contracts Flashcards
formation of k (common and ucc or mixed )
-if mixed, apply the law for whichever is the predominate part in the k
UCC
Generally, Article 2 of the ucc applies to k’s with transactions in the sale of goods. Goods are all movable things moveable at the time they are identified to the k. The term goods include growing crops.
Offer only need the quanity everything else can be filled in with gap fillers.
merchant= one who regularly deals in goods of the kind sold or who otherwise by his profession holds himself out as having special knowledge or skills as to the practice or goods involved) ,
-Firm Offers
Merchant firm offer- must be a merchant. A person who regularly deals in goods of the kind sold. only need good faith, no consideration.
-option k’s need consideration
*however both go by the date in the offer and not when offer is recieved.
-promissary estoppel where promisor should have known that promisee would rely on the offer and did in fact rely. Therefore, under the doctrine of promise is irrevocable for a reasonable period of time
-part performance on unilateral k
good faith- okay if wanting econoic benifit..
Bad faith is when a person trys to extort;
Ucc acceptance with additional terms: must be substantially material
Warranty of merchantibity is already implied in all ks with the sale of good from a seller so is not considered additional terms.
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-Common Law K=O+A (M+A)+C-D
Generally a contract requires mutual assent of a (off and acceptance), consideration and absence of defenses” k =O+A(MA)+C-D”. A Offer is a promise to be bound to a k. If there are certain definite terms, communicated to offeree, it can be accepted or rejected until terminated. A offer can be accepted or rejected unless and until it is terminated.
offers must contain the parties, subject matter, price, quanity
offers can be terminated by:
revocation b4 acceptance ….rejection, counter offer (not inquire), lapse of time, incapacity, death, unilateral k and performance was started.
Unless firm offer(merchant dealer and k in writing) option K(need consideration), cant be terminated by any of above.
Acceptance is a manifestation of assent to terms of the offer. if offeror dont say how to accept then its by reasonable method.
Exception; mailbox rule, once acceptance put in mail its a k…excp: if rejection sent b4 acceptance then its whichever is received first (it does not matter if its not read/open just need to be received)
ucc acceptance
-Silence and acceptance- if writing and If no objection in writing within 10 days after receiving confirmation of the terms of K, K is enforceable without signature
also A party that reads a sign in a store and does not object to its contents is deemed, by
her silence, to have accepted the terms written on the sign.
-promise to ship the goods, or shipping the goods within reasonable time
-new terms is accepted unless material alter k or express non acceptance in reasonable time.
-if new terms not material then just knocled out and ct will gap fill
mirror image for common law
perfect tender for ucc*
buyer can accept all or some or reject
-if accommodation is sent with non confirming then that is a counteroffer that can still be accepted or rejected
-buy does not have a duty to ship back unless seller requests buyer too. not shipping back does not constitute a acceptance
- cashing of a check by a creditor in response to a letter by the debtor to settle the
contract dispute, is considered an assent to the terms of the debtor’s letter.
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Consideration-
generally every k requires consideration to be enforceable and any modification to a k requires new consideration.
Consideration is a bargain for exchange of something of legal value. Value can mean benefit, to promisee but usually means detriment to promisor, promise must induce detriment to promisor….I did something you got somedthing… you did something I got something.
*however if nec. To avoid injustice a court will enforce a promise without consideration if: the promisor should have expected the promisee to change his position in reliance on the promise; The promisee did change his position; and the change in position was to the promisee’s detriment. (A person could think that the promise was based on a reward for their past action if no clear condition was set)
legal detriment is doing something you are not legally obligated to do or refraining from doing something you are legally entitled to do
-gifts are not consideration; unless giver will induce substantial reliance and failure to uphold promise will cause injustice
-A act of forbesrance. Is consideration
Example- the promisor must ask for a performance or a return promise in exchange ( must be done sinutanimously)
exceptions to consideration:
firm offer, promissory estoppel, payment of past debts after barred by sol, debtor don’t genuwinely belief owe the amount claimed and a settlement for a lesser amount is paid
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Defenses
Sof- my legs and any k that will be performed in more than 1 year. The k must be signed by the party to be charged (have the performance)
Unless exception: full perform on a service k , unique/ custom goods, real estate k- full or part performance, and possession the prop, or improve the k, lifetimeemploymentK not subject to the SOF because ee could die b4 the year is up.
all k’s in my legs that is getting modified, the mofification must be in writting also.
Estoppell–detrimental reliance- it is reasonable expected that the offered would rely to her detriment one offer and offeree does rely(do a act only because relied on the k)
-impracticability
Impracticability occurs whenunforeseen!! (i.e acts of god) circumstancesrender one party’s performance under the contractprohibitively expensiveor otherwise undulyburdensome.
If performance of a contract becomesimpracticable, theduty to perform is discharged. as long as, the condition was not a material part of the inital agreement
* Theburdenof performance is nowfar greaterthan either party had reasonably anticipate
UCC
No impracticability because these are consideredassumed business risks.
frustration of purpose?
If unforeseen circumstances make the purpose of the contract essentially impossible, the parties may be discharged from their contractual duties.
Courts look to The party’sprincipal purposeof entering into the contract issubstantially frustrated; and
Non-occurrenceof the event that caused the frustration of purpose was an implicitassumptionof the contract
incapacity- minor, mental incom., intoxication
Mistake
duress
misrepretation, mistake, misunderstanding, publicpolicy, unconscionability, undue influence, sof
undueinfluence- enter a party into a k after being unfairly persuaded by them- persuaded party lacked capaity, expertise, or part of a special relationship, unfairly persuaded by the stronger party, persuasion hindered the free will of weaker
(no time to speak to att, neg. conseq if you delay, demand that the k be completed imm., talk about the k at a unsual time)
unconscionable k- bargining terms were so unequal that it shock the conscience (no reasonable person would agree to it.
minor cant void necc. k’s, minor can enforce k’s (implicity by not voiding it, explicity by orally and writing) conduct (mutual exchanhe by both partys) if entered k before adulthood, minor reached adulthood,
public policy- k violate law, formd to commit a crime, violate certain value and freedom
mutual misunderstanding in term of k-
no k if both lacked knowledge of term
is a k if both meant the def to be somehing else
misken- mistaken belief to fact in k
unilaterial mistake is still a k unless other party had reason to know of mistake
-k’s
void- void and non existence
voidable- vaild but one party can void it
general
Contracts – General Law
In order to have a valid and enforceable contract under the common law contracts and
UCC Art. 2 there must be 1) an offer, 2) an acceptance of that offer, 3) a meeting of the
minds between the parties, 4) valid consideration, which is bargained for exchange or
detrimental reliance, and 5) all parties must have capacity and legal authority to enter
into a contract. The non-breaching party has a right to damages at law and in equity, but
that party also has a duty to mitigate their damages
Contracts Blurb:
Under common law contract principles and Art. 2 of the Uniform Commercial Code, it
appears we have a contract between ___ and ___. In order to have a valid enforceable
contract we need: 1) an offer, 2) an acceptance which mirrors that offer, 3) a meeting of
the minds between the parties, 4) valid consideration, which is bargained for exchange,
and 5) both parties must have capacity and authority to enter into a contract. (This
usually triggers agency issues).
Statute of Frauds
Given that this agreement is (about an interest land, Sale of Goods over $500, cannot be
performed within a year) we need a sufficient writing to satisfy the statute of frauds in
common law and Art. 2 of the UCC.
Excuses For Non-Performance
Note: Remember - this is S**t that happens after the Contract
_____ may effectively be excused from contract liability due to an unforeseeable event
by arguing an Excuse for Non-Performance of (Frustration of Purpose, Impossibility,
Commercial Impracticability, Illegality, Unconscionability, etc.)
Frustration of Purpose
…if by looking at the intent of the parties from a subjective standpoint the court deems
the purpose of the contract is frustrated, _____ may be excused from performing under
the law.
Impossibility
…if the court determines that under an objective standpoint that it is impossible for
anyone to perform given _____ (fire, 9/11, tsunami, no more goods in commerce, etc.)
_____ may be excused from performance under the law.
Commercial Impracticability
…if the court determines that unforeseen events have made performance highly
burdensome and commercially difficult or expensive _____ may be excused from
performing under the law.
Parole Evidence Blurb
6
We may have an issue regarding the Parole evidence rule, as to the statement made by
____ before signing the contract. The Parole Evidence rule holds that any prior or
contemporaneous statements made before signing the contract are not admissible to
alter or contradict the terms of a fully integrated agreement. Except as to fraud, or
collateral agreements.
Intent of Parties Blurb
In order to fashion fair and reasonable damages the court will look to the intent of the
contracting parties. They will look to a) the trade usage, b) the course of dealings of the
parties, c) the course of performance of the parties and d) the four corners of any
written document.
Contracts Damages Blurb
_____ may recover Expectancy Damages which is the benefit of the bargain, and puts
the non-breaching party where they would have been but for the breach. ____ may also
recover their Consequential Damages, which are those that are reasonably foreseeable
and occasioned by the breach.
Implied Covenant of Good Faith and Fair Dealing Blurb
Under common law all contracts have an implied covenant of good faith and fair
dealing. No bad faith, deceit or unreasonableness.
Note: may also trigger a consumer protection claim for unfair and deceptive acts in
trade or commerce.
If it doesn’t feel right, it probably isn’t - look to 1) Breach of Covenant of Good Faith and
Fair Dealing and 2) a state consumer protection statute
promises
advertisements- not offers unless it is specfic and detailed info such as price,quanity, and who can accept
rewards- are offers if its money in exchange for performance since (it will be a quailty on who can get the award y what theb performance requires).
warranty of merchantability, and when does itapply?fit for the ordinary purposefor which they would be used.
Sellercan disclaimtheimplied warranty of merchantability?By:
Expressly disclaiming the warranty, using the word “merchantability” in the contract inconspicuouswriting (if written); or
* Usinglanguage or circumstancesthat are reasonably understood toexcludethe warranty of merchantability
* Examples:“As is”written into the contract, or if there arepatent(obvious) defects
fitnessfor a particular purpose, -guarantees that thegoods are fit for the particular purposefor which the buyer intends to use them.It only applies whensellerhasreason to know:
* Theparticular purposefor the goods; and
* That the buyer isrelyingupon the seller’s skill toselect goods reasonably fitfor that purpose
However implied warranty offitnessfor a particular purposenegated?
A
When:
* There is awritten disclaimerthat isclearandconspicuous, or
* The goods havepatent defectsthat were easy to detect
Express warranty?
Anaffirmation of fact or promiseordescriptionof the goods made by the seller to the buyer which relates to the goods and becomes part of thebasis of the bargain; or
* Sample or modelmade as part of the basis of the bargain that creates anexpectationtheitem will conformto the sample or model
Third Party rights (assignment, delegation, beneficiaries
Assignment
-Generally, most k rights can be assigned. To assign must manifest an intent to transfer rights under contract to assignee. Oral assignments are effective. However a assignment is not effective if, K forbids, law forgets, the assignment would substantially change the obligators (person doing the performance) duty or would substantially change the obligator’s risk (who willl be paying them), or the k is for personal services.
-In a third party k, there is the org. Party, assignee and the vested benificary. Incidental third party to k’s is not a party to the k because they do not have rights they can enforce if the k is not performed. Although, they will receive a benefit.
-Assignor/ assignee/ and performer ( think service k like painter and owner and neighbor of house)
Assignment is when the owner of the right manifest a present intent to transfer their existing rights….allowed unl3ss k say not allowed
K needs to say no assignment of rights otherwise will be interpreted as no delegation of duties
Assignments are vocable to donis a.k.a. gifts, and is not revocable to anyone with consideration
Implied warrants of assignments
They would not do anything to mess up the assignment, and they have the right that they are portion to make the assignment
No assignments if:
Assignment would materially alter the risks or obligations with respect to the other party to the contract;
Assignment of pay is allowed
Assignment would violate the law or public policy;
The obligor has a personal interest in providing their service to the obligee rather than a 3rd party; or
The contract specifies that assignments are prohibited
The assignee has the rights to sue the obligator
Next, assignors are liable to performer if the org. P delegate their duties to them. By manifesting the intent to transfer duties under k to another party. but orginal is also liable if assignee defaults
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benificaries
creditor beneficiary(obligation), donee beneficiary(gift), incidentental beneficiary unintended gift,
Rights of intended B- Promisor:always,because promisor is under an obligation to the beneficiary
* Against thePromisee:neverconcerning enforcement of the promised performance under the new contract; a 3rd party beneficiary willonlyhave rights against the promisee if there wasa prior obligationbetween promisee and third party beneficiary; however, A party may not assert the defenses of another party in a contract action if they were
not a party to that contract.
Reasoning: While consideration is necessary to enforce a contract, if there was no consideration(agreement) to
support the org. parties agreement to thethe ben. …the obligating party cant use the lack of consideration as
a defense because is not a was not a party to the k with the oweing party and the ben. agreement.
Vested remander- intended third party beneficiaryvest?
A third party intended beneficiary’s interest vests if:
* Beneficiarysues;
* Beneficiaryjustifiably changesherposition of relianceon the K;
* At the request of the parties, the beneficiarymanifests assentto the contract; or
* The contract’sexpress termsstate that the rights have vested
* the ben. not vested. Vesting requires that the third party
become aware of the contract and assent to it. Assent is inferred if it is a promise to pay money (a benifit to the ben.)
The parties to the K must seek third-party permission to modify or resend the contract.
Remedy for B’s
If the third-party is a vested b, then they can sue the promisor for specific performance .
If the third-party is a creditor, then they can sue the promisor to enforce their obligation
If the third-party is a Don-ney, then they have no right to damages but can try specific performance
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delegation
A effective delegation of duties occurs when a party to a k manifests a present intention to transfer duties under the k to another party. The delegate assumes those duties, and becomes liable for them under the k by promising to perform.
Secondary liable as surety unless novation agreement to substitute a new party into the land release org. Party
not if:
k is for specfic/ custom or k says so
Performance
excuse of performace
condition-Action or event that is required to take placebeforeperformance is triggered/due
condition precedent-Condition must takeplacebeforeperformance/another event is triggered
condition subsequent- Performance is not excused untilafter event occurs
concurrent condition- Each party is required to performat the same time
express condition- Expresslyincluded in Kas a condition
if one party’s performance is subject to anexpress condition,and the condition does not occur, The party who would havebenefitedfrom the condition isdischargedfrom theirperformance obligations, unless there was waiver, bad faith conduct, or one of the parties may suffer forfeiture or great loss. (Ie, the party that was to get a mortgage dont apply for the mortgage)
common lawdoctrine of substantial performance-
As long as a partysubstantially performs(even if they did not meet every requirement), the other party isstill obligated to performtheir obligations
bi lateral k- mutual promise to perform (you do x and I do y) acceptance once performance start
Unilateral K- requires full performance as a method of acceptance (once performance is complete )
- G of:::My legs k’s must be in writing unless
- Exception for G seller deliver goods and buyer accept….
- Exception for L part performance and either improvements or money
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-Mutual mistake k is voidable by the adversely affected party,
-unilateral mistake then if non mistaken p knew or had reason to know about the mistake then is a k but is voidable my mistaken party.
- gap fillers- courts will fill in terms missing in k by course of dealing, course of performance, usage of trade, ucc won’t fill in quantity ***
- Poe- what is the purpose of the evidence being produced( cant be to contradict can be to define or clarify terms) is the k integrated?(intended to be final) ie. Merger clause. Even if k is intended to be fnal still can show evidence of course of course of dealing….industry standards….
Breaches
Generally when have a reasonable basis for insecurity for the other party performance can demand assurances. Must be in writing, may suspend performance until assurance recieved. If assurances is not received within a reasonable time,( not more than 30 days) then the K is repudiated.
- antipatory reputdiation can be expressed or implied - it Dont have to be told to the other party.,.once the facts say that the party lost the ability to perform…anticipatiry repudiation is done
When k is repudiated, the non breaching party may treat as a breach and sue immediately, suspend performance and wait to sue, treat as a offer to remind (make new k/new terms), ignore and urge performance.
However, repudiating party may withdraw repudiation by retraction such as indicating intent to perform but must include assurances. But cant repudiate if, the other party has canceled k, materially changed position in reliance, or considered repudiation final. (Ex: cant say not paying because k is over but you didn’t enter into a new k with someone else yeet etc)
- violating terms of K
When a party Breaches a k determine if:
A. breach is either minor or substantial,
- Minor breach non breaching party must still perform. But they can get damages.
- Material breach excuses the non breaching party from performance and still get damages
B. What was the performance required(bi lateral….and conditions),
c. In what way did they breach the k?(Modifications of a pre existing duty (have a exception) or willful breach (just not doing it), or unforeseeable event(impracticability, impossibility),
d. Is the k divisible?
e. What damages shall the non breaching party receive (also considering possible reductions from there no performances, or mitigations that could have saved them some loss by bring in some kind of profit)
Each party have a duty to perform conditioned on the other party’s performance. Failure to provide complete or substantial performance relieves Other party of duty to pay. If the breaching party performance is substantial, the breach is minor the condition is excused and the non breaching party failure to pay is a breach.
The court looks to the amount of benifit received, adequate of damages, extent of performance, hardship to the breaching party and whether breach was negligent or willful,
A party whofails to substantially performhas made a Material breach. Extent to which the aggrieved party will bedeprived of the expected benefit;
* Likelihood that the breaching party willcure;
* Extent to which the aggrieved party can becompensated by damages;
* Extent to which the breach waswillful or in bad faith; and
* Extent to which the breaching party will suffergreat lossorforfeitureif a material breach is found
***If time of essence - breach is material
If substantial performace by breaching p - minor breach
special made goods- Specially madefor the buyer;Not for saleto others; and Seller has made “either a substantial beginning of theirmanufactureor commitments for theirprocurement”
***Devisable
Generally, if k is divisible the party that performed parts is entitled to collect k price for those parts performed minus the damages owed, disible k’s are if the performance of each must be divided into 2 or more parts, the number of parts due from each must be same, performance of each party by one is agreed equivalent of corresponding part
modifications
Common- pre existing duty - promise to perform a duty already owed to the promisor is not consideration.
***pre existing rule exceptions
Generally, Some courts allow modification without additional consideration if the modification is “fair and equitable” in view of circumstances not anticipated when the k was made. For example, if the party encountered difficulty in performing bordering on impracticability (unexpected). however, If the unanticipated event significantly increase the cost of performance that would make it more expensive to still perform, a ct may allow modification of the k price without additional consideration if it would be fair and equitable
A promise to pay part of a debt that is unenforceable because of the statute of
limitations is a new promise and does not reactivate the statute of limitations on the old
debt.
*past actions are not consideration for a k because it fails consideration (there was no detriment to promisee, action of promisee did not induce by promisor, there was no Bargin foe exchange)
*past action exceptions
: material benefit-if the promisor received a material benefit from the promisee and promisee did not mean for the benefit to be a gift(ie. no gift Was just being a good Samaritan); mutual modification- promise to pay more $ for different performance; unforseen cirm. that render performance substantially more burdensome than was reasonably anticipated; valid defense- to k formation (voidable obligation); third party -offer a promise contingent upon permance of a contractual obligstion by a party; honest dispute- as to duty; mofification of k for the sale of goods
Ucc- generally k modifications only require good faith and no additional consideration. Good faith means honesty in fact and the observance of reasonable commercial standards of fair dealings such as a legit commercial reason for modification; However, if the k is one in my legs, the modification must be in writing also
perfect tender rule- delivery must conform to the order or can be accepted , rejected, or part …if accommendation was sent then is a counter offer and not acceptance….
*** Rescind a k vs pre existing duty
Rescinding a k is the parties mutually agreeing to change the original k at a different price and enter into s new k.
duress
Duress vs economic duress
-generally, when a party agree to new price. It can be void if the agreement was on either duress or economic duress. Duress is when a party assent to a k by improper threat by the other party that leaves the victim no reasonable alt. Economic duress is not taking advantage of the other party economic needs but with holding something the party wants or needs will constitute economic duress if the party threatens to commit a wrongful act that would seriously threaten the other contracting party’s property or finances and there are no adequate means available to prevent the treating loss (example need the item or service urgently or will be seriously injure)
Deliveries UCC
Perfect tender rule
Requiresabsolute perfecttender of goods as specified in the contract
Once the buyeracceptsthe nonconforming goods, what can the buyer do?
* Paythe contract price of those goods; and
* Seek damagesfor any nonconformity if the seller is notified
*non conforming goods is similar to repudiation
Seller can only cure if sent a note.
Buyercan only reject nonconforming goods?
if:
* The buyer hasnot previously acceptedthe goods (UCC § 2-606(1)); and
* The buyer has givennoticeto the seller that she is rejecting within areasonable timeafter delivery
- Buyer can’t reject after accepting by inspection and indicating the goods do conform or by failure to inspect
- Acceptance may be revoked if the goods are defective that the value is substantially impaired.
- If a installment k ( separate deliveries) if one order is messed up can’t cancel k unless it is a “ substantial impairment” can’t be cured” therefore buyer must accept but can get damages for loss it incurred
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-When does therisk of losstransfer from the seller to the buyer in:
Risk of Loss in Carrier Cases:
* Shipment K’s: Risk of loss transferred to buyer once sellerdelivers goods to common carrier
* Destination K’s: Risk of loss transferred to buyer when goods aretendered at the destination
FOB-shipment- shipment K:risk of loss passes to buyer once sellerdelivers goods to common carrierand arranges for their shipment.
“FOB buyer’s place of business” -
It is adestinationcontract: risk of loss passes to the buyerafterthegoods are tenderedat the destination point
non-carrier cases
When the parties do not agree to use a common carrier to deliver goods.
-If seller isnot a merchant:ROL passes to the buyer upontender of delivery
-Onlytenderof delivery is required,notactual receipt by the buyer
-If seller is amerchant:ROL passes to buyer when thebuyer physically takes possessionof the goods
POE
Generally, Bars admission ofextrinsic evidenceofpriororcontemporaneousagreements or dealings thatcontradict/supplementthe terms of integrated K’s
Courts interpret k’s to determine if there was a k by Express terms;
* Course of performance; How the parties have interacted in theCURRENT transaction
* Course of dealing previous transactionswith each other; and
* Trade usage- A business custom or practice that is so common and pervasive that it is expected in regards to a certain transaction. Must be proven.
Common
-intergrated - final,
-merger clause- final
-partially integrated - not fully
-exceptions: when can evidence be produced: partial agreement, To show thatK does not exist/was never formed (evidence of misunderstanding, mistake, etc), Asdefenseto enforceability (duress, illegality, etc), To resolveambiguities, To provecondition precedent, Tosupplement or explain termsw/ evidence of trade usage/past dealings (UCC § 2-202 - sale of goods only)
To help courtinterpret Kby showing parties’ subjective understanding of terms
Ucc
Presumption that K’s are partially integrated; allows addition ofnon-contradictoryterms unless the parties would have “certainly” included them
UCCgap fillerforplace of delivery?
Seller’s place of business
Payment- Due at the time and place at which the buyer is supposed to receive the goods
remedies
Equitable remedies - specific performance, restitution, unjust enrichment, negative injunction
Monetary - expectation, reliance, restitution, liquidated
Damages, specfic performance(not service k’s because in involuntary servitude), injunction (cant or must do this or refrain from this) reformation (ct rewrite k), recision (need vest third party consent), release one party from k,
non compete clause- there is a significant business justification; the scope is reasonable in duration and geo scope, express provision of a non compete
Liquidated damages will be enforced if (1) at the time of contracting it would have been
or was difficult to ascertain what the damages would be, (2) it must be a reasonable
estimate, and (3) it cannot amount to a penalty.
Alternative A is False
Issue: Does rain excuse performance under a contract under a theory of impracticability?
Rule: No. Impracticability will only excuse performance where the occurrence causing the lack
of performance is unforeseeable. This primarily applies to acts of God, and war.
Reasoning: Since rain is a foreseeable event, it would not excuse Mercury from getting the bike back
on time.
Alternative B is False
Liquidated damages will be enforced if (1) at the time of contracting it would have been
or was difficult to ascertain what the damages would be, (2) it must be a reasonable estimate, and (3) it cannot amount to a penalty.
Issue: Is a sign that is read considered part of a contract, even if it is not explicitly written into
the contract?
Rule: Yes. A party that reads a sign in a store and does not object to its contents is deemed, by
her silence, to have accepted the terms written on the sign.
Reasoning: Mercury read the sign at Biped’s insistence, and did not object to its contents. Therefore,
he is deemed to have accepted its terms. There is no parol evidence issue since the sign
did not contradict the parties agreement.
© 2018 Marino Bar Review
compensatory damages- expectation, reliance, restitution
expectation formula- loss of val to non breaching party + incidental and consequental – payment/benifits recieved + any costs saved as a result of the breach
no expectation damages if speculative, unforseeable, damages could have been avoided, cost more to perform then the mfv
buyer of goods is entitled to - liquid, incidental, consequentail
Incidental- costs associated with breach and mitigation (transportation, warehouse cost)
consequental- losses to buyer because of a particular need or use for the goods. loss must be foreseeable to seller. (allowed in breach of warranty cases not PI w consumer goods)
luquidated damages provision- they specfy how damages should be allocated in the event of a breach as long it was intended ,reasonable at time made, reasonable to actual harms
punitive damages- willful and intentionally
reformation- rewiting k to include intent of parties …prior agrement existed, agreement was put into writing, difference between prior agreemnt and written expression
equitable remedies- injunction(when monetary rem. are inadequate)
reliance- reasonable out of pocket expenses incurred by non breaching party from reliance upon the nonperforming party’s promise to perform (expenditures mde in prep for performance or while performing minus any loss breaching party can prove the aggrieved party would have suffered had he k been fully performed.
resdtitution damages- the value of benifit conferred on the other party (not available if there was full performance) amount is determined by the ct (ex: med services during med emergency on unconscious person so they got a benifit..without there bing a k
replevin- buyer reprosess their prop. the buyer is unable to cover after a reasonable effort; circum stances indicate buyer will be unable to cover through reasonable effort; if goods were shipped with a security interest and satisfactory of the secuirty was made.
ucc- buyer breach seller can:
resell and recover damages for diff between k price and resale price, if seller dont resale then k price and market price, lost volume sellers get lost profit……if seller resale the goods then seller get k price- the gain from resale, incidental damages…if seller did not resale then k price - market price for the goods + incidental damages
if seller breaches then buyer gets the cover, difference between market price and k price, incidental damages, consequential damages.. cover is a substitute good from a different seller made on good faith and reasonalble value respected by the court… if buyer cant recover then market priceat the time of the breach minus k price
if buyer accepts goods but later revoke acceptancebecause of defective…buyer can sue for breach of k and recover the difference between the value of the goods contracted for and value of the goods recieved.
promissory estoppel damage- is reliance damage
employer k’s - damage is expectation
specfic- unique and real prop, vested third party
***Damages
Non breaching party can get damages taking from the amount that they owe the breaching party for the work that they did not perform given that the k is divisible. However, if non breaching party fails to pay breaching party for their substantial work done, that would be a unjust enrichment and breaching party can recover value of services minus non breaching party damages.
Expectation- put P in position he would have been in had the k been performed by breaching party
Get the costs it will be for the thing that the breacher did not do or value measure- the difference in value for what it is worth now and what was promised. Courts typical dont like to do the value measure because it encourage breach. Look to see, if k had the duty of breacher in it, breacher knew of non breacher intended purpose for their land once breacher did what he needed to do, whether the land is fit for intended purpose now since breach. Breach was willful.
Consequential damages- ascertainable additional loses the non breaching party will face from the breaching party non performance (ie. Loss of business profits since cant use land)
K damages must be foreseeable as a result of the breach. (A reasonable person would have foreseen damages as a result of the breach (the non breaching party told breaching party of his plans with the land).(ascertainable is certain and not speculative)ex: the business must be started already unless have evidence to prove certainly would have got the money like clients already signed up or track record of loyal clients
Reductions in damages
Damage awards should take into consideration the costs saved because of breach(from expected returns should only consider profit). Also damages that could have been avoided by reasonable effort after breach (things non breacher could have done to make money like doing the things thy were doing before they entered k with breacher
differences
misrepresentation vs non disclosure- misrepresentation affirmativly saying something that isnt true
nondisclosure- withholding info
misrepresentation vs. neg misrep
both misrep to a material fact that known was false and p reasonably relied on it.except neg (should have known)
bad faith vs good faith
bad- one party is exploiting otherfor unfair gain
good faith- asking for more money due to a increased burden on one party caused by unanticipated circum
employment k’s, real estate k’s
Generally, employment contracts breached by the employee are considered divisible
and employment contracts breached by the employer are considered whole. An employee
that is wrongfully discharged is entitled to the salary that would have been payable during
the remainder of the term, reduced by the income that she has earned, will earn, or could,
with reasonable diligence, earn during the expired term
A contract for the sale of real property must be contained in a single writing or in
sufficiently connected writings. must be signed by both parties with a description of the land, price, party names, full or part performance, and possession the prop,or improve the k,
acceleration clause- Although acceleration clauses with forfeiture provisions are enforceable, they are
unconscionable to enforce where substantial equity has been built up. Here, Planner has
paid $40,000 toward the purchase and it would be inequitable to have him lose the entire
amount over a two day delay, which is minor.
