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Table of Contents
I. IS THERE A CONTRACT?...................................................................................................................1
CONSIDERATION...........................................................................................................................................1
A. Bargain.........................................................................................................................................1
B. Reliance (Promissory Estoppel)...................................................................................................1
C. Unenforceable Promises...............................................................................................................2
i. Past Consideration..................................................................................................................................2
ii. Moral Obligation....................................................................................................................................2
Material Benefit Rule (Exception – JX Split)..............................................................................................2
iii. Gift Promise...........................................................................................................................................2
iv. Illusory Promise.....................................................................................................................................2
BARGAINING PROCESS.................................................................................................................................2
A. Offer..............................................................................................................................................2
i. Property Sales........................................................................................................................................3
ii. Price Quotes...........................................................................................................................................3
iii. Jokes/Bluffs............................................................................................................................................3
iv. Mistakes.................................................................................................................................................3
v. Advertisements.......................................................................................................................................3
B. Acceptance....................................................................................................................................4
i. Unilateral Contracts...............................................................................................................................4
ii. Bilateral Contracts..................................................................................................................................4
iii. Competitive Bidding..............................................................................................................................4
iv. Common Law.........................................................................................................................................4
Mirror-Image Rule......................................................................................................................................4
Mailbox Rule...............................................................................................................................................4
v. UCC....................................................................................................................................................... 5
Accommodation..........................................................................................................................................5
C. Terminating Power of Acceptance................................................................................................5
i. Rejection................................................................................................................................................5
ii. Revocation.............................................................................................................................................5
1. Consideration....................................................................................................................................5
2. “Firm offers” under UCC 2-205........................................................................................................5
3. Reliance by offeree (promissory estoppel)........................................................................................5
Partial Performance (Brooklyn Bridge metaphor)..................................................................................5
iii. Lapse......................................................................................................................................................6
iv. Death......................................................................................................................................................6
DETERMINING TERMS OF THE CONTRACT...................................................................................................6
A. Common Law – Mirror-Image Rule & the “Battle of the Forms”...............................................6
i. Mailbox Rule.........................................................................................................................................6
A. Sale of Goods – UCC §2-207........................................................................................................6
i. UCC §2-207(1)......................................................................................................................................6
ii. UCC §2-207(2) – Merchants Only.........................................................................................................6
iii. UCC §2-207(3)......................................................................................................................................7
1. Knock-Out Rule................................................................................................................................7
iv. Shrink-Wrap Contracts...........................................................................................................................7
v. Rolling Contracts...................................................................................................................................7
PRECONTRACTUAL LIABILITY......................................................................................................................8
A. Irrevocable Offers.........................................................................................................................8
i. Option Contracts....................................................................................................................................8
B. Failed Negotiations.......................................................................................................................8
C, Breach of Promise to Negotiate in Good Faith............................................................................8
i. Restitution..............................................................................................................................................8
ii. Misrepresentation...................................................................................................................................8
iii. Preliminary Agreements.........................................................................................................................9
1. Tribune I...........................................................................................................................................9
2. Tribune II..........................................................................................................................................9
DEFINITENESS OF TERMS.............................................................................................................................9
II. STATUTE OF FRAUDS......................................................................................................................9
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Contracts Outline –Bjorklund – Fall 2007
Sarah Scott ii
Contracts Outline –Bjorklund – Fall 2007
I. IS THERE A CONTRACT?
Consideration
Bargained-for exchange; quid pro quo
Does not require benefit/detriment – though this often provides evidence of exchange
Forbearance – can be sufficient consideration if it’s something you could have done otherwise
o Hamer (uncle/nephew) – forbore from drinking, gambling, etc.
o Fiege (bastardy case) – she forbore from suing for bastardy – even though he wasn’t the
father doesn’t matter because she acted in good faith (thought he was and had basis for
belief) subjective basis of forbearance (could satisfy objective basis too, but you only
need one or the other)
“Peppercorn” - courts won’t generally evaluate adequacy of consideration – BUT if disparity in
values is so great that the nominal value is obviously a cover, modern court will not find valid
($1 for house vs. Million Dollar Swipe case)
A. Bargain
R2C §71(2): “A performance or return promise is bargained for if it is sought by the promisor in
exchange for his promise and is given by the promisee in exchange for that promise.”
Kirksey (“If you will come and see me, I will give you a place to raise your family”) – no
bargained-for exchange no consideration
CAB (three employees violated non-compete clauses) – court was wrong in finding consideration
– their raises/promotions were not bargained-for in exchange for compliance with non-competes,
and employees were forced to sign non-competes after they were hired (new terms were imposed
upon hiring)
Strong (wife guarantees husband’s IOU to P, “until such time as I want my money”) – court says
no consideration for wife’s promise – his promise was illusory – didn’t say how long he would
forbear from collecting (like at-will employment, could be the next day)
B. Reliance (Promissory Estoppel)
Bargained-for exchange can be too limiting at times – reliance comes to the rescue
Promissory Estoppel (R2C) – Elements:
o There was a promise
o Promisor reasonably expected promisee to rely
o Promisee DID rely (acted or forbore – detriment)
o Injustice can be avoided by enforcement
2 philosophical takes on what reliance is doing:
o Promise w/o consideration; reliance can substitute to enforce K expectation
damages
o Promise, reliance on that promise; reliance damages
Ricketts (grandfather promised granddaughter $2,000 to quit job) - $2,000 was expectation
damages; $500 (one year’s salary) was reliance (he died one year after she quit)
Cohen – P relied on D’s promise of anonymity, lost job when they broke promise
Feinberg – P relied upon promise of pension in making decision to retire
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D&G Stout (turbulent Indiana liquor market case) – P relied on D’s promise to maintain P’s
status in negotiations, and D knew it binding promise
C. Unenforceable Promises
i. Past Consideration
Feinberg – no consideration (P did not retire because of pension) but reliance can substitute
R2C §86 – promise for already received benefit only binding to the extent necessary to prevent
injustice
ii. Moral Obligation
Mills – moral obligation to care for dying man not enough for consideration with the father –
also past consideration.
Material Benefit Rule (Exception – JX Split)
Webb – Exception to Moral Obligation Rule – moral obligation is adequate when there was
“material benefit”– benefit (saved life) and detriment (injury), plus evidence of past performance
(D paid P for 7 years) – court manipulates black letter law.
iii. Gift Promise
Nothing given in exchange
iv. Illusory Promise
Lucy, Lady Duff Gordon – court determined it was not illusory for D to say he would use his best
efforts because he was acting in good faith and had strong incentive to perform (if he didn’t sell
her stuff he wouldn’t get his cut)
Bargaining Process
Objective view: what would a reasonable person understand is meant by communication
usually trumps
Subjective view: what does person hearing communication actually believe
“Meeting of the minds” – overly-subjective – not good standard
3 kinds of K:
o Express: both parties make explicit the fact they are entering into K
o Implied-in-fact: K is implied by words or actions (e.g. longstanding relationship)
o Implied-in-law: no K exists, but courts “invent” one in order to give restitution for
unjust enrichment (Cotnam v. Wisdom – doctor can recover from estate of deceased
on basis of this – PP to encourage doctors to help dying people)
A. Offer
“An act whereby one person confers upon another the power to create contractual relationships
between them.”
o Act must be expression of will or intention
o Act must lead offeree to reasonably believe that power to contract has been
conferred upon him
ELEMENTS OF VALID OFFER:
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B. Acceptance
“A voluntary act of the offeree whereby he exercises the power conferred upon him by the offer,
and thereby creates the set of legal relations called a contract.”
Offeror is “Master of the Offer” – ways to accept:
o Performance (unilateral K) – but offeror must know that performance has
commenced
o Return promise (bilateral K)
Offeror can set terms of acceptance – but up to him to set such conditions – otherwise default
rules kick in (reasonableness)
Silence does not equal assent – unless history of past dealings would indicate otherwise (Hobbs
v. Massasoit Whip Co.)
i. Unilateral Contracts
Acceptance by performance does not require notice, unless offeror wouldn’t know you were
performing otherwise (offeror must know offer has been accepted).
Carbolic Smoke Ball case – acceptance of the offer was the use of the smoke ball. D asked for
return performance rather than promise, and court found D didn’t require notification of
acceptance.
ii. Bilateral Contracts
Acceptance by return promise requires notice (unless offeror waives – see International Filter
Co. v. Conroe Gin). Acceptance must be given within reasonable time – could be after
performance has commenced but must be straightaway.
White v. Corlies & Tift – “Upon an agreement” to finish in two weeks, “you can begin at once.”
Ds wanted promise to finish in two weeks, not actual performance; if P commenced performance
where they would see it, that would have sufficed as acceptance (offeror must know offer has
been accepted). Could also possibly see P’s buying lumber as merely preparing to perform.
iii. Competitive Bidding
Auction default rules (can be changed but must be done explicitly):
With reserve price:
o Bid is the offer
o Seller is free to reject bid until the “hammer” falls
Without reserve price:
o Bid acts as acceptance and seller must take it
iv. Common Law
Rejection (or counter-offer) kills offer – offeree loses opportunity to accept
Mirror-Image Rule
Used to determine if there was ever a K at all.
At common law, acceptance that does not “mirror” terms of offer is not acceptance, but rather
rejection + counter-offer
International Filter Co. v. Conroe Gin – default rule says P must give D notice of acceptance,
but P waived this requirement in their offer, so D still on hook
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Mailbox Rule
v. UCC
More flexible than mirror-image rule of common law – there can be acceptance by giving non-
conforming goods. Buyer then has option of treating this as a breach, or of accepting the non-
conforming goods.
Accommodation
Corinthian v. Lederle – vaccines case – sending of 50 units at lower price and offering to send
950 at higher price or to cancel order – not an acceptance of P’s terms but rather rejection +
counter-offer done in interest of other party and interest of time
C. Terminating Power of Acceptance
i. Rejection
Terminates power of acceptance. Anything other than mirror-image acceptance functions as
rejection.
ii. Revocation
Must be done before acceptance.
Hoover v. Clements – “We might not want to go through with it” held as revocation of offer to
buy – doesn’t have to be more specific because no K established yet – courts reluctant to force
parties into K (freedom to contract and freedom from contract).
Ways to make offer irrevocable:
1. Consideration
Dickinson v. Dodds – D promises to hold offer open until Friday morning – but no consideration
to support this, so not a binding K. OK for offeror to revoke indirectly (via 3rd party) so long as
offeree gets reliable information to that effect.
2. “Firm offers” under UCC 2-205
Higher standard on merchants to protect consumers – can make offer to buy/sell goods signed in
writing which by its terms gives assurance it will be held open (option K) – doesn’t require
consideration and is irrevocable for time stated (or reasonable time if none stated but never > 3
months).
3. Reliance by offeree (promissory estoppel)
Ragosta v. Wilder – D offers to sell Fork Shop and to keep offer open until 11/1 – but no
consideration for this (P gives $2k but D returns it, P’s detriment in obtaining financing was not
bargained for). P can’t claim acceptance by performance because he only prepared to perform
(getting money together).
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v. Rolling Contracts
Broadens definition of K formation – rolling K formed over period of time:
o “Acceptance of goods” under §2-606(1) doesn’t necessarily equate to acceptance
of offer
o Buyer can reject goods after detailed review (though this isn’t always the case –
try to return CD after shrink-wrap off)
o Buyer has opportunity to read license and then reject product
Precontractual Liability
A. Irrevocable Offers
Drennan v. Star Paving – subcontractor revokes bid after contractor’s bid accepted – court said
subc’s offer was irrevocable because there was an implied subsidiary promise
i. Option Contracts
With UNILATERAL K, A is bound by an option K based on implied subsidiary promise not to
revoke until B has had opportunity to finish performing (Restatement 45) – power shifts to B –
commencement of performance creates option K
With BILATERAL K, K becomes binding because B gave implied promise by commencing
performance – both A and B are bound
Move to Maine case – power shifted to daughter/offeree – she gets to accept, mother can’t revoke
Restatement §87(2) – mainly used for subcontracting: “An offer which the offeror should
reasonably expect to induce action or forbearance of a substantial character on the part of the
offeree before acceptance and which does induce such action or forbearance is binding as an
option contract to the extent necessary to avoid injustice.”
B. Failed Negotiations
Hoffman v. Red Owl -
C, Breach of Promise to Negotiate in Good Faith
At common law, no implied duty to negotiate in good faith
“Good faith” very much dependent on context – courts have lots of leeway
There can be agreement to negotiate in good faith, but must meet all K requisites (mutual assent,
consideration)
Channel Home Centers v. Grossman – though no implicit duty to negotiate in good faith, there
can be specific promise to do so – here there was and D breached that promise (gave definite
promise, got letter of intent (bargained-for exchange), then rented to competitor)
Potential claims arising from negotiating behavior:
i. Restitution
Restitution of benefits conferred during negotiations – problem is often the promisor is not
unjustly enriched because of promisee’s injury, and promisee’s reliance may result in benefit to
someone else
ii. Misrepresentation
Can have bad faith in negotiating while intending NOT to reach agreement
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Hoffman v. Red Owl – P reasonably relied on promise that $18k was enough to buy franchise –
injustice can be prevented by finding breach of promise. But impossible to award expectation
damages because we don’t know how much franchise would have cost (like Sullivan)
Farther away parties are from K means P is more likely to get reliance; closer parties are means P
might get restitution/expectation
iii. Preliminary Agreements
1. Tribune I
Parties agree on all terms and their ultimate contractual objective; agreement still to be
memorialized in a formal document but the agreement is still fully binding.
2. Tribune II
Parties agree on some terms and agree to negotiate in good faith to reach final agreement; but
parties are not yet committed to ultimate contractual objective and may never reach it.
Definiteness of Terms
Definite enough to permit court to determine whether or not there was a breach (was there an
assent and thus a K?)
Definite enough for a court to be able to determine and award damages
Sources of terms:
o K itself
o Preliminary negotiations
o Government regulations
o Common industry practice
o Course of dealing
o Implied terms (UCC gap-fillers)
Oglebay Norton Co. v. Armco, Inc. – K included two pricing mechanisms and both failed – can
parties be held to K? Court orders parties to agree on price or submit to mediation – unusual
ruling – probably ordered specific performance rather than damages because damages are too
hard to calculate here
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o Only covers promises that literally can’t be performed within one year (e.g. five-year
employment K; Hamer agreement for 16-year-old to abstain from vices until 21)
o Can cover Ks that last < one year but that conclude > one year from making of K (e.g.
one-year employment that starts two weeks from making of agreement)
o Lifetime employment falls outside the statute – P can always die within a year, so SF
would be satisfied
o Even if factual impossibility, if K doesn’t spell out then no SF
C. Sale of Goods ≥ $500 (UCC §2-201)
iv. UCC §2-201(1)
Relaxation of writing requirement with respect to sale of goods:
o Goods for price ≥ $500 (can be aggregated)
o Signed by party against whom enforcement is sought
o Quantity needs to be shown in writing
o Writing sufficient to indicate K for sale of goods
Sometimes not clear if K is primarily for goods or services – which is incidental to which?
If agreement is not between two merchants and 2-201(1) not satisfied, go on to 2-201(3)
v. UCC §2-201(2) (Merchants Only)
Applies to transactions between MERCHANTS ONLY
Written confirmation can be sufficient as against the non-signing party if:
o Writing is sent within reasonable time, and
o Writing is signed by A, and
o Writing confirms agreement between A and B (sometimes difficult to determine – writing
in GPL Treatment appeared to be both confirmation and acceptance), and
o Writing is enforceable against A, and
o B does not object to its contents within 10 days of receipt (silence is acceptance)
vi. UCC §2-201(3)
K that does not satisfy requirements of 2-201(1) may be enforceable if:
o Goods are specifically manufactured (i.e. can’t be found easily on the market), OR
o Party admits K was made, OR
o Payment OR delivery of goods has been made and accepted
D. Suretyship
Primary obligor (or surety in her stead) owes something to oblige
vii. Main-Purpose Doctrine
When main purpose of “suretyship” is to get something of tangible benefit (i.e. promisor makes
agreement to benefit himself rather than 3rd party) removes agreement from SF
o Adequacy of consideration can be evaluated by courts under main-purpose doctrine
o Way courts manipulate evidence to find K or not depending on what they want (court
goes out of its way to suggest SF in Power Entertainment even though party that SF
protects is waiving that protection)
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A. Partial Performance
Often used for sale of real property:
o Taking of possession by purchaser
o Past performance of price
o Improvements to property
B. Reliance
Equitable estoppel – can be used to protect reliance on false factual assertion
Promissory estoppel – when no actual false factual assertion but one party reasonably relies on
oral K as promise, thereby suffering detriment (son promised farm for 20 years work in
Monarco)
C. Restitution
When party was unjustly enriched (parents received 20 years work and increased value of
property in Monarco – but these damages were harder to prove than reliance)
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CISG
No writing required under CISG – still have to prove K though
Article 11: “A K of sale need not be concluded in or evidenced by writing and is not subject to
any other requirement as to form. It may be proved by any means, including witnesses,”
Capacity
A. Infants (Minors)
Capacity issues can also extend to elderly (historically extended to married women but no more)
PP considerations – “protection” of certain parties can be seen as patronizing
ELEMENTS:
o Ks made by infants are voidable at their option – infant may choose to disaffirm K but
other party may not
“void” = no good by either party
“voidable” = can be disaffirmed by 1 party, but nothing inherently wrong with K
o Minor must restore property (what’s left of it) and gets $ back (often to seller’s detriment
if property has depreciated)
Must do so within reasonable time – reasonableness depends on circumstances
Minor can’t be put in better position because of disavowal (child actor in
Cabovitz tried to back out of K with agent after he got recurring role on show)
o Excludes Ks for “necessaries” – PP decision, courts didn’t want providers of such goods
to be discouraged from entering into Ks with minors over fears of voidability
Housing not necessary if minor living with parents (i.e. doesn’t protect runaways)
Cars can be necessaries, but court didn’t find this in Kiefer
o Excludes certain Ks for personal property in minor’s possession (newspaper delivery boy
can’t disavow K with newspaper)
o Other statutory exclusions – e.g. car insurance
Ks made by parents for minors ok (Brooke Shields case)
Potential legislative solutions for infant capacity problems:
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o Allow parties to submit K to court for approval; if K is fair, minor may not disaffirm (but
hindrance on seller)
o Rebuttable presumption of incapacity (but seller still can’t protect himself)
o Allow minor to petition court for blanket removal of disability (i.e. court order) best
option
Misrepresentation by minor – if reasonable person would believe minor is of age and relied on
that belief, could estop minor from disavowing K (n/a in Kiefer because it was boilerplate
provision, car seller didn’t rely, D didn’t show fake ID so no affirmative misrepresentation)
B. Mentally Infirm
ELEMENTS (Restatement §15):
o Is person unable to act in reasonable manner in relation to the transaction?
o Does other party know of this condition? (This was debatable in Ortelere – did school
board really know she changed her pension?)
Did other party change their position as result? (Also at issue in Ortelere – what if
she died years later instead of 2 months?)
Potential legislative solutions for mentally infirm capacity problems:
o Guardianships – require designation of incompetence, and person under guardianship
loses capacity to K
o Conservatorships – less strict, for people who need “direction in the management of their
affairs” – still requires judicial determination, but person under conservatorship may still
enter into Ks subject to conservator’s ability to disaffirm Ks that are not for necessaries
(puts person in infancy status)
Unfairness in Bargaining Process
A. Duress
ELEMENTS:
o Party is forced to agree because of
o Wrongful threat that
o Precluded exercise of free will, AND
o Goods/services must not be (readily) available from another source (Loral – going to
only 10 subcontractors enough mitigation?)
o Regular action for breach of K must be inadequate (immediacy needed, no self-help)
Impermissible pressure during initial bargaining process or renegotiation – can be:
o Physical/emotional duress
o Economic duress – but not illegal to threaten something you have right to, e.g. sue
(provided there is reasonable belief in validity of suit)
Not duress just because one party knows something other doesn’t – this is typical negotiation
Modifications & Rescissions – When is modification of K product of genuine assent vs.
impermissible coercion?
o Rescission and modification can be rolled into one transaction (release/waiver of term,
substitution of another)
Mistakes & Assignment of Risk – Typically party who makes mistake must bear the risk, but if it
appears that resulting deal would be fair, can use newer doctrine to get around, with limitations
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If party makes affirmative representation of partial truth, must do so for whole truth (zoning law
about apportioning house as apartments in Kannavos; presenting paper saying currently no
termites but not paper saying past termites) – like misfeasance vs. nonfeasance
B. Misrepresentation
ELEMENTS:
o Party to K makes (whether knowingly or unknowingly) false statement
o False statement is material (not about something minor)
o Other party justifiably relied on statement (V must exercise degree of diligence – amount
varies depending on V’s capacities, nature of transaction, plausibility of representation –
car buyer should have checked A/C was working before buying)
o Misrepresentation must be of fact, not opinion
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Pyeatte v. Pyeatte – No K existed (promise made in context of marriage) – wife was first granted
expectation damages but this was thrown out and she was given restitution damages (wasn’t a
breach of K case, and expectation damages more vague than restitution)
i. Quantum Meruit
When P makes mistaken bid to his detriment, then D breaches – can P get full value of services
or only price in K? Usually based on market value of benefit
Can be used as alternative to K-based damages even when there is a K, IF:
o Other party breaches before performance is completed (not always clear if there’s been a
breach and/or who breached)
When D breaches, P is excused from performance
o May stop performance and sue – on the K or in QM (but must be right about D’s breach
or P will be sued himself)
o May continue performance and sue on the K – may NOT sue in QM if performance
complete
Can only continue performance if not aware of breach (Luten Bridge Co. –
otherwise must stop performing)
P must decide at time of breach – not entitled to disavow K later
JX SPLIT (argue both on exam):
o Restatement says P can get full value of performance, court should set aside K
o Many courts say no, K price is ceiling – don’t reallocate risk
Limitations on Damages
General Damages – Arising naturally, according to ordinary course of things – don’t need any
particular knowledge to know these damages would ensue (lost profits, etc.)
Special Damages – Such as may reasonably have been within contemplation of parties at time of
K (cheese maker lost out on food critic review, not just profit on cheese; carrier couldn’t have
known Hadley mill would have to shut down)
Emotional distress almost never recoverable for breach of K UNLESS it’s particularly
foreseeable (funeral Ks) or suit also involves tort claim
A. Avoidability
Difference in value is appropriate measure, even if nominal (non-inferior piping in Jacobs &
Young; 1 foot shorter pool)
o For breaching buyer, difference is K price – market value (burden on seller to show
property worth less at time of breach than K price)
o For breaching seller, difference is market value – K price (burden on buyer to show
property worth more at time of breach than K price)
UCC and common law encourage cover – will let cover price fix measure of damages regardless
of market price, provided that cover price is in same neighborhood (won’t penalize you for
covering at high price or benefit you for covering at low price – you get what you get)
Duty to Mitigate – misnomer – not breach of K if you fail to mitigate but it will reduce your
damages
o Cover must be done promptly
o Employment context – must accept employment that is comparable (not inferior)
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B. Foreseeability
Must be reasonably foreseeable (objective & subjective) that breacher knew injury would result
Determined at time of K formation
All that must be foreseeable is that loss would result if breach occurred (don’t need precise form
of breach)
Restatement §351 (encapsulates Hadley):
o Damages are not recoverable for loss that breacher did not have reason to foresee as
probable result of breach when K was made
o Lost may be foreseeable as probable result of breach because it follows from breach:
In ordinary course of events
As result of special circumstances that breacher had reason to know
o *Court can limit damages for foreseeable loss in order to avoid disproportionate
compensation (*this section not widely accepted)
Also see Hadley in UCC – seems to suggest buyers get both incidental damages (mitigation
costs) and consequential damages (what completion of K could have led to), where sellers only
get incidental– oversight? Possibly – has been fixed since – mention both ways on exam.
C. Certainty
Must have “reasonable certainty” of amount of expectation damages – can be approximate but
can’t be based merely on hopes (UNIDROIT Principles)
Harder for new businesses to recover than established ones, but if proof then ok (Book & Bottle
shop case – lots of testimony)
D. Damages Under CISG
Damages when party has not covered measured by market price at time of breach vs. K price
(important where price of commodity fluctuates)
Generally can get back variable costs (incurred as result of breach) but not fixed costs (those you
would have spent anyway) – both UCC and CISG (Delchi would have incurred labor costs of
A/Cs anyway)
UCC and CISG very similar in all respects (duty to mitigate, foreseeability) EXCEPT CISG is
more liberal on foreseeability – possible result, rather than probable
Specific Performance
Not the preferred remedy – practical difficulties:
o May be impossible or undesirable (e.g. if deadlines have passed)
o May be difficult to monitor or enforce (courts aren’t always effective enforcers)
o Parties may not be interested in working together anymore – bad blood
o Other reasons courts don’t like: affects individual autonomy and might flood court with
policing Ks; threatening damages can be better mediation tool than specific performance
Available when damages remedy is inadequate (to protect expectation interest) – usually given in
connection with land/property or other unique goods (jet wasn’t unique in Klein, plus since $
profit was end goal specific performance not necessary – damages would suffice; cowboy broke
horse, should get horse – might be different if he just wanted to sell horse)
Restatement §360 – factors to consider:
o Difficulty of proving damages with reasonable certainty
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Unilateral Mistake
Hard to get relief under mutual mistake; REALLY hard to get relief for unilateral mistake (if
only Renners were mistaken about water supply they probably wouldn’t have won)
Restatement §153:
o Error concerns fact
o Erroneous fact must have been basic assumption on which party made K
o Mistake must have material effect on agreed exchange of performances, adverse to
mistaken party
o Adversely affected party must not have born risk of mistake, AND
o Equities must favor relief for mistake (Elsinore was anomaly, but since D rescinded right
away, mistake was honest, and school board could bear cost better, he won)
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Impracticability
Comes into play when:
o Post-K formation change in circumstances
o Serious effect on reasonable expectations
Must be more than mere inconvenience or lack of profit or better opportunity
elsewhere (only thing Transatlantic could say was it had to pay more $ - this can
be enough but not usually)
o Excuses performance
ELEMENTS:
o Something unexpected occurred after K was formed (extraordinary circumstances –
suggestion of foreseeability)
o Risk of unexpected occurrence was not allocated either by agreement or custom
o Occurrence rendered performance impracticable
UCC §2-615:
o Delay in delivery or non-delivery in whole or in part… is not a breach… if performance
as agreed has been made impracticable by the occurrence of a contingency, the non-
occurrence of which was a basic assumption on which K was made (suggestion of
foreseeability here too)
Sarah Scott 23