another k outline

8/8/2019 Another k Outline

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CONCEPTUAL OVERVIEW

BOX 1 BOX 2 BOX 3

Is there a valid K? Is the K breached? What is the remedy?

1. FORMATION 1. INTERPRET 1. INJUNCTIVE RELIEF

2. TERMS 2. PERFORMANCE

INADEQUATE

2. DAMAGES (expectation,

reliance, punitive,restitution, nominal)

3. PUBLIC POLICY 3. EXCUSES 3. SPECIFICPERFORMANCE

Introduction___________________________________________________________

I. What is a contract?a. All state law

Her definition: conduct that creates binding commitment enforceable by thelegal system

II. fundamental conflict in contracts:economic necessity v. individual autonomyExample 1: rules v. standards (see Kennedy CS 244-248)

• distinction between rules and standards is not rigid

• rules take power away from the judiciary

• standards provide a lot more leeway1. rule are good : certain/consistent/prevent discretion, but over/under inclusive

2. standards are good: standards result in transaction costs, lack of certainty;perhaps result in a more just outcome

Example 2: formalities v. informalities• formalities increase transaction costs (?), make it easier for people who

don’t know formalities to be taken advantage of

• informalities are less certain (see Williams CS 248-251))1. formalism-RULES focused; founded by Langdell and Williston –

mechanical application of the rules to reach a correct result2. realists- STANDARDS focused; rejects formalism; Pound, Llewellyn –

results of a decision-making process in which both the finding of facts



and the applications of rules were affected by the personalities, povs,interests, and goals of decisionmakers (not neutral)

3. economists (‘Chicago School’): seem to be big on the rules?; Posnertwo fundamental beliefs:

1. rules increase efficient outcomes

2. inefficient rules should be modified in favor of more efficient ones4. CLS: deconstruction – cant develop system of decisionmaking within ourlegal system as it now exists; functions as political ideology- preservesdistributions of weath/power

III. Two ways to view doctrines, contracts, etc:a. formalist/classical b. pragmatist/modern



Section 2: Enforcement/Remedies____________________________________________________________________

I. DAMAGESa. nominal – a fixed sum without regard to the amount of loss b. restitution – goal: preventing the breacher from unjust enrichment; strongest

c. reliance- goal: to undue harm of the reliance on the promise has done to thenonbreacher

d. expectation (“normal remedy”) – goal- to put the plaintiff in as good a position ashe would have occupied had the promise been performed

▬ remember: doctrines of foreseeability, certainty, causation, and mitigation may preventrecovery of damagesReliance Damages:

Wartzman v. Hightower Productions, Ltd (p. 925)

Issue: (1) Whether trial judge correctly permitted jury to consider the issue of “reliancedamages”? (2) Whether trial court correctly refused jury to consider prejudgement interest?(actually there are 4)

Facts: poll-sitter went to attorney to incorporate. Attorney did a bad job which destroyedthe endeavor.

Holding: Trial court judgement affirmed ($170000 for plaintiff)Rule:

• reliance damages when expectation damages are too difficult to calculateArguments for Wartzman

1. Bring up limitations -- foreseeability, mitigation, and causation2. Their damages are speculative (that's why no expectation damages) -

court says that attorneys should foresee3. Mitigation - equal opportunity -- firm could have mitigated

No duty on hightower to hire a security attornery bc they did not have the

funds (and the wartzman firm knew that)

Expectation Damages:

• net expectation (value of performance promised – cost of performance promised by plaintiff)

• total breach – four elements for this claima. loss in value (value in what was promised – what was actually

received) b. other loss – incidental/consequential damages

• reasonable attempts to avoid loss

•

general principle is that all loss is recoverablec. cost avoidedd. loss avoided

• if risks cannot be priced, they are not considered (foreseeibility)

• partial breach- general principle applies (as does the first two calculations (a+b) for total breach)

• pre/post judgement interest might be available (p. 820 n5)



• doctrines that normally apply to mitigate these damages: foreseeability, causation,certainty, mitigation

• restitution damages are as close to punitive damages as we get.FORMULA:Loss in value + other loss – cost avoided – loss avoided

Turner v. Benson (SC of TENN., 1984) (p. 913)Issue: whether proper measure of damages was applied to a vendee’s breach of a real estate

contract?

• Uses the general rule: proper measure of damages available to a vendor against a breaching vendee is difference between K price and the fair market value at thetime of the breach (p. 814)

• Facts: real estate contract that was breached by buyer (child care)

• Holding: affirm liablely and remand with damages to be determined acc. To principles

• Damages are not easy to calculate – shows calculation of expectation damagesLimitations on Damages:

Hadley v. Baxendale (Court of Exchequer 1854) (p. 831)Issue: whether jury was properly instructed about the liability for

expectations damages (arising from lost profit) in original case?Facts: mill owner’s crank shaft broke. Sent it to Greenwich for new one

via pickford & co. told clerk to hasten the production/delivery but it wasdelayed – mill did not resume for several days. Appeal for misdirection by judge to jury (jury awarded 25l)

Holding: new trial. Loss of profits cannot be considered – not foreseeibilein new trial.

Rule: damages are recoverable only if they were reasonably foreseeableat the time of the contract; in certain kinds of recurring disputes, there might

be a best cost avoider -- economics says make that person liable bc they canpreventconsequential damages are limited to what is forseeabile

• Hadley is still with us. Reasons:1.Disincentive to enter into contracts if liable for stuff that we cannot foresee(incentive to gain knowledge -- avoid risk)2.reduce litigation costs3.unfair to change

• No attorneys fees even if breacher losesRockingham Country v. Luten Bridge Co. (US Court of Appeals – 4th

Circuit) (p. 848)Issue: Whether a non-breaching party has an obligation to mitigate damagesupon notice of breach?Facts: contract made by county with construction company to build a bridge.Notice of cancellation of contract was given to Luten before bridgeconstruction began.Holding: Obligation for nonbreaching party to mitigate damages exists.Plaintiff awarded profit + expense up until the contract was cancelled.



Rule: Non-breaching party has a duty to mitigate damages. (otherwiseconstrued as a limitation on plaintiff’s recovery of damages

Restitution Damages:

•Restatement provides for restitution in a variety of circumstances (see

Restate § 349, 373-377), but no restitution is if the only breach is that theperson did not pay.K situations for restitution:

a. Partial performanceb. It turns out no K (incapacity, person is a minor, crazy, fraud,duress) -- box 1 isssuesc. Rescission

• Rationale is to prevent combination of unjust impoverishment withunjust gain—interest strongest for judicial intervention

• Quantum meruit allos a promise to recover the value of services he gave

to the D regardless of whether he would have lost money on the K and beenunable to recover in a suit on the K

• Liability for benefits received disgorge unjust enrichment of a defendantat plaintiff's expense

• Measurement of restitution damages = “as justice requires”o This can mean either market value, the increase, or other value

Pro (of market value rule) Con

• Prevents unjust gain bybreacher

• Makes Ks less efficient

• Doesn’t make non-breachercome out ahead

United States ex. Rel Coastal Steel Erectors, Inc v. Algernon Blair (p.943)Issue: Whether a subcontractor who ceases work because of contractor’sbreach recover in quantum meruit the value of labor + equipment alreadyfurnished?Facts: Blair contracted to provide steel erection for Coastal. Coastal refused toprovide money for crane as per contract. That was material breach.Holding: The court found that the sub is entitlted to recover.Rule: You can recover the value of the service that you have provided so thatyou can be saved from loss if the other party breaches.

II. SPECIFIC PERFORMANCE

Pros Cons

• Sometimes not ineff

• Provides remedy when damages just wont do (land, etc)

• Broken relationship – doesn’twork so well

• Sometimes Ineff



• Hard to supervise/enforce

• Coercion/slavery

• Free compensation in labormarket (w/employ situations)

Two reasons to grant (when asked for):

1. Expectation remedy is undercompensatoryFrustration and anger

2. The plaintiff is in best position to choose the lesser of 2 evils

▬ courts consider: hardship to def or others, hostility to the merits of the P’scase, values (freedom of speech, freedom from compulsory service)

• Law and equity relationship is important (p. 314)o In personam relief = injunction or spec performance (awarded

trad by equity courts)o To achieve these, it is necess to show that damages (default)

are inadequateo Discretionary remedy that the court can choose to use

City Stores Co. v. Ammerman (p. 967)

Issue: Whether a company who was promised a lease is entitled to specificperformance of this lease when the conditions set forth in the alleged contractare met?Fact: City Stores claims that a letter (constituting a contract?) was writtenpromising them a lease if the shopping center was constructed.Holding: Letter in question was a binding unilateral contract, which gave Poption to accept lease at Tyson’s Corner.Rule: Important that specific performance not interfere with the rights of athird party. Two criteria for spec performance: (1) damages must be inadequate and (2)damages are impractical. Court ordered specific performance.

Economic argument for spec performance:expectation damagessystematically undercompensate people and difficult for a court to do (see p.977 n7)

American Broadcasting v. Wolf (p. 978)Issue: Whether ABC is entitled to spec perform of K provision against Wolf

(sportscaster)?Fact: Wolf signed a K w/ good faith negotiation provision. ABC claims that heviolated it.Right of first refusal - if he gets an offer, ABC can shoot it down first -- givethem a chance to match•No court would enforce first right of refusal indefinitelyHolding: Wolf did violate the provision, but equitable relief (spec performance)will not be granted. Would unduly burden Wolf who would be kicked off the air.



Rule: Courts don’t order spec performance of services. Courts will considerthe role/rights of third parties. Timing is key. Thirteenth amend (involuntaryservitude) could be a problem. Only $ available. In this case, it was too lateanyway bc Wolf was already working for CBS.

• Court also said that enforce non-comp when trade secrets, spec harm

after K expiration; public policy = more comp without non-compprovisions

• Dissent would have enforced a 90-day injunction▬ Restatement (Second) says that injunctive relief is ok, but only if therestrained engagement would have been for a competitior of the P.

• Injunctive relief (negative enforcement) when (1) services are unique(2) employee expressly or impliedly convenanted not to work forothers during the period

• Different states have different laws on post-employ comp KsLumley v. Wagner (p. 986)Facts: Wagner contracted to be in several operas in London at Lumley’s opera

house during 1852 season. She Ked not to be in any other operas at the time.She then agreed to perform for another companyHolding: court held that she could be enjoined.

• Restatement § 367 says that negative enforcement ok, but positiveenforcement is not in most circumstances

Do we need promise/covenant?

• Yes, if strictly following Lumley

• No, if court says such a promise is implied -- could use pattern of fact(i.e. pattern of behavior proves) also could be implied in law(different)

▬ trailing clause – agreement not to reveal trade secrets. Courts generally don’t like.

III. Agreed RemediesPros Cons

• Certainty

• Less court time

• Lower admin costs

• Freedom of K

• Parties are better able toevaluate risks and what K is

worth to them

• Overreaching (excessivecompared to actual loss)

• Greater bargaining power -not really agreeing

• Retribution and deterrence isfor the state, not for

individuals (pub v. private)o Deter = utilo Retribution = kantian

• When non or defective performance has occurred, parties can agreeto compromise or setltle their dispute



• Agreed remedy provisions (called liquidated damages clause)o Must pass certain test to be enforceable:

THE TEST…ex ante1. Actual damages must be difficult to know at the time of the K 2. The stipulated sum must be a reasonable estimate of the actual

damageso Has to not be a penalty since penalty damages are not allowed

Wasserman’s v. Township of Middletown (p. 989)Issue:Facts: township owned land and leased to wasserman in 1971 -- for thirtyyears with a fixed cost regardless of inflation, etc. The agreed remedies in thelease: (1) Pro rata of improvement costs and (2) 25 % of 1 year gross receipts(Fighting about 2 not 1)Holding: Court endorses a reasonableness standard for evaluating liquidateddamages. Gross receipts was arbitrary and had no relation to actual damages.Rule: Court doesn’t like “conclusary”. Remanded for assessment of

reasonableness.

IV. Analysis of RemediesUnderlying question here: Is there a role for the state in cases where theparties can agree?Efficiency v distribution

o Efficiency - if we end up with more gain for society as awhole (size of the pie, not slices)o Distribution - size of slices

Cooter and Ulen: if we didn’t have glitches, everything would be taken careof by agreed remedies. Frictionless model…

Friedmann – no difference between eff breach and conversion; view asincentive structure – think about the implication of changes in structure onbehavior – if breaches are deterred, breachers may refuse to K unless theycan get a better price. LOTTERY TICKET???Craswel l - Risk preferences - preferant (like risks) or avoidant (avoid risks)

o Overcompensation is going to mess up the market -- if you preferrisks, go bet on a horserace; OVERCOMP = too many precautionso Undercompensation results in too few precautionso Remedies give you incentives to take precautions againstbad stuff

Epstein: state shouldn’t intervene; His argument is in favor of fixed undercompensatory damages ---

1. Law is too biased in favor of using the remedies of the state -- let theparties decide more

DUALISM -- courts are only committed to freedom of contract beforehand --then they step in afterward-say that it is inefficient



-in a world with litigation where it is costly --- fixed sums would be better thanall the rules applied in the common law-attorney fees ensure that the courts are systemically undercompensatory-nonideal assumptions

• He loves the fedex contract because it is systemic compensation and

limits damagesIf plaintiffs know that they will be compensated, then plaintiffs don’t mitigate-reputational constraints will ensure that sellers don’t breach-financial losses also provide this constraint(doesn’t work for monopolist)

Babchek : Two conclusions:1. Buyer with the high risk should convey to seller -- seller could charge

more and take precautions-make carrier the insurerOther way…

2. They shouldn’t have to be the insurer --- buyer with the high risk shouldbe liable -- carrier shouldn’t be (buyer is the best cost avoider)

-buyer gets own insuranceSocial valuable - increases sum total of wealth (efficiency) according toBabchek

Radin: there is a role for the state.World is not ideal (ec theories tend to assume that)Some observations:

•

Certain remedy structure influences selection of parties -- we will changewho we contract• REMEDIES = INCENTIVE STRUCTURES

o If OVER is remedy -- then underselection of riskier sellers• Risk of error with rule-based system -- rule sweeps under people who

shouldn’t be thereStill may be better bc it is more certain

o Rules are subdivided (conditioned, more specific) to try toavoid the possibility that a rule is misappliedo Imperfect information

• People value stuff differently

• These args do not concern themselves with who is richer or poorer ---distributive justice not considered -- these issues are not considered

• System runs on trust



Section 3: Justification for K enforcement

I. autonomy and consent

A. Fried – makes two key arguments for promises:1. Reciprocity/scope of freedom of will (kant)

2. Convention (wittgenstein) - institution of social prac -- people under itare boundForce in particular case depends upon the existence of the practice

Argues against other justifications:o Truth-telling? - concludes that if you were honest at the time(and then change our mind) - not a lieo Harm to other and benefit to self? - can be unjust, but notalwayso People's expectations? (reliance) - cant have a world inwhich expectations of me could limit my freedom (unless I make apromise)

• Need reciprocity of future commitment to increase freedom of will (knownas autonomy due to the kantian basis - autonomy vs. heteronomy (can bemanipulated)

1. It's obligatory (morally) to have an institution of promising ---freedom of will demands that the institution of promising has to beavailable2. For individuals to keep promises - must keep promises bcyou have invoked the moral convention (you have chosen)otherwise you would be using the other person

• He thinks that self-interest is a bad grounding for doing this --- bc people

will change their mindsCraswell- answers Fried.

II. economic efficiency, social welfare maximizationTheory of efficient breach:III. public/private distinctionIV. personhood and the limits of K



Section 4: Classical System of K Law Three grounds for making a promise enforceable:1. consideration – something given in exchange for a promise2. promissory estoppel – reliance on the promise3. unjust enrichment – restitution

Two prominent characteristics of classical K theory:1. preference for clear rules (legal formalism) over standards2. indifference to morality or social policy (other than promises should bekept)

I. Mutual assent• Classical view – binding commitment immed – magic moment of the

meeting of the wills

• Modern view – may be relational over time (no meeting of the mindsrequire)

Theories:

Subjective theory - what did you really have in your mindObjective theory -- reasonable person would have expected/done(normally socialized language practictioner)

- under both classical and modern theory, can be legally bound to promisewithout express intent (or actual intent) -- §21Ray v. Eurice Bros (p. 27)Issue: Whether a contract requires intent of parties to be bound?Facts: Rays are suing Eurice Bros for breach of written K to build their house.Holding: Eurice Bros breached K. Eurice Bros responsible for cost of completion of K.Rule:K has nothing to do with the intent of the parties. K = force of law to

certain acts of the parties which ordinarily accompany and represent a knownintent (Hand) Key test of a true interpretation is what a reasonable person inthe position of the parties would have thought it to mean (OBJECTIVE)

II. Doctrine of Consideration (bargained-for exchange)-existence of a promise alone will not be enough for the law to uphold thepromise – need consideration (although not the only basis now)

• Ways to find no consideration1. No promise2. Was donative or gratuitive3. Illusory promise

4. Moral consideration

Hamer v. Sidway (p. 41)Issue: Whether by virtue of K D’s testator, William Story, became indebted tohis nephew on his 21st birthday for $5000?Facts: Uncle promised nephew $5000 in a letter.Holding: Court held that it is enough that something is promised, done,forborne, or suffered by the party to whom the promise is made as



consideration for the promise made by him… Order reversing trial court judgment infavor of plaintiff was reversed on the grounds that plaintiff's promise to abandon his legalright to use tobacco and alcohol was sufficient consideration to enforce the contract.

Rule:

Baehr v. Penn-O-Tex Corp (p. 47)Issue:Fact: Gas station. Lessee couldn’t pay rent.Holding:Rule:

Dougherty v. Salt (p. 54)Issue: Whether there was any consideration for the promised payment (fromaunt to Charlie)?Fact: Aunt promised Charlie $3000 in printed form. Trial court said Charlieshould win, trial judge set aside the verdict and dismissed.Holding: The promise was an unenforceable promise of an executory gift. Noconsideration -- gratuitiousRule:

Two possible approaches to the document in Dougherty:1. FORMAL WRITTEN DOCUMENT -- 4 corners approach - creates an

unambiguous approach - more predictive2. Contextual (pragmatic) - look beyond it; see the context

Ways to solve the problem for Charlie:1. Make a will

o Formalityo

Could revoke2. Trusto Might have to go to lawyero Could be revocable

Dougherty v. Hamer: Why did Hamer win and Charlie not?Hamer Dougherty

Formality Letter Printed formMotive Refraining from

drinking/smoking?Nice boy?

Identity of PElapsed Time Suit right after aunt died

Consideration w/in Indicated behavior wasthe condition

No condition

-EISENBERG- on consideration…

• administrative problems with donative promises(radin disagrees)

• donative promises are more likely to be less deliberative



• fades out if you have ingratitude or improvidence

Plowman v. Indian Refining Co. (p. 64)Issue:Facts: Company promised to pay one-half salary for life when economic

conditions demanded that they let the workers go. When the companyHolding: The court held that there was no valid contract for the court to paythe employee one half salary for life – no consideration, gratuitious. Courtrejects reliance (promissory estoppel) here.Rule:



III. Offer and acceptance (meeting of the minds)Classical doctrine test = did the minds meet?Offer and acceptance labels need to be appliedK = element of futurityBilateral K = reciprocal commitmentl exchange of promises.

Classical K making goes something like…1. parties engage in prelim negotiation2. on party (offeror) makes an offer – direct, complete proposal3. other party then has the power of acceptance – if acceptance is provided,then K comes into being Two defense to contract formation:

1. I never made you an offer2. Even if I did, you didn’t accept properly

Lonergan v. Scolnick (p. 162)Issue: Whether the K existed/entered into?

Facts: P says that D entered into K to sell some land for $2500.Holding: Court held that specific performance was not required. Letter was notgiving P exclusive offer.Rule: There can be no K unless the minds of the parties have met andmutually agreed upon some specific thing.

• Whether an offer has been made or not is often decided by the courts(use of the word “offer” is sometimes not even enough)

• Common law has held that offer and revocation must becommunicated to be effective, although sometimes an acceptance istreated as effective as soon as dispatched.

Mailbox rule- *deposited acceptance” – is that offer/revocation is effective as

soon as dispatched. Justified in terms of the offeror’s designation of the postas an agent of communication of acceptance. Later cases rejected this – focuson the practical need of the offeree to have a firm basis for action in relianceon the effectiveness of her acceptance once it had been dispatched.→Mailbox rule is NOT applicable in situations in which the offeror has stated(expressly or by implication) that the offer must acceptance must be receivedto be effective. Underlying rationale: the offeror is the master of the offer Technology:-writing formalitiesContract formation:a. early – lots of time to revoke

b. late – K not formed until done

Normile v. Miller (p. 171)Issue: Whether changes to the terms of a contract for sale of propertyamounts to a rejection/c.offer or modification of an existing option K offer?Fact: Normile + Kurniawan signed written offer to purchase prop. K wasreturned signed by D with substantial changes to the terms. N wasn’t sure,Byer (realtor) took the K to another buyer (Segal) who accepted. Normile then



attempted to accept, but was notified that it was too late after an attempt atacceptance. Normile claims he had an option K.-change in terms was a c/offer (rejection of seller’s offer)Holding: Court held that K can only exist w/meeting of the minds on all terms.Meeting of the minds requires assent to the exact terms – if they change Segal

has the valid/binding K.Rule: Changes to K (terms) amount to rejection; When you don’t acceptsomething, it lapses. Changes to terms defeat meeting of the mindsstipulation. Revocation does have to be communicated, but can be doneindirectly.

IV. Acceptance by performance (unilateral K)

• Unilateral contract – when the offeror should offer to exchange apromise of a future performance only in return for the offeree’s actualrendering of performance rather than her mere promise of futureperformance. The gift of a promise in exchange for the performance of an act.

Performance = assent AND consideration necessary to bind the offeror.o Maximum protection for the offeror (since offeror is not bound

until/unless performance is received)o Risky for offeree since offeror can revoke contract before

completion of performance Under classical theory, there would be no remedy really for

the offeree in that situation bc K never came into being(offer revoked beforehand) (p. 178)

- courts now use unilateral contract analysis to enforce liability byimposing liability on an offeror in cases where no promissory acceptancewas invited or required. ???

- under classical theory, no protection for offeree who relied on a promiseif no option

Petterson v. Pattberg (p. 179)Issue: Whether a unilateral contract between two parties existed where P wasinformed of revocation when he attempted to complete performance and hadrelied upon the K?Fact: Petterson was owner of prop in Brooklyn, Pattberg was owner of bondexecuted by Petterson on this prop (mortagage). D made agreement to allowpayment of remaining balance on mortgage at reduced rate. Petterson cameto Pattberg’s house within specified time and tried to pay the balance. D thensaid that he had sold the mortgage. D refused to take the money. Petterson

had contracted to sell property free/clear of the mortgage.Holding: Letter from Pattberg to Petterson was a unilateral K. Offer to enterinto unilateral K must be withdrawn before the act requested has beencompleted. D withdrew offer before money was tendered.Court found that nocontract existed which could be breached/no damages for P.Dissent – fundamental injustive



Rule: Unilateral contract is not created until full performance is tendered and K can be revoked at any point prior to this time since K isn’t created until thatpoint.

V. Formalities

Functions that legal formalities serve (acc to Fuller, p. 52):1. evidentiary – providing evidence of the existence and purport of the K incase of controversy2. cautionary – acting as a check against inconsiderate action3. channeling – mark or signal the enforceable promise – simple, external testof enforcibility- despite the end of the seal, consideration sometimes serves these functions

• statute of frauds isn’t enough to make promise enforceable –also need consideration! (opposite is also true – if consideration but doesn’tmeet SoF, then no K)

• courts have become lenient on the SoF

Statute of Frauds – see Restatement beginning p. 305If you are going to apply it, ask these questions:1. is the K one of the types to which the SoFs applies?2. Is the SoFs satisfied? (written statement, signed by the D, etc)(3. if no to 2, are there other factors (such as performance or reliance by the Pthat might invoke an exception to the statutory bar?)Crabtree v. Elizabeth Arden Sales Corp (p. 298)Issue: Whether parol evidence is sufficient to establish an enforceableemployment contract under the statute of frauds?Fact: Crabtree negotiated an agreement with E. Arden for position as salesmanager. Evidence of this negotiation and agreement consisted of a memo

recorded on a telephone order, welcome telegram, and a payroll changerequest signed. D said no increase in pay at appropriate time. P sued forbreach. D claim statute of frauds prevents enforcement.Holding: Court held that the contract exists and is enforceable against the D.Rule: Parol evidence may be used in combination with oral testimony toestablish the existence of a K. Two threshold requirements established:1. signed writing must itself establish a contractual relationship between theparties2. unsigned writing must on its face refer to the same transaction as thesigned writing



Section 5: Alternative Basis for Legal Enforcement

I. Promissory estoppel• Not traditional – unbargained-for reliance substituted for consideration• Reliance as a means of proving contract exists• Relying on a promise that cant become a contract• Very controversial because it really tears apart• This is out of place, but Section 90 - comment D thinks that a promise

is a contract (any contract remedy would be fine) – remember thatdoctrines of mitigation apply to damages!

• Also, dealings between family members usually don’t have toconform to bargain theory – legal obligations based on relationship of parties (promissory estoppel and restitution have been used)

• Equitable estoppel – applies where one party has made misstatement of fact, not promise – courts seem to believe that estoppel of either varietycan be based on conduct as well as express promise

Four things..1. Promise2. Promisor should reasonably expect induces reliance

Of definite and substantial character (Removed from require, but stillconsidered)

3. Does induce reliance on part of promisee or a third party4. Must enforce to avoid injustice (detrimental reliance)

Wright v. Newman (p. 80)Issue: Whether, in the absence of a written contract, promissory estoppel may

be used to enforce a promise on the basis of reliance and justice?Facts: Bruce Wright acted as father and provided child support for son of Newman. He is not father. He then stopped paying. Newman seeks to makehim pay. No written K.Holding: Court thinks that there is a promise, but it is impliedDissent: he hasn’t paid for 7 years!Rule: Promissory estoppel prevents promisor from reneging on promise wherethe promisor should have expected that the promise to rely. Considerationmay be found in any benefit accruing to the promisor ot any reliance, loss,trouble, disad, or charge imposed on the promise.

Allegheny College v. National Chautauqua County Bank (p. 85)Issue:Facts:Mary Yates Johnston promised $5000 30 days after her death for ascholarship fund. $1000 was paid in Dec 1923 while she was still alive. Sixmonths later she took back her promise and then died. Estate didn’t pay,college seeks payment.



Holding: Court held that the duty of naming scholarship fund after her wassufficient consideration (resulting in bilateral agreement). Court upheld K,required estate to pay.Dissent: Allegheny college was not required to do anythgin…no acceptanceand no K.

Rule:

• Commercial – initially PE was confined to noncommercial sphere xemployee benefit/pension cases, but now it has expanded to includecommercial promises

Katz v. Danny Dare (p. 102)Issue: Whether PE can be invoked in a commericial context where anemployee claims promise of pension must be enforced?Facts: Katz filed suit for pension payments from DD. Katz chased a robber andwas struck in the head. When he came back, he had problems working, so

boss offered him a big pension with part time employment. BoDs adoptedresolution. K claims he would have not retired without pension and relied on it.DD guy (Shopmaker) says that he would have been fired otherwise. K beganworking for another company after retiring, then checks from DD decreased.Holding: All three elements of PE are met here, enforcement of pensionnecessary.Rule: Three elements necessary to invoke doctrine of PE: (1) promise; (2)detrimental reliance; (3) injust can be avoided only by enforcement

II. Restitution (no promises)

• Grounded in K law, but separate now – implied contracts, founded in

unjust enrichment; classical K law doesn’t recognize• Basis of liability: a person who has been unjustly enriched at the

expense of another is required to make restitution to the other” Two types:1. implied-in-fact – parties actually agreed to this2. implied-in-law (quasi K) ( restatement rejected this terminolory – calledrestitution) – can be used in K situations, but also other ways (like fraud orconversion of prop) – an obligation imposed by law without regard to eitherparty’s expressions of assentRest on legal fiction arising from considerations of justice and equitableprinciples of unjust enrichment – “constructive contracts” - legal fiction -- treat

the case as if this were true in order to get "right" result• Remedy in modern courts = constructive trust or accounting (equitable

remedies)Credit Bureau Enterprises v. Pelo (p. 118)Issue: Whether a party who has received a benefit from another is obligated topay where he did not make a promise to the other party?



Facts: Pelo was taken to hospital because he made threats of self harm.Magistrate had him detained (involun) for 48 hours. He was forced to signrelease form. Judicial hospitalization referee determined that the requiredelements for involuntary hospitalization were lacking.Holding: Pelo is liable for the hospital bill due to restitution – express K isn’t

even needed (hospital release form).Rule: Where a person performs services for antoher which are known to andaccepted by the latter, the law implies a promise to pay for those services.

III. Promissory Restitution (late promises)

• Classical theory would reject – a promise for benefits previously receivedwas not binding bc the benefits were past consideration (although someexceptions)

Mills v. Webb (p. 146)Issue: Whether father was obligated to provide compensation for his son’s

care?Facts: Levi (son) returned from sea very ill. P took him in (he was poor and indistress). Father wrote letter promising to pay for expenses.Holding: Father has no obligation to pay. No consideration for letter promise.He would have if the child had been a minor.Dicta: People should choose the moral route, not be coerced into moralobligation by law.Rule: This is classical theory.

Webb v. McGowin (p. 151)Issue: Whether a promise can be enforced where consideration was for past

benefit?Facts: Webb was working and was going to drop a 75 lbs block of wood. W sawMc and was forced to divert the block by holding on to it.. W fell with theblock. M wasn’t injured, W was crippled for life. M then agreed to care for W inconsideration for his actions. W received payments until M’s death. W isbringing suit against estate to continue the payments. Some assumptions:

o If you could have promised as you were falling, you wouldhaveo Presumption that if you had been able to bargain, you wouldhave done ito Material benefit

Holding: Court loosened the consideration doctrine and ordered the estate topay.Rule: Exceptions can be made to past obligation rule.

• Material benefit rule: if a person receives a material benefit fromanother, other than gratuitiously, a subsequent promise to compensate theperson for rendering such a benefit is enforceable.FULLER AND POSNER – trying to justify the doctrine that certain promisesbased on moral obligation are neforceable



• Fuller –pragmatic rule? add one half and one half = 1--- analogy formoral consideration + promise = legal enforcement ? (p. 156)

• Posner - has a different explanation for benefit rule

If you promise to pay that has been discharged, you can stillbe held

o Past legal obligation -- reputational If you agree to pay a debt that you would not otherwise

have to pay, other people will deal with you -- signalo Interdependent utility function - depends on anothero Applies to gratuitious promises



Section 6: Evolution/Expansion of Traditional Pictureof K Formation ______________________________________________________________________________ I. Limitations on revocability of offerAside: big issues: Power imbalance, info costs, reputations, repeatplayers

A. Pre-acceptance reliance“offeror is the master of the K”

• Courts don’t like to interpret this

• If no option K, classical theory will not protect an offeree who relied onan offer she had not yet accepted Two ways to win under classical theory:

1. Earlier acceptance

2. Option contract – separate covenant not to revoke for specified period of time – when offeree/vendee gives the offeror some consideration to holdopen the offer open for a stated period of time (irrevocable underclassical theory)

o Both parties have to knowo Has to be clear

James Baird v. Gimbel Bros (p. 190)Issue: Whether a conditional contract was created between a sub and acontractor?Facts: D (sub) sent bid to contractors that was underestimated by 50 % for

deliver of linoleum. On 12/28, sub contacted all contractors that its bid wasmistaken. Contractor had already made bid which was accepted 12/30including the sub.Holding: Acceptance was not timely. No contract existed because the bid wasnot an option and acceptance of offer was too late.Rule: Sub is not bound to contractor by use by contractor of bid. No contract untacceptance of bid. Judge Hand says (and most other courts agree): mere use by a general contractone particular sub’s bid does not constitute acceptance of the bid, forming a bilacontract.

Drennan v. Star Paving Co. (p. 193)Issue: Whether the sub’s bid constitutes an offer? Whether P’s reliance on D’s bmakes D’s bid irrevocable?Facts: P is contractor who received D’s (sub) bid + it was lowest. P was awardedK. D then told P that he couldn’t do it for bid price (doubled his estimate).Holding: No enforceable option or bilateral K was created, however PE means thbound. D’s promise was a promise on condition expressly or by implication



Rule: PE can be used to force subs to perform under bid to prev injustice whererevocable wasn’t specified and bid wasn’t unreasonable.Hand says: Offer is not a promise. Offer doesn’t become a promise until consideis given.

• Subsidary promise – promise created to prevent injustice; consideration is furn

by part performance or tender.• Contractor is not allowed to delay accept of sub’s bid once awarded the K Ways this could have been avoided:1. If D had said expressly in his offer that it was revocable at any time, he probawould have prevailed (has been exception to this, but…)2. If P knew error or reasonably should have expected error (i.e. amount so out owhack), then P couldn’t justifiably rely on the sub’s bid

• Most people think that Baird and Drennan directly contradict – Drennan hasprevailed – subs are usually bound absent some other conditionRadin says Drennan means: sub is bound when bid is submitted (if you knowthat the general contractor is relying), but the general contractor is not bound

- subsequent decisions have affirmed that PE is used to protect general contractors against subs, but not subs against generalcontractors.

When will PE not work:1. Reliance doesn’t make sense (not reaonable -- should have known there

was a mistake)2. Inequitable behavior or general (n2 p 198)

a. Bid shopping – trying to find another cheaper sub while holdingother sub bound

b. Bid chopping – attempting to renegotiate w/ bidder to decrease K price after being awarded the K 3. Not even an offer

Best rule (p. 201) was found to be the both-parties-are bound-or-neither-is-bound approach – so both sub and general contractor would be bound whenthe sub’s bid is used on two conditions: (1) sub bid is responsive to the needsof the K and (2) sub is financially or otherwise capable of performance.

B. Pre-acceptance reliance on promisePop’s Cones v. Resorts International (p. 208)

Issue: Whether PE may be invoked where an offer was never specificallymade?Facts: Taube (owner of Pop’s) started negotiating about opening tcby. She wastold by RI that they were committed to K w/her. She was told to put her stuff into storage + ended her other lease. She was given a cart to try it out. Shewas then not given a K.Holding: Court reverses summary dismissal (says there might be a claim)



Rule: Four elements of PE (in NJ): (1) clear + definite promise; (2) promisemade w/expectation that promise will rely; (3) promise must actually rely; (4)detriment of def and substantial nature must be incurred due to reliance.

II. Relaxation of explicit mutuality of obligation

Mutuality of obligation - both parties or neither party has to be bound;being bound means that each party had to give up somethingProblems generally:

• Problems for distributorship problems and requirements and outputs K (posner's case)

• Requirement contract - promise to buy an entirety of our need from X(one source of supply)

o Causes problem under classical rule -- looks like no requirementsfor buyer (K is not good then)

A. One-sided business commitments

• Court can find that terms are implied by law – made part of an

agreement by operation of the rules of law (not agreement of partiesthemselves)

• Implied in fact is when parties agree to in some meaningful way

Wood v. Lady Duff-Gordon (p. 432)Issue: Whether a mutuality of obligation existed in an exclusive right tomarket contract?Facts: Lady Duff-Gordon was a creator of fashions. P was supposed to haveexclus right to place her endorsement on designs of others+ exclus rt to placeher designs on sale and license others to market. He claims she breachedwhen she placed her endorsements w/out his know + withheld profits. Shesays no mutuality + no K.Holding: Mutuality of obligation is implied. K did exist.Rule: A promise may be lacking, but the whole writing may be instinct with anobligation imperfectly expressed. Implied obligation to use reasonableefforts will prevent a somewhat indefinite promise from beingillusory. (courts have continued to hold this)

• Eisenberg says that agreements in which one party makes only anonbinding illusory promise ought to be enforceable according to their ownterms

o Party who has made the non-illusory promise has “bargained for achance”

Locke v. Warner Bros (p. 444)Issue: Whether failure to perform a pay or play contract in good faithconstitutes a cause of action for breach or fraud?



Facts: She settled for 450, 000 + some prop. She had pay or play ontract withWB. She found out that Clint was funding the contract. It appeared that WBhad no intention of playing. She got mad and claims breach and fraud.Holding: Court held that there were issues of material fact that needed to betried on the breach and fraud allegations. Court found an implied covenant of

good faith and fair dealing. Fraud can be inferred.Rule: Implied covenant of good faith sometimes used by courts to protect theparties’ rights to receive the fruits of the K.Restatement 205(1) – subterfuges and evasions violate the obligation of goodfaith even though the actor believes his conduct to be justified.

B. Requirements and output contractsRequirement K – Seller entitled to reliance w/ this K Output K- (2-306(1)) forbids the seller from selling any of his output to anyother buyer so as to give the buyer a reasonably assured source of supply.Empire Gas Corp v. American Bakeries (p. 455)

Issue: Is the requirement K in this case a buyer’s option K, entitling the buyerto purchase all he needs of the good in question on the terms set forth in theK, but leaving him free to purchase none if he wishes provided that he doesnot purchase goods from anyone else and is not acting out of ill will toward theseller?Facts: AB entered into a requirement K with EG. AB never actually bought fromEG because it decided not to convert its fleet to propane.Holding: “More or less” clause of K does not include none (quantityunreasonably disproportionate to any stated estimate). Demanded impliesonly overestimation, need to have valid business reason – AB gave no reason. Jury misinstruction was also harmless. Court affirmed the jury verdict for the

plaintiff.Rule: Burden of proof of buyer’s bad faith falls on the seller.

• Usually parties work this out to maintain a business relationship

Has some examples…valid v. invalid reasons• Valid: factory shut down, boiler replacement• Invalid: want to buy it somewhere cheaper, harm the seller (competing

in another market)

III. Relational K – Macneil (CS p. 193)• Classical contract sounds like everyone is the market• Contracts that are dropped on us are not relational - those where

businesses engage with each other are relational• Two branches:

o Economic• If we consider partial integration and long term view of

efficiency change?o Non-economic branch

• If we factor in business, social, etc?• Two things become important:



o Unknowns - market could changeo Risk-sharingo Conflict resolution built in

IV. Qualified acceptance – battle of the forms

• Qualified acceptance is a counteroffer under the classical rule• Mirror image rule - cant have an acceptance unless it is exactly the

sameo Otherwise, counteroffer

• Last shot - boilerplate in the last form will be what is in the contract

• Forms = increase eff, decr personalization, increase risk

• Terms can be boilerplate or dickard (important)Brown Machine v. Hercules (p. 231)Issue: Whether the indemnity clause was included in the K?Fact: Seller's form has 16 paragraphs on the machine and 15 boilerplateparagraphs (#8) is the indemnity clause. Buyer's form - written purchaseorder w/ No indemnity clause + Expressly conditional - my terms only. Sellerdidn’t return the buyer's form, but sent acknowledgement back - invoice fordepositHolding: Hercules PO included express limitation to the terms of its offer.Indeminification provision did not become part of the K. Hercules isn’tresponsible.Rule: See UCC 2-207(2) – additional terms become part of the K unless (a)offer expressly limits acceptance to terms of the offer (b) they materially alterit or (c) notification of objection to them is given w/in reason time.

• If they had said "our terms only" -o

If they perform, go to 2-207 (3) - acted as if there was a contract,so the terms are only those that are in common (knock out rule)o If they don’t perform, no contract

2-207 CHANGES (p. 252)—p. 196-197 of UCC book OLD 2-207 NEW 2-207 (and 2-206(3))(2)Three prong test for additionalterms, they become part of the K,UNLESS:a. offer expressly limits accept of terms of the offerb. materially alters it

c. notification of objection has/is givenw/in a reason time

2-207(1) would become 2-206(3)2-207(2) w/ 3-pring formula fordealing w/add terms would vanish

• Seems to be more difficult toget saddled with a K and terms youdon’t want here (mirror image rule) –revision would make it more likelythat unapproved clauses would beallowed, but modification is more

GOAL: to avoid favoring either the firstor the last shot- no preference – usesthe same test for each

• Gives discretion to courts interms of whether verbal or nonverbalbehavior may be claimed to be an



difficult under old (considered morec/offer?)

agreement to another’s record.

• Attempt to deal with changes inthe way contracts are formed (lack of review by humans, more electronictransfers)

• Rejects mirror image rule*** key application in the Klocek case – all terms get knocked out that don’tagree, so only obligation would be to send the computer

V. Rolling Contract (money now, terms later)

• Shrinkwrap (intended to be effective as soon as the buyer uses orunwraps the product) or click through termsHill v. Gateway 2000 (p. 255)Issue: Whether terms that are provided after performance (or delivery of goods) are binding?Facts: Hills received a computer with K including arbitration clause. They kept

the computer for more than 30 days before complaining.Holding: When Hills kept computer for more than 30 days, they acceptedGateway’s offer. Hills had to arbitrate.Rule:

- ProCD held that K formed at sale – only K terms are known- Courts says that buyers accept terms all the time w/out disclosure and

the approve or return situation promotes efficiency- Court says three ways that shoppers can figure out terms: have seller

send a copy of terms before buying; consult public sources; inspectdocuments after delivery (return if necess before 30 days are up)

- Arbitration eliminates CALS + ensure there is no public record of any

decisionRelevant Restatement sections:

• 2-204o Performance + opportunity to see the termso Doesn’t reject within reasonable time (i.e. sending it back)

• 2-207o Performance = K o Additional terms are proposed modo Not effective unless agreed

Klocek v. Gateway (p. 259)Issue: Whether standard terms included in shipped computer box were part of K between K and G?Facts: P claims breach of K and warranty. Gateways says K P has to arbitrate.Standard Terms contains this clause which was shipped with the computer,gave P five day period to send computer back.Holding: Court held that K did not have to arbitrate since the purchaser isactually the offeror and G = offeree. Offeror, since not a merchant, has toexpressly approve any change in terms. Keeping the computer past five days



was not enough to demonstrate acceptance of the standard terms, so they arenot part of the K.Rule: Outcome of these cases depends on who is considered the offeror/eeaccording to the court.-modification of UCC 2-209 would result in same outcome

UCITA- criticized for benefiting commericial interests, harms consumers +smaller businesses

- only two states have enactedRandom Radin: If late formation, then we need to make a law about what is areasonable opportunity to see the terms and reasonable opportunity to returnthe goods.

VI. UCC Statute of frauds• represents a relaxation of classical rules (2-201) – no meeting of the

minds

Bazak International v. Mast (p. 333)Issue: Whether oral agreement is enforceably under the merchant’s exceptionto the SoFs?Facts: Textile merchants are arguing about oral agreement to sell fabric underthe “merchant’s exception” (2-201(2))Holding: PO forms signed by buyer, not seller, and sent to seller and retainedwithout objection fall under exception – are enforceable.Dissent says that PS are not enough to indicate complete agreement (orsatisfy SoFs); writings were ambiguous, Pos = offers; hurts SoFs.Rule:

• Court also rejects parol evidence in the threshold issue of whether

documents on face satisfy SoF• SoFs requires confirmation – not clear what the explicit confirmation has

to be..p. 342

•

VII. Incomplete bargainingQuake Construction v. American Airlines (p. 278)Issue: Whether of a letter of intent to award a K to Quake is an enforceable K?Facts: Jones told Quake that it would get the K for expansion of some facilitiesat O’Hare. Jones sent letter of intent.Holding: Letters of intent may be enforceable if the parties intend them to be

binding. This letter is ambiguous, especially as to the intent of the parties.Remanded to the trial court.Rule: Factors to consider in whether parties intended to reduce theiragreement to writing: whether type of agreement is usually put to writing,whether agreement includes few or many details, whether the agreementinvolves are small or large sum of money, whther the agreement requiresformal writing for full expression of the covenants, and whether negotiationsindicated that a formal written document was contemplated. Other factors



can also include: where the negotiating process was abandoned, the reasons itwas abandoned, and the extend of the assurances, and the other party’sreliance

• Both UCC and Restate allow for parties to be bound contractually whenthey have reached agreement in principle.

Two types of incomplete bargaining:1. the agreement to agree – when the parties have reached agreement on ano of matters, but have left for future agreements one or more terms.2, formal contract contemplated – when the parties have reached agreementin principle on at least the major provisions of they agreement, but theycontemplate a formal written agreement.



Section 7- Breach (How should the K beinterpreted?)___________________________________________________________I. Form v. substance, subjective vs. objective

Form: the expression of an agreement in a particular medium and with aparticular indicium of assent; doctrines that are supposed to limit us andshape outcomeSubstance: is there actually a deal?Example of blur: definiteness, requirement of considerationSubjective – if the parties attributed materially different meanings to K language, no K was formedRaffles v. Wichelhaus (p. 350) – “Peerless Case”Issue: Whether an enforceable contract exists where each of the parties has adifferent interpretation of the terms?Facts: Two merchants entered into a K for the sale of cotton to arrice ex

Peerless from Bombay. Two ships named Peerless were sailing from Bombay –one in Oct and one in Dec. The seller thought Dec, buyer thought Oct.Holding: No consensus, no binding K between them. (subjectivist interp)Old Objective – Holmes based his argument for obj on two grounds: (1) submade enforcement of Ks too difficult (2) external method was fair bc oneshould expect his/her words to be interpreted acc. To normal usage --- wordsand conduct should be interpreted in accordance with the standard of areasonable person familiar with the circumstances.Modern Objective approach (response to argument that Old Obj couldresult in a meaning that neither of the parties intended): court should answertwo questions: (1) whose meaning controls the interpretation of the K? (2)

What was that party’s meaning?;• Restatement §201 adopts this approach – mutual understanding of

parties controls

• If the parties don’t agree, K should be interpreted according to themeaning of one party if the other party either knew or had reason to know of the meaning attached by the former

• If neither party knew, then Raffles applies – no K exists bc of theabsence of mutual assent

II. RULES OF INTERPRETATION (p. 358)

1. nosciture a sociis – a word in a series is affected by the other words in theseries or a word may be affected by its context.2. ejusdem generic – a general term, when added to a specific one, will includeonly things that are like the specific one (i.e. restrictive interpretation)3. expression unius exclusion alterius – if one or more specific terms are listed,other items, although similar in kind, are excluded4. ut magis valeat quam pareat – an interpretation that makes the contractvalid is preferred to one that makes it invald



5. omnia praesumuntur contra proferentem- if a written K contains a word orphrase that is capable of two reasonable meanings, the interpretation which isless favorable to the party who drafted the K will be preferred .6. interpret contract as a whole – a writing or writings that form part of thesame transaction should be interpreted together as a whole.

7. “Purpose of the parties” – the principal purpose of the parties is given greatweight when determining meanings. Used with caution. If the purposes of theparties are obscure, court may rely on plain meaning.8. specific provision is exception to general one – if two provisions areinconsistent with each other, the specific provision will be deemed to qualifythe more general one (to provide exception to).9. Handwritten or typed provisions control printed provisions – based on theidea that language written or typed into K is more recent and reliable.10. public interest preferred – if PI is affected, interpretation which favors PIwill be preferred.11. (Restatement § 203(a)) court should prefer an interpretation that makes

an agreement reasonable, lawful, and effective to one that produces anunreasonable or illegal or ineffective result.

• Also possible that a court will conclude that failure to agree on amaterial term means that there is no K

III. Varieties of evidence of meaningFrigaliment Importing Co v. BNS Int Sales Corp (p. 360)Issue: Whether a K which calls for “chicken” should be interpreted as per the Dor the P? Does K exist if parties have different meaning?Facts: P and D differ on what “chicken” means.Holding:D prevails since P could not meet its burden of showing that “chicken”

was used in a narrower rather than borader sense.Rule: Party with the more specific interpretation has burden of proving thatthe term was used in the more narrow sense.Plain meaning rule – when courts say that the plain meaning should governunless term is ambiguous – only look within the four corners(classical/formalistic approach)

o Been rejected on the argument that words have more than onemeaning, but courts still use

o Relevant trade usage can overcome plain meaning, butstatutes/admin regs generally aren’t enough

IV. Parol evidence ruleParol evidence rule – involves the admissibility of evidence of oralagreements, but also may apply to some written – it operates to excludeevidence, it has the effect of preventing one party from introducing into courtextrinsic/collateral evidence of matters not contained within the writtenagreement of the parties

o Any admitted evidence has to be relevant



Thompson v. Libby (p. 384)Issue: Whether parol evidence is admissible to show a warranty within acontract for sale where the contract contains no evidence of this warranty?Facts: D sold P logs. D offered a warranty of the quality of the logs.Holding: Court erred in admitting parol evidence since warranty is not

collateral to K, it is part of it. New trial was order.Rule: It is presumed that the whole engagement of the parties is reduced towriting of K, where this is not the case, parol evidence may be offered to fill inthe gaps.Parol evidence cannot speak where writing is silent.

• Integration – entire agreement embodied in the document (this ispresumption – buyer in this case argued it wasn’t, and lost)

o Complete – writing that is intended to be a final and exclusiveexpression of the agreement of the parties (ct said in Thompsonthat K= complete)

o Partial – a writing that is intended to be final, but not complete bcit deals with some bu not all aspects of a transaction between

partieso Four corners – use only the written, formal K to determine if

integratedo Merger clause – states that the writing is intended to be final and

complete (ensures complete integration)Ambiguity: latent or patentExceptions to the rule….(p. 388)1. the parol evidence doesn’t apply to evidence offered to explain themeaning of the agreement

o Classical – generally admitted parol evidence for explanatorypurposes only if the writing appeared on face to be ambiguous

o Modern – more likely to admit parole v to show that the languageused in the agreement has special meaning

2. doesn’t apply to agreement, whether oral or written, made after theexecution of the writing3. doesn’t apply to evidence offered to show that effectiveness of theagreement was subject to an oral condition precedent4. doesn’t apply to evidence offered to show that the agreement is invalid forany reason such as fraud duress, undue influence, incapacity, mistake, orillegality5. doesn’t apply to evidence that is offered to establish a right to an equitableremedy, such as reformation of the K 6. doesn’t apply to evidence introduced to establish a collateral agreementbetween the parties.→ adopting idea that words are not enough only hurts individuals (helpsbusinesses who are able to litigate more readily)→ rule is perpetuated by distrust of juriesUCC + Restatement allow for usage of trade, course of dealing, and course of performance evidence – some courts allow some do not.



V. Implied warranties Three types:

1. Express - says I promise that this boat can go 25 miles an hour…writtenor oral concerning the quality or nature of goods (2-313)o

Can prove through words, description, sample, or modelo Sales talk or mere puffery does not give rise to express warranty

2. Implied warranty of merchantibility - the buyer (if the seller is amerchant) is the quality that is to be expected in the trade for a good of that kind (2-314)

o Pass without objection in the tradeo Fit for ordinary purposes for which such goods are used

3. Implied warranty for a particular purpose - relying on skill, judgement etc for sale of goods

(2-315) – doesn’t have to be defective, just not good for purpose

Bayliner Marine Corp v. Crow (p. 485)Issue: whether there was sufficient evidence to support the trial court’s ruleingthat the manufacturer of a sport fishing boat breached an express warrantyand implied warranty of merchantability and fiteness for a particular purpose?Facts: Crow bought a boat to go fishing. It need to go a certain speed. Theboat he received did not go the speed he wanted it to. He tried to get moneyback, but he had put lots of hours of use in.Holding: Crow says express warranty in brochure. Court says it is just anopinion, not warranty. Court rejects implied warranties.Rule:

o UCC 2-316 governs disclaimers, modification, exclusion of warranties –

three important proposed changes:1. disclaimer of the merchantability warranty must be made by a writing orother “record” – →“remedial promises” made by sellers = express warran2. disclaimer of fitness also requires an explicit statement that the sellerassumes no responsibility3. “as is” disclaimers have to be conspicuous and in a writing or otherrecord in Ks w/consumers



Section 8: Breach (what constitutes actionable non-performance?) _______________________________________________________________________________

I. Concept of breach

Three situations in which non-performance is not breach:1. bilateral K – one party fails, the other doesn’t have to perform2. time hasn’t arrived, but likelihood of other party nonperformance issubstantial3. performance is conditional + condition doesn’t happen

• Economistic law professor at yale• Theory- should be analyzed in terms of insurance (like insurance) --

assumes people will have to pay for it• These articles are supplementary - ways of looking at things that

enhances understanding• Makes argument that consumers will demand to have warranties excluded/disclaimers

Why analogous to insurance?• Insurance= you buy in case of a risk• Warranty = purchase in case of risk - if risk happens you collect• Ought to regulate like insurance (acc to priest)• Manufacture is going to had off cost to consumer• High risk people are bound to break it -- they benefit; low-risk are

paying money for high risk behavior/people

II. Material Breach Jacob & Youngs v. Kent (p. 745)Issue: Whether there was a breach?

Facts: P built a residence for the Ds. K included provision that plumbing workuse standard pipe of reading manufacture. P did not use all Reading pipe, butinstead used pipe of comparable quality. Omission of Reading pipe was notfraudulent or willful.Holding: Must balance consitency/certainty vs. fairness/justice. Measure wouldbe difference in value of pipes, not cost of replacement. P wins.Dissent – P didn’t perform the K. P is liable for the breach. (classical view)Rule:

• Economist would say that substantial performance (of the same valueand use) doesn’t matter in terms of efficiency

• Function is key to the economist -- good/bad faith DOESN’T matter to

him/hero Increase transaction costs to figure this stuff out for no real reason

(of importance)o Remedy tends to be the difference in market value unless there is

subjective value that is stated beforehand (possibly?)• Will theory (classical position)- whatever details were bargained for

in the contract are to come to him/her regardless of how trivial• Independent convenant theory - separate suits



• Put together, the breach would result in two suits• Two conditions (types of ):

o Expresso Implied/constructed - makes covenants dependent

• A doesn’t perform, B doesn’t have to pay then•

If the thing they were supposed to do is collateral, then they remainindependent, have to perform• If material, then the convenants become dependent• Collateral - you have to sue independently• Cardozo says if the defect is insubstantial -- forfeiture against the

breaching partyo Doesn’t like forfeiture result

• Restatement thinks (p. 759)o Total breach = discharges other party from its dutieso Material = other party can suspend and wait for a cure

Also other tests (p. 760)

REMEDIES1. Dimmuntion in fair market value2. Suspension of your own performance (await cure),then #13. Complete discharge - don’t have to perform

III. Anticipatory Repudiation• Will theory-- you can plan to break a promise, but change your mind and

perform before the obligation is dueFlatt & Sons v. Schupf (p. 763)

Issue: Whether K was repudiated by P which justified non-performance by D?

Facts: Flatt seeks specific performance of real estate K made with schupf.Holding: Trial court erred in granting summary judgement. P did not repudiate K.Rule:

o Common law provides a right to retract a repudiationo Must tell other party that it is treating the K as rescinded



Section 9: Avoiding Agreement (bad bargaining,circumstances, policy)Ways to get out of contracts: Purported Contracts

Bad Bargaining – something is wrong with the procedure of the parties’interactions, this should not be treated as a contract because there issomething wrong with the procedure Bad Bargains – something is wrong with the bargain itself, one side is takingadvantage of the other Bad Circumstances – there have been underlying assumptions of the world asa back-drop when the contract is formed but sitations have changed thatmake the situations differentBad Policy – the sovereign just doesn’t want to contract to let the parties do

something even if they parties want to enter into these, prostitution, killing [There are other ways, claim there was no offer, no acceptance, it violates thestatute of frauds… but these are all additional concepts to end the contract.] These can be used defensively or offensively – if the other party tries tobring suit against you, then defensively you can bring these issues up, or youcan let them ride. Offensively you can sue someone else about the duress of acontract and try to get restitution or damages for fraud.Freedom of Contract is about the freedom of will:

a. anything that doesn’t come from freedom of the will has tobe part of the system too, you have to disallow things that

overcome a person’s freedom of the will by using coercion.a. You cannot allow unfree transfers from coercion if youwant freedom of will

b. Clear cases of Unfreedom that fall out of the will theory inthe classical system

a. Duressi. Tortureii. Threats of death or GBH

b. Incapacityi. Infancyii. Mental disability

iii. Delusionc. Fraud

i. Liesii. Trickeryiii. Deliberate misinformation and manipulation

Less Clear cases for the Classical System (do not clearly fall into one category)a. Grossly unfair terms



a. Traditional theory is that you are not supposed toinquire into the subsistence of the agreement (peppercorntheory)

b. Subject matter that is off-limits (Public Policy)a. Might be paternalistic and economically inefficient

c. Mistake or changed circumstancesa. Classical theory could think that the mistake is a clearcase where there is no meeting of the minds (Peerless), butit is more difficult when it looks like one person is at fault, orone person could have more easily found out if there was amistakeb. Changed circumstances could be easy, but it is moredifficult when it looks like one party did not plan aheadenough for the circumstances to occur, what kind of risksyou should have taken into account, risk management

Duress MIGHT be able to be extended to the duress under economic coercion:-but this tred lightly on the overlap between economic and philosophicalstandings, this is a background moral commitment that we don’t have amoral right to keep our jewelery collection, so we won’t think there isduress involved if we have to let it go.-so, duress is often defined by what we assume that we have a moralright to, and then we must let this go because of force or circumstances

Expansion of Duress:“Economic Duress”“Undue Influence” – I was so in love that I had to do this because I was

crazily in love, this was his influence

Expansion of Incapacity: - what about being drunk, or under the influence of drugs, or a severe lack of sleep, should the contract be valid when you signedit but were incoherent? Expansion of Deception: - there is a problem of actually lying to someone, orknowing that they are basing their judgment on an inaccurate information

(Caveat emptor – the buyer beware and take the proper information thatis necessary for the information to be good)

I. Duress and undue influenceo Began as only between family members or those in a fiduciary

relationship – has expandedo Classical doctrine - had to be threat of great bodily harm, deatho No definition of coercion -- economists think that it isnt

Totem v. Alyeska



Issue: Whether economic duress rendered the settlement contract betweentwo parties unenforceable?Facts: Totem contracted w/Alyska – Totem was to transport pipeline materialsfrom Houston to Alaska. K was terminated bc of problems due to bad weather,miscommunication of materials to be transported, additional cost, etc. Totem

need money or go bankrupt, so had to accept undercompensation viasettlement. Totem wants to rescind settlement since it was made underduress.Holding: Totem’s allegations, if proven as a matter of fact, could show duress.(Remanded)Rule:Duress exists where (1) one party involun accepts terms of another (2)circumstances permitted no other alternative (3) circumstances were a resultof coercive acts of another party

- requires that wrongful acts or threats, intentionally cause party to enterinto particular transaction

- threat to breach K or withhold payment can be considered wrongful act

- economic duress means that the contract is voidable, not void—will bebinding unless disaffirmed + may be expressly or implicitly ratified bythe victim

- POSNER case: Selmer - if a party agrees to a settlement bc of adesparate need for cash is not duress unless financial hardship is causedby the other party (Selmer p. 534)

- This case could be distinguished from the posner case -- bad faith, etc- Modern theory place less emphasis on free will – no agreement reflects

true free will

Three elements (REstatment § 175) for ec duress:

1. a wrongful or improper threat2. lack of reasonable alt3. inducement to K by the threat (threat doesn’t have to be illegal)-atty threat = misconduct (p. 533)

Odorizzi v. Bloomfield School District (p. 535)Issue: Whether undue influence was used to obtain resignation from K?Facts: Odorizzi was a teacher at elementary school under K. He was arrestedon charges of homosexual activity. He was then visited by immedsuperintendent and principal at his apt while in severe emotiondistress/exhaustion – they told him to resign. Charges were dropped. He wants

to rescind. He claims duress.Holding: No duress or menace. No cause of action for fraud. No mistake of factor law. Court did find cause of action for use of undue influence.Rule:Undue influence is persuasion which tends to be coercive in nature,persuasion which overcomes the will without convincing the judgment –overpersuasion – taking adv of another’s weakness of mind – taking a grosslyoppressive and unfair adv of another’s necessities or distressCharacteristics of overpersuaion:



1. discussion of trans at unusual, inappropriate time2. consummation of the transaction in an unusual place3. insistent demand that the business be finished at once4. extreme emphasis on untoward consequences for the victim5. use of multiple persuaders on dominant side against a single victim

6. absence of third party advisers to the victim7. statements that there is not time to consult atty, etc- Willing to call it fraud if there is a fiduciary relationship (relationship of

trust)- Many cases of undue influence are due to the relationship

Domination to:• Undue susceptibility• Excessive pressure• Results in weakness of will (domination)

What could have been done differently?• No time•

Locale• No of people• No attorney

II. Lying and concealment- Fraud = equitable recission, courts also recognized legal right of

recission – difference is pretty unimportant though…- Two possible remedies now:

a. tort action for damagesb. recission – defrauded party would have to return any money or prop

received, so if that party doesn’t want to return, then wont seekrecission ALSO, if recission is not possible, then not an option

Syester v. Banta (p. 544)Issue: Whether D is liable for fraud (and damages)?Facts: P is widow. She was sold unbelievable amount of dance lessons. Juryfound fraud and awarded huge damages, including exemplary.Holding: Court affirms jury verdict and damages.Rule: see Restatement § 164What was the fraudulent or material mispresentation?

• You can be a professional dancer• You don’t need an attorney

• Implied promise (I am a qualified instructor) – goldlevel?

- Classical rule- opinions are not actionable – modern law qualifies this- Restatment says that opinion amounts to misrepresentation if the persosn

giving the opinion misrepresented his/her state of mind -- § 169 option isactionable if…

o Person giving opinion is in a fiduciary relationshipo Person giving is an expert



o Person renders an opinion to one who is peculiarly susceptible (age,etc)

Damages – two rules in tort actions for misrepresentations:1. out-of-pocket – P can recover the difference b/t what she parted with andwhat she received plus consequential damages she suffered prior to discovery

of fraud2. benefit of the bargain – P is to be put in the position she would have been if the D had spoken truthfullyIII. Unconscionability

• Substantive – more like paternalism; terms are too one-side-fairness of the terms of the resulting bargain• Procedural – like the transgression against will theory; badprocess – lack of choice by one party or some defect in the bargaining process

-You either have both or substantive only-Unconscionability rarely when there is any bargaining-- Usually standardadhesion forms

- courts have shown a lot of restraint when applying this

Williams v. Walker-Thomas Furniture (p. 566)Issue: Whether K including cross-collateral clause was unconscionable?Facts: Williams was a poor woman on gov assistance with lots of kids. She hadsuccessfully bought and paid off several items from WT. They sold her a stereosystem using a K with a cross-collateral clause. She eventually defaulted andthey took all of the items she had purchased, even though she has paid in fullfor them.Holding: Yes, as a matter of fact, could be unconscionable – remanded.Dissent – she knew what she was doing.

Rule:- have to consider the circumstances when the K was madeWhat is unconscionable here?- Add-on clause – cross-collateral clause- Knew that she was poor

• Collateral- something that the company gets torepossess if you don’t pay• Court of appeals thinks that it is significant that thecompany knew of her poor financial position – despite thisthey sold it to her

• Absence of meaningful choice• K terms that are unreason/unfavorable to the other party

On to economic analysis…why might not be fair for poor• information asymmetry• lack of alternatives

• delivery costs• transportation cost (shopping cost)



Epstein says that these things that we see as oppressive K terms actuallyallow poor people to enter in to Ks for things that would otherwise be pricedtoo high

• thinks he knows bc of the graph• may not have perfect competition

- consumer protection legislation (p. 576)Remedy for unconscionability1. could say K is invalid2. rewrite the bad part – make it reasonable

• if the court rewrites, there are monitoring costs (haveto make sure that it is changed/enforced correctly)• problematic for courts to write Ks (wills)• courts may not be better writer – not easy for thecourt to do this accurately• more risk has to be factored in with the possibility of

no K (knowing that the court can figure out what was goingon)• could force people to live with unconscionable Ks bconly alternative is to have it thrown up• tolerate affront to will theory?

Can price be unconscionable?• Ahern case (p. 573-574) – is unconscionable?

• Could be economic duress• Fraud

Reynoso case (top of p. 573) No just price theory – rarely cases with only overpriced as issue

•

Our system doesn’t like just price restraint• Difficult to figure out what markets look like

IV. Standard forms + “adhesion”7 Characterisitcs of an adhesion K (p. 381)Slawson argues that boilerplate not part of K (only purported Ks)

• Disconnect between the ideal and the reality of the K situation• Kornhauser – in this model paragraph – commodity model (K as product) – p. 335

• Different from ordinary language

• Economic meaning is more specific…part of thecommodity/product• Standard forms are a good thing once you understandwhat you are actually buying in the form• Against traditional understanding bc not bargainingand not consent (only take it or leave it)



• Information has a role in traditional K – minds didn’tmeet here too – traditional K has a lot of stuff about info andknow (who develops, who is resp – Hadley v. Baxendale)• Most economists have this model• Standard terms are norm – without cant customize•

Information in quireies would lead you to look atmarket structure and wealth distribution• Although you could custom more without this(radin view)

V. Public Policy- Restatement § 178- 179 speaks to this – says legis not judges – weigh a lot

of factors including:o Nature of public policy involvedo The degree of resulting forfeitureo Whether denial of relief would futher that policyo In pari delicto – if both parties are engaging in wrongful conduct, the

court will not hel either partyClass example:Murder for hireUsuryRestraint of tradeRestraint of marriageK to violate lawInterference with family

Questionable:Exculpation of tort liability

Transfer of child custodyDonahue v. Federal Express (p. 466)Issue:Facts: Donahue was employee. Appellant employee called defendantemployer's attention to various improprieties. Thereafter defendantsupervisor, appellant's immediate supervisor, accused appellant of grossmisconduct. Appellant after failing to have his termination overturned bydefendant employer's Guaranteed Fair Treatment Procedure (GFTP), sued.Holding: appellant could not sue for breach of the implied duty of good faithand fair dealing, where the underlying claim was for termination of an at-willemployment relationship; defendant employer's grievance procedure imposed

no separate contractual duties on it; superior work performance could notovercome at-will employment presumption.Rule:- some jurisdictions recognize public policy exception to at will doctrineRemedy if K is against public policy

Let losses lieRestitution – Restatement 2d 197, 198, 199



BABYSELLINGPosner says..

1. people should market what they like (why should state bemoralistic)2. practical (blackmarket)

• all states say that you cannot purchase an adoption

Three categories:1. commissioned adoption2. paid adoption of “unwanted” children3. “surrogacy” – commissioned adoption with specified geneticmaterial

VI. MistakeUnilateral mistake

1. mistaken about the nature of the thing (one party only) –

other parties non-disclosure might be another doctrine --- 1-54 © -determines who bears the risk of the mistake2. One party makes mistake (not fault of other) – IL doctrine isthat the mistake has to be material, notwithstanding the exerciseof reasonable care, so bad enforcement would be unconscionable,have to get them back to where they were

• 153 Rest 2d• Contract was rescinded even though there was aunilateral mistake (rare)- think reasonable care (relied onspecs)• Balancing test

Will-Fred’s v. Metropolitan Sanitary District (p. 643)Issue: Whether mistake renders K voidable?Facts: Will-Fred’s submitted bid for rehab of water reclamation plant w/deposit. Wil-Fred’s attempted to withdraw after bids opened – w/draw wasrejected – told they would be awarded the K.Holding: Wil-Fred’s was granted recission + return of security deposit.Rule: Restatement § 153 – requires that (a) enforce would be unconscionableor (b) other party had reason to know of the mistake

VII. Changed CircumstancesChanged Circumstances – who has the risk?

3. Impossibility – Taylor v. Caldwell – music hall fire4. Frustration – Krell-coronation of King5. Impractibility – Mineral Park – excavation much moreexpensive due to water

So three separate doctrines – but all about the same thing in a sense

• If we viewed all of this from risk allocation, we would ask two questions:1. Who assumed risk?



2. Who should bear risk?• If we knew who assumed the risk, then we can assume that the risk was

included in the price…• If no one took on the risk, move to the normative question - who should

o Economic analysis - person who can best protect the risk -- want to

give incentives for future assumption of risko Best cost avoider example -- want to price the risks into the K -

systemic rule(util)o From non-economic view, a little more difficult to figure outo If person dies, probably should be not be held? Although you can

insure anything…Karl Wendt v. Int Harvester (p. 655)Issue:Facts: Wendt + IH signed agreement where Wendt was IH dealer. Economicdownturn drove IH out of farm equip business. Defendant corporations soldtheir farm equipment division but did not terminate plaintiff dealer's contract

under the contract's terms. The court reversed the judgment for defendantsand remanded for a new trial on the issue of plaintiff's damages because thedistrict court erred when it instructed the jury on the defense of impracticability of performanceHolding: Remanded.Issue:

VIII. Modification of existing K - Court has become lenient on this – see Restatement § 89 – promise

modifying is binding if:a. mod is fair + equitable in view of changed circumstancesb. extent provided by statute

c. extent to which justice requires in view of material change in position

Kelsey-Hayes v. Galtaco (p. 688)Issue: Whether breach occurred when D attempted to modify price after K agreed to?Facts: D + P contracted for castings. P says that price increases were agreedto under duress, unconscionable, in bad faith, constitute unjust enrichment,Holding:Court denied summary judgement for D.Rule:-one-sided modifications are presumptively improper- special circumstancesrequired



RESTATEMENT SECTIONS

Restatement §21- can be legally boun to promise without expressing intention to be bound (w/out actualintent)Restatement § 32- unless lang otherwise, an offer may be accepted either by a promise of performance inreturn or by an actual rendering of that performance.

Restatement § 35- unless there are circumstances to take it out of ordinary doctrine, if offer withdrawn before acceptance, the acceptance was too late.Restatement § 45 – option K created by part performance or tender (p. 281) – unilateral K?Restatement § 69 – silence can be acceptance where (1) offeree takes the benefit of the services w/reasonopportunity to reject+ reason expect that compensation was expected (2) offeror has state/given reason for offeree to understand silence is consent (3) reason that offeree should notify of non-acceptance (p. 288)Restatement § 70- written offer which is accepted = K Restatement § 76 – Conditional PromiseRestatement § 79 – Adequacy of consideration – mutuality of obligationRestatement § 86- promissory restitution – material benefit ruleRestatement § 87- option K defined

Restatement § 89 – modification of an executory K Restatement § 90 – promissory estoppel

Restatement § 130 – K performed within one year otherwise has to be in writingRestatement § 131 – Statute of Frauds – requires signature by/on behalf of party to be charged; identifiessubject matter of K, sufficient to indicate K has been made; states the esstential terms (p. 309)Restatement § 132- parol evidence - several writings are ok if one is signed and clearly demonstrate theyrelate to same transactionRestatement § 153- when a mistake makes K voidable (wil-fred’s)Restatement § 159 – misrepresentation definedRestatement § 164- fraudulent or material mispresentation

Restatement § 168- reliance on assertions of opinion

Restatement § 169- when reliance on opinion is not justifiedRestatement § 175 – economic duress

Restatement § 177- undue influence

Restatement § 178 – when a term is unenforceable on public policy groundsRestatement § 179 – public policy against enforcementRestatement § 202- course of performanceRestatement § 208 – unconscionability

Restatement § 209 – integrated agreement (invokes parol evidence rule)Restatement § 210 – also integrated (partially v. completely) agreementsRestatement § 211- standardized agreement termsRestatement § 213- parol evidence rule

Restatement § 222- trade usageRestatement § 223 – course of dealingRestatement § 250 – manifestation of intent to not perform must be def and unequivocal – anticipatory breach, but can happen if party doesn’t intendRestatement § 256- retraction of repudiationRestatement § 349 – if a party cannot prove expectation damages, they can recover reliance damagesRestatement § 356(1) – liquidated damages must be reasonable. Unreason = unenforce on pub policy grdsRestatement § 367 – negative injunction ok, positive injunction is not (p. 381)



Restatement § 373 – non-breaching party can recover restitution instead of expectationRestatement § 374 – restitution damages can be conferred based on the benefit conferred to the other partyRestatement § 375 – if K performance has ended due to impracibility or incapability, then both sides can seerestitution (due to statute of frauds)Restatement § 376 – restitution when contract voidable due t omistake, duress, undue influence, misrep, etc)

Restatement § 377 – restitution when K is discharged due to impracticability, frustration of purpose, etc)

UCC – remember, sale of goods

1-205- trade usage + course of dealing2-201- Statute of Frauds (p. 35)2-202 – parol evidence rule – tilted to admissibility2-204 – allows parties to be bound when they have only agreed in principle (see Quake)2-205 – firm offers2-206- offer/acceptance2-206 – two means of acceptance – promise of performance in return or by actually rendering perform2-207- additional terms in accept/confirmation – spec as relates to output K- additional terms in

acceptance or confirmation – prevents companies from tacking on other terms (see Klocek)2-208- course of performance2-209 – modification, recission, waiver of K (p. 43) – mod has to meet statute2-302 - unconscionability2-306 – Outputs, exclus dealings…2-313 – express warranties2-314 -- implied warranty of merchantability2-315- implied warranty of fitness for a particular purpose – only when buyer relies on seller’s judge; doesnshowing that goods are defective (just not good for purpose)2-316 – disclaimers, exclusion, modification of warranties2-610- anticipatory breach2-611- retraction of repudiation

CISG

Article 8 – modified objective approach to interp (rejection of parol evidence rule) any relevant evidence abo parties knew or had reason to know about each other’s intent is ok Article 16(1) – adopts the mailbox rule BUT …an offer cannot be revoked if it indicates that for a fixed peritime it is not revocable or it was reasonable for the offeree to rely…Article 18(2) – modifies the rule – places the risk on the offeree



Contracts Glossary

Bailment - delivery of personal property -- possession without title -- obligationto take care of itBilateral contract – an exchange of promises, reciprocal commitments;

classically require offer and acceptanceConsideration- the inducement to a contract. The cause, motive, price, orimpelling influence which induces a contracting party into a contract. Thereason or material cause of a K. (Restatement §17, 71)CISG- UN Convention on the International Sale of Goods effective 1988;applies to sale of goods, has force of law (treaty); like the UCC although a fewlimitations (has to be between parties in countries that recognize, notconsumer transactions, etc)Efficiency – transaction costs low or reduced, resources allocated in their mosthighly valued usesEx rel- rising out of the relationship of (government has interest) -

congressional statute that they have interest in having resolvedIn quantum meruit – as much as he deserved – in relation to restitutiondamagesRestatement 2d – written by ALI; persuasive authorityStatute of frauds – originated in 1677 in English Parliament – enacted invirtually every US state; certain types of contracts must be evidenced by asigned writing to be enforceable in court; has been overlaid by common law in20th certurySub judice – under adjudicationUCC- every state has enacted some form of this; does not govern all Ks; buthas become very important in K law; Llewllyn was primary drafter; created by

NCCUSLUCITA – Uniform Computer Information Transactions Act; ALI sponsoredaddition to the UCC; hit heavy opposition – only a couple of state haveadopted

another k outline

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