Contract Law II Outline

7/27/2019 Contract Law II Outline

1/24

1

Contracts II OutlineProfessor Maggs

I.Contract InterpretationA. PAROLE EVIDENCE RULEPRIOR AGREEMENTS

1. RULES:a. An integration is the final written expression of an agreement. Rest. 2nd 209(1).

i.An integration is complete if it is intended to be the exclusive statement of the agreement. 210(1). Otherwise it is incomplete. 210(2).

b. A complete integration discharges any terms of a prior agreement that are w/in its scope. 213(2).

c. A partial integration discharges any terms of a prior agreement that are inconsistent. 213(1), 216(1).

d. Willistons 4-Corners Test (Majority): courts determine whether an integration is complete bylooking only w/in the 4 corners of the document

i.Contract must appear on its face to be incomplete in order to permit parol evidence ofaddl terms

ii.if it looks complete- integrated; if doesnt look complete- partially integratede. Corbins All Circumstances Test(Minority): for issues of completeness, no relevant evidence,

parol or otherwise, is excluded; no written document is sufficient standing alone

f. A court may reform a written contract based on mutual mistake or fraud as to its content. 155.

g. Merger clauses (i.e. Henningsen, p. 446)specifies this contract/document is an exclusivestatement of all the terms as a complete integrated agreement

2. PATTERN OF ARGUMENTATIONa. s claim: made a promise and did not keep itb. s defense: the alleged promise was discharged under the parol evidence rule b/c it was

not included in our subsequent written agreement.c. s 1st reply: the promise was not discharged b/c it is outside the scope of the written

agreement

i.Gianni v. R. Russell- contract says Gianni cant sell tobacco;new drugstore in building;Held- the alleged prior agreement (exclusive right to sell soda) was w/in the scope of the

lease (b/c would naturally be included in document)- given the clause giving up right to

sell tobacco (4 Corners Test used)d. s 2nd reply: The promise was not discharged b/c the written agreement was only a partial

integration, and the promise is not inconsistent (term not discharged b/c not inconsistent)

i.Masterson v. Sine- Masterson sold ranch to sis, incl. in contract clause that he couldrepurchase w/in 10 yrs. for same consideration, he goes bankrupt, bankruptcy trustee

wants to repurchase; Held-possible alleged prior agreement that the option was

assignable only for family exists; remand to find parties intente. s 3rd reply: The written agreement should be reformed to include the promise b/c we both

mistakenly thought the promise was included or b/c fraudulently misled me to think it was

included

i.Bollinger v. Central Penn Quarry- Quarry deposits waste on Bolls farm; Boll alleges prioragreement they will cover all waste w/topsoil , which they did initially; Held- contract

includes prior term- Quarry wouldnt have initially covered waste if they hadnt agreed todo so from beginning (court reformed lease to include the promise)

B. PAROL EVIDENCE RULEMEANING OF TERMS (discharge of prior agreements)1. 2QUESTIONS:

a. Can parol evidence by admitted (to show the meaning of terms)?b. If extrinsic evidence is admitted, whose meaning controls?

2. RULES:


2/24

2

a. Traditional Plain Meaning Rule(Minority): if the contract has a plain/ clear meaning, thenno extrinsic evidence can be introduced.

i.Usage of Trade(Custom) Exception- some fields use terms w/special meaning that ppl inthat trade understand; trade usage meaning can always be admitted

Hurst- Lake contracted w/Hurst to buy meat scraps w/Lake having right to discount ifmeant < 50% protein, Lake took discount; Hurst- we meant 49.5% + protein; Held-

allowed custom exception- trade meaning of the termb. Modern Intent Rule (Majority): if there is an ambiguity, you may introduce extrinsic evidence;

214(c); may ALWAYS introduce extrinsic evidence (doing away w/parol v. rule)i.Side-issues:Arguments for: goal- figure out intent of parties; language is not precise and difficult to

figure out; this ev. should always come in

Extrinsic evidence never excluded (unless irrelevant); problem- no certainty incontracts b/c can always bring in parole v.implies words inadequate to bind

meaning

ii.Pacific Gas- turbine dropped, damaged; Pacific- you have to pay for damage b/c youpromised you would indemnify us; Thomas- indemnify meant only 3rd party prop.

damage would be covered, not that owned by you; Held- plain meaning rule applies;

damages covered under contract

iii.Trident- Trident took out loan, interest rates fell, Trident wanted to pay off loan & get lowerrate elsewhere; clause- shall not have right to prepay; Trident argues this mean you

could prepay but there would be a 10% penalty; Held- evidence can come inc. When evidence shows that 2 parties attached different meanings to a term, if one party

knew or should have known the meaning attached by the other party, it will be interpreted

against the party who should have known the meaning attached by the other. 201(2).

d. If neither partys meaning of a term prevails under the previous rule, the term cannot beenforced; if no fault, then no contract. 201(3).

3. PATTERN OF ARGUMENTATIONa. (Round 1)

i.s claim: promised to do X, which means Y, and did not do it.ii.s defense: X means Z, and I did Z.

Raffles v. Wichelhaus- s, Wichel, buying cotton from s to arrive ex Peerless; meant- any ship Peerless; meant- Oct. ship; cotton came on Dec. Peerless, s didnt

pay; Held- parol evidence admitted; one party thought it meant one thing, otherparty thought it meant something else, neither should have known what other thought,

so no binding contract

Oswald- Allen had 2 coin collections, Swiss (only Swiss coins) and Rarity(someSwiss); , Oswald, wanted to buy allof the Swiss coins; thought just the Swiss

collection; Held: parole v. shows parties construed different meanings of all Swiss

coins, so no contract

Frigaliment- BNS sells Frig chix; , Frig, meant broiler; meant any chicken; extrinsicevidence admitted, which conflicted; to win, Frig would have to show BNS

knew/should have known what Frig meant or meant it as Frig did

b. (Round 2)i.or : The court should conclude the X has my meaning based on the following extrinsic

evidence: [description of evidence; i.e. Frigaliment- testimony as to meaning of chix].ii.or : The court should not consider the other partys proffered extrinsic evidence (otherthan usage of trade evidence) b/c X has a plain meaning.

i.e. in Raffles, seller asserted: plain under contract that as long as goods arrived on aship called Peerless, doesnt matter when sailed (ct. rejected)

c. (Round 3)i.or : My meaning of X should prevail b/c the other party knew or should have known

what I thought X meant. Frigaliment- buyer said seller should have known b/c we used

chicken in Engl. (tho rest in German) to convey meaning; ct. rejected ii.: If my meaning does not prevail, then the term has no meaning and cannot be enforced

b/c I did not know and should not have known what thought X meant.


3/24

3

Raffles, Oswald, Frigaliment- this defense succeeded in all; held- no agreement onthat aspect, cannot be enforced

C. FILLING GAPS W/IMPLIED TERMS1. RULES

a. Contracts may include not only their express terms, but also terms implied in law or implied infact.

b. Implied in fact: implied based on the particular circumstances of the contract at issuei.Wood v. Lucy- reasonable efforts implied; Lucy gave Wood exclusive right to market her

products, then she gave someone else the rights, he sued; Held- implied duty of goodfaiththat he would use reasonable efforts

c. Implied in law- based on policy considerations, law says this term will be part of the contract;2 Kinds:

i.Mandatory (i.e. every contract includes duty of good faith)- cannot be waived/ altered,always present. 205

Dalton- Daltons SAT varies b/c he is sick 1st time; ETS wont release his score, relies ontheir handwriting expert; submits evidence, but ETS wont look at it; Held- implied

duty of good faithETS MUST evaluate materials he has submittedii.Default (i.e. general assignability of contract rights, such as was waived in Masterson)-

implied in law, unless contract says otherwiseparties may change. 317(2)(c).

2. PATTERNS OF ARGUMENTATIONa.

(Implied Promise)i.s claim: made an implied promise and did not keep itii.s claim: I did not make the implied promise

ct. must look at all circumstances of the caseb. (Implied Condition)

i.made a promise and did not keep itii.s defense: my performance was excused by the non-occurrence of an implied conditioniii.s response: the implied condition does not exist or, in the alternative, was satisfied

II.Performance and BreachA. EXPRESS CONDITIONS

1. RULESa. The non-occurrence of an express condition excuses performance subject to the condition,

regardless whether it has a material effect on the performance.i.defense- party being sued claims they didnt have to perform b/c their performance was

subject to a condition (which didnt occur)

ii.Strict Compliance Rule- unless the condition is strictly met, the party whose performance iscondition doesnt have to perform

iii.Luttinger v. Rosen- Luttinger agrees to buy Rosens house if hegets an interest rate < 8.5%,he doesnt (non-occurrence of express condition); s offer to reduce the house price so

payments stay the same; Held- may reject the offer; new offer irrelevant b/c there must

be strict compliance w/the orig. terms of bargain

b. A party may condition performance on a subjective event/ standard (i.e. satisfaction w/theother partys performance). But when practicable, courts will interpret a condition of

satisfaction to mean satisfaction of a reasonable person. 228.

i.Gibson v. Cranage- Gibson, artist, offered to enlarge Cranages small portrait of his deaddaughter subject to condition that Cranage would only pay if satisfied; Held- subjective

standard okay if Cranage evaluated photo and acted in good faith

2. PATTERN OF ARGUMENTATIONa. s claim: made a promise and did not keep itb. s defense: My performance of the promise was excused by the non-occurrence of an

express condition.

B. CONSTRUCTIVE CONDITION OF PRIOR PERFORMANCE1. RULES

a. Prior performance by one party may be a constructive condition to the other partysperformance (when facts suggest one performance is dependent on another). 237


4/24

4

b. Substantial performance (performance w/o a material breach) will satisfy the constructivecondition.

c. Courts determine whether a material breach has occurred by considering a variety ofcircumstances. 241. In general, courts are hesitant to find a material breach.

2. PATTERN OF ARGUMENTATIONa. s Claim: made a promise and did not keep it.b. s Defense: My performance was excused b/c s prior performance was a constructive

condition to my performance, and did not perform as promised.

c. s 1st Reply: There was no constructive condition of prior performance; our performanceswere meant to be independent of each other.

i.Kingston() v. Preston- Kingston was to buy Prestons business and provide security (i.e.mortgage thru bank); he did not provide security, Preston didnt deliver business; Lord

Mansfield, Held- evidence, sense, and meaning of the contractthere was logically a

constructive condition here; promises not independent of each otherd. s 2nd Reply: Even though I did not perform exactly as promised, I substantially performed

(no material breach) and therefore satisfied the constructive condition. (claim used inregard to what remedy should be; must still pay, but allow damages)

i.Jacobs & Youngs v. Kent- J & Y promise to build house w/Reading pipe (constructivecondition?) in exchange for payment; Held- there was substantial performance, wrong

pipe not material breach, so Kent must perform/pay (Court may subtract allowance for

damages)ii.Walker & Co.() v. Harrison- Harrison, , contracted w/W & Co. for them to install andmaintain a sign; cobwebs, graffiti, tomato, Harrison defaulted; Held- poor maintenance

not severe (no material breach), so not excused from paying

iii.Plante () v. Jacobs- Plante built Jacobs a house, they didnt pay, asserted non-occurrence of constructive conditionbuilding house to the contract (no downspouts,

kitchen cabinets, wall in living rm. 1 ft. off); Held- Plante substantially performed, no

change in value of house, Jacobs must pay

example of some courts reluctance to find a material breach, even when breach issomewhat substantial

C. RESTITUTION DESPITE A MATERIAL BREACH1.

R

ULESa. In some jurisdictions, a party to a contract may recover in restitution despite havingcommitted a material breach. 374(1).

b. The measure of recovery is the benefit conferred in excess of any loss caused. 374(1).2. PATTERN OF ARGUMENTATION

a. s claim: I conferred a benefit on in attempting to perform a promise, and although Ibreached, would be unjustly enriched if he did not pay for the benefit.

i.Britton v. Turner- Britton agrees to work on Turners farm for 12 mos., but leaves after 9.5 andisnt paid; Held- Britton can recover under a theory of restitution, should be compensated

for benefit; Damages = contract price(cost of completion + other loss)

ex. of court requiring restitution despite a s breachD. DIVISIBILITY OF PERFORMANCES

1. RULESa. When practicable, a court may divide a single contract into 2 or more separate contracts. 240.

b. Even if a materially breached the undivided contract, the s performances are notexcused in any of the separate contracts which the has substantially performed.

2. PATTERN OF ARGUMENTATIONa. s Claim: made a promise and did not keep it.b. s Defense: My performance was excused b/c s prior performance was a constructive

condition to my performance, and committed a material breach.

c. s Reply: Although I committed a material breach, I substantially performed one or moredivisible parts of the contract. s performance is not excused for those parts.


5/24

5

i.Kirkland v. Archbold- Builder, Kirkland, making repairs to Archbolds house; he started, shestopped him and refused to pay b/c he used wrong siding; Held- not practical to divide

one construction project (where separate payment installments)

E. IMPRACTICABILITY AND FRUSTRATION OF PURPOSE1. RULES

a. A partys performance may be excused by the occurrence of an event that renders theperformance impracticable, if both parties assumed that the event would not occur. 261.

b. A partys performance may be excused by the occurrence of an event that frustrates thepartys principle purpose, if both parties assumed that the event would not occur. 265.

2. PATTERN OF ARGUMENTATIONa. s Claim: made a promise and did not keep it.b. s 1st Defense: My performance was excused b/c an event occurred that rendered my

performance impracticable, and we both assumed that the event would not occur.

i.examples: death, illness, destruction; non-occurrence of the constructive condition- thatsomething wouldnt happen to make performance impracticable

ii.Taylor v. Caldwell- Taylor to rent Caldwells property for concerts, hall burnt; Held- impliedconstructive condition that if something happens to render performance impracticable

(that the parties hadnt specified in contractb/c they didnt consider it happening), you

dont have to perform

iii.Limitations: promisors fault promisors negligence (courts are divided) contrary indications in contract

c. s 2nd Defense: My performance was excused b/c an event occurred that frustrated myprinciple purpose, and we both assumed that the event would not occur.i.Krell v. Henry- Krell agreed to rent Henry his apt. to see procession of coronation of Edward

VII; parade rescheduled, Henry didnt pay; Held: Henry does not have to pay b/c his

purpose had been frustrated

III.Who May Enforce a ContractA. INTENDED 3RD PARTY BENEFICIARIES

1. RULESa. An intended 3rd party beneficiary of a promise may enforce the promise. 304.b.

A person is an intended 3rd party beneficiary of a promise if the promise intended to give theperson the benefit of the promise and a right to enforce would effectuate the parties

intention. 302.

2. PATTERN OF ARGUMENTATIONa. s Claim: made a promise and didnt keep it.b. s Defense: is not a person entitled to enforce.c. s reply: I am an intended 3rd party beneficiary.

i.Bain v. Gillispie- Gillispie, whose store sells sports memorabilia, sues Bain, the referee, formaking a bad call; Held- Bain cannot recover b/c no close relation/ he was not an

intended beneficiary (as promisee or 3rd party)ii.Seaver v. Ransom- Mrs. Beman wants to leave her house to her niece, but no time to

modify; husband agrees to convey the house to her niece, he doesnt; niece sues; Held-

the niece can enforce the promise as an intended 3rd party beneficiary

B. ASSIGNEES1. RULES

a. An assignee of contract rights may enforce those rights.b. A party may assign rights under a contract, unless(1) the assignment would increase the

burden on the promisor; (2) the assignment is forbidden by statute; or (3) the assignment is

precluded by contract. 317(2).

c. To assign a right under a contract, a party must manifest an intention to surrender the rightpermanently to another person.

2. PATTERN OF ARGUMENTATIONa. s Claim: made a promise and did not keep it.


6/24

6

b. s Defense: is not a person entitled to enforce.c. s Reply: The promisee assigned his or her rights to me.d. s Argument: The assignment wasnt valid. Or- there was a restriction.

i.Shiro v. Drew- Drew gives loan to Fiberlast for manufacturing radome to go to Counter;Fiberlast promises any $ received from Counter would be remitted to Drew; Held- no

assignment b/c $ is still going thru Fiberlast (who isnt giving up right to receive payment),

Drew isnt able to force payment from Counter b/c there is no assignment

ii.Herzog v. Irace- Jones injured in motorcycle accident; Irace obtains settlement for him;Jones gets surgery done by Herzog,

, agreeing to assign his right to the settlement

proceeds; Jones tells Irace to pay him directly and that hell pay Herzog, he doesnt;

Held- this was a valid assignment to Herzog

IV.Scope of Article2A. RULES

1. Provisions of Art. 2 apply to contracts for the sale of goods, supplementing or replacing thecommon law rules that apply to other kinds of contracts. See, e.g. 2-201(1), 2-314(1). See also

2-102.

2. THE TERM GOODSINCLUDES:a. things movable at identification 2-105(1)

i.things- must have tangible, physical properties; ambiguity- electricity, natural gasii.does not include services(getting a haircut) or intangible properties(copyright); does not

include real estate or things attached to real estateiii.transformation is possible (repaving driveway- concrete movable before mixed/laid)

b. unborn young of animals 2-105(1)i.i.e. calf after its born

c. growing crops 2-105(1)i.i.e. corn still growing in the field

d. minerals to be severed by the seller 2-107(1)i.coal, goldii.only if severed by seller b/c if buyer severs, will need other property rights (easement, etc.)

e. structures to be severed by the seller 2-107(1)i.i.e. items attached to realty and capable of severance

f. other things severable w/out material harm 2-107(2)i.i.e. fixtures at time of purchase that can be torn out w/o harm (presumably to the realty)-

i.e. fireplace

g. timber to be cut 2-107(2)h. future goods 2-105(2)

i.i.e. doesnt fit into a category at the time, but will in the future meet def. of goods 3. The term goods does not include anything not covered by the preceding definition (i.e. real

estate or services), and 3 items are expressly excluded from the definition(non-goods: money in

which the price is to be paid, securities, things in action, or legal claims) 2-105(1).

4. A sale of goods is a transaction in which title to the goods passes from the seller to the buyer fora price. 2-106(1). This definition excludes transactions like leases, bailments, and gifts.

5. The term contract for sale includes both a contract to sell in the future and a present sale, eventhough a present sale may not involve any promises. 2-106(1).

6. A HYBRID CONTRACTis a contract for sale of both goods and non-goods.

a. Predominant Purpose Test (Majority)most courts will apply Art. 2 provisions to a hybridcontract when the predominant purpose of the contract is the sale of goods.

b. Gravaman of the Complaint Test (Minority) - some courts will apply Art. 2 provisions to ahybrid contract if the complaint of the suit concerns the sale of goods (if complaint is about

services, UCC will not apply, and common-law will apply).i.Anthony Pools v. Sheehan- Pools constructs a pool for Sheehan, who slips off the diving

board and is injured; Pool- 2-314 doesnt apply b/c sale of services, not goods; Held- Ct

applies gravamen of complaint test b/c diving board = sale of good

7. Most courts will apply Art. 2 provisions to a transaction that is not a contract for the sale of goodsbut is analogous.


7/24

7

a. Hoffman v. Horton- Hoffman bids on property, gavel comes down, new bidder says he hadbid more, price went up $17k, Hoffman still bout, but sued for difference; Held- UCC doesnt

apply b/c involves property, but okay for trial court to borrow UCC rule and hold ok to

continue bidding when there was nothing in the common law

b. Zapatha () v. Dairy Mart- DM cancels its franchise agreement w/Zapatha, who refused tokeep store open longer hrs.; Zapatha- clause allowing cancelation of franchise violates

UCCs good faith req, 1-203, and termination clauses can be unconscionable, 2-302.; Held-

contract not w/in scope of UCC (tho it involved sale of goods, thrust was franchise fee), but

applies UCC by analogyc. Some courts take an inclusive approach to Art. 2 based on policy considerations.i.Advent Systems v. Unisys- see below, top of p. 8; i.e. one reason ct. decided to apply Art. II

is that software is sold like other goods

B. PATTERN OF ARGUMENTATION1. Example 1: AVAILABILITY OF A CLAIM

a. s Claim: breached the implied warranty of merchantability in 2-314(1).b. s Defense: 2-314(1) does not apply (and therefore no implied warranty of

merchantability was made) b/c this is not a contract for the sale of goods.

2. Example 2: AVAILABILITY OF A DEFENSEa. s Claim: made a promise and did not keep it.b. s Defense: The promise is not enforceable b/c the requirements of the statute of frauds in 2-201(1) were not satisfied.c. s Reply: 2-201(1) does not apply b/c this is not a contract for the sale of goods.

i.Advent Systems v. Unisys- Unisys backed out of contract to buy software from Advent;Unysis defends- SOF, no signed writing; Advent- SOF doesnt apply b/c software not a

good; Held: software is a good b/c 1. once on floppy disk, its tangible; 2. good to have

a uniform rule to apply to software

3. Example 3: AVAILABILITYOF AN EXCEPTION TO A DEFENSEa. s Claim: promised to keep an offer open and broke the promise.b. s Defense: The promise is not enforceable b/c gave no consideration in exchange.c. s Reply: No consideration is needed b/c of the exception for firm offers in 2-205.d. s Response: 2-205 does not apply b/c this is not a contract for the sale of goods.

V.Article 2 Basic ConceptsA. MERCHANT RULES1. RULES

a. Art. 2 applies to both merchants and non-merchants, but it contains some provisionsapplicable only to merchants.

i.i.e. the SOF in 2-201(1) applies to everyone, but the confirmation exception in 2-201(2)applies only to contracts btw 2 merchants.

b. A party can be a merchant by:i.dealing in goods of the kind involved in the transaction;ii.having knowledge or skill as to the goods involved in the transaction, for the purpose of

goods provisions like 2-314 on the implied warranty of merchantability;

iii.having knowledge or skill as to the practices involved in the transaction, for the purpose ofpractices provisions like 2-201(2) or 2-205 on firm offers Decatur Coop v. Urban- Urban offers to sell wheat to Decator Coop, who then

contracts to sell it to a grain elevator; price of grain increases, and Urban denies

making the contract, asserts SOF; Held- Urban is non-merchant, does not have

knowledge in the business practice; exception to SOF non-applicable

iv.hiring an agent who has the knowledge or skill to qualify as a merchant. 2-104 & cmt. 2.c. A person can be a merchant for the purpose of some UCC provisions or some transactions

but not others.

2. PATTERN OF ARGUMENTATIONa. s Claim: breached a promise to buy or sell goods.b. s Defense: My promise is not enforceable b/c the SOF is not satisfied. 2-201(1)


8/24

8

c. s Reply: The SOF is satisfied b/c failed to respond to my confirmation w/in 10 days. 2-201(2)

d. s Response: The confirmation exception does not apply b/c I am not a merchant. 2-104(1)

i.Decatur Coop(see above)

B. MODIFICATION OF CONTRACT TERMS1. RULESa. Common law- consideration reqd. Rest. 72, Alaska Packersb. Art. 2- no consideration reqd. 2-209(2)

i.But- request for modification must be made in good faith (must have a good reason, notjust intent to extort more $)

ii.Contract may bar oral modificationc. Waiver of Contract Rights

i.Common law- waiver permitted.Swartzreich- Swartzreich received a job offer, then got another offer for more $; his

current employer offered him more $ and tore up the old contract; Held- free to waive

your contractual rights

ii.Art. 2- same- may waive your contractual rights for the sale of goods. 2-209(4) Wisconsin Knife v. Natl Metal Crafters- Natl agreed to make blanks for Wis. Knife;

Natls delivery was late; Wis. Knife initially accepted late orders and then sued when

they continued to be late; Held- Wis. Knife waived right to insist on timely deliver, and

Natl relied on that waive

Majority- must have reliance for a waiver to be enforceable (problem- not in code) Takeaway- UCCis different from common law in that it doesnt require consideration

for modifications

C. UNCONSCIONABILITY1. RULES

a. A court may refuse to enforce a contract or term of a contract that it finds unconscionable. 2-302(1). Q: does enforcing the clause shock the conscious?

i.Some arguments a party might assert to an objectionable term: may argue for strictconstruction, may argue lack of adequate notice (Klar), may argue its unenforceable

b/c it violates public policy

b. Courts monitor contracts for oppression (substantive unconscionability), perhaps producedby remedy meddling or excessive prices, and for unfair surprise (procedural

unconscionability), perhaps resulting from hidden contract terms or contracts offering no

meaningful choice. 2-302 cmt. 1.

i.Substantive unconscionability- oppression; i.e. limiting remedies (Bloomfield Motors) ormodification of warranties

restriction of recovery for personal injury more commonly viewed as unconscionablethan restricting recovery of economic loss

ii.Procedural unconscionability- unfair surprise; manner in which the contract is made isunconscionable;i.e. tiny terms one cant read, terms one wouldnt ordinarily expect, no

meaningful choice over terms, such as an adhesion contractc. Courtsrarelyinvalidate contract provisions as unconscionable, especially in contracts btw

merchants. Note- dont get carried away.

2. A & M Producecase- A & M purchased a tomato sorting machine from FNC, machine defective,tomato crop lost; A & M claims breach of express and implied warranties; FNC- contracts

disclaimer says no consequential damages; Held- procedurally uncons. b/c: 1. terms in small print

on back of form contract; 2. unequal bargaining power; substantively uncons. b/c: 1.

unreasonable disclaimer on mass-produced product; 2. FNC is expert, relied upon by A & M; 3.

consequential damages foreseeable; 4. manufacturer should bear risk machine wont work


9/24

9

a. FNCs response (common, decent arg.)- 2-316 specifies method by which warranties canbe excluded (writing must be conspicuous and mention merchantability), and we complied

w/this, so it was not unconscionable

3. PATTERN OF ARGUMENTATIONa. s Claim: breached the implied warranty of merchantability. 2-314(1).b. s Defense: The implied warranty of merchantability was disclaimed. 2-316(2).c. s reply: The attempted disclaimer is unconscionable and therefore not enforceable. 2-

302(1).

D. GOOD FAITH1. RULES

a. Some UCC provisions expressly require good faith. I.e.- the buyer under a requirementscontract must specify the quantity of goods required in good faith. 2-306(1).

b. All UCC contracts also contain an implied duty of good faithin their performance andenforcement, though not in their formation. 1-203.

c. The general definition of good faithrequires only honesty in fact. 1-201(19).d. The merchant definition of good faithrequires honesty in fact and the observance of

reasonable commercial standards of fair dealing in the trade. 2-103(1)(b). The existence

of commercial standards of fair dealing in the trade must be proved.

2. PATTERN OF ARGUMENTATIONa. s Claim: breached the implied duty of good faith when did X. 1-203.b. s Defense: There was no dishonesty and (if is a merchant) has not shown that standards

of fair dealing in the trade prohibit X.i.Zapatha v. Dairy Mart(see p. 7)- Zapatha had not proved existence of fair dealing

E. UCC STATUTE OF FRAUDS SPECIAL RULES1. RULES

a. Contract must specify only the quantity of the goods (not essential terms). 2-201(1), cmt. 1i.Cant rely on SOF if you received a written confirmation and didnt object

ii.Merchant exception. 2-201(2)a writing in confirmation of the contract satisfies the writingrequirement of 2-201(1) if btw merchants and sent w/in a reasonable time unless written

notice of objection to the contents is given w/in 10 days after receipt

Decatur Coop- p. 8b. Special manufacture- if manufacturer started work, cant assert SOF as a defensec. Admissions- if you admit you made the promise, cant assert SOF as a defensei.Unique Designs- Court rejected SOF argument ruling oral agreement was valid b/c it was

undisputed the parties had made the agreement

ii.Partial delivery- the contract is not enforceable beyond amount of goods admitted. 2-201(3)(b); if seller only admits to part, that is all that is enforceable

d. Paid/Received. 2-201(3)(c)- if youve paid/accepted or received/accepted the goods,cant assert SOF as a defense

e. Electronic transactions can substitute a signed writing; i.e. clicking buy online f. Ispromissory estoppelan exception to the SOF?

i.Non-UCC states Rest. 139, MonarcoMajority- yes, promissory estoppel may be used to overcome a lack of writing when a

signed writing is required by the SOF

ii.UCC statesMajority- yes; most states have agreed promissory estoppel may be an exception to

the SOFo Decatur(p. 8); 1-103

Minority- noo Union Oil v. Lige Dickson- Lige does paving contracting, buys asphalt from

Union; Union promised not to raise prices for existing contracts Lige had, broke

that promise and alleged theyd not made it; Held- promissory estoppel claim

fails, 2-201(3) states all exceptions, need uniformity, dont want an increase in

litigation

2. PATTERN OF ARGUMENTATION


10/24

10

a. s Claim: made a promise and didnt keep it.b. s Defense: SOFc. s Reply: promissory estoppel

F. SUPPLEMENTAL GENERAL PRINCIPLES1. RULE- Unless displaced by particular provisions of the UCC, otherwise applicable principles of law

and equity supplement the UCCs provisions . UCC sits on top of the common law and other

statutes, leaving them intact and applicable.

2. PATTERN OF ARGUMENTATIONa. Supplemental Claims

i.s Claim: In performing our contract for the sale of goods, s conduct gave me a claimunder a state statute applicable as a supplemental general principle of law.

Zapatha v. Dairy Mart- see p. 7b. Supplemental Defenses

i.s Claim: promised to buy or sell goods and did not do it.ii.s Defense: Promise is not enforceable b/c it was induced by a statement constituting a

misrepresentation under common law rules applicable as supplemental general

principles.

VI.Article 2 Offer and AcceptanceA. MISCELLANEOUS RULES

1. FIRM OFFERS 2-205a. Option Contract = promise to keep offer open (exception to requirement of consideration)

i.common law- basis for enforcement reqd; enforceable promise not to revoke a promisefor a certain period requires consideration Dickinson v. Dodds-; Dick found out informally the property was being sold to another;

Held- no obligation to keep offer open b/c no consid.; before complete acceptance

by Dick, Dodds could contract w/another

ii.Art. 2- exception for firm offers by merchants (if requirements met). 2-205.An option contract by a merchant is not revocable during the time stated if the

following requirements are met: 1. offeror is a merchant and; 2. merchant promises in

writing to keep the offer open.

If reqs met, offer must be kept open for the stated period but for no more than 3 mos. If not in writing, requires consideration

iii.Friedman v. Sommer- Sommer, owner of NY apt. building decides to sell apt.s as co-ops;Sommer offers: purchase at current price for 30 days; Sommer then revokes, andFriedman attempts to accept; Held- Sommer may revoke the offer b/c the terms are non-

exclusive; saying itll lapse after 30 days different from saying it will be open for 30 days

b. Revocationi.prevented from revoking if:

binding option contract (promise to keep offer open) exception for firm offers by merchants applies. 2-205 party makes offer, other party relies on the offer, and no promise to keep the offer

openii.Drennan v. Star Paving- , general contractor, relied on Star Pavings offer in submittinga

large bid; Held- enforceable on promissory estoppel; s reliance makes s offer

irrevocableiii.E.A. Coroniscase- Gordon Construction, contractor, solicited bids for a bldg project; E.A.

promised to sell Gordon steel structural gods and then revoked; Held- reliance could

make an offer revocable, but must prove elements of promissory estoppel

iv.UCC sits on top of the common law, and if its not precluded by the UCC, UCC may besupplemented w/the common law

Response may argue something is precluded by the UCC (as in Lige Dickson, wherepromissory estoppel couldnt overcome SOF b/c couldnt creat addl exceptions to

those already listed in UCC)

2. FORM OF ACCEPTANCE 2-206(1)(a)a. Offeror is master of the bargain


11/24

11

b. If offeror does not specify how to accept, any reasonable manner of acceptance is okc. You can make a promise by beginning performance but doesnt count as acceptance

unless you provide notice

d. Means of Acceptance:i.promise to shipii.shipment

policy- prevent unilateral trick; trickster may argue no acceptance b/c no completeperformance; UCC- if you ship the goods, whether conforming or non-conforming, you

are accepting the contract; if defective- youve breachede. Pittard () v. Unique- Pittard helped Unique sell their lathe w/understanding Unique wouldbuy a lathe from Pittard, they didnt; Unique- contract too indefinite to enforce (2-204(3)) b/c

not agreed upon and course of dealing shows no formation (1-205); Held- 2-305- price can

be settled later, just must be reasonable; & 1 prior contract does not equate to a course of

dealing

3. NOTICE OF ACCEPTANCE 2-206(2)a. If youre merely promising to perform, notice of acceptance is required(unless waived, as in

Corlies & Tift)

4. CHARACTERIZATION OF ORDERS 2-206(1)(b)a. ORDERS ARE OFFERSb. important b/c at common-law, it was important to look carefully at the communication to

determine whether it was an offer or just preliminary communications

5. CONDUCT SHOWING AGREEMENT 2-204(1)a. courts do not need to determine precisely what was the offer and what was the

acceptance; so long as the parties can be shown to make an agreement, it is enough (even

w/o specific characterization of 1 offer and 1 acceptance)

6. DEFINITENESS 2-204(3)a. promise is sufficiently definite to enforce so long as it can be shown the parties intended to

enter an agreement and there is a reasonable basis for providing an appropriate basis

b. open term (e.g. price), 2-303(1); even if there are open terms, enforceable if clear there wasintent to form a contract; price must just be reasonable

B. PATTERNS OF ARGUMENTATION1. NO OFFER

a.

s Claim: Breach of contract.b. s Defense: There was no offer.c. s 1st Reply: An order for goods may be characterized as an offer under 2-206(1)(b).d. s 2nd Reply: No distinct offer is necessary if the conduct of the parties shows the existence

of a contract. 2-204(1).

2. OFFER REVOKED BEFORE ACCEPTANCEa. s Claim: Breach of contract.b. s Defense: The offer was revoked before acceptance.c. s Reply: promised to keep the offer open.d. s Response: There was no consideration for the promise to keep the offer open.e. s Reply: No consideration is needed under 2-205 (option contract in writing by merchant

must be kept open).

3. NO ACCEPTANCEa. s Claim: Breach of contract.b. s Defense: There was no proper acceptancec. s Reply: The attempted acceptance was made in manner and medium reasonable under

the circumstances. 2-206(1)(a).d. s Response: There was no consideration for the promise to keep the offer open.e. s 2nd Reply: The acceptance was made by a promise to ship or a prompt or current

shipment of conforming or nonconforming goods. 2-206(1)(b).

f. s 3rd Reply: No distinct acceptance is necessary if the conduct of the parties shows theexistence of a contract. 2-204(1).


12/24

12

4. NO NOTICE OF ACCEPTANCEa. s claim: breach of contract.b. s defense: There is no contract b/c you did not provide notice of your acceptance of my

offer before it lapsed. Notice was required b/c you attempted to accept by beginning

performance. 2-206(2).

5. AGREEMENT TOO INDEFINITE TO ENFORCEa. s claim: Breach of contract.b. s defense: The agreement is too indefinite to enforce b/c obligations of parties are unclear.c. s reply: The contract is sufficiently definite b/c the facts show the parties intended to make

a contract, and there is a reasonably certain basis for giving an appropriate remedy, in

particular ______. 2-204(3).

C. THE BATTLE OF THE FORMS1. Is there a contract?

a. RULESi.mirror image rule Rest. 59, 1-103

common law rule- a purported acceptance which contains different or addl terms tothe offer is not really an acceptance but a counteroffer, no contract

o Columbus Rolling Mill- , Rwy., rejected by making new offer; Held- a proposalto accept on terms different from those offered = rejection of offer, ending the

negotiation, unless other party accepts

ii.exceptionto mirror image rule 2-207(1)s 1st Clause may form a contract even if there are different/ addl terms in the purported

acceptance, unless the offer says the offeree has to agree to the stated terms

(proviso)

iii.proviso(exception to exception) 2-207(1)s 2nd Clause exception subject to proviso- may form a contract even if addl/different terms UNLESS

acceptance is made expressly conditional on assent to the addl terms

i.e. if purported acceptance contains addl terms and if the acceptance requiresassent to those terms to form a contract, there is no contract (mirror image rule

applies)

iv.contract by conduct 2-207(3) conduct by both parties which recognizes the existence of a contract is sufficient to

establish a contract (even if the writings dont acknowledge a contract) i.e. buyer sends want 200 cds; acceptance- will ship Tues. but only if you agree to

this price; buyer doesnt agree to price but takes cds and sells them binding

contract

What are the terms of a contract formed by conduct but not by forms? 2-207(3)o terms on which the writings agree 2-207(3)s 2nd sent.;

the terms will consist only of those terms that are common to both forms;addl terms cut out

o ANDany gap fillerssupplied by UCC e.g., 2-309(1) must be reasonable

o Pattern of Argumentation s Claim: broke a promise to do X. s Defense: Our contract was formed by conduct and X is not a term on

which the writings agree. s Reply: The term X becomes part of the contract as a gap filler

supplied by the UCC.

b. PATTERN OF ARGUMENTATIONi.s Claim: Breach of contract.ii.s Defense: No contract was formed b/c the purported acceptance was not a mirror

image of the offer. Rest. 59.iii.s 1st Reply: A contract may be formed even if the acceptance contains addl or

different terms under the exception in 2-207(1)s 1st clause.


13/24

13

iv.s Response: The exception does not apply b/c the acceptance in this case expresslyrequired the offeror assent to the different or addl terms. 2-207(1)s 2nd clause.

v.s 2nd Reply: A contract was formed by our conduct even if the forms do not create acontract. 2-207(2).

2. What are the terms of the contract formed by the exception to the mirror image rule?a. RULES

i.Additional Terms General Rule- A contract has been formed, but it doesnt contain the addl terms,

which are just proposalsfor modifying the terms. 2-207(2)s 1st sent.Merchant Rule- If btw merchants, the terms become part of the contract unless the

offeror objects to them (in advance, or after seeing them, w/in reasonable time) or

unless they materially alter the contract (where merchant rule wont apply).

o usually doesnt apply, would just use general ruleii.Different Terms; 3 different ways to deal w/them:

same as additional(minority)- treat them as proposals for modifying the contract;different terms become part of the contract if the two parties are merchants unless

they would materially alter or buyer objects. 2-207 cmt. 3

knock out (majority)- if different terms btw offer and acceptance, knock-out thedifferent terms, change the terms to what is reasonable (i.e. gap-filler). 2-207 cmt. 6;

Prof. White

offer controls- b/c 2-207 doesnt say you must do anything, just ignore them and saythe terms of the offer control (Prof. Summers)

iii. Gap Fillers- i.e. default- reasonable price. e.g. 2-305(1) gap fillers specify a rule if the contract does not; i.e. if no specification of when it is to

be performed, must be w/in a reasonable time

b. PATTERN OF ARGUMENTATIONi.s Claim: broke a promise to do X.ii.s Defense: I did not promise to do X in my offer.iii.s1st Reply: The term X was included in my acceptance and became part of the

contract under the merchant rule in 2-207(2)s 2nd sent.iv.s Response: The merchant rule in 2-207(2)s 2nd sent. does not apply b/c its elements

are not satisfied. At most the term is a proposal for modifying the contract, which I did

not accept. 2-207(2)s 1st sent.

v.s 2nd Reply: The term X is part of the contract as a gap filler supplied by the UCC b/ceither our agreement does not address the issue or b/c the offer and acceptance have

different terms on the issues; a court should apply the knock-out approach.vi.s Response: The court should not apply the knock-out approach.

c. C. Itoh & Co., Inc. v. Jordan Intl Co.- Itoh sent purchase order for steel coils; Seller, Jordan,sent acknowledgement that contained addl terms- express condition required arbitration if

dispute arose; Held- falls under proviso; there is a contract b/c parties acted like there was,

knock out addl terms (arbitration clause)

i.Hypo- what if no express condition? there would be a contract, under 2-207(1), but thearbitration clause would just be a proposal; merchant rule would apply- unless objected

to, it would be part of the agreement; C. Itoh could argue it materially alters the

agreement

d.

Hypo- Prob. 3, p. 77- offer for goods ship Oct. 15, purported acceptance- ship Dec. 15;majority- knock out 2 dates and just requires shipment w/in reasonable time

VII.Terms in the BoxIs a buyer bound by terms in the box? Is the contract formed before or after the buyer saw the terms

in the box? 2 Views:

1. View #1: Hill v. Gateway- Hill orders/ pays for Gateway comp.; arrival- Hill finds terms in the box- ifyou keep the comp. past 30 days, agree disputes will be arbitrated; Hill - clause inconspicuous

(rejected by court), and only bound by terms they knew about when contract made; Held- seller is

master of the bargain and may specify how acceptance is formed


14/24

14

2. View #2: Klocek v. Gateway- buyer orders goods, seller accepts by shipping; Held- terms in box areat most a proposal to modify/ amend the contract, 2-207; terms of the contract are whatever was

agreed to when the computer was bought

VIII.What Courts May Consider in Determining the Meaning of an AgreementA. 1-205(4) Hierarchy: Express Terms Course of Performance Course of Dealing Usage of Trade

1. Express terms- first in the hierarchy2. Course of performance, 2-208(1)- a course of performance acquiesced to is evidence of the terms

of the agreement

3. Course of dealing, 1-205(1)- past transactions (previous contracts) have established a commonbasis of understanding for interpretation of the parties dealings

4. Usage of trade, 1-205(2)- any practice/ method of dealing done regularly in a place/ trade as tojustify an expectation that it will be observed w/respect to the transaction in question

B. Nanakuli v. Shell- Shell promised to protect price of asphalt for Nanakuli, asphalt paver, andbreached; Held- upheld protection b/c price protection is regularly practiced for existing contracts in

the asphaltic paving trade, 2 instances enough to establish course of perf., exception to express terms

(paying posted terms at delivery), not a negation

1. For Lige Dicksoncase, (holding oral agreement to protect price unenforceable b/c of SOF), couldhave used usage of trade arg. instead of relying on the oral agreement

IX.Art. 2 Receipt, Inspection, and WarrantiesA.

RECEIPT AND INSPECTION1. Rules

a. BUYERS RIGHTS AND DUTIESi.Duty to pay. 2-301

if goods tendered. 2-507(1) after inspection. 2-513(1), (2)

o if defective, seller has to pay cost of inspection (otherwise, they are buyerscost)

ii.Right to reject 2-601(a) perfect tender required- if they fail to conform to contract, buyer has right to reject good faith 1-203; buyer has general duty of good faith, must act honestly and abide

by reasonable standards of commercial dealing in the trade (i.e. trade might not

permit rejection if only slight defect)

iii.Methods of acceptance. 2-606(1) signifying acceptance, 2-606(1)(a) failing to reject, 2-606(1)(b) acting inconsistently, 2-606(1)(c): i.e. buyer rejects but continues to use, sells, or leases

the good

iv.Right to revoke acceptance. 2-608(1) & (3); i.e. if buyer discovers after acceptance thegoods have a defect, which substantially impairs the value of the goods to the buyer,

and buyer was unable to discover defects prior to paying (b/c latent b/c or seller had

assured no defect), then buyer may revoke

b. SELLERi.Duty to deliver. 2-301.

if price tendered by buyer. 2-511(1)ii.Right to cure (mitigates perfect tender rule)

early tender. 2-508(1); seller may try again to deliver perfect goods surprise reject. 2-508(2); i.e. if seller thought the goods would be acceptable to the

buyer; may cure by making conforming tender w/in reasonable time (and will get

purchase price; however, seller must still pay damages, since they werent conforming,

i.e. if late)

iii.Effect of cure seller gets price. 2-607(1) seller pays damages. 2-714(1)

2. Pattern of Argumentationa. SELLERS CLAIM AND BUYERS DEFENSES


15/24

15

i.Ss Claim: B did not pay for the goods. 2-301ii.Bs 1st Defense: S did not tender the goods. 2-507(1).iii.Bs 2nd Defense: S did not let me inspect the goods. 2-513(1).iv.Bs 3rd Defense: I rejected the goods b/c they were not perfect. 2-601(1).v.Ss 1st Reply: You in fact accepted the goods b/c you did an act consistent w/my

ownership of them, etc. 2-606(1)(c).

vi.Ss 2nd Reply: Although you rejected, I subsequently cured the defect. I had a right tocure b/c I tendered early or b/c I had reasonable grounds for thinking the goods would

be accepted. 2-508(1) & (2). (If seller cures, buyer must accept and pay for goods, but may have a claim for

damages caused by the non-conformity)

vii.Bs 4th Defense: I revoked acceptance. I had a right to revoke acceptance b/c (1) thegoods were non-conforming; (2) the non-conformity substantially impaired their value to

me; and 3(a) I reasonably assumed the non-conformity would be cured or (3)(b) I did not

discover the non-conformity during inspection b/c of the difficulty of discovery or b/c of

your assurances. 2-608(1) & (3).

b. BUYERS CLAIM AND SELLERS DEFENSESi.Bs Claim: S failed to deliver the goods. 2-301.ii.Ss Defense: B failed to tender payment for the goods. 2-511(1).

B. WARRANTIES1. RULES

a. Types of Warrantiesi.EXPRESSWARRANTY 2-313(1)(a) & cmt. 3; any assertion of fact seller might make about the

good; doesnt necessarily have to be case that buyer relies on the statement

Common arguments by sellersin express warranty cases:o no intent to make warranty

always invalid- intent unnecessary; goods must be described in someway; if seller makes an affirmation about product, it creates an express

warranty

o no reliance by buyer always invalid; there is no requirement of reliance; if description is made,

that warranty is enforceable b/c its part of the bargain

o seller disclaimed warranty(contract says there is no express warranty) always invalid; may not disclaim express warranties; will look at disclaimer

and description to try to make them consistent

o buyer waived warranty violation(by not objecting though buyer knew thedescription was false)

sometimes valid; q: whether buyer waived or noto mutual mistake

Rest. 152, 154(1); sometimes valid; 154(1)- usually seller should bear therisk that they are mistaken when making a warranty (b/c they are the

expert)

o just puffing/ opinion 2-313(2), Tyson; sometimes valid

Doug Connor, Inc. v. Proto-Grind, Inc.- Doug buys wood-grinding machine from P-G,who said it would grind up Palmettos; it didnt; Doug asserts breach of express

warranty; P-G: oral affirmations were puffing/ opinion and buyer didnt rely (b/c he

knew a competitor who the machine didnt work for); Held: finder of fact could reas.

conclude the promise were more than just puffing

ii.IMPLIED WARRANTIES F.F.P.P., 2-315

o Fitness For a Particular Purpose- the goods will be useful for whatever youbought them for (i.e. seller recommends a particular item for a certain use)

opinions may create it, merchantability doesnt matter, seller doesnthave to be a merchant, not typically disclaimed


16/24

16

o Tyson v. Ciba-Geigy Corp.- farmer, Tyson, planting no-till soybeans neededpesticide; seller recommended Dual 8E, but it didnt kill Tysons crabgrass; Held-

no express warranty (just puffing) but there was breach of FFPP

Merchantability 2-314(1) & (2)o if the seller is a merchant, unless there is a disclaimer, there is an implied

warranty that the goods will be merchantable: fit for their ordinary use

(ordinary purposes for which such goods are used) [2-314(2)(c)] and properly

packaged and labeled

oAmbassador Steel Co. v. Ewald Steel Co.- Ambassador sold Ewald steel, whichEwald sold to another co.; steel cracked when used on RR tracks, co. didnt

pay Ewald, who wouldnt pay total $ to Ambassador; Held- the steel wasnt

merchantable, not fit for ordinary purposes b/c it wasnt w/in the commercial

range

Morrow v. New Moon Homes- Marrows buy a mobile home from Golden Heart(immediate retailer), manufactured by New Moon Homes; many defects; Held- s

may recover from GH under FFPP and warrant of merchantability for difference btw

what home is worth and would have been worth if warranted, as well as for

consequential damages (i.e. to property);

o tho 2-318 doesnt address vertical privity: Held: Morrows may also recoverfrom NMH; Rule: consumer may bring a warranty action against the

manufacturer even tho consumer has no privity w/manufacturer

o policy reasons: consumer inability to protect himself; manufacturer more ableto handle risk, has more info; promotes circularity of litigation

Title 2-312(1); seller warrants that seller has good title when selling the goods Other 2-314(3) -that arise from facts of the cases (new, when you buy from store)

b. Warranty Issuesi.3rd-Party Beneficiaries 2-319, esp. alt. C

Alternative C (Majority)- the warranty extends to anyone who could be reasonably beexpected to use or be affected by the goods

ii.Damages loss in value of the product itself 2-714(2)i.e. you get the difference in value btw

what you were promised and what you got (difference btw value of goods as they

are and what value they would have had if as warranted)

consequential damages 2-714(3), 2-715(2)(a)o economic loss- recoverable, provided it was foreseeableo personal injury 2-715(2)(b); foreseeability not required; so long as injury was

proximately caused by breach of warranty, buyer/ injured party may recover

o may recover for property if damages were foreseeable Morrow v. New Moon Homes

iii.Privity connectedness btw the parties/ who can bring suit Vertical Privity (can buyer recover from remote seller (vs. immediate seller)?)

o UCC doesnt address vertical privity Horizontal Privity (can injured non-buyer recover from a seller?) Hypo- Maggs car accelerates due to defect and he and passengers (family and

guests) crash into his garage)

o warranty theory- good claim car is not merchantable, buyer can recover fromimmediate seller

o Can buyer, non-buyer, and intended 3rd party occupants recover? 2-714- if breach of warranty, buyer may recover the measure of

damages, which is the difference at the time of acceptance btw value

of goods accepted and value they would have had if as warranted; may

also recover consequential damages

Alternative A (Majority)- A sellers warranty, express or implied, extends tobuyer, and his family and guests, if reas. to assume they might be

affected by the goods (addressing horizontal privity)

c. Disclaimers


17/24

17

i.Express warranties 2-316(1)cant be disclaimedii.Implied warranties 2-316(2)canbe disclaimed, provided req.s are met

Implied warranty of merchantability- almost all sellers attempt to disclaim this Disclaimers invalid if there is non-compliance w/formalities, 2-316(3):

o Writing must be conspicuous and mention merchantability conspicuous = reasonable person ought to have noticed it

o FFPP disclaimer- must be in writing, be conspicuous, and mentionmerchantability

Sierra Diesel v. Burroughs- Burroughs sold SD a computer for billing/ tracking inventory,didnt function as expected; Held- disclaimer of merchantability and FFPP not

conspicuousb/c on back of page, lack of heading, right in middle, small font Exceptions: with all faults or asis no implied warranty of merchantability (i.e. used

car, e-bay)

iii.Unconscionability 2-302(1) efforts to disclaim when breach results in person injury typically unconscionable Martin v. Joseph Harris- Martin bought Harris seeds, which had fungus and developed

a disease; Held- unconscionable even tho min. req.s of 2-316 met

2. PATTERN OF ARGUMENTATIONa. s Claim: made an (express or implied) warranty that the goods would be __, and the

goods are not __, b/c __. 2-312(1), 2-313)1), 2-314(1), 2-315b. s 1st Defense: I did not make the warranty; the elements of __ are not satisfied b/c __.

i.Coakley & Williams v. Shatterproof Glass-c. s 2nd Defense: I did not make the warranty to you b/c you are not the person who might

have been reasonably expected to use, consume or be affect by the goods. 2-318, alt. C.d. s 3rd Defense: I disclaimed the warranty in accordance w/the requirements of 2-316(1).e. s 1st Reply: The warranty is an express warranty and cannot be disclaimed. 2-313(1).f. s 2nd Reply: The disclaimer is unconscionable in this case b/c __. 2-302(1).

i.Martin v. Joseph Harrisg. s Remedy: I am entitled to damages equal to the value of the goods accepted and the

value they would have had if they had been as warranted, plus incidental and

consequential damages. 2-714(1), (2); 2-715(1) & (2).

X.BuyersRemedies(if there is breach of contract)A. RULES

1. CANCEL/STOP PAYMENT/RECOVER PAYMENTS, 2-711(1), 2-601, 2-608a. When can buyer cancel and withhold/ recover payment?

i.upon sellers failure to deliver/ repudiation, 2-711ii.upon buyersjustified rejection of goods(i.e. if damaged at time of delivery), 2-601 (may

reject unless otherwise agreed)

perfect tender/ goodfaith, 2-601, 1-203o perfect tender rule- if the goods (or tender of delivery) fail in any respect to

conform to the contract, the buyer may reject the goods

this is contrary to the rule of substantial performance& material breach(i.e.Jacob & Youngs v. Kent- use of Cohost instead of Redding pipe not a

material breach;see also Walker & Young v. Harrison- duty to maintain

neon sign subst. performed)

why different? w/goods, you can generally give the goods back, somuch less of a hardship

o obligation of good faith- i.e. if tender is nearly perfect- oh come on ruleo DP Technology v. Sherwood Tool- DP creates custom computer system for

Sherwood, hardware came 16 days late and Sherwood doesnt pay; Held-

applies minority rule- no material breach b/c substantially performed

sellers right to cure, 2-508(1), (2) if:o early tender (time of performance hasnt occurred yet) OR surprise rejection

(reasonable grounds to believe the goods would conform), 2-608(1)

o seller has a limited right to try again, to get it right; mitigates harshness ofperfect tender rule


18/24

18

duty to hold goods for seller, 2-602(2)(b), (c)- buyer must hold w/reasonable care forsufficient time for seller; dont have to send back unless previously agreed

iii.upon buyersjustified rejection of acceptance(buyer accepts goods and then decides torevoke acceptance)

Requirements:o the defect must cause substantial impairment of valueto buyer (substantial

breach)

o it must b/c of assumption of cure/ difficulty of discovery (i.e. difficult to discoverit wouldnt work or seller assured it would work)

o reasonable timeJorgensen v. Presnall- buyers purchased mobile home, which had many defects; they

sought to revoke acceptance/ cancel the contract; Held- there was a substantial

impairment of value, seller has limited number of chances to cure

2. FORCE DELIVERY OF GOODS, 2-716, 2-502a. Ways buyer can force delivery of goods if seller fails to deliver goods/ repudiates

i.Specific performanceif goods are unique or other proper circumstances (not reallydefined by UCC), 2-716(1)

Sedmak v. Charlies Chevrolet- Charlies reneged on its promise to sell a corvettepace car to the Sedmaks; Held- specific performance is appropriate b/c, although the

car is not unique, it would have been impossible to obtain otherwise w/o considerable

expense and inconvenience

Hilmor Sales Co. v. Supronica Corp.- claims lipstick and nailpolishes ordered at close-out prices are unique; Held- specific performance not granted; could cover at a

higher price and obtain the difference

ii.Replevin(pre-judgment seizure), 2-716(3) Requirements:

o goods identified, 2-501(1)(a) i.e. not if future-made, custom goods or seller doesnt have them

o unable to cover (buyer is unable to make a reasonable purchase in substitutionafter reasonable effort), 2-712(1)

iii.Recovery after partial payment, 2-501(1) Requirements:

o special property interest (i.e. goods have been identified)o buyer pays unpaid portiono buyer may only recover if: consumer goods(since 1999) orseller becomes

insolvent

3. RECOVER DAMAGES FOR NON-ACCEPTED GOODS, 2-712, 2-715a. cover difference, 2-712,

i.Cover- price at which buyer buys substitute goods; can charge seller who breached thedifference

ii.Requirements: good faith w/o reasonable delay reasonable purchase; must be a commercially reasonable substitute if not the same in substitution; cant buy addl goods; must be substituting goods seller didnt supply

b.

market difference, 2-713(1)difference btw market price at time buyer learned of breachand contract price, together w/consequential damages, less expenses savedi.measuring market price?

location, 2-713(2)o non-deliveryplace of tendero if rejection occursplace of arrival

i.e. NY buyer buys eggs from Atlanta seller, FOB; rejects; here, use marketprice at place of arrival; if FOB, buyer not entitled to recover shipping

costs b/c they are not incidental; other incidentals- cost of storing/ selling

the eggs; consequential- lost profit possibly

timewhen buyer learned of breach, 2-713(1)


19/24

19

branch of tradesame as contract, 2-713o i.e. if farmer selling corn to elevator breaches, elevator can recover cost to

cover (minus contract price) from another farmer, not the market price

elevators are selling for

ii.Limitationson buyers ability to recover market damages under 2-713? none mentioned, so none; sometimes buyer gets a windfall if f buyer decides not to

use the market damages to buy the goods (and there is a dramatic change in price)

2-711, cmt. 3; 1-106: remedies should be liberally administered to put aggrieved partyin as good a position as if the other party had performed

Allied v. Victor- Allied to buy raisins from Victor, resell to Jap. buyer; price of raisins shotup, Victor didnt deliver, Allied sues; Jap. co. never sues Allied; Held- recovery not

allowed under 713; aggrieved party should be put in as good a position as if the other

party performedrequires limiting award of damages to buyer to its actual loss

(expected profit)

o general statement of 1-106 (putting aggrieved party in same place they wouldhave been in) vs. specific rule that buyer can recover the market price

difference; general rule:specific controls(ct. here disagreed)

But See TexPar Energy v. Murphy Oil- Texpar to buy asphalt from Murphy and then sell itto Starry; price of oil shot up; Murphy breached, forcing TexPar to breach w/Starry

(who it settled w/); Held- specific provision of 2-713 applies, TexPar entitled to market

price damages (allows non-breaching party the windfall)

What if buyer has already covered?o Can buyer recover market price if buyer has covered at a lower price?

courts are divided; most courts- no, b/c buyer would then be better off some courts- always entitled to market damages (even if cover damages

are less)

why? someone will get a windfall, why give it to the breaching party;benefit of buyer being a good negotiator/shopper should not be

given to the seller, who breached

o 2-712- if you pay over the market price, in good faith, you may recover thedifference

c. incidental damages, 2-715(1)- damages that arise in the ordinary case, expenses reasonablyincurred; may recover post-rejection costs

d.

consequential damages, 2-715(2)- loss that is foreseeable and unavoidable4. OBTAIN DAMAGES FOR ACCEPTED GOODS, 2-714, 2-715

a. General Rulesi.buyer may accept some or all goods, 2-601(b),(c)ii.duty: payment for goods accepted, 2-607(1); must be at the contract priceiii.duty: notice to seller, 2-607(3)(a): must be w/in a reasonable time after you realize goods

are defective

b. damages for accepted goods may be for breach of warranty, 2-714(2), (3)i.difference btw value of goods as accepted and value they would have had if as

warrantedii.Chatlos Systems v. NCR- NCR sold Chatlos a computer for bookkeeping; contract price-

$40k, value of accepted goods- $6k, value if as warranted- over $200k (use of expert

testimony to prove); Held- s recover difference btw value of goods if as warranted (over

$200k) minus value of goods accepted ($6k)

c. damages may be for other problems (i.e. lateness, etc.), 2-714(1),(3)i.J.V. Zimmerman v. General Mills- JVZ delivered toys for GMs cereal late; JVZs defense

that GM didnt provide notice of defect fails- JVZ knew delivery was late; GM wants $ for

airfreight, overtime, and cartons it destroyed; Held- GM recovers airfreight and overtime

(but not cartons b/c not date-stamped, couldve used in another box)

5. AWAIT DELIVERY/RETRACTION OF REPUDIATION6. RECOVER IN RESTITUTION DESPITE BUYER HAVING ALSO BREACHED

a. Seller fails to deliver, but buyer is also in breach; buyer may recover in restitution anypayments buyer has made to seller, but must subtract either $500 or 20%, whichever is less.


20/24

20

B. PATTERN OF ARGUMENTATION1. BUYERS DEFENSES BASED ON REMEDY PROVISIONS

a. Ss claim: B promised to accept and pay for goods and did not do it.b. Bs 1st defense: I had a right to suspend my payment b/c S gave me reasonable grounds for

feeling insecure (and I demanded that S provide me w/adequate assurance of

performance). 2-609(1).

c. Bs 2nd defense: I had a right to cancel the whole contract b/c S repudiated the wholecontract or breached the whole by failing to deliver when payment was due. 2-610(b), 2-

711(1).d. Bs 3rd defense: I had a right to cancel w/r/t one installment b/c S repudiated the obligation

to deliver the installment or failed to deliver it when payment was due. 2-610(b), 2-711(1).

2. BUYERS REQUEST FOR THE PRICE PAID AND MARKET DAMAGESa. Bs claim: S promised to transfer and deliver the goods and did not do it.b. Bs damage request: S should have to pay damages equal to the price already paid and the

difference btw the market price and the contract price, plus incidental and consequential

damages but less expenses saved. 2-711(1)(b), 2-713(1).

c. Ss reply: B is not entitled to the market price difference b/c B covered. 2-713 cmt. 5.3. BUYERS REQUEST FOR THE PRICE PAID AND COVER DAMAGES

a. Bs Claim: S promised to transfer and deliver the goods and did not do it.b. Bs damage request: S should have to pay damages equal to the price already paid and the

difference btw the cover price and the contract price, plus incidental and consequentialdamages but less expenses saved. 2-711(1)(a), 2-712(2).

c. Ss reply: B is not entitled to the cover price difference b/c B did not make in good faith, andw/o unreasonable delay, a reasonable purchase in substitution from those due from me. 2-

711(2).

4. BUYERS ATTEMPT TO FORCE DELIVERYa. Bs claim: S promised to transfer and deliver the goods and did not do it.b. Bs 1st request: I am entitled to replevin b/c the goods have been identified and I am unable

to cover. 2-716(3).

c. Bs 2nd request: I am entitled to recover the goods identified b/c the seller became insolventw/in 10 days after receipt of the 1st installment for their price. 2-502(1).

d. Bs 3rd request: The court should award specific performance b/c the goods are unique orthere are other proper circumstances. 2-716(1).

e. Ss reply: The court has the discretion to deny specific performance for equitable reasons. 2-716 cmt. 1.

5. BUYERS REQUEST FOR RESTITUTIONa. Bs claim: Although I breached the contract (by repudiating or by failing to pay the full price

when due), I am entitled to restitution of the payments made to the seller, minus $500 or 20%,whichever is less. 2-718(2). See Davis Chemical v. Diasonics.

b. Ss counterclaim: B failed to pay and accept the goods and is liable for damages. 2-718(3); 2-703.

6. NON-CONFORMING DELIVERYa. Bs claim: S delivered non-conforming goods.b. Bs 1st remedy request: Having accepted and paid for the goods, I am entitled damages

measured in any reasonable manner. 2-714; 2-703.

c. Bs 2nd remedy request: Having rejected the goods, I am entitled to recover the price anddamages. 2-711(1).

XI.SellersRemediesA. If buyer repudiates/ failure to pay (see XII): Seller may (2-610b), seek any remedy available for any

other type of breach; withhold/suspend delivery; cancel the contract; suspend performance; or

reclaim the goods.

B. What DAMAGES can the seller recover from the buyer? 2-7131. FULL CONTRACT PRICE(recovery of full purchase price) when:

a. goods accepted, 2-709(1)(a)- if buyer has accepted goods, he must pay full purchase pricei.issue: when does acceptance occur?


21/24

21

ii.Bloom v. Skelly- issue: when does acceptance occur? Skelly agreed to buy candelabrasfrom Bloom; delivery attempted multiple times to her home, eventually she said she would

not accept them; Held- if you dont reject or inspect (w/opportunity to do so), implied

acceptance, Bloom recovers [Skelly might assert there was implied rejection]

b. white elephants, 2-709(1)(b), (2)- buyer has not accepted goods, butseller cantresellthem at a reasonable price after reasonable efforts(seller entitled to full contract amt.)

i.i.e. buyer contracts for mink coat in large size w/large flare; might be able to resell, butunlikely for reas. price; best for seller to recover full purchase price so that buyer can

actually get the coat (rather than paying a high amt. of difference and getting zip)2. DIFFERENCE BETWEEN CONTRACT PRICE AND THE MARKET PRICEa. seller will seek damages b/c contract price higher than market damages; if buyer seeking

market damages, b/c market is higher than agreed to

b. measure market price at time/place for tender; if repudiation occurs before tender, considermarket price at time seller learns of repudiation (i.e. anticipatory damages)

3. DIFFERENCEBETWEEN CONTRACT PRICE AND RESALE PRICEa. if resale is made in a commercially reasonable manner, seller can recover difference btw

contract price and resale price, even if its lower than the market price

b. if there is a resale, andresale (35.5)is higher than market price(35), cant get difference btwcontract (36) and market- must get difference btw contract and resale price

c. Is the seller barred from using 2-708(1) (difference btw contract and market price) if:i.seller actually resells? Yes, Tesoro

Holborn Oil v. Tesoro- Holborn to buy oil at $1.30, price fell to .80, repudiated; Tesororesold gasoline for $1.10 (higher than market!); Tesoro wants diff btw market and

contract (we should benefit from our negotiating skills, could have made 2 sales),

Holborn btw resale and contract; Held- 1-106, seller should be limited to difference btw

contract and resale, not recover more than expected profitii.market damages would exceed lost profit under 2-708(2)?No,Southwire

Transworld v. Southwire- contract for sale of aluminum, monthly deliveries, pricedropped, buyer repudiates; Held- seller may recover difference btw contract price

and market price (which exceeds lost profit); ok for seller to get windfall; risk taken by

both parties market price would rise/fall

4. RULE: buyer may get retain the deposit up to a certain limit:a. amount of liquidated damages

i.if buyers deposit exceeds the liquidated damages, buyer can recover the difference btwthe deposit and the liquidated damages

b. buyer can recover deposit, less 20% of the value of the total performance to which buyer isobligated under the contract or $500, whichever is smaller, 2-718(2)(b)

c. amount of actual damages, 2-718(3)(a)5. LIQUIDATED DAMAGES, 2-718(1)

a. seller may recover liquidated damages stipulated in contract at an amount reasonable inlight of the harm caused by the breach

b. sellers often ask for % of contract price, or the deposit; Courts have usually found a % ofcontract price to be a reasonable amount

c. Martin v. Sheffer- buyer, Martin, rejected (wrongfully) printer on b/c late; Martin had paid50% deposit and sues to get it back; seller counterclaims for liquidated damages; Held- full

purchase price liquidated damages not unreasonable(they are getting goods at price theycontracted for; sophisticated parties, UCC- businesses can vary terms)

6. LOST PROFIT, 2-708(2)a. restitution offset to showing of sellers ability to recover damagesb. impt measurement b/c in many cases, contract price will be the same as market price, and

resale is often the same as contract/market price

c. Testfor whether seller could have made another sale & is due lost profit under 2-708:i.seller had capacity to make another sale(Majority)

Neri v. Retail Marine Corp.- Neri hospitalized, couldnt buy boat, Retail refused torefund his deposit; Held- Neri entitled to his deposit, less Retails lost profit (another boat

sale), less incidental damages (storing boat until resale)


22/24

22

ii.seller had the capacity and could have made one more sale profitably(Diasonics) Diasonics v. Davis- Diasonics contracted to sell MRI to Davis, who breached; Held-

case remanded to determine if seller could have made another sale profitably

o most sellers are already producing at max capacityd. Calculation of lost profit

i.2-208(2)- measure of damages may be the profit which seller would have made if buyerhad fully performed:

[profit expected + overhead] + incidental costs + costs incurredpayments/ proceeds(usually 0)

o profit expected is contract pricecost of procuremento cost expected = direct cost expected + overheado profit + overhead = contract pricedirect costs expected

ii.Bulldozers Inc.- lost profit is 30k (contract price)(20k, direct cost, + 1k, commission) + 0 + 00 = $9k

lost profit changes when # of bulldozers sold changes b/c the cost of fixed overheadchanges when spread over 10 vs. 9 bulldozers

C. Pattern of Argumentation1. SELLERS DEFENSES BASED ON SELF-HELD REMEDY PROVISION

a. Bs Claim: S promised to transfer and deliver goods and did not do it.b. Ss 1st Defense: I had a right to suspend my performance b/c B gave me reasonable grounds

for feeling insecure(and I demanded assurance).

c. Ss 2nd Defense: I had a right to cancel the whole contract b/c B repudiated the wholecontract or breached the whole byfailing to paywhen payment was due.

d. Ss 3rd defense: I had a right to cancel w/respect to 1 installment b/c B repudiatedtheobligation to pay for it or failed to pay for it when payment was due.

e. Ss 4th defense: I had a right to refuse to deliver except for cash b/c I discovered Bsinsolvency.

f. Ss 5th Defense: I had a right to stop delivery b/c B repudiated or failed to payor b/c Idiscovered Bs insolvency.

2. SELLERS REQUEST FOR THE CONTRACT PRICEa. Ss claim: B promised to accept and pay for goods and did not do it.b. Ss damage request: B should have to pay the contract price for the goods.c. Bs reply: S is not entitled to the contract price b/c I did not accept the goods and the goods

could be resold for a reasonable price after reasonable efforts.

3. SELLERS REQUEST FOR THE RESALE DAMAGESa. Ss claim: B promised to accept and pay for goods and did not do it.b. Ss damage request: B should have to pay the difference btw the contract price and the

resale price, plus incidental damages less expenses saved.

c. Bs reply: S cannot recover the resale price difference b/c S did not resell the goods in goodfaith and in a reasonable manner.

4. SELLERS REQUEST FOR THE MARKET DAMAGESa. Ss claim: B promised to accept and pay for goods and did not do it.b. Ss damage request: B should have to pay the difference in the market price and the

contract price, plus incidental damages, less expenses saved.

c. Bs reply: S cannot recover market damages b/c S resold the goods at a price above themarket price. (Southwire)

5. SELLERS REQUEST FOR LOST PROFITa. Ss claim: B promised to accept and pay for goods and did not do it.b. Ss damage request: B should have to pay my lost profit as measured by 2-708(2).c. Bs reply: S cannot recover lost profit b/c S is not a lost volume seller. S could not have

profitably made another sale if it had delivered the goods to me. (Davisv. Diasonics)

6. SELLERS REQUEST TO RECLAIM GOODSa. Ss claim: I have a right to recover goods from B b/c the goods were delivered before I

discovered Bs insolvency.


23/24

23

b. Bs 1st defense: S did not assert a claim for the goods w/in 10 days after their receipt and thebuyer did not fraudulently misrepresent solvency in writing w/in 3 mos. before delivery. 2-

702.

c. Bs 2nd defense: I purchased the goods from the buyer in the ordinary course or in goodfaith, and thus acquired good title.

XII.Diminished Expectation of Future Return PerformanceA. Insecurity and Insolvency

1. BUYER AND SELLERS REMEDIES FOR INSECURITY/INSOLVENCYa. If a party has reasonable grounds for feeling insecure about the other partys performance,

they may demand adequate assurancethe other party will perform andsuspend

performanceuntil receipt of assurance

i.2-609(1)- when you make a contract, you not only promise to perform, but also implicitlypromise not to impair the other persons expectation you will perform

ii.Standard for insecurity? very low: just a report from an apparently reliable sourceiii.If no adequate assurance is given? 2-609(4): after receipt of demand for assurance,

failure to provide assurance w/in a reasonable time, not to exceed 30 days, is repudiation

of the contract (treated as a breach- recover thru ordinary means)iv.CPMT v. Panama Canal- PC chartered tugboat from CPMT- option to purchase boat

w/clear title; PCC heard CPMT had 3rd mortgage, wasnt making payments on 1st

mortgage from broker, said itd w/hold payment until receipt of assurance; Held- PCCs

feeling of insecurity and request for assurance reasonable (didnt have to exercise due

diligence to find out if info true); PCC had a right to suspend performance

b. Sellers remedies upon discovering buyers insolvencyi.refuse to deliver except for cash(even if contract requires otherwise), 2-702(1)ii.stop delivery(even if title has passed)

2-401(2)- when title passes from seller to buyer:o if seller responsible to get goods to carrier, title passes at start of shipment

2-705- requirement of notice to stop deliver, but notice to buyer not requirediii.reclaim goods already delivered, 2-702(2); seller must make reclaim for goods w/in 10

days (10 day period does not apply if buyer misrepresented solvency in writing w/in 3 mos.

before contract was made)

what if buyer has sold them to another? 2-702(3) seller may still recover them unlessthey were bought in good faith

c. Definition of insolvency, 1-201(2):i.have ceased to pay debtsii.have ceased to pay debts as they are due (may not have defaulted yet, but wont be

able to pay debts as they come due)

iii.meet definition of insolvency under federal bankruptcy law: if your assets exceed yourliability (total amount of $ you owe)

2. BUYERS OR SELLERS REPUDIATIONa. ways to repudiate

i.by language or conduct i.e. common to call and repudiate by saying youll only perform if contract terms are

changed

Ducks ex.- Motion Pix finds out that Robles leased the WW2 Duck to someone else;Motion may cover immediately, even before performance is due; Motion does have aduty to mitigate

ii.by not providing assuranceb. retraction of a repudiation- buyer may retract a repudiation unless the seller treated it as final

/ took action in reliance

c. permitted responses to a repudiationi.may immediately resort to any remedy that is available for breachii.await performance, for a commercially reasonable amount of time

d. Oloffson v. Connor- Coomer to sell corn, 2 installments; repudiates; Oloffson proceeded as ifno repudiation, then tried to charge Coomer $ to cover on each date of installment; Held-

upon repudiation, Coomer could wait a commercially reas. time (here, none) or cover


24/24

immediately; why? clear repudiation, easy to contract w/another; trade custom to pay diff.

btw contract/market price date of repudiation

B. Cancellation of Installment Contracts1. SELLERS REMEDIES WHEN BUYER BREACHES W/RESPECT TO ONE INSTALLMENT:

a. recover price of accepted goods (whether 1 or several installments)b. suspend future deliveries until buyer provides adequate assurancec. cancel remainder of contract if breach substantially impairs the value of the whole

i.breach of the whole: when a nonconformity substantially impairs value of the wholecontract; whole contract should not be cancelled lightly

if only sellers security is impaired, seller has a right to demand assurance, but not tocancel whole contract

2. BUYERS REMEDIES WHEN SELLER BREACHES W/RESPECT TO ONE INSTALLMENT:a. accept installment and seek damagesb. reject installment and seek damages(if breach substantially impairs value of installment and

cannot be cured)

c. suspendfuture payments untilseller provides adequate assuranced. cancel remainder of contract if breach substantially impairs the value of the whole

i.i.e. if 1st breach suggests there will be future breaches that cant be curedii.Graulich Caterer v. Hans Holterbausch- Graulich to provide microwavable meals for WorldFair exhibit; 1st 2 installments not as warranted, Hans cancelled entire contract; Held-

subst. impairment of whole contract, ok to cancel; time was of the essence, no time to

wait for cureiii.Midwest Mobile Diagnostic v. Dynamics- Midwest to buy 4 trailers from Dynamics; 1st

couldnt be certified by MRI co. and wasnt attractive; Held- grounds to cancel entire

contract b/c 1st had substantial impairment and needed all 4 w/in period of time

e. perfect tender rule does not apply in installment contracts; can only reject if there hasntbeen substantial performance; defects in prior installments are cumulative in effect

Contract Law II Outline

Documents

Transcript of Contract Law II Outline