CONTRACTS SPRING 2005

 Formation issues . Accord and satisfaction o Bilateral or Unilateral . Modification and waiver o Donative promise . Past or moral consideration . NO K BUT can enforce if reliance o Defenses o Implied in fact or Implied in law . Unconscionability o Offer . Fraud . Lapse of Time . Duress . Counteroffer . Public policy . Revocation . Mistake  Option K  Interpretation issues . Acceptance o Plain meaning o Acceptance o 4 principles . Did you agree o extrinsic evidence of parties intent . Counteroffer . how weigh against text of K . Modes of acceptance o scope of K ?  By performance . integration—parol evidence  By prescribed method  Performance issues  By silence o Good faith issues  By click o Did you meet K standards or not? o Consideration issues o Changed circumstance/Impossibility . Mutuality (extent of doctrine?) o Conditions—was performance conditional? Did  Illusory promise condition arise?  Req and Output K o Substantial Performance/Perfect Tender  Conditional promise  Remedy issues (depends on other categories)  Satisfaction clause o Specific Performance . Legal duty o Damages o Restitution o Reliance damages/costs

1 I. OFFER Unilateral: Requires acceptance by performance, no mutuality Bilateral: Requires acceptance by promise Offer R2 § 24: offer = manifestation of *Facts determine if an item is for Lonergan v. Scolnick: π sees ad for land p403-410 willingness to enter a bargain; sale or if there is an invitation to in paper; ∆ is selling for $2500. π asks if communicates to other party that his bid: he’s looking at the correct land; ∆ tells π *Use facts to determine if it’s assent is invited and would conclude a) reas. expectation that a price he needs to move quickly. Before π gets an offer or an invitation to the offer. tag at a store is an offer for sale ∆’s letter, ∆ sells to 3rd party. Held: no K negotiate further. R2 § 22: mutual assent = 1 party b) but certain stores = less exists b/c conditional offer that π act Offer= “I will (sell or buy)” or offers; 2nd party accepts. Possible certainty, e.g. antiques: Fisher v. before another buyer. “I offer” even if no clear offer/acceptance. Bell: illegal to sell switchblades; Lefkowitz v. Surplus Store: ad in paper Prelim= “Are you interested” ∆ has switchblade in shop for coat and stole to 1st person at door; π or “Would you give” or “I An offer should leave nothing else to window w/ price tag. Held: not was first but store refuses to sell b/c only quote” or “I would consider” negotiate and should not have doubts an offer since it’s illegal to sell, aimed at women. Held: definite offer b/c that it would result in a K if buyer merely an invitation to negotiate. performance requested for CD. Ad did Ad: clear, definite, explicit, no accepts. Fact specific. not specify conditions, so π gets remedy. room for negotation = an *No K if party makes conditional Moulton v. Kershaw: ∆ sends letter offer. Offer elements: 1) intent to enter offer and other party doesn’t advertising price of salt and how it would bargain; 2) definite terms—subject meet condition. be delivered = only an invitation to deal, “Did you get what you matter, price, quantity; 3) directed at *General ads w/ no stipulations not an offer. wanted?” particular offeree are not offers—merely invites to Fairmount Glass v. Grunden: B makes offer. first inquiry asking for price quote; S responds w/ offer and B accepts = a K. Termination of Offer; R2 § 41: Lapse of time. Offeree’s Methods to terminate power to Akers v. Sedberry: If 2 parties are face- Lapse, Rejection, Counter- power to accept ends at time specified accept: to-face and an oral offer is made w/o Offer in offer, or after reas. time if not 1) expiration/lapse of offer stating time for acceptance, infer that p411-423 specified. “reas. time” is a ? of fact, 2) rejection by offeree expected at once. Conversation ends = circums. (extinguish) offer ends. Offer must be accepted *Offer by mail is accepted if sent 3) counter-offer (change) Ardente v. Horan: π’s acceptance of ∆’s according to its T&C. before midnight on day offer rec’d (inquiries/requests are not house-for-sale included condition that unless otherwise indicated by counter-offers) furniture was included. Acceptance was Counteroffer OR a Wish? lang/circums. 4) qualified/conditional not definite, so no K. A counteroffer. R2 § 59: qualified acceptance: reply acceptance = treated as Culton v. Gilchrist: L offers to renew Lapse depends on: which purports to accept but is counteroffer lease; T accepts and says wants to add a 1) time of offer and conditional on offeror’s assent to 5) valid revocation by offeror cookroom. Wish does not invalidate

2 2) purpose of offer add’l or dff T&C is not accept, it’s a 6) operation of law acceptance—has no bearing on whether counteroffer R2 § 39: counter offer = or not he still wanted the lease. Mirror Image Rule: CL that made by offeree relating to same *Offer lapses if time is built into RI DOT v. RR: RI has ROFR for sale of acceptance must exactly matter; proposing a substituted the offer. RR property; state accepts sale and writes mirror offer. bargain. Terminates offeree’s power *Acceptance cannot impose that removing tracks clause doesn’t apply. to accept unless parties’ intent is add’l conditions or add limits  π claims = counteroffer. Held: Change otherwise becomes a counteroffer. benefitted offeror = acceptance. Change R2 § 37: Option K = power of *Expressing a wish is not a was to an immaterial term. acceptance not terminated by condition, so it is an acceptance. Price v. Oklahoma College: prof signs rejection, counteroffer, revocation, or *Acceptance under protest is still renewal of K and adds that he doesn’t like death. an acceptance the T&C. Held: not a counteroffer—just telling ∆ how he felt. Revocation R2 § 42: offeree’s power to accept *Offer revoked if offeree has Dickinson v. Dodds: ∆’s offer to sell p423-443 terminates when offeree receives reas. info that offeror has taken open until 9am; π hears rumor that ∆ sold intention from offeror not to enter action to void the offer. to 3rd party. Held: ∆ had no CD to hold Offers by definition unilateral proposed K. *Promise to keep an offer open offer open, and π should have known light until met by an acceptance. R2 § 28: Auctions: can accept/reject not valid w/o CD. off. any bid; bidder can reject bid until *When bid is made, offeror is Payne v. Cave: ∆ was highest bidder; Has performance begun? sale ends. not bound until other side changed mind and wouldn’t buy. Auction R2 § 45: offer NOT revocable after accepts. A bid is only an offer. house π sued for difference. Held: For ∆. offeree begins performance (modern) *Offeror can revoke a unilateral Bidder ∆ revoked before π knocked R2 § 87: offer which offeror has reas. K anytime prior to offeree hammer. expectation will induce action before beginning performance. Ragosta v. Wilder: π offers to buy shop acceptance and which does induce *Reliance can substitute CD such and begins to get financing before ∆ action is binding as an option K. that offeror can NOT revoke if accepts offer. ∆ counteroffers if π meets Reliance. the offeree reas. relied on offer ∆ at bank w/ $; π processes loan but ∆ UCC § 2-328 being open for reas. amt of time. retracts. Held: π was only preparing to § 90. perform so ∆ could revoke. UCC § 2-205: Firm Offers: offer to *Oral acceptance of unilateral Drennan v. Star Paving: ∆ bids $7K for B/S goods gives assurance that offer offer is nothing more than an paving work; π uses ∆’s bid to calc total will be open is NOT revocable for acknowledgment. bid; π awards sub-K to ∆; ∆ revokes bid; lack of CD for no more than 3 π covers and finds another sub-K for months. $11K. Held: π used ∆’s offer to calc bid = π was bound to perform on reliance of ∆’s bid. II. ACCEPTANCE: *Agreement? *Modes of acceptance? (method prescribed?)

3 *Put as much specificity as possible into *Counteroffer Performance offer/acceptnace; offeror has most power. *Meeting of the minds? Silence *Most important = make sure both parties have *Implied in Law/Implied in Fact? Click notice of other’s intentions. Mailbox Rules: (cake being baked) 2. Acceptance effective on 3. Acceptance effective on 4. Acceptance effective on 1. Acceptance effective on receipt/Revocation effective on receipt/Revocation effective on dispatch; revocation effective on dispatch/revocation effective on dispatch receipt dispatch. receipt (common law) (CA) Acceptance by Act R2 § 32: Offeree gets to choose if *Motive doesn’t matter—if Klockner v. Green: stepmom intends to p459-469 offer is interpreted as inviting offeree going to accept even w/o leave property to π; doesn’t sign will b/c to accept by promise or performance. compensation, that’s okay. superstitious. Held: just b/c π would have *Promise? R2 § 62: If offeree can choose b/w Intent rather than lack of words. cared for stepmom anyway, her oral K to *Performance? (Unilateral = promise and perf as acceptance, *Offer of prize for act is a leave property to stepchild enforceable by can be accepted by perf only) beginning perf = accept by perf. (for unilateral contract: perf = their performance. *Motive? complete performance) acceptance. Simmons v. U.S.: π knows about fishing *Gift? UCC § 2-206: unless K is clear, an *Notification of acceptance of contest; catches fish unintentionally. IRS offer to make a K shall be interpreted unilateral K not req’d if offeror taxes prize as income; π said prize was a as allowing acceptance in any manner. does not specify it. gift. Held: Not a gift—π knew of reward; R2 § 54: if offer invites offeree to *Notification of acceptance of accepted offer for unilateral K by his perf. accept by perf, NO notification nec. to unilateral K occurs when perf is Carlill v. Carbolic Smoke Ball: ad offers make acceptance effective unless offer rendered; unilateral K binding w/ $100 reward if person gets the flu; π gets requests notification. anyone who performs act. the flu. K required perf; π performed; *Offeror needs reas. ability to notice to offeror of acceptance comes w/ know that offeree has accepted. notice of performance. Public confidence = ∆’s CD. Bishop v. Eaton: even in a unilateral K, notice may be req’d if promisor had no way of knowing offer was accepted; offeree must notify in a reas. time. “Harry wants more $” “Let him have it/I’ll pay” = mail all necessary to constitute acceptance. Acceptance by Conduct, R2 § 69: where an offeree fails to Polaroid v. Rollins Environmental: π hired ∆ to cleanup hazmat; K said ∆ Silence, Subjective reply to an offer, silence/inaction = agreed to indemnify π for injuries/damages. ∆ never returned accept IF acknowledgment. EPA cites π; π sued ∆ for indem. Held: ∆’s compliance *Look to relationship b/w a) offeree takes benefit of offer w/ w/ terms/perf. of K = acceptance of offer’s terms. (accept by conduct)

4 parties; perf. of K reas. to know that compensation Phillips v. Moor: ∆ offers to buy; π replies 5 days later; ∆ rec’d notice. expected Held: b/c ∆ didn’t object to delay in acceptance, waived right to have offer *Unless offeree is bound to b) offeror has given offeree reason to accepted in reas. time. (failure to reject) answer, silence does NOT know that silence = intent to accept Kukuska v. Hail Insurance: π applies and sends pymt, month later ∆ denies constitute acceptance. c) prev. dealings = reas. that offeree coverage: same day there’s a hailstorm. π sues for damages. Held: for π--∆ would notify offeror if didn’t accept had $, so duty to reply. b/c of delay, π didn’t apply to other insurance *Performance = acceptance if R2 § 30: If offeror prescribes method companies. (silence) mode of acceptance is not of acceptance, only that method will Vogt v. Madden: sharecropping agreement, π wants to renew and try to specified. bind offeror. But if offeror suggests a grow beans for profit. ∆ does not respond; leases to 3rd party. ∆ did not permitted method, other methods are accept by silence, none of the R2 § 69 exceptions apply. (silence) *If offeree fails to reject; gives not precluded. Hobbs v. Massasoit: by not refusing ∆’s eelskins, π created tacit K to pay. late acceptance = counter International Filter v. Conroe Gin: oscillating notice problem; π had to offer; silence to counter have Exec approve ∆’s acceptance; Exec approves but ∆ wants out. Held for accepts counter. π b/c not required to notify ∆ of Exec approval. (subjective acceptance) Subcontractor’s Bid *Winning GC not obligated to use Holman Erection v. Madsen: π gave bid for sub-K; GC ∆ uses it; ∆ awards p476-486 sub-K that GC listed on bid. sub-K to different company. Held: GC listing a sub is not accepting sub’s *Notification of use of sub-K does offer. While under Star Paving a GC can rely on sub-K; sub-K cannot rely NOT constitute acceptance. on GC. CA Legis solution: GCs cannot bid-shop, so listing a sub-K = use. *If GC bargains for sub-K’s bid, then Electrical Construction v. Maeda: GC lures sub-K into bidding: if GC gets bid is CD = K. K and sub-K is lowest, GC will go w/ sub-K. No legal duty for sub-K to bid, so if bids on conditional promise from GC, GC must use sub-K if low. Electronic *Clicking on online agreements = Capsi v. Microsoft; π class action sues MSN b/c of forum selection clause = p486-503 acceptance if agreement is clear. WA. Held: acceptance by click = acceptance. Must pay attn b/c clicking = Offeror must let you see the license signing. first. Implied-in-Law IIL: legal fiction; no actual K. Would *If party acts w/o other party’s Nursing Care v. Dobos: ∆ needed p506-540 otherwise be unjust enrichment. knowledge/consent, but provides emergency care; incapable of consent. Quasi-K. Does not rest on assent. nec benefits = quasi-K IIL K to prevent injustice: if she had “officious intermeddler”: if *If you had the chance to accept, known, she would have accepted K to you don’t ask someone to do you would. save her life. something, you don’t have to pay for it. No foisting. Implied-in-Fact IIF: K where assent is implied. *∆ has reason to know there’s an Day v. Caton: π builds wall on property; Difference from “accept by Promises inferred from acts. Party w/ expectation of payment. understood that ∆ would pay for ½; ∆ silence”: silence indicates choice of accepting/rejecting svcs he *Courts presume acceptance of refuses. ∆ had oppty to accept/reject; some sort of intent; IIF almost benefits from says nothing. offer if it was a reasonable mode silence = acceptance if ∆ knows that π is

5 always an attempt to of acceptance and they had acting on assumption of assent. hoodwink. Unjust enrichment knowledge of the offer. Bastian v. Gafford: ∆ hires π to draft is irrelevant. *K can be implied through plans on cost-plus; ∆ then cannot get performance/course of the K. financing w/o firm offer so goes w/ Personnel Handbooks: Look to duration of job, different architect. Held: ∆ must At-will employment can guidelines. compensate π for plans π made even tho ∆ become an IIF. Rule from Asmus: not unjustly enriched: enough that he *Unilateral K? (split) *Offer can be withdrawn if: requested ∆ do something w/ implication *Enforceable b/c of reliance? a) indefinite nature that he would pay for services. *Majority view from Asmus: b) changes made after a Pine River Bank v. Mettile: ∆ hired π as ER can change relationship w/ reasonable time at-will EE; π fired w/o ∆ following notice; EE’s continued perf = c) reasonable notice is given to guidebook. Held: for π. ∆ restricted itself acceptance. employees w/ the guidebook after the at-will K; π’s d) employees’ vested benefits not continued employment = CD to modify DeMasse v. ITT: (similar facts to interfered with K. Asmus but the minority view): to Foley v. Interactive Data: ∆ tells π that modify an employment K, you need: Kershaw: how much would a π’s job is safe = inference of agreement 1) an offer to modify friend do for a friend v. going modfying at-will employment. 2) assent to offer above-and-beyond? Look to Asmus v. PacBell: ∆ rescinds benefits 3) consideration equity. offered in handbook after giving notice Continued employment cannot be CD, and offering benefits for accepting new otherwise you have illusion that to rules. ∆ had said would not withdraw preserve your rights you have to give handbook unless a condition occurred; them up. Need something more for condition does not occur but ∆ allowed to CD (different from Asmus!!) withdraw. III. CONSIDERATION: what’s bargained for; what makes a K enforceable; frees people to make and revoke promises *Donative Promises *Mutuality: Illusory? *Forbearance? Donative Promises  Promise to make a gift is  CD: performance/return Dougherty v. Salt: Nephew cannot get $ p6-18 unenforceable b/c of lack of CD promise that must be from aunt for nothing—her promise to  A promise needs CD to be bargained for: value, act, give $3K at her death is not enforceable. Courts normally don’t look to enforceable; bargained for on both forbearance Schnell v. Nell: H agrees out of love for adequacy of CD. sides.  Past performance is not CD W to leave property to her heirs. CD = 1  Nominal CD may have form of  CD must be substantive—not cent for $600 = no CD at all. (form only) “Is it bargained for? Is it bargain, but is really just donative form only. Fungible *Conditional Gift: tramp and the coat—

6 what promisor and promisee R2 § 1, 17, 71 exchange v. a “special depends on if you get what you want or both want? penny.” just putting a condition on a gift. Reliance R2 § 90: D&G Stout v. Bacardi: Bacardi Kirksey: π moves to ∆’s property upon p23-45 1) promisor should reas. expect to tells D&G that B will continue to promise of house/land. Then ∆ kicks her induce action/forbearance use D&G for distributing  out  no recovery; no recognition of If a promise induces action 2) actually induces the D&G chose not to sell business reliance. Classical K law before § 90. and is relied upon, it is action/forbearance b/c relied on B’s promise, so B Feinberg: @will EE—“upon retirement $ binding. 3) binding so as to avoid injustice liable for drop in price D&G can $/mo,” rec’d $ after retirement; ER son (added in R2—not in R1) get for the business. B w/in terms cannot stop  promise induced reliance Allows a remedy if the *Promissory estoppel: ∆ stopped of K but still liable for reliance. Hayes v. Plantations: EE retires, then promise is relied upon, even from denying truth of promise if π Walters v. Marathon Oil: W ER authorizes pymts and EE visits each w/o CD relied on promise to his detriment. improves gas station on reliance year to check: implies that pymts will Treats estoppel as a species of CD. of promise by oil co. Oil co. continue. But since EE was going to Encompasses both estoppel in Walters represents “promissory defaults; W gets future earnings retire anyway and asked each year  not pais and promissory estoppel. estoppel” in a commercial setting. as damages. (reliance NOT reliance b/c not direct *Estoppel in pais: A makes statement expectation—could have invested to B and B relies on statement = A is elsewhere but for promise) estopped from denying truth Bargain R2 § 71: to constitute CD, perf/prom  Court will not try to assess Chouinard: Father and 2nd son w/in p46-62 must be bargained for. Perf/prom can whether values bargained for legal rights to drive hard bargain against Forbearance be given to 3rd party. Courts will try are equivalent. Once there is 1st son to find CD whenever possible. CD, doesn’t matter if no gain Hamer v. Sidway: Promisee’s promise Each party views his R2 § 72: any perf bargained for is CD to promisor; loss to promisee doesn’t have to benefit promisor: uncle’s promise/perf as price of UCC 2-205: a written “firm offer” is  Hard bargaining is okay— offer to pay nephew $5K for not drinking other’s promise/perf open for time stated w/o CD threat to withhold what other is enforceable: N gave up a legal right R2 § 74: forebearance from asserting a party needs is NOT duress Batsakis v. Demotsis: WWII Greece—K *Generally need to pay CD to claim is CD, unless claim is invalid—  K void when there are NO for 500K drachmae ($25) repaid at $2K is keep an option open. except if claim was asserted in g-f adequate means avail to avoid not invalid—both parties got what  Usually, nominal CD binds written a threatened loss except to bargained for. Bad bargain does not void *Perfect tender rule: CL rule options and guaranties. enter a K—desperate traveler CD. that you have to give exactly  Exceptions: legal duty, duress  Forbearance from a legal right Post v. Jones: EXCEPTION—the what you said you would. A R2 § 175, 176: you can’t threaten a can be CD; promisee can “desperate traveler”: shipwreck w/ oil, way to get out of Ks. party to form a K with you. benefit from promise rescuers force an auction. K void b/c ship Ameliorated in R2 and UCC. themselves (MBA case) must either take what is offered or get nothing. Not duress b/c party did not wrongfully cause the other party’s

7 problem. Mutuality UCC 2-305: Unless otherwise agreed, *A K is unenforceable if it lacks Scott v. Moragues Lumber: Once S p85-109 seller dealing in goods must use best mutuality, except for a unilateral bought the boat, bound to charter it to efforts to supply goods and buyer must K—does not require mutuality. ML. If S had never bought the boat, Both parties bound or neither use best efforts to promote sale (Wood *K can be conditioned upon never bound. is bound. Applies only to v. Lucy) and Mattei: pay balance on happening of an event, even if Mattei v. Hopper: S wants out of land Bilateral Ks. Unilateral Ks property once have enough tenants— either party controls the dev deal b/c in K is term that B can get do not require mutuality. implied g-f to look for tenants = CD condition. Once condition out if cannot find leases. But B acting in happens, both bound. g-f to find the leases, so S is bound. Illusory promise rule ignores UCC 2-306: output and requirement *Cancellation clause cannot be Gurfein (plate glass): buyer can cancel if bargained chance of Ks are valid/operate in g-f. Amount arbitrary and unrestricted shipper takes too long: seller could have transaction. cannot be unreas. disprop. to *Promissory estoppel: intervenes bound buyer by shipping sooner—stretch. estimates. CL voided if buyer/seller if promise is illusory. (A A limited promise is NOT lack of How to decide what good could reduce to 0, but modern looks at genuinely shrinks realm of mutuality. faith is? G-F not necessarily chance of having requirements as CD. choice, but B only seems to limit Laclede v. Amoco: π’s right to cancel is = being nice. Conditional promise where condition options—A is not bound. = R2 § restricted b/c had to wait a year and give is w/in promisor’s control is still valid 77) notice. ∆ cannot cancel at all. “Did you get what you CD as long as accepted before *Requirement/output Ks look Requirements K is enforceable. wanted?” condition met illusory, but discretion is limited, Coca-Cola v. Orange Crush: could so there is CD. CD = value of cancel anytime, so no K—illusory Illusory Promise: promise can be not chance to get business. promise. performed w/o consequences. “buy all Harris v. Time: Any detriment at all can I want.” An illusory prom for a real At will employment clauses are serve as CD, e.g. opening an envelope. prom. is not enforceable. valid: commercially feasible; Wood v. Lucy, Lady Duff-Gordon: courts will not inquire. (Grouse: even if no explicit mutuality, K is ee hired, at last min. told not to enforceable if g-f indicates implied report: er breached b/c have g-f promise to perform. “Law has outgrown duty to let ee prove himself. Ee its primitive stage of formalism.” gets reliance, not expectation, Circumstances and nature of agreement damages b/c not a K.) indicate an implied promise. Preliminary Negotiations/ UCC § 2-204: K is enforceable even if *Bargain is unenforceable if it’s Academy Chicago Publishers v. Indefiniteness/ terms are missing as long as parties so indefinite that court can’t Cheever: K for unpublished stories; π p541-560 intended a K and there’s a remedy. determine the material terms w/ decides style. No terms about #, which Look to conduct. reas. certainty or cannot figure stories, pages, etc. Held: too many UCC 1-203: K imposes obligation of out an appropriate remedy. important gaps = uncertain g-f in performance/enforcement. *Reliance damages only if an Deli v. Schumacher: K gave π option to

8 *K is unenforceable if it excludes innocent party is harmed. renew lease; π renews but ∆ has jacked essential terms. rent double. Held: no SP unless there was *Not necessary for writing to contain a formula to calc the increased rent in the all possible provisions/cover every existing lease. “agree to agree” is contingency. unenforceable *Prelim negotiations are not a K Channel Homes v. Grossman: ∆ plans unless there’s CD. to buy mall; π interested in leasing space *Reasonable reliance can make and sends ∆ letter of intent that ∆ uses to negotiations into a K to negot in G-F. secure financing. Then ∆ leases to π’s competitor. Held: no K to enter lease, but a binding K to negotiate in g-f (specificty, consideration)

IV. LEGAL DUTY: *Accord and satisfaction? *Modification and waiver? *Substitute K? *Past or moral consideration Legal Duty Intro R2 § 73: performance of legal duty Gray v. Martino: cop catches jewel thieves, but cannot use performance of p109-133 which is not doubtful is not CD. If it legal duty as CD to collect reward. differs from required act, it is CD. Denney v. Reppert: bank employees and on-duty cops do not get reward; Preexisting legal duties are R1 § 406 off-duty non-jdx cop does b/c he had no duty. not CD as either promise or Lingenfelder v. Wainwright: Builder won’t continue building unless also performance. UCC 1-207, 3-311, 3-103, 3-104 gets K for fridge = unenforceable. Cannot use obligation from previous K (the building) as CD for new K (the fridge K). Modification is If there is any extra effort 1. Public officer cannot use as CD unenforceable if party promises same perf. as original K. beyond what is legally what are official duties. Foakes v. Beer: If F makes payments, B won’t demand r. Not enforceable required, look to enforce. 2. EEs: duty to safeguard ERs’ b/c the “CD” is what F is legally bound to do anyway. = CL. Modern: property parties get a benefit from the new K, so could be CD. 3. Pymt of lesser amt in exchange for Austin Instrument v. Loral: A has sub-K to build parts for L; L gets a 2nd relief from debt is NOT CD K and A says won’t fill unless L pays more for 1st K. L cannot find another (preexisting K duty) sub-K so forced to meet A’s demands. Duress = L had no choice and A had full control. Withholding goods presumptively creates duress: L must prove affirmatively, L had no meaningful alternatives. Different reading of facts than lower court! Modification and Waiver R2 § 89: modification to a K is binding IF Angel v. Murray: mod is fair based on

9 p133-151 1) mod is made before the K is executed changed circum. Increased # of dwellings 2) mod is fair/equitable in view of circumstances makes garbage business costs skyrocket. 1) any provision that is not 3) prompted by circumstances not anticipated at K formation City council agrees to pay more: not a necessary can be waived 4) extent provided by statute ‘hold-up’ game b/c request based on 5) extent that justice requires enforcement in view of material change unexpected increase in garbage. 2) Express or implied waivers based on reliance Clark v. West: (waiver): ∆ represented to are acceptable and can be UCC 2-209: NO CD NECESSARY to modify a K for sale of goods as π that ∆ did not require literal perf. of determined from conduct long as UCC 1-203 g-f met, legitimate commercial reasons., 1-107 some condition and π believed—then Waiver : a gift in the K relationship; can retract unless reliance. waiver is binding even w/o CD. Giving 3) You can retract a waiver w/ Enforceable b/c only apply to non-material elements. up drinking was not material—the K was notice. R2 § 84: promise to perform conditional duty is binding despite non- about writing. Publisher knew author was occurrence of condition: party to existing K promises to perform even drinking and still accepted the work. 4) Condition (waivable) or though a condition of the K has not been performed. Enforceable IF a) Lingenfelder v. Wainwright: see above promise (cannot be waived) waived condition is not material AND b) uncertainty of occurrence of condition was not an element of risk assumed by promisor *Waiver is retractable for future commercial transactions, but not for past transactions. Accord and Satisfaction Accord: one party to existing K agrees *A&S: Requires offer, Schwartzreich v. Bauman-Basch: to accept different perf. acceptance, and CD. Not binding tearing signatures off old K signals Created to reflect business Satisf: the performance of the accord until accord is satisfied. creation of new K = substitute K rather realities trumps the legal Substituted K: may discharge original *Executory accord—before than modification. duty rule when there is a K if original is disputed, unliquidated, accord is satisfied—is Flambeau v. Honeywell: H sells F dispute not mature, did not involve payment of unenforceable. equipment and services. ∆H says πF *Satisfaction extinguishes the $. *If not a sub. K, it’s exec. accord: owes $109K; πF deducts the $14K for the prior K. 1. Claim of offset disputes entire amt. a) promisee’s rights suspended services it doesn’t want marked “in full Undisputed  claim offset  Dispute under old K; payment.” ∆H cashes the check and 2. For an undisputed amount, partial b) promisee may sue under old K notifies π that it was not in full—demands payment does not satisfy. or accord if promisor fails to the 14K. There was A&S. When H 3. For a disputed amount, pymt in full perf; cashes the check, there was g-f on π’s part satisfies total amount. c) after perf, promisor can sue if that was paying in full, so ∆’s argument promisee refuses to accept that F escapes legal duty to pay $14K not valid. Substitute K: most basic; cancel an existing K Modification: no new CD, just recognize a Accord/Satisfaction: substitute one party’s CD = both sides give up their consideration. Then stupid deal and will pay more. UCC recognizes for something different: Get the party to take sit down and write another K. Not common, w/o new CD; part of relational contracts. But something else (new CD rather than just a must prove both parties had intent to destroy the not enforceable at CL. Usually ends up that one different amount) instead of what was originally

10 old K and create a new one. New K replaces the party is paying less/more. Often that a fungible offered in the deal. If party accepts, it’s an Old K; Schwartzreich. amount changes. accord. If it occurs, it’s satisfied. Past Consideration Promise to pay for what has already R2 § 82: If debtor makes new Mills v. Wyman: CL approach = M takes p152-163 been tendered is unenforceable b/c it is promise to pay debt that would care of W’s son until son dies; W not a bargain. otherwise be unenforceable b/c of promises to pay M back, but Moral CD: Promisor’s R2 § 82: Debt is cancelled by S of L SofL, new promise is enforceable unenforceable. No CD based on moral motivation for making unless: 1) debtor voluntarily w/o new CD. A new promise. obligation; W’s promise was donative promise is a past benefit to acknowledges debt to lender Why not enforce? only and M’s son was an adult. the promisor or detriment to 2) debtor voluntarily pays as interest 1) people over-promise in an Webb v. McGowin: Modern = Binding promisee that gave rise to 3) debtor makes statement to lender emotional state b/c a tangible benefit was conferred and moral, but not legal, that debtor will not use S of L as 2) evidentiary concerns the promise was made directly by the obligation. defense. 3) encourages harm to claim a beneficiary (not an heir as in Mills). R2 § 83: promise to pay debt after reward Employee dropped block from top; bankruptcy is binding. Examples: employer was below; ee jumped to divert R2 § 84: promise to perform despite A saves B’s son; B promises to block and saves er’s life; ee crippled; er non-occurrence of condition binding pay: not binding. promises to pay. Er acknowledged moral unless condition was material, A lends B $; B dies and widow obligation arising from material benefit, uncertainty of the condition was an promises to pay: not binding. and that moral obligation revives a legal element of risk assumed. A finds B’s horse; B promises to duty and is sufficient CD. R2 § 86: adopts Webb but does not pay: binding b/c B received change CL: promise made in return for benefit an earlier-received benefit is binding to the extent necessary to prevent injustice. Except if 1) promise is a gift or if promisor would not be unjustly enriched 2) extent that value of promise is disproportionate to benefit received V. DEFENSES: *Duress/Overweening (Austin v. Loral above) *Mistake (mutual, unilateral, palpable—term of art known to one side, transcription) *Fraud *Public Policy *Unconscionability Unconscionability UCC 2-302: if a K/term is uncon at Procedural: K voidable if gross Williams v. Walker-Thomas Furniture: p62-85 time it was made, the court can: inequity of bargaining power store puts buyers on payment plan that 1) refuse to enforce it  Lack of knowledge keeps balance on all purchases until all

11 Assumes CD exists. 2) enforce everything except the uncon  Lack of capacity to paid off = unconscionable 3) limit application of uncon to avoid understand Maxwell v. Fidelity: couple buys $$$$ Exception to R2 § 79: courts uncon results  Unfair surprise water heater that doesn’t work  will look at terms to apply  Uneven bargaining power unconscionable. Does not distinguish b/w unconscionability. At CL: needed both procedural and  Predatory conduct proc. and sub. –either is enough. substantive—Step One is proc, Step Substantive: K voidable if it’s Weaver v. AMOCO: W. signs lease that What is role of court in Two was subst. Use proc. uncon. to outrageous, unjust. says he’s indemnifying oil co. for their relation to activism? Uncon get out of CL to then look at substance R2 211: Standardized negligence. W has less bargaining power; is a judge-made protection. of K. Agreements: if a party has reason printed form = unconscionable. Modern: substantive alone is enough. to believe that a party wouldn’t agree if knew about a particular Look at seller and buyer in relation to term, the term isn’t part of the K each other. Public Policy Limits on K violates public policy if: *Pre-nups are enforceable; post- Koch v. Koch: Oral prenup that MIL will Contracts 1) violates express provision of law nups aren’t under nofault divorce live w/ couple; wife enters in g-f; duration p164-192 2) contrary to policy of express law *Some ideas so important to of promise “forever” not enforceable. though not expressly prohibited public policy that cannot contract Avitzur: Ketubah a religious document, *Goal of K: create 3) otherwise contrary to good morals; out of them and expect a court to but secular principles can be enforced. relationships that fit w/in law brings in morals not expressed in law enforce it. No state involvement. Division of property is a civil issue so and public policy. state has an interest. (Dissent sees Desperate Traveler: Not duress b/c slippery slope). not illegal and no moral obligation to Baby M: K clear, written, signed, help, but promise unenforceable b/c capacity but violates public policy: no violates a moral norm. Once you counsel for surrogate, K before volunteer to help… conception, K should have child’s best interests in mind Mutual Mistake R2 § 152: If both parties are mutually *Is the mistake material? Look to Sherwood v. Walker: (barren cow) CL p694-713 mistaken about a basic assumption of other remedies available. rule that if both parties assent based on fact AND mistake has a material effect *If both parties are uncertain as erroneous material fact, K is void. ∆ mistake of both parties at on agreed exchange = K is voidable. to the value of the item, then the refuses to deliver cow b/c worth a lot formation makes K voidable R2 § 153: K w/ mistake not enforced mistake could make the K more fertile than barren. if mistake makes enforcement enforceable: Wood v. Boynton: Griffith v. Brymer (coronation): Both *Did the parties allocate risks unconscionable. lady sells stone for $1 to a renter and hotel knew why renter was themselves? “as is”? R2 § 154: Even if a mistake exists, K jeweler, both didn’t know what renting room (to watch the coronation). not rescinded if adversely affected it’s worth. Turns out it’s an The coronation has been cancelled prior *Essence or material? party accepted risk. “As is” clause uncut jewel worth $700. Held: to the agreement. π is able to get money

12 allocates risk. Party can also be neither knew intrinsic value = not back b/c purpose frustrated. Mistake *Ignorance is not the same as responsible if recognizes he has wrong = uphold K. existed at time of deal. mistake. limited knowledge but accepts *Difference from Firestone v. Lenawee v. Messerly (sewage) Land has anyway. Union League where art people illegal septic tank; land has negative *Allocating risk: thought painting was worth way value, but π purchased “as is,” so stuck. 1) insurance more than it was, K still valid. Garb-KO v. Lansing-Lewis: S finds 2) risk avoidance Mkt affected by perceptions, enviro damage to property; even after 3) moral fairness (channel social parties believed at time that transaction S would be liable for cleanup. behavior) painting was authentic. Essence Asks B for a) indemnity or b) withdraw the same, so no mistake. from K. B refuses b/c of “as is” clause. Smith v. Zimbalist: π sold ∆ two Held: No K. Mistake about a material violins for $8K, ∆ thought they were a Sardo v. Fidelity: (also see for fact makes K voidable. S offered B reas. Stradivarious/Guarnerius and π signs Form Ks) = not a mutual mistake choices to save K; B refused to negot. warranty that they are. Held: no K, b/c ∆ never intended to cover West Coast v. Miner’s Aircraft: K b/w breached express warranty. = UCC 2- jewelry. Look to plain language π and 3rd party to sell scrap; 3rd takes 313, 314, 315 on warranties: If S of the K. valuable engines w/o knowing it; sells to warrants item, those specifications are ∆. ∆ knows of mistake and won’t return part of the K. to π. Held: for π. Palpable mistake case. Gartner v. Eikill: ∆ sells parcel to π to build on land, but land cannnot be built on. Both parties thought it could, so rescind the K.

Unilateral/Transcription R2 § 153: if one party is mistaken Recission available if: Elsinore SD v. Katsorff: ∆ bid on K for p715-734 about a basic assumption AND 1) mistake is material to K school, π asked ∆ to double-check b/c ∆’s mistake was material, K voidable if: 2) not result of neglect of legal bid substantially lower. ∆ affirmed; then Very hard to prove! a) effect of mistake would make duty discovers computation error and promptly enforcement unconscionable 3) enforcement unconscionable notifies π asking to withdraw. Held: b/c ∆ You can’t escape for bad b) other party had reason to know of 4) other party can be returned to let π know in reas. time and mistake was judgment alone. mistake or his fault caused the mistake status quo honest, recission acceptable/no harm done R2 § 159: misrepresentation= 5) mistaken party gave prompt Travelers Insurance v. Bailey: If you know the K is too good assertion not in accord w/ facts notice to rescind; restore other transcription error: Bailey’s K said he’d to be true, then you assume R2 § 161: non-disclosure can = party everything of value get annuity monthly rather than yearly; the risk that it is. assertion. Party must disclose a fact to *Can happen at any point, even company wants reformation. Okay b/c ∆ prevent misrepresentation or fraud. after performance has started. never relied on monthly = not unconscion *Refusal to disclose a fact to correct a Rescind: Parties agree together Weintraub v. Krobatsch: (roaches) π

13 party’s mistake = failure to act in good to get out of the K. wants to buy house from ∆; π asks about faith. Deliberate concealment = roaches and ∆ says there are none. ∆ rescind K. keeps lights on so roaches stay hidden. *Vendor has no duty to inform buyer Eytan v. Bach: π bought 3 paintings for of the obvious. $160, thinks they’re originals and not repros. Held: B was looking for a bargain; not fraud b/c B didn’t ask and S didn’t lie. VI. INTERPRETATION *Plain meaning = when you pick up the K, can you sit in your chair and know what it means w/o raising your eyes? Ignores special meanings. *Four principles on meanings from R2? *Parol Evidence? Extrinsic Evidence? Subjective and Objective R2 § 20, 201: Four principles: Hierarchy (obj to subj) Lucy v. Zehmer: CL = after drinking, ∆ Interpretation 1) subj. attach different meanings; 1) Dictionary meaning signs paper to sell farm and claims p362-388 neither party knows other party had 2) Customary/trade usage (can be thought it was a joke. But words in K different meaning and not =ly reas., determined objectively) have one meaning and both parties knew *Look for parol evidence more reas. prevails (Swiss chicken) 3) Mutual understanding of the it; no fraud or deception = SP. Court does 2) subj. attach different meanings and parties (can be unique b/w not consider that there was no ‘meeting of *Look for extrinsic evidence equally reasonable, neither prevails. parties) the minds.’ (external to K but informs the “Peerless” = a mistake. 4) Individual thinks words meant Peerless: Each party had a different ship K) 3) Attach same meaning  meaning something (very subjective; named “Peerless” in mind. Held: No K prevails even though irrational burden on party to show his b/c each meaning was equally reasonable CL had strong preference for 4) Parties attach different meanings; version is more reasonable than = no meeting of the minds. written words rather than one party knows the other party’s the other) Swiss Chicken: π would have to prove intent. How would RP read meaning  that meaning prevails even that its meaning of “chicken” was more words/conduct. tho less reas. Oswald v. Allen: no meeting of reas. Goes thru hierarchy; π’s argument minds b/c both parties reas. to is rebuttable, so general use prevails. Ambiguity: need to look *Use RP inference as standard for assume that “Swiss coin Embry v. Hargadine: π asks for new outside the K for correct determining which meaning is more collection” meant all coins OR employment K, employer tells π “not to meaning. reas special collection. worry.” Held for ee: RP would think = a K. MCC-Marble Ceramic: K is oral, but π signs pre-printed K and claims agreement didn’t include terms on the back. Held: π gets to explain to jury to decide if K reflected parties’ subjective intent. Interpreting Purpose R2 § 204: “gap filler”: If K exists but *Where duration is not explicit, Haines v. New York: 1924 K req’d ∆ to

14 p388-397 does not specify an essential term, court will imply intention “for extend sewer lines; if complies, will court will supply a reas. term under reasonable time.” Court is overload. Court says K should have *If court can determine circums. disinclined to enforce a perpetual included duration and circums. when ∆ party’s intent, even if not K. must extend lines. Held: NYC is not expressed in K, court will 1. Always start with plain meaning *Where scope is not explicit, obligated to expand, but must maintain. uphold intentions. 2. Logical inference court will imply boundaries Spaulding v. Morse: father agrees to pay 3. What parties would have expressed *If both parties attach same child support until son goes to college; *How far should the court go if oversight had been brought to their reasonable meaning to a term, son goes to Army instead. Held: K in implying intent? attention. even if it is incorrect, then the drafted w/ intent for father to pay while 4. What parties would have expressed meaning is binding. son cared for by ex-wife, but now son if they had foreseen the problem— *“forever” or any type of under care of Army = father does not court infers intent based on perpetual performance violates have to pay. policy/fairness public policy. (See also Koch v. Lawson v. Martin Timber: ∆ has K for 5. then move to trade usage, etc. If Koch). 2 years to cut timber from π’s land; if it both parties are part of the trade, then *Aleatory condition lives outside rains a lot ∆ gets an extra year to make up that use governs over general usage. the control of parties, e.g. the rain for high water. There is high water, but ∆ Prevails only once it’s proven. in Lawson. still could have fulfilled K. Held: ∆ does not get add’l year b/c intent was that if the rain prevented ∆ from being able to complete, would get extra year. Here, no prevention. Usage, Course of Dealing, R2 § 219: usage is habitual or *Court must take into account Berwick & Smith v. Salem Press: 2 vol. Course of Performance customary practice special trade usage set or 2 books/volume?. ∆ publisher hires p397-402 220: interpret based on usage if each *If only 1 party has reason to π to print books: is the K charge per knew/had reason to know abut usage know of trade usage, then no K. volume (makes bill 2x ∆’s expectations) 222: trade usage: regularly and neither knew/had reason to know or per set? Held: plain meaning and trade observed in a place, vocation, that other was not following the usage Nanakuli Paving v. Shell Oil: π usage was per volume; ∆ tries to get out or trade that it creates an 221: supplement/qualify agreement w/ wants ∆ to price-protect on gov by claiming special usage, but ∆ must expectation that it will be reas. usage if each party knows/has K; ∆ has price-protected π before pay. observed. A question of fact reason to know of usage and does not so under course of perf π can Flower City v. Gumina: K to paint if it exists; interpretation is a know other party is not using it this expect ∆ to do so on this K too. homes for fixed price; ∆ did not know question of law. way that that included painting hallways, but 223: course of dealing = sequence of trade usage implies hallways. Since ∆ is prev. conduct which establishes new to trade, allowed to argue that have common basis of understanding reason not to know trade usage—read K literally = No K.

15 Parol Evidence Rule (applies *If written agreement meant to be *Goal to give finality to Mitchell v. Lath: π buys house; ∆ agrees to a prior or contemporaneous complete (integrated), that trumps all agreements such that they are not on side to remove ice house. K doesn’t oral agreement) previous oral and written agreements. always under attack by previous include ice house provision and ∆ refuses p587-601 Test for enforcement: negotiations. Early K formalism. to perform. Held: ice house related to p606-622 1) separate form of agreement *Balance the contradiction that to property, so should have been in writing. 2) does not contradict written know if something is material Masterson v. Sine: sale of ranch w/ Take Away: if it’s important, 3) would not normally have been you have to look outside the K. option to repurchase; B goes bankrupt and get it in writing in the K. included *If side agreement is material, creditor and his wife want to exercise the fact that it’s not in the K option. Evidence that option was to be UCC § 2-202: agreed upon R2 § 209: integrated agreement meant shows K is not integrated (argue limited to the family introduced; TC terms cannot be contradicted to be written expression of one or against exclusion of PE). refuses. Held: should have considered the by prior agreements, but more terms of K *Side agreement is valid if there PE b/c not certain wouldn’t have included terms can be explained by 210: complete integration = exclusive is 1) separate CD and/or 2) terms a) course of performance expression of parties. would naturally be omitted from Integration Clause: written K is final b) course of dealing 213: binding integrated agreement main written agreement. and incorporates everything into the c) usage of trade discharges all previous inconsistent agreement. d) consistent add’l terms agreements w/in its scope. 1. Plain Meaning/4 Corners of K unless writing intended to be 215: if agreement is partially or (Williston) Hatley v. Stafford: idea that it’s complete and exclusive. completely integrated, no evidence can 2. Trade Usage important to look at who the parties are: be introduced that contradicts 3. Course of Dealing? lawyers? Business people? Ordinary 216: admit evidence of add’l terms 4. Course of Performance? (not folks? consistent w/ agreement unless applicable to PER b/c after K) complete integration. Corbin looks to actual intent.

16 Extrinsic Evidence (outside *Must tip the scales in its favor to Allow extrinsic evidence if: Steuart v. McChesney: CL = ∆ granted π info that helps w/ K prevail. Not an easy test to meet. *judge’s interpretation not the ROFR on land purchase. K stipulated interpretation) *Detriment is it bars SJ. only one possible price comes from county rolls. π sues for p611-637 *recognize words are imprecise SP even though county rolls majorly Also: *circumstances alter meaning undervalued the land. ∆ wants extrinsic *Berring likes UCC: if parties Nanakuli: course of performance *excluding extrinsic evidence evidence that the parties wanted a fair have been performing the K, allowed π to believe ∆ would price leads to a meaning neither party assessment, not literally the county. Held: shouldn’t go back to protect. bargained for. the K was unambigous = no extrinsic. beginning for interpretation— Course of dealing = past relationships PG&E v. Drayage: ∆ damages π’s look at what they actually frame the discussion. Also: property and π sues under indemnity have been doing. Course of performance = two parties MCC-Marble: disagreement clause. ∆ wants evidence that in trade live out the K and work out problems over if terms on back of form K practice and dealings clause refers only to *Root structure of plain No PER b/c PER must be count. Have to look outside K damage to 3rd party’s property. meaning still important! before/contemp to K. for evidence as to intent. Trident v. Conn. Gen Life: loan barred Trade usage: modify terms but don’t prepayment; another term says 10% fee if abolish plain language. Reasonable? prepay. π wants to intro evid based on Parties can also define terms specially meaning of two terms. CA, so must for themselves. allow; EI deprives K lang of meaning. VII. PERFORMANCE *Good Faith (unconscionability relates to formation) *Changed circumstances/Impossibility? *Substantial Performance?

17 Duty to Perform in Good- Farnsworth: Implied conditions *If there’s a finite amount of Patterson v. Meyerhofer: π has K to sell Faith Summers: Excluder analysis— goods, one party cannot frustrate ∆ 4 parcels of land that π is to buy at p868-900 whatever is left over = good-faith other’s perf by “buying up stock” auction. ∆ attends auction and buys the *Implied obligation of g-f not Burton: Foregone opportunity: if you *Making perf more difficult is land herself for less than K. Held for π: ∆ to interfere w/ other party’s make someone forego an oppty in not bad faith. cannot intentionally prevent other party performance. contracting with you (Berring doesn’t *Parties have expectation that from performing (finite amt goods) like!) other party will act in g-f. Iron Trade v. Wilkoff: π buys from Hindering performance = bad *Not neglecting promise if limited supply of rails of ∆; ∆ also buying faith; Just being in the same *Standard of g-f higher after K is economically reasonable to rails and price is driven up. Held: b/c it’s market = not bad faith. signed. Must give parties what would perform. You don’t need to go a market, ∆ not precluded from buying have stipulated has problems been bankrupt to perform the K. from various sellers. foreseen. *Economic hardship and Best v. US National Bank (NSF fees): *Very hard to prove!! financial difficulty are not bank breached obligation to perfomr in g- Fortune v. National Cash Register: enough to excuse performance. f b/c NSF fee is much higher than what it applies g-f to an at-will employment *You are not your brother’s actually costs bank. K; ee has benefits coming and er keeper, but “sharp dealing”: Bloor v. Falstaff: K for royalties, but discharges so ee does not get benefits. taking deliberate advantage of sales going down. S must exercise best Held: er may have acted in b-f. other party’s oversight of its efforts but doesn’t have to go bankrupt to Covenant of g-f and fair dealing rights under the K = bad faith. ensure B gets royalties. violated if er terminates ee and doesn’t After K is signed, expect parties Market St. v. JC Penney’s: π had option pay benefits already eraned. to act cooperatively. to buy property at price in K if financing for improvements failed. ∆s refuse financing = π seek to buy; do not notify ∆ of price calc in K. TC: SJ for ∆ b/c π acted in bad-faith; App: R&R b/c not enough facts; ∆ is soph and should have known about calculation in K. (p902-920) Applies: UCC 2-601: UCC seems to adopt Jacob & Youngs v. Kent (wrong brand Other end of the spectrum = *When A promises to do something perfect tender rule, but lots of of pipe) = π built house for ∆ but π used a perfect tender, where you get for B, and A performs but not exceptions: different brand of pipe than ∆ specified. exactly what you were told. perfectly: a difference exists as to what UCC 2-508: Cure: Pipes were functionally identical and A way to get out of Ks even if A promised and the perf A rendered. 1) if time for delivery has not house is complete. Held: for π, ∆ must you got pretty much what you passed, S may notify B of intent pay balance on house. There was g-f perf. wanted. (shipment from Answers: to fix the defect and make a Grun Roofing v. Cope: Cope wanted Jersey City rather than When can A sue B for expectation conforming delivery russet roof, but it has yellow streaks; Newark) damages less defects? 2) if S reas expects that B will wants new roof. Held: home is castle; π

18 or accept the non-conforming tender not entitled to payment. When can A only sue B for restitution w/ or w/o $ allowance, S may TW Oil v. ConEd: oil supposed to be of for value of benefits A rendered? have further reas time to < 1% sulfur; π says thinks the oil is .52% substitute if S lets B know in a but it’s .92%. ∆ rejects; π offers to cure Whether or not perf is substantial = a reas time. w/ substitute oil, ∆ rejects and wants to question of fact. Test: did perf meet cancel K to get oil cheaper—mkt has the essential purpose of the K? changed. Held: for π; S needs only reas. Kreyer v. Driscoll: didn’t meet subst grounds to believe goods will be accepted perf b/c lot of work left undone. Zabriskie Chevrolet v. Smith: π sold ∆ a car that breaks. After π fixes, ∆ still won’t accept. Not curing b/c ∆ now has lost faith in the car. Changed *Parties excused IF perf actually Legal impossibility = Mineral Park Land v. Howard: K for ∆ Circumstances/Impossibilit impracticable b/c commercial impracticability to haul all gravel needed from π’s land; ∆ y 1) event happens and non-occurrence Test: only hauls ½ it needs from π b/c the rest p740-758 was a basic assump on which K was 1) unexpected contingency under water and greatly would increase made 2) K did not allocate risk cost. Held: No K b/c impracticability. Implied condition that if 2) change not the fault of either party 3) Occurrence rendered Perf would be so excessive and something necessary ceases, AND 3) adversely affected party performance legally impossible commercially unreasonable = impossible. impossibility excuses didn’t assume risk Transatlantic v. US (Suez Canal): performance. UCC 2-615: excuse by failure of Court won’t allow impossibility customary shipping route was through presupposed condition: delay in if promisor assumed risk in K. Suez, but int’l crisis occurs and it’s closed *Mistake that comes after the delivery is NOT breach if perf has = π sought to recover for add’l expenses. K. been made impracticable Frustration of Purpose Held: follow test; π could still have R2 § 261 performed and should have known risk. Impossibility: will get Taylor v. Caldwell: π hires concert hall; rescission. it burns down. Held: in absence of Impracticability: high warranty, implied condition that parties standard; related to imposs. excused from perf if it’s impossible. More emphasis on risk US v. Wegematic: ∆ supposed to deliver allocation. computers and assumed risk of delay. Turns out ∆ cannot make the computers at all, but represented that it could, so bound VIII. REMEDIES: damages (monetary award) or specific performance (order from court to party to perform as promised) *Specific Performance *Expectation Damages (presumption)

19 *Reliance *Restitution/Recission Intro to Damages R2 § 344 = 3 types of remedies: *Most cases are about Hawkins v. McGee (hairy hand): p194-211, 217-224 1) Expectation breach/damages, not whether if a Damages can never make you better than 2) Reliance K existed. you expected if the K was performed. 3) Restitution Patient gets expectation as if Dr. had not *Never place π in better position breached = no p&s award. *Generally no punitive damages. Line than if K had never been made. Limits π’s expectations in medical b/w torts and contracts. context to reliance—never absolute warranty. Expectation Damages (forward-looking) *Gives victim the benefit of the bargain he made. Breaches not enforced w/ Goal to place victim of breach in position would have been in if punitive damages/prison b/c we want breach to occur if it is efficient. promise had been performed *Used where promise is enforceable b/c part of a bargain *Based on the K price. *Includes incidental damages (cost spent in mitigation; reasonable efforts *Efficient breach theory (Friedman): allows resources to go to higher to avoid loss. All reasonable expenses associated w/ delay or breach) valued enterprises; problem w/ transaction costs. *Includes consequential damages (losses foreseeable from breach, e.g. *Easier to measure than reliance damages. injury resulting from defective performance, that could not be prevented by cover, etc) *Efficient breach: have K at one price, but can get another K at higher price that makes up for damages under 1st K. Problem: Ignores transaction costs. Damages for Breach of Standard: Cost of completion under *DV awarded if completion is Louise Caroline Nursing Home v. Service K by Contractor substitute K minus K price remaing to impossible/not economically Dixon: ∆ stopped construction; π hired p225-249 be paid under original K + incidental + feasible. Market value another contracotr for same price. Π consequential damages. Especially if differences often do not wants value b/w building as abandoned Presumption that victim will material breach or minor defect. substitute for subjective value and value of completion, but π not receive cost of completion Diminished Value: Value as promised people place on goods/services. entitled to damages b/c would leave π unless the cost is grossly minus current value (+ incidental + See Grossman Holdings v. better off than if there had been no disproportionately greater consequential). For economic waste. Hourihan, the front-view house breach. than the value of the goal that Damages limited to value actually case: π wants house Elmira SD v. McLane: Contractor knew would be attained. received minus value would have reconstructed, court says that that special beams were central to the received if K performed. reconstruction wasteful but π design, but uses bad beams. SD wants Courts will question if the π Sub. contractor: Cost to complete w/ could recover for diff value b/w completion ($375K) while ∆ wants DV will actually use the $ to new contractor minus original K price. house contracted for and house ($3K). Court finds that ∆’s conduct was make the repairs, e.g. built. That the house increased in not innocent, awards cost of completion. Peevyhouse and the ship  *Courts may award std damages rather value does not bar recovery. Peevyhouse: π owns farm w/ coal cost of completion would lead than diminished value if believe that π *Even if restoration explicit in K, deposits, allows ∆ to mine but stipulates

20 to a windfall, so get DV. will use $ to complete K. if costs are > tha post-restoration that ∆ must perform remediation; ∆ mines value, courts will use DV. but then refuses to clean up. Π wants *Non-breaching party entitled to be performance ($25K); ∆ argues DV: value made whole but no more. Eastern Steamship v. U.S.: of farm currently – value of restored farm costs to restore ship = $4M; = $300. Economic waste theory wins. *Can recover cost of perf. if defect is value after restoration = $2M = See also Apache: even w/ envt’l laws, if central to purpose, even if >DV; for ∆ b/c would be wasteful use cost to cleanup results in economic waste, particularly for residences/if contractor of public funds. The π has no DV wins. Legal rule contravenes both knew about importance of certain incentive to fix the ships and written K and equities. Hein principle. feature. would be a windfall. Droher v. Tousbin: ∆ to build π house for $44K; house sags. Cost to rebuild *If contractor exercises g-f effort to Ruxley v. Forsyth: (loss of fun >$20K; DV <$20K = πs only get DV b/c perform but defects occur, buyer w/ the pool case): No economic ∆ not willful and cost to fix are > than entitled to recover cost to fix unless harm, but people have a reason would benefit. ∆ has acted in g-f. cost is grossly disprop. to benefits for asking for something specific U.S. Naval Inst. v. Charter: Hunt for derived. for their home. Measure by harm Red October, ∆ sells paperbacks before K suffered to promisee. allowed him to. Held: π gets damages. Damages for Breach of Standard: Profits + cost incurred prior *Formulas will reach the same Aiello Construction: π hired to do Service K by Owner (Party to breach (except materials that can be result as long as the addition of construction for ∆; ∆ will pay in to have svcs performed) used for another job) – amount already profits is replace by the installments. ∆ has no $ = π stops work. paid (+ incidental + consequential) – subtraction of loss in the standard Court awards π: costs incurred + profit - *Calculation method? replacement job. measure in the event of a losing ∆’s pymt + interest. Court will select the R2 § 347: K price – costs remaining to K. Just use whichever #s easier most appropriate calculation based on the *Lost-Volume be incurred – amt already paid (+ incid to determine. *Lost-volume facts. Seller?/Endless supply of + conseq)(– replacement job – seller can claim lost profits if it Wired Music: π distributes music good? salvageable materials). can prove supply of services are through wires; ∆ moves out and new T unlimited enters agreement w/ π. ∆ says π not *Overhead? *Breach does not save π from *Overhead is not included in entitled to damages b/c π charges new T overhead or fixed costs –breach forces calculation of costs. Do not higher price; π awarded lost profit b/c π π to cover OH w/ fewer transactions = deduct overhead/fixed costs from has unlimited supply limited only by # of digs into profit from other sales. profits in damages calculations. Ks. OH is meant to be included in Vitex: Sale for shower-proof material; ∆ lost profit (although more like does not deliver. The π argues for lost lost proceeds) profits (rev – costs); ∆ says costs should include OH; but OH is constant w/ or w/o K so not included.

21 Continental Sand v. K&K Sand: ∆ breaches warranty; cost to repair 2x purchase price. Held: π gets repair b/c warranty guarantees condition. Damages for Breach of K 1. Cover price – K price (+ incidental *Buyer may choose to cover, but Burgess v. Curly Olney’s: π to buy 3 for Sale of Goods + consequential) 2. Market price at if buyer fails to cover and this combines for $2.2M but doesn’t take p249-271 (governed by UCC) time of breach – K price (+ incidental exacerbates damages, extra delivery. ∆ returned down pymt and sold Breach by Seller/ Damages to + consequential) damages are not recoverable. to 3rd party for $3.4M; π does not cash Buyer *Market price = price b/w a returned check. The π wants UCC 2-713 UCC 2-712: Cover: B can sub. goods willing B & S in same locale at (Mkt price – K price) to give it benefit of in g-f. Damages = cost of cover – K time of breach. its bargain; ∆ says just down pymt. UCC 2-711: B’s security cost + incid/conseq. Not covering Court: π didn’t prove mkt price; its resale interest in rejected goods: doesn’t bar other remedies. UCC 2-714: Buyer’s Damages agreement was a sham. recover cost to cover all UCC 2-713: B’s damages for non- for Breach Regarding Accepted goods affected. delivery: Mkt price – K price + Goods: a) B recovers non- UCC 2-715: B’s Incid/Conseq Damages: incid/conseq. Must be in g-f; be able conformity; b) value of goods as charges for effecting cover (incid) and to prove mkt price. accepted and value if goods had loss from particular requirements S knew been as warranted. about and couldn’t have been prevented *only subtract variable costs in by cover. determining lost profits. Damages for Breach of K 1. Mkt price – K price + incidental UCC 2-710: S’s Incidental: KGM v. Fresh Networks: Breach by for Sale of Goods 2. K price – resale price + incidental includes reas. charges incurred to seller of lettuce  chain leads to Taco Breach by Buyer/ Damages to stop delivery; return/resale of Bell. B buys from other sources at higher Seller Lost Volume: Lost profits (K price – goods resulting from B’s breach. price and ships to clients on “cost plus” wholesale) + incidental. and refuses to pay for earlier shipments = UCC 2-703: Where buyer *Rule from UCC 2-718: If S counterclaims b/c B didn’t really lose $ rejects/revokes acceptance of UCC 2-718: Deposits often non- measure of damages isn’t enough b/c of cost-plus. Held for B: B could goods or fails to make pmt: S refund if breached: S cannot keep to put S in as good a position as have had a windfall even w/o breaching can more than 20% of value of K or $500 performance, S gets damages = the K. a) withhold delivery (whichever is smaller). profit plus incidnetal costs Neri v. Retail Marine Corp: π buys b) resell/recover damage boat; π pays increased deposit b/c ∆ c) recover damages for non- UCC 2-704: S can resell goods UCC 2-708: S’s Damages for agrees to arrange for immed. delivery. acceptance intended for a K; salvage unfinished non-acceptance = market price at Then π rescinds K b/c π cannot make d) cancel materials time/place – unpaid K price + pymts; boat is delivered to ∆ and ∆ incidental – costs saved by refuses to return deposit. The π proposes UCC 2-706: S can resell goods in a breach. If not good enough, no damages b/c ∆ is able to resell boat 4

22 reas. way = recover difference b/w award lost profit (lost volume months later; ∆ wants profit (could have sale price and K price. seller) sold 2 boats instead of 1) plus incidental costs of storage for 4 months. Held: Lost- volume seller, unlimited supply of boats = lost profits awarded. UCC 2-718 (rather than the dominant UCC 2-708) Mitigation/K for UCC § 2-704: When goods are *very subjective to determine Rockingham Cty v. Luten Bridge (CL): Employment unfinished at time of notice, S can reasonableness K to build bridge; just as π is beginning, ∆ p271-285 finish manufacturing and sell to *element of social hierarchy— cancels K b/c doesn’t want the bridge. Π mitigate or sell for parts. Must higher classes have more choices continues to build and then sues for entire *Consider reasonableness of minimize B’s loss. *Once a party is aware of breach; K price. Held: π only gets costs incurred rejection of an alternative. R2 § 350 party has obligation to mitigate up til breach + lost profit, not the whole and not add to damages w/o K. π was aware of breach = obligation to *Difficult to refuse to MacLaine v. Fox: π had K w/ studio reason = cannot pile on mitigate/avoid excessive damages. mitigate for purely personal, to do a movie-musical and have damages Madsen v. Murray (Modern): Pool table idiosyncratic reasons. artistic control. Studio cancels movie *Nonbreaching party does not sold for scrap; S claims selling table as it and offers her a Western for same have duty to mitigate if the was would hurt his reputation: rejected. salary. Western is in Australia, not breaching party has = ability to Was unreasonable to sell for scrap. LA, plus no artistic control. Held: for minimize damages Bank One v. Taylor: ∆ closes π’s π. Two Ks are for different kinds of *Mitigation does not mean you account; π misses out on some deals. ∆ employment = no obligation to examine decisions hypercritically argues π did not adequately cover—she mitigate. *If offered a different or inferior didn’t hock her jewelry. Held: for π. Employment: std = K – replacement kind of employment, no need to You don’t have to make personal gains from new job + incidentals. Ee take job as mitigation, e.g. outlays/sacrifice your rights. must make reas. effort to find moving. Very fact based: dissent replacement job; wages from compar. in MacLaine says that court job will be subtracted from damages. doesn’t know enough about If ee can prove loss of prof. films. opportunities or damage to prof. *EE breach = ER entitled to reputation, that is compensable too. recover costs to replace ee.

23 Foreseeability UCC § 2-715: conseq. damages from *Damages must be foreseeable Hadley v. Baxendale: CL: Crankshaft p286-298 S’s breach include loss resulting from by the reasonable person at time breaks, π orders a new one. ∆ delays general/partic. reqs. Which S had K is made. Damages must arise shipping—breaches K. Damages limited 1) ordinary course of events? reason to know & that couldn’t be 1) directly from breach or to what shipper could foresee at time of K prevented by cover. 2) special circumstances that = π does not get lost profits. Creates two 2) special circumstances that R2 § 351: Loss not recoverable unless breaching party knew about. rules for conseq damages. breaching party had been told breaching party had reason to foresee about? damages as probable result of breach. *Modern idea is to impute Victoria Laundry: Modern: Shipper Loss is foreseeable if: knowledge of RP to ∆.: damages new boiler; π laundry sues for 1) ordinary course of events (imputed) *Only need to show that the lost profits. RP could foresee that a 2) special circumstances that party in harm is not so remote that a RP laundry would lose profits w/o a boiler breach had reason to know (actual) could not foresee it. w/o π specifying. Standard is what is *Court can limit by: likely to result from breach, not what is 1) excluding recovery for lost profit necessary. 2) aloow only for loss incurred in reliance 3) circums. as justice requires

24 Certainty UCC § 1-106: Remedies are to be *New businesses are held to a Kenford v. Erie County: ∆ hired π to p299-308 liberally administered to place victim higher standard for lost profits build sports stadium; negot. break down in as good a position as full perf., but b/c so speculative. & stad. is never built. The π sues for lost To get damages, you have to neither conseq. nor penal damages *Damages must be in prospective profits over its 20-year prove them w/ reasonable unless specially provided for. NO contemplation of both parties at operation K. Held: loss of future profits certainty. This is easier said punishment. time of K. must show a) w/ certainty that breach than done b/c definition of *Be careful of the number of caused damages; b) proof of reas. “reasonable” is so tricky. R2 § 352: Uncertainty works as a limit assumptions in an economic certainty; c) damages were fairly w/in on damages. Damages aren’t model. contemplation of both parties at time of Without certainty, no recoverable for loss beyond amt that *Damages can be based on K. The π cannot establish b) or c) despite damages = all or nothing. evidence permits to be estab. w/ reas. proven record from the past to experts—nothing comparable. certainty. claim future expected profits. Ashland v. Jenien: K to develop stock *Damages can be calculated by model; if π is fired gets revenue. Can Reasonable certainty more projection of lost profits. figure out damages based on previous commonly required than “rational *Courts likely to find certainty if revenue and test-marketing. basis.” there is: Rombola v. Cosindas (racehorse): π 1) an actual breach trains ∆’s horse; π gets 75% winnings. ∆ “Loss of chance” theory—if Producer 2) loss is proportionate to refuses to race horse; π can use horse’s earns $100K for a successful act and expected damages prior winnings to calculate what he lost 5% of acts succeed, damages = 5% of 3) breach resulted in harm by ∆’s breach by not racing the horse. $100K = $5K. (stretch) Contemp Mission v. Famous Music: π’s record is moving up the charts; ∆ DJ refuses to promote; use statistics on sales based on other records to calculate π’s loss.

25 Liquidated Damages UCC § 2-708 1) no one anticipates a breach = Wasserman’s v. Middletown: π store p308-322 UCC § 2-718: LD must be reasonable remedies not bargained for very leased premises from ∆ city; city cancels in light of anticipated/actual harm efficiently lease and π sues on LD clause for 25% Not enforceable if it’s a caused by breach. Unreasonably large 2) LD cannot be snuck into a K gross receipts. BUT gross receipts not a penalty. = penalty 3) policy consideration sif LD is good measure of actual damages b/c R2 § 356: K can include LD, but only a penalty or a remedy overstates = a penalty caluse. Real estate: damages always to amt that’s reas. in light of Lee Oldsmobile v. Kaiden: π pays $5K ascertainable at time of anticipated or act caused by breach *LD does not prevent from deposit on a Rolls, then buys elsewhere breach but rarely at time of K, AND in recognition of the difficulties asking for other remedies, e.g. and wants deposit back. ∆ cannot keep b/c damages = diff b/w K of proving exact amt of loss. Term SP. deposit b/c damages easy to calculate. He price and market value at time fixing LD as unreasonably large is *Look at reasonableness at time resold the Rolls = cannot keep deposit. of breach. unenforceable based on public policy of breach OR at time of K. (time Hutchinson v. Tompkins: ∆ withheld (penalty). of K more common b/c don’t deposit on sale of land after π’s breach; *LD generally stands if damages are want to undo a reas. bargain) damages could be ascertained at time of not ascertainable at time of K, but look *Valid LD = forecast of actual breach but hard to do at time of K b/c of to equity at time of breach. If LD is damages. market fluctuations. LD not a penalty, so larger than loss caused by breach, ∆ can keep the deposit. reduce. Specific Performance R2 § 359: if expec. damages work, no UCC 2-716: B’s right to SP: London Bucket v. Stewart: π wants SP, p323-339 SP—if $ damages would be adequate, 1) use when goods are unique or but could not show remedy at law inadeq. no SP. R2 §360: factors affecting other appropriate circumstances. Walgreens v. Sara Creek: K that L Approp. if K concerns unique adequacy of damages: 2) Include T&C as to pymt, won’t let another pharmacy in mall during subject matter—but 1) difficulty in proving damages w/ damages, or other relief T’s lease; π sues for SP rather than uncertainty in damages is certainty damages when L wants to breach b/c better test. 2) difficulty of getting subst. perf SP will not be awarded if can’t know what lost profits would be or 3) likelihood that damages could be adequate damages may be loss of good will. Held: SP = force parties collected recovered at law. to negotiate. Van Wagner v. S&M (ha!) Enterprises: *Term in K mandating an billboard space at Manhattan midtown injunction rather than damages is tunnel—π cannot get SP b/c damages unenforceable—court gets to were an adequate remedy b/c value of exercise its discretion. billboard was determinable. Weathersby v. Gore: ∆ supposed to sell π cotton; ∆ cancelled, π doesn’t cover, and cotton price rises. The πB cannot get SP b/c could have covered and didn’t.

26 Reliance Breaching party is liable for forseeable *Used where promise is Security Stove v. American Railways: π p340-346 damages, even if expenses incurred enforceable b/c relied upon tells ∆ why it’s so important for burner to *Goal to place victim party in prior to existence of K. (donative promise). get to NJ on time (takes care of Hadley position would have been in *Includes opportunity costs. issue of foreseeability). π has expenses had promise not been made. Based on victim party’s costs. *If profit is uncertain, use for K w/ ∆. Held: ∆ liable for those expenses incurred and part perf. expenses b/c π would have used different Relief will sometimes be limited to to calculate recovery. shipper. measure by extent of promisee’s *Must have acted rather than just Anglia TV v. Robert Reed: π is making reliance rather than by terms of planned to act. film; selects director, designer, location; promise (Westside v. G-P). then hires ∆ actor; ∆ backs out. The π Westside v. Georgia Pacific: wants all expenses incurred before hired Sub-K to ship steel; GC to pay ∆. Held: π can recover prior expenses b/c sub-K; GC defaults but B ∆ had reasaon to know that if he promises to pay sub-K. Then B breached, π’s expenditures would be defaults too. Sub-Kπ wants full wasted. (stretch) reimbursement; B says only responsible from promise forward. Held: B’s proposal better. Restitution R2 § 370: victim entitled to rest. of *Goal to take away breaching Osteen v. Johnson: DJ agreed to promote p346-360 amt given as benefit to breaching party party’s gain from promise. π’s music (2 albums), but only promotes *Reasonable value of benefit thru past perf/reliance *Use if K is a losing K for non- 1st. Award to π = amt paid to DJ – reas. conferred by promisor to *Victim has option b/w expectation breaching party. value of svcs he did perform. Breach was promisee. and restitution rest. is for material *Determined from facts/circums. material. breach Rather then terms of K = differ Coastal Steel v. Algernon Blair: Blair *Breach must be “material” R2 § 371: benefit = what it would from expectation. breaches and retains benefits w/o paying, and go to the “essence” of the have cost breaching party to obtain; *Sub-K can recover rest. even if so Coastal is entitled to rest. Coastal K. extent to which breaching party was full perf. would have been loss. would have lost by completing the whol enriched Quantum Meruit: action for project, but can still recover under *Breaching party who wants recovery for work, services. Ex: quantum meruit for the work it did do. to recover cannot have acted *Approp. if a) recission; b) damages B breaches, A can get paid for Oliver v. Campbell: π represents ∆ in ‘wilfully’ and must prove that not computable; c) quasi-K. value of work done even if divorce suit; ∆ fires π after trial. The π victim’s damages are less exceeds K price. Only if K not can only collect K value, not value of than the unjust enrichment. near completion—part svcs b/c K was completed. performance Britton v. Turner: EE has K to work for a year; only paid when year is over. EE

27 Breaching party can recover if leaves employment after 9 months. Held: victim would otherwise be EE did breach, but can recover value of unjustly enriched. (subtract benefit conferred on ER. victim’s damages from breach). IX. FORM CONTRACTS Form Contracts UCC 2-204: Parties’ conduct may *If the writing isn’t a K, but Koehring and Columbia Hyundai: these p641-657; p662-671 recognizes the existence of a K. Can parties’ conduct recognizes a K are not form battles b/c there never was a 1) No K (never had a meeting find a K even if don’t know inception. and establishes a K = a K exists. K. 1) telegrams back and forth never of the minds initially) Some terms can be left open in a K. *Additional terms in an reach an agreement; 2) changed term = a 2) K w/ 2nd party’s terms UCC § 2-207: forms don’t match = acceptance are proposals for counteroffer. controlling = CL “last shot add’l terms in acceptance or addition to the K. Gardner Zemke v. Dunham Bush: rule” confirmation (NOT counteroffer): K Knock out rule: π buys chiller; offer 3) K w/ 1st party’s terms exists unless acceptance is expressly Knock Out Rule: terms on includes warranty. ∆’s acknowledgment controls = original offer made conditional on assent to add’l or which parties don’t agree = drop disclaimed all warranties. Parties didn’t controls different terms. out of K; UCC supplies the talk about discrepancies; ∆ refused to 4) K w/ UCC provisions = (1): saves contracts; fixes missing terms. If too many terms warranty. Held: UCC changed CL Knock Out Rule, use 2-207 (2): resolves differences; past last-shot to knock out, may be that there approach of mirror image, so apply 2-207 for add’l terms (3): problem-catcher. If terms really was no meeting of the minds and and knock out conflicts; supply UCC are different; knock out and subst’t no K at all. (UCC 2-207(3)) standard. ∆’s expressly conditional not Opt-in or Opt-out? *Add’l terms = part of the K unless: Transwestern Pipeline v. really expressly conditional: π did not a) offer expressly limits acceptance to Monsanto: M claims K have to opt-in, could only opt-out. If you have a meaningful terms of offer performed so long that TP had ProCD v. Zeidenberg: ∆ bought π’s chance to reject a K after b) materially alters offer implied acceptance to M’s terms. software to use commercially but license purchase, the K is valid. c) objection raised in reasonable time Ridiculous—why accept M’s? agreement inside box. Held: ∆ could return product if didn’t agree w/ license, *What would happen if all terms so K is binding. had to be laid out before sale? Hill v. Gateway: π ordered computer w/ Outside of box not proper place ∆’s warranty; could have returned in 30 for all that small print. days if didn’t agree. Could not back out of arbitration agreement b/c had meaningful oppty to reject. Interpretation and R2 § 211: If other party knows that Sardo v. Fidelity Deposit: π asks for insurance for jewelry store; ∆’s policy Unconscionability in Form there’d be no agreement if the other covers securities but not the actual jewelry. Robbery: π sues for coverage. Ks party knows about a term in the K, Held: ∆ did not mislead ∆; K was plain to read. Tough luck CL for form Ks. p672-679 then that K is not part of the Weaver v. Amoco: π w/ HS diploma signs lease that gives ∆ indemnity and agreement. no liability. ∆ sues for indemn after its own negligence. Held: uncons to

28 enforce indemnification. Proc: π did not understand K and ∆ hid terms. *Berring likes the idea that only the Subst: uncon to ask π to pay for his own suffering. “dickered terms” are really part of the K.

Objective  Subjective Standard  Individual Situation Static  Dynamic Binary  Multifaceted

“cake being baked” “kischka” “dickered terms” “time-space continuum” “oscillating notice problem”

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