwise unambiguously indicated v. Sidway, nephew gets $ for not smoking or drinking, can be
Rejection: by c/o (mere inquiry v. counter); effective when by the language or circumstances an offer to make a K shall be forbearance, does not have to be adequate or equitable, must
rec’d; option K offeree can reject & accept later before option construed as inviting accept. in any manner and by any medium induce promise]
expires UNLESS offeror detrimentally relies on offeree’s reasonable in the circumstances” UCC 2-206 Inducement: does not itself have to induce promise R 2nd 81
rejection @ Common Law: Mirror-Image  otherwise c/o [Thomas v. Thomas, widow allowed to stay even though
Irrevocable Offers: -any conduct that evidences MOM is accept. agreement was made out of respect for dead brother, $1
1. By merchant UCC 2-205 – Firm Offer: promise to -Mailbox Rule – accept. valid when sent; no MBR for opt. k and payment sufficient consid. regardless of why they made the
hold open, irrevocability can’t exceed 3 mo. MBR invalid if offer said no MBR
deal]
[Lonergan v. Scolnick, buying 40 acres of Joshua -accept. then reject. – MBR applies unless reject. arrives 1st
Nominal: a sham or nominal consideration does not satisfy R 2nd
Tree. Held: letter from seller not offer b/c buyer had @ UCC: Add. & diff. terms  object. Intent to accept UNLESS
71, R 2nd 79 cmt. D [In re Edwin Farnham Greene, couple in an
no reason to believe that his acceptance would seal accept. expressly conditional on assent on new terms; OR
affair create a K once they breakup but $1 not sufficient
the deal] -both parties start to perform
-accept. by unauthor. method is still accept. if rec’d by offeror consideration because it is nominal]
2. Option supported by consideration NO Consideration If…
3. Option inducing reliance: must be in writing, signed when offer is still open
UCC 2-606: Acceptance of Goods  (a) after reasonable - Illusory promise (uncertain terms)
by offeror, and a reasonable time R 2nd 87 (1)
4. Detrimental reliance by offeror – req. reasonable opport. to inspect goods signifies to the seller that the goods are - Moral obligation EXCEPTION where there is a
expectation & creates option K to avoid injustice R conforming or that he will take or retain them in spite of their material benefit [Webb v. McGowin, man saved
2nd 87 (2) non-conformity; or (b) fails to make an effective reject., (c) does from block of lumber = material benefit] [Mills v.
5. UniL offer where offeree has begun performance – any act inconsistent w/ seller’s ownership Wyman, no enforceable promise where moral
must get reasonable time to perform, mere prep. [LaSalle National Bank v. Mel Vega, buyer sent K & said it obligation is not material benefit]
doesn’t count R 2nd 45 cmt. (f) [Marchiondo v. would be executed when signed by trustee, seller executed & - Past consideration EXCEPTION binding to extent
Scheck, P is broker and finds buyers for D seller. D sent back, buyer did not have trustee sign so no K] necessary to prevent injustice but not binding if
revokes offer for sale. Held: broker accepted by By shipment…[Corinthian Pharmaceuticals v. Lederle conferred as gif or value is disprop. R 2nd 86
performance is entitled to commission] Laboratories, partial shipment of non-conform. is c/o not - Pre-existing duty EXCEPTION where agreement
6. Mailbox Rule – once acceptance sent by mail offer accept. b/c it explicitly stated it was an accomm.] UCC 2-206 modif. needs no consid. UCC 2-209(1); where
cannot be revoked By shipment… FOB/ Destination – seller allocates risk till perform. of legal duty can be new consid. if it is
Revocable when: offeree receives a manifestation of intent not goods reach buyer, FOB/ Shipment – buyer takes risk upon different R 2nd 73 [Levine v. Blumenthal, agreement
to be bound shipment UCC 2-319 to reduce rent is unenforc. b/c duty to pay rent is
Advertisements: offer when clear, definite, explicit and leaves By perform… Accept. by perform. req. part of offer requests PEED so no consid.]
nothing up to negotiation [Lefkowitz v. Great Minneapolis perform. & includes accept. by a perform. which operates as a Promissory Estoppel: substitute for consideration. R 2nd 90, 139:
Surplus Store, fur coats case] return promise R 2nd 50 (2); where offeror invites accept. by only Detrimental reliance on promise, foreseeable/reasonable, remedy
perform. then option K R 2nd 45 is limited as justice requires [Rickets v. Scothorn, grandfather’s
promise enforced because granddaughter unjustly relied on it]

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STEP 2: PERFORMANCE (is K Void: a K that cannot be enforced; is K Voidable: either party can avoid valid K; is K Unenforceable: valid but one party refuses to
carry out its terms)
A. Contract Terms: Interpretation & Construction A. Contract Terms: Modification C. Discharge of Duty:
Certainty:  CL R 2nd 89: modif. of K not fully performed is Performance:
- Even though a manifestation of intention is intended to binding if modif. fair and equitable, and @ CL Substantial perform. is enough; factors to decide if
be understood as an offer, it can’t be accept. so as to form circumstances not anticipated at time of K substantial perform. is ok (1) how much of K benefit did
a K unless the terms of the K are reasonably certain R 2 nd  UCC 2-209: an agreement modifying K doesn’t innocent party receive, (2) to what extent will damages make up
33 [Varney v. Ditmars, employer offered to give need consid. to be binding for imperf. perform., (3) extent to which breach was wrongful or
employee a “fair share of profits” the court found that [Angel v. Murray, garbage delivery case, court allowed in bad faith
modification b/c it met reqs. in R 2nd 89] @ UCC “Perfect Tender Rule” UCC 2-601 is required.
the terms were so indefinite it was pure conjecture] UNLESS (a) goods do not conform but time of perform. not
@ CL Last Shot Rule: if perform. happens after exchange of expired UCC 2-508, OR (b) if it is an installment K
Indefiniteness: messages, parties believed K existed, whoever sent last form Changed Circumstances: Impossibility,
- R 2nd 33 (2) term of K reasonably certain if they provide prevails Impracticability, and Frustration of Purpose
basis for determining the existence of a breach and for  UCC 2-615: unless a greater obligation is assumed,
giving approp. remedy (3) missing terms may show lack @ UCC Knockout Rule: UCC 2-207 no breach if by the occurrence of a contingency the
of intent to K [MGM v. Scheider, actor in TV series, Held: If Additional  one party is not merchant then non-occurrence of which was a basic assumption on
missing term of start date of film could be determined terms are a proposal which K was made
by customs of industry] If Additional  both merchants then terms become  @ CL FOP – R 2nd 265: (1) a purpose without which
part of K unless: materially alter, offer expressly the K makes little sense, (2) substantial (more than
limits to terms, or offeror rejects w/in reason. time profit loss), (3) non-occurrence of frustrating event is
Price Gaps: a basic assumption on which K was made
If Diff.  one party is not merchant terms adopted
-@ UCC 2-305 K can be concluded even if price is If Diff.  both merchants then “Knockout Rule”  @ CL Impracticability – R 2nd 266: (1) performance
unsettled, price is reasonable price at time of delivery but is impracticable or (2) frustrated without fault of
MUST include quantity  OPEN PRICE TERM Parol Evidence Rule: Evidence not allowed where the K is party by event that non-occurrence of which is basic
assumption on which K was made
-@ CL: R 2nd 204 when parties to a bargain defined to be fully integ. If not, then evidence of the agreement outside of
writing can be allowed in ONLY to supplement not to Accord & Satisfaction: (1) good faith dispute over amount,
a K have not agreed to a term which is essential to their
contradict. UCC 2-202 (2) in writing, signed by parties, (3) states that it is an “Accord &
rights and duties, a term which is reasonable under the Satisfaction”
circumstances is supplied by court [Oglebay v. Armco,
after finding intent to K regardless of the failure of the B. Third Parties: D. Excuse of Condition:
pricing system held that the terms were to be filled and Assignment of Rights Anticipatory Repudiation: UCC 2-610 (1) info about
@ UCC 2-210: Must not increase the burden on the other party potential breach must be from reliable source, (2) duty to
the K enforced] inquire, (3) duty to cover  Duty to mitigate triggered
or allow them to receive less than he would have for his bargain
@ CL R 2nd 317 (2): a K right may be assigned unless it (a) Can file suit OR wait for non-performance
Interpretation (prior dealings/ industry customs): materially changes burden on other party, (b) statute forbids, (c) Retraction of Repudiation: when no reliance
UCC 2-202: terms of K can’t be contradicted by outside assignment is validly precluded BUT under R 2nd 322 K Actual Material Breach
evidence but can be supplemented and explained  prohibition limits rights NOT power Duty is discharged but material breach to core of K; party can
LOOK TO PAROL EVIDENCE RULE treat as (a) partial breach or (b) total breach. Can terminate
Delegation of Duties performance and collect for entire K.
nd
R 2 206: In choosing among meanings, the meaning is
@ CL R 2nd 318: An obligor can properly delegate his duty Immaterial Breach
unless the oblige has a substantial interest in having that person Remedy for promise broken is merely damages but must
chosen which operates against the drafter of the perform the K continue to perform; breaching party can get restitution.
document
Condition Precedent: Never Occurred  No Duty
Novation Waiver/ Estoppel: if party waives other party’s conditional duty,
An agreement between two parties in a K for a third party original party may retract waiver UNLESS other party relied on
to step into replace one of the parties. All must sign. the waiver of the duty

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STEP 3: REMEDIES
Damages for Breach Limitations to Damages Rescission, Reformation and Release
1. Expectation: R 2nd 344 (a). Having the benefit - Mitigation: duty to not make position worse; Rescission: the undoing of K and restoring the parties to
of the bargain, being put in as good as a See R 2nd 350 their pre-K positions. See UCC 2-209.
position as if the contract had been performed. - Foreseeability: can recover (1) all damages
2. Reliance: R 2nd 344 (b). Reimbursed for loss reasonably foreseeable at time of K; (2) special Reformation: seeks to restore the efficacy of a writing
caused by reliance, put in as good a position as conditions communicated to all parties; See R that improperly reflects the agreement. See R 2nd 155.
he would have been had the contract not been 2nd 351
made  Hadley Rule: Loss of profits not *** Rescission & reformation are usually a result of a
3. Restitution: R 2nd 344 (c). Having restored to recoverable where violating party did not have mutual mistake regarding a material fact of the K***
one any benefit one conferred on the other ability to foresee the loss at the time the K was
party. The goal of this remedy is to undo the made; See UCC 2-715(2)(a) OR See R 2nd 351 Release: writing that manifests intent to discharge other
unjust enrichment of the breaching party (1) person of duty.
 Disgorgement: repayment for ill-gotten - Certainty: must be able to prove damages with @ CL: release must generally be supported by
gains imposed on wrongdoers by court reasonable certainty; See R 2nd 352 consideration to discharge duty
 USE Restitution for K that terminates due @ UCC: a claim of right can be discharged in whole or
to FOP and for Rescission Specific Performance (See UCC 2-716, R 2nd 357) part w/o consideration by waiver or renunciation that is
@ UCC Buyer’s Remedies: UCC 2-711 is appropriate when the contract refers to something that signed and delivered by aggrieved party. See UCC 1-306.
When seller’s time for perform. arises seller may: is unique and other damages or remedied would not
(1) do nothing – breach by seller succeed in restoring the non-breaching party
(2) make nonconforming tender – breach by seller  Elements for Specific Perform.: (1) difficulty of proving
(3) make conforming tender – perform. by seller damages w/ reasonable certainty, (2) difficulty of procuring a
Seller’s Failure to Tender – Buyer can get… suitable substitute perform. by means of money awarded as
 Damages: recover market price minus K price damages, and (3) likelihood that damages will be collected
 Cover: purchase similar goods elsewhere and recover
replacement price minus K price. See UCC 2-712. *** Usually NOT awarded for service K b/c forcing
 Specific Perform. See UCC 2-716. someone to perform a service may be against labor laws,
 Replevin: buyer can get identified undelivered goods from constitutional rights etc. ***
seller if similar goods available in marketplace. See UCC 2-716.
ONLY IF (a) seller becomes insolvent w/in 10 days
of receiving payment from buyer OR; (b) goods were Injunctive Relief: getting a court order saying that
partially paid for by buyer only for family or personal something must occur or restrain the occurrence of
purposes something.
@ UCC Seller’s Remedies: UCC 2-703
a. Right to price upon accept.
b. Right to reclaim goods
c. Wrongful rejection: if buyer wrongfully rejects
seller has alternative remedies (1) collect damages (2)
resell goods (3) recover the price (4) incidental
damages IN ADDITION to other three
d. Loss volume seller: seller can recover for lost
profits if seller has a large capacity to sell goods and
seller would have made sale if buyer hadn’t breached
(K price minus seller’s costs); See UCC 2-708(2)

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