Pre Midterm
UCC Gap Fillers
1. open price terms
2. place for delivery
3. time provision
4. time for payment
5. risk of loss
6. buyers right to inspection
This level of breach occurs when there are only minor deviations in performance and the non-breaching party is NOT relieved of their duties
Partial breach
Consequential damages can only be recovered if, at the time of contract formation, the defendant had reason to foresee the damages as this.
a probable result of the breach
A seller's lost profit remedy is available in three situations. Name them
1. lost volume seller
2. partially manufactured goods
3. intermediary who has yet to acquire goods after breach
Specific performance is never granted for this type of contract because it would be analogous to involuntary servitude.
After anticipatory repudiation, the non-repudiating party has three options. Name them
1. suspend performance
2. terminate and sue for breach or
3. treat the k as valid and wait until performance is due
What discharges duties under a k?
1. full performance
2. tender of performance that is rejected
3. agreement by the parties
4. valid defense or excuse
5. occurrence of a condition
6. total breach/repudiation by other party
This doctrine allows a seller who could have made both the original sale and the substitute sale to recover lost profits from the breached contract even after reselling the goods.
Lost volume
When a buyer accepts non-conforming goods, they are limited to this remedy, and must give the seller notice within a reasonable time or lose all remedies.
Warranty damages (difference in value of goods accepted vs value of goods warranted)
What does a losing k do to reliance damages?
Limits reliance damages if the breaching party can prove with reasonable certainty that the plaintiff would have lost money if the breached k was fully performed
Force Majeure rule
External forces outside the parties control
That are not reasonably foreseeable, and
That materially affect the performance of a party's duties
Under UCC perfect tender, if goods fail in any respect to conform to the contract, the buyer may do one of three things. Name them.
1. reject the whole;
2. accept the whole; or
3. accept any commercial unit and reject the rest
The measure of general damages for a contractor's breach in a construction contract is this.
reasonable additional cost incurred by the owner to complete and/or repair the construction
Lost volume seller test
1. The person who bought the resold item would have been solicited by plaintiff even w/o the breach/resale
2. The solicitation would have been successful
3. The plaintiff could have performed that additional cost
Exceptions to delegations of duties
Duties may not be delegated w/o the obligees consent if:
The k is personal services;
A special relationship exists between obligor and obligee;
The delegation results in a material change in performance or expectancy of performance; or
The k language prohibits delegation of duties
Secondary rules of interpretation
1. preference to treat the k as valid, lawful, and reasonable
2. conflicting clauses
3. ejusdem generis
4. interpretation against the drafter
This clause in a contract precludes the doctrine of substantial performance if a party misses the specified deadline.
time is of the essence clause
The measure of general damages for an employer's breach of an employment contract is this formula.
compensation under the k minus any amount earned (or reasonably earnable) by the employee in other employment
Under the UCC, the seller recovers the entire contract price (not just profit) in three situations. Name them
1. buyer accepted goods but hasnt paid
2. goods were damages in the control of buyer or
3. goods cannot be resold
A donee beneficiary may sue the promisee (Party B) only in limited circumstances. What are the two conditions that must be met?
(1) the promisee directly told the third party of the benefit they would receive, AND (2) the third party reasonably relied to their detriment on that promise (promissory estoppel)?
Determining the materiality of the breach
1. extent of nonbreaching partys loss of expected benefit
2. adequacy of money damages
3. loss suffered by breaching party
4. likelihood of cure by breaching party
5. lack of good faith and fair dealing
Sellers right to cure rule
If buyer rejects delivery of goods, seller has a right to cure improper tender by
(1) Time for performance has not passed
Seller must give notice they intend to cure and deliver conforming goods within the deadline set by the k
OR (2) Time for performance has passed
Second chance under limited circumstances if (a) buyer reasonably believes buyer would accept and (b) reasonably notifies the buyer
Market damages under the UCC are calculated as market price at this time and place, minus the contract price.
time the buyer learned of the breach at the place of tender
Under the UCC, if a seller does not deliver goods, the buyer's first option is to seek cover. Define cover damages.
difference between cost of cover (good faith) and the k price + incidental and consequential damages - expenses paid
HYPO: Company A and Company B form a contract where A promises B to pay B's debt of $5,000 owed to C. A later refuses to pay C. Who can C sue, and what are C's rights?
C is a creditor beneficiary. C can sue A (the promisor) for breach. C may also still sue B on the original debt but can only recover from one party (no double recovery). B (promisee) can also sue A, but any remedy flows to benefit C, not B