Topics for Review

Question 1

Substantial Performance and Perfect Tender Rule; which is common law, which is UCC?

Answer 1

Substantial Performance = Common Law

Perfect Tender Rule = UCC

Question 2

What is the Perfect Tender Rule and which case illustrates it?

Answer 2

A party doesn’t have to “perfectly perform”, just that the completed goods must perfectly conform to the terms of the contract in every respect

Complete performance under the terms of the contract that were promised to them

Printing Center of TX, Inc. v. Supermind Publishing Co.

Question 3

If something is not “perfect tender”, what can the party do? And what section of UCC has this list?

Answer 3

1. Reject/return the non-conforming goods and not pay for them
2. Keep them (consider them “good enough”)
3. Go find another seller for the same product, then sue the original seller for the difference between what they would’ve paid originally vs. what they had to pay to get them somewhere else

Question 4

If a party gets another seller to produce the same product pursuant to the 3rd option in the Perfect Tender Rule, what section of UCC is that?

Answer 4

§ 2-712: Cover; Buyer’s Procurement of Substitute Goods

Question 5

What is the acronym for Statute of Frauds, and what do each of them stand for?

Answer 5

MYLEGS

Marriage, Year long, Land, Executor, Goods (>$500), Suretyship

Question 6

What are the two requirements for a contract to be valid under the Statute of Frauds?

Answer 6

1. Must be a written agreement

2. Must be signed

Question 7

What is the policy reason behind allowing a digital signature on an email/electronic communication to be sufficient as a signature under SoF?

Answer 7

It saves time and costs of administrative work relating to executing contracts

Question 8

Which case demonstrates the year rule?

Answer 8

Professional Bull Riders v. AutoZone (PBR had a contract with AutoZone, AZ pulled out, claimed Statute of Frauds; if it was to be longer than a year, they should’ve had a signed writing)

Question 9

What is the differentiation between Statute of Frauds with respect to goods and the UCC with respect to goods?

Answer 9

The UCC applies to all sale of goods

Statute of Frauds applies to the sale of goods for more than $500

Question 10

For a writing to be sufficient about goods under the Statute of Frauds, it must include what?

What case demonstrates this?

Answer 10

The QUANTITY of goods

Eastern Dental Corp. v. Isaac Masel Co.

Question 11

What is the calculation for Expectation Damages?

Answer 11

Expected profit + incidental damages

Question 12

When are reliance damages calculated?

Answer 12

When it’s impossible to calculate expectation damages, or when it would be unfair to the defendant

Question 13

What does reliance damages aim to do?

Answer 13

Put the plaintiff back into a position as if the contract never happened at all (the difference between where P started and where they ended up after performance)

Question 14

What is the Lumley Rule and which case is it?

Answer 14

Contract law will not force someone to perform against their will (Lumley v. Wagner)

Question 15

Which equitable remedy does the Lumley Rule fall under?

Answer 15

Negative injunction; court orders a party NOT to do something

It’s an attempt to compel them to perform by prohibiting them from doing the same for anyone else

Question 16

When can punitive damages be awarded?

Answer 16

Rarely, but when elements of fraud, malice, gross negligence, or oppression mingle in the contract controversy

Question 17

Courts will not award damages unless all three of these elements are met

Answer 17

F.U.C.

Foreseeability (party must reasonably give other party notice of potential loss from breach of contract)

Unavoidability (P has a responsibility to avoid incurring additional damages when a breach has occurred)

Certainty (to award damages, P must be able to provide sufficient evidence to show the amount of damages with reasonable certainty, otherwise it’s too speculative)

Question 18

Under Unavoidability, what is the duty to mitigate doctrine?

Answer 18

Non-breaching party has a duty to mitigate (make less severe) the amount of damages incurred by them

Can’t intentionally make damages “worse”

Question 19

What are 2 ways a plaintiff can mitigate damages?

Answer 19

1. When D has breached the contract, P has to stop working towards full performance of K
2. When employer has breached contract, they must seek new employment or accept an offer of equally similar position

Question 20

For the Statute of Frauds, what are the two requirements for a signed writing?

Answer 20

1. It must be received by the other party

2. The other party must have good reason to understand its contents

Question 21

What is the UCC provision that governs Statute of Frauds sale of goods?

Answer 21

§ 2-201 (sale of goods for $500+ isn’t enforceable unless there’s a signed writing sufficient to indicate that a contract has been made, and is not insufficient because it omits or incorrectly states an agreed upon term)

Question 22

What is the Merchant Exception to the sale of goods and the Statute of Frauds?

Answer 22

For the sale of goods between merchants, if one party puts out a signed writing, the other party must send their objection, or they can’t use the SoF defense

Question 23

What CAN parol evidence do, and what CAN’T it do?

Answer 23

It CAN: Explain ambiguities in the terms of the final contract

It CAN’T: Add to or contradict things in the contract

Question 24

What 3 conditions must be met for parol evidence to be admitted? (T.C.G.)

Answer 24

1. Collateral agreement (subject matter is ‘totally different’ from the original contract, so it wouldn’t be implied by existing terms)
2. Cannot contradict express/implied provisions of the contract
3. Parties wouldn’t ordinarily expect to put it in the written contract (good faith omission)

Question 25

What is Corbin’s view on parol evidence?

Answer 25

Corbin = looking beyond the 4 corners of the document to determine the intentions of the contract

Question 26

What is Williston’s view on parol evidence?

Answer 26

Williston = 4 corners ONLY! If a contract has an integration clause, it’s clearly a binding/whole contract, and no need to look anywhere else

Question 27

What are the 2 policy considerations about parol evidence?

Answer 27

1. There can be disagreements about the use of it because it’s possible one party will make oral promises to get the other party to sign
2. Parol evidence rule is allowing the one thing it was meant to prevent; people making up oral terms

Question 28

Which UCC provision bars parol evidence if the parties intended the signed contract to be the “complete and exclusive” statement of their agreement?

Answer 28

§ 2-202(b)

Question 29

What is the policy behind assignment & delegation?

Answer 29

If it’s so important to a party, they should include a clause within the contract to prevent it, especially to avoid misunderstandings with non-sophisticated parties

Question 30

What is the general doctrine of accord and satisfaction?

Answer 30

If there is a good faith dispute between the buyer and seller, and the goods are less than the agreed upon condition, the parties settle on a lower value for the exchange and the seller cannot go after the full amount from the buyer

Creates a new contract

Question 31

What case illustrates the general doctrine for accord and satisfaction?

Answer 31

Schnell v. Perlmon (onion case)

Question 32

What is accord and satisfaction?

Answer 32

Accord = new offer in the context of a disputed amount (sending a check for a different amount is a “new offer”)

Satisfaction = accepting the accord as a good faith agreement (cashing the check)

Question 33

What is the pre-existing duty rule?

Answer 33

Where someone has a contractual duty to perform, they cannot seek more compensation to perform what they were already contractually bound to do

Question 34

What is the general rule of adequacy of consideration? And which case demonstrates it?

Answer 34

Just because a contract is a “bad deal” for one party does not void the contract when there’s been consideration on both sides

Batakis v. Demotsis (guy gives woman small amount of money in exchange to get a lot more back)

Question 35

What are the 3 provisions of UCC § 2-209 (Modification in a contract is fine as long as it’s a “good faith” change)?

Answer 35

1. Does not need consideration to be binding
2. Parties have a duty of “good faith”
3. “Bad faith” to escape performance is barred

Question 36

What are the Affirmative Defenses?

minimums

Answer 36

Misrepresentation/fraud
Incapacity
Non-disclosure
Impossibility
M: Other M, Duress/undue influence
Unilateral mistake
Mutual mistake
Statute of frauds