Is there a contract?
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1 1. te whether this transaction is governed by UCC or the Restatement. 2. Does the Statute of Frauds apply? The contract must be in writing if it is in regard to land, if by its nature it takes more than one year to perform, or if it is in regard to goods of greater than $500 value. Is there a contract? Was there an Offer? Were the terms specific? Did the offer indicate the party s intent to be bound? Was there an Acceptance? Was there acceptance to exact terms of the offer pursuant to mirror image rule? If not, can UCC or the parties performance be used to imply a contract? contract Was the acceptance made according to offer s to instructions (note silence can never be acceptance)? Was the acceptance made within time specified? Does the mailbox rule apply? Was there Consideration? Was there legal detriment? Was there reliance so that 90 Promissory Estoppel applies? Was there benefit conferred? Are all of the material terms agreed on? THERE IS AN ENFORCEABLE CONTRACT What are Material Terms? Unilateral or Bilateral? Was there an outright breach or is it another problem? Were parties far enough in negotiations to implicate a contract to negotiate in Good Faith? Was such a contract explicit? Was an option created by partial performance of acceptance?
2 Was there Substantial Breach? Was there fraud, duress or unconscionability? Breach is excused Was there a change in circumstances or failure of a substantial assumption of the contract? Breach is excused Could there be a waiver? Was the breach excused by implication of past performance? Breach is excused Breach unexcused; victim can recover GO TO DAMAGES Is there vagueness/ambiguity in contract? Can the Courts fill in vague/ambiguous terms (te: the court will not fill in material terms) according to: Writing in the contract Past performance of the contract Past dealing in other contracts Usage/Custom Can the Parol Evidence rule apply to clarify situation? EXCEPTIONS TO PAROL EVIDENCE - fraud/duress unclear terms scribner s error If courts cannot interpret contract themselves and parol evidence cannot be admitted, the contract will be void for vagueness.
3 Was there Mistake? Mutual R152 Unilateral R153 Contract Voidable Was the mistake as to a basic assumption? Contract enforceable Risk allocation: R154, always restitution and fairness G.U. Did the other party know or have reason to know of the mistake? Was the mistake Scribner s Error or General Unilateral? S.E. If parties have agreed to terms, and only the written document is defective, a meeting of minds occurred and the contract is enforceable on original understood terms. R155 Contract is voidable under R153 Contract is voidable if party does not bear risk of mistake by R154. Also note that risk is allocated depending on fairness; court will also see whether risk has been allocated contract itself. Was there a SURPRISE? If contract term is unconscionable, court will refuse to enforce it. R208, U2.302 Could also argue breach of good faith U1.203, R 205 Did dealings breach Good Faith? There is a warranty of good faith in every contract negotiation process R205, U1.203
4 Is MODIFICATION or WAIVER an issue? If covered by UCC, If covered by Restatement, 148 Under the UCC, no consideration is necessary for a waiver if it is in good faith AND it is written Was there consideration given for the modification? Was the modification sought in good faith due to changed circumstances? Modification is enforceable Was the modification based on Waiver? Modification is enforceable Modification is unenforceable Was waiver revoked with sufficient notice? Waiver properly revoked; modification unenforceable Waiver is enforceable
5 Remedies DAMAGES Legal Equitable when remedy at law is inadequate SPECIFIC RELIEF Is there a liquidated Damages Clause in the contract? Are the liquidated damages a fair estimate of expectation damages? Look to Expectation Damages which are the benefit of the bargain, intended to put the victim where he would be if the contract had been performed: Are they either: $0 or negative in amount; Uncertain (i.e., new venture); or Excessive given circumstances? Court will enforce liquidated damages Injunction Specific Performance Is specific performance of the contract will be awarded ONLY if: Contract is clear The remedy at law is inadequate There is mutuality of performance Uniqueness makes it impossible to assess damages Expectation Damages awarded Reliance damages awarded intended to put the victim where he would be had the contract never been made. These can include: Lost opportunity Difference between market value and value as is NOTE: punitive damages damages for mental distress Has everyone mitigated/covered? RESTITUTION always an option
6 Restitution Damages Has there been: Unjust Enrichment; Partial Performance; OR Benefit knowingly conferred but not under contract? Is Plaintiff the breacher? Restitution damages Damages will be benefit conferred but limited to contract price Damages will be the amount of benefit conferred, regardless to whether Lower price was specified in contract; or Contract would have resulted in a loss
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