CONTRACTS
PAWLOWIC 2000
I. ENFORCING PROMISES
First Enforceable Contracts were with a Seal
A. Consideration:
General Definition: To constitute consideration, a performance or return promise must be bargained for. 搂 71
1. Legal Value:
Benefit to the PromissorOR
Detriment to PromisseeAND
2. Bargain for Exchange (BFE)
Did the Promise induce the Detriment? Did the Detriment Induce the Promise?Hamer v. Sidway
Performance as consideration (Testator uncle asks nephew to give up drinkin00and smokin00/font>
Fiege v. Boehm 搂74
Forbearance to bring a valid claim is consideration; however, forbearance to assert a claim, which proves to be invalid is not consideration unless the forbearing party believes the claim, may be valid. Even if it later proves to be invalid (Good Faith Belief).
Alleged father 00mother forbears bastardies charge.
Kirksey v. Kirksey
Gratuitous Promise not enforceable (No BFE)
Sister-in-law travels to brother-in-law00 farm (1840)
Fenberg v. Pfeifer
Past performance not consideration
CAB Inc. v. Ingram
Future performance (Employment is not consideration)
Peppercorn 搂 79 Adequacy of Consideration (Krull v. Goodman)
Something of little value given in exchange for or to the promissor00 detriment.
May or may not be enforceable, because the BFE is a mere pretense.
Strong v. Sheffield
Illusory promise: A promise is illusory if performance of the promissor is optional (not enforceable).
Mills v. Wyman
(Cared for sick son.) A moral obligation is not enforceable.
Gulf v. Eastern Airlines
Output (requirement) contracts: Promises to buy requirements or sell output are enforceable. The parties must operate in good faith.
B. Detrimental Reliance
Promissory Estoppel 搂 90
Promise which the promissor should reasonably expect to induce reliance on the part of the promissee; and which does induce such reliance is binding, if injustice can be avoided only by enforcement of the promise. D & G Stout, Inc. v. Bacardi; Ricketts v. Scothorn (none of my grandchildren work00/font>
4 Areas Promissory Estoppel can be used
1) Family Prom 2) Prom to convey land 3) Charitable Subscriptions 4) Prom w/ Grat Bailmts .
C. Restitution
Unjust Enrichment 搂 87 (2) & 搂 90
Separate cause of action from K law, since there is no promise involved. A last resort since there are other remedies under K law.
Quasi 00Contract: Obligation created by law with regard to assent of bound party. Duty defines the K.
Elements:
Person must be enriched (Benefit Conferred) Enrichment must be at expense of 00/font> Retention without compensation would be unjustRestitution requires that 00/font> expected payment from 00/font>, not from someone else. Ordinarily 00/font> must be aware before or as it is happening. Good Samaritans are not compensated (Mills v. Wymann)
Exception: Medical person rendering medical services at an emergency (Cotnam v. Wisdom)
D. Moral Obligations
Moral Obligations are generally unenforceable.
Exceptions:
Re-affirmation: Prior obligation for which there was consideration but now there is no duty to pay. Promissory Restitution: Promise in Recognition of a benefit previously conferred by the promissee to the promissor to prevent injustice (Webb v. McGowin) 搂 86 Promise made by a minor and re-affirmed after reaching adulthoodII. BARGAINING PROCESS
A. Assent 搂17
Formation of K requires Bargain (搂 17), which has Manifestation of Mutual Assent (搂 18) and consideration.
B. Offer 搂 24
Manifestation of a willingness to enter into a bargain. The promissor confers the Power of Acceptance on the promissee (搂 24)
Preliminary Negotiations 搂 26 (Invitation to Negotiations) is not an offer, if manifestation of assent is required to complete (e.g. solicitations of bids)
Process to arrive at a bargain requires an offer and an acceptance.
Offer must be communicated to an identified promissee, who must know of the offer before he can accept (Effect of Misunderstanding 搂 20)
Price quotations are not offers, unless there is specific language to indicate such (Fairmount Glass Works)
Advertisements: They normally do not constitute offers; but if they contain very specific language (e.g. first come, first served) they may be considered offers (Lefkowitz v. Great Minneapolis Store)
C. Acceptance
Exercise of power conferred upon one party by the offer of another; acceptance creates contractual obligations.
Int00 Filter Co. v. Conroe Gin
00/font> accidentally sends 00/font> letter; invitation to negotiation; 00/font> relies; 00/font> accepts & sends 00/font> a $1200 water filter. Manifestation of Assent to the terms made by the offeree in a manner-invited 搂 50.
Offer can only be accepted by a person whom it invites to furnish consideration 搂 52
Master of the Offer 搂 30
Performance: By choosing to accept by performance, the offeree promises to render complete performance 搂 62 Evertite Roofing Corp. v. Green.
Counter-Offer 搂 59
If an offer suggests a permitted manner but others are not precluded 搂 60
Notification of Acceptance
Acceptance by promise 搂 56: Necessary to use reasonable diligence to notify promissor of acceptance. Or that promissor receives seasonable acceptance. White v. Corlies & Tift: Contractor started work (performance) before notifying businessmen (who countermanded) No K. 搂 53 Acceptance by performance: When acceptance by performance is invited, no notification is necessary unless offer requires a notification or the promissee knows promissor has no means of finding out. Evertite Roofing Corp. v. Green Only Acceptance by Performance (Option Contract): Offeror cannot revoke once performance starts. K is formed when performance begins. Notification covered in 搂 54. Acceptance by silence: Silence alone is generally not acceptance. (3 exceptions: 搂 69)
D. Termination of Power of Acceptance
Revocation 搂 42: Offeror can revoke offer at any time prior to acceptance. Revocation is not effective until received by offeree. Power of acceptance terminated 搂 43: When promissee obtains reliable information that promissor has taken action inconsistent with intention to enter K (Dickenson v. Dodds). Death 搂 48: Death or incapacity of either party terminates the 00e power of acceptance; however death does not terminate an options contract. Lapse of Offer 搂 41: 1) Offer good only as long as provided by terms; 2) offer made face-to-face valid only to end of conversation; 3) Offer for x days means x days from receipt by offeror. Rejection 搂 38: Offeree00 power of acceptance is terminated by his rejection, unless offeror manifests contrary intention Irrevocable Offers: Ordinarily an offer is revocable at the discretion of the 00r at any time prior to acceptance; even if offer states it will be open x days; it can still be revoked because x days is a separate and unenforceable promise.The Four Irrevocable Offers
Standard Option K 搂 87: Remember that the offer must be in writing and signed by the promisor, reciting a consideration. (Actual consideration is not necessary). Merchants Firm Offer (UCC 2-205): Offer by merchant to buy/sell goods that includes leaving the offer open, is enforceable for that time period, even though there is no consideration. If no time stated it lasts for a reasonable time/NLT 3 mos. Offer when only means of acceptance is to perform: Once performance begins K. Offer is irrevocable; must complete for K 搂 45. Only applies to unilateral K, which demands performance. It does not apply to offers, which invite promises 搂 32; nor does it apply to offers that are ambiguous 搂 62. K may be Irrevocable under Detrimental Reliance 搂 87(2): To prevent injustice.E. When Acceptance Becomes Effective (Mailbox Rule)
When it leaves the possession of the 00e regardless of if it reaches the 00r 搂 63 Offeree must use reasonable means of acceptance 搂 65 Offeree00 rejection terminates the power of acceptance only when received by the offeror; offeree can supercede a rejection if the acceptance is received before the rejection.F. Acceptance varying the Offer: Battle of the Forms (UCC 2-207)
Common Law: Acceptance must be the 00irror image of offer 搂 58 or it acts as a counter-offer Performance without objection: The terms of the resulting K are those of the counter-offer Last Shot Rule: Whoever gave the last form governed contract. Sale of Goods (UCC 2-207): Determine if K did in fact exist, although different terms were stated Determine which terms govern KGeneral Rules UCC 2-207(1):
Expression of acceptance or a written confirmation operates as acceptance, even if it states other terms. Unless acceptance is 00xpressly conditional upon terms00/font> Once K is determined UCC 2-207(2) to hash out other terms.General Rules UCC 2-207(2):
Ordinarily different/additional terms are construed as proposals for addition to K. Between merchants additional terms become part of K, unless Offer limits acceptance to terms of K Materially alters the K Notification of objection is given within reasonable time. If new term falls within one of the above is viewed as a proposal for addition to the K, K will be governed by terms of the offer. UCC 2-207(2) mentions only additional terms not different. Three ways to interpret. Knockout Rule: Conflicting terms cancel each other out. Any supplementary terms are filled with UCC 00ap Fillers.00/font> Fall-Out Rule: Conflicting terms of the offeree fall out, leaving only the terms of the offeror as governing. Interpret according to UCC: Everything different is added into contract as proposals and anything conflicting has fallen out and been supplanted by UCC gap fillers.General Rules UCC 2-207(3):
If the parties are acting as if they have a contract 00then they do, even if nothing matches
G. Pre-Contractual Liability
Failed negotiations 00no K. Negotiations do not constitute an offer. Ordinarily there is no liability without a valid offer, acceptance and consideration; HOWEVER, there are three exceptions:
Option K: May be formed by beginning performance Restitution: Claim may lie if A has conferred a benefit on B at B00 request with the expectation of remuneration even though there is no K. Detrimental Reliance: One party has relied on another to such a degree to make a claim.(搂 87 00ffer00/b>/ 搂 90 00romise00/b>)
Drennan v. Star Paving
General Contractor relied on sub00 bid. The subcontractor revoked. The general contractor was awarded damages. Since subcontractor revoked prior to acceptance no K existed. Construction contracts are the exception to these rules (G).
Holman Erection v. Madsen & Sons
A general contractor is not bound to a subcontractors bid. A General contractor used a sub in calculating his bid, then awarded job to someone else. Sub did not have det. Rel. since he sent his bid to 6 other contractors.
H. Definiteness
The terms of the K are reasonably certain if they provide a basis for the existence of breach and for determining appropriate remedy 搂 33
UCC 2-204(3): K does not fail for lack of definiteness if parties meant to make K and there is reasonably certainty for an appropriate remedy.
Contract must contain:
Identities of parties (UCC & Rest) Subject matter of parties (UCC & Rest) Time for performance (Rest) Price (Rest)III. REQUIREMENT OF ENFORCEABILITY: STATUTE OF FRAUDS
UCC 2-201: An which has consideration and manifestation of mutual assent may still be unenforceable for lack of writing. Certain K00 must be in writing:
Special promises of an executor: to answer for the duty of decedent Surety ship: K to answer for the debt of another Must be promise to pay another00 legally enforceable debt Surety must be secondarily liable (not the obligor) Surety agreements do not have to be in writing if they fall in the 00ain Purpose00 exception; if surety00 main propose is to further his own interest, then it does not have to be written. Marriages related to K: (prenuptial agreements) Land K00: Applies to leases and mortgages Even if K is not enforceable because of statute of frauds they may become enforceable if seller conveys land or if buyer takes possession of land and begins to make improvements. One year K00: Contract that cannot be performed within one year must be in writing. Sale of goods over $500: (UCC 2-201) Three exceptions: Goods specifically manufactured for the buyer If the party against relief is being sought admits an any judicial text that an oral contract was made. Goods for which payment has been made and accepted or which have been received and accepted.Requirements of a writing/signing
Any written medium will suffice and my be pieced together from several writings. Common Law requirements 搂 131 (Rule that removes from the statute of frauds)
Identifies the subject matter Sufficient to indicate K between parties Signed by party to be charged (PTBC) Includes essential termsUCC 2-201 (1) Requirements which writing must include:
Indication that K for sale has been made (O/A & C) Quantity (Only term that has to be included, doesn00 even have to be right) Signed by the PTBCPTBC does not have to sign if the agreement is between merchants
PTBC receives written confirmation of K in a reasonable period of time Writing is sufficient against sender (complies with UCC 2-201(1)) PTBC has reason to know of writings content PTBC does not provide written objection to the writing within 10 days after it is received.Modifications to K00 must comply with Statute of Frauds provisions.
Rescission to K00, which must be in writing, may be oral. Under UCC must be in writing (if greater than $500).
IV. POLICING THE BARGAIN
A. Capacity to Contract:
Certain classes are not bound by the K00 they enter:
Minors 搂 14: Voidable for anyone under 18 years of age Mentally Ill 搂 15: If illness is so acute that there is no relationship between mentally ill person00 intent and conduct Intoxicated Persons 搂 16: K is voidable only if guy is so drunk that he is unable to understand the nature of the transaction and other party does. Persons under guardianship 搂 13: Person under legal guardianship is absolutely without ability to KB. Unfairness in Bargaining Power:
Courts generally do not enquire into the adequacy of the consideration 00a bad deal is still a deal.
C. Duress: Any wrongful act, which overcomes the free will of the party (subjective standard)
Remedy: May include granting the victim the power to avoid the K, as well as restitution There are two types Actual Physical Compulsion: K is void 搂 174 Improper threat: 搂搂 175 & 176 Improper threat (Crime, Tort, Bad Faith, B/K) Threat must induce manifestation of assent Victim must have no reasonable alternative but compliance Undue influence Special or confidential relationship b/n parties Unfair persuasion over submitterD. Pre-Existing Duty Rule
Performance of a legal duty owed to OR which is neither doubtful nor the subject of honest dispute Similar performance is consideration if it differs from what was required by duty that reflects more than pretense. 搂 74 Provides the resolution of a good faith dispute involving a pre-existing legal duty is consideration, the party owing is giving up his right to pursue the dispute. Contract may be rescinded upon mutual assent and a new K entered into. Performance of the identical duty already owed may be consideration if the original K is rescinded; then, the pre-existing legal duty serves as consideration for the new promise. Rescission of right to breach or seek mutual rescission Forbearance of a right (rescission) may constitute consideration (DeCicco v. Schweitzer)Two Questions exist if Pre-Existing Rule is an issue.
Is there duress? Is there consideration? If there was a duty to perform, the exact same thing then there is no legal value. Except: Settlement of good faith Performance differs from original duty in more than a pre-tense Rescission eliminated duty Unexpected circumstances and good faith modification enforced even without consideration Pre-existing legal duty owed to a 3rd party.Modification of a Contract
Common Law 搂 89: Modification of a duty not yet performed, must be fair and equitable, voluntarily agreed upon by both parties, and made in response to events not anticipation at the forming of the K UCC 2-209: Modification needs no consideration to be bindingE. Payment in Full (Accord and Satisfaction)
If a debtor in good faith dispute tenders a check, which states payment in full in conspicuous letters, and the creditor cashes the check, the creditor has discharged the debtor from all duties and debtor has given consideration by forbearance to a claim.
F. Mistake
K based on mistaken belief may be avoided or voided 搂 20 Mutual Mistake (Most Common) 搂 152 Mutual Mistake As to K Basic Assumption of K Has a material defect Avoidance sought by adversely affected party Adversely affected party didn00 bear the risk 搂 154 Unilateral Mistake 搂 153 (Hardest to prove) Enforcement would be unconscionable Other party had reason to know of mistake; or, his fault caused it.G. Misrepresentations (Three types)
Assertion does not agree with the facts Concealment of true facts Non-disclosure: Normally there is no duty to disclose. Exception are covered in 搂 161H. Contract is voidable by victim of misrepresentation 搂 164
Misrepresentation occurred Must be fraudulent Must induce assent Must be relied upon be victimI. Unconsciounability: When terms are so unfair as to shock the conscience
Adhesion Ks: Courts usually rule they are unenforceable General Unconscienability Doctrine 搂 208/UCC 2-302: Whether clauses involved are so-one-sided as to be unconscionable Consumers 00not merchants 00only ones who can succeed with this Question of law: Goes to judges Two General Types Procedural: How term entered into K Substantial: Goes to fairness of the term itself Remedies: Court may strike offending clause, rewrite or void the entire KV. LAW OF THE CONTRACT
A. Parol Evidence Rule: 搂搂 209 00217: Parties have reduced memorialized K in writing. Does not happen with oral K. If the parties intend the writing to be final expression of agreement.
B. Two types of integrated agreements
Partially integrated: If document is not intended to include all details of the agreement; result is all prior inconsistent Ks are discharged 搂 213 and no evidence of prior agreements (either oral or written) may be admitted 搂 215, such evidence would vary a term of the writing. Completely integrated: If document is intended to include all details of their agreement (complete and exclusive) all prior Ks are discharged and evidence of any previous agreement may be admitted. Parol Evidence Rule does not apply to subsequent agreements UCC 2-202: Basically the same as the common law. If writing is a final expression, it may not be contradicted by any prior written or oral agreements. Merger Clause: Expressly states writing constitutes sole and exclusive agreement between parties, if no merger clause exists. Natural inclusion test (Common law): If ORP in parties position would have naturally included what was in the oral agreement, then evidence of oral agreement is not admissible. Certainly Included test (UCC 2-202): Bars evidence of any prior oral agreements if they would have certainly been in the written expression.Methodology
Is writing final expression of parties00agreement?If yes, then all parties prior Ks are discharged and evidence from prior oral or written K agreements or negotiations, which contradict, are inadmissible.
Is writing final and exclusive expression?Apply either the Natural Inclusion Test (common law) or Certainly Included Test (UCC). If evidence sought to be introduced is of an additional term, which should have been included, then evidence may not be introduced.
Exceptions to the PER 搂 214: Evidence from prior oral or written agreement or neg. is admissible to prove Writing is not an integrated agreement Integrated agreement is integrated or partial Meaning of writing Illegality fraud or duress Rescission Denying rescission Reformation Specific PerformanceB. No Oral Modification Clause
Common Law: Could use reliance on oral modification allowed to orally modify a no-oral-modification clause UCC 2-209: Signed agreement which excludes modification except by signed writing, cannot be modified. For customer to merchant, must be separateInterpretation
Plain Meaning Rule: If language is plain on its face, then no extrinsic evidence is necessary, only ambiguous language may be admissible. Modern Approach: If language in question is at all susceptible to parties00purported meaning, then extrinsic evidence will be admitted. If both parties show that they attached a different meaning to a term of K, 搂 20 may be activated 00no mutual assent 00no K 搂 201: Provides where parties have attached same meaning it governs Party who didn00 know nor should have known other meaning 00is the meaning which prevails Party attempting to show its meaning has burden of proof 搂 202 Purpose of parties 搂 203 Terms will be given their reasonable, lawful and effective meaning.VI. PERFORMANCE AND BREACH
A. Conditions:
At K formation, duties and rights are created. Often the duty of performance is conditional on some other event occurring; if it does not occur within a specific and reasonable time, the conditional duty does not matter and is discharged.
搂 224: Condition is an event, not certain to occur, which must occur before performance becomes due under K
搂 225: Conditional performance does not mature unless condition occurs or its non-occurrence is excused.
B. Satisfaction Clauses: One party00 duty is conditional on it being satisfied within product, leasing, arr, etc.
Standard in determining what is satisfactory may be based on an objective standard Architects certificates: Most common example of third party being condition on party00 duty to perform.C. Express conditions: Must be strictly complied with writing, any deviation discharges conditional party00 duty to perform
Court will normally look at intent of party Construction of K: Payment no t a condition of Gen00 duty to pay SubD. Condition/Duty/Both
Failure of Condition: Does not equate to B/K. Only when party promised to effect a condition does it become a breach. If act is a condition: Failure discharges other party If act is a duty: Failure to effect act is B/K, but other party must still perform If act is a condition and duty: Failure of the condition is B/K and discharges other party00 dutyE. Constructive Conditions:
When K contained an exchange of promises, it is presumed that performances will be exchanged. If one does not occur, the other does not have to happen. Independent Promises: Duty on either side must be performed regardless of if the other duty has been performed; duties are not conditional upon each other. Each party00 substantial performance of his promise is a constructive condition to performance by the other party. 搂 237 Remaining duty to perform is conditional upon there being no uncured material failure by the other party. Failure of one party to substantially perform allows injured party to: Suspend performance 搂 242 if failure remains uncured, injured party is discharged.Test for Substantial Performance (UCC): Does performance meet essential purpose of the K?
Test for Material Breach (Common law): 搂 241
Any deviation from full performance, whether material or not is B/K and injured party may recover damages; however failure must be material to discharge injured parties performance.
搂 241 Factors to determine material breach: All five must be met
搂 242 When one parties duties are discharged (uncured material failure)
搂 234 Order of performance: In absence of agreement 00work then pay
搂 238 Concurrent performance (Mutual Conditions): When performances are simultaneous
搂 234 Simultaneous
UCC 2-507 Seller00 Tender
UCC 2-511 Buyer00 Tender
F. If condition is not excused, it must be satisfied
Complete Satisfaction: If expressed condition Substantial Satisfaction: If Constructive condition Divisibility: If K is divisible by UnitMethodology
Define conditions 搂搂 224-225 Identify failure to perform (any failure B/K) Determine if K is divisible 搂 240, if so treat as individual pairs of K Determine if duty was expressed or constructive Expressed condition: Injured party duty is discharged unless court excuses Constructive condition: Injured party duty is to continue to perform unless an uncured material failure Determine if substantial performance If no substantial performance or have a material failure, then injured party may suspend duty to perform if 搂 242 indicates If failure is not material and injured party has suspended performing apply 100 Determine remedies for B/K Determine if restitution for unjust enrichment is appropriateG. Divisible and Separate K
搂 237 applies if K is not divisible 搂 240 applies if K is divisible Can performance be apportioned? Is it fair to regard as agreed equivalents Construction and employment Ks are normally not divisibleH. Material Breach for K (Sale of Goods)
Perfect tender rule: UCC 2-601 Reject the whole Accept the whole Reject some and accept some UCC 2-508 provides seller in this situation some cure provisionsI. Anticipating Repudiation
搂 250 Must consist of either an absolute or unequivocal refusal to perform; or a distinct and positive statement of inability to perform before performance is due. Language is important in determining whether repudiation ha occurred. Repudiation may come from conduct, which is inconsistent. Injured need not wait for performance to be due to sue for B/K; can sue upon knowledge of the repudiation. Effects of repudiation 搂 253 Immediately sue for B/K Injured party00 duty to perform is discharged Repudiation will excuse any condition the repudiators duties 搂 255Exception: 搂 253 Injured party cannot sue for total breach upon repudiation, if the injured party has already performed and is only waiting for completion by the party to sue for that amount that has come due (progress payments) not for the entire amount.
Many Ks include acceleration clause to circumvent this exception.
Assurance
Party, who has reasonable grounds that the other party may breach, may demand assurance from that party that it will not. Party seeking assurance may suspend performance until he receives such assurance. Failure to provide assurance in a reasonable time constitutes repudiation.Retraction (搂 256; 2-611):
Repudiation may be retracted before repudiator00 next act is due, unless party has cancelled or materially altered his position or otherwise indicated he accepts the repudiation as final.METHODOLOGY: Anticipatory Repudiation
Determine if anticipatory repudiation occurred (unequivocal refusal or distinct statement of inability to perform) If not 00one party may seek the assurance of the other. If repudiation has occurred and no effective retraction occurred, determine what action injured party may take. At common law: Duty is discharged and claim for damages for total breach (w/ exception of progressive/installment payments) Under UCC 2-610 Await performance or Resort to remedy for B/K: Seller 2-703 Buyer 2-711 In either case, injured party may suspend own performance. Decide which remedy injured party is entitled to搂 374 Allows parties in breach to recover restitution damages on theory of unjust enrichment, equivalent to value of benefit conferred on other party less any damages caused by breach.
VII. REMEDIES
Specific Performance Expectation interest Reliance interest Restitution interestNo punitive damages in K law.
UCC 2-703 = Seller00 catalog of damages UCC 2-711 = Buyer00 catalog of damages
A. Specific Damages
Only awarded when legal remedy is inadequate 00/font> must show he would suffer irreparable injury if not awarded specific performance. 2-716 Buyer00 specific performance is replevin 2-709 Seller00 specific performance is action on the priceB. Expectation Interest (搂 347; 2-708/2-713)
Common law Loss 00Cost = Expectation
Loss in Value
Construction K: Buyer = K Price 00any payment received
Seller = K Price 00current value
Employment K: Employee = K Price 00salary received
Employer = K Price 00work received
Costs avoided
Construction K Buyer = Cost to complete
Seller = Payments not made
Employment K: Employee = Salary for substitute/comparable position
Employer = Cost of salary not paid
UCC 2-713 Buyer UCC 2-708 Seller
Mkt price at B/K 003 approaches Market price at performance 00K price + incidentals 00expenses saved
At time of breach Breach + reasonable time When performance is due in KC. Reliance Damages 搂 349
Damages = Costs incurred 00payments received 00costs of the party in breach The costs must be justifiableD. Restitution Interest
Common LawDamages = Reasonable value of benefit 00payment received
搂 371 Limited as justice requires Measured by
Reasonable value of benefit received Increase in value of the breaching party00 property Under UCC Buyer is injured 00/font> 搂 2-711 Buyer00 remedies Cover under 2-712: using good faith, reasonable time, reasonable substitution No Cover = damages under 2-713 In some rare cases Replevin 2-716 Incidental and consequential damages 2-715 Under UCC Seller is injured party 00/font> 2-703 Sellers remedies Withhold delivery Resell goods 搂 2-706 Seller may recover under 2-708 Seller may be entitled to action on price 2-709 Incidental Damages NOT consequential damages 2-710 Non-conforming goods 搂 2-714 If seller tenders goods without notifying the buyer, the buyer does not have to accept (perfect tender rule 2-601). If he (buyer) receives then he has to pay the K price (2-706) Unless buyer seasonably notifies seller of nonconforming goods, he cannot sue for B/K If he does notify he can sue for remedies under 2-714 Liquidated damages 2-718: Damages may be estimated in the agreement If the damages would be difficult to ascertain The amount must be reasonable Restitution for buyer 2-718 Lost Volume Seller 2-708(2) Emotional Damages 搂 353General Rule: Emotional damages are NOT awarded unless damages are patently foreseeable
VIII. LIMITATIONS ON DAMAGES
Avoidability Unforeseeability UncertaintyA. Avoidability 搂 350
Avoidable consequence rule
Injured party must make efforts to limit the damages Injured party is not entitled to recover for anything that could have been avoided. Cost to remedy defect Value that 00/font> attaches to cost of complete performance 搂 352 if uncertain 00/font> 搂 348 Cost of completing performance or diminution of value The court will choose the lowest amount Purpose of K Economic waste Willfulness or recklessness of breach Three factor balancing testB. Unforeseeable 搂 351
These naturally arise for B/K
Damages not recoverable if breaching party had no reason to foresee Loss may be foreseeable General damages Special damages Courts may limit damage to foreseeable loss as justice requires, to prevent undue enrichmentC. Uncertainty 搂 352
Damages are not recoverable for losses beyond any amount that the evidence can prove with reasonable certainty.
