Restatement

Question 1

20. Effect of Misunderstanding

Answer 1

There is no manifestation of mutual assent to an exchange if the parties attach materially different meanings to their manifestations and

(a) neither party knows or has reason to know the meaning attached by the other
(b) each party knows or has reason to know the meaning attached by the other

Question 2

33. Certainty

Answer 2

(1) 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.
(2) The terms of a contract are reasonably certain if they provide a basis for determining the existence of a breach and for giving an appropriate remedy.
The court will not award on speculation
Deemed to be reasonably certain if the court can determine a basis for the existence of a breach and give an appropriate remedy.

Question 3

84. Promise to perform a duty in spite of non-occurence of a condition

Answer 3

A promise to perform in spite of the non-occurrence of a condition is binding, whether the promise is made before or after the time for the condition to occur.

(a) occurrence of the condition was a material part of the agreed exchange for the performance of the duty and the promisee was under no duty that it occur
(b) uncertainty of the occurrence of the condition was an element of the risk assumed by the promisor

Question 4

151. Mistake

Answer 4

A mistake is a belief that is not in accord with the facts (versus an assertion for misunderstanding)

Question 5

152. When a mistake of both parties makes a contract voidable

Answer 5

Where a mistake of BOTH PARTIES at the time a contract was made as to a basic assumption , that has a material effect on the exchange of performances, the contract is voidable by the adversely affected party, UNLESS he bears the risk.
- To determine if material, account is taken of any relief of reformation, restitution or otherwise, meaning that if there is a remedy then maybe it isn’t material

Question 6

154. When the party bears the risk of mistake

Answer 6

Presumption = no risk assumed
But bears the risk when
(a) the risk is allocated to him by agreement of the parties
(b) he is aware, at the time the contract is made that he has only limited knowledge (burden on the buyer to do research)
(c) the risk is allocated to him by the court

Question 7

158. Relief including restitution

Answer 7

(1) Either party may have a claim for relief including restitution
(2) If money damages will not avoid injustice, then the courts may grant relief on such terms as justice requires including protection of the parties’ reliance interests

Question 8

201. Whose meaning prevails.

Answer 8

Once you ascertain the meaning, then what meaning prevails:
(1) Where the parties have attached the same meaning to a promise or term, it is interpreted in accordance with that meaning

Question 9

202. Rules in aid of interpretation.

Answer 9

Objective standard. (1) words and other conduct are interpreted in light of all the circumstances, and if the principle purpose of he parties is ascertainable, it is given great weight (2) a writing is interpreted as a whole, all writings that are part of the same transaction are interpreted together (3) unless a different intention is manifested

Question 10

203. Standards of Preference in Interpretation.

Answer 10

(a) an interpretation which gives a reasonable, lawful, and effective meaning to all the terms is preferred (b) express terms are given greater weight than (most important) course or performance, (second most important) course of dealing, and (less weight) usage of trade

Question 11

204. Supplying an Omitted Essential Term.

Answer 11

(Wood v. Lucy Lady- good faith effort) when parties to have not agreed with respect to a term which is essential to a determination of their rights and duties, a term that is reasonable in the circumstances is supplied by the court

Question 12

205. Duty of Good Faith and Fair Dealing

Answer 12

Every contract imposes upon each party a duty of good faith and fair dealing in its performance and its enforcement

Question 13

206. Interpretation Against the Draftsman

Answer 13

Interpreted against the party that drafted. A meaning is generally which operates against the party who supplies the words or from whom a writing otherwise proceeds. However, it is always better to take control and draft the contract yourself.

Question 14

209. Integrated Agreement

agreement is a manifestation of mutual assent

Answer 14

Writing or set of writings constituting final expression of one or more terms of the agreement, to be determined by the court as a question preliminary to determination of a question of interpretation or to application of the parol evidence rule.

Question 15

210. Completely Integrated Agreement

merger clause or parties intent to determine

Answer 15

Agreement adopted by the parties as a complete and exclusive statement of the terms of the agreement. Nothing else gets in, additional terms are inadmissible.

Question 16

210. Partially Integrated Agreement

Answer 16

Agreement other than a completely integrated agreement and consistent additional terms are admissible.

Question 17

212. Interpretation of Integrated Agreement.

Answer 17

An interpretation of an integrated agreement is directed to the meaning of the terms of the writing or writings in the light of the circumstances.

Question 18

214. Evidence of prior or contemporaneous agreements and negotiations

Answer 18

Agreements and negotiations prior to or contemporaneous with the adoptions of a writing are admissible in evidence to establish:

(a) that the writing is or is not an integrated agreement
(b) that the integrated agreement, if any is completely or partially integrated
(d) illegality, fraud, duress, mistake, lack of consideration, or other invalidating cause
(e) ground for granting denying rescission, reformation, specific performance, or other remedy

Question 19

217. Integrated Agreement Subject to Oral Requirement of a Condition

Answer 19

Where the parties to a written agreement agree orally that performance of the agreement is subject to the occurrence of a stated condition, the agreement is not integrated with respect to the oral condition

Question 20

221. Usage Supplementing the Agreement

Answer 20

An agreement is supplemented or qualified by a reasonable usage with respect to agreements of the same type, if each party knows or has reason to know of the usage and neither party knows or has reason to know that the other part has an intention inconsistent with that usage

Question 21

223. Course of Dealing.

Answer 21

A course of dealing is a sequence of previous conduct between the parties to an agreement which is fairly to be regarded as establishing a common basis of understanding for interpreting their expressions and other conduct.

Question 22

224. Condition Defined.

Answer 22

A condition is an event, not certain to occur, that must occur before a performance obligation becomes due (unless it’s non occurrence is excused)

Question 23

237. Effect on other party’s Duties of a failure to render performance

Answer 23

It is a condition of each party’s remaining duties to render performances to be exchanged under an exchange of promises that there be no uncured material failure by the other part to render any such performances due at an earlier time.

Question 24

238. Effect on other party’s duties of a failure to offer performance

Answer 24

Where all or part of the performances to be exchanged under an exchange of promises are due simultaneously, it is a condition of each parties duties to render such performance that the other party either render or with manifested present ability to do so offer performance on part of the simultaneous exchange.

Question 25

240. Part performance as agreed equivalents

Answer 25

If the performances to be exchanged under an exchange of promises can be apportioned (gives court authority to sever contract) into corresponding pairs of part performances so that so that the parts of each pair are properly regarded as agreed equivalents.

Question 26

242. Circumstances Significant in Determining when remaining duties are discharged

Answer 26

In determining the time after which a party’s uncured material failure to render or to offer performance discharges the other parties remaining duties to render performance, these circumstances are significant:

(a) those stated in 241
(b) the extent to which it reasonably appears to the injured party that the delay may prevent or hinder him in making reasonable substitute arrangements
(c) when a a duty is due to perform without delay, a delay in performance does not discharge the parties remaining duties unless it is specified that the performance is due that day

Question 27

243. Effect of a breach by non-performance as giving rise to a claim for damages for total breach

Answer 27

A breach by non performance gives rise to a claim for damages for total breach only if it discharges the injured party’s remaining duties to render such performance, other than to tender an agreed equivalent.

(2) Gives rise to a claim for damages for total breach
(3) If the performance does not relate to the money payments, then the breach does not give rise to a claim for damages of total breach
(4) In any case other than those stated in the preceding subsections, a breach by non-performance gives rise to a claim for total breach only if it so substantially impairs the value of the contract to the injured party at the time of the breach

Question 28

250. When a statement or an act is a repudiation.

Answer 28

(1) A repudiation is: a statement by the obligor or the obligee indicating that the obligor will commit a breach that would of itself give the obligee a claim for damages for total breach or (2) A voluntary affirmative act which renders the obligor unable or apparently unable to perform without such a breach. (when a party does, or says something indicating he is not going to perform)

Question 29

251. When failure to give assurances may be treated as a repudiation(= clear manifestation not to perform)

Answer 29

Where reasonable grounds arise to believe that the obligor will commit a breach by non-performance that would of itself give the obligee a claim for damages for total breach, the obligee may demand adequate assurance of due performance and may, if reasonable, suspend any performance for which he has not already received the agreed exchange until he reaches such assurance.

Question 30

253. Effect of repudiation as a breach and on other parties duties.

Answer 30

Where an obligor repudiates a duty before he has committed a breach by non-performance and before he has received the agreed exchange for it, his repudiation alone gives rise to a claim for damages for total breach
(2) Where performances are to be exchanged under an exchange of promised, one party’s repudiation of a duty to render performance discharges the other party’s remaining duties to render performance.

Question 31

265. Discharge by Supervening Frustration

Answer 31

Performance is possible but it is utterly worthless, almost all of it is gone. Where after a contract is made, a party’s principle purpose is substantially frustrated without his fault by the occurrence, of an event the non-occurence of which a basic assumption on which the contract was made, his remaining duties to render performance are discharged, unless the language or the circumstances indicate the contrary.

Question 32

261. Discharge by Supervening Impracticability

Answer 32

• Intervening event
• Changed circumstance
• Excessive cost and substantially increased performance obligation
  Where, after the contract is made, a party’s performance is made impracticable without his fault by the occurrence of an event the non-occurence of which was a basic assumption on which the contract was made, his duty to render that performance is discharged, unless the language or circumstance indicate the contrary.

Question 33

272. Relief Including Restitution.

Answer 33

The Court may grant relief on such terms as justice requires including protection of the parties’ reliance interests

Question 34

275. Assent to Discharge Duty of Return Performance.

Answer 34

If a party, believe he has fully performed his duty under a contract, manifests to the other party, his assent to discharge the other party’s duty to render part or all agreed exchange, the duty is to that extent discharge without consideration.

Question 35

279. Substituted Contract.

Answer 35

A substituted contract is a contract that is itself accepted by the obligee in satisfaction of the obligor’s existing duty.

Question 36

302. Intended and Incidental Beneficiaries.

Answer 36

(1) Unless otherwise agreed between promisor and promisee (another agreement), a beneficiary of a promise is an intended beneficiary if recognition of a right to performance in the beneficiary is appropriate to effectuate the intention of the parties and either:
(2) An incidental beneficiary is a beneficiary who is not an intended beneficiary- you are either one or the other you have rights or not.

Question 37

306. Disclaimer by a Beneficiary

Answer 37

A beneficiary who has not previously assented to the promise for his benefit may in a reasonable time after learning of its existence and terms render any duty to himself inoperative from the beginning by disclaimer

Question 38

307. Remedy of Specific Performance

Answer 38

Where specific performance is otherwise an appropriate remedy, either the promisee or the beneficiary may maintain a suit for specific enforcement of a duty owed to an intended beneficiary

Question 39

308. Indemnification of Beneficiaries

Answer 39

It is not essential to the creation of a right in an intended beneficiary that he be identified when a contract containing the promise is made (life insurance policies)

Question 40

309. Defenses Against the beneficiary

Answer 40

(for promisor against 3rd party beneficiary) A promise creates no duty to a beneficiary unless a contract is formed between the promisor and the promisee; and if a contract is voidable or unenforceable at the time of its formation the right of any beneficiary is subject to the infirmity.