EPSTEIN CONTRACTS OVERIVEW

I.

Three sources of contract law

(1)
(2)
(3)

Cases (cases that you were asked to read)

Restatement
UCC Article 2 sections
a. If transaction is primarily a sale of goods AND
b. If you were asked to read a relevant UCC provision
II.
20 vocabulary terms
(1) Contract
(2) Offer
a. Bilateral contract offers
b. Unilateral contract offers
(3) Revocation of an offer
(4) Rejection of an offer
a. Counter offer
b. Conditional acceptance
c. Common law mirror image rule
(5) Acceptance
(6) Consideration
(7) Promissory estoppel
(8) Parol evidence rule(s)
(9) Conditions
(10)
Expectation damages
(11)
Reliance damages
(12)
Consequential damages
(13)
Avoidable damages
(14)
Liquidated damages
(15)
Material breach
(16)
Impossibility/impracticability
(17)
Frustration of purpose
(18)
Third party beneficiary
(19)
Assignment
(20)
Delegation
III.
Seven questions
#1Is there an agreement?
#2 Did the person not performing the agreement receive
consideration (or was there reliance on her promise?
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#3 Is there a legal reason not to enforce the agreement

(i.e., a defense)
#4.What are terms of the agreement?
#5. How will courts enforce agreements?
#6 Is there a post-agreement excuse for nonperformance?
#7 What are the contract rights and duties of third parties?
QUESTIONS ONE: IS THERE AN AGREEMENT?
1.

Manifestation of mutual assent

A.
Objective theory
B.
Lucy v. Zehmer

2.

Initial communication as an offer

A.
Commitment by one party
a.
Context - advertisement
b.
Content
1. reasonable terms
2. missing terms
3. vague or ambiguous materials terms
B.
Comparison of contract with offer
3.Termination of offers
A.
Lapse
B.
Death or incapacity
C.
Revocation
D.
Rejection
a. Counter offer as indirect rejection
b. Conditional acceptance as indirect rejection
c. Mirror image rule as indirect rejection under
common law
d. 2-207 as UCC alternative to common law mirror
image rule
4.

Acceptance of an offer that has not been terminated

A.
Method of acceptance
a. Offer can control method of acceptance

B.

b. Bilateral contract offers/unilateral contract

offers, Davis v. Jacoby
c. Contracting at a distance and the mail box
rule(s)
Effect of acceptance (caterpillars and
butterflies)

QUESTION TWO: DID THE PERSON NOT PERFORMING

RECEIVE CONSIDERATION (OR WAS THERE RELIANCE ON
HER PROMISE)?
1.Definition of consideration: bargained for legal detriment
2.Three steps
(1) Identify promise breaker
(2)What did promise breaker bargain for?
(3)Did plaintiff/promise suffer a legal detriment?
3 FIVE most common consideration fact patterns
(1)Family agreements, Hamer v. Sidway
(2)Past consideration
(3)Pre-existing legal duty
i.
Alaska Packers case
ii.
Modification of contracts governed by common
law
iii.
Modification of contacts governed by Article 2
(4))Illusory promises and Hooters case
(5)Options
4.Promissory estoppel as consideration substitute
A. Restatement
1. Alternative basis for contract
2. Elements
B. State law variations
QUESTION THREE: IS THERE A LEGAL REASON NOT TO ENFORCE
THE AGREEMENT (i.e., a defense)?
1.Capacity
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2. Duress, Austin v Loral

3. Misrepresentation, Halpert
4.Nondisclosure, Swinton, Weintraub
5.Mistake of existing fact, Sherwood v. Walker
6.Unconscionable
A.
Procedural, AND
B.
Substantive
7.Public policy
8.Ambiguity and Raffles v. Wichelshaus
9. Statute of frauds
A. Purpose
B. Within (i.e., subject to)
1. land transfers
2. sale of goods for 500
3. services contract not capable of being peformed
within one year of contract
C. Satisfying (i.e., no defense)
1. writing
- contents
- signed by defendant
2. performance
3. reliance, Restatement Second section 139

QUESTION FOUR: WHAT ARE THE TERMS OF THE CONTRACT?

1.Parol evidence rule (rules)
A. Purpose
B. Vocabulary
1.
Integrated
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2.
Completely integrated
3.
Partially integrated
4.
Merger clause
5.
Parol evidence
C.Rules
1.
Cant contradict
2.
Can explain
3.
Can establish defense
4.
Can add terms if . . .
2.Conduct as a source of terms
A. Course of performance
B. Course of dealing
C. Custom and usage
3.Court-supplied terms, Wood v. Lucy, Lady Duff Gordon
4. Implied warranties, 2-314, 2-315

QUESTION FIVE: HOW WILL COURTS ENFORCE AN AGREEMENT?

1.Specific performance
A. History
B. Present day policy concerns
2. Damages
A. Policy compensate, not punish
B. Expectation interest
i. overview: three steps
(1) DOLLAR CONSEQUENCES OF NO BREACH
(WHICH IS WHAT WAS EXPECTED)
(2) DOLLAR CONSEQUENCE OF BREACH
(3) COMPARISON OF (1) AND (2)
ii.
Hawkins v, McGee and inadequate information
iii. Peevyhouse and too much information: cost of
completion or diminution in value
C.
Consequential damages and Hadley v, Baxendale
D. Avoidable damages and Parker v. 20th Century Fox
E.
Other limitations on damages
i.
Certainty
ii.
No punitive damages
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F.

Contract provisions regarding damages

i.
Liquidated damages (and punitive damages)
ii. Limitation of remedies (and unconscionability)

QUESTION SIX: IS THERE A POST-CONTRACT EXCUSE FOR

NONPERFORMANCE?
1.

Other parties nonperformance

2.

Other parties less than complete performance

A.
Article 2s perfect tender standard
B,
Common laws material breach test, Jacob & Youngs v.

Kent
3.

Anticipatory repudiation, Hochster v, DeLaTour

A. Early material breach
B. Unambiguous words or conduct

4.

UCCs reasonable grounds for insecurity, 2-609

5.

Nonoccurrence of express condition

A. Home sale hypo
B. Jacob & Youngs v. Kent dictum
C, Good faith/forfeiture

6.

Impossibility, impracticability, frustration of purpose

A. Ability to perform and Taylor v. Caldwell
B. Elimination of mutually understood purpose of
performance and Krell v Henry
C. UCC 2-613 (identified goods) and 2-615

QUESTION SEVEN: WHAT ARE THE RIGHTS AND DUTIES OF THIRD

PARTIES?
1.Third party beneficiaries
A.Life insurance as example
B.Consideration to defendant, but not from plaintiff
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C.No privity
D.Intended beneficiary
2.Assignment of contract rights
A.Post-k transfer of rights
B.Vocabulary
C.Limitations on assignments
3.Delgation of duties
A.What a delegation is not
B.Not a novation
C.Not a transfer
D.Consequences of delegation
i. Delegating party remains liable
ii. Delegatee liability only if she received consideration
E.Limitations on delegations
i. Contract provisions
ii. Personal services contracts

CLOSING CAVEAT: IF YOUR PROFESSOR IS

WRONG, HE IS STILL RIGHT.