Preface

Casebook Correlation Chart

Capsule Summary

Chapter 1
INTRODUCTION

I.

MEANING OF “CONTRACT”

A.

Definition

II.

VOID, VOIDABLE AND UNENFORCEABLE CONTRACTS

III.

ECONOMIC ANALYSIS OF CONTRACT LAW

IV.

SOURCES OF CONTRACT LAW

Chapter 2
OFFER AND ACCEPTANCE

I.

INTENT TO CONTRACT

A.

Mutual assent

B.

Objective theory of contracts

C.

Intent to create legal relations

D.

Intent to memorialize agreement in writing

II.

OFFER AND ACCEPTANCE GENERALLY

A.

Requirement of offer and acceptance

B.

Restatement definition

C.

Promise contained in offer

D.

Offer creates power of acceptance

1.

Options

III.

VALIDITY OF PARTICULAR KINDS OF OFFERS

A.

Offer made in jest

B.

Offer distinguished from expression of opinion

C.

Preliminary negotiations distinguished from offers

D.

Price quotations distinguished from offers

E.

Advertisements as offers

F.

Offers at auctions

G.

Invitations to bid

H.

Seller’s response to inquiry

I.

Indefinite offers

J.

Offers proposing a series of contracts

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VALIDITY OF OFFERS

IV.

THE ACCEPTANCE

A.

Acceptance defined

B.

Who may accept the offer

C.

Must be in response to an offer

D.

Offeree usually required to know of the offer

E.

Method of acceptance

1.

Can suspend mailbox rule

2.

Mode of acceptance where not specified in offer

3.

Acceptance of unilateral contract

4.

Acceptance of bilateral contract

5.

Where offer invites either promise or performance

6.

Acceptance by silence

7.

Notice of acceptance of unilateral contract

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THE ACCEPTANCE

V.

ACCEPTANCE VARYING FROM OFFER

A.

Problem generally

B.

Common-law view

1.

Injustice

C.

Liberal UCC view

1.

“Battle of the forms”

2.

Role of § 2-207

3.

Text of § 2-207

4.

Summary

D.

Detailed discussion

E.

Acceptance expressly conditional on assent to changes

F.

Additional term in acceptance

1.

Contract formed

2.

Proposal for addition to the contract

3.

At least one party not merchant

4.

Both parties merchants

5.

Recap of how additional terms are handled

6.

Additional term in first document but not second

G.

Different (conflicting) terms in documents

H.

Response diverges too much to be acceptance

I.

Contract by parties’ conduct

J.

Confirmation of oral agreement

K.

“Terms to follow” contracts (a/k/a “rolling” contracts)

L.

Negotiations not involving standardized forms

M.

Electronic commerce, and its effect on contract formation

N.

Modern view of divergences in non-UCC cases

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ACCEPTANCE VARYING FROM OFFER

VI.

DURATION OF THE POWER OF ACCEPTANCE

A.

Determining whether the acceptance is timely

B.

“Continuing offers” implied

C.

Four ways of terminating offer

D.

Offer terminated by offeree’s rejection

E.

Counter-offer terminates power to accept

F.

Lapse of time

G.

Revocation

1.

Effective upon receipt

2.

Lost revocation

3.

What constitutes receipt of revocation

4.

Indirect communication of revocation

5.

Revocation of general offer

H.

Death or incapacity of offeror or offeree

I.

Supervening illegality

J.

Irrevocable offers

1.

Exceptions

2.

The standard option contract

3.

“Firm offers” under the UCC

4.

Part performance or detrimental reliance

K.

Temporary irrevocability caused by part performance or detrimental reliance

VII.

WHEN ACCEPTANCE BECOMES EFFECTIVE

A.

Introduction

B.

General “mailbox” rule

C.

Misdirection of acceptance

D.

Acceptance lost in transmission

E.

Where offeree sends both acceptance and rejection

F.

Acceptance of option contracts

G.

Effective date of revocation of offer

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TIMELINESS AND EFFECTIVENESS OF ACCEPTANCE

VIII.

INDEFINITENESS

A.

Problem of indefiniteness generally

B.

Modern view more liberal

C.

Necessary terms

1.

Court may supply missing term

2.

Implication of reasonable terms, generally

3.

Implied obligation of good faith

4.

Trade usage or other external evidence

5.

Need for an intent to contract

6.

Agreement to agree

7.

Contracts where terms are left to one party’s specifications

8.

Indefiniteness cured by part performance

IX.

MISUNDERSTANDING

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INDEFINITENESS AND MISUNDERSTANDING

Exam Tips on
OFFER AND ACCEPTANCE

Chapter 3
CONSIDERATION

I.

INTRODUCTION

A.

Consideration as a requirement for a contract

B.

Purpose of consideration doctrine

C.

Definition

D.

Two kinds of problems

II.

THE BARGAIN ELEMENT—GIFT PROMISES

A.

The bargain element generally

1.

“Bargain” defined

B.

Ordinary gift cases

1.

Bargains vs. conditional gifts

2.

Test for distinguishing bargains from pre-conditions

3.

Non-economic benefits

4.

Business context does not negate donative intent

5.

Absence of overt bargaining not fatal

C.

Sham and nominal consideration

D.

Importance of whether recited consideration was actually paid

E.

Promisee must be aware of promise

F.

Consideration doctrine not applicable to executed gifts

III.

THE BARGAIN ELEMENT—“PAST CONSIDERATION”

A.

“Past consideration” not sufficient

B.

Pre-existing debt

C.

Promise to pay for past services received

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THE BARGAIN ELEMENT

IV.

THE “DETRIMENT” ELEMENT GENERALLY

A.

The “detriment” aspect of consideration

B.

“Detriment” idea summarized

C.

Consideration may be either promise or performance

D.

Where issue arises

E.

Court will not inquire into “adequacy” of the detriment

1.

Minor effort or other thing of non-monetary value

2.

Equity courts have different rule

3.

Inadequacy of consideration as evidence of fraud, duress, unconscionability, etc.

V.

THE PRE-EXISTING DUTY RULE

A.

The pre-existing duty rule generally

B.

General pre-existing duty rule in two party cases

1.

Promise to modify

2.

Deterring hold-up behavior

3.

Construction contracts

4.

Restatement view

5.

The “unforeseen circumstances” exception

6.

Promissory estoppel

7.

Where extra duties assumed

8.

Duty owed to third person rather than to promisor

9.

Some states have rejected rule

10.

Rewards and bonuses

C.

Agreements to accept part payment of debt in satisfaction of whole

D.

Extension agreements

E.

Settlement of other kinds of suits

F.

The “three party” pre-existing duty cases

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DETRIMENT, AND THE PRE-EXISTING DUTY RULE

VI.

MUTUALITY OF CONSIDERATION

A.

Requirement that each side furnish consideration

B.

Consideration in bilateral contracts

C.

“Mutuality of obligation”

VII.

ILLUSORY, ALTERNATIVE, AND IMPLIED PROMISES

A.

Introduction

B.

Illusory promises

1.

Reservation of right to change mind

C.

Alternative promises

D.

Right to terminate agreement

E.

Other kinds of implied promises

VIII.

REQUIREMENTS AND OUTPUT CONTRACTS

A.

Requirements and output contracts

B.

UCC approach

C.

Requirements and output contracts distinguished from continuing offers

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MUTUALITY PROBLEMS ILLUSORY, ALTERNATIVE AND IMPLIED PROMISES, AND REQUIREMENTS AND OUTPUT CONTRACTS

IX.

MISCELLANEOUS CONSIDERATION PROBLEMS

A.

Conditional promises

1.

Conditions outside of the promisor’s control

2.

Where condition is within partial control of the promisor

3.

Promisee’s discretion

B.

Voidable and unenforceable promises

C.

Forging a good unilateral contract out of a bad bilateral one

1.

Non-competition clause

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MISCELLANEOUS CONSIDERATION PROBLEMS

Exam Tips on
CONSIDERATION

Chapter 4
PROMISES BINDING WITHOUT CONSIDERATION

I.

INTRODUCTION

II.

PROMISES TO PAY PAST DEBTS

A.

Promises to pay past debts that are no longer legally enforceable

B.

“Moral consideration”

C.

Scope of promisor’s duty

III.

PROMISE TO PAY FOR BENEFITS RECEIVED

A.

Promise to pay for benefits received generally

1.

Where services were requested, and rendered with an expectation of payment

2.

Benefits previously received but not requested

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PROMISES TO PAY PAST DEBTS AND PROMISES TO PAY FOR BENEFITS RECEIVED

IV.

OTHER CONTRACTS BINDING WITHOUT CONSIDERATION

A.

Promise to perform a voidable duty

B.

Modification of contracts

1.

Contracts containing a “no oral modification” clause

2.

Good faith and unconscionability in modifications

C.

Option contracts

1.

Restatement

2.

Offers which induce reliance

3.

Firm offers under the UCC

D.

Guaranties

E.

Contracts under seal

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OTHER CONTRACTS BINDING WITHOUT CONSIDERATION

V.

PROMISSORY ESTOPPEL

A.

Introduction

1.

Other applications

B.

Restatement definition

C.

Unbargained-for reliance

D.

Promises to make gifts

1.

Intra-family promises

2.

Oral promises to convey land

E.

Charitable subscriptions

F.

Gratuitous bailments and agencies

G.

Promises to pay pensions

H.

Offers by sub-contractors

I.

Promise to perform business service

1.

Promise to obtain insurance

2.

Promise to make a loan

J.

At-will jobs and other at-will relationships

K.

Duty to bargain in good faith

L.

Theories of recovery

M.

Promissory estoppel under the UCC

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PROMISORY ESTOPPEL

Exam Tips on
PROMISES BINDING WITHOUT CONSIDERATION

Chapter 5
MISTAKE

I.

NATURE OF MISTAKE GENERALLY

II.

GENERAL RULE ON MISTAKE

III.

MUTUAL MISTAKE

A.

Restatement position

B.

Restatement’s three requirements

C.

Meaning of “basic assumption”

D.

Material effect on agreed exchange

E.

Allocation of risk

1.

Agreement of the parties

2.

Conscious ignorance

3.

Allocation by court

F.

Relation to breach of warranty

G.

Misunderstanding

Quiz Yourself on
MUTUAL MISTAKE

IV.

UNILATERAL MISTAKE

A.

The problem generally

B.

Traditional rule

C.

Modern view

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UNILATERAL MISTAKE

V.

DEFENSES AND REMEDIES

A.

Negligence usually not a defense

1.

Failure to act in good faith

2.

Failure to read writing

B.

Remedies

1.

Avoidance

2.

Reliance damages

3.

Adjustment of contract as substitute for avoidance

VI.

REFORMATION AS REMEDY FOR ERROR IN EXPRESSION

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DEFENSES, REMEDIES, AND REFORMATION

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MISTAKE

Chapter 6
PAROL EVIDENCE AND INTERPRETATION

I.

THE PAROL EVIDENCE RULE GENERALLY

A.

How the rule applies

II.

TOTAL AND PARTIAL INTEGRATION

A.

The concept of “integration”

B.

“Partial” vs. “total” integrations

C.

Statement of the parol evidence rule

D.

Contemporaneous and subsequent expressions

E.

The UCC’s parol evidence rule

Quiz Yourself on
THE PAROL EVIDENCE RULE, AND “TOTAL” VS. “PARTIAL” INTEGRATION

III.

THE ROLES OF THE JUDGE AND JURY

A.

Preliminary determinations made by judge

B.

Conflicting views on how judges decide

C.

Deciding whether a writing is an integration, and whether particular terms contradict or supplement it

Quiz Yourself on
THE ROLES OF THE JUDGE AND JURY

IV.

SITUATIONS IN WHICH THE PAROL EVIDENCE RULE DOES NOT APPLY

A.

Rule does not bar a showing of fraud, mistake or other voidability

B.

Existence of a condition

C.

Collateral agreement supported by separate consideration

D.

Subsequent transactions

E.

Interpretation

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WHEN THE PAROL EVIDENCE RULE DOES NOT APPLY

V.

INTERPRETATION

A.

Interpretation generally

B.

Maxims of interpretation

1.

Primary purpose rule

2.

All terms made reasonable, lawful and effective

3.

Construction against the draftsman

4.

Negotiated terms control standard terms

C.

One party knows or should know of the other’s meaning

VI.

TRADE USAGE, COURSE OF PERFORMANCE, AND COURSE OF DEALING

A.

Common-law use of “custom”

B.

Modern tendency exemplified by UCC

C.

Effect on the parol evidence rule

D.

Allowable to add or subtract from the agreement

E.

Priorities

VII.

OMITTED TERMS SUPPLIED BY COURT

A.

Court may supply term

B.

Restatement rule

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INTERPRETATION; TRADE USAGE, COURSE OF PERFORMANCE, AND COURSE OF DEALING; OMITTED TERMS SUPPLIED BY THE COURT

Exam Tips on
PAROL EVIDENCE AND INTERPRETATION

Chapter 7
CONDITIONS, BREACH, AND OTHER ASPECTS OF PERFORMANCE

I.

INTRODUCTION

II.

CLASSIFICATION OF CONDITIONS

A.

Precedent/Subsequent distinction

B.

Express and constructive conditions

III.

DISTINCTION BETWEEN CONDITIONS AND PROMISES

A.

Importance of distinction

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CLASSIFICATION OF CONDITIONS, AND THE DISTINCTION BETWEEN CONDITIONS AND PROMISES

IV.

EXPRESS CONDITIONS

A.

Strict compliance

1.

Avoidance of forfeiture

2.

Interpreted in light of parties’ intentions

B.

Satisfaction of a party

C.

Satisfaction of a third person

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EXPRESS CONDITIONS

V.

CONSTRUCTIVE CONDITIONS

A.

Use of constructive conditions in bilateral contracts

B.

Order of performance

1.

Periodic payments or other alternating performance

2.

Where no order of performance agreed upon

C.

Independent vs. dependent promises

D.

Divisible contracts

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CONSTRUCTIVE CONDITIONS

VI.

SUBSTANTIAL PERFORMANCE

A.

Doctrine of substantial performance

1.

Relation to material breach

2.

Consequences of non-material breach

B.

Suspension followed by discharge

C.

Factors determining whether a breach is material

D.

Material breach in contracts for the sale of goods

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SUBSTANTIAL PERFORMANCE

VII.

EXCUSE OF CONDITIONS

A.

Introduction

B.

Hindrance or wrongful prevention

C.

Intent to forego the benefit of the condition (“waiver”)

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EXCUSE OF CONDITIONS

VIII.

REPUDIATION AND PROSPECTIVE INABILITY TO PERFORM AS FAILURES OF CONSTRUCTIVE CONDITIONS

A.

General effect of prospective breach

B.

Insolvency or financial inability

C.

Right to adequate assurance of performance

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REPUDIATION AND PROSPECTIVE INABILITY TO PERFORM AS FAILURES OF CONSTRUCTIVE CONDITIONS

Exam Tips on
CONDITIONS, BREACH, AND PERFORMANCE

Chapter 8
ANTICIPATORY REPUDIATION AND OTHER ASPECTS OF BREACH

I.

TOTAL AND PARTIAL BREACH

II.

ANTICIPATORY REPUDIATION GENERALLY

A.

A recap

1.

Hochster v. De La Tour

B.

Hochster accepted

C.

What constitutes a repudiation

1.

Traditional view

2.

Modern view

3.

Promisor’s statement

4.

Voluntary acts rendering performance impossible

5.

Prospective inability to perform

6.

Insolvency

7.

Threatened breach must be material

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ANTICIPATORY REPUDIATION IN GENERAL

III.

OTHER ASPECTS OF REPUDIATION

A.

Repudiation after repudiator’s performance has fallen due

1.

Same application

B.

Retraction of repudiation

C.

The repudiatee’s option to sue or continue the contract

D.

Repudiatee’s inability to perform

E.

Repudiatee owes no remaining duties

1.

Payment of money

F.

Damages for repudiation under UCC

1.

When does buyer learn of breach

G.

Right to demand assurances of performance

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OTHER ASPECTS OF REPUDIATION

Exam Tips on
ANTICIPATORY REPUDIATION AND OTHER ASPECTS OF BREACH

Chapter 9
STATUTE OF FRAUDS

I.

INTRODUCTION

II.

SURETYSHIP AGREEMENTS

A.

General rule

1.

Purpose of rule

2.

Applies to defaults as well as debts

3.

Other person must be liable

4.

Promise must be made to creditor

B.

The main purpose rule

C.

Memorandum requirement

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SURETYSHIP AGREEMENTS

III.

THE MARRIAGE PROVISION

IV.

THE LAND CONTRACT PROVISION

A.

Contracts to transfer and buy land

B.

Interests in land

C.

Effect of vendor’s performance or vendee’s reliance

1.

Conveyance by vendor

2.

Vendee’s detrimental reliance

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THE LAND CONTRACT PROVISION

V.

THE ONE-YEAR PROVISION

A.

General rule

1.

Time runs from making of the contract

B.

Performance must be impossible within the one-year period

1.

Contingency judged from time of contract’s execution

2.

Impossibility or other excuse for non-performance

C.

Alternative performances

1.

Termination clauses

D.

Full performance on one side

E.

One-year provision applies to all contracts

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THE ONE-YEAR PROVISION

VI.

CONTRACT FOR THE SALE OF GOODS

A.

Goods versus other property under the UCC

B.

General rule as to goods

1.

Contracts combining services and goods

2.

Exceptions to the UCC Statute

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CONTRACTS FOR THE SALE OF GOODS

VII.

SATISFACTION OF THE STATUTE BY A MEMORANDUM

A.

Requirement

B.

What memorandum must contain

C.

Signature

D.

UCC memorandum requirements

1.

Error or omission

2.

Confirmation from one merchant to another

VIII.

EFFECT OF NON-COMPLIANCE

A.

Effect where only part of the contract is within the Statute

IX.

ORAL RESCISSION AND MODIFICATION

A.

Oral rescission

B.

Modification

1.

Modified contract viewed as if it were original contract

2.

Effect of unenforceability

3.

Reliance on oral modification

C.

No-oral-rescission-or-modification clauses

X.

RESTITUTION, RELIANCE AND ESTOPPEL

A.

Remedies generally

B.

Quasi-contractual recovery

1.

Not limited by contract price

2.

Plaintiff must not be in material default

3.

Reliance damages

C.

Promissory estoppel

1.

Traditional estoppel grounds

2.

Grounds broadened

3.

Limit still imposed on doctrine

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SATISFACTION BY MEMORANDUM; EFFECT OF NON-COMPLIANCE; ORAL RESCISSION AND MODIFICATION; AND RESTITUTION, RELIANCE AND ESTOPPEL

Exam Tips on
STATUTE OF FRAUDS

Chapter 10
REMEDIES

I.

INTRODUCTION

A.

Recovery on and off the contract

1.

Suit “on the contract”

2.

Suit in “quasi-contract”

B.

Law/equity distinction

II.

EQUITABLE REMEDIES

A.

Equitable relief generally

1.

Unified system

2.

Types of equitable relief

B.

Limitations on the use of equity

1.

Inadequacy of damages

2.

Definiteness

3.

Difficulty of enforcement or supervision

C.

Land-sale contracts

D.

Contracts involving personal services

E.

Sale of goods

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EQUITABLE REMEDIES

III.

KINDS OF DAMAGE MEASURES

A.

Three kinds of interest

IV.

EXPECTATION DAMAGES

A.

Expectation interest

1.

“Benefit of the bargain”

B.

Usual formula for calculating expectation damages

C.

Construction contracts

1.

Builder breaches

2.

Owner breaches

D.

Allocation of overhead

E.

Cost of completion vs. decrease in value

F.

Requirement of reasonable certainty

1.

Profits from a new business

2.

Public whim

3.

Cost of completion unknown

4.

Alternative damage measure chosen

5.

UCC has liberal certainty requirement

G.

UCC follows expectation rule

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EXPECTATION DAMAGES

V.

RELIANCE DAMAGES

A.

General function of reliance damages

1.

Reliance damages as a component of expectation damages

B.

Reliance damages where profits too speculative

C.

Promissory estoppel

D.

Doctor-patient contracts

E.

Limitations on amount of reliance recovery

1.

Contract price as limit

2.

Recovery limited to profits

3.

Expenditures prior to signing of contract

F.

Cost to plaintiff, not value to defendant

G.

Reliance damages under the UCC

VI.

RESTITUTION

A.

Restitution generally

1.

Calculation of value

B.

Restitution as a remedy for breach of contract

C.

Restitution not limited to the contract price

1.

Rationale

2.

Restitution not available where plaintiff has fully performed

D.

Restitution in losing contract

E.

Restitution for the breaching plaintiff

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RELIANCE AND RESTITUTION DAMAGES

VII.

SUBSTANTIAL PERFORMANCE AS A BASIS FOR SUIT ON THE CONTRACT

A.

Substantial performance generally

B.

Calculation of defendant’s damages

1.

Cost of remedying defect

2.

Where waste involved

C.

Divisible contracts

VIII.

SUITS IN QUASI-CONTRACT

A.

Situations where quasi-contract may be used

B.

Measure of damages

C.

Quasi-contract where no contract attempted

1.

Rationale

2.

Emergency services supplied

D.

Unenforceable contracts

E.

Quasi-contractual recovery by a breaching plaintiff

1.

Use in construction cases

2.

Payments made by party in breach

3.

Limited to pro-rata contract price

4.

“Willful” default

5.

UCC allows partial restitution to breaching buyer

F.

Plaintiff not entitled to contract damages

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SUITS IN QUASI-CONTRACT

IX.

FORESEEABILITY

A.

General limits on consequential damages

B.

Hadley v. Baxendale

C.

Universally followed

1.

Nomenclature used by courts

2.

Factors bearing on unforeseeability

3.

Parties may allocate risks themselves

4.

Knowledge of consequential damages necessary

5.

Foreseeability distinguished from certainty

6.

Time for measuring foreseeability

7.

UCC rule is liberal

8.

Buyer who has to pay liquidated damages to third party

X.

AVOIDABLE DAMAGES

A.

General rule

1.

“Duty to mitigate”

B.

Standard of reasonableness

1.

Personal service contract

C.

Sales contracts

1.

Obligation of aggrieved buyer

2.

Seller’s duty to mitigate

D.

Affirmative conduct by plaintiff which increases loss

E.

Non-exclusive contracts

F.

Losses incurred in avoiding damages

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FORESEEABILITY AND AVOIDABLE DAMAGES

XI.

NOMINAL AND PUNITIVE DAMAGES

A.

Non-compensatory damages

B.

Nominal damages

C.

Punitive damages

D.

Damages for mental suffering

XII.

LIQUIDATED DAMAGES

A.

Reason for liquidated damages clauses

B.

Rules of enforceability

C.

Policy against penalties

D.

Reasonableness of amount

E.

Difficulty of fixing damages

F.

Damage clause limiting probable recovery

G.

UCC rules on liquidated damages

H.

Consequence of unenforceability

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NOMINAL AND PUNITIVE DAMAGES; LIQUIDATED DAMAGES

XIII.

DAMAGES IN SALES CONTRACTS

A.

Distinction between acceptance and rejection

B.

Buyer’s damages generally, where goods have not been accepted

1.

Right of cover

2.

Contract/market differential

3.

Consequential and incidental damages

4.

Specific performance

5.

Rejection as a remedy

C.

Seller’s damages for breach

1.

Resale by seller

2.

Contract/market differential

3.

Lost profits

4.

Seller’s action for the price

5.

Incidental damages

6.

No consequential damages

7.

Liquidated damages

D.

Damages where the goods are accepted

1.

Seller’s action for price

2.

Claim of buyer who has accepted

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DAMAGES IN SALES CONTRACTS

Exam Tips on
REMEDIES

Chapter 11
CONTRACTS INVOLVING MORE THAN TWO PARTIES

I.

ASSIGNMENT AND DELEGATION GENERALLY

A.

Introduction

B.

Assignment distinguished from delegation

II.

ASSIGNMENT

A.

Present transfer

1.

Significance of distinction

B.

Assignor’s right extinguished

C.

UCC rules on assignment

1.

What assignments are covered by Article 9

2.

Where Article 9 does apply

D.

No writing required absent statute

E.

Gratuitous assignments

F.

What rights are assignable

G.

Contract terms prohibiting assignment

H.

Rights of the assignee against the obligor

1.

Significance

2.

Effect of obligor’s giving performance to assignor

3.

Modification of the contract by obligor and assignor

4.

Waiver of defenses by obligor

5.

Counterclaims, set-offs and recoupment by the obligor

I.

Rights of successive assignees of the same claim

J.

Rights of assignee against assignor

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ASSIGNMENT

III.

DELEGATION OF DUTIES

A.

Delegation generally

B.

Continued liability of delegator

1.

Rationale

2.

Novation

C.

Non-delegable duties

D.

The delegate’s liability

1.

Promise made solely for delegator’s benefit

2.

“Assumption”

3.

General “assignment” of the “contract”

E.

Delegation of non-delegable duties

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DELEGATION OF DUTIES

IV.

THIRD PARTY BENEFICIARIES

A.

Introduction

B.

Older cases and the First Restatement

C.

Second Restatement’s abandonment of the two category structure

1.

“Intended” beneficiaries may recover

2.

Definition of “intended beneficiary”

3.

Incidental beneficiaries

4.

Factors to determine who is “intended” beneficiary

5.

Beneficiary’s assent or knowledge unnecessary

D.

Some frequently arising situations

1.

Public contracts

2.

Real estate neighbors

3.

Mortgage assumptions

E.

Discharge or modification by the original parties

F.

Defenses against the beneficiary

G.

Beneficiary versus promisee

H.

The UCC and third party beneficiaries

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THIRD PARTY BENEFICIARIES

Exam Tips on
CONTRACTS INVOLVING MORE THAN TWO PARTIES

Chapter 12
IMPOSSIBILITY, IMPRACTICABILITY, AND FRUSTRATION

I.

INTRODUCTION

II.

IMPOSSIBILITY OF PERFORMANCE

A.

Supervening impossibility generally

B.

Restatement approach

C.

Destruction or unavailability of the subject matter

1.

Taylor v. Caldwell

2.

Determining subject matter of the contract

3.

General rule

4.

Contract to build a structure from scratch

5.

Building renovation

6.

Contracts for the sale of goods

D.

Impossibility of intangible but essential mode of performance

1.

Defective or unrealistic specifications

2.

Impossibility due to failure of third person

E.

Death or illness

F.

Supervening illegality

G.

Temporary impossibility

III.

IMPRACTICABILITY

A.

Impracticability as a kind of impossibility

B.

UCC in accord with modern view

1.

What is impracticable under the Code

2.

Use by buyer

3.

Allocation of risk by parties

IV.

FRUSTRATION OF PURPOSE

A.

Frustration of purpose distinguished from impossibility

B.

Factors to be considered

C.

UCC view

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IMPOSSIBILITY, IMPRACTICABILITY, AND FRUSTRATION OF PURPOSE

V.

RESTITUTION AND RELIANCE WHERE THE PARTIES’ OBLIGATIONS HAVE BEEN DISCHARGED

A.

Shifting the losses

B.

Return of down payment

C.

Restitution

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RESTITUTION AND RELIANCE WHERE THE PARTIES ARE DISCHARGED

Exam Tips on
IMPOSSIBILITY, IMPRACTICABILITY, AND FRUSTRATION

Chapter 13
MISCELLANEOUS DEFENSES: ILLEGALITY, DURESS, MISREPRESENTATION, UNCONSCIONABILITY, AND LACK OF CAPACITY

I.

ILLEGALITY

A.

Kinds of illegal contracts

1.

Gambling contracts

2.

Contract to buy an illegal business

3.

Usurious contracts

4.

Covenants not to compete

5.

Commercial bribery

6.

Exculpatory contracts

7.

Licensing requirements

8.

Impairment of family relations

B.

Effects of illegality on contractual recovery

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ILLEGALITY

II.

DURESS

III.

MISREPRESENTATION

A.

Misrepresentation generally

B.

Elements of proof required

C.

Concealment and nondisclosure

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DURESS AND MISREPRESENTATION

IV.

UNCONSCIONABILITY AND ADHESION CONTRACTS

A.

Weapons against unfair contracts

B.

Adhesion contracts

C.

Unconscionability generally

D.

The Code view generally

E.

Varieties of unconscionability

1.

Procedural unconscionability

2.

Substantive unconscionability

F.

Excessive price

G.

Remedy-meddling

H.

Remedies for unconscionability

V.

CAPACITY

A.

Capacity generally

B.

Infants

C.

Mental incompetents

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UNCONSCIONABILITY AND ADHESION CONTRACTS; CAPACITY

Exam Tips on
MISCELLANEOUS DEFENSES: ILLEGALITY, DURESS, MISREPRESENTATION, UNCONSCIONABILITY AND LACK OF CAPACITY

Chapter 14
WARRANTIES

I.

WARRANTIES GENERALLY

A.

Nature of warranty

B.

Proving breach of warranty

II.

EXPRESS WARRANTIES

A.

Express warranty defined

1.

Basis of the bargain

2.

Puffing

3.

Descriptions

4.

Sample or model

III.

IMPLIED WARRANTY OF MERCHANTABILITY

A.

The warranty of merchantability generally

B.

Meaning of “merchantable”

C.

Cigarettes and alcohol

IV.

WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE

A.

Warranty of fitness generally

B.

Conditions

V.

THE WARRANTY OF TITLE AND AGAINST INFRINGEMENT

VI.

PRIVITY

VII.

DISCLAIMERS OF WARRANTY

A.

Disclaimers generally

B.

Disclaimers of express warranty

1.

Description amounting to a warranty

2.

Oral warranties prior to written contract

C.

Disclaimers of implied warranty

VIII.

MODIFYING CONTRACT REMEDIES

A.

Modification of remedies distinguished from disclaimers

B.

Code limitations

1.

“Failure of essential purpose”

2.

Unconscionability

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WARRANTIES (Entire Chapter)

Exam Tips on
WARRANTIES

Chapter 15
DISCHARGE OF CONTRACTS

I.

RESCISSION

A.

Mutual rescission

B.

Where fully performed on one side

C.

Writing not necessary

D.

Duty to pay for benefits received

E.

Unilateral rescission

II.

EXECUTORY ACCORDS AND “ACCORD AND SATISFACTION”

A.

Executory accord

B.

Consequence of accord

C.

Check cashing as an accord and satisfaction

III.

SUBSTITUTED AGREEMENT

A.

Substituted agreement distinguished from executory accord

B.

Consequences of substituted agreement

C.

Distinguishing between an executory accord and a substituted agreement

D.

Formal requirements for substituted agreement

IV.

NOVATION

V.

ACCOUNT STATED

VI.

RELEASE AND COVENANT NOT TO SUE

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DISCHARGE OF CONTRACTS (Entire Chapter)

Exam Tips on
DISCHARGE OF CONTRACTS

ESSAY EXAM QUESTIONS AND ANSWERS

TABLE OF CASES

TABLE OF UCC REFERENCES

TABLE OF RESTATEMENT REFERENCES

SUBJECT MATTER INDEX