Contracts Summary PDF

**I. Applicable Law** 1. What type of contract is it? - Primarily for services? → Governed by Common Law (Restatement (Second) of Contracts). - Primarily for the sale of goods? → Governed by the Uniform Commercial Code (UCC). - Mixed goods and services? → Use t...

**I. Applicable Law** 1. What type of contract is it? - Primarily for services? → Governed by Common Law (Restatement (Second) of Contracts). - Primarily for the sale of goods? → Governed by the Uniform Commercial Code (UCC). - Mixed goods and services? → Use the Predominant Purpose Test. - Definition: This test determines the dominant purpose of the contract. If the primary purpose is the sale of goods, the UCC applies. If the primary purpose is services, common law applies. Factors include: - The language of the contract. - The nature of the business of the supplier. - The value of goods versus services provided. 2. Specific jurisdiction? - Check for any state-specific laws that might modify general principles. **II. Formation** 1. Offer - Was there an objective manifestation of intent to be bound? - Were the essential terms (e.g., subject matter, price, quantity, time, parties) definite and certain? - Was the offer communicated to the offeree? 2. Acceptance - Did the offeree communicate acceptance in the required manner? - Was the acceptance unequivocal? - Was the acceptance timely? (Consider the Mailbox Rule). 3. Consideration - Was there a bargained-for exchange of legally sufficient value? - Did the promise involve a detriment to the promisee or a benefit to the promisor? - Were there issues like illusory promises, past consideration, or pre-existing duty? - Was a substitute for consideration used (e.g., Promissory Estoppel)? **III. Performance** 1. Terms of the Contract - Are the terms clear and unambiguous? - Are there express or implied conditions? - Conditions precedent: An event that must occur before a party's obligation arises. - Concurrent conditions: Events that must occur simultaneously for obligations to be triggered. - Conditions subsequent: An event that extinguishes an existing duty of performance. 2. Integration and the Parol Evidence Rule - Definition of Integration: - Fully integrated: The writing is intended as the complete and exclusive statement of the terms. No extrinsic evidence is admissible to contradict or supplement the terms. - Partially integrated: The writing includes some, but not all, terms of the agreement. Extrinsic evidence may supplement but not contradict the terms. - Not integrated: The writing is not intended as a final or complete expression of the agreement, and extrinsic evidence is admissible. - Definition of the Parol Evidence Rule: Prohibits the use of extrinsic evidence to alter or contradict the terms of a fully integrated written contract, except under specific exceptions. - For extrinsic evidence: - Is it being used to clarify an ambiguity in the written contract? - Is it being offered to prove a defense to formation (e.g., fraud, duress, mistake)? - Is it being used to establish a condition precedent, a modification, or a collateral agreement? 3. Performance and Breach - Have the parties performed their obligations? - If not, assess whether the breach is total, material, or minor. **IV. Defenses to Formation or Enforcement** 1. Mistake - Mutual Mistake: Both parties misunderstood a material fact. - Unilateral Mistake: One party misunderstood; is enforcement unconscionable, or did the non-mistaken party know of the mistake? 2. Duress and Undue Influence - Duress: Improper pressure or coercion used to force a party to enter a contract. - Undue Influence: Exploitation of trust or dominance to influence a party's decision. 3. Illegality - Is the contract's subject matter illegal or against public policy? 4. Statute of Frauds - Definition: Certain contracts must be in writing to be enforceable. Includes contracts: - For the sale of land. - That cannot be performed within one year. - For the sale of goods over \$500 (UCC). - Check whether the writing requirement was met. 5. Unconscionability - Definition: Contracts that are shockingly unfair or oppressive to one party may be unenforceable. Often arises when there is an imbalance of bargaining power. 6. Impossibility, Impracticability, or Frustration of Purpose - Definitions: - Impossibility: Performance is objectively impossible due to unforeseen events (e.g., destruction of subject matter). - Impracticability: Performance is possible but extremely difficult or expensive due to unforeseen events. - Frustration of Purpose: The contract's purpose is destroyed by unforeseen events, rendering performance pointless. **V. Remedies** 1. Legal Remedies - Expectation Damages: Put the aggrieved party in the position they would have been in had the contract been performed. - Reliance Damages: Reimburse expenses incurred in reliance on the contract. - Restitution Damages: Restore benefits conferred on the breaching party. - Liquidated Damages: Enforce agreed-upon damages if they are reasonable and not punitive. 2. Equitable Remedies - Specific Performance: Enforce performance when monetary damages are inadequate. - Injunction: Prevent actions that breach the contract. 3. Limitations on Remedies - Duty to Mitigate: The aggrieved party must minimize their losses. - Foreseeability: Damages must have been foreseeable at the time of contracting.