Restatements and UCCs

Question 1

Offer Defined

Answer 1

Rest 24
manifestation of willingness to enter bargain justifying another in understanding that their assent = invited and will conclude bargain

Question 2

Preliminary Negotiations: Manifestation of Willingness

Answer 2

Rest 26
not an offer if person it’s addressed to knows/has reason to know that person making it DOESN’T intend to conclude bargain UNTIL he’s made FURTHER manifestation of assent

Question 3

Preliminary Negotiations: Written Memorial

Answer 3

Rest 27
If manifest assent itself = sufficient to form K, won’t be voided by manifest intent to prepare + adopt written memorial of it, BUT circumstances might show that the agreement = PRELIMINARY NEGOTIATIONS

Question 4

Ways to Terminate Power of Acceptance

Answer 4

Rest 36
- rejection/counter-offer by offeree
- lapse of time
- offeror’s revocation
- death/incapacity
- non-occurrence of any condition of acceptance under terms

Question 5

Offeror’s Revocation of Offer

Answer 5

Rest 38
offeree’s power of acceptance = terminated when receive offeror’s manifest intent to NOT enter proposed K

Question 6

Implied Notice of Revocation of Offer

Answer 6

Rest 43
offeree’s power of acceptance = terminated when:
(1) offeror takes definite action inconsistent w intent to enter proposed K, AND
(2) offeree acquires reliable info of this

Question 7

Acceptance

Answer 7

Rest 30
Forms of Acceptance:
- affirmative answer in words
- performance
- refraining from performing specified act
OR
- may allow offeree to select terms

unless indicated otherwise, offer invites acceptance in ANY MANNER + by ANY MEDIUM reasonable in circumstances

Question 8

Default modes of acceptance

Answer 8

Rest 32
offer = interpreted as inviting acceptance by:
(1) promise to perform, OR
(2) rendering performance

choice = up to OFFEREE

Question 9

Mirror Image Rule

Answer 9

Rest 61
acceptance requesting change/addition to terms of offer = not invalidated UNLESS acceptance = made to depend on assent to such terms

Question 10

UCC Acceptance

Answer 10

2-207
NO LAST SHOT, NO MIRROR IMAGE, BATTLE OF THE FORMS

even if add/diff terms from offer, still valid acceptance UNLESS acceptance expressly made conditional on assent to new terms (which would then be PROPOSALS for addition to K)

Ks Between Merchants: terms automatically part of K unless (1) offer expressly limits acceptance to terms, (2) new terms materially alter K, OR (3) counterparty objects w/ reasonable time

Question 11

Firm Offers

Answer 11

UCC 2-205
offer by merchant to buy/sell goods in signed writing that (by its terms) can’t be revoked for pd of time (max = 3 months)
ONLY MERCHANTS

Question 12

Merchants

Answer 12

UCC 2-104
(1) person who deals in goods of that kind
(2) holds self out as having knowledge/skill peculiar to practices/goods involved

Question 13

Option K Definition

Answer 13

Rest 25
promise that (1) meets K formation requirements AND (2) takes away promisor’s ability to revoke offer

Question 14

Option K Termination of Power of Acceptance

Answer 14

Rest 37
CAN’T terminate option K power of acceptance by rejection/counteroffer, revocation, or death/incapacity UNLESS requirements for discharge of K duty = mety

Question 15

Option K

Answer 15

Rest 45
if promise ONLY in exchange for performance, option K created when offeree tenders/begins performing

Offeror’s duty to perform = CONDITIONAL on completing/tendering invited performance in accordance w terms of offer

Question 16

Acceptance by Performance

Answer 16

Rest 62
if offer invites choice between acceptance by promise or performance, tendering/starting performance = acceptance

Question 17

Acceptance by Silence

Answer 17

Rest 69
acceptance by silence ONLY when:
(1) take benefit w reas. opp to reject + w reason to know offer was made w expectation of compensation, OR
(2) knew/had reason to know that assent may be manifested by silence, OR
- prior dealings make it reasonable that notice required if don’t intend to accept

Question 18

Memorandum: General Requirements

Answer 18

Rest 131
- signed writing
- reasonably ID K subject matter
- sufficiently indicate K = made, AND
- states w reasonable certainty the essential terms of unenforced promises in K

Question 19

SOF writing not made as memorandum of K

Answer 19

Rest 133
unless K for consideration of marriage, SOF may be satisfied by signed writing NOT made as memorandum of K

Question 20

Form Ks

Answer 20

Rest 211
standardized agreements

interpreted wherever reasonable to treat all those similarly situated as alike, w/o regard to their knowledge/understanding of standard terms of writing

generally enforceable UNLESS absurd term

Question 21

Rest Consideration

Answer 21

71
requires bargain for performance/promise

Performance may consist of:
- act other than promise,
- forebearance, OR
- creation/modification/destruction of legal relation

consideration may be given TO promisor/3rd person
- may be given BY promisee/3rd person

Question 22

Pre-Existing Duty Rule

Answer 22

Rest 86
promise = binding to extent necessary to prevent injustice IF made in recognition of benefit promisor previously received from promisee

NOT binding if (1) conferred benefit as gift/no unjust enrichment, OR (2) to extent that its value = disproportionate to benefit

Question 23

Modification

Answer 23

Rest 89
modification = binding if:
(1) fair and equitable in view of unanticipated circumstances at time K made

Question 24

UCC Consideration

Answer 24

2-209
no consideration req’d for agreement to be binding, BUT must meet test of “GOOD FAITH”

Question 25

Adequacy of Consideration

Answer 25

Rest 79 cts won't look into adequacy of consideration (equal values/bad bargains)

Question 26

Forbearance as Consideration

Answer 26

Rest 74 generally not consideration UNLESS: (a) claim/defense = doubtful bc of uncertainty as to facts/law, OR (b) forbearing/surrendering party believes claim/defense may be fairly determined to be valid (good faith req)

Question 27

Promissory Estoppel

Answer 27

Rest 90 promise which promisor should reasonably expect to induce action/forbearance on part of promisee/3rd person and which DOES induce such action = BINDING if can only avoid injustice by enforcing promise

Question 28

When Misrepresentation is Fraudulent/Material

Answer 28

Rest 162 FRAUDULENT if assertion intended to induce manifest assent + maker: (1) knows/believes assertion isn't factual, OR (2) lacks stated/implied confidence in truth, OR (3) knows he lacks basis he states/implies for assertion MATERIAL if: (1) likely to induce reasonable person to manifest assent, OR (2) maker knows it would likely induce recipient to manifest assent

Question 29

When Misrepresentation Makes K Voidable

Answer 29

Rest 164 voidable if manifest assent = induced by fraud/material misrep by other party upon which recipient is justified in relying

Question 30

Misrepresentation as Inducing Cause

Answer 30

Rest 167 misrep induces party's manifest assent IF substantially contributes to decision to manifest assent

Question 31

Assertion of Opinion

Answer 31

Rest 169 justified in relying on it IF: - relationship of trust + confidence with other - reasonable belief that other (compared to self) has special skill/judgment/objectivity abt subject matter - some other special reason they're particularly susceptible to the type of misrep involved

Question 32

Duress

Answer 32

Rest 175 no reasonable alternative - if assent induced by improper threat by other party, K = VOIDABLE by vic - if assent induced by improper threat by NON-PARTY, K = VOIDABLE by vic UNLESS other party in good faith + w/o reason to know of duress either gives value/relies materially on transaction

Question 33

Improper Threats

Answer 33

Rest 176 THREAT = IMPROPER IF: - threat = crime/tort, or threat itself would be crime/tort - threat = criminal prosecution - threat of use of civil process + threat made in bad faith - threat = breach of duty of good faith and fair dealing under K w recipient THREAT = IMPROPER IF resulting exchange isn't on fair terms AND: - threatened act would harm recipient + not significantly benefit other, - effectiveness of threat in inducing manifest assent = significantly increased by prior unfair dealing by party making threat, OR - what's threatened = otherwise use of power for illegitimate ends

Question 34

Unconscionability

Answer 34

Rest 208 + UCC 2-302 if K/term = unconsc. at time K made, ct may: (1) refuse to enforce K, (2) enforce remainder w/o unconscionable clause, OR (3) limit application of unconsc. clause to avoid any unconsc. result

Question 35

Implied Duty of Good Faith and Fair Dealing

Answer 35

Rest 205 every K imposes upon each party a duty of good faith and fair dealing in its performance + enforcement

Question 36

Implied Duty of Good Faith

Answer 36

UCC 1-304 every K/duty w/in UCC imposes obligation of good faith in performance + enforcement

Question 37

Ambiguity: Whose Meaning Prevails

Answer 37

Rest 201 (1) if SAME meaning, then that meaning (3) if DIFF meanings, then neither party bound (no assent) EXCEPTION (2) if DIFF meanings, A prevails IF when K made: - A didn't know B's diff meaning AND B had reason to know A's meaning, OR - A had no reason to know of B's meaning AND B had reason to know A's meaning

Question 38

Tools of Interpretation

Answer 38

Rest 202 + UCC 1-303 (1) terms of K (2) course of negotiation (3) course of performance (4) course of dealing (5) trade usage/custom

Question 39

Rest Agreements to Agree

Answer 39

204 if essential term of K = omitted by parties, courts may supply term reasonable in the circumstances

Question 40

UCC Agreements to Agree

Answer 40

2-305 parties can conclude K EVEN IF price unsettled IF both intend price = reasonable at time for delivery if: (1) nothing = said as to price, (2) price left for parties to agree on + fail to agree, OR (3) price to be set by market/3rd party + not set/recorded good faith requirement if 1 party at fault for failure to fix price, other party may (1) treat K as cancelled, OR (2) fix at reasonable price themself

Question 41

K Term Requirements

Answer 41

Rest 33 - if 1/more terms left open/uncertain, MIGHT show NO intent to understand it as offer/acceptance

Question 42

Illusory Promise

Answer 42

Rest 77 promise = illusory if: (1) party purports to make promise, AND (2) reserve choice of alternative performances

Question 43

UCC gap fillers

Answer 43

2-305: price (good faith req) 2-306: quantity 2-308: delivery (at business/known other place) 2-309: time (reasonable )

Question 44

Parol Evidence Rule

Answer 44

UCC 2-202 if evidence conflicts w writing in K, NOT admitted UNLESS explain/supplement K: (a) by course of dealing, usage of trade, or course of performance, AND (b) by evidence of consistent additional terms UNLESS court finds writing = intended as COMPLETE and EXCLUSIVE statement of terms

Question 45

Express Warranty

Answer 45

UCC 2-313 affirmation of fact/promise, description, or sample/model - provided by seller to buyer - becomes part of basis for bargain

Question 46

Implied Warranty of Merchantability

Answer 46

UCC 2-314 if seller = merchant who deals in goods of this kind must be fit for ordinary uses of such goods

Question 47

Implied Warranty of Fitness for a Particular Purpose

Answer 47

UCC 2-315 when at time of K formation seller has reason to know: (1) any particular purpose for which goods are required, AND (2) buyer relies on seller's skill/judgment to select/furnish suitable goods

Question 48

Warranty Exceptions

Answer 48

UCC 2-316 can exclude/modify warranties if done so CLEARLY and CONSPICUOUSLY

Question 49

Voidability

Answer 49

Rest 214 PER admissible IF evidence of fraud, mistake, duress, or other voidability

Question 50

Mistake of Fact Risk Allocation

Answer 50

Rest 154 party = allowed to void K if party didn't bear risk party can bear risk IF: (1) K allocates risk, (2) conscious ignorance, OR (3) court determines it's reasonable to allocate risk

Question 51

Bilateral Mistake

Answer 51

Rest 152 mutual mistake at time of K that goes to a basic assumption underlying the K and materially affects the exchange Elements to Rescind: (1) both parties = mistaken at time K made, (2) mistake goes to basic assumption underlying the K, (3) mistake materially affects the exchange, AND (4) said party doesn't bear risk of mistake

Question 52

Unilateral Mistake

Answer 52

Rest 153 ELEMENTS TO RESCIND: (1) both parties mistaken at time K made, (2) mistake goes to basic assumption underlying K, mistake materially affects exchange, AND (4) said party doesn't bear risk of mistake PLUS: - effect of mistake makes enforcement unconscionable, OR - other party had reason to know of mistake OR other party's fault caused mistake

Question 53

Impracticability

Answer 53

Rest 261 (1) after K formation (2) supervening event occurs w/o fault of party seeking relief (3) event causes party's performance to become impracticable (4) non-occurrence of supervening event was a basic assumption on which the K was made (explicit/implicit) (5) party doesn't bear risk of changed circumstances (risk allocation)

Question 54

CL Breach

Answer 54

Rest 241 PERFORMANCE FACTORS (1) extent to which non-breacher got expected benefit (2) chance that breacher will cure breach JUSTICE/EQUITY FACTORS (1) hardship to breacher/non-breacher from rescinding K (2) whether damages will adequately compensate the non-breacher (3) breacher's culpability

Question 55

Perfect Tender Rule

Answer 55

UCC 2-601 If goods/tender of delivery fail in ANY RESPECT to conform to K, BUYER MAY: (1) REJECT the whole, (2) ACCEPT the whole, OR (3) ACCEPT any commercial unit(s) and REJECT the rest

Question 56

Cure by Seller

Answer 56

UCC 2-508 If at delivery, buyer rejects goods as non-conforming, seller may have right to cure REJECTION BEFORE DATE REQUIRED IN K: right to cure = UNCONDITIONAL AFTER DATE REQUIRED IN K: seller has right to cure within further reasonable time IF seller reasonably believed goods would be acceptable w/ or w/o a $ allowance

Question 57

Anticipatory Repudiation

Answer 57

UCC 2-610 aggrieved party may: (1) for commercially reasonable time, wait for repudiating party to perform, OR (2) sue before performance has arrived

Question 58

Adequate Assurances of Performance

Answer 58

Rest 251 + UCC 2-609 one party has reasonable grounds for believing other party will breach K - may demand adequate assurance of performance AND suspend own performance (UCC: demand must be in writing) - if assurances are sent, party making demand MUST perform - if assurances NOT sent in reasonable time, then party making demand can treat K as being anticipatorily repudiated

Question 59

Expectation Damages

Answer 59

Rest 347 [loss in value + I/C loss] - [avoided $]

Question 60

buyer's right to cover

Answer 60

UCC 2-712 good faith + w/o unreasonable delay can make reasonable purchase/K to purchase sub goods [cover $ + K $ + I/C damages] - [$ saved bc of breach] if don't cover, not barred from other remedies

Question 61

buyer's damages

Answer 61

UCC 2-713 [market price at time learn of breach + K $ + I/C damages] - [$ saved bc of breach]

Question 62

Economic Waste Doctrine

Answer 62

Rest 348 can measure expectation damages either by: (1) Cost of Completion (subjective) OR (2) Diminution in Market Value (objective)

Question 63

Foreseeability

Answer 63

Rest 351 follows from breach in ordinary course of events OR reason to know of special circumstances if damages = disproportionate, can limit by (1) excluding lost profits, (2) only allowing reliance, or (3) limit if justice so requires

Question 64

Certainty

Answer 64

Rest 352 can only recover damages for $ loss proved with reasonable certainty

Question 65

Reliance Damages Measure

Answer 65

Rest 349 [$ spent in reliance on K (prep/performance)] - [avoided $ breacher can prove w reasonable certainty]

Question 66

Avoidability

Answer 66

Rest 350 can't recover if could've avoided loss w/o undue risk, burden, or humiliation can still recover if didn't avoid BUT made reasonable (but unsuccessful) efforts to avoid

Question 67

seller's right to resell

Answer 67

UCC 2-706 resell in good faith + in commercially reasonable manner [resale $] - [K $ and incidental - avoided $ bc of breach]

Question 68

seller's damages

Answer 68

UCC 2-708 [market price at time+place for tender] - [unpaid K $ and incidental - avoided $ bc of breach]

Question 69

Punitive Damages

Answer 69

Rest 355 not recoverable for breach unless conduct = also a TORT for which punitive damages = reasonable

Question 70

LDC

Answer 70

Rest 356 + UCC 2-718 LDC allowed if (1) at reasonable amt + (2) difficult to prove loss unreasonably large LDC = void as penalty

Question 71

Modification

Answer 71

UCC 2-719 can add/sub, limit/alter damages modified remedy = optional, but if expressly agreed to be exclusive remedy, then it's the SOLE remedy consequential damages can be limited/excluded UNLESS unconscionable

Question 72

specific performance

Answer 72

UCC 2-716 when goods = unique/other proper circumstances

Question 73

Restitution for Injured Party

Answer 73

Rest 373 entitled to damages for any benefit conferred onto breacher by part performance/reliance NO restitution if only breach = $ owed

Question 74

Restitution for Breaching Party

Answer 74

Rest 374 if justified refusal to perform bc of other's breach, RESTITUTION: [any benefit conferred] - [loss caused by their own breach] NO damages if value of performance as liquidated damages = reas. in light of anticipated/actual breach + difficult to prove loss

Question 75

Restitution Measure

Answer 75

Rest 371 measure by breaching party's: (1) reas. value of what they received, OR (2) extent of increased value/advancement of interests

Question 76

Tortious Interference w Performance of K by 3rd Party

Answer 76

Rest 2 of TORTS 766 liable to injured party for loss resulting from 3rd person's failure to perform K

Question 77

Mailbox Rule

Answer 77

Rest 63 non-instantaneous communication unless otherwise indicated, acceptance upon DISPATCH w/o regard to whether it reaches offeror Option Ks: acceptance upon RECEIPT