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Attack Outline (Fall 2016) Prof.

Alex Seita
Andrew M. Gelbman
CONTRACTS: Legally enforceable agreement. Service: governed by common law Sale of Goods: governed by Art. 2 of UCC.
FORMATION: (1) offer, (2) acceptance, (3) intent, & (4) consideration. Offer: R certain terms (e.g., parties, subject matter, & price). Joke: invalid
if offeree knows/should know Invitation to negotiate: not valid offer (e.g., price quote/proposal). Advertisement: not offer unless express promise
(specific terms). Typ. considered solicitation of offers. Puffery: promo statement not offer if not taken seriously by a R person (e.g., We sell best
pizza in town!). Termination: before acceptance via: (1) rejection, (2) counteroffer, (3) lapse of time, (4) revocation, (5) death or incapacity, or (6)
destruction of subject matter. Note: Terminated offers may not be accepted. Option K (common law or UCC): irrevocable if promise, for
consideration, not to revoke for specified time. Firm offer (UCC 2-205): Even w/o consideration, irrevocable if merchant agrees, in signed writing,
not to revoke for specified time. (Max 3 months). Unilateral K: irrevocable for R time after start of performance & full performance designated
means of acceptance. Detrimental reliance: irrevocable for R time if R expects to change position/prepare for performance (e.g., a subcontractor
detrimentally changes position in R expectation of work from general contractor). Death or incapacity: of either party terminates. Destruction of
subject matter: terminates. Acceptance: assent to terms, by designated offeree that knows of offer & intends to be legally bound to specific terms of
offer Method: may be communicated by any R method (e.g., phone, mail, or fax), unless offer provides for a particular method. Bilateral: offeree
gen. accepts by communicating promise. Unilateral: may accept only by full performance. Mirror-image rule: Acceptance must = exact terms - does
not apply to sale of goods under UCC. Mailbox rule: acceptance effective on proper dispatch regardless if ever received, if mailed before any
rejection of same offer. Acceptance effective even on improper dispatch, if actually received w/i R amount of time. Rejection not effective until
received. (1) Accept followed by reject: offeree mails accept first & later mails rejection. accept effective. (2) Reject followed by accept: mail
reject first & later mail accept 1st received effective. (3) Simultaneous accept/reject: mail accept & reject simultaneously 1st received effective.
Exceptions: option contracts (effective on receipt), unilateral contracts (full performance), or offer specify alternate time/manner of acceptance.
Effective date of revocation: effective on receipt unless prior valid accept. Silence: mere silence acceptance unless: (1) benefit of services (benefit
of offered services despite R opportunity to reject & knows compensation expected), (2) exercise of dominion (acts inconsistently w/offerors
ownership), (3) prior dealings (understand silence constitutes acceptance or (4) implied-in-fact K (indicates accept by silence & intent to accept by
silence). Intent: intend to be legally bound by terms. No particular manifestation req. Consideration: bargain for & exchange value, party (1) does
something not previously obligated to do or (2) refrain from doing something legal right to do. Adequacy: Any adequate & sufficient exchange of
value unless nominal value (real value must pass), purely moral obligation (to provide value for past benefit), past consideration (benefits already
conferred), or illusory promise (overly vague or non-binding promise unless promisor has choice of alternative performances, & each adequate if
offered alone). Preexisting-duty rule: legal/K duty already owed insufficient. Modification: modification to existing K w/o new/addl consideration
violates preexisting-duty rule, unless alteration of duties, unforeseen circumstances, or sale of goods. Settlement of claims: surrender invalid
claim/defense violates preexisting-duty, unless surrenderer believes in good faith claim/defense valid at time of K. Promise to surrender valid claim =
good consideration. Promissory estoppel: gratuitous promise enforceable if: (1) promisor R expects promise to induce action/forbearance, (2) R
reliance on promise to substantial detriment & (3) injustice avoided only by enforcement (remedy limited based on actual loss & extent of reliance.)
Statutory substitute: signed writing substitute for consideration (some states), typically related to discharge of claim/other interest.
ENFORCEABILITY: Contracts enforceable, unless: (1) defense to enforceability or (2) violation of Statute of Frauds.
Defenses: ICUDUM: Illegality, Lack of Capacity (DIY mental Defect, Intoxication, Youth (infancy)) Undue Influence, Duress, Unconscionability,
or Misrepresentation. Illegality: against public policy, because it (1) calls for/facilitates serious crime or tort or (2) endangers public welfare. Lack
of Capacity: Infancy: under age 18 voidable by infant, but not adult party. Disaffirm or ratify: infant may disaffirm or ratify K until R time after
majority. If ratified both parties bound. Exceptions: Contracts for necessities enforceable & not voidable. Mental illness or defect: defect prevents
R understanding nature & consequences or (2) defect renders unable to act R & other party knows/has reason to know of defect. K voidable: legal
rep. may disaffirm or defective may disaffirm/ratify on regaining mental capacity. Intoxication: rendered unable R to: understand nature &
consequences or (2) R act in relation. Other party must know/have reason to know or else intoxication no defense voidable. Undue influence:
assent induced by unfair persuasion under domination of persuader (dependent) or in fiduciary relationship. Duress: improper threat of harm to the
economic interests or emotional well-being of . CL economic duress: (1) Improper threat that (2) coerced into K (3) with some resistance . NY
economic duress: (1) forced into K by wrongful threat (2) to w/hold goods not available elsewhere (3) & remedy for breach of K is inadequate. 2nd
Res duress: (1) Assent induced by improper threat (2) that leaves the victim with no R alternative. Undue influence: does not require improper threat
but (1) undue susceptibility in servient person (2) excessive pressure by dominating person (3) implied unfair advantage to dominating person. Note:
does not include legal & purely economic threat (threat to cease doing business). Unconscionability: procedurally/substantively unfair that no R
person would agree. Procedurally unfair: significant inequality in bargaining power/no meaningful choice or alternative (take-it-or-leave it) or an
unfair surprise (e.g., buried term). Substantively unfair: terms overly harsh or one-sided. Standard Form Ks: Become Ks of adhesion if standard form
Ks imposed & drafted by party of superior bargaining strength, giving subscribing party only opportunity to adhere to the K or reject it. Mere use of a
standard form does not mean one party has superior bargaining power compared to the other. Arms length bargaining two parties to bargain not
related to each other & each party is trying to get the best deal for self. Ks of adhesion fully enforceable: unless K does not fall w/in R expectations of
weaker/adhering party, or if consistent with R expectations of parties K, when considered in context, unduly oppressive or other party has reason to
believe assenting party would not do so if particular term known term is not part of K Misrepresentation: assent induced by justifiable reliance on
untrue assertion of past/present fact, either fraudulent/ material. (Untrue assertion: misstatement, or overt concealment, or failure to disclose facts
when (A) one party knows/should know other misunderstands & unlikely to discover truth or (B) one party has fiduciary duty to disclose.
Fraudulent assertion: intends to induce assent & knows assertion untrue/aware of unacceptably high risk assertion false. Material: mistakenly
believes assertion true, if (1) likely to induce R persons assent; or (2) knows misrepresentation likely to induce particular party assent, even if assent
unR under circumstances. Justified reliance: misrepresentation presented as a fact (not opinion/puffery). Reliance on opinion/puffery justified, if (1)
in a fiduciary relationship (2) believes asserter has special skill or knowledge, or (3) extreme susceptibility (illiterate/gullible).
STATUTE OF FRAUDS: signed writing by party charged (usually ), if K falls within MY LEGS: Marriage, cannot complete w/i one Year, sale of
Land, Executor-administrator agreements, (5) sale of Goods for $500+, or (6) Suretyship. must plead failure to comply with S of F as an
affirmative defense. To say K w/i So F means K must be written & signed to enforce; to say K outside SoF means K does not have to be written to
enforce or w/i SoF but exception makes it enforceable altho not written. Unjust enrichment in Longer than 1 Year Contracts: may recover in part,
w/o signed writing, under unjust enrichment to extent oral agreement partially performed. Part performance of Land Contracts: signed writing not
required if a party renders part performance (some combination of possession, payment &/or improvement) in R & detrimental reliance on promise.
Statutory exceptions on leases: State law often creates exceptions to SoF for short-term leases/mortgages. Executor-administrator: falls within SoF if
exec/admin of estate promises to answer personally for obligation of decedent. Goods for $500+ (UCC 2-201): falls w/i SoF unless specially
manufactured goods (not suitable for sale in ordinary course of sellers business, & substantially began manufacture/procurement), Court admission:

admits to K in testimony, in a pleading, or otherwise. Part performance: goods received & accepted; or payment has been made & accepted.
Suretyship Main-purpose rule: exception if surety/guarantor promises primarily for own economic advantage, not benefit of another.
Merchants duty to read mail: Confirmation sent w/i R time & recipient has reason to know contents = no signature of recipient to make K
enforceable if no objection is sent w/i 10 days - can then sue the recipient because the sender has provided a writing + signature & therefore satisfied
subsection (1). Lifetime of promisor: Reliance + equitable factors: (1) so substantially changed position in reliance upon K that would suffer
unconscionable injury if K were not enforced & (2) party seeking to assert SoF unjustly enriched if permitted to escape K.
INTERPRETATION: Plain Meaning Rule determine what agreed terms mean, applies only to completely integrated written agreements, no
extrinsic evidence admitted if written terms certain. NY Four Corners Rule: If writing clear to the judge, no extrinsic evidence admitted but might
admit evidence if context/ circumstances ambiguous but evidence of what parties said will not create an ambiguity. CA Rule: consider All Credible
Evidence to determine if ambiguous - if language fairly susceptible to multiple interpretations, then evidence admissible to determine the meaning of
term. Parties: parties intent & given great weight & words/conduct interpreted in light of circumstances. Terms: (1) Where R, all terms interpreted
to have R, lawful & effective meaning; (2) specific/exact terms given greater weight than general language; & (3) negotiated/added terms given
greater weight than standardized terms. (4) if R, ambiguities resolved against drafter. Course of Performance, Course of Dealing, & Usage of
Trade: used to explain or supplement a written K - to exclude, must be carefully negated. Usage of trade custom in industry, Course of dealing
past conduct by parties in prior transactions, Course of performance conduct by parties in K at issue (Need more than a single occurrence)
Clarifying terms: terms must be R certain or unenforceable. Indefinite: term open/uncertain: (1) supply customary/R term or (2) void K.
Ambiguity: If written K contains ambiguous terms having 2+ materially different meanings & no agreement on same meaning = no K. If parties
attach diff meanings for a non-material term = K, but neither bound by meaning attached by other party. Omitted Term: If essential, court can supply
R term. Parol Evidence Rule determine what the terms of the K are. Precludes extrinsic E of prior oral agreement in determining terms of written
K. Completely integrated agreements complete & exclusive statement of agreement btwn the parties, NO evidence of oral terms can be considered.
Can show completely integrated by putting in a merger clause. Partially integrated agreements complete only as to certain terms. Only consistent
addl oral terms are admissible; as to whether oral agreement was supposed to be part of K - Consistent additional terms: oral term that might
naturally be made as a separate agreement by the parties - oral term that would naturally & normally be included in written K or would certainly
have been included or contradicts a written term not consistent addl term. PER allows evidence of oral term mistakenly omitted allowing
reformation of K. No Oral Modification (NOM) Clauses - no modifications to K unless in writing. CL NOM clauses ineffective; wont be
enforced unless party relied on oral modification UCC NOM clauses are effective except where oral modification is waiver & reliance on such
waiver. Merger clause + NOM clause = zipper clause; precludes evidence of prior/ future oral terms being added to written K. K Modifications:
UCC rejects common law by allowing mods of a K w/o consideration, but they must be made in good faith
BATTLE OF FORMS (UCC 2-207): Gen. K is created by non-mirror-image accept unless acceptance expressly made conditional on assent to
addl or diff. terms (required in A before conditional A found must use provisional lang.) for sale of goods. Non-merchant: If at least one party nonmerchant, any new/modified terms in acceptance incorporated into K only if expressly agreed to by other. Merchant: If all parties merchants, any
new terms/modified terms that do not materially alter K, in acceptance are automatically incorporated into K. Last form controls. (Exceptions:
New/modified terms not incorporated if: (1) offer explicitly provides acceptance limited to terms of original offer, (2) new terms materially alter
agreement, or (3) offeror objects to new terms within R time.) If no provision lang. in acceptance = K. Terms = agreed terms & diff terms are
knocked out (Addl terms = proposals to modify & can be Accept or Reject) Diff terms = Majority: different terms cancel out & UCC gap fillers
apply (knock out rule), Minority: only offerees different terms drop out & the offerors terms are the K (drop out rule), CA: different terms = addl
terms so non-materially different terms = K; materially different terms K. Materially altering term: No Implied Warranty of Merchantability if
would normally exist, Term subjective surprise/hardship, Add Arbitration not material (except in NY = materially altering), No gap filler for
arbitration
WARRANTIES: Express warranty (UCC 2-313): may consist of (1) (A) express affirmation of fact/promise by seller, (B) description, or (C)
sample that (2) relates to goods & (3) becomes part of basis of bargain. Language: No particular language to create Seller intent & buyer reliance:
seller need not intend to create & buyer need not rely on existence of such warranty, to be effective. Mere puffery: not created by mere seller
opinion/recommendation Breach of express warranty: breached if goods do not conform to affirmation of fact, promise, description, or sample.
Implied warranty of merchantability (UCC 2-314) (IWM): goods merchantable (i.e., fit for their ordinary purposes). Seller must be a merchant: or
no implied warranty of merchantability. Implied warranty of fitness for a particular purpose (IWF) (UCC 2-315): goods must be fit for buyers
particular purpose if (1) buyer relies on seller skill/judgment to select goods fit for particular purpose, & (2) seller knows of buyer reliance &
particular purpose. Seller need not actually have any particular skill or judgment. Seller need not be a merchant: seller need not be a merchant in
order for IWF to arise. Disclaimer: IWM & IWF may generally be disclaimed. Express warranties are very difficult to disclaim. General disclaimer
language: IWM & IWF may be disclaimed through general language of disclaimer, such as as is, with all faults, or similar. IWM: may also be
disclaimed by spoken or conspicuous written language, which must specifically mention merchantability. IWF: IWF may be disclaimed by
conspicuous written language. Express warranties: disclaimed, if at all, only by language/conduct that unmistakably negates existence of warranty.
REMEDIES: Legal remedies: money in form of (1) damages or (2) restitution. Damages: may award full compensation for actual loss. Note:
Nominal damages for minimal loss, punitive damages for torts. Expectation damages: recover benefit of bargain; puts in position as if K
performed (value of breaching partys performance + Injured partys incidental damages - loss or cost injured party avoided due to breach)
Consequential damages: may recover special damages resulting from unique circumstances R foreseeable at time of K. (May include lost profits).
Reliance damages: if expectation damages are too speculative/difficult to measure - may recover loss incurred in reliance on K. Place in same
position as if K never ([loss + preparation/performance expenditures] - [ expected loss]). Liquidated damages: recover amount set by K but if unR
relative to anticipated/actual loss penalty unenforceable. Limits: amount recoverable by limited by (1) Avoidability (duty to mitigate loss) cannot
recover damages loss avoidable w/o undue risk, burden, or humiliation, unless makes R efforts to avoid loss. Lost volume seller: Reseller that could
benefit from both contracts may recover lost profits. Typically applies to large scale resellers Foreseeability: may not recover damages for loss that
could be R foreseen (1) in ordinary course of events or (2) under special circumstances known to breacher. Uncertainty: may not recover damages
for loss that cannot be proven with R certainty. Restitution: prevents unjust enrichment in cases of part performance by awarding either: (1) R value
of breaching partys performance or (2) value of other partys unjust enrichment. Equitable Remedies: Order against a breaching party: order
specific performance or an injunction if damages alone inadequate remedy, based on: (1) difficulty of proving damages, (2) difficulty of procuring
substitute performance, & (3) likelihood of collecting damages. Specific performance: must perform a unique contractual duty (typically sale of
land/unique goods, but never personal services). Injunction: must take/refrain from an action that violates K duty. Declaratory judgment: declare
legal rights & responsibilities btwn parties Reformation: reform terms of K to express agreement btwn parties accurately (correct
misrepresentation/mistake). Implied-in-law K (quasi-K): implies existence of K to avoid injustice. Rescission: rescind K & terminate contractual
rights & duties of parties.