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Contracts Spring 2021-- Roadmap ● Areas of law to cover when answering a question: (remember to show your work! Say WHY and HOW you came to that conclusion) ○ What law applies? ■ Common law, UCC or CISG? ■ Is it mixed? ■ CISG = treaty, so its > UCC because of supremacy clause ○ Was there a meeting of the minds? ■ When was the offer? ■ When was acceptance? ■ Were there counteroffers? ■ Retracted? ● Could it be retracted? (e.g. firm offer) ● Was it retracted? ○ Consideration ■ Did this type of contract require consideration? ■ If so, was the consideration valid? ○ How many parties are there? ■ 2 like most of the contracts we’ve covered? ■ Or are there third parties? ● Intended or incidental? ● If intended, is it a creditor or donee beneficiary? ● Have rights vested? ● Does it involve a gov’t contract? ● Was there assignment of rights and/or delegation of duties? ○ Where are we? This tells you where to look within the source of law you have already identified! ■ Is this a problem solving question in the negotiation phase? ■ Or was a contract already formed? ● If it was formed, do both parties still want it to be valid? ○ Does a party want to include extrinsic evidence? ■ Interpretation ■ Parol evidence rule ■ Battle of the forms ● Or, is one or more parties trying to say the contract is void or voidable? ○ Void?
■ Lack of capacity (e.g. infancy) ■ Duress ■ Public policy ■ Illegality ■ Unconscionability ○ Voidable? ■ Due diligence ■ Mistakes ■ Representations ■ Warranties ■ If the contract is already formed, is the issue with performance or breach? ● If breach was it material, total, partial? ● If UCC, perfect tender rule ○ Any defenses? ■ Some examples= ● impossibility/impracticability/frustration of purpose or force majeure clause ● anticipatory repudiation ○ Any damages? What kind and to whom? ■ Types of remedies: ● Equitable remedies ○ Specific performance ○ Injunctive relief ○ Avoidance ○ Rescission ● Damages ○ Liquidated ○ Expectancy ○ Reliance ○ Special damages like consequential and incidental ○ Punitive ■ Limitations on recovery/ defenses to breach ● Failure to mitigate ● Foreseeability ● Avoidability ● Anticipatory repudiation ● Other considerations when answering the question:
(the end product is the object of a transfer of title), its goods, even tho process may involve labor costs that substantially outweigh cost of materials]
CISG art. 2 [GOODS ONLY]: doesn’t apply to goods bought for personal use
unless the seller neither knew nor ought to have known that the goods were
bought for any such use. Doesn’t apply to auctions, execution,
stocks/shares/investment securities/negotiatable instruments/money,
ships/vessels/hovercraft/aircraft or electricity
- Art 3, : goods manuf/produced are sales unless party who orders goods
supplies a substantial part of the materials necessary for manuf /
production
- DOESN’T APPLY TO PREPONDERANT PART OF OBLIGATIONS [OF PARTY
FURNISHING GOODS] CONSISTING IN THE SUPPLY OF LABOR/SERVICES
CISG art 6: “the parties may exclude the application of this Convention, or subject
to article 12 derogate fro or vary the effect of any of its provision”
Merchant (S 2-104): a person who deals in goods of the kind or otherwise by his occupation holds himself out as having knowledge or skill peculiar to the practices or goods involved in the transaction. Course of performance mean one party does something and other party accepts (2 acts, at least) Course of dealing means party’s have established habits. Expectations are that they will continue to be that way. We have created these habits thru past dealings Trade usage/usage of trade means the way things are usually done in this industry or this market if the parties have reason to know how things are usually done. b/c as repeat players, they are familiar w/ them Step 2. The _ letter/sentence was / was not an offer because:
- INVITATION TO DEAL OR OFFER : COMMON LAW: both offer and acceptance, for MM purposes = objective manifestations of assent, not subjective intents Offer – reasonably communicated to person, [some person or group of persons] but see rewards exception to general advertisement rule that ads aren’t offers: 100$ Reward + ad = offer // Another exception to general rule: specifies price, quantity and means to purchase what’s advertised indicating desire to enter a contract , engendering a reasonable understanding tht acceptance will create contract // but if otherwise just states price, quantity, first come first serve = NOT AN OFFER. JUST AN AD / INVITES PEOPLE TO COME AND MAKE AN OFFER !!!!! o If essential terms in it so that all u need to do is say yes to accept: “wld u agree to this price” is ok if essential terms [subject matter, performances to be exchanged] in it
o Aka no further assent / negotiation needed from offeror [ unless “to my personal satisfaction” exception to general rule] Invitation to deal - §26 [price quotes, estimates, etc.] = “estimate” / “price quotation” o person buying has reason to know tht other person making manifestation of willingness to bargain requires a further manifestation to conclude the bargain o see §33 for failing offers [ MERE INVITATIONS TO DEAL]: Even though a manifestation of intention is intended to be understood as an offer, it cannot be accepted so as to form a contract unless the terms of the contract are reasonably certain/definite = Aka must have a reasonable basis for determining the existence of breach and for giving an appropriate remedy EVEN IF SAYS ITS AN OFFER if it says “ all offers are subject to approval by us” = cannot be an offer because still requires an additional manifestation of assent by offeror / doesn’t include acceptance to preclude the bargain/deal “The objective theory of contract views offers in the minds of how a reasonable person would view __.” “If one party objectively communicates a desire to enter a contract, engendering a reasonable understanding that acceptance will create a contract, then he has made an offer.” Here, ____ IF NOTHING APPLIES TO BE AN OFFER, Ask if offer/contract is implied from acts, conduct or words: implied in fact [§4 – does work after asked to, implied will be paid reas price / auction, for ex .] or implied in law [ require u to compensate another for a benefit conferred in order to avoid UNJUST ENRICHMENT: i.e. helping dying person on street UCC: True even if parties fail to include terms tht would result in a failure at common law= don’t fail for indefiniteness if parties intend to make a contract and a “reasonable basis” [look at commercial context. But more missing terms, more likely didn’t intend to make contract] = difference 1 2-204(3) need quantity. Can never gap fill quantity 2-305: don’t need price term. One party can determine it if in good faith CISG :
- Article 14: a proposal for concluding a contract addressed to 1 or more parties constitutes an offer if it is sufficiently definite and
- indicates the intention of the offeror to be bound in case of acceptance. o A proposal is sufficiently definite if it indicates the goods and expressly or implicitly fixes or makes provisions for determining the quantity and price
- Article 15: an offer becomes effective when it reaches the offeree
- [An offer, even if it is irrevocable, may be withdrawn if the withdrawal reaches the offeree before or at the same time as the offer ]
- Article 55: open price = impliedly made reference to the price generally charged @ the time of the conclusion of the contract for such goods sold under comparable circs in the trade concerned
NEGOTATING // CONSIDERING OFFER IF DON’T EXPRESSLY SAY NOT REJECTING = COUNTER-OFFER AT COMMON LAW. BUT, IF SAY NOT REJECTING WHEN CONSIDERING “under further advisement”, especially if don’t offer price adjustment / ”considering but also interested in adding a turkey” w/o price adjustment = NOT A REJECTION AT COMMON LAW., but PRUDENCE!!!! PRUDENCE IS NOT AMBIVALENCE , SO IT IS NOT A RECOVATION: Once offeree rejects, no more contract / destroys offer. IF ACCEPTS AFTER REJECTS, CREATES NEW OFFER. Now, offeree is offeror and offeror is offeree Considering an offer alone is not rejecting (§38 of restatements Mirror-image: must match offer exactly
- But see Last-shot rule: if boilerplate sent before performance, implied acceptance and those terms prevail [ similar to 2-207(3) in that conduct creates the contract] Mail-box: ASK: WAS THE DISPATCH[ACCEPTANCE] OR RECEIVAL[REJECTION] RECEIVED FIRST??? not for options **_: effective on dispatch - always works if sent acceptance first, but if
- A_** dispatched , r sent ,r received (call/priority) , a received applies unless offeror relied on the rejection that it first received o Morrison: dispatched acceptance by mail. Then called to revoke, but irrelevant bc acceptance effective on dispatch - TRICKY QUESTION: if rejection, acceptance, whichever is received first may determine... o if r,a dispatched, ,r received , a mailbox rule says acceptance applies!!! o and if r,a,a,r acceptance will def apply !! ONCE ACCEPT OFFER IS GONE. DONE. FINISHED AT THAT MOMENT. EFFECTIVE ON DISPATCH. CAN NOT REVOKE!!!!! UNLESS OFFEROR REALLY RELIED?
- If improperly mailed wont apply, unless post office fixes it / minor effor / offeror receives it
- If acceptance by performance: o Mandated as exclusive means option in favor of offeree once begins performing [only offeror bound] o Not mandated as exclusive means but still allowed because didn’t mandate promise as exclusive means binds both in the sense that offeror cannot revoke once performance begins, but offeree makes an implied promise to complete and if doesn’t, also liable o Performance over time = acceptance not complete until performance complete, but offeror cannot revoke in the mean time
- OPTION CONTRACTS ARE SEPARATE CONTRACTS: ACCEPTANCE OF IT MUST BE RECEIVED WITHIN THE TIME SPECIFIED BY THE OPTION PERIOD AND MERE DISPATCH WONT DO [recipient many times doesn’t care or waives application of the rule by conduct indicating deal still on] *** no mailbox rule under CISG = acceptance is only effective on receipt !!!!! NO KNOWLEDGE OF OFFER BUT ACCEPT ANYWAYS BECAUSE PERFORMED THE ACTS REQUIRED???? **Ok!
- The “no knowledge of offer” made requirement is designed to protect offeree from offers by parties that require affirmative requirements of rejection** !!! / offers by superior bargaining power type offerors that are unconscionable , etc..
- If the lack of knowledge about the offer only serves to later benefit the offeree in a reward type situation it should be ok to allow offeree to accept, even if no real detriment to offeree, it can provide the benefit to offeror and not getting the reward wld be unjust entichment
UCC: 2-
Prompt or current shipment of nonconforming goods constitutes an acceptance [ unless seasonably notifies tht nonconforming goods are only an accommodation]
- Any manner/mode reasonable including prompt promise to ship or actual shipping
- If begin performance, must tell offeror in reasonable time or offeror can treat it as lapsed 2-207: battle of the forms [ can be one form, after customer makes an offer, for ex – Kloeck] (1) acceptance w/o proviso is a valid acceptance [w/ proviso = counter-offer] Article 2 governs this transaction because ABC offered to buy items for delivery, which means they’re movable and therefore are goods. Under § 2-207(1), an offeree’s confirmation form operates as an acceptance if it confirms the offer and is sent within a reasonable time unless it contains a proviso. Zed’s form confirmed by repeating the quantity and price of goods specified in ABC’s purchase order.
- UNLESS BOTH FORMS DISAGREE ON QUANTITY !!!! THEN NO MEETING OF THE MINDS !!!!!! **_(2) additional terms are mere proposals if:
- not merchants and will be added only if expressly agreed to.. otherwise, where both merchants_** additional terms will be added unless: -they materially alter [ yes disclaimer implied warranties at UCC, no at common law: implied merchantability only if seller is a merchant, reserving power to cancel by seller if buyer fails to meet any invoice when due, anything resulting in surprise or hardship] the deal, the offeror objects in a reasonable time or the first doc expressly limits acceptance to its terms [“offeror proviso”] different terms knocked out and gap-filled… If no acceptance in (1) (3) says can still be an acceptance if parties act lk it. Only terms both agree to in contract. Gap fillas for the rest / express >COP>COD>usage ******Only way don’t is IF ACCEPTANCE HAS A PROVISO [even “nonwithstanding” can be interpreted as a proviso in acceptance, also “even if” or “unless”]**. All else is a Q of what terms are in the contract )*********: (1): the forms create a contract b/c they don’t disagree with each other (2): the forms create a contract BUT there’s something discrepant btwn 2: 2a. there is an additional term in acceptance (2) to see if in contract: ADDITIONAL TERMS BTWN MERCHANTS [ 2-104: very broad, comment shows 2 definition explains that a merchant for confirmatory memoranda purposes under 2-207 is that “almost every person in business” is deemed a merchant]
3a. only terms on which both parties agree go into the contract. Supplementary terms (§1-303, Article 2, and if not common law) fill gaps. §1-303 is best gap filler: Express terms [what parties said to each other] Course of performance [at least 2 incidents, that show party’s expectations via how they behave in this deal/contract = 1 party behaved repeatedly and other party, knowing this, accepted it without objection = must be >1 behaviors in same deal. Cant be PO, invoice. New PO, new invoice.] Course of dealing [at least 2 incidents, that show party’s expectations via how they behaved in prior deals/contracts with each other = establishes a common basis of understanding for interp their expressions and other conduct // HABITS ARE ESTABLISHED IN PAST DEALS. But if never litigated/arbitrated, arbitration clause wouldn’t help here ] Usage of trade [how people behave in the same market or same industry to the extent that party’s would know this is what is expected, but if merchant very likely to be unclear = such regularity to justify expectation that it will be observed with respect to transaction in question // at common law, litigation prevails over arbitration for example ] Trade usage/usage of trade means the way things are usually done in this industry or this market if the parties have reason to know how things are usually done. b/c as repeat players, they are familiar w/ them o Usage practice/method/custom (1), having such regularity (2) as to justify an expectation that parties will observe/assume it applies to their transaction (3) unless agreed otherwise, court [and parties] expect them to do things the way its normally done. need to disclaim it if intend not to be bound by it 1-303c: if trade code, Q of law for judge You would need to explain your reasoning on four issues: whether the forms created a contract (which a proviso would have prevented); whether Zed’s arbitration clause is an additional term or a different term; whether both parties are merchants; and whether Zed’s arbitration clause has become part of the contract. Don’t assume that Article 2 governs or that the parties are both merchants. These are steps in your reasoning, and you must explain them. PRINCESS CRUISE LINES HOW COMMON LAW COUNTER-OFFERS WORKS AS A PROVISO IN offeree’s FAVOR:
- Any term additional in acceptance = counter-offer. If a offeror gives permission to proceed / conduct sufficient to show acceptance offeree’s terms replaced all of offeror’s terms! allows offeree master of offer with power to create contract and its terms!!!!!
- This is what a proviso [UCC] is intended to do for an offeree, but a proviso is tricky because under UCC, its not “last shot rule” so offeree’s terms in the doc that had the proviso wouldn’t be binding.
- Rather, only the terms to which the parties agreed wld be added [SO OFFEREE CANT GUARANTEE ANYTHING. Ur entire boilerplate is gone] and more likely gap fillers will be neutral / not in ur favor
- [Klocek: offeror sends PO offeree sends goods back + PO [proviso]. Too late. MM before/when PO received and accepted. So when sent T&C in box = mere proposal and since klocek not a merchant, need to expressly agree. ] 2-606: acceptance of goods: reasonable opportunity to inspect and doesn’t reject, does any act inconsistent with seller’s ownership or after reasonable opp to inspect, tells seller conforming or accepting despite non-conforming nature 2a. if doesn’t look like acceptance , ask: silence exception applicable? [ where INACTION would be required to not accept? to make silence applicable, impose a duty on offeree: “offeree must __ /shall/will not/shall not/cannot sue for/agree to” ] (a) prior relationship/COD [pattern of _] that would give offeree reason to believe silence=acceptance (b) offeree retains benefit + knows of offer [see Norcia] + offeree knows offeror will expect compensation + had time to reject [§69] (c) offeree exercises dominion over goods and then does something with them [hangs it up/uses/sells] even if doesn’t intend to accept [many states don’t allow unordered merchandise] (d) offer states can be accepted this way + offeree intends to accept 2b. if looks like acceptance , ask: (a ) timely? [according to period: held open or is good until X, then POA ends when X occurs. OR reasonable if none] (b) In proper form [promise or act required in offer?] (c) deviates? [ mirror image – CAN ANSWER YES OR NO // or additional statement just a mere implication of offer: Implied gap filla? // **or LAST-SHOT: perform as if deal [SHIPPED
- ACCEPTED]** THEN last form [counter-offer’s] terms apply Vs. UCC 2-207 allows for anything tht doesn’t have a proviso (even if more/dif terms) also more gap fillas so more implications/easier to be an acceptance] CISG: - 18: no silence, but any statement or conduct made indicating assent / EFFECTIVE ON RECEIPT OR AT MOMENT ACT OCCURS (18(3))
- REVOCATION OR REJECTION? COMMON LAW: ON RECEIPT, ALSO OPTIONS ARE IRREVOCABLE Revocation:
- An act of revocation, known to offeree. Includes ambivalence o Irrevocable if: option [w/ consideration, even if offeror rejects during option time] = an Option is a sep contract, a promise to keep the offer open, so thus requires paying sep consideration or promise to pay consideration irrevocable /even if reject, or death, or incapacitated mailbox rule DOES NOT APPLY TO OPTION CONTRACTS. Thus, acceptance is only effective on receipt here !!!!!!! detrimental reliance [reasonable, and offeror shld reasonably expect this: §87], or
- Website: agree to give its website/software services and customer agrees to abide by the rules Illusory(§77) ok [limits future options in SOME lil way]: - personal satisfaction [good faith limitation] // output/requirements [good faith: so in UCC, if a shutdown by a requirements buyer for lack of orders in entire mkt, not just cuz less profitable now = not just cuz now a losing contract, ok if good faith – 2- comment 2] // exclusive agency [best efforts or good faith] o ”furnish all sand first party can sell” w/ limit [limit is = first party is engaged in the business of selling and shipping sand. So can claim cld poss refuse to sell sand/fail to do so but if based contract on sellers ability to sell sand, its not illusory] - termination at will if notice given // price formulas // - conditional promises if not entirely at will of promisor to fulfill condition or CONTROL = GOOD FAITH / best efforts / some limitation - moral obligation/material benefit only [IN UCC, SEE §86 FOR COMMON LAW] where debtor promises to pay for a debt or part of debt although NO LONGER legal obligation to do so [ after bankruptcy proceedings have begun or finished] bc debt has been discharged by bankruptcy / barred by SOL [ to the extent of $ promised only] Illusory not ok : - gifts, past consideration [unless moral obligation exception: voidable obligation but promise to perform] - conditional promises where condition in complete control/will of promisor and doesn’t limit future options at all [ill do X if I chose to do X] // or a sham bc condition could **not poss occur
- no moral obligation exception where debtor promises to pay for a debt owed to** creditor BEFORE bankruptcy proceedings have begun because still a legal obligation... but see payment of valid debt mod below: Mods: [§89] - Pre-existing duty rule: [for contracts not fully performed]: doesn’t suffer detriment to do what already obligated to do [through employment, law, etc.] o ok if promises something different/more under a bilateral contract, ok if performance outside scope of official duties, or public duty thts not required by law o ok if fair and equitable mods in light of changing circs [§89] = modern trend [[1]] and [[2]] is promissory estoppel… o EVEN IF BOTH PARTIES AGREE TO MOD IN SIGNED WRITING if there is no consideration for the mod [i.e. one promises to do more for no additional $] NO ENFORCEABLE MOD!!!! but usually ok if modification w/o consid when: a party encounters unanticipated difficulties (A), + mod is fair and equitable in view of circs not anticipated by parties when contract was made (B), + and contract is still executory on both sides (C) [ each side owes performance] and
both parties agree to mod (D) o ok if payment of valid debt [unless partial payment of liquidated, present debt] if preventing routine settlement/ debtor did something different / honest dispute / or unliquidated debt [aka no agreement on price / agreement to not to enter bankruptcy [if legal right to do so or liquidate business] = okk!!! o And if promise to pay part of a valid debt [partial payment and/or extension], prob ok if creditor agrees to partial payment [fairly bargained for]
- clickwrap terms: [i.e. u do something affirmative to manifest ur assent by clicking, u cannot say the terms were not given w/ adequate notice, as long as they were available before u downloaded the software, for example] … o ok if “we can make changes at any time but we’ll give u notice first” and “if u use service after change takes effect, means accepting ” because it’s a condition that is satisfied, so declaration is activated, so MM [as long as RP wld think ur agreeing] If trying to prove consideration §86 restatements EXPANDS material benefit RULE [A) usually for voidable debts [ AS UCC] , B) charitable donations, C) promisee had some reliance interest, i.e. compensate for costs invested ]: X enabled Y to get benefit, so thts adequate consideration for Y giving X ___
- Requirements = WHERE THE terms of a contract are susceptible to 2 significations, tht will be adopted which gives some operation to the contract rather than the one that makes it inoperative” / so a contract shld be construed in such a way as to make the obligation imposed by its terms mutually binding upon the parties, unless such construction is wholly negatived by the language used o Q in a requirements contract = did the vendor have knowledge of the purchasers requirements??? WAS IT ANTICIPATED BY THE PARTIES AND KNOWN TO THE DEFENDEANT THAT EXPERIENCED SALESMAN / WLD BE ABLE TO SELL A SUBSTANTIAL AMT OF SAND? [ even when amt delivered or paid for cannot be determined at time contract made, its not illusory if the terms of the promise give a sufficiently definite objective std to enable a court to determine the amt when the time comes for enforcement]/duty is conditional on objective need 4 it]
- or if trying to prove consideration for gift “if u come over, ill give u bike” // “if u give me the bike, ill come over to ur house in 5 mins and hangout with u” = me going to ur house was a detriment bc u were lonely and wanted company and I was busy and didn’t want co./ cost of gas / etc.
- TRYING TO PROVE GIVING UP INVALID LEGAL CLAIM is consideration IF giving up smoking is valid consid, giving up suing on an invalid but honest legal claim shld be too! // some grounds for thinking it wld be successful
- Courts sympathize, invent legal fictions whereas they imply tht the SUBSEQUENT promise is contemporary w/ the previous benefit [in effect, willing to imply a promise tht ___ (gratitutious promise was implied in fact as part of/a reward for _his beneficial acts/reliant acts)
- I reserved my rights to go back on my decision [I decided, prior to ur promise to ___, but I reserved my rights not to do __ when I ___]
- 2-309 = DIFFERENCE: “change my mind at any time” is ok if reasonable notification received by other party - Also, 1-308 = if u reserve rights “w/o prejudice” “under protest” or “the likes are sufficient” u cant waive rights to perform in a manner demanded by other party, so modification or promise wld not be enforceable [ mod ok if good faith and no reservation of rights: SO UR USING UR RIGHTS TO STOP MOD/AGREE TO PROMISE LATER BUT RESERVE RIGHTS NOT TO PAY !!!!!! Mods // MODIFICATIONS = NOT ASSIGNING / DELEGATING. There can be unilateral assignment and delegation! - 2-209 = DIFFERENCE: modifications don’t need consideration ONLY GOOD FAITH needed or if other party relied on promise to modify - NOM ok if not waived by trying to orally mod, for ex., but if provided by merchant, must be sep signed by non-merchant - Although express terms > COP > COD > usage to modify, COD can prevail: 1B. EXCEPTIONS TO CONSIDERATION [ if UCC, no exception needed for mod] 1. moral obligation expanded into material benefit rule §89= if benefit received implies some moral obligation to repay benefactor/promisee, even if not legal, court may enforce it [ charitable donations, debtor promising after debt discharged, many others may not be economic: saving someones life, for ex.] - or any other otherwise unenforceable promise bc minority/incapacitated promise made still enforceable against party not young/dumb if minority/incapacitated party made a real promise [not illusory] to them
2. promissory estoppel [§90] = “GAG IN MOUTH” = only get reliance interest damages = GOOD ALTERNATIVE WHEN CANT PROVE RELIANCE WAS JUSTIFIABLE [AOR] OR WHEN NO CONSIDERATION…. - really: estopping someone from saying NO CONTRACT WAS MADE !!!!!!!!!!!!!!
- (1) PROMISE MADE (2)promisor reasonably expects/foresees promise will induce action or forbearance (3) action/forbearance induced/DETRIMENTAL RELIANCE (4) therefore justice requires enforcement of promise *** **only awarded for reliance expenses incurred after contract made [so expenses made before breaching party knew/had reason to know other party wld incur losses if breach are unenforceable]********* - Usually awarded only when party asserting the rights deliberately engaged in misleading behavior with knowledge/reason to know misleading and wld or cld induce reliance
- Reliance on a promise tht falls short of contract bc of some defect/omission in agreement formation [vagueness – id certum est quod certum redid potest , SOF clause, escape clause but some commitment to justify] where fairness demands accountability despite failure to comply w/ legal formalities o If charitable pledge / other gifts no reliance needed [§90(2)] o Also gratuitous promises to convey land if reliance by moving onto land and making improvements, gratuitous intra-fam promises , gratuitous promises to procure insurance… o Will make lender insurer when making a promise to pay premium [East Providence] o Sometimes for irrevocability to create an enforceable option even tho no consideration giving to the extent necessary to avoid injustice, usually in SUBCONTRACTOR BIDS [§87(2) = usually when part performance doesn’t establish the reliance, but instead when must undergo subs expense, or undertake subs commitments, or forego alternatives to accept, for ex. ] Unless agreed otherwise, subcontractors offer [bid] is irrevocable until general contractor has had a reasonable opportunity to notify subcontractor of the award and accept the subcontractor’s offer CISG: nothin - NO CONSID REQUIRED// article 29 says can modify as long as agreed to / NOM ok to prevent oral mods unless reliance on conduct // article 12 says u can waive this via 96 declaration 2. IS THERE A SOF [STATUTE OF FRAUDS] ISSUE? [sof= makes a lot of sense, but not realistic] Common law - Agree to answer debts of another, marriage, sale of land [or any transfer/alienation of an interest in land – see Waddle], sale of goods 500$ or more, leases 1000$ or more, sale of personal property beyond 5000$, or agreements that cannot possibly be performed within 1 year [even if performance is 1 day!! AND IF DOESN’T STATE TIME, SOF DOESN’T APPLY]
Court resolves by saying the 3. legal description in the cross claim summarizes or quotes the deeds But its ONLY signed by Waddle’s lawyer, not Elrod or her lawyer = WHY NOT ENOUGH ALONE But reed email signed by elrods lawyer Hagan email is a doc signed by waddles layer 1 st^ email incorporated into 2nd^ email, which is a reference to 1st email and Elrods cross claim does not deny the accuracy of the description. ELROD’S ANSWER, UNLESS DENIES(which just said doesn’t), ADMITS TRUTHFULNESS OF ALLEGATION OF THE DESCRIPTION. Elrods answer, signed by elrods lawyer, is o PROBLEM is whether the “ Thanks, Mary Beth” and “greg reed” = which is an electronic signature, is enough? Ya. UCC
- Pretty much same [goods 500 or more/personal property/leases] but content of memo requirement is less [2.201(1) = just need quantity] and signing requirement is a bit diff - 2.201(2) = if both merchants , and within a reasonable time of oral 1 sends written confirmation to other and is signed by sender, and recipient has reason to know of contents and doesn’t give written notice of objection within 10 days signing requirement is discharged [Thompson v Goodrich]// allows judicial admission exception [2.201(3)(b)] o ONLY BE REALLY CAREFUL LIKE THIS WHEN UR TRYING TO ENFORCE A GIFT : some consideration papered to satisfy UCC §2-201 [2-202[2] takes away SOF defense when btwn merchants, a writing confirming agreement is sent and not objected to within 10 days of receipt
- SOMETIMES A RULE WORKS, BUT ITS NOT LOGICAL [ merchant exception to SOF]
- If the goods are >500$ and there is no writing, BUT FULL PAYMENT is tendered no SOF issue Exam Tip: An acronym for remembering when a writing signed by the party to be charged is not required for a sale of goods, even if for $500 or more, is SWAP : S pecially made goods, W ritten confirmation by a merchant, A dmission in court, or P erformance through receipt and acceptance of goods or part payment. These elements take the contract out of the Statute of Frauds. CISG – no writing requirement [article 11] but article 12 says u can waive this, or article 29, via article 96 declaration
- WHAT WAS THE PROBLEM AFTER CONTRACT FORMED?
1. Was there a PRESENT duty to perform????? / anything discharging?
If reasonable expectations induced by contract have been fulfilled, then yes. IF NOT ask if some event occurring after formation excuses performance?
(1) present duty to perform: A) CONDITIONS PRECEDENT / condition on promise: all conditions met / all CPS performed or excused? A1 ) constructive condition of tender (showing willingness to perform) not satisfied? [enforceable contract but duties not enforceable until each party tenders: UCC 2-511(1) says buyer must pay first and seller then delivers, but if neither happen, both get out (seller cant sue if buyer doesn’t pay if seller himself doesn’t deliver) like 2-507(1) // common law sale of land says same time/concurrent and §238 = bilateral/executory, neither party’s duties enforceable until other tenders performance]
- If seller tenders delivery and buyer refuses to tender payment [or paid and refuses to accept goods] sellers duty to perform is discharged o If buyer paid already [i.e. just rejected goods] buyer can recover in restitution even though sellers duty is discharged o **** when a party’s duties of performance are discharged, the other party is entitled to restitution of any benefits conferred onto the discharged party in an attempt to perform on his side ***********
- If common law substantial performance of an implied / constructive condition is enough to trigger obligation to pay o But subs performance = simple breach and entitled to damages o Jacobs and Young: yes the breach was immaterial and yes it was inadvertent, but wlda still be entitled to any damages = difference btwn value received under subs performance and value bargained for. In j&y, it was nominal so 1$
- At UCC only perfect tender of the condition to deliver triggers the obligation to pay
- If explicit condition strict compliance, at either common law or UCC, triggers the obligation to pay … but: A2) did the party seeking enforcement waive the right, even if expressed as a condition, to that strict performance : orally mod after NOM clause: through behavior [acquiescence], conduct acted as either a i) mod of terms previously stated or ii) waiver of right to enforce that term(s) – §89 and 2-209(4) says can be waived … but u can un-waive the waiver under 2-209(5) by asking for re-instatement of the term for the future if waiver not relied upon and reasonable notice is given B) CHANGED CIRCS : imposs or highly impracticable? [see impracticability / impossibility / force majeure = prob not gonna work if buyer claiming cuz thatd just be a “losing contract” frustration of purpose type situation: all buyer has to do is pay ] C) FRUSTRATION: some supervening event frustrated purpose or value of contract? D) common law should the non-occurrence of an express condition still nonetheless be excused i.e. because the non-occurrence of conditional event was caused
