Contracts Golden Shower

1nL GCLDLN SnCWLk CI CCN1kAC1S
I ICkMA1ICN CI CCN1kAC1S
a 1nL 8AkGAINING kCCLSS
l 1he naLure of AssenL
ll 1he Cffer
lll 1he AccepLance
lv 1ermlnaLlon of Lhe ower of AccepLance
v uCC 8aLLle of Lhe lorms
vl reconLracLual LlablllLy
vll 1he 8equlremenL of ueflnlLeness
8ASIS ICk LNICkCING kCMISLS
l lundamenLals of ConslderaLlon
ll 1he 8equlremenL of Lxchange AcLlon ln Lhe asL
lll romlses as ConslderaLlon
lv 8ellance (promlssory esLoppel) as a 8asls of LnforcemenL
v 8esLlLuLlon as an AlLernaLlve 8asls for 8ecovery
vl CapaclLy
II DLILNSLS 1C LNICkCLMLN1
l Cverreachlng uuress and undue lnfluence
ll ConcealmenL and MlsrepresenLaLlon
lll MlsLake
lv unconsclonablllLy
v ubllc ollcy
vl SLaLuLes of lrauds
III CCN1kAC1 1LkMS
l 1he arol Lvldence 8ule
ll lnLerpreLaLlon
lll Cood lalLh
IV CCN1kAC1 LkICkMANCL
l Lxpress CondlLlons
ll ConsLrucLlve CondlLlons
lll AnLlclpaLory 8epudlaLlon
V kLMLDILS ICk 8kLACn
l 1he urposes of 8emedles
ll Measurlng LxpecLaLlon
lll Speclflc erformance
lv AvoldablllLy
v loreseeablllLy and CerLalnLy
ICkMA1ICN CI CCN1kAC1S
1nL 8AkGAINING kCCLSS
1he Nature of Assent (116124) kest 1718 21
lor a ConLracL Lo be formed Lhere musL be an ouLward manlfesLaLlon of muLual assenL
O 1hls follows Lhe ob[ecLlve" sLandard of relylng on whaL a reasonable person would Lhlnk
O MosL !urlsdlcLlons no longer use Lhe sub[ecLlve" sLandard requlrlng a meeLlng of Lhe mlnds
lf a reasonable person would flnd Lhe ouLward manlfesLaLlons of Lhe parLles Lo be serlous and blndlng
(noL ln [esL 21) lL may be LreaLed as such regardless of wheLher a parLy Lo Lhe k had menLal assenL or
noL

17 kequ|rement of a 8arga|n
1 LxcepL as sLaLed ln SubsecLlon (2) Lhe formaLlon of a conLracL requlres a bargaln ln whlch Lhere
ls a manlfesLaLlon of muLual assenL Lo Lhe exchange and a conslderaLlon
2 WheLher or noL Lhere ls a bargaln a k may be formed under speclal rules appllcable Lo formal ks
or under Lhe rules sLaLed ln 8294
18 Man|festat|on of Mutua| Assent
ManlfesLaLlon of muLual assenL Lo an exchange requlres LhaL each parLy elLher make a promlse
or begln or render a performance
21 Intent|on to 8e Lega||y 8ound (No Iok|ng ku|e)
nelLher real nor apparenL lnLenLlon LhaL a promlse be legally blndlng ls essenLlal Lo Lhe
formaLlon of a conLracL buL a manlfesLaLlon of lnLenLlon LhaL a promlse shall noL affecL legal relaLlons
may prevenL Lhe formaLlon of a conLracL

Lucy v Zehmer
1he uefendanL Zehmer (uefendanL) wrlLes a conLracL Lo sell land on a napkln and when Lhe lalnLlff
Lucy (lalnLlff) Lrles Lo enforce lL uefendanL clalms he was only [oklng
O k blndlng because Lhere was manlfesLaLlon of muLual assenL beLween parLles
O lgh as a Ceorgla lne case
O 21 (lnLenL Lo be bound)

1he Cffer (126136) kest 24
Corbln An offer ls an acL whereby one person confers upon anoLher Lhe power Lo creaLe conLracLual
relaLlons beLween Lhem lL musL be an acL LhaL leads Lhe offeree reasonably Lo belleve LhaL a power Lo
creaLe a conLracL ls conferred upon hlm lL ls on Lhls ground LhaL we musL exclude lnvlLaLlons Lo deal or
acLs of mere prellmlnary negoLlaLlons and acLs evldenLly done ln [esL or wlLhouL lnLenL Lo craLe legal
relaLlons All Lhese are acLs LhaL do noL lead oLhers reasonably Lo belleve LhaL Lhey are empowered Lo
close Lhe conLracL

8||atera| and Un||atera| Contracts
O 8llaLeral an agreemenL ln whlch each of Lhe parLles Lo Lhe conLracL makes a promlse or seL of
promlses Lo Lhe oLher parLy
4 conLracL ls one ln whlch Lhere are duLles on boLh sldes rlghLs on boLh sldes and
conslderaLlon on boLh sldes
O unllaLeral (usually reward) only one parLy Lo Lhe conLracL makes a promlse
4 1he requlremenL LhaL accepLance be communlcaLed Lo Lhe offeror ls walved unless
oLherwlse sLaLed ln Lhe offer 1he offeree accepLs by performlng Lhe condlLlon and Lhe
offerees performance ls also LreaLed as Lhe prlce or conslderaLlon for Lhe offerors
promlse 1he offeror ls masLer of Lhe offer lL ls he who decldes wheLher Lhe conLracL
wlll be unllaLeral or bllaLeral ln unllaLeral conLracLs Lhe offer ls made Lo Lhe publlc aL
large

24 Cffer Def|ned
An offer ls Lhe manlfesLaLlon of wllllngness Lo enLer lnLo a bargaln so made as Lo [usLlfy anoLher
person ln undersLandlng LhaL hls assenL Lo LhaL bargaln ls lnvlLed and wlll conclude lL

Cwen v 1unlson
offers u $6000 for loL u responds saylng lL would noL be posslble for me Lo sell lL unless l was Lo
recelved $16k ln cash"
O Language lnsufflclenL Lo creaLe an offer
O More llkely beglnnlng of a bargaln
lalrmounL Class Works v CrundenMarLln Woodenware Co
asked whaL prlce mason [ars could be sold Lo Lhem and u quoLed a prlce wlLh Lhe sLaLemenL for
lmmedlaLe accepLance"
O 8lndlng offer
O All had Lo do was accepL/perform
LefkowlLz v CreaL Mlnneapolls Surplus SLore
u publlshed a newspaper ad for a $90 scarf Lo be sold for $1 (male) aLLempLed Lo purchase sald scarf
and was refused because lL was lnLended only for women"
O 8lndlng Cffer

1he Acceptance (1471S8 38 68) kest 30 S0 69
Corbln An accepLance ls a volunLary acL of Lhe offeree whereby he exerclses Lhe power conferred upon
hlm by Lhe offer and Lhereby creaLes Lhe seL of legal relaLlons called a conLracL WhaL acLs are sufflclenL
Lo serve Lhls purpose? We musL look flrsL Lo Lhe Lerms ln whlch Lhe offer was expressed elLher by
words or by oLher conducL 1he offeror has ln Lhe beglnnlng full power Lo deLermlne Lhe acLs LhaL are
Lo consLlLuLe Lhe accepLance
O Cnce accepLed offeror can no longer wlLhdraw from Lhe relaLlonshlp or change Lerms
O Cfferor can seL Lerms of accepLance
O Cfferor can change Lerms or wlLhdraw prlor Lo accepLance

More on ||atera|]un||atera| contracts
8elaLlonshlps beLween parLles ln unllaLeral and bllaLeral conLracLs can be analyzed by rlghLs and duLles
O When conLracL ls formed A has a rlghL Lo have 8 perform cerLaln duLles
O ln bllaLerals boLh parLles have rlghLs and duLles
O ln unllaLerals Lhere ls a duLy on Lhe Cfferor's slde and a rlghL on Lhe offeree's slde
O 1hls relles on promlses from one parL Lo anoLher
O unllaLeral conLracLs one way promlse
O 8llaLeral conLracLs promlses from boLh parLles Lo Lhe oLher

30 Iorm of acceptance |nv|ted
1 An offer may lnvlLe or requlre accepLance Lo be made by an afflrmaLlve answer ln words or by
performlng or refralnlng from performlng a speclfled acL or may empower Lhe offeree Lo make
a selecLlon of Lerms ln hls accepLance
2 unless oLherwlse lndlcaLed by Lhe language or Lhe clrcumsLances an offer lnvlLes accepLance ln
any manner and by any medlum reasonable ln Lhe clrcumsLances
S0 Acceptance of offer def|ned acceptance y performance acceptance y prom|se
1 AccepLance of an offer ls a manlfesLaLlon of assenL Lo Lhe Lerms Lhereof made by Lhe offeree ln
a manner lnvlLed or requlred by Lhe offer
2 AccepLance by performance requlres LhaL aL leasL parL of whaL Lhe offer requesL be performed
or Lendered and lncludes accepLance by a performance whlch operaLes as a reLurn promlse
3 AccepLance by a promlse requlres LhaL Lhe offeree compleLe every acL essenLlal Lo Lhe maklng of
Lhe promlse
69 Acceptance y S||ence or Lxerc|se of Dom|n|on
1 Where an offeree falls Lo reply Lo an offer hls sllence and lnacLlon operaLe as an accepLance ln
Lhe followlng cases only
a Where an offeree Lakes Lhe beneflL of offered servlces wlLh reasonable opporLunlLy Lo
re[ecL Lhem and reason Lo know LhaL Lhey were offered wlLh Lhe expecLaLlon of
compensaLlon
b Where Lhe offeror has sLaLed or glven Lhe offeree reason Lo undersLand LhaL assenL may
be manlfesLed by sllence or lnacLlon and Lhe offeree ln remalnlng sllenL and lnacLlve
lnLends Lo accepL Lhe offer
c Where because of prevlous deallngs or oLherwlse lL ls reasonable LhaL Lhe offeree
should noLlfy Lhe offeror lf he does noL lnLend Lo accepL
2 An offeree who does any acL lnconslsLenL wlLh Lhe offeror's ownershlp of offered properLy ls
bound ln accordance wlLh Lhe offered Lerms unless Lhey are manlfesLly unreasonable 8uL lf Lhe
acL ls wrongful as agalnsL Lhe offeror lL ls an accepLance only lf raLlfled by hlm

lnLernaLlonal lllLer Co v Conroe Cln lce LlghL Co
offered Lo sell waLer Lank for $1230 and sald accepLance could be approved by u's execuLlve u
manager wroLe accepLed" and reLurned lL
O AccepLance valld
O arLy's lnLenLlons were Lo form k
WhlLe v Corlles 1lfL
bullder gave u an esLlmaLe on whaL lL would Lake Lo flx up Lhelr offlce lefL Lhe esLlmaLe and u lefL
new speclflcaLlons buL offered Lhe work menLally agreed Lo Lhe offer and purchased Lhe maLerlals
for Lhe work buL dld noL ouLwardly Lell u LhaL he had accepLed
O noL blndlng
O no manlfesLaLlon of accepLance
LverLlLe 8ooflng Corp v Creen
u(Creen) soughL Lo have (rooflng co) roof Lhelr house upon compleLlon of a credlL check When Lhe
credlL check cleared arrlved only Lo see Lhe work belng done by anoLher company sues Lo obLaln
money damages for conLracL
O Ialld offer/accepLance
O MusL allow reasonable Llme for Lo meeL condlLlon and accepL

1erm|nat|on of ower of Acceptance (1677S 18083 18S88) kest 2S 3843
63 UCC 220S
Cnce an offer has been made Lhe power Lo accepL can be LermlnaLed by
1 Lapse of Lhe offer
a 1lme perlod Lo accepL usually sLaLed expllclLly
b lf noL reasonable Llme
c Cral offers usually only good durlng Lhe faceLoface encounLer
2 8evocaLlon by offeror prlor Lo accepLance
a Common law rule allows revocaLlon prlor Lo accepLance
b noL so for CpLlon ConLracLs (See 23)
l ConslderaLlon
ll flrm offers" under uCC
lll 8ellance
3 Cfferor's deaLh or lncapaclLy
a Ceneral rule k cancelled
b Works for offeror and offeree
c CpLlon conLracLs/flrm offers can sLlll be accepLed
d See 48 of 8esLaLemenL
4 Cfferee's re[ecLlon
a Mlrror lmage rule AnyLhlng oLher Lhan pure accepLance re[ecLlon/counLeroffer
b 1hls can be mlLlgaLed by courLs as ln uCC 2207 (below ln uCC secLlon)
Mallbox 8ule
AccepLance good on dlspaLch unless Lhe offer provldes oLherwlse accepLance Lakes effecL when
dlspaLched wheLher or noL offeror recelves lL 8sLmL 63
O CpLlon k AccepLance noL good unLll recelved by Lhe offeror
O LosL/delayed accepLance Cfferor bears rlsk lf accepLance ls losL or delayed
O Lxample A flrm of wool dealers LhaL had made an offer by posL Lo sell 800 fleeces could noL
revoke Lhe offer afLer Lhe offeree a flrm of woolen manufacLures had puL a leLLer of accepLance
ln Lhe posL Adams v Llndsell 183 8e 63 commenL a
4 lf re[ecLlon ls senL afLer accepLance buL arrlves flrsL accepLance ls sLlll good on dlspaLch
4 8uL offeree may be esLopped from enforclng k lf offeror relled on re[ecLlon
8e[ecLlon good when recelved
O 8e[ecLlon or counLeroffer by mall or Lelegram does noL LermlnaLe Lhe power of accepLance unLll
recelved by Lhe offeror
O 8uL accepLance malled afLer sendlng re[ecLlon/counLeroffer ls only a counLeroffer unless Lhe
accepLance ls recelved by Lhe offeror before he recelves Lhe re[ecLlon or counLeroffer 8sLmL
40
4 LxcepLlons Cfferor can back ouL lf offeree sends accepLance re[ecLlon re[ecLlon was
recelved 1
sL
Lven Lhough accepLance ls good when senL offeror relled on re[ecLlon b/c
he goL lL 1
sL

AccepLance by 1elephone AccepLance by Lelephone governed by same prlnclples as lf parLles were ln
Lhe presence of each oLher 8sLmL 64
MusL be roperly ulspaLched recauLlons musL be Laken Lo lnsure safe Lransmlsslon of accepLance or lL
lsn'L good 8sLmL 66
LffecL of 8ecelpL of AccepLance lf lmproperly ulspaLchedlf offeree uses means of Lransmlsslon noL
lnvlLed or does noL Lake proper care ln Lransmlsslon lL ls good on dlspaLch lf lL arrlves wlLhln Lhe Llme a
properly dlspaLched accepLance would have 8sLmL 67

2S Cpt|on Contracts
An opLlon k ls a promlse whlch meeLs Lhe requlremenLs for Lhe formaLlon of a k and llmlLs Lhe
promlsor's power Lo revoke Lhe offer
38 ke[ect|on
1 An offeree's power of accepLance ls LermlnaLed by hls re[ecLlon of Lhe offer unless Lhe offeror
has manlfesLed a conLrary lnLenLlon
2 A manlfesLaLlon of lnLenLlon noL Lo accepL an offer ls a re[ecLlon unless Lhe offeree manlfesLs an
lnLenLlon Lo Lake lL under furLher advlsemenL
39 Counteroffers
1 A counLeroffer ls an offer made by an offeree Lo hls offeror resulLlng Lo Lhe same maLLer as Lhe
orlglnal offer and proposlng a subsLlLuLed bargaln dlfferlng from LhaL proposed by Lhe orlglnal
offer
2 An offeree's power of accepLance ls LermlnaLed by hls maklng of a counLeroffer unless Lhe
offeror has manlfesLed a conLrary lnLenLlon or unless Lhe counLeroffer manlfesLs a conLrary
lnLenLlon of Lhe offeree
40 1|me When ke[ect|on or CounterCffer 1erm|nates the ower of Acceptance
8e[ecLlon or counLeroffer by mall or Lelegram does noL LermlnaLe Lhe power of accepLance unLll
recelved by Lhe offeror buL llmlLs Lhe power so LhaL a leLLer or Lelegram of accepLance sLarLed afLer Lhe
sendlng of an oLherwlse effecLlve re[ecLlon or counLeroffer ls only a counLeroffer unless Lhe
accepLance ls recelved by Lhe offeror before he recelves Lhe re[ecLlon or counLeroffer
41 Lapse of 1|me
1 An offeree's power of accepLance ls LermlnaLed aL Lhe Llme speclfled ln Lhe offer or olf no Llme
ls speclfled aL Lhe end of a reasonable Llme
2 WhaL ls a reasonable Llme ls a quesLlon of facL dependlng on all Lhe clrcumsLances exlsLlng
when Lhe offer and aLLempLed accepLance are made
3 unless oLherwlse lndlcaLed by Lhe language or Lhe clrcumsLances and sub[ecL Lo Lhe rule sLaLed
ln 49 an offer senL by mall ls seasonably accepLed lf an accepLance ls malled aL any Llme
before mldnlghL on Lhe day on whlch Lhe offer ls recelved
42 kevocat|on y commun|cat|on from offeror rece|ved y an offeree
An offeree's power of accepLance ls LermlnaLed when Lhe offeree recelves from Lhe offeror a
manlfesLaLlon of an lnLenLlon noL Lo enLer lnLo Lhe proposed conLracL
43 Ind|rect commun|cat|on of revocat|on
An offeree's power of accepLance ls LermlnaLed when Lhe offeror Lakes deflnlLe acLlon
lnconslsLenL wlLh an lnLenLlon Lo enLer lnLo Lhe proposed conLracL and Lhe offeree acqulres rellable
lnformaLlon Lo LhaL effecL
48 Death or Incapac|ty of Cfferor or Cfferee
An offeree's power of accepLance ls LermlnaLed when Lhe offeree or offeror dles or ls deprlved
of legal capaclLy Lo enLer lnLo Lhe proposed conLracL
63 1|me When Acceptance 1akes Lffect
unless Lhe offer provldes oLherwlse
a An accepLance made ln a manner and by a medlum lnvlLed by an offer ls operaLlve and
compleLes Lhe manlfesLaLlon of muLual assenL as soon as puL ouL of Lhe offeree's possesslon
wlLhouL regard Lo wheLher lL ever reaches Lhe offeror 8u1
b An accepLance under an opLlon conLracL ls noL operaLlve unLll recelved by Lhe offeror
UCC 220S I|rm Cffers
An offer by a merchanL Lo buy or sell goods ln a slgned wrlLlng whlch by lLs Lerms glves
assurance LhaL lL wlll be held open ls noL revocable for lack of conslderaLlon durlng Lhe Llme sLaLed or lf
no Llme ls sLaLed for a reasonable Llme buL ln no evenL may such perlod of lrrevocablllLy exceed Lhree
monLhs buL any such Lerm of assurance on a form supplled by Lhe offeree musL be separaLely slgned by
Lhe offeror

ulcklnson v uodds
u offered Lo Sell hls properLy for 800 pounds and gave hlm unLll lrlday aL 9 Lo accepL uurlng Lhe
lnLerlm u sold Lhe properLy Lo Allan for Lhe same prlce
O no breach Lhere was never an accepLance and Lhls does noL consLlLuLe an opLlon conLracL
O 1elllng someone Lhey have a cerLaln amounL of Llme Lo comply does noL llmlL Lhe offeror's rlghL
Lo revoke excepL ln rare slLuaLlons

UCC 8att|e of the Iorms (18893 206220) UCC 2206 207
uCC ArLlcle 2 Coverns only Lhe sale of goods as deflned ln 2103
Many dlspuLes lnvolvlng goods are solved by arblLraLlon and Lhe AAA recommends Lhe followlng clause
ln every commerclal k
O Any conLroversy or clalm arlslng ouL of or relaLlng Lo Lhls k or Lhe breach Lhereof shall be
seLLled by arblLraLlon admlnlsLered by Lhe AAA under lLs Commerclal ArblLraLlon 8ules and
[udgmenL on Lhe award rendered by Lhe arblLraLor(s) may be enLered ln any courL havlng
[urlsdlcLlon Lhereof
uCC 2207 governs Lhe Mlrror lmage" rule and allows k formaLlon even when Lhe Lerms are sllghLly
dlfferenL

UCC 2206 Cffer and Acceptance |n Iormat|on of Contract
1 unless oLherwlse unamblguously lndlcaLed by Lhe language or clrcumsLances
a An offer Lo make a conLracL shall be consLrued as lnvlLlng accepLance ln any manner and
by any medlum reasonable ln Lhe clrcumsLances
b An order or oLher offer Lo buy goods for prompL or currenL shlpmenL shall be consLrued
as lnvlLlng accepLance elLher by a prompL promlse Lo shlp or by Lhe prompL or currenL
shlpmenL of conformlng or nonconformlng goods buL such a shlpmenL of non
conformlng goods does noL consLlLuLe an accepLance lf Lhe seller seasonably noLlfles Lhe
buyer LhaL Lhe shlpmenL ls offered only as an accommodaLlon Lo Lhe buyer
2 Where Lhe beglnnlng of a requesLed performance ls a reasonable mode of accepLance an offeror
who ls noL noLlfled of accepLance wlLhln a reasonable Llme may LreaL Lhe offer as havlng lapsed
before accepLance
UCC 2207 Add|t|ona| 1erms |n Acceptance or Conf|rmat|on
1 ueflnlLe and seasonable expresslon of accepLance or wrlLLen conflrmaLlon operaLes as
accepLance even lf lL sLaLes dlfferenL Lerms Lhan agreed upon unless Lhe accepLance ls clearly
conLlngenL
2 AddlLlonal Lerms are Lo be consLrued as proposals for addlLlons Lo Lhe conLracL 8eLween
ML8CAn1S Lhese become parL of Lhe conLracL unless
a Cffer expressly llmlLs accepLance Lo Lhe Lerms of Lhe offer
b 1hey maLerlally alLer lL C8
c noLlflcaLlon of ob[ecLlon Lo Lhem has already been glven or ls glven wlLhln a reasonable
Llme afLer noLlce of Lhem ls recelved
3 ConducL recognlzlng Lhe exlsLence of a conLracL ls sufflclenL even lf Lhe wrlLlngs and words
would noL oLherwlse esLabllsh one 1he Lerms of such a conLracL shall be Lhose whlch Lhe
wrlLlngs of Lhe parLles agree Lo along wlLh any supplemenLs under Lhls acL

SLepSaver uaLa SysLems lnc v Wyse 1echnology
CompuLer packages conLalned smallprlnL warranLy dlsclalmers LhaL Lhe parLles had noL dlscussed
O 1hese were noL valld because hadn'L been acLually agreed Lo
O Couldn'L negaLe Lhe k as a counLeroffer
roCu lnc v Zeldenberg
roCu lncluded a llcense agreemenL LhaL prevenLed users from sharlng Lhe lnfo commerclally ln shrlnk
wrap packaglng Z lgnored Lhls llcense and spread Lhe lnfo for proflL
O 8lndlng see uCC 2206
O Z had Llme Lo lnspecL and elLher accepL or refuse Lhe Lerms
lll v CaLeway 2000 lnc
CaLeway (u) lncluded a llsL of Lerms LhaL would become blndlng lf Lhe buyer dldn'L reLurn Lhe compuLer
wlLhln 30 days lll () Lrled Lo reLurn Lhe compuLer afLer 30 days and clalms LhaL Lhe Lerms should noL
be blndlng
O 8lndlng under same raLlonale above See uCC 2206

recontractua| L|a|||ty (22034 23946) kest 4S 87 90
1yplcally Lhere ls no acLlon for preconLracLual llablllLy excepL ln slLuaLlons where performance was
reasonably lnduced (as below ln Lhe s)
rellmlnary 8lndlng AgreemenLs/CommlLmenLs
O rellmlnary 8lndlng AgreemenL When parLles fully declde Lhe lmporLanL polnLs and agree Lo
memorlallze Lhelr conLracL ln a laLer documenL
O rellmlnary 8lndlng CommlLmenL Many Lerms declded buL oLhers Lo be negoLlaLed sLlll arLles
musL negoLlaLe ln good falLh buL are noL bound by Lhe agreed upon Lerms (yeL)

4S Cpt|on Contract Created y art erformance or 1ender
1 Where an offer lnvlLes an offeree Lo accepL by renderlng a performance and does noL lnvlLe a
promlssory accepLance an opLlon k ls creaLed when Lhe offeree Lenders or beglns Lhe lnvlLed
performance or Lenders a beglnnlng of lL
2 1he offeror's duLy of performance under any opLlon conLracL so creaLed ls condlLlonal on
compleLlon or Lender of Lhe lnvlLed performance ln accordance wlLh Lhe Lerms of Lhe offer
87 Cpt|on Contract
1 An offer ls blndlng as an opLlon conLracL lf lL
a ls ln wrlLlng and slgned by Lhe offeror reclLes a purporLed conslderaLlon for Lhe maklng
of Lhe offer and proposes an exchange on falr Lerms wlLhln a reasonable Llme C8
b ls made lrrevocable by sLaLuLe
2 An offer whlch Lhe offeror should reasonably expecL Lo lnduce acLlon or forbearance of a
subsLanLlal characLer on Lhe parL of Lhe offeree before accepLance and whlch does lnduce such
acLlon or forbearance ls blndlng as an opLlon conLracL Lo Lhe exLenL necessary Lo avold ln[usLlce
90 rom|se keasona|y Induc|ng Act|on or Iorearance (rom|ssory Lstoppe|)
1 A promlse whlch Lhe promlsor should reasonably expecL Lo lnduce acLlon or forbearance on Lhe
parL of Lhe promlsee or a Lhlrd person and whlch does lnduce such acLlon or forbearance ls
blndlng lf ln[usLlce can be avolded only by enforcemenL of Lhe promlse 1he remedy granLed for
breach may be llmlLed as [usLlce requlres
2 A charlLable subscrlpLlon or a marrlage seLLlemenL ls blndlng under SubsecLlon (1) wlLhouL proof
LhaL Lhe promlse lnduced acLlon or forbearance

urennan v SLar avlng Co
(urennan/conLracLor) sues for damages on conLracL afLer u (SLar/subconLracLor) made a bld for pavlng
and Lhen backed ouL afLer had already lncluded u's bld ln hls own bld for consLrucLlon work 1rlal
courL ruled for enforclng u's bld as a blndlng conLracL
O 8lndlng under 43 and 90
O 8easonably lnduced performance
O 8ellance damage
offman v 8ed Cwl SLores
began negoLlaLlons Lo geL a franchlse agreemenL wlLh 8ed Cwl and underLook several sLeps Lo make
LhaL happen 8ed Cwl assured hlm LhaL $18k would be sufflclenL Lo geL Lhe franchlse and offman sold
hls currenL buslness moved and goL a new [ob Lo make LhaL happen upon geLLlng Lhe money Lhey
Lold hlm LhaL Lhe prlce was now $34k
O Lnforceable by
O reasonably relled on promlse and Look acLlon Lo secure money
Channel ome CenLers ulvlslon of Crace 8eLall Corp v Crossman
was a home developmenL company seeklng Lo renL space ln a mall owned by u (Crossman) 1hey
negoLlaLed Lerms and u Lold LhaL he would wlLhdraw LhaL space from Lhe markeL unLll Lhey could
flnallze a deal wenL Lhrough greaL expense and Llme Lo procure Lhe proper fundlng and supporL and
Lhen u wlLhdrew from Lhe agreemenL
O Cffer noL on paper yeL
O 8lndlng as a rellmlnary 8lndlng AgreemenL

1he kequ|rement of Def|n|teness (10S06 246S6) kest 33
Lven lf muLual assenL ls formed sLlll need sufflclenL deflnlLlon Lo form conLracL
1hls serves 2 funcLlons
1 1o deLermlne breach courL musL know Lhe Lerms of Lhe conLracL
2 MusL deLermlne whaL Lhe promlse was Lo know Lhe damages
ueflnlLeness need noL be speclflc numbers can lnclude
O Cood lalLh
O 8easonable LfforL
O LLc lf courL can deLermlne a sLandard
CourL can plece LogeLher Lerms from many sources Lo flnd sufflclenL deflnlLeness of Lerms lncludlng
O rellmlnary negoLlaLlons
O rlor communlcaLlons
O LxLernal sources such as governmenLal regulaLlons and Lrade usage
O rlor deallngs beLween Lhe parLles (See uCC 1303)
O LLc
lL ls enough lf Lhe agreemenL provldes means for maklng lLs Lerms sufflclenLly deflnlLe by Lhe Llme
performance ls called for
O can allow speclflcaLlon aL a laLer daLe
AM8lCuCuS 1L8MS SCuLu ALWA?S 8L ln1L88L1Lu ACAlnS1 1L u8Al1lnC A81? ( 206)

33 Certa|nty
1 Lven Lhough a manlfesLaLlon of lnLenLlon ls lnLended Lo be undersLood as an offer lL cannoL be
accepLed so as Lo form a conLracL unless Lhe Lerms of Lhe conLracL are reasonably cerLaln
2 1he Lerms of a conLracL are reasonably cerLaln lf Lhey provlde a basls for deLermlnlng Lhe
exlsLence of a breach and for glvlng an approprlaLe remedy
3 1he facL LhaL one or more Lerms of a proposed bargaln are lefL open or uncerLaln may show LhaL
a manlfesLaLlon of lnLenLlon ls noL lnLended Lo be undersLood as an offer or as an accepLance
UCC 230S Cpen r|ce 1erm
1 1he parLles lf Lhey so lnLend can conclude a conLracL for sale even Lhough Lhe prlce ls noL
seLLled ln such a case Lhe prlce ls a reasonable prlce aL Lhe Llme of dellvery lf
a noLhlng ls sald as Lo prlce
b 1he prlce ls lefL Lo be agreed by Lhe parLles and Lhey fall Lo agree
c 1he prlce ls Lo be flxed ln Lerms of some agreed markeL or oLher sLandard as seL or
recorded by a 3
rd
person or agency and lL ls noL so seL or recorded
2 A prlce Lo be flxed by Lhe seller or by Lhe buyer means a prlce for hlm Lo flx ln good falLh
3 When a prlce lefL Lo be flxed oLherwlse Lhan by agreemenL of Lhe parLles falls Lo be flxed
Lhrough faulL of one parLy Lhe oLher may aL hls opLlon LreaL Lhe conLracL as cancelled or hlmself
flx a reasonable prlce
4 Where however Lhe parLles lnLend noL Lo be bound unless Lhe prlce be flxed or agreed and lL ls
noL flxed or agreed Lhere ls no conLracL ln such a case Lhe buyer musL reLurn any goods already
recelved or lf unable so Lo do musL pay Lhelr reasonable value aL Lhe Llme of dellvery and Lhe
seller musL reLurn any porLlon of Lhe prlce pald on accounL

1oys lnc v lM 8urllngLon Company
leased a spoL ln a mall for 3 years wlLh opLlon Lo renew for anoLher 3 aL Lhe Lhenprevalllng raLe" u
leased lL Lo someone else before glvlng enough Llme Lo renew
O 1erms deflnlLe enough
O ConLracL enforced
Cglebay norLon Co v Armco lnc
arLles agreed Lo shlp lron LogeLher wlLh raLes declded by leadlng shlppers or muLual agreemenL"
arLles dlsagreed on Lerms and argued LhaL k was vold because of lndeflnlLeness
O arLles lnLended Lo be bound even regardless of prlclng
O CourL ordered medlaLlon Lo reach agreemenL on $

8ASIS ICk LNICkCING kCMISLS
Iundamenta|s of Cons|derat|on (2946) kest 17 7174 79 81
ConslderaLlon ls for 8CMlSLS noL ConLracLs
O never say no conslderaLlon for Lhls conLracL"
O Say no conslderaLlon for Lhls promlse"
ConslderaLlon ls requlred Lo form a legally blndlng k so LhaL people aren'L burdened and legally bound
by Lhlngs LhaL were noL well LhoughLouL or LhaL are consequenLlal
O 8equlremenL of conslderaLlon came ouL of a long hlsLorlcal background of Lrylng Lo deLermlne
when breach of k acLlons would lle
O ConslderaLlon seems Lo summarlze Lhese Lechnlcal requlremenLs

1here are several caLegorles of agreemenLs LhaL are ofLen bound by Lhelr own rules/LradlLlons
1 lamlly ConLracLs
a usually no ConLracL acLlon because famlly exchanges are ofLen glfLs or done ouL of Lhe
goodness of Lhelr hearL
b usually have no conslderaLlon
c 8uL see amer v Sldway for example of enforceable famlly k
2 Moral CbllgaLlons
a noL blndlng
b AlLhough promlse glven as a resulL of moral obllgaLlon may be under 86 (below) Lo
avold ln[usLlce
3 LmploymenL ConLracLs (See below ln romlses as conslderaLlon secLlon)
a used Lo be (and someLlmes sLlll are) governed by Lhelr own seL of rules/sLaLuLes
b 8uL essenLlally follow general conLracL common law
c Lmployee andbook can be exLenslon of ConLracL (MeLLllle)
4 ConLracLs for Lhe Sale of Coods
a Coverned by uCC ArLlcle 2

17 kequ|rement of a 8arga|n
1 LxcepL as sLaLed ln Sub (2) Lhe formaLlon of a conLracL requlres a bargaln ln whlch Lhere ls a
manlfesLaLlon of muLual assenL Lo Lhe exchange and a conslderaLlon
2 WheLher or noL Lhere ls a bargaln a conLracL may be formed under speclal rules appllcable Lo
formal conLracLs or under Lhe rules sLaLed ln 8294
71 kequ|rement of Lxchange 1ypes of Lxchange
1 1o consLlLuLe conslderaLlon a performance or a reLurn promlse musL be bargalned for
2 A performance or reLurn promlse ls bargalned for lf lL ls soughL by Lhe promlsor ln exchange for
hls promlse and ls glven by Lhe promlsee ln exchange for LhaL promlse
3 erformance may conslsL of
a An acL oLher Lhan a promlse C8
b A forbearance C8
c 1he creaLlon modlflcaLlon or desLrucLlon of a legal relaLlon
4 1he performance or reLurn promlse may be glven Lo Lhe promlsor or Lo some oLher person lL
may be glven by Lhe promlsee or by some oLher person
72 Lxchange of rom|se for erformance
O LxcepL as sLaLed ln 73 74 any performance whlch ls bargalned for ls conslderaLlon
73 erformance of a Lega| Duty
O erformance of a legal duLy owed Lo a promlsor whlch ls nelLher doubLful nor Lhe sub[ecL of
honesL dlspuLe ls noL conslderaLlon buL a slmllar performance ls conslderaLlon lf lL dlffers from
whaL was requlred by Lhe duLy ln a way whlch reflecLs more Lhan a preLense of bargaln
74 Sett|ement of C|a|ms
1 lorbearance Lo asserL or Lhe surrender of a clalm or defense whlch proves Lo be lnvalld ls noL
conslderaLlon unless
a 1he clalm or defense ls ln facL doubLful because of uncerLalnLy as Lo Lhe facLs or Lhe law
or
b 1he forbearlng or surrenderlng parLy belleves LhaL Lhe clalm or defense may be falrly
deLermlned Lo be valld
2 1he execuLlon of a wrlLLen lnsLrumenL surrenderlng a clalm or defense by one who ls under no
duLy Lo execuLe lL ls conslderaLlon lf Lhe execuLlon of Lhe wrlLLen lnsLrumenL ls bargalned for
even Lhough he ls noL asserLlng Lhe clalm or defense and belleves LhaL no valld clalm or defense
exlsLs
79 Adequacy of Cons|derat|on Mutua||ty of C||gat|on
1 lf Lhe requlremenL of conslderaLlon ls meL Lhere ls no addlLlonal requlremenL of
a A galn advanLage or beneflL Lo Lhe promlsor or a loss dlsadvanLage or deLrlmenL Lo
Lhe promlsee C8
b Lqulvalence ln Lhe values exchange C8
c muLuallLy of obllgaLlon"
81 Cons|derat|on as Mot|ve or Induc|ng Cause
1 1he facL LhaL whaL ls bargalned for does noL of lLself lnduce Lhe maklng of a promlse does noL
prevenL lL from belng conslderaLlon for Lhe promlse
2 1he facL LhaL a promlse does noL of lLself lnduce a performance or reLurn promlse does noL
prevenL Lhe performance or reLurn promlse from belng conslderaLlon for Lhe promlse

amer v Sldway
uncle promlses nephew $3k lf he dldn'L drlnk smoke gamble or swear unLll 21
O 8lndlng even Lhough famlly k
O ConslderaLlon glvlng up legal rlghLs
O Conflrmed ln 71(3)(c)
llege v 8oehm
Woman agrees noL Lo brlng basLardy charges lf homeboy pays $10 a week 8lood LesLs laLer showed
LhaL chlld wasn'L hls
O SLlll blndlng
O Woman gave up a clalm she belleved ln good falLh Lo be Lrue
O See 74

1he kequ|rement of Lxchange Act|on |n the ast (S0S6) kest 71 86

asL acLlon LhaL ls noL bargalned for Lyplcally does noL consLlLuLe conslderaLlon unless LhaL acLlon was
reasonably lnduced 1hls prevenLs people from belng obllgaLed Lo someone who has done Lhem an acL
of klndness
O Same reason glfLs/moral obllgaLlons aren'L conslderaLlon
O See 86 for general rule
O See 90 (above) for excepLlon

b A forbearance C8
86 rom|se for 8enef|t kece|ved
1 A promlse LhaL ls made ln recognlLlon of a beneflL prevlously recelved by Lhe promlsor from Lhe
promlsee ls blndlng Lo Lhe exLenL necessary Lo prevenL ln[usLlce
2 A promlse ls noL blndlng under subsecLlon (1)
a lf Lhe promlsee conferred Lhe beneflL as a glfL or for oLher reasons Lhe promlsor has noL
been un[usLly enrlched or
b 1o Lhe exLenL LhaL lLs value ls dlsproporLlonaLe Lo Lhe beneflL

Mllls v Wyman
uocLor LreaLed 23 ?C boy who ended up dylng 8oy's faLher promlsed Lo pay hlm
O noL blndlng
O asL acLlon/moral obllgaLlon noL conslderaLlon
Webb v McCowln
Man [umped ln fronL of a welghL and suffered crlppllng ln[ury Lo prevenL u from dylng u promlsed Lo
pay hlm unLll dled
O 8lndlng
O ln[ury would make lL unfalr noL Lo pay
O See 86

1he kequ|rement of a 8arga|n (S6S8 6667) kest 7174
ConslderaLlon musL be bargalned for wlLh boLh parLles Lhlnklng Lhey wlll geL someLhlng ouL of Lhe deal
Mere graLulLles or moral obllgaLlons are lnsufflclenL Lo meeL Lhls requlremenL

b A forbearance C8
72 Lxchange of rom|se for erformance
O LxcepL as sLaLed ln 73 74 any performance whlch ls bargalned for ls conslderaLlon
honesL dlspuLe ls noL conslderaLlon buL a slmllar performance ls conslderaLlon lf lL dlffers from
whaL was requlred by Lhe duLy ln a way whlch reflecLs more Lhan a preLense of bargaln
74 Sett|ement of C|a|ms
3 lorbearance Lo asserL or Lhe surrender of a clalm or defense whlch proves Lo be lnvalld ls noL
conslderaLlon unless
a 1he clalm or defense ls ln facL doubLful because of uncerLalnLy as Lo Lhe facLs or Lhe law
or
b 1he forbearlng or surrenderlng parLy belleves LhaL Lhe clalm or defense may be falrly
deLermlned Lo be valld
4 1he execuLlon of a wrlLLen lnsLrumenL surrenderlng a clalm or defense by one who ls under no
duLy Lo execuLe lL ls conslderaLlon lf Lhe execuLlon of Lhe wrlLLen lnsLrumenL ls bargalned for
even Lhough he ls noL asserLlng Lhe clalm or defense and belleves LhaL no valld clalm or defense
exlsLs

klrksey v klrksey
8roLher offers Lo leL hls slsLer llve ln a house on hls land lf she moves her famlly down Lhere
O CourL ls dlvlded buL says no conslderaLlon
O Seems llke a mere graLulLy
O AlLhough whaL abouL her glvlng up shlL and movlng?

rom|ses as Cons|derat|on (S886) kest 7S77
Lxchanges of promlses can be conslderaLlon 1hls ls Lhe mosL common Lype ln facL and ls called a
bllaLeral conLracL
O romlse musL be Lo perform some acLlon LhaL would lLself be conslderaLlon ( 73)
O CannoL be lllusory (see 77)
1hls promlse can be lnferred from Lhe language and clear lnLenL of Lhe parLles 1hls usually ls Lhe case
when one parLy agrees Lo provlde some producL and Lhe oLher lmplles LhaL Lhey wlll conLlnue Lo buy lL
from Lhem (See LasLern/Lady uuffCordon)

7S Lxchange of rom|se for a rom|se
O LxcepL as sLaLed ln 7677 a promlse whlch ls bargalned for ls conslderaLlon lf buL only lf Lhe
promlsed performance would be conslderaLlon
76 Cond|t|ona| rom|se
1 A condlLlonal promlse ls noL conslderaLlon lf Lhe promlsor knows aL Lhe Llme of maklng Lhe
promlse LhaL Lhe condlLlon cannoL occur
2 A promlse condlLlonal on a performance by Lhe promlsor ls a promlse of alLernaLlve
performances wlLhln 77 unless occurrence of Lhe condlLlon ls also promlsed
77 I||usory and A|ternat|ve rom|ses
A promlse or apparenL promlse ls noL conslderaLlon lf by lLs Lerms Lhe promlsor or purporLed promlsor
reserves a cholce of alLernaLlve performances unless
1 Lach of Lhe alLernaLlve performances would have been conslderaLlon lf lL alone had been
bargalned for C8
2 Cne of Lhe alLernaLlve performances would have been conslderaLlon and Lhere ls or appears Lo
Lhe parLles Lo be a subsLanLlal posslblllLy LhaL before Lhe promlsor exerclses hls cholce evenLs
may ellmlnaLe Lhe alLernaLlves whlch would noL have been conslderaLlon

SLrong v Sheffleld
Man glves a promlssory noLe saylng LhaL he won'L collecL on lL unLll he feels llke lL
O no conslderaLlon for Lhls promlse (lllusory)
O robably conslderaLlon lf he had glven acLual Llme perlod (deflnlLeness?)
MaLLel v opper
promlses Lo buy a house lf Lhey flnd Lhe lease saLlsfacLory
O ConslderaLlon for Lhls promlse
O Sub[ecLlve sLandard for saLlsfacLlon buL sLlll good falLh (deflnlLeness)
Lake Land LmploymenL Croup of Akron LLC v Columber
Lmployer had Lmployee slgn a noncompeLe afLer 3 years of work e conLlnued Lo work Lhere for 10
years and Lhen was flred ConslderaLlon?
O ?es lmplled conslderaLlon ls slgn noncompeLe and we won'L flre you
O noL lllusory because employee was aware he would probably be flred lf dldn'L slgn
LasLern Alr Llnes lnc v Culf Cll CorporaLlon
Company agreed Lo supply [eL fuel aL raLe posLed by 3
rd
parLy 1haL raLe changed and became
unproflLable for Culf Cll
O 8lndlng ConslderaLlon for promlse ls lmplled use of [eL fuel by LasLern
O lmpracLlcablllLy charge (dlscussed laLer) no good because noL gross ln[usLlce"
Wood v Lucy Lady uuffCordon
Wood goL Lucy Lo glve hlm excluslve rlghLs Lo markeL her merch She began markeLlng herself and
clalms no conslderaLlon
O ConslderaLlon for promlse of excluslvlLy
O lmplled promlse ls LhaL he wlll Lry and markeL her shlL

ke||ance (rom|ssory Lstoppe|) as a 8as|s of Lnforcement (8994 46S0 9497)
kest 71 90
As prevlously dlscussed a promlse reasonably expecLed Lo lnduce acLlon LhaL lnduce such acLlon wlll be
consldered blndlng Lo Lhe exLenL LhaL lL would creaLe an ln[usLlce ( 90)
O 1hls ls separaLe and dlsLlncL from conslderaLlon
O ere rellance ls noL [usL a remedy buL a Lheory for enforclng a promlse
O uamage/remedy ls usually llmlLed Lo prevenL ln[usLlce" (90(1))
romlssory LsLoppel (allowlng rellance Lo serve as conslderaLlon) applles ln 4 ma[or caLegorles of cases
1 lamlly romlses
2 romlses Lo Convey Land
3 romlses Coupled wlLh CraLulLous 8allmenLs
4 CharlLable SubscrlpLlons
erson ls esLopped" from lnvalldaLlng Lhe clalm for no conslderaLlon because lL would be un[usL

b A forbearance C8
90 rom|se keasona|y Induc|ng Act|on or Iorearance
parL of Lhe promlsee or a 3
rd
person and whlch does lnduce such acLlon or forbearance ls blndlng
lf ln[usLlce can be avolded only by enforcemenL of Lhe promlse 1he remedy granLed for breach
may be llmlLed as [usLlce requlres
2 A charlLable subscrlpLlon or a marrlage seLLlemenL ls blndlng under sub (1) wlLhouL proof LhaL
Lhe promlse lnduced acLlon or forbearance

8lckeLLs v ScoLhorn
CrandfaLher promlsed Lo pay granddauLher $2k so she dldn'L have Lo work She qulL her [ob and he
dldn'L pay
O romlssory esLoppel
O lf she hadn'L qulL her [obno conslderaLlon and no k
O She relled on hls promlse Lo her deLrlmenL
lelnberg v felffer Co
CLC offered Lo pay 40 year employee penslon afLer she reLlred She reLlred and Lhen CLC's wlfe refused
Lo pay up clalmlng no conslderaLlon/glfL/graLulLy
O romlssory esLoppel
O SecreLary relled on promlse and qulL her [ob
O noL allowlng recovery would be gross ln[usLlce Lo an old woman

kest|tut|on as an A|ternat|ve 8as|s for kecovery (10S113) kest 370371
8esLlLuLlon can also serve as a basls for recovery because we don'L wanL Lo allow un[usL enrlchmenL
(made ln good falLh) even lf Lhere ls no conslderaLlon
O Cood falLh acLor besLowlng un[usL enrlchmenL on anoLher should be resLored
O 1hls acLlon ls called a quaslconLracL
4 erson ls glven quanLum merulL (whaL he deserves)
O no ClllClCuS ln1L8MLuuLL8S
4 Can'L force servlces on someone and make Lhem pay resLlLuLlon
4 8u1 professlonal renderlng servlces he Lhlnks are necessary can be repald (see CoLnam)

370 kequ|rement that enef|t e conferred
O A parLy ls enLlLled Lo resLlLuLlon under Lhe rules sLaLed ln Lhls 8esLaLemenL only Lo Lhe exLenL
LhaL he has conferred a beneflL on Lhe oLher parLy by way of parL performance or rellance
371 Measure of kest|tut|on Interest
lf a sum of money ls awarded Lo proLecL a parLy's resLlLuLlon lnLeresL lL may as [usLlce requlres be
measured by elLher
a 1he reasonable value Lo Lhe oLher parLy of whaL he recelved ln Lerms of whaL lL would
have cosL hlm Lo obLaln lL from a person ln Lhe clalmanL's poslLlon C8
b 1he exLenL Lo whlch Lhe oLher parLy's properLy has been lncreased ln value or hls oLher
lnLeresLs advanced

CoLnam v Wlsdom
sues Lo recover for LreaLlng u's son whlle unconsclous 1he son dled and u refuses Lo pay Lhe surgery
blll
O 8esLlLuLlon acLlon good
O LnrlchmenLlncreased chance of survlval
O 1hey acLed as Lhey LhoughL was necessary noL as offlclous lnLermeddlers
Callano v Cakwood ark omes Corp
ConLracLed Lo planL shrubs aL a person's house e dled before paylng Lhem and Lhey sue Lhe new
owners of Lhe house for resLlLuLlon
O no good
O LnrlchmenL noL un[usL no skeLchlness from new home owners
O 8esLlLuLlon usually based on some mlsLake no mlsLake here
O Also can'L geL ouL of orlglnal conLracL because some 3
rd
parLy ls enrlched

Capac|ty (312321) kest 1216
erson musL be able Lo legally creaLe conLracLs before Lhey can be blndlng 1he mosL common classes of
people lacklng full capaclLy are
1 Mlnors ( 14)
a LxcepLlon for necesslLles
b uoesn'L maLLer lf oLher parLy knows Lhey are underage (unless decelved)
c uepends on SLaLe laws whaL Lhe proper age ls
d uay before 18
Lh
8day ln 14
e 21 ln klefer below
2 8eLards (13)
a lf unable Lo undersLand k (cognlLlve LesL)
b lf unable Lo acL ln reasonable manner and oLher parLy knows (vollLlonal LesL)
c uLCluLu Cn CASL 8? CASL (Au CC) 8ASlS
3 urunks ( 16)
a Cnly applles lf oLher parLy knows and
b 1hey are so fucked up Lhey would noL pass Lhe 13 reLard LesL (see 16)
MosL of Lhese lncur voldable conLracLual obllgaLlons whlch means Lhe parLy wlLh capaclLy may be held
responslble buL Lhe deflclenL parLy can geL ouL of Lhelr end of Lhe deal lf Lhey so choose

12 Capac|ty to Contract
1 no one can be bound by conLracL who has noL legal capaclLy Lo lncur aL leasL voldable
conLracLual duLles CapaclLy Lo conLracL may be parLlal and lLs exlsLence ln respecL of a
parLlcular LransacLlon may depend upon Lhe naLure of Lhe LransacLlon or upon oLher
clrcumsLances
2 A naLural person who manlfesLs assenL Lo a LransacLlon has full legal capaclLy Lo lncur
conLracLual duLles Lhereby unless he ls
a under guardlanshlp
b An lnfanL
c MenLally defecLlve Cr
d lnLoxlcaLed
13 ersons Affected y Guard|ansh|p
O A person has no capaclLy Lo lncur conLracLual duLles lf hls properLy ls under guardlanshlp by
reason of an ad[udlcaLlon of menLal lllness or defecL
14 Infants
O unless a sLaLuLe provldes oLherwlse a naLural person has Lhe capaclLy Lo lncur only voldable
conLracLual duLles unLll Lhe beglnnlng of Lhe day before Lhe person's elghLeenLh blrLhday
1S Menta| I||ness or Defect
1 A person lncurs only voldable conLracLual duLles by enLerlng lnLo a LransacLlon lf by reason of
menLal lllness or defecL
a e ls unable Lo undersLand ln a reasonable manner Lhe naLure and consequences of Lhe
LransacLlon or
b e ls unable Lo acL ln a reasonable manner ln relaLlon Lo Lhe LransacLlon and Lhe oLher
parLy has reason Lo know of hls condlLlon
2 Where Lhe conLracL ls made on falr Lerms and Lhe oLher parLy ls wlLhouL knowledge of Lhe
menLal lllness or defecL Lhe power of avoldance under SubsecLlon (1) LermlnaLes Lo Lhe exLenL
LhaL Lhe conLracL has been so performed ln whole or ln parL or Lhe clrcumsLances have so
changed LhaL avoldance would be un[usL ln such a case a courL may granL rellef on such
equlLable Lerms as [usLlce requlres
16 Intox|cated ersons
A person lncurs only voldable conLracLual duLles by enLerlng lnLo a LransacLlon lf Lhe oLher parLy
has reason Lo know LhaL by reason of lnLoxlcaLlon
a e ls unable Lo undersLand ln a reasonable manner Lhe naLure and consequences of Lhe
LransacLlon or
b e ls unable Lo acL ln a reasonable manner ln relaLlon Lo Lhe LransacLlon

klefer v lred owe MoLors lnc
Cuy under 21 buys a car and lL Lurns ouL Lo be a lemon e sues Lo geL hls money back under voldable
conLracL
O ConLracL was voldable
O Law ln LhaL SLaLe was 21 Lo have full conLracLual duLles
CrLelere v 1eachers' 8eLlremenL 8d
Woman was on leave for menLal lllness and declded Lo cash ln her 401k resulLlng ln $60k loss Lo her
husband when he dled e clalms LhaL her declslon/k was lnvalld due Lo menLal lncapaclLy
O k voldable
O Woman may have passed cognlLlve LesL (quesLlonable)
O uld noL pass vollLlonal LesL
Cundlck v 8roadbenL
purporLed Lo sell hls land for way under value buL Lrled Lo resclnd when reallzlng LhaL he was geLLlng
gypped lamlly/medlcal experLs clalmed he was menLally lncompeLenL
O ueal sLands courL says noL enough evldence ln record of lncompeLence
O LsLabllshes casebycase lnqulry lnLo menLal compeLency

DLILNSLS 1C LNICkCLMLN1
Cverreach|ng Duress and Undue Inf|uence (32233S 3403S2) kest 17S77
73 89
1he courLs have found LhaL conLracLs musL be made on relaLlvely equal bargalnlng powers Allowlng a
parLy Lo have an undue advanLage leads Lo unfalr conLracLs LhaL yleld poor economlc resulLs for Lhe
damaged parLy 1he CourLs accordlngly allow a parLy Lo resclnd (avold) Lhe conLracL
ConLracLs are ff lf a parLy was under duress durlng Lhe bargalnlng process 1hls lncludes
1 1hreaL ( 173176)
a arLy can'L be lnduced Lo conLracL by LhreaL lf lL meeLs cerLaln condlLlons
b See 8esL lor express condlLlons when LhreaLs make voldable conLracLs
l usually crlmlnal/LorLlous behavlor
c 1hreaLenlng LAWluL acLlon ls noL lmproper
2 unfalr bargalnlng AdvanLage ( 177)
a SomeLlmes one parLy can use economlc coerclon" whlch requlres (AusLln)
l wrongful LhreaL of breach of k precludlng exerclse of free wlll
ll lmmedlaLe possesslon of needful goods ls LhreaLened
lll LhreaLened parLy cannoL obLaln goods elsewhere
b undue lnfluence (Cdorlzzl)
l use of excesslve pressure
ll Cn a vulnerable person
lll 8y a domlnanL sub[ecL
lv CL Looks aL 7 Lypes of evldence
1 ulscusslon aL unusual or lnapproprlaLe Llme
2 1ransacLlon ln unusual place
3 lnslsLenL demand LhaL deal be made lmmedlaLely
4 LxLreme emphasls of bad resulLs lf deal noL made
3 Canglng up on weaker parLy
6 Absence of 3
rd
parLy advlsor Lo weaker parLy
7 1elllng weak parLy LhaL Lhere ls no Llme Lo consulL aLLorney
3 reexlsLlng uuLy 8ule (Alaska ackers/ 177)
a Can'L leverage your already conLracLed for duLles lnLo a beLLer deal
b 8u1 can resclnd and modlfy Lo avold Lhls (SchwarLzrelch below)
l 1hls creaLes a whole new k
ll usually Lear up old conLracL and slgn new one

honesL dlspuLe ls noL conslderaLlon buL a slmllar performance ls conslderaLlon fl lL dlffers from
whaL was requlred by Lhe duLy ln a way whlch reflecLs more Lhan a preLense of a bargaln
89 Mod|f|cat|on of Lxecutory Contract
A promlse modlfylng a duLy under a conLracL noL fully performed on elLher slde ls blndlng
a lf Lhe modlflcaLlon ls falr and equlLable ln vlew of clrcumsLances noL anLlclpaLed by Lhe parLles
when Lhe conLracL was made or
b 1o Lhe exLenL provlded by sLaLuLe or
c 1o Lhe exLenL LhaL [usLlce requlres enforcemenL ln vlew of maLerlal change of poslLlon ln rellance
on Lhe promlse
17S When Duress y 1hreat Makes a Contract Vo|da|e
1 lf a parLy's manlfesLaLlon of assenL ls lnduced by an lmproper LhreaL by Lhe oLher parLy LhaL
leaves Lhe vlcLlm no reasonable alLernaLlve Lhe conLracL ls voldable by Lhe vlcLlm
2 lf a parLy's manlfesLaLlon of assenL ls lnduced by one who ls noL a parLy Lo Lhe LransacLlon Lhe
conLracL ls voldable by Lhe vlcLlm unless Lhe oLher parLy Lo Lhe LransacLlon ln good falLh and
wlLhouL reason Lo know of Lhe duress elLher glves value or relles maLerlally on Lhe LransacLlon
176 When a 1hreat |s Improper
1 A LhreaL ls lmproper lf
a WhaL ls LhreaLened ls a crlme or LorL or Lhe LhreaL lLself would be a crlme or LorL lf lL
resulLed ln obLalnlng properLy
b WhaL ls LhreaLened ls a crlmlnal prosecuLlon
c WhaL ls LhreaLened ls Lhe use of clvll process and Lhe LhreaL ls made ln bad falLh or
d 1he LhreaL ls a breach of Lhe duLy of good falLh and falr deallngs under a conLracL wlLh
Lhe reclplenL
2 A LhreaL ls lmproper lf Lhe resulLlng exchange ls noL on falr Lerms and
a 1he LhreaLened acL would harm Lhe reclplenL and would noL slgnlflcanLly beneflL Lhe
parLy maklng Lhe LhreaL
b 1he effecLlveness of Lhe LhreaL ln lnduclng Lhe manlfesLaLlon of assenL ls slgnlflcanLly
lncreased by prlor unfalr deallng by Lhe parLy maklng Lhe LhreaL or
c WhaL ls LhreaLened ls oLherwlse a use of power for llleglLlmaLe ends
177 When Undue Inf|uence Makes a Contract Vo|da|e
1 undue lnfluence ls unfalr persuaslon of a parLy who ls under Lhe domlnaLlon of Lhe person
exerclslng Lhe persuaslon or who by vlrLue of Lhe relaLlon beLween Lhem ls [usLlfled ln assumlng
LhaL LhaL person wlll noL acL ln a manner lnconslsLenL wlLh hls welfare
2 lf a parLy's manlfesLaLlon of assenL ls lnduced by undue lnfluence by Lhe oLher parLy Lhe
conLracL ls voldable by Lhe vlcLlm
3 lf a parLy's manlfesLaLlon of assenL ls lnduced by one who ls noL a parLy Lo Lhe LransacLlon Lhe
conLracL ls voldable by Lhe vlcLlm unless Lhe oLher parLy Lo Lhe LransacLlon ln good falLh and
wlLhouL reason Lo know of Lhe undue lnfluence elLher glves value or relles maLerlally on Lhe
LransacLlon

Alaska packers' Ass'n v uomenlco (reexlsLlng uuLy)
llshermen conLracLed Lo work for a summer and Lhen LhreaLened Lo qulL once aL sea lf Lhey dldn'L geL
more $ u agreed Lo pay Lhem exLra and Lhen dldn'L
O u wlns
O Can'L leverage exlsLlng duLy Lo geL beLLer deal (preexlsLlng duLy rule)
O 1hls puLs Lhem aL unfalr advanLage because u had no cholce buL Lo glve ln or lose Lhelr servlces
SchwarLzrelch v 8auman8asch (8esclsslon/modlflcaLlon)
Lmployer conLracLed Lo pay $90 a monLh Lmployee goL dlfferenL offer of $113 a monLh from
compeLlLor and orlglnal employer offered $100 a monLh lf he sLayed
O Allowed because of resclsslon/modlflcaLlon
O 1ore up old k and wroLe new one
WaLklns Son v Carrlg (u/8M)
began excavaLlon work and hlL rock e Lold u LhaL he would have Lo charge 9x Lhe agreed raLe Lo
conLlnue u agreed and Lhen refused Lo pay Lhe exLra under preexlsLlng duLy rule
O 1hls funcLlons as modlflcaLlon/resclsslon under 89
O Change of raLe was reasonable [usL and agreed upon
AusLln lnsLrumenL lnc v Loral CorporaLlon (economlc coerclon)
u enLered lnLo k wlLh navy Lo provlde radar and subked wlLh Lo glve Lhem parLs u goL 2
nd
k and
LhreaLened Lo breach 1
sL
k lf noL glven 2
nd
Subk as well aL hlgher Lhan markeL prlce
O 2
nd
subk lnvalld aL LhaL prlce because of economlc coerclon (177)
O leveraged Lhelr flrsL deal lnLo a second and Look advanLage
O uamages probably llmlLed Lo dlfference ln markeL value/charged prlce
Cdorlzzl v 8loomfleld School ulsLrlcL (undue lnfluence)
1eacher charged wlLh belng gay School board says Lhey wlll publlclze and embarrass hlm lf he doesn'L
reslgn e seeks Lo resclnd hls reslgnaLlon afLer belng acqulLLed of buLLsex
O undue lnfluence ls found and reslgnaLlon volded
O CourL llsLs 7 Lypes of evldence Lo flnd Lhls (llsLed above)

Concea|ment and M|srepresentat|on (3S2362) kest 1S9164
eople should noL be able Lo proflL from poor morals and Lake advanLage of oLhers by Lrlcklng Lhem lnLo
unfalr prlces/compensaLlon based on knowledge known by one parLy and noL apparenL Lo Lhe oLher
O 1hls creaLes a publlc pollcy favorlng poor morals/llars
O uo noL have Lo hold Lhe person Lo Lhe hlghesL scruples" buL do need Lo make parLles acL
reasonably ln Lhelr deallngs
CourL can make conLracLs formed ln Lhls manner avoldable
O lf mlsrep was maLerlal (lmporLanL Lo Lhe formaLlon of k 162)
O CourLs are especlally llkely Lo lnvalldaLe a k lf Lhe formaLlon lLself (assenL) was lnduced by
maLerlal mlsrepresenLaLlon (See 16364)

1S9 M|srepresentat|on Def|ned
A mlsrepresenLaLlon ls an asserLlon LhaL ls noL ln accord wlLh Lhe facLs
160 When Act|on |s Lqu|va|ent to Assert|on (Concea|ment)
AcLlon lnLended or known Lo be llkely Lo prevenL anoLher from learnlng a facL ls equlvalenL Lo an
asserLlon LhaL Lhe facL does noL exlsL
161 When NonD|sc|osure |s Lqu|va|ent to Assert|on
A person's nondlsclosure of a facL known Lo hlm ls equlvalenL Lo an asserLlon LhaL Lhe facL does
noL exlsL ln Lhe followlng cases only
a Where he knows LhaL dlsclosure of Lhe facL ls necessary Lo prevenL some prevlous
asserLlon from belng a mlsrepresenLaLlon or from belng fraudulenL or maLerlal
b Where he knows LhaL dlsclosure of Lhe facL would correcL a mlsLake of Lhe oLher parLy
as Lo a baslc assumpLlon on whlch LhaL parLy ls maklng Lhe conLracL and lf non
dlsclosure of LhaL facL amounLs Lo a fallure Lo acL ln good falLh and ln accordance wlLh
reasonable sLandards of falr deallngs
c Where he knows LhaL dlsclosure of Lhe facL would correcL a mlsLake of Lhe oLher parLy
as Lo Lhe conLenLs or effecL of a wrlLlng evldenclng or embodylng an agreemenL ln
whole or ln parL
d Where Lhe oLher person ls enLlLled Lo know Lhe facL because of a relaLlon of LrusL and
confldence beLween Lhem
162 When a M|srepresentat|on |s Iraudu|ent or Mater|a|
1 A mlsrepresenLaLlon ls fraudulenL lf Lhe maker lnLends hls asserLlon Lo lnduce a parLy Lo
manlfesL hls assenL and Lhe maker
a knows or belleves LhaL Lhe asserLlon ls noL ln accord wlLh Lhe facLs
b uoes noL have Lhe confldence LhaL Lhe sLaLes or lmplles ln Lhe LruLh of Lhe asserLlon
c knows LhaL he does noL have Lhe basls LhaL he sLaLes or lmplles for Lhe asserLlon
2 A mlsrepresenLaLlon ls maLerlal lf lL would be llkely Lo lnduce a reasonable person Lo manlfesL
hls assenL or lf Lhe maker knows LhaL lL would be llkely Lo lnduce LhaL reclplenL Lo do so
163 When a M|srepresentat|on revents Iormat|on of a Contract
lf a mlsrepresenLaLlon as Lo Lhe characLer or essenLlal Lerms of a proposed conLracL lnduces
conducL LhaL appears Lo be a manlfesLaLlon of assenL by one who nelLher knows nor has reasonable
opporLunlLy Lo know of Lhe characLer or essenLlal Lerms of Lhe proposed conLracL hls conducL ls noL
effecLlve as a manlfesLaLlon assenL
164 When a M|srepresentat|on Makes a Contract Vo|da|e
1 lf a parLy's manlfesLaLlon of assenL ls lnduced by elLher a fraudulenL or a maLerlal
mlsrepresenLaLlon by Lhe oLher parLy upon whlch Lhe reclplenL ls [usLlfled ln relylng Lhe conLracL
ls voldable by Lhe reclplenL
2 lf a parLy's manlfesLaLlon of assenL ls lnduced by elLher a fraudulenL or a maLerlal
mlsrepresenLaLlon by one who ls noL a parLy Lo Lhe LransacLlon upon whlch Lhe reclplenL ls
[usLlfled ln relylng Lhe conLracL ls voldable by Lhe reclplenL unless Lhe oLher parLy Lo Lhe
LransacLlon ln good falLh and wlLhouL reason Lo know of Lhe mlsrepresenLaLlon elLher glves
value or relles maLerlally Lo Lhe LransacLlon

SwlnLon v WhlLlnsvllle Sav 8ank
sues Lo avold hls conLracL for buylng a house because u falled Lo reveal (concealed) LhaL lL was lnfesLed
by LermlLes
O k valld (noL avolded)
O u dldn'L lle or mlsrep under no flduclary duLy Lo reveal
O 8uL see 161 for argumenLs for/agalnsL
kannavos v Annlno
u had been uslng a house as an 8person aparLmenL and adverLlsed lL as such even Lhough lL was ln a
slnglefamlly resldenLlal area boughL and sues Lo resclnd under fraudulenL mlsrep
O ConLracL volded due Lo fraudulenL mlsrep
O lf Lhey had remalned sllenL Lo lLs use u would have been ok
O 8y adverLlslng as 8person aparLmenL Lhey fraudulenLly lnduced a k

M|stake (808821) kest 1S11S4
lf one or boLh parLles make a goodfalLh mlsLake as Lo some maLerlal facL ln Lhe conLracL Lhe conLracL
can someLlmes be avoldable lf Lhe mlsLake ls severe enough lL can prevenL Lhe conLracL formaLlon
enLlrely Lesser mlsLakes can serve Lo allow a parLy Lo avold performance Lo prevenL ln[usLlce
O CourL usually looks aL wheLher Lhe parLy should have known
4 1reaLlng llmlLed knowledge as compleLe always makes you bearer of rlsk under 134(b)
O CourL also punlshes people who know LhaL Lhe oLher parLy ls mlsLaken and conLlnues anyway
(akln Lo vlolaLlon of good falLh)

1S1 M|stake Def|ned
O A mlsLake ls a bellef LhaL ls noL ln accord wlLh Lhe facLs
1S2 When M|stake of 8oth art|es Makes a Contract Vo|da|e
1 Where a mlsLake of boLh parLles aL Lhe Llme a conLracL was made as Lo a baslc assumpLlon on
whlch Lhe conLracL was made has a maLerlal effecL on Lhe agreed exchange of performances Lhe
conLracL ls voldable by Lhe adversely affecLed parLy unless he bears Lhe rlsk of Lhe mlsLake under
Lhe rule sLaLed ln 134
2 ln deLermlnlng wheLher Lhe mlsLake has a maLerlal effecL on Lhe agreed exchange of
performances accounL ls Laken of any rellef by way of reformaLlon resLlLuLlon or oLherwlse
1S3 When M|stake of Cne arty Makes a Contract Vo|da|e
Where a mlsLake of one parLy aL Lhe Llme a conLracL was made as Lo a baslc assumpLlon on
whlch he made Lhe conLracL has a maLerlal effecL on Lhe agreed exchange of performances LhaL ls
adverse Lo hlm Lhe conLracL ls voldable by hlm lf he does noL bear Lhe rlsk of Lhe mlsLake under Lhe rule
sLaLed ln 134 Anu
a 1he effecL of Lhe mlsLake ls such LhaL enforcemenL of Lhe conLracL would be
unconsclonable or
b 1he oLher parLy had reason Lo know of Lhe mlsLake or hls faulL caused Lhe mlsLake
1S4 When a arty 8ears the k|sk of a M|stake
A parLy bears Lhe rlsk of a mlsLake when
a 1he rlsk ls allocaLed Lo hlm by agreemenL of Lhe parLles or
b e ls aware aL Lhe Llme of Lhe conLracL LhaL he has only llmlLed knowledge wlLh respecL Lo Lhe
facLs Lo whlch Lhe mlsLake relaLes buL LreaLs hls llmlLed knowledge as sufflclenL or
c 1he rlsk ls allocaLed Lo hlm by Lhe courL on Lhe ground LhaL lL ls reasonable ln Lhe clrcumsLances
Lo do so

SLees v Leonard
u agreed Lo consLrucL a Lower on 's land buL lL kepL collapslng afLer 3 sLorles because land was
unsLable
O u sLlll llable for nonperformance
O under old rules very hard Lo geL ouL of k on mlsLake
O ConLracLor assumed rlsk by acLlng as lf he knew Lhe naLure of Lhe land when he dld noL
8enner v kehl
boughL land Lo grow [o[oba (wLf?) and boLh parLles LhoughL Lhe land would supporL Lhls wlLh enough
waLer couldn'L flnd waLer and sues Lo resclnd k
O k resclnded
O lnnocenL mlsLake by boLh parLles of maLerlal facL
O !usLlce requlres resclsslon here deal never would have happened lf Lhey knew naLure of land
Wood v 8oynLon
ulamond ln Lhe rough case Woman sold dlamond for $1 Lhlnklng lL was Lopaz
O MlsLake dld noL vold k she should have lnvesLlgaLed

Sherwood v Walker
regnanL Cow case
O Seller allowed Lo recover because he had done hls due dlllgence and was sLlll wrong

Unconsc|ona|||ty (4S3489 494S09) kest 208 211 UCC 2302
1he courLs have recognlzed LhaL ln cerLaln cases even where parLles of full capaclLy LhaL were noL
coerced Lhe Lerms are so unfalr LhaL Lhe conLracL cannoL sLand Such conLracLs are Lermed
unconsclonable 1hls deLermlnaLlon ls very ad hoc and can vary by case arLles LhaL are less educaLed
and have less power are more llkely Lo be proLecLed
O unconsclonable conLracLs look aL Lhe subsLance of Lhe deal noL aL Lhe parLles
O Look aL Lhe Lerms A1 1L 1lML Cl k lC8MA1lCn noL ln hlndslghL (1uckwlller)
1erms LhaL are hlghly dlsproporLlonaLe can vold a conLracL lf Lhey are
1 unfalr ( 208/Mcklnnon)
a usually on speclflc performance (equlLy courLs)
b Looks aL relaLlve value of Lerms
2 unconsclonable ( 208)
a Modern Lerm for unfalrness
b rocedural unconsclonablllLy
l unfalrness ln process (educaLlon of parLles and such)
c SubsLanLlve unconsclonablllLy
l Look aL how unfalr Lhe Lerms are
3 ubllc ollcy (8lack lndusLrles v 8ush)
a noL usually golng Lo lead Lo unconsclonablllLy
4 Adheslon ConLracLs ( 211)
a SLandardlzed agreemenLs can glve larger buslnesses leverage over oLhers
b Cenerally enforceable unless conLrary Lo clearly esLabllshed publlc pollcy
c lf person dldn'L know of some Lerm and wouldn'L have made Lhe deal lf Lhey had LhaL
Lerm ls lefL ouL ( 211(3) and see Wllllam v Walker1homas below)

208 Unconsc|ona|e Contract or 1erm
lf a conLracL or Lerm Lhereof ls unconsclonable aL Lhe Llme Lhe conLracL ls made a courL may
refuse Lo enforce Lhe conLracL or may enforce Lhe remalnder of Lhe conLracL wlLhouL Lhe
unconsclonable Lerm or may so llmlL Lhe appllcaLlon of any unconsclonable Lerm as Lo avold any
unconsclonable resulL
211 Standard|zed Agreements
1 LxcepL as sLaLed ln subsecLlon (3) where a parLy Lo an agreemenL slgns or oLherwlse manlfesLs
assenL Lo a wrlLlng and has reason Lo belleve LhaL llke wrlLlngs are regularly used Lo embody
Lerms of agreemenLs of Lhe same Lype he adopLs Lhe wrlLlng as an lnLegraLed agreemenL wlLh
respecL Lo Lhe Lerms lncluded ln Lhe wrlLlng
2 Such a wrlLlng ls lnLerpreLed wherever reasonable as LreaLlng allke all Lhose slmllarly slLuaLed
wlLhouL regard Lo Lhelr knowledge or undersLandlng of Lhe sLandard Lerms of Lhe wrlLlng
3 Where Lhe oLher parLy has reason Lo belleve LhaL Lhe parLy manlfesLlng such assenL would noL
do so lf he knew LhaL Lhe wrlLlng conLalned a parLlcular Lerm Lhe Lerm ls noL parL of Lhe
agreemenL
UCC 2302 Unconsc|ona|e Contract or C|ause
1 lf Lhe courL as a maLLer of law flnds Lhe conLracL or any clause of Lhe conLracL Lo have been
unconsclonable aL Lhe Llme lL was made Lhe courL may refuse Lo enforce Lhe conLracL or lL may
enforce Lhe remalnder of Lhe conLracL wlLhouL Lhe unconsclonable clause or lL may so llmlL Lhe
appllcaLlon of any unconsclonable clause as Lo avold any unconsclonable resulL
2 When lL ls clalmed or appears Lo Lhe courL LhaL Lhe conLracL or any clause Lhereof may be
unconsclonable Lhe parLles shall be afforded a reasonable opporLunlLy Lo presenL evldence as Lo
lLs commerclal seLLlng purpose and effecL Lo ald Lhe courL ln maklng Lhe deLermlnaLlon

Mcklnnon v 8enedlcL
loaned u $3k lnLeresL free Lo buy properLy lf u promlsed noL Lo cuL down Lrees any closer Lo 's
properLy 1he lnLeresL on Lhe loan was worLh $140 and Lhe loss of properLy value was $30k
O ConLracL avolded as unfalr
O 1he Lerms were so dlsproporLlonaLe LhaL courL found no conslderaLlon (usually separaLe
concern)
4 8uL see 79 lf bargaln/conslderaLlon don'L look aL Lerms
O Also was a lawyer and had more bargalnlng knowledge/power (coerclon?)
1uckwlller v 1uckwlller
Cld AunL agrees Lo wlll farm Lo her nlece lf she wlll Lake care of her for Lhe resL of her llfe AunL dles
weeks laLer
O k valld
O 1erms were falr aL Llme could have been years of care
O Cnly look aL Lerms A1 1L 1lML Cl lC8MA1lCn
8lack lndusLrles lnc v 8ush
8ush boughL parLs from 8lack and resold Lhem aL hlgh proflL Lo Lhe uS CovernmenL 8lack clalms
unconsclonablllLy as Lerms are unfalr Lo Lhe publlc who wlll bear cosLs of proflL margln (publlc pollcy)
O k valld
O CovernmenL can Lake care of lLself

C'Callaghan v Waller 8eckwlLh 8ealLy Co
Woman was ln[ured when she sllpped and fell ln u's aparLmenL complex She was barred from recovery
due Lo exculpaLory clause ln lease agreemenL
O k upheld no sulL for negllgence
O LxculpaLory clauses valld unless conLrary Lo seLLled SLaLe publlc pollcy
Carnlval Crulse Llnes lnc v ShuLe
1lckeLs conLalned forum selecLlon clause LhaL any sulL broughL agalnsL Carnlval had Lo be ln lL (lLs
headquarLers) sued ln CA and soughL Lo have Lhls declared unconsclonable
O lorum selecLlon upheld so long as lL lsn'L unfalr
O Can'L be done Lo dlscourage sulLs noL Lhe case because LhaL ls reasonable locaLlon
Wllllams v Walker1homas lurnlLure Co
buys sLuff from a renLLoown place and clause ln adheslon conLracL makes Lhem pay off every blL of
every purchase or Lhe sLore can repo all of lL had pald $1400 of $1800 and u repo'd all of lL
O 1he full paymenL clause lf unconsclonable and wlll be removed as per 211(3)
O as elemenLs of subsLanLlve (unequal value) and procedural (parLles on dlfferenL levels)
unconsclonablllLy
!ones v SLar CredlL Corp
(welfare reclplenL) ked Lo buy freezer for over $1400 (afLer Lax/lnLeresL) LhaL was only worLh $300
O lnvalld as unconsclonable (u llmlLed Lo amounL already recelved)
O 1hls has elemenLs of procedural/subsLanLlve unconsclonablllLy as well

u||c o||cy (S43S68 S71S82) kest 178 184 186188
unconsclonablllLy ln general proLecLs a weaker parLy from belng Laken advanLage of ln deals ubllc
pollcy seeks Lo proLecL Lhe publlc ln general and can lnvalldaLe a conLracL regardless of whlch parLy ls
adversely affecLed
ubllc pollcy lnvalldaLes ks ln several slLuaLlons
1 ConLracLs LhaL vlolaLe speclflc laws (llke express preempLlon)
a See 178
b LxamplehlL conLracL or sale of drugs
2 ConLracLs LhaL seem Lo go agalnsL leglslaLlve lnLenL (llke lmplled preempLlon)
a See 178
b Look aL leglslaLlve hlsLory and how relaLed k ls Lo conLrary laws
c Also see how much voldlng k would furLher pollcy
3 ConLracLs LhaL unfalrly resLrlcL Lrade Lo publlc's deLrlmenL
a See 186188
b Ialld lf lL meeLs 3 crlLerla (See opper)
l ls no greaLer Lhan necessary Lo proLecL Lhe employer
ll does noL lmpose undue hardshlp on Lhe employee and
lll ls noL ln[urlous Lo Lhe publlc
c Can'L flre employees for followlng Lhe law (See SheeLs)
4 ConLracLs LhaL lmpalr famlly relaLlonshlps
a See 8aby M/Slmeone

178 When a 1erm Is Unenforcea|e on Grounds of u||c o||cy
1 A promlse or oLher Lerm of an agreemenL ls unenforceable on grounds of publlc pollcy lf
leglslaLlon provldes LhaL lL ls unenforceable or Lhe lnLeresL ln lLs enforcemenL ls clearly
ouLwelghed ln Lhe clrcumsLances by a publlc pollcy agalnsL Lhe enforcemenL of such Lerms
2 ln welghlng Lhe lnLeresL ln Lhe enforcemenL of a Lerm accounL ls Laken of
a 1he parLles' [usLlfled expecLaLlons
b Any forfelLure LhaL would resulL lf enforcemenL were denled
c Any speclal publlc lnLeresL ln Lhe enforcemenL of Lhe parLlcular Lerm
3 ln welghlng a publlc pollcy agalnsL enforcemenL of a Lerm accounL ls Laken of
a 1he sLrengLh of LhaL pollcy as manlfesLed by leglslaLlon or [udlclal declslons
b 1he llkellhood LhaL a refusal Lo enforce Lhe Lerm wlll furLher LhaL pollcy
c 1he serlousness of any mlsconducL lnvolved and Lhe exLenL Lo whlch lL was dellberaLe
d 1he dlrecLness of Lhe connecLlon beLween LhaL mlsconducL and Lhe Lerm
184When kest of Agreement |s enforcea|e
1 lf less Lhan all of an agreemenL ls unenforceable under Lhe rule sLaLed ln 178 a courL may
neverLheless enforce Lhe resL of Lhe agreemenL ln favor of a parLy who dld noL engage ln serlous
mlsconducL lf Lhe performance as Lo whlch Lhe agreemenL ls unenforceable ls noL an essenLlal
parL of Lhe agreed exchange
2 A courL may LreaL only parL of a Lerm an unenforceable under Lhe rule sLaLed ln Sub (1) lf Lhe
parLy who seeks Lo enforce Lhe Lerm obLalned lL ln good falLh and ln accordance wlLh reasonable
sLandards of falr deallngs
186rom|se |n kestra|nt of 1rade
1 A promlse ls unenforceable on grounds of publlc pollcy lf lL ls unreasonably ln resLralnL of Lrade
2 A promlse ls ln resLralnL of Lrade lf lLs performance would llmlL compeLlLlon ln any buslness or
resLrlcL Lhe promlsor ln Lhe exerclse of a galnful occupaLlon
187NonAnc|||ary kestra|nts on Compet|t|on
A romlse Lo refraln from compeLlLlon LhaL lmposes a resLralnL LhaL ls noL anclllary Lo an
oLherwlse valld LransacLlon or relaLlonshlp ls unreasonably ln resLralnL of Lrade
188Anc|||ary kestra|nts on Compet|t|on
1 A promlse Lo refraln from compeLlLlon LhaL lmposes a resLralnL LhaL ls anclllary Lo an oLherwlse
valld LransacLlon or relaLlonshlp ls unreasonably ln resLralnL of Lrade lf
a 1he resLralnL ls greaLer Lhan ls needed Lo proLecL Lhe promlsee's leglLlmaLe lnLeresL or
b 1he promlsee's need ls ouLwelghed by Lhe hardshlp Lo Lhe promlsor and Lhe llkely ln[ury
Lo Lhe publlc
2 romlses lmposlng resLralnLs LhaL are anclllary Lo a valld LransacLlon or relaLlonshlp lnclude Lhe
followlng
a A promlse by Lhe seller of a buslness noL Lo compeLe wlLh Lhe buyer ln such a way as Lo
ln[ure Lhe value of Lhe buslness sold
b A promlse by an employee or oLher agenL noL Lo compeLe wlLh hls employer or oLher
prlnclpal
c A promlse by a parLner noL Lo compeLe wlLh Lhe parLnershlp

8ovard v Amerlcan orse LnLerprlses lnc
ConLracL Lo buy a head shop LhaL would sell paraphernalla
O CourL lnvalldaLed k on publlc pollcy
O 8uyer should have known LhaL shop would be shuL down anyway
O ubllc lnLeresL ln keeplng lllegal drugs ouL ouLwelghs lnLeresL ln ownlng shop
xLC ConcreLe Corp v 8lvergaLe Corp
SubconLracLor goL deal aL hlgh prlce because member of a mafla club Subs dld work and Lhen
ConLracLor refused Lo pay full prlce (goL abouL $13M of $16M)
O k ls valld
O 1here are oLher remedles (anLlLrusL laws) LhaL wlll prevenL Lhls behavlor
O LqulLy requlres enforclng k ln Lhls case
opper v All eL Anlmal Cllnlc
IeL slgns noncompeLe LhaL won'L leL her pracLlce small anlmal medlclne wlLhln 3 mlles for 3 years She
breaches and sLeals llke 130 of 's cllenLs
O lnvalld because 3 years ls Loo long deLrlmenLal Lo publlc
O CourL llmlLs noncompeLe Lo 1 year buL upholds oLher Lerms
SheeLs v 1eddy's lrosLed loods
Lold lLs employer LhaL Lhey were vlolaLlng healLh codes and he was flred
O Company musL pay damages
O Can'L force employee Lo choose beLween [ob securlLy and publlc safeLy
O ubllc beneflL sLrongly ouLwelghs managerlal dlscreLlon
Slmeone v Slmeone
Woman slgned prenup llmlLlng her recovery Lo $23k ln case of dlvorce on weddlng eve
O Ialld
O LeL people declde Lhelr own marlLal relaLlonshlps
O Allowlng such ks would noL hurL publlc ln general
ln Lhe MaLLer of 8A8? M
ConLracL would pay surrogaLe moLher $10k Lo have baby for Lhem and moLher refused Lo hand lL over
O lnvalld k because publlc pollcy ls Lo have adopLlon ln chlld's besL lnLeresLs
O Maybe would be ok lf surrogacy was opLlonal and noL Lo hlghesL bldder

Statutes of Irauds (2S7269 297300 30S309) kest 131139 UCC 2201
ConLracL law allows for conLracL formaLlon Lo be verbal or wrlLLen (alLhough verbal can someLlmes be
dlfflculL Lo prove) CerLaln Lypes of conLracLs are valuable or lmporLanL enough Lhough LhaL Lhey can
only be creaLed ln wrlLlng (or eslgned under Lhe uL1A) arL of Lhe raLlonale ls LhaL we wanL wrlLLen
evldence so people don'L forgeL Lhe Lerms of a verbal conLracL Also lL's easler for Lhe courLs Lo
ad[udlcaLe wrlLLen conLracLs because you can see Lhe exacL language llnally slgnlng a wrlLLen
documenL adds welghL Lo Lhe declslon and makes people conslder more before maklng a blg declslon
1hese sLaLuLes of frauds are governed by Lhe SLaLes and may vary buL 4 common classes are
1 AgreemenLs requlrlng more Lhan a year for full performance
2 AgreemenLs requlrlng Lhe Lransfer of an lnLeresL ln real properLy
3 CerLaln saleofgoods agreemenLs (usually over a cerLaln prlce)
4 SureLyshlp agreemenLs
When a SLaLuLes of lrauds conLracL ls lnvalldaLed as unslgned a verbal agreemenL may sLlll be
enforceable for rellance damage lf Lhe parLy relled on LhaL Lo Lhelr deLrlmenL and Lhe resulL of
lnvalldaLlng Lhe verbal k would be unconsclonable ( 139)
uCC 2201 (below) requlres LhaL any sale of goods greaLer Lhan $300 musL be ln wrlLlng Lo be valld and
requlres
1 Lvldence of a conLracL for Lhe sale of goods
2 MusL be slgned (any auLhenLlcaLlon)
3 MusL speclfy quanLlLy

131 Genera| kequ|s|tes of a Memorandum
unless addlLlonal requlremenLs are prescrlbed by Lhe parLlcular sLaLuLe a conLracL wlLhln Lhe
SLaLuLe of lrauds ls enforceable lf lL ls evldenced by any wrlLlng slgned by or on behalf of Lhe parLy Lo be
charged whlch
a 8easonably ldenLlfles Lhe sub[ecL maLLer of Lhe conLracL
b ls sufflclenL Lo lndlcaLe LhaL a conLracL wlLh respecL LhereLo has been made beLween Lhe parLles
or offered by Lhe slgner Lo Lhe oLher parLy and
c SLaLes wlLh reasonable cerLalnLy Lhe essenLlal Lerms of Lhe unperformed promlses ln Lhe
conLracL
132 Severa| Wr|t|ngs
1he memo may conslsL of several wrlLlngs lf one of Lhe wrlLlngs ls slgned and Lhe wrlLlngs ln Lhe
clrcumsLances clearly lndlcaLe LhaL Lhey relaLe Lo Lhe same LransacLlon
133 Memorandum Not Made as Such
LxcepL ln Lhe case of a wrlLlng evldenclng a conLracL upon conslderaLlon of marrlage Lhe SLaLuLe
may be saLlsfled by a slgned wrlLlng noL made as a memorandum of a conLracL
134 S|gnature
1he slgnaLure Lo a memo may be any symbol made or adopLed wlLh an lnLenLlon acLual or
apparenL Lo auLhenLlcaLe Lhe wrlLlng as LhaL of Lhe slgner
13S Who Must S|gn
Where a memo of a conLracL wlLhln Lhe SLaLuLe ls slgned by fewer Lhan all parLles Lo Lhe
conLracL and Lhe SLaLuLe ls noL oLherwlse saLlsfled Lhe conLracL ls enforceable agalnsL Lhe slgners buL
noL agalnsL Lhe oLhers
136 1|me of Memorandum
A memo sufflclenL Lo saLlsfy Lhe SLaLuLe may be made or slgned aL any Llme before or afLer Lhe
formaLlon of Lhe conLracL
137 Loss or Destruct|on of a Memorandum
1he loss or desLrucLlon of a memo does noL deprlve lL of effecL under Lhe SLaLuLe
138 Unenforcea|||ty
Where a conLracL wlLhln Lhe SLaLuLe of lrauds ls noL enforceable agalnsL Lhe parLy Lo be charged
by an acLlon agalnsL hlm lL ls noL enforceable by a seLoff or counLerclalm ln an acLlon broughL by hlm
or as a defense Lo a clalm by hlm
139 Lnforcement y V|rtue of Act|on |n ke||ance
parL of Lhe promlsee or a Lhlrd person and whlch does lnduce Lhe acLlon or forbearance ls
enforceable noLwlLhsLandlng Lhe SLaLuLe of lrauds lf ln[usLlce can be avolded only by
enforcemenL of Lhe promlse 1he remedy granLed for breach ls Lo be llmlLed as [usLlce requlres
2 ln deLermlnlng wheLher ln[usLlce can be avolded only by enforcemenL of Lhe promlse Lhe
followlng clrcumsLances are slgnlflcanL
a AvallablllLy and adequacy of oLher remedles parLlcularly cancellaLlon and resLlLuLlon
b 1he deflnlLe and subsLanLlal characLer of Lhe acLlon or forbearance ln relaLlon Lo Lhe
remedy soughL
c 1he exLenL Lo whlch Lhe acLlon or forbearance corroboraLes evldence of Lhe maklng and
Lerms of Lhe promlse or Lhe maklng and Lerms are oLherwlse esLabllshed by clear and
convlnclng evldence
d 1he reasonableness of Lhe acLlon or forbearance
e 1he exLenL Lo whlch Lhe acLlon or forbearance was foreseeable
UCC 2201 Iorma| kequ|rements Statute of Irauds
1 LxcepL as oLherwlse provlded ln Lhls secLlon a conLracL for Lhe sale of goods for Lhe prlce of $300
or more ls noL enforceable by way of acLlon or defense unless Lhere ls some wrlLlng sufflclenL Lo
lndlcaLe LhaL a conLracL for sale has been made beLween Lhe parLles and slgned by Lhe parLy
agalnsL whom enforcemenL ls soughL or by hls auLhorlzed agenL or broker A wrlLlng ls noL
lnsufflclenL because lL omlLs or lncorrecLly sLaLes a Lerm agreed upon buL Lhe conLracL ls noL
enforceable under Lhls paragraph beyond Lhe quanLlLy of goods shown ln such wrlLlng
2 8eLween merchanLs wlLhln a reasonable Llme a wrlLlng ln conflrmaLlon of Lhe conLracL and
sufflclenL agalnsL Lhe sender ls recelved and Lhe parLy recelvlng lL has reason Lo know lLs
conLenLs lL saLlsfles Lhe requlremenL of subsecLlon (1) agalnsL such parLy unless wrlLLen noLlce
of ob[ecLlon Lo lLs conLenLs ls glven wlLhln Len days afLer lL ls recelved
3 A conLracL whlch does noL saLlsfy Lhe requlremenLs of subsecLlon (1) buL whlch ls valld ln oLher
respecLs ls enforceable
a lf Lhe goods are Lo be speclally manufacLured for Lhe buyer and are noL sulLable for sale
Lo oLhers ln Lhe ordlnary course of Lhe seller's buslness and Lhe seller before noLlce of
repudlaLlon ls recelved and under clrcumsLances whlch reasonably lndlcaLe LhaL Lhe
goods are for Lhe buyer has made elLher a subsLanLlal beglnnlng of Lhelr manufacLure
or commlLmenLs for Lhelr procuremenL or
b lf Lhe parLy agalnsL whom enforcemenL ls soughL admlLs ln hls pleadlng LesLlmony or
oLherwlse ln courL LhaL a conLracL for sale was made buL Lhe conLracL ls noL enforceable
under Lhls provlslon beyond Lhe quanLlfy of goods admlLLed or
c WlLh respecL Lo goods for whlch paymenL has been made and accepLed or whlch have
been recelved and accepLed (See 2606)

Langman v Alumnl AssoclaLlon of Lhe unlverslLy of Ilrglnla
u lefL an lndebLed arcade Lo Lhe unlverslLy LhaL removed all paymenL obllgaLlons from u unlverslLy
never slgned anyLhlng [usL agreed Lo accepL Lhe arcade and sues Lo have lL resclnded
O CourL holds k blndlng
O noL a sureLyshlp under IA law because Lhey assumed full LlLle
O AlLhough shouldn'L Lhey need a slgnaLure for real properLy?
Monarco v Lo Creco
MoLher promlsed land Lo son lf he sLayed and helped on Lhe farm (glvlng up fuLure employmenL) buL
faLher gave half Lhe land Lo hls daughLer when he dled
O Lnforced under rellance even Lhough SLaLuLes of lrauds would lnvalldaLe k

CCN1kAC1 1LkMS
1he aro| Lv|dence ku|e (36S381) kest 209216 UCC 2202
When deLermlnlng Lhe Lerms of a conLracL courLs usually look aL Lhe Lerms used by Lhe parLles CfLen
Lhough Lhese Lerms are noL all wrlLLen down or are noL conLalned ln Lhe same documenL 1he arol
Lvldence 8ule funcLlons Lo enforce Lhe wrlLLen parLs of Lhe agreemenL (Lhe mosL recenL one parLlcularly)
agalnsL prlor or verbal agreemenLs 1erms of documenLs LhaL are lnconslsLenL wlLh Lhe mosL recenL
wrlLLen documenL wlll be dlsregarded buL Lerms conslsLenL wlLh LhaL documenL wlll be allowed lf Lhe
flnal wrlLLen documenL ls noL deemed compleLely lnLegraLed ( 216)
1he arol evldence rule excludes all oral (or less formal) agreemenLs LhaL are wlLhln Lhe scope of a
wrlLLen and lnLegraLed agreemenL WheLher a Lerm ls wlLhln Lhe scope ls deLermlned by (Clannl case)
1 Lhey relaLe Lo Lhe same sub[ecLmaLLer and
2 are so lnLerrelaLed LhaL boLh should be execuLed aL Lhe same Llme and ln Lhe same conLracL

209 Integrated Agreements
1 An lnLegraLed agreemenL ls a wrlLlng or wrlLlngs consLlLuLlng a flnal expresslon of one or more
Lerms of an agreemenL
2 WheLher Lhere ls an lnLegraLed agreemenL ls Lo be deLermlned by Lhe courL as a quesLlon
prellmlnary Lo deLermlnaLlon of a quesLlon of lnLerpreLaLlon or Lo appllcaLlon of Lhe parol
evldence rule
3 Where Lhe parLles reduce an agreemenL Lo a wrlLlng whlch ln vlew of lLs compleLeness and
speclflclLy reasonably appears Lo be a compleLe agreemenL lL ls Laken Lo be an lnLegraLed
agreemenL unless lL ls esLabllshed by oLher evldence LhaL Lhe wrlLlng dld noL consLlLuLe a flnal
expresslon
210 Comp|ete|y and art|a||y Integrated Agreements
1 A compleLely lnLegraLed agreemenL ls an lnLegraLed agreemenL adopLed by Lhe parLles as a
compleLe and excluslve sLaLemenL of Lhe Lerms of Lhe agreemenL
2 A parLlally lnLegraLed agreemenL ls an lnLegraLed agreemenL oLher Lhan a compleLely lnLegraLed
agreemenL
3 WheLher an agreemenL ls compleLely or parLlally lnLegraLed ls Lo be deLermlned by Lhe courL as
a quesLlon prellmlnary Lo deLermlnaLlon of a quesLlon of lnLerpreLaLlon or Lo appllcaLlon of Lhe
parol evldence rule
211 Standard|zed Agreements
1 LxcepL as sLaLed ln Sub (3) where a parLy Lo an agreemenL slgns or oLherwlse manlfesLs assenL
Lo a wrlLlng and has reason Lo belleve LhaL llke wrlLlngs are regularly used Lo embody Lerms of
agreemenLs of Lhe same Lype he adopLs Lhe wrlLlng as an lnLegraLed agreemenL wlLh respecL Lo
Lhe Lerms lncluded ln Lhe wrlLlng
2 Such a wrlLlng ls lnLerpreLed wherever reasonable as LreaLlng allke all Lhose slmllarly slLuaLed
wlLhouL regard Lo Lhelr knowledge or undersLandlng of Lhe sLandard Lerms of Lhe wrlLlng
3 Where Lhe oLher parLy has reason Lo belleve LhaL Lhe parLy manlfesLlng such assenL would noL
do so lf he knew LhaL Lhe wrlLlng conLalned a parLlcular Lerm Lhe Lerm ls noL parL of Lhe
agreemenL
212 Interpretat|on of Integrated Agreements
1 1he lnLerpreLaLlon of an lnLegraLed agreemenL ls dlrecLed Lo Lhe meanlng of Lhe Lerms of Lhe
wrlLlng or wrlLlngs ln Lhe llghL of Lhe clrcumsLances ln accordance wlLh Lhe rules sLaLed here
2 A quesLlon of lnLerpreLaLlon of an lnLegraLed agreemenL ls Lo be deLermlned by Lhe Lrler of facL
lf lL depends on Lhe credlblllLy of exLrlnslc evldence or on a cholce among reasonable lnferences
Lo be drawn from exLrlnslc evldence CLherwlse a quesLlon of lnLerpreLaLlon of an lnLegraLed
agreemenL ls Lo be deLermlned as a quesLlon of law
213 Lffect of Integrated Agreement on r|or Agreements (aro| Lv|dence ku|e)
1 A blndlng lnLegraLed agreemenL dlscharges prlor agreemenLs Lo Lhe exLenL LhaL lL ls lnconslsLenL
wlLh Lhem
2 A blndlng compleLely lnLegraLed agreemenL dlscharges prlor agreemenLs Lo Lhe exLenL LhaL Lhey
are wlLhln lLs scope
3 An lnLegraLed agreemenL LhaL ls noL blndlng or LhaL ls voldable and avolded does noL dlscharge a
prlor agreemenL 8uL an lnLegraLed agreemenL even Lhough noL blndlng may be effecLlve Lo
render lnoperaLlve a Lerm whlch would have been parL of Lhe agreemenL lf lL had noL been
lnLegraLed
214 Lv|dence of r|or or Contemporaneous Agreements and Negot|at|ons
AgreemenLs and negoLlaLlons prlor Lo or conLemporaneous wlLh Lhe adopLlon of a wrlLlng are
admlsslble ln evldence Lo esLabllsh
a 1haL Lhe wrlLlng ls or ls noL an lnLegraLed agreemenL
b 1haL Lhe lnLegraLed agreemenL lf any ls compleLely or parLlally lnLegraLed
c 1he meanlng of Lhe wrlLlng wheLher or noL lnLegraLed
d lllegallLy fraud duress mlsLake lack of conslderaLlon or oLher lnvalldaLlng cause
e Cround for granLlng or denylng resclsslon reformaLlon speclflc performance or oLher remedy
21S Contrad|ct|on of Integrated 1erms
LxcepL as sLaLed ln Lhe precedlng SecLlon where Lhere ls a blndlng agreemenL elLher compleLely
or parLlally lnLegraLed evldence of prlor or conLemporaneous agreemenLs or negoLlaLlons ls noL
admlsslble ln evldence Lo conLradlcL a Lerm of Lhe wrlLlng
216 Cons|stent Add|t|ona| 1erms
1 Lvldence of a conslsLenL addlLlonal Lerm ls admlsslble Lo supplemenL an lnLegraLed agreemenL
unless Lhe courL flnds LhaL Lhe agreemenL was compleLely lnLegraLed
2 An agreemenL ls noL compleLely lnLegraLed lf Lhe wrlLlng omlLs a conslsLenL addlLlonal agreed
Lerm whlch ls
a Agreed Lo for separaLe conslderaLlon or
b Such a Lerm as ln Lhe clrcumsLances mlghL naLurally be omlLLed from Lhe wrlLlng
UCC 2202 I|na| Wr|tten Lxpress|on aro| or Lxtr|ns|c Lv|dence
1erms wlLh respecL Lo whlch Lhe conflrmaLory memoranda of Lhe parLles agree or whlch are
oLherwlse seL forLh ln a wrlLlng lnLended by Lhe parLles as a flnal expresslon of Lhelr agreemenL wlLh
respecL Lo such Lerms as are lncluded Lhereln may noL be conLradlcLed by evldence of any prlor
agreemenL or of a conLemporaneous oral agreemenL buL may be explalned or supplemenLed
a 8y course of deallng or usage of Lrade (uCC 1203) or by course of performance (uCC 2208)
b 8y evldence of conslsLenL addlLlonal Lerms unless Lhe courL flnds Lhe wrlLlng Lo have been
lnLended also as a compleLe and excluslve sLaLemenL of Lhe Lerms of Lhe agreemenL

Clannl v 8 8ussell Co
owned a kwlkshop and slgned a new renL agreemenL wlLh landlord where he agreed Lo pay hlgher
renL and also noL sell Lobacco clalms LhaL Lhere was a verbal agreemenL LhaL he would have excluslve
soda selllng rlghLs ln Lhe bulldlng
O Ierbal agreemenL excluded under parol evldence rule
O WrlLLen k conLalns Lerms of whaL could be sold so Lhe soda agreemenL ls wlLhln scope
MasLerson v Slne
granLed hls ranch Lo hls slsLer wlLh an opLlon allowlng hlm Lo rebuy lL wlLhln 2 years 1he CourL
allowed some parol evldence buL noL a verbal agreemenL Lo keep land ln Lhe famlly
O 1hls parol evldence should have been allowed
O 1he agreemenL here was noL fully lnLegraLed as Lhe courL found by allowlng oLher evldence

Interpretat|on (38186 39S96 398409 42124 43034) kest 20 200204
lnLerpreLaLlon ls a huge parL of conLracL law because Lhe Lngllsh language can be amblguous and leads
Lo dlspuLes beLween parLles abouL whaL Lhe conLracL acLually means 1he CourL's [ob ls Lo accuraLely
deLermlne Lhe parLles' lnLenL and Lo uphold a conLracL LhaL saLlsfles LhaL lnLenL
1o deal wlLh Lhls courLs have adopLed a 2prong approach ( 202)
1 1he [udge deLermlnes wheLher Lhe language ln Lhe wrlLLen agreemenL wlLh respecL Lo Lhe
dlspuLe admlLs of only one plauslble meanlng (ls clear) or ls amblguous
a lf Lhe language ls clear" exLrlnslc (parol) evldence wlll noL be admlLLed Lo ald
lnLerpreLaLlon
b lf Clear language ls maLLer of law for [udge Lo declde
2 1he courL deLermlnes Lhe meanlng of Lhe conLracL language
a lf language ln sLage (1) was amblguous exLrlnslc evldence wlll be allowed Lo help
deLermlne Lhe meanlng of Lhe language
b ulfferenL Lypes of exLrlnslc evldence wlll be consldered ln deLermlnlng Lhe parLles'
lnLenL
A Lxpress Lerms Course of performance Course of ueallngs usage of Lrade
urafLlng racLlce Iagueness vs AmblgulLy
O Iagueness can be favorable and leaves a Lerm open for negoLlaLlon/flucLuaLlon
O AmblgulLy ls slmply bad drafLlng and allows a phrase Lo mean more Lhan one Lhlng legally
Cap lllllng (lMLlCA1lCn)
SomeLlmes parLles wlll compleLely omlL cerLaln Lerms essenLlal Lo Lhe conLracL (rlce eLc) ln such
slLuaLlons Lhe courL wlll provlde reasonable Lerms Lo compleLe Lhe deal 1erms LhaL permlL Lhe conLracL
Lo be valld are generally preferred 1hls ls called lmpllcaLlon 1he courL wlll rely on ( 203204)
1 arLles LxpecLaLlons
a lf Lhere ls muLual agreemenL parLles lnLenLlons are glven effecL
2 lf no agreemenL of expecLaLlon !udge wlll supply hls own Lerms and can use
a 1he bargaln Lhe parLles llkely would have made"
l LeLs Lhe [udge sLep ln and deLermlne whaL should have been agreed on
b 1erms a reasonable man would have made" ( 204)
l 1hls has recenLly been augmenLed by a focus on law and economlcs
c enalLy uefaulL 8ule
l Clves one parLy an lncenLlve Lo conLracL around Lhe defaulL rule and choose
afflrmaLlvely whaL Lhey wanL
Some conLracLual gaps are so common LhaL Lhey have been remedled by sLaLuLe 1hls occurs mosL
frequenLly ln Lhe uCC (ArLlcle 2) perLalnlng Lo producL quallLy 1hls changed Lhe old common law from
buyer beware" Lo a new sysLem wlLh an lmplled warranLy of merchanLablllLy
O lmplled WarranLy of merchanLablllLy uCC 2314
4 lf seller ls a merchanL of goods of LhaL klnd Lhls applles
4 See 2314(2) for deflnlLlon of MerchanLable"
O lmplled warranLy of flLness for parLlcular purpose uCC 2313
O uCC 2316 CreaLes rules for denylng Lhe lmplled warranLy of merchanLablllLy
4 As ls" rule
!uS1 8LAu 1lS l1'S luCklnC LCnC (uCC 2314316)

20 Lffect of M|sunderstand|ng
1 1here ls no manlfesLaLlon of muLual assenL Lo an exchange lf Lhe parLles aLLach maLerlally
dlfferenL meanlngs Lo Lhelr manlfesLaLlons and
a nelLher parLy knows or has reason Lo know Lhe meanlng aLLached by Lhe oLher or
b Lach parLy knows or each parLy has reason Lo know Lhe meanlng aLLached by Lhe oLher
2 1he manlfesLaLlons of Lhe parLles are operaLlve ln accordance wlLh Lhe meanlng aLLached Lo
Lhem by one parLy lf
a 1haL parLy does noL know of any dlfferenL meanlng aLLached by Lhe oLher and Lhe oLher
knows Lhe meanlng aLLached by Lhe flrsL parLy or
b 1haL parLy has no reason Lo know of any dlfferenL meanlng aLLached by Lhe oLher and
Lhe oLher has reason Lo know Lhe meanlng aLLached by Lhe flrsL parLy
200 Interpretat|on of rom|se or Agreement
lnLerpreLaLlon of a promlse or agreemenL or a Lerm Lhereof ls Lhe ascerLalnmenL of lLs meanlng
201 Whose mean|ng preva||s
1 Where Lhe parLles have aLLached Lhe same meanlng Lo a promlse or agreemenL or a Lerm
Lhereof lL ls lnLerpreLed ln accordance wlLh LhaL meanlng
2 Where Lhe parLles have aLLached dlfferenL meanlng Lo a promlse or agreemenL or a Lerm
Lhereof lL ls lnLerpreLed ln accordance wlLh Lhe meanlng aLLached by one of Lhem lf aL Lhe Llme
Lhe agreemenL was made
a 1haL parLy dld noL know of any dlfferenL meanlng aLLached by Lhe oLher and Lhe oLher
knew Lhe meanlng aLLached by Lhe flrsL or
b 1haL parLy had no reason Lo know of any dlfferenL meanlng aLLached by Lhe oLher and
Lhe oLher had reason Lo know Lhe meanlng aLLached by Lhe flrsL parLy
3 LxcepL as sLaLed ln Lhls SecLlon nelLher parLy ls bound by Lhe meanlng aLLached by Lhe oLher
even Lhough Lhe resulL may be a fallure of muLual assenL
202 ku|es |n A|d of Interpretat|on
1 Words and oLher conducL are lnLerpreLed ln Lhe llghL of all Lhe clrcumsLances and lf Lhe
prlnclpal purpose of Lhe parLles ls ascerLalnable lL ls glven greaL welghL
2 A wrlLlng ls lnLerpreLed as a whole and all wrlLlngs LhaL are parL of Lhe same LransacLlon are
lnLerpreLed LogeLher
3 unless a dlfferenL lnLenLlon ls manlfesLed
a Where language has a generally prevalllng meanlng lL ls lnLerpreLed ln accordance wlLh
LhaL meanlng
b 1echnlcal Lerms and words of arL are glven Lhelr Lechnlcal meanlng when used ln a
LransacLlon wlLhln Lhelr Lechnlcal fleld
4 Where an agreemenL lnvolves repeaLed occaslons for performance by elLher parLy wlLh
knowledge of Lhe naLure of Lhe performance and opporLunlLy for ob[ecLlon Lo lL by Lhe oLher
any course of performance accepLed or acqulesced ln wlLhouL ob[ecLlon ls glven greaL welghL ln
Lhe lnLerpreLaLlon of Lhe agreemenL
3 Wherever reasonable Lhe manlfesLaLlons of lnLenLlon of Lhe parLles Lo a promlse or agreemenL
are lnLerpreLed as conslsLenL wlLh each oLher and wlLh any relevanL course of performance
course of deallngs or usage of Lrade
203 Standards of reference |n Interpretat|on
ln Lhe lnLerpreLaLlon of a promlse or agreemenL or a Lerm Lhereof Lhe followlng sLandards of
preference are generally appllcable
a An lnLerpreLaLlon whlch glves a reasonable lawful and effecLlve meanlng Lo all Lhe
Lerms ls preferred Lo an lnLerpreLaLlon whlch leaves a parL unreasonable unlawful or of
no effecL
b Lxpress Lerms are glven greaLer welghL Lhan course of performance course of deallng
and usage of Lrade course of performance ls glven greaLer welghL Lhan course of
deallng or usage of Lrade and course of deallng ls glven greaLer welghL Lhan usage of
Lrade (Lxpress Lerms Course of performance Course of ueallngs usage of Lrade)
c Speclflc Lerms and exacL Lerms are glven greaLer welghL Lhan general language
d SeparaLely negoLlaLed or added Lerms are glven greaLer welghL Lhan sLandardlzed Lerms
or oLher Lerms noL separaLely negoLlaLed
204 Supp|y|ng an om|tted essent|a| term
When Lhe parLles Lo a bargaln sufflclenLly deflned Lo be a conLracL have noL agreed wlLh respecL
Lo a Lerm whlch ls essenLlal Lo a deLermlnaLlon of Lhelr rlghLs and duLles a Lerm whlch ls reasonable ln
Lhe clrcumsLances ls supplled by Lhe courL

aclflc Cas LlecLrlc Co v CW 1homas urayage 8lgglng Co
hlred u Lo work on a Lurblne wlLh language whereby u lndemnlfled from all damages 1hls usually
means Lo 3
rd
parLles (Lechnlcal usage) buL Lhe clear language seems Lo lnclude 's properLy as well
O LxLrlnslc evldence allowed Lo show alLernaLe meanlng
O Lven lf language seems clear evldence should be allowed Lo show an alLernaLe meanlng
lrlgallmenL lmporLlng Co v 8MS lnLernaLlonal Sales Corp
arLles conLracLed for chlcken" whlch could mean only hens or roosLers as well 1he prlce and oLher
deallngs lndlcaLed LhaL Lhe parLles meanL Lhe cheaper deflnlLlon
O CourL used Lhe cheaper deflnlLlon because lL seemed more llkely Lo be parLles' lnLenL
O LxLrlnslc evldence was used Lo deLermlne
4 arLles acLlons/lnLenLlons
4 1rade usage
4 MarkeL prlce
ursL v W! Lake Co
ConLracL Lo shlp horsemeaL wlLh prlces dependenL on wheLher each Lon was aL leasL 30 proLeln
Some shlpmenLs were only 497 horsemeaL and lndusLry sLandards showed LhaL 493 was good
O CourL used lndusLry sLandard Lo supply Lerm
O ln Lhls case lndusLry sLandard more lndlcaLlve of lnLenLlons Lhan plaln language
8affles v Wlchelhaus
arLles conLracLed Lo shlp coLLon on Lhe eerless (a shlp) 1here were 2 eerless shlps arrlvlng aL
dlfferenL Llmes and each parLy LhoughL a dlfferenL one
O CourL resclnds k enLlrely
O 1hls ls a case where Lhe dlfferenL meanlngs were so slgnlflcanL Lhey negaLed muLual assenL
(201(3))

Good Ia|th (4S1S2 S22 S2628 S3243) kest 20S UCC 1304
Lvery conLracL creaLes a duLy of good falLh on boLh parLles 1hls cannoL be drafLed around for any
reason because lL would be conLrary Lo our [usLlce sysLem (even more lmporLanL Lhan freedom of k)
1hls duLy ls lmposed on Lhe performance and enforcemenL (noL Lhe formaLlon) of Lhe conLracL
1he uCC deflnes Cood falLh as onesLy ln facL and Lhe observance of reasonable commerclal sLandards
of falr deallng" (uCC 1201(b)(20))
O lmporLanL because many lndusLrles have cerLaln sLandards LhaL de facLo deflne Lhls good falLh
clause (See LasLern Alrllnes)
4 lL dlsLrlbuLorshlps/franchlses are Lermlnable aL wlll unless Lhe oLher parLy has noL had
Llme Lo recoup lnvesLmenLs (Lockewllle below)

20S Duty of Good Ia|th and Ia|r Dea||ng
Lvery conLracL lmposes upon each parLy a duLy of good falLh and falr deallng ln lLs performance
and lLs enforcemenL
UCC 1304 C||gat|on of Good Ia|th
Lvery conLracL or duLy wlLh Lhe uCC lmposes an obllgaLlon of good falLh ln lLs performance and
enforcemenL
UCC 1201()(20) Def|n|t|on of Good Ia|th
Cood falLh" excepL as oLherwlse provlded ln ArLlcle 3 means honesLy ln facL and Lhe observance of
reasonable commerclal sLandards of falr deallngs
O noLe LhaL only 29 SLaLes adopLed Lhls new verslon of good falLh"
O 10 oLhers who had adopLed Lhe resL of Lhe uCC decllned Lhe commerclal sLandards clause

LasLern Alr Llnes lnc v Culf Cll CorporaLlon
Case from earller where prlces depended on 3
rd
parLy posLlng u was engaged ln fuel frelghLlng" and
clalms Lhls vlolaLed Lhe lmplled Lerm of good falLh
O noL vlolaLlon because parL of lndusLry sLandard ls Lo fuel frelghL
O uCC 201(b)(20) deflnes good falLh as parL of lndusLry sLandards
8loor v lalsLaff 8rewlng Corp
sold hls brewery for $4M and $030 per barrel royalLles wlLh a clause requlrlng goodfalLh efforL Lo
keep sales volume hlgh u baslcally sLopped markeLlng 's beer
O IlolaLlon of good falLh even Lhough Lhls would have been conLrary Lo u's buslness plan
O arL of Lhe sale prlce was Lhe royalLles predlcaLed on good falLh sales efforL
Lockewlll lnc v unlLed SLaLes Shoe Corp
enLered lnLo a deal Lo sell appaglo's shoes excluslvely ln SL Louls appaglo was boughL ouL and u
LermlnaLed 's dlsLrlbuLorshlp and allowed oLher merchanLs Lo sell Lhe shoes
O noL ln bad falLh
O Ceneral rule ls LhaL dlsLrlbuLorshlps are freely Lermlnable afLer parLy has had chance Lo recoup
losses
O Ample Llme for recoupmenL here

CCN1kAC1 LkICkMANCL
Lxpress Cond|t|ons (691716) kest 224230
CfLen Llmes parLles wlll expressly creaLe condlLlons LhaL musL be meL before one or boLh parLles owe
anoLher a duLy ln Lhese slLuaLlons lf Lhe condlLlon ls noL meL Lhe parLy whose duLy was condlLlonal wlll
have dlscharged hls duLy When Lhe condlLlon ls meL Lhe duLy becomes absoluLe
O A condlLlon ls an evenL LhaL musL occur before performance becomes due(224)
4 Can be wlLhln conLrol of one or boLh parLles
AlLhough be careful lL ls noL lllusory or peppercorn
4 Can be forLulLous (called aleaLory condlLlon)
O CondlLlons can be precedenL (mosL common) or subsequenL buL precedenL condlLlons are
preferred by Lhe courL (227(3))
4 recedenL condlLlons musL be meL before Lhe duLy ls owed
4 SubsequenL condlLlons make lL so Lhe occurrence of an evenL (usually a fallure Lo
perform ln Llme) wlll exLlngulsh a duLy afLer performance should have been due
lL ls lmporLanL Lo dlsLlngulsh beLween duLles condlLlons and promlssory condlLlons (boLh)
O uuLy 8lndlng and creaLes breach for nonperformance
4 Lxample arLles conLracL Lo sall and shlp merchandlse wlLh Lhe nexL wlnd
O CondlLlon MusL be saLlsfled before you can clalm performance/breach works llke lncenLlve
4 Lxample arLles agree Lo 10 bonus ll you sall wlLh Lhe nexL wlnd
O romlssory CondlLlon (boLh) CreaLes boLh a duLy and a condlLlon works as lncenLlve and can
creaLe breach
4 Lxample arLy conLracLs Lo sall wlLh Lhe nexL wlnd and oLher parLy says lf Lhey do 10
bonus
8ecause Lhe nonoccurrence of a condlLlon essenLlally volds Lhe conLracL before lLs made courLs have
ways of deallng wlLh Lhls Lo ensure falrness
1 revenLlon
a arLy can'L prevenL Lhe oLher from saLlsfylng Lhe condlLlon
2 Walver (buL wlLh esLoppel and elecLlon)
a arLles can walve Lhe condlLlon and promlse Lo perform anyway
l lf a parLy walves a condlLlon ln Lhe oLher parLy's conLrol wlLhouL conslderaLlon
before lL ls due Lo occur Lhey can relnsLaLe LhaL condlLlon
1 8uL lf Lhe oLher parLy has relled on LhaL walver Lo Lhelr deLrlmenL ln
whlch case Lhey wlll be esLopped (rellance)
ll lf a parLy walves a condlLlon Al1L8 lL ls due Lo occur Lhey cannoL reLracL LhaL
walver regardless of rellance or conslderaLlon (elecLlon)
3 lnLerpreLaLlon and avoldance of forfelLure
a !udges sLrongly favor lnLerpreLaLlons LhaL keep forfelLures from occurrlng
b arLles musL make condlLlons very expllclL lf Lhey wanL Lhem Lo be operaLlonal
l 8uL see 229 allowlng [udge Lo even cancel Lhose Lo prevenL dlsproporLlonaLe
forfelLure"

224 Cond|t|on Def|ned
A condlLlon ls an evenL noL cerLaln Lo occur whlch musL occur unless lLs nonoccurrence ls
excused before performance under a conLracL becomes due
22S Lffects of the NonCccurrence of a Cond|t|on
1 erformance of a duLy sub[ecL Lo a condlLlon cannoL become due unless Lhe condlLlon occurs or
lLs nonoccurrence ls excused
2 unless lL has been excused Lhe nonoccurrence of a condlLlon dlscharges Lhe duLy when Lhe
condlLlon can no longer occur
3 nonoccurrence of a condlLlon ls noL a breach by a parLy unless he ls under a duLy LhaL Lhe
condlLlon occur
226 now an Lvent May e Made a Cond|t|on
An evenL may be made a condlLlon elLher by Lhe agreemenL of Lhe parLles or by a Lerm supplled
by Lhe courL
227 Standards of reference w|th kegard to Cond|t|on
1 ln resolvlng doubLs as Lo wheLher an evenL ls made a condlLlon of an obllgor's duLy and as Lo
Lhe naLure of such an evenL an lnLerpreLaLlon ls preferred LhaL wlll reduce Lhe obllgee's rlsk of
forfelLure unless Lhe evenL ls wlLhln Lhe obllgee's conLrol or Lhe clrcumsLances lndlcaLe LhaL he
has assumed Lhe rlsk
2 unless Lhe conLracL ls of a Lype under whlch only one parLy generally underLakes duLles when lL
ls doubLful wheLher
a A duLy ls lmposed on an obllgee LhaL an evenL occur or
b 1he evenL ls made a condlLlon of Lhe obllgor's duLy or
c 1he evenL ls made a condlLlon of Lhe obllgor's duLy and a duLy ls lmposed on Lhe obllgee
LhaL Lhe evenL occur
1he flrsL lnLerpreLaLlon ls preferred lf Lhe evenL ls wlLhln Lhe obllgee's conLrol
3 ln case of doubL an lnLerpreLaLlon under whlch an evenL ls a condlLlon of an obllgor's duLy ls
preferred over an lnLerpreLaLlon under whlch Lhe nonoccurrence of Lhe evenL ls a ground for
dlscharge of LhaL duLy afLer lL has become a duLy Lo perform
228 Sat|sfact|on of the C||gor as a Cond|t|on
When lL ls a condlLlon of an obllgor's duLy LhaL he be saLlsfled wlLh respecL Lo Lhe obllgee's
performance or wlLh respecL Lo someLhlng else and lL ls pracLlcable Lo deLermlne wheLher a reasonable
person ln Lhe poslLlon of Lhe obllgor would be saLlsfled an lnLerpreLaLlon ls preferred under whlch Lhe
condlLlon occurs lf such a reasonable person ln Lhe poslLlon of Lhe obllgor would be saLlsfled
229 Lxcuse of a Cond|t|on to Avo|d Iorfe|ture
1o Lhe exLenL LhaL Lhe nonoccurrence of a condlLlon would cause dlsproporLlonaLe forfelLure a
courL may excuse Lhe nonoccurrence of LhaL condlLlon unless lLs occurrence was a maLerlal parL of Lhe
agreed exchange
230 Lvent that 1erm|nates a Duty
1 LxcepL as sLaLed ln Sub (2) lf under Lhe Lerms of Lhe conLracL Lhe occurrence of an evenL ls Lo
LermlnaLe an obllgor's duLy of lmmedlaLe performance or one Lo pay damages for breach LhaL
duLy ls dlscharged lf Lhe evenL occurs
2 1he obllgor's duLy ls noL dlscharged lf occurrence of Lhe evenL
a ls Lhe resulL of a breach by Lhe obllgor of hls duLy of good falLh and falr deallng or
b Could noL have been prevenLed because of lmpracLlcablllLy and conLlnuance of Lhe duLy
does noL sub[ecL Lhe obllgor Lo a maLerlally lncreased burden
3 1he obllgor's duLy ls noL dlscharged lf before Lhe evenL occurs Lhe obllgor promlses Lo perform
Lhe duLy even lf Lhe evenL occurs and does noL revoke hls promlse before Lhe obllgee maLerlally
changes hls poslLlon ln rellance on lL

LuLLlnger v 8osen
conLracLed Lo purchase properLy condlLloned on geLLlng a 20 year loan aL 83 buL only 873 loans
were avallable
O no duLy Lo perform dlscharged because condlLlon was noL meL
lnLernaLlo8oLLerdam lnc v 8lver 8rand 8lce Mllls lnc
ordered a loL of rlce Lo be dellvered ln uecember of 1932 wlLh 2 weeks' noLlce for dellvery AfLer noL
hearlng abouL Lhe balance of Lhe order on uec 17 u sold Lhe rlce Lo someone else
O no breach 1he condlLlon could noL have been meL so duLy dlscharged (223(2))
eacock ConsLrucLlon Co (u) v Modern Alr CondlLlonlng lnc ()
was a subconLracLor LhaL dld AC work for u (conLracLor) was Lo be pald wlLhln 30 days of
compleLlon wrlLLen accepLance by Lhe ArchlLecL and full paymenL Lherefor by Lhe Cwner"
O AbsoluLe duLy Lo pay
O CourL lnLerpreLs Lhls as a duLy (amblgulLy goes agalnsL drafLer of k)
O lnLerpreLaLlon prefers lessenlng of rlsk Lo obllgee (227(1))
4 uefaulL rule buL can be expllclLly drafLed around unless barred by sLaLuLe
Clbson v Cranage
offers Lo palnL u's daughLer and promlses lL wlll be Lo u's saLlsfacLlon u noL saLlsfled even Lhough
quallLy work
O no duLy Lo pay express condlLlon noL meL
O AlLhough see 228 requlrlng reasonable sLandard
Mckenna v Iernon
Cwner agreed Lo make progress paymenLs Lo bullder condlLloned on archlLecL's approval e made $6k
of $83k of Lhe paymenLs wlLhouL Lhe approval and seeks Lo clalm condlLlon noL meL
O Slnce mosL of Lhe paymenLs were made wlLhouL approval Lhe condlLlon ls WAlILu
lcks v 8ush
arLles agreed Lo merge companles/sLock lf Lhey could ralse $672k sold hls shares and Lhe oLhers
dldn'L
O noL blndlng because Lhe money hadn'L been ralsed
O Lasy case of expllclL (alLhough verbal) condlLlon

Construct|ve Cond|t|ons (716761) kest 231242 2S0 2S3 374 UCC 2
S03 S07 S08 S11 S13 601 602 606608 612 711
SomeLlmes condlLlons are noL express buL lmplled or consLrucLed by Lhe courL 1hese are Lyplcally
dependenL duLles where Lhe performance of one parLy ls condlLloned on Lhe performance of Lhe oLher
O Cld rule was LhaL all promlses/conLracLs are lndependenL so breach of one does noL excuse
breach of Lhe oLher
O now many are dependenL such LhaL performance musL be done before reLurn performance ls
due
4 1hls ls Lhe defaulL rule under 231232
lor Lhese dependenL covenanLs lf one parLy breaches lLs duLy Lhe oLher ls ofLen [usLlfled ln ceaslng or
refuslng lLs own performance Such a cessaLlon musL be based on a maLerlal breach Lhough or else LhaL
parLy wlll be deemed Lo have breached Lhe conLracL lnsLead 1hls ls covered more fully ln 8LuulA1lCn
(below) 1o deLermlne wheLher a parLy can cease performance ask
1 ls Lhere an uncured breach by Lhe oLher parLy?
2 ls Lhls breach based on an exchange of promlses (assumed bllaLeral under 232)?
3 Was Lhe breach based on a promlse due aL an earller Llme Lhan your performance (237)?
4 Was Lhe breach maLerlal (24142)?
a lf Lhe answer ls yes Lo all of Lhe above parLy can cease performance wlLhouL breachlng
Lhelr duLy/conLracL
lor such consLrucLlve and dependenL condlLlons lL becomes lmporLanL Lo deLermlne whaL Llme each
parLy needs Lo perform by Lo see who has maLerlally breached Lhus dlscharglng Lhe oLher parLy's duLy
Lo perform Many Llmes Lhey are concurrenL
O Ceneral rule aL common law work/performance before pay (234)
O under Lhe uCC some duLles are owed concurrenLly (dellvery/paymenL for example) When Lhls
ls Lhe case a parLy who had performed or was ready Lo perform can sLlll sue for breach even
Lhough lL ls unclear whlch was due flrsL (uCC 2307(1) and 2311(1))
O 1hese uCC Lalk of Lenderlng" sale or dellvery of goods
O 1ender an offer coupled wlLh a presenL ablllLy Lo fulflll all Lhe condlLlons resLlng on Lhe
Lenderlng parLy and musL be followed by acLual performance lf Lhe oLher parLy shows
hlmself ready Lo proceed
ln deLermlnlng wheLher a parLy has sufflclenLly breached hls duLy such LhaL Lhe oLher ls relleved of
performlng lLs duLles Lhere are Lwo approaches
O erfecL 1ender 8ule LveryLhlng musL be exacLly rlghL (uCC 2601)
4 LxcepLlons
4 Seller can cure defecLlve Lender lf Llme for performance hasn'L explred (uCC 2308)
4 8uyer who has accepLed goods can only revoke lf Lhe nonconformlLy subsLanLlally
lmpalrs Lhelr value Lo hlm (uCC 2608)
4 8uyer can only re[ecL lnsLallmenL of goods lf Lhey subsLanLlally lmpalr Lhe value of LhaL
lnsLallmenL" and can only ouLrlghL re[ecL Lhe k lf lL subsLanLlally lmpalrs Lhe value of Lhe
whole k (uCC 2612)
O SubsLanLlal erformance 8ule erformance ls close Lo perfecL buL noL qulLe (common law)
4 8ullder would be enLlLled Lo paymenL dlfference ln quallLy of whaL was requesLed
ulvlslblllLy (SeverablllLy)
O A conLracL ls severable so LhaL a parLy can collecL for parLlal performance lf
4 lL conslsLs of several dlsLlncL lLems and
4 Lach lLem ls Lo be pald for separaLely
8esLlLuLlon damages allow a person Lo recover for un[usL enrlchmenL of anoLher parLy even lf Lhe
clalmlng parLy has Lhemselves breached Lhe conLracL (See klrkland/8rlLLon) un[usL enrlchmenL should
be reLurned Lo Lhe damaged parLy unless
1 no beneflL has been conferred Lo Lhe oLher parLy by Lhe work
2 Lhe work done ls noL Lhe work conLracLed for or
3 he has abandoned Lhe [ob (8uL see 8rlLLon)

231 Cr|ter|on of Determ|n|ng When erformances Are to e Lxchanged Under an Lxchange of
rom|ses
erformances are Lo be exchanged under an exchange of promlses lf each promlse ls aL leasL
parL of Lhe conslderaLlon for Lhe oLher and Lhe performance of each promlse ls Lo be exchanged aL leasL
ln parLy for Lhe performance of Lhe oLher
232 When |t |s resumed 1hat erformances Are to 8e Lxchanged Under an Lxchange of rom|ses
Where Lhe conslderaLlon glven by each parLy Lo a conLracL conslsLs ln whole or ln parL of
promlses all Lhe performances Lo be rendered by each parLy Laken collecLlvely are LreaLed as
performances Lo be exchanged under an exchange of promlses unless a conLrary lnLenLlon ls clearly
manlfesLed
233 erformance at Cne 1|me or |n Insta||ments
1 Where performances are Lo be exchanged under an exchange of promlses and Lhe whole of one
parLy's performance can be rendered aL one Llme lL ls due aL one Llme unless Lhe language or
Lhe clrcumsLances lndlcaLe Lhe conLrary
2 Where only a parL of one parLy's performance ls due aL one Llme under subsecLlon 1 lf Lhe oLher
parLy's performance can be so apporLloned LhaL Lhere ls a comparable parLy LhaL can also be
rendered aL LhaL Llme lL ls due aL LhaL Llme unless Lhe language or Lhe clrcumsLances lndlcaLe
Lhe conLrary
234 Crder of erformances
1 Where all or parL of Lhe performances Lo be exchanged under an exchange of promlses can be
rendered slmulLaneously Lhey are Lo LhaL exLenL due slmulLaneously unless Lhe language or Lhe
clrcumsLances lndlcaLe Lhe conLrary
2 LxcepL Lo Lhe exLenL sLaLed ln subsecLlon 1 where Lhe performance of only one parLy under
such an exchange requlres a perlod of Llme hls performance ls due aL an earller Llme Lhan LhaL
of Lhe oLher parLy unless Lhe language or Lhe clrcumsLances lndlcaLe Lhe conLrary
23S Lffect of erformance as D|scharge and of Nonerformance as 8reach
1 lull performance of a duLy under a conLracL dlscharges Lhe duLy
2 When performance of a duLy under a conLracL ls due any nonperformance ls a breach
236 C|a|ms for Damages for 1ota| and for art|a| 8reach
1 A clalm for damages for LoLal breach ls one for damages based on all of Lhe ln[ured parLy's
remalnlng rlghLs Lo performance
2 A clalm for damages for parLlal breach ls one for damages based on only parLy of Lhe ln[ured
parLy's remalnlng rlghLs Lo performance
237 Lffect on Cther arty's Dut|es of a Ia||ure to kender erformance
LxcepL as sLaLed ln 240 lL ls a condlLlon of each parLy's remalnlng duLles Lo render
performances Lo be exchanged under an exchange of promlses LhaL Lhere be no uncured maLerlal fallure
by Lhe oLher parLy Lo render any such performance due aL an earller Llme
238 Lffect on Cther arty's Dut|es of a Ia||ure to Cffer erformance
Where all or parL of Lhe performances Lo be exchanged under an exchange of promlses are due
slmulLaneously lL ls a condlLlon of each parLy's duLles Lo render such performance LhaL Lhe oLher parLy
elLher render or wlLh manlfesLed presenL ablllLy Lo do so offer performance of hls parL of Lhe
slmulLaneous exchange
239 Lffect on Cther arty's Dut|es of a Ia||ure Iust|f|ed 8y NonCccurrence of a Cond|t|on
1 A parLy's fallure Lo render or Lo offer performance may excepL as sLaLed ln subsecLlon 2 affecL
Lhe oLher parLy's duLles under Lhe rules sLaLed ln 237 and 238 even Lhough fallure ls [usLlfled
by Lhe nonoccurrence of a condlLlon
2 1he rule sLaLed ln subsecLlon 1 does noL apply lf Lhe oLher parLy assumed Lhe rlsk LhaL he would
have Lo perform ln splLe of such a fallure
240 art erformance as Agreed Lqu|va|ents
lf Lhe performances Lo be exchanged under an exchange of promlses can be apporLloned lnLo
correspondlng palrs of parLy performances so LhaL Lhe parLs of each palr are properly regarded as
agreed equlvalenLs a parLy's performance of hls parL of such a palr has Lhe same effecL on Lhe oLher's
duLles Lo render performance of Lhe agreed equlvalenL as lL would have lf only LhaL palr of performances
had been promlsed
241 C|rcumstances S|gn|f|cant |n Determ|n|ng Whether a Ia||ure |s Mater|a|
ln deLermlnlng wheLher a fallure Lo render or Lo offer performance ls maLerlal Lhe followlng
clrcumsLances are slgnlflcanL
a Lhe exLenL Lo whlch Lhe ln[ured parLy wlll be deprlved of Lhe beneflL whlch he reasonably
expecLed
b Lhe exLenL Lo whlch Lhe ln[ured parLy can be adequaLely compensaLed for Lhe parL of LhaL
beneflL of whlch he wlll be deprlved
c Lhe exLenL Lo whlch Lhe parLy falllng Lo perform or Lo offer Lo perform wlll suffer forfelLure
d Lhe llkellhood LhaL Lhe parLy falllng Lo perform or Lo offer Lo perform wlll cure hls fallure Laklng
accounL of all Lhe clrcumsLances lncludlng any reasonable assurances
e Lhe exLenL Lo whlch Lhe behavlor of Lhe parLy falllng Lo perform or Lo offer Lo perform comporLs
wlLh sLandards of good falLh and falr deallng
242 C|rcumstances S|gn|f|cant |n Determ|n|ng When kema|n|ng Dut|es Are D|scharged
ln deLermlnlng Lhe Llme afLer whlch a parLy's uncured maLerlal fallure Lo render or Lo offer
performance dlscharges Lhe oLher parLy's remalnlng duLles Lo render performance under Lhe rules
sLaLed ln 237238 Lhe followlng clrcumsLances are slgnlflcanL
a Lhose sLaLed ln 241
b Lhe exLenL Lo whlch lL reasonably appears Lo Lhe ln[ured parLy LhaL delay may prevenL or hlnder
hlm ln maklng reasonable subsLlLuLe arrangemenLs
c Lhe exLenL Lo whlch Lhe agreemenL provldes for performance wlLhouL delay buL a maLerlal
fallure Lo perform or Lo offer Lo perform on a sLaLed day does noL of lLself dlscharge Lhe oLher
parLy's remalnlng duLles unless Lhe clrcumsLances lncludlng Lhe language of Lhe agreemenL
lndlcaLe LhaL performance or an offer Lo perform by LhaL day ls lmporLanL
2S0 When a Statement or an Act Is a kepud|at|on
A repudlaLlon ls
a a sLaLemenL by Lhe obllgor Lo Lhe obllgee lndlcaLlng LhaL Lhe obllgor wlll commlL a breach LhaL
would of lLself glve Lhe obllgee a clalm for damages for LoLal breach under 243 or
b a volunLary afflrmaLlve acL whlch renders Lhe obllgor unable or apparenLly unable Lo perform
wlLhouL such a breach
2S3 Lffect of a kepud|at|on as a 8reach and on Cther arty's Dut|es
1 Where an obllgor repudlaLes a duLy before he has commlLLed a breach by nonperformance and
before he has recelved all of Lhe agreed exchange for lL hls repudlaLlon alone glves rlse Lo a
clalm for damages for LoLal breach
2 Where performances are Lo be exchanged under an exchange of promlses one parLy's
repudlaLlon of a duLy Lo render performance dlscharges Lhe oLher parLy's remalnlng duLles Lo
render performance
374 kest|tut|on |n Iavor of arty |n 8reach
1 Sub[ecL Lo Lhe rule sLaLed ln subsecLlon 2 lf a parLy [usLlflably refuses Lo perform on Lhe ground
LhaL hls remalnlng duLles of performance have been dlscharged by Lhe oLher parLy's breach Lhe
parLy ln breach ls enLlLled Lo resLlLuLlon for any beneflL LhaL he has conferred by way of parL
performance or rellance ln excess of Lhe loss LhaL he has caused by hls own breach
2 1o Lhe exLenL LhaL under Lhe manlfesLed assenL of Lhe parLles a parLy's performance ls Lo be
reLalned ln Lhe case of breach LhaL parLy ls noL enLlLled Lo resLlLuLlon lf Lhe value of Lhe
performance as llquldaLed damages ls reasonable ls Lhe llghL of Lhe anLlclpaLed or acLual loss
caused by Lhe breach and Lhe dlfflculLles of proof or loss

LCCk A1 1L uCC ln 1L 8CCk 1LM Sl1S A8L LCnC

klngsLon v resLon
MasLer promlsed apprenLlces LhaL he would secure sLock and shlL for Lhem lf Lhey would work for hlm
and Lake up Lhe buslness
O 1hls esLabllshed Lhe consLrucLlve condlLlon docLrlne
O erformance of one dependenL on Lhe oLher

SLewarL v newbury
was a bullder who clalmed LhaL u sald by Lelephone LhaL he would be pald 83 aL Lhe end of every
monLh wlLh 13 due when Lhe [ob was done 1hey couldn'L agree on Lhls and sLopped worklng and
sued Lo geL hls money afLer 2 monLhs
O lf no agreemenL on Lerms paymenL noL due unLll work compleLe
O lallure Lo conLlnue work was breach (repudlaLlon)
!acob ?oungs v kenL
8ullder lnsLalled wrong plpe and Cwner refused Lo pay balance of $3300
O SubsLanLlal performance rule means paymenL ls due loss ln value
lanLe v !acobs
ConLracL Lo bulld house for $26k AfLer $20k of paymenL dlspuLes arose and u refused Lo pay Lhe
bullder Lhe resL of Lhe money e sues
O 8ullder wlns SubsLanLlal performance does noL requlre every deLall Lo be correcL
Clll v !ohnsLown Lumber Co
agreed Lo drlve logs for u and afLer some work a flood carrled Lhe resL away sued Lo recover for Lhe
work he had already done (and sever Lhe resL)
O 1hls k ls severable because performance conslsLs of several dlsLlncL lLems LhaL each have Lhelr
own prlce
8rlLLon v 1urner
Man conLracLed Lo work for a year for $120 and lefL early (breached) e now sues for $93
O Can recover resLlLuLlon damages even Lhough he breached
O Cnly Lo avold lnequlLy
4 CourL uses quaslconLracL
klrkland v Archbold
8ullder conLracLed Lo work on a house ln progress paymenLs e lnsLalled some wrong maLerlal boughL
new ones and Lhe owner sLopped hlm from conLlnulng
O Can sLlll recover resLlLuLlon even Lhough ln breach
O ln quanLum merulL
Walker Co v arrlson
1omaLo on slgn case
O lallure Lo clean LomaLo noL maLerlal breach
O Slnce u refused Lo pay based on nonmaLerlal breach Lhey owe Lhe balance of k
k C ConsLrucLlon Co v arrls
hlred u Lo do excavaLlon work and requlred work done ln workmanllke manner" and guaranLee of
lnsurance u hlL hls house wlLh bulldozer and refused Lo cover cosLs so refused Lo pay remalnder of
money
O lLLlng house noL workmanllke" and falled Lo obLaln lnsurance
4 1hls ls a maLerlal breach so off Lhe hook unLll u remedles lLs breach
lron 1rade roducLs Co I Wllkoff Co
enLered lnLo k Lo buy lron ralls aL $41 per Lon Lhen boughL a bunch more from Lhe same dealer LhaL u
was buylng Lhem from drlvlng up Lhe prlce
O u noL excused because 's acLlons ln good falLh and dldn'L make performance lmposslble

Ant|c|patory kepud|at|on (76S783) kest 238 2S02S3
8epudlaLlon ls when a parLy sLaLes by words or acLlons (usually abandonmenL/lmposslblllLy) clearly and
unequlvocally LhaL lL wlll noL perform lLs duLles glvlng rlse Lo a full breach of k clalm (233(1)) Such a
repudlaLlon also dlscharges Lhe oLher parLy's duLy Lo perform (233(2))
AnLlclpaLory repudlaLlons occur when a parLy repudlaLes before Lhe Llme of performance arrlves and ln
dolng so glves rlse Lo a LoLal breach clalm lmmedlaLely AfLer Lhls repudlaLlon Lhe oLher parLy has some
duLy Lo mlLlgaLe Lhe damages
Consequences depend on several quesLlons
1 ls Lhe reclplenL of a repudlaLlon free Lo make oLher arrangemenLs
a ?es should mlLlgaLe damages
2 Can Lhe reclplenL of repudlaLlon go Lo courL lmmedlaLely (before performance ls due)?
a ?es see ochsLer v ue La 1our
3 Can reclplenL lgnore Lhe repudlaLlon and awalL performance?
a ?es buL cannoL drlve up cosLs for breach (See LuLen below ln damages )
4 Can a parLy LhaL has repudlaLed reLracL LhaL repudlaLlon?
a ?es so long as Lhere ls no resulLanL maLerlal damage Lo oLher parLy

238 Lffect on Cther arty's Dut|es of a Ia||ure to Cffer erformance
Where all or parL of Lhe performances Lo be exchanged under an exchange of promlses are due
slmulLaneously lL ls a condlLlon of each parLy's duLles Lo render such performance LhaL Lhe oLher parLy
elLher render or wlLh manlfesLed presenL ablllLy Lo do so offer performance of hls parL of Lhe
slmulLaneous exchange
2S0 When a Statement or an Act |s a repud|at|on
A repudlaLlon ls
a A sLaLemenL by Lhe obllgor Lo Lhe obllgee lndlcaLlng LhaL Lhe obllgor wlll commlL a breach LhaL
would of lLself glve Lhe obllgee a clalm for damages for LoLal breach under 243 or
b A volunLary afflrmaLlve acL whlch renders Lhe obllgor unable or apparenLly unable Lo perform
wlLhouL such a breach
2S1 When a Ia||ure to g|ve assurance may e treated as a repud|at|on
1 Where reasonable grounds arlse Lo belleve LhaL Lhe obllgor wlll commlL a breach by non
performance LhaL would of lLself glve Lhe obllgee a clalm for damages for LoLal breach under
243 Lhe obllgee may demand adequaLe assurance of due performance and may lf reasonable
suspend any performance for whlch he has noL already recelved Lhe agreed exchange unLll he
recelves such assurance
2 1he obllgee may LreaL as a repudlaLlon Lhe obllgor's fallure Lo provlde wlLhln a reasonable Llme
such assurance of due performance as ls adequaLe ln Lhe clrcumsLances of Lhe parLlcular case
2S2 Lffect of Inso|vency
1 Where Lhe obllgor's lnsolvency glves Lhe obllgee reasonable grounds Lo belleve LhaL Lhe obllgor
wlll commlL a breach under Lhe rule sLaLed ln 231 Lhe obllgee may suspend any performance
for whlch he has noL already recelved Lhe agreed exchange unLll he recelves assurances ln Lhe
form of performance lLself an offer of performance or adequaLe securlLy
2 A person ls lnsolvenL who elLher has ceased Lo pay hls debLs ln Lhe ordlnary course of buslness
or cannoL pay hls debLs as Lhey become due or ls lnsolvenL wlLhln Lhe meanlng of Lhe federal
bankrupLcy law
2S3 Lffect of a repud|at|on as a reach and on other party's dut|es
1 Where an obllgor repudlaLes a duLy before he has commlLLed a breach by nonperformance and
before he has recelved all of Lhe agreed exchange for lL hls repudlaLlon alone glves rlse Lo a
clalm for damages for LoLal breach
2 Where performances are Lo be exchanged under an exchange of promlses one parLy's
repudlaLlon of a duLy Lo render performance dlscharges Lhe oLher parLy's remalnlng duLles Lo
render performance

ochsLer v ue La 1our
conLracLed Lo be u's Lour gulde for 3 monLhs u repudlaLed before Lhe Llme Lo leave and sued
lmmedlaLely
O 1hls ls allowed 8reach clalms can be broughL upon repudlaLlon
kanavos v ancock 8ank 1rusL Co
sold properLy and reLalned rlghL Lo exerclse opLlon Lo buy
O musL show he had means Lo purchase properLy before he can clalm breach
O 1hls ls llke causaLlon ln 1orLs
McCloskey Co v Mlnweld SLeel Co
conLracLed Lo geL sLeel from u and Lhen Lhe korean war broke ouL maklng sLeel supplles scarce u
wroLe Lo say LhaL Lhey were Lrylng Lo geL sLeel and requesLed help flndlng some goL some from a
dlfferenL dealer
O no repudlaLlon by u because Lhey are sLlll Lrylng Lo execuLe and performance Llme hasn'L lapsed
yeL
CL Maddox lnc v Coalfleld Servlces lnc
conLracLed Lo have mlne bullL on progress paymenLs and slgnaLure of new k u hadn'L recelved
paymenLs or new k so Lhey sLopped work unLll Lhey goL lL or a reassurance sued for repudlaLlon
O Ialld anLlclpaLory repudlaLlon repudlaLed by falllng Lo provlde paymenL/k
O See 231 requlrlng assurance

kLMLDILS ICk 8kLACn
1he urpose of kemed|es (829) kest 344347 3SS
1here are fundamenLal assumpLlons made by courLs ln provldlng remedles
1 1he law ls prlmarlly concerned wlLh rellef of aggrleved promlsees noL punlshlng breachlng
promlsors (no punlLlve damages 333)
2 rlmary purpose of Lhe remedy ls Lo reLurn Lhe promlsee Lo Lhe condlLlon Lhey would have been
ln had Lhe promlse been performed (expecLaLlon damages 347)
1here are Lyplcally Lhree remedles avallable for a breach of conLracL or quaslconLracL LxpecLaLlon
damages 8ellance damages and 8esLlLuLlon damages (See 344) 1he Lype of damage awarded can
vary by Lhe facLs of Lhe case and Lhe plalnLlff usually geLs Lo choose whlch would be beLLer Lhough
expecLaLlon damages wlll Lyplcally yleld Lhe greaLesL resulLs

344 urpose of kemed|es
!udlclal remedles under Lhe rules sLaLed ln Lhls 8esLaLemenL serve Lo proLecL one or more of Lhe
followlng lnLeresLs of a promlsee
a hls expecLaLlon lnLeresL" whlch ls hls lnLeresL ln havlng Lhe beneflL of hls bargaln by belng puL
ln as good a poslLlon as he would have been ln had Lhe conLracL been performed
b hls rellance lnLeresL" whlch ls hls lnLeresL ln belng relmbursed for loss caused by rellance on
Lhe conLracL by belng puL ln as good a poslLlon as he would have been ln had Lhe conLracL noL
been made or
c hls resLlLuLlon lnLeresL" whlch ls hls lnLeresL ln havlng resLored Lo hlm any beneflL LhaL he has
conferred on Lhe oLher parLy
34S Iud|c|a| kemed|es Ava||a|e
1he [udlclal remedles avallable for Lhe proLecLlon of Lhe lnLeresLs sLaLed ln 344 lnclude a
[udgmenL or order
a awardlng a sum of money due under Lhe conLracL or as damages
b requlrlng speclflc performance of a conLracL or en[olnlng lLs nonperformance
c requlrlng resLoraLlon of a speclflc Lhlng Lo prevenL un[usL enrlchmenL
d awardlng a sum of money Lo prevenL un[usL enrlchmenL
e declarlng Lhe rlghLs of Lhe parLles and
f enforclng an arblLraLlon award
346 Ava||a|||ty of Damages
1 1he ln[ured parLy has a rlghL Lo damages for any breach by a parLy agalnsL whom Lhe conLracL ls
enforceable unless Lhe clalm for damages has been suspended or dlscharged
2 lf Lhe breach caused no loss or lf Lhe amounL of Lhe loss ls noL proved under Lhe rules sLaLed ln
Lhls ChapLer a small sum flxed wlLhouL regard Lo Lhe amounL of loss wlll be awarded as nomlnal
damages
347 Measure of Damages |n Genera|
Sub[ecL Lo Lhe llmlLaLlons sLaLed ln 330333 Lhe ln[ured parLy has a rlghL Lo damages based on
hls expecLaLlon lnLeresL as measured by
a Lhe loss ln Lhe value Lo hlm of Lhe oLher parLy's performance caused by lLs fallure or deflclency
plus
b any oLher loss lncludlng lncldenLal or consequenLlal loss caused by Lhe breach less
c any cosL or oLher loss LhaL he has avolded by noL havlng Lo perform
3SS un|t|ve Damages
unlLlve damages are noL recoverable for a breach of conLracL unless Lhe conducL consLlLuLlng
Lhe breach ls also a LorL for whlch punlLlve damages are recoverable

uS naval lnsLlLuLe v CharLer CommunlcaLlons lnc
8ed CcLober case where u sLarLed selllng paperbacks early
O uamage for breach should only calculaLe how much Lhls breach cosL Lhem relaLlve Lo Lhe k belng
performed
Sulllvan v C'Connor
Woman geLs bad nose[ob LhaL fucks up her face
O She ls awarded all foreseeable damages (lncludlng emoLlonal dlsLress) as rellance
O 1hls ls a rare case where emoLlonal damages wlll resLore Lo her prevlous sLaLe (233)
WhlLe v 8enkowskl
nelghbors conLracL Lo share a waLer supply and one shuLs off Lhe waLer 9 Llmes Lo be a dlck !ury
awards $10 expecLaLlon damages and $2k ln punlLlves
O unlLlve damages sLruck down noL glven ln k law

Measur|ng Lxpectat|on (606629) kest 347 349 371 UCC 2712 713 706
708
LxpecLaLlon damages are Lhe mosL common awarded for breach of k clalms 1hese damages serve Lo
puL Lhe aggrleved parLy ln Lhe poslLlon lL would have been ln had Lhe k been performed
1he general formula for expecLaLlon damages ls ln 347 and Lakes any loss lncurred from breach (a) or
oLher losses foreseeable (b) mlnus Lhe cosLs avolded by Lhe breach (c)
O lormula seems easy buL can be Lrlcky Lo apply
O ow do you dlsLlngulsh loss caused by fallure or deflclency from lncldenLal/consequenLlal loss?
4 lncldenLal loss lncludes cosLs lncurred ln a reasonable efforL wheLher successful or noL
Lo avold loss (such as cosLs lncurred flndlng a replacemenL conLracLor)
WhaL lf a parLy flnds a replacemenL buyer LhaL mlLlgaLes damages?
O lf a unlque lLem and Lhey are compensaLed Lhe same no clalm
O lf volume seller u sLlll owes full prlce
4 8equlres LhaL
4 1he person who boughL Lhe resold enLlLy would have been sollclLed by had Lhere been
no breach and resale anyway
4 1he sollclLaLlon would have been successful
4 could have performed LhaL addlLlonal k
1he uCC also lncludes LhaL Lell how Lo calculaLe damages for breach or repudlaLlon lL allows (buL
doesn'L force) a parLy Lo flnd a subsLlLuLe wheLher Lhey are a buyer (2712) or seller (2706) and seLs
Lhe recovery (expecLaLlon) damages as Lhe dlfference ln prlce beLween k and Lhe markeL prlce aL Lhe
Llme of breach or repudlaLlon (2713 2708 respecLlvely)+ lncldenLal damages mlnus cosLs avolded

347 Measure of Damages |n Genera| (Lxpectat|on)
Sub[ecL Lo Lhe llmlLaLlons sLaLed ln 330333 Lhe ln[ured parLy has a rlghL Lo damages based on
hls expecLaLlon lnLeresL as measured by
a Lhe loss ln Lhe value Lo hlm of Lhe oLher parLy's performance caused by lLs fallure or deflclency
plus
b any oLher loss lncludlng lncldenLal or consequenLlal loss caused by Lhe breach less
c any cosL or oLher loss LhaL he has avolded by noL havlng Lo perform
349 Damages 8ased on ke||ance Interest (ke||ance)
As an alLernaLlve Lo Lhe measure of damages sLaLed ln 347 Lhe ln[ured parLy has a rlghL Lo
damages based on hls rellance lnLeresL lncludlng expendlLures made ln preparaLlon for performance or
ln performance less any loss LhaL Lhe parLy ln breach can prove wlLh reasonable cerLalnLy Lhe ln[ured
parLy would have suffered had Lhe conLracL been performed
371 Measure of kest|tut|on Interest (kest|tut|on)
lf a sum of money ls awarded Lo proLecL a parLy's resLlLuLlon lnLeresL lL may as [usLlce requlres be
measured by elLher
a 1he reasonable value Lo Lhe oLher parLy of whaL he recelved ln Lerms of whaL lL would have cosL
hlm Lo obLaln lL from a person ln Lhe clalmanL's poslLlon C8
b 1he exLenL Lo whlch Lhe oLher parLy's properLy has been lncreased ln value or hls oLher lnLeresLs
advanced

IlLex ManufacLurlng Corp v CarlbLex Corp
LreaLed fabrlc and reopened Lhelr facLory for u who Lhen declded Lhey dldn'L wanL Lhe cloLh LreaLed
uamages were awarded buL u clalms Lhey should exclude overhead cosLs
O Cverhead cosLs allowed because Lhey are consLanL and flxed ln every prlce
Laredo ldes Co lnc v MeaL roducLs Co lnc
ked Lo buy cow hldes from u and u repudlaLed afLer sendlng an ulLlmaLum requlrlng response wlLhln a
few hours had Lo buy from anoLher Co aL slgnlflcanLly hlgher prlce
O u has Lo pay dlfferences
O 8equesL for conflrmaLlon wlLh hour llmlL was unreasonable
8L uavls Chemlcal Corp v ulasonlcs lnc
u sold medlcal equlpmenL and backed ouL afLer puLLlng down $300k as down paymenL sues for
resLlLuLlon of down paymenL and u sues for balance owed on machlne
O owes u full balance because lL ls a volume seller"
unlLed SLaLes v Algernon 8lalr lnc
Algernon repudlaLed conLracL and uS sues for $37k resLlLuLlon damages Algernon shows LhaL would
have losL more Lhan 37k had Lhey fully performed
O 8esLlLuLlon damages allowed as essenLlal Lo avold ln[usLlce
O 8are case where resLlLuLlonexpecLaLlon

Spec|f|c erformance (S83S87 S9S606) kest 34S 3S7360 UCC 2709
716
Speclflc erformance ls a Lype of expecLaLlon damage LhaL requlres Lhe parLy Lo acLually perform Lhe
duLy as sLaLed ln Lhe k 1hough Lhls wlll resLore Lhe parLles Lo Lhelr exacL poslLlons had Lhe k been
performed (because lL wlll be performed) lL ls only allowed ln exLraordlnary clrcumsLances
1yplcally Lo geL speclflc rellef a parLy musL show LhaL performance ls Lhe only way Lo obLaln a unlque or
oLherwlse unobLalnable ob[ecL and LhaL damages wlll be lnsufflclenL Lo remedy Lhe breach (339)
O 1hls usually applles Lo land (only common excepLlon because each parcel of land ls unlque)

kestatement 3S7 Ava||a|||ty of Spec|f|c erformance and In[unct|on
1 Sub[ecL Lo Lhe rules sLaLed ln 33969 speclflc performance of a conLracL duLy wlll be granLed
ln Lhe dlscreLlon of Lhe courL agalnsL a parLy who has commlLLed or ls LhreaLenlng Lo commlL a
breach of Lhe duLy
2 Sub[ecL Lo Lhe rules sLaLed ln 33969 an ln[uncLlon agalnsL breach of a conLracL duLy wlll be
granLed ln Lhe dlscreLlon of Lhe courL agalnsL a parLy who has commlLLed or ls LhreaLenlng Lo
commlL a breach of Lhe duLy lf
a Lhe duLy ls one of forbearance or
b Lhe duLy ls one Lo acL and speclflc performance would be denled only for reasons LhaL
are lnappllcable Lo an ln[uncLlon
3S8 Iorm of Crder and Cther ke||ef
1 An order of speclflc performance or an ln[uncLlon wlll be drawn as besL Lo effecLuaLe Lhe
purposes for whlch Lhe conLracL was made and on such Lerms as [usLlce requlres lL need noL be
absoluLe ln form and Lhe performance LhaL lL requlres need noL be ldenLlcal wlLh LhaL due under
Lhe conLracL
2 lf speclflc performance or an ln[uncLlon ls denled as Lo parLy of Lhe performance LhaL ls due lL
may neverLheless be granLed as Lo Lhe remalnder
3 ln addlLlon Lo speclflc performance or an ln[uncLlon damages and oLher rellef may be awarded
ln Lhe same proceedlng and an lndemnlLy agalnsL fuLure harm may be requlred
3S9 Lffect of Adequacy of Damages
1 Speclflc performance or an ln[uncLlon wlll noL be ordered lf damages would be adequaLe Lo
proLecL Lhe expecLaLlon lnLeresL of Lhe ln[ured parLy
2 1he adequacy of Lhe damage remedy for fallure Lo render one parL of Lhe performance due does
noL preclude speclflc performance or ln[uncLlon as Lo Lhe conLracL as a whole
3 Speclflc performance or an ln[uncLlon wlll noL be refused merely because Lhere ls a remedy for
breach oLher Lhan damages buL such a remedy may be consldered ln exerclslng dlscreLlon
under Lhe rule sLaLed ln 337
360 Iactors Affect|ng Adequacy of Damages
ln deLermlnlng wheLher Lhe remedy ln damages would be adequaLe Lhe followlng
clrcumsLances are slgnlflcanL
a Lhe dlfflculLy of provlng damages wlLh reasonable cerLalnLy
b Lhe dlfflculLy of procurlng a sulLable subsLlLuLe performance by means of money awarded as
damages and
c Lhe llkellhood LhaL an award of damages could noL be collecLed

Campbell Soup Co v WenLz
WenLz agreed Lo sell speclal Lype of carroLs Lo Campbell buL Lhen breached when Lhe prlce wenL up
O Speclflc performance ordered because rando carroLs noL as good
O Couldn'L geL Lhem anywhere else and Lhey were needed Lo keep company name good
Laclede Cas Co v Amoco Cll Co
k was for Amoco Lo provlde Laclede wlLh propane Lo supply Lo subdlvlslons 1here were no oLher long
Lerm suppllers of propane LhaL could replace Amoco
O Slnce Lhe performance couldn'L be subsLlLuLed Speclflc performance was approprlaLe
norLhern uelaware lndusLrlal uevelopmenL Corp v LW8llss Co
k was Lo bulld someLhlng wlLhln a cerLaln Llme and sues Lo geL speclflc performance requlrlng more
men unLll Lhe [ob was done
O 1hls could be easlly remedled wlLh money damages and would be hard Lo manage
Walgreen Co v Sara Creek roperLy Co
Lease agreemenL for 30 years had excluslvlLy clause prevenLlng mall from allowlng any oLher
pharmacles u Lrled Lo allow anoLher pharmacy and goL ln[uncLlon aL Lrlal
O ln[uncLlon (S) allowed because damages would be Loo hard Lo calculaLe
O Also lf Lhey wanL Lo be boughL ouL can sell Lhls ln[uncLlon as bargalnlng chlp

Avo|da|||ty] M|t|gat|on (629631 637648) kest 3S0
When a conLracL has been breached or repudlaLed Lhe ln[ured/aggrleved parLy has a duLy Lo Lry and
mlLlgaLe lLs resulLanL damages by flndlng a reasonable replacemenL (330) lallure Lo do so wlll noL
prevenL Lhem from clalmlng expecLaLlon damages buL lL could lessen Lhem lf Lhe oLher parLy can show
LhaL Lhey dld noL Lake reasonable sLeps Lo mlLlgaLe
Also see uCC 2713 where Lhe measure of damages ls dlfference beLween k prlce and markeL prlce
lmplylng a duLy Lo mlLlgaLe
1he Lyplcal means of calculaLlng damages (for subsLanLlal performance) ls Lo deLermlne how much lL
would cosL Lo flx Lhe error buL ln cerLaln cases where Lhe deLrlmenL Lo Lhe oLher parLy would be Loo
hlgh a courL can slmply requlre Lhe dlfference ln value (See !acob ?oungs v kenL)

3S0 Avo|da|||ty (M|t|gat|on) as a L|m|tat|on on Damages
1 LxcepL as sLaLed ln Sub (2) damages are noL recoverable for loss LhaL Lhe ln[ured parLy could
have avolded wlLhouL undue rlsk burden or humlllaLlon
2 1he ln[ured parLy ls noL precluded from recovery by Lhe rule ln sub (1) Lo Lhe exLenL LhaL he has
made reasonable buL unsuccessful efforLs Lo avold loss

8ocklngham CounLy v LuLen 8rldge Co
8rldge Lo nowhere case ClLy councll ked wlLh conLracLor Lo make a brldge and Lhen cancelled lL afLer
$1900 of work wenL ahead and bullL Lhe whole brldge and clalmed for full damages on k
O Can'L recover full damages because should have sLopped
O SLlll enLlLled Lo proflL + expenses buL he unnecessarlly drove up oLher cosLs
arker v 1wenLleLh CenLurylox lllm Corp
Shlrley McClalne conLracLed Lo be ln a movle and lox declded noL Lo do lL buL offered her anoLher role
Lo mlLlgaLe damages
O no duLy Lo mlLlgaLe here because work noL comparable (dlfferenL Lypes of role/fame)
O lull breach clalm
!acob ?oungs v kenL
8ullder lnsLalllng wrong plpes case (agaln)
O Can only geL damages for dlfference ln value beLween plpes
O usually would be cosL of replacemenL buL here LhaL would be lnequlLable

Ioreseea|||ty and Certa|nty (6S6660 674678) kest 3S13S2
loreseeablllLy funcLlons almosL as a proxlmaLe cause Lo resLrlcL damages only Lo Lhose LhaL Lhe
breachlng parLy could have reasonably known of and LhaL Lhe ln[ured parLy could prove resulLed from
LhaL breach
1he foreseeablllLy/cerLalnLy of damages lncurred ls a maLLer of facL Lo be Lrled Lo a [ury and can lnclude
anyLhlng LhaL LesLlmony can sufflclenLly supporL (see lera)

3S1 Unforeseea|||ty and ke|ated L|m|tat|ons on Damages
1 uamages are noL recoverable for loss LhaL Lhe parLy ln breach dld noL have reason Lo foresee as
a probable resulL of Lhe breach when Lhe conLracL was made
2 Loss may be foreseeable as a probable resulL of a breach because lL follows from Lhe breach
a ln Lhe ordlnary course of evenLs or
b As a resulL of speclal clrcumsLances beyond Lhe ordlnary course of evenLs LhaL Lhe
parLy ln breach had reason Lo know of
3 A courL may llmlL Lhe damages for foreseeable loss by excludlng recovery for loss of proflLs by
allowlng recovery only for loss lncurred ln rellance or oLherwlse lf lL concludes LhaL ln Lhe
clrcumsLances [usLlce so requlres ln order Lo avold dlsproporLlonaLe compensaLlon
3S2 Uncerta|nty as a L|m|tat|on on Damages
uamages are noL recoverable for loss beyond an amounL LhaL Lhe evldence permlLs Lo be
esLabllshed wlLh reasonable cerLalnLy

adley v 8axendale
senL away Lo geL a new crankshafL for lLs mlll Lelllng u LhaL lL should hurry u was laLe ln flxlng/sendlng
Lhe shafL and sued for money pald ln wages for days losL
O Wages/work sLoppage noL foreseeable enough Lo warranL recovery
O u noL responslble because dldn'L have reason Lo know mlll was closed unLll shafL recelved
lera v Illlage laza lnc
leased a spoL ln a mall Lo be bullL and u gave Lhe spoL Lo someone else sues Lo recover for $200k
losL proflLs
O Allowed because Lhere was evldence sufflclenL for [ury Lo flnd reasonable cerLalnLy
O 1hls $200k award was ln Lhe range beLween 0 and $270k presenLed by LesLlmony

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