Contract Spring 2011 Final

belief not in accordance with the facts about circumstances existing at the time the K was made

1)mistake of fact
2)of both parties
3)at the time the K was made
4)as to a basic assumption on which the K was made
5)has a material effect on the agreeed exchange of perfomance of the parties, then the K is voidable by the adversely affected party
6)unless he bears the risk under the rules of section 154

a. the K allocates the mistake to him
b.He has “conscious uncertainty”
c.The court allocates the loss to him b/c it is reasonable to do so

(1) a mistake of fact
(2) of one party
(3) at the time the K was made
(4) as to a basic assumption on which the K was made
(5)has a material affect on the agreed exchange of performance that is adverse to him, the K is voidable by him
(6) unless he bears the risk under the rules of section 154 and:
a. the effect of the mistake is such that enforcement of the K would be unconscionable OR
b. the other party had reason to know of the mistake of his fault caused the mistake

When a parties performance is made impracticable w/o his fault by the occurrence of an event, the non occurrence of which was a basic assumption on which the K was made, his duty to render performance is discharged unless the language or the circumstances indicate the contrary

if the existence of a particular person is necessary for performance of a duty his death or such incapacity as makes performance impracticable is an event that the non-occurrence of which is a basic assumption on which the K was made (its impossible to perform a K when you're dead)

if the existence of a specific thing is necessary for the perf. of a duty its failure to come into existence, destruction, or such deterioration as makes performance impracticable is an event the non occurrence of which was a basic assumption on which the K was made

where after a K is made a party's principle purpose is substantially frustrated w/o his fault by the occurrence of an event the non nonoccurence of which was a basic assumption on which the K was made

(look at the purpose of K and see if its been frustrated)

performance of a legal duty already owed to a promisor [which is neither doubtful nor the subject of honest dispute] is not consideration

1. New Consideration
2. 89 (c)--extent justice requires
3. Rescission aka "mutual release"
4. changed circumstances 89(a)
5. 2-209 does away w/ PEDR
6. Duress

purpose of the promisee is to make a gift to the beneficiary or to confer upon him a right against the promisor to some performance neither due nor supposed or asserted to be due from the promisee to the beneficiary.” The wife in the insurance co. scenario is a donee beneficiary

promisor promised to discharge a debt owed to a 3rd party by the promisee

"everyone else"--no standing to sue BOTH RS

combines creditor and donee

unless otherwise agreed btwn the promisor/promisee a beneficiary of a promise is an intended Ben. if recognition of a right to performance in the ben. is appropriate to effect the intention of the parties and either
a. the performance of the promise will satisfy an obligation of the promisee to pay to the ben or
b. the circumstances indicate the promisee intends to give the ben the benefit of the promised performance

is a beneficiary who is not an intended beneficiary... can't sue

General Rule: the promisor may assert against the ben any defenses that the promisor could assert against the promisee if the promisee were suing on the K

an intentional relinquishment of a known legal right

waiver + reliance

to the extent that the non occurrence of a condition would cause disproportionate forfeiture a court may excuse the non occurrence of that condition unless its occurrence was material part of the agreed exchange

1. waiver or estoppel
2. election
3. prevention (breach)
4. impossibility/impracticability
5. to avoid forfeiture

If the parties have not agreed on the order of performance, performances that can be rendered at the same time are due simultaneously

if cannot be rendered at the same time, the performance requiring the longer period of time must be rendered before the performance requiring the shorter period of time will be due

1.extent to which the injured will be deprived of benefit which he reasonably expect--important!!
2. the extent to which the injured can be adequately compensated for the benefit of which he will be deprive
3. the exent to which the party failing to perform or to offer to perform will suffer forfeiture
4. the likelihood that the party failing to perform or to offer to perform will cure his failure taking account of all the circumstances including any reasonable assurances
5. the extent to which the behavior of the party failing to perform or to offer to perform comports with standards of good faith and fair dealing

a. look at all the factors in 241
b. the extent to which it reasonably appears to the injured party that deal may prevent or hinder him in making reasonable substitute arrangements

indication a party will not perform when performance is due in future--key word is before performance is due

D= LV - CA + OL - LA

unpaid K price when buyer breaches; difference btwn what D promised and what D actually did

costs P would have incurred to perform his end of the deal; cost of complete performance minus cost of reliance

incidental damages= out of pocket expenditures that P makes after breach that he wouldn't have had to make if no breach
consequential damages= lost opportunites, P could have used something he got from D to make gains with 3rd parties

where buyer breaches, seller can resell the asset to someone else and avoid some of the losses would have otherwise incurred... must reduce award by this price

what a willing buyer and seller would agree to

has replaced the concept of economic waste-- it is an unearned and unexpected gain--a gratuitous circumstance--avoided by only awarding loss of market value-- but if inevitable, give the windfall to the non-breacher

may not be reflected in the market value of property--sentimental value-- unquantifiable amount

D= Profit + CR + OL - LA

Profit= LV-CCP

D=Unpaid salary (k price) - CA (0) + OL (0) - Salary eanred from sub employment

D= LV = LA + OL

LV= cost to hire another employee
LA= breaching employees unpaid salary

D= K price - FMV price + OL

D= FMV price - K price + OL

cost of repair

-If a provision in the K prohibits it
-Rights that materially change obligor’s duty
-Where the obligor undertakes to do something personal for the obligee
-Where assignment would materially increase the obligor’s burden of risk, even though it does not alter the obligor’s duty
-Assignments made unenforceable by statute: wages of employees, Ks with federal government

a delegate may perform the duty and obligee has no right to refuse to accept the performance (delegating party's duty is not discharged)

manifestation of intent to act or refrain from acting so made as to justify a promisee in understanding that a commitment has been made

An event not certain to occur which must occur before performance under K becomes due

created by the parties express agreement // either party does not have to perform unless or until something happens // good consideration as long as one party is not solely w/in control of the condition

law implies/creates a condition

Both a promise AND expressly conditional

intentional relinquishment of a known legal right.... can be revoked

waiver + reliance... can change mind about waiver until other party relies on it

-waiver or estoppel
-election
-prevention
-impossibility/impracticability
-to avoid forfeiture

irrevocable waiver... only happens after time for perfomance has expired

if occurence of event is somewhat w/in control of one of the parties, that party has the duty to use reasonable efforts or due diligence to make sure it happens

courts will excuse if its equitable to avoid forfeiture of the other party

performances due at the same time should be rendered simultaneously, but if they cannot be rendered simultaneously, the performance requiring the longer period of time must be rendered first

when one party is not willing to assume all of the risks of full performance before the other party begins rendering performance, that party should be paid in installments as they progress through the task

the extent to which the injured party will be deprived of the benefit he reasonable expected

an indication one party will not perform when performance is due in the future

-urge repudiator to retract
-sue IMMEDIATELY for breach
-do nothing

obligee may demand assurance if reasonable grounds suggest obligor is going to commit a complete breach-- bond or letter of credit

-compensation
-substitution
-expectation

-Foreseeability
-Certainty
-Causation
-mitigation

type of loss

an issue foreseeable at the time of loss

amount of loss

doesn't need to be calculated to exact certainty, but beyond mere speculation--reasonable certainty

Fact of loss

asks as a matter of fact, if the breach caused the injury

(avoidability) a person who suffers a loss from a breach is under a reasonable obligation to mitigate

-at will

-term

-just cause

either can terminate at any time, for any reason

both agree work will last for a fixed period of time and can only be fired if not working for a set amount of time

usually accompanied with progressive discipline

Employee can quit at any time

Employer can only fire if just cause, not arbitrary or capricious

attorneys fees

damages for emo distress

punitive

1-106 (1) (no consequential or penal)

Cover 2-712

Market Price- K Price 2-713

Specific Performance 2-716

Resale 2-706

K Price- Mkt Damages 2-708

Action for the Price 2-709

1- materially changes his position on reliance of the K

2- brings suit against the promisor or

3. manifests assent to the K at the request of the promisee or promisor