Contracts Notes

1. Have to know of the offer when you accept it.

2. Termination of an offer
a. Revocation prior to acceptance
b. Offeree rejects the offer
c. Making a counteroffer
i. When you make your counteroffer, you can no longer go back
and accept the original offer
ii. Look @ the question. Is there a contract? Not just payment, but
a contract.
1. If the painter had sued in chancery court seeking a quasicontract remedy for unjust enrichment, would have been
ok.
d. Lapse of time
3. Offer asked for dog to be returned, not just found
a. Reward contracts unilateral so you can only accept by performing
b. Also have to have knowledge of the offer
4. Mailbox rule
a. Only applies to acceptances
i. Acceptance is effective upon dispatch, not receipt
ii. So when the acceptance is sent, even when lost, there has still
been an acceptance
5. Options
a. Promise to keep an offer open for a period of time
b. UCC deviates from common law
i. C/ L must be consideration
ii. UCC For a merchant if the offer is signed and gives assurance
that the offer will remain open is irrevocable during the time
stated (max 90 days)
c. Question here is under c/l so there needs to be consideration
6. Requirements Contract
a. Most contracts (esp. UCC) need a set quantity
b. But in a requirements contract it is governed by the buyers good faith
need
i. Orders must be proportionate to what youve ordered in the past
7. Options question
a. Art collector is NOT a merchant
b. There was consideration - $5
c. Mailbox rule doesnt apply for options must be in the offerors hands
during the option period
8. Consideration
a. Bargained for exchange or benefit/detriment quid pro quo
b. Past consideration is not valid under c/l
9. Statute of Frauds
a. Defense for contract formation
i. Certain contracts must be in writing in order to be enforceable
ii. My Legs
1. Marriage
2. Term of Years

3. Land sale
4. Executory contracts
5. Sale of Goods ($500+)
6. Surety contracts (answering for debts of another)
iii. This was executory so it had to be in writing
10.UCC 2-207 Battle of forms
a. At c/l in order to have a valid acceptance, acceptance must be a mirror
image of the offer
b. If the offeree accepts the offer and makes a material alteration the
terms of the offer control
c. If the offeree makes acceptance conditional upon ascent to the new
terms it is rejection and counter offer
d. If offeree accepts and makes a non-material change to the offer, the
nonmaterial change becomes part of the contract unless the offeror
timely objects
e. Material Alteration
i. Anything having to do with money, liabilities, or remedies
11.Promissory estoppel
a. Creditor relied on mothers gratuitous promise
i. To his detriment
12.Mistake
a. Mutual
i. When both parties are mutually mistaken about the terms of a
contract
ii. If it goes to the heart/essence of the agreement, it is grounds for
rescission
b. Unilateral
i. Only one party is mistaken about contract terms
ii. Will not prevent contract formation
iii. IF the non-mistaken party knows or has reason to know of the
other partys mistake they cannot take advantage of it
13.Modifications
a. C/l
i. New consideration because of pre-existing duties
b. UCC
i. Good faith modifications regardless of consideration
14.Statute of frauds
a. Sale of goods over $500 so need a writing
b. If one party, within a reasonable time after entering into an oral
agreement sends a written confirmation to the other party.it binds
the sender
i. If recipient doesnt object w/in 10 days binds them too
15.Perfect Tender Rule
a. UCC
i. If a seller fails to tender perfect tender to a buyer. Acceptance
and breach buyer has options
1. Accept goods pay contract price
2. Timely reject goods and sue for damages
3. Accept in part and reject in part

ii. If the delivery is accompanied by notice of accommodation, then

you treat the delivery as a counteroffer that can be accepted or
rejected
16.Perfect Tender
a. Seller failed to deliver full order
b. Buyer refusing to pay and breaching party is suing
c. UCC
i. Non-breaching party must minimize/mitigate damages as much
as possible
ii. Cover price contract price = buyers standard remedy under
UCC
17.3rd party beneficiaries
a. Vesting of rights
i. Prior to a vesting of rights, the contracting parties can do w/e
they want to the contract w/o the 3rd party beneficiaries consent
ii. Once rights have vested the 3rd party beneficiary has to consent
iii. Vesting occurs
1. When 3rd party beneficiary learns of the contract and
assents to it
2. When 3rd party beneficiary learns of the contract and
relies on it
3. When 3rd party beneficiary learns of the contract and
brings a lawsuit from it
iv. Only the contracting parties can raise most defenses
18.Parole evidence rule
a. Prevents the introduction of prior or contemporaneous agreements
that vary and/or modify the terms of a complete and integrated
contract
b. Exceptions
i. Evidence that a contract was subject to a condition precedent is
always admissible
19.Anticipatory Breach
a. Breach before anything has even begun
b. Owner can break the K and sue for damages to sue for
breach/damages
c. No duty to inform breaching party that he was attempting to cover
costs
d. Can only retract if the other side hasnt already relied upon the
anticipatory breach
20.Adequate insurances
a. One party is unsure of another partys performance
b. Other party can make demand for this
c. Adequate assurances
i. Can inform the other side of doubt that you may not be able to
perform
d. Difference between anticipatory repudiation and an expression of
doubt
21.Excuses to performance
a. Objective impossibility

i. Noone can perform the contract

ii. Act of God
1. Something interferes and you cant perform
iii. Drop in credit rating isnt enough
22.Assignments and delegations
a. All Ks are assignable and delegable EXCEPT
i. Unique personal services contracts and long-term requirement
contracts
b. Assignments can be for consideration or gratuitous
i. Gratuitous assignments are revocable unless there has been
reliance
23.Breach and remedies
a. Non breaching party suing and recovering for all foreseeable
compensatory damages
b. Breaching party suing entitled for reasonable value of services
provided minus the nonbreaching parties damages
24.Contract remedies goal is to place the nonbreaching party in the position
they would have been had the contract been performed
25.UCC
a. Non breaching seller
i. Contract price minus resale price = sellers standard remedy
ii. OR
iii. Lost-profits doctrine
1. Volume sellers
a. Give buyer or seller their lost profits