Remedies
Formation
Terms in the Agreement
SOF, Parol Evidence, Extrinsic Evidence
Consideration/Promissory Estoppel
Performance & Breach
Defenses
MISC
MISC 2
HYPOS!
100
in order, what types of damages are these? (100 points for each)
1. returns the promisor to their original position pre-K
2. puts the promisee in the position of a fully performed K
3. returns the promisee to their original position pre-K
1. restitution: returns the promisor to their original position pre-K
2. expectation: puts the promisee in the position of a fully performed K
3. reliance: returns the promisee to their original position pre-K
100
What kind of contract is a promise for a promise?
A bilateral contract.
100
If both parties attach different meanings to an ambiguous term and neither knows the other’s meaning, what is the result?
There was no contract formed because there was no meeting of the minds/mutual assent. (Raffles v. Wichelhouse "Peerless"; Oswald v. Allen "Swiss Coins").
100
This rule stops parties from adding earlier oral terms that conflict with a final written contract.
The Parol Evidence Rule.
100
Does reliance substitute for consideration?
Yes—promissory estoppel can enforce a promise lacking consideration.
100
If a seller tenders nonconforming goods but still has time left on the contract, what right can they assert to fix the issue?
Right to cure.
100
What defense applies when a party’s assent is induced by a false assertion that is fraudulent or material?
Misrepresentation.
100
a "volume seller" (whose supply meets/exceeds demand) may recover _____ + _____ from buyer's breach, even if resold (UCC §2-708(2), Neri)
lost profits + incidentals
100
Under Restatement §36, what events terminate an offeree’s power of acceptance?
(1) Rejection or counteroffer, (2) lapse of time, (3) revocation by the offeror, or (4) death or incapacity of either party.
100
Under the mailbox rule, acceptance becomes effective at this moment.
Dispatch
200
expectation damage formula
LIV (loss in value) + OL (other loss) - CA (costs avoided) - LA (loss avoided)
200
If someone responds to an offer by saying, “I will only accept if you XYZ,” what is that response called, and what happens to the original offer?
It is a counteroffer, and it terminates the original offer. (Ardente v. Horan)
The “mirror image rule”: an acceptance that varies terms of the offer is treated as a counteroffer, not a valid acceptance.
200
What do course of performance, course of dealing, and usage of trade all help courts determine?
The meaning of the parties’ agreement and how to interpret or supplement terms.
200
Under Restatement §201, whose meaning controls when parties disagree on a term’s meaning?
The meaning of the party who did not know of a different meaning controls, if the other party should have known.
200
What is the difference between a modification under common law and under the UCC?
Common law requires new consideration.
UCC requires good faith but not new consideration.
200
If a party reasonably fears the other will not perform, what UCC tool allows them to demand clarification?
Adequate assurance of performance.
200
What doctrine makes a contract voidable when the bargaining process or contract terms are extremely unfair?
Unconscionability.
200
Under Hadley v. Baxendale, damages are recoverable only if they meet this limitation.
Foreseeability
200
Why does restitution doctrine allow a breaching buyer to reclaim part or all of a deposit even though they committed the breach?
Restitution prevents the seller from receiving a windfall—an unearned gain exceeding actual economic loss.
If the seller suffers little or no damage from the breach, retaining the full deposit would give them a bonus rather than compensate a loss. (Vines v. Orchard Hills).
200
A landscaper contracted for six months at $300/month, worked four months, then breached the contract by quitting for a higher-paying job. The homeowner refused to pay anything. What is the landscaper entitled to?
He is entitled to $1,200—the value of the four months of work performed (restitution; prevents unjust enrichment).
300
A liquidated damages clause is unenforceable if it is a _____, meaning the amount is disproportionate to expected harm. (Wassener, Lake River, §356)
penalty
liquidated damages must reflect a good faith estimate of likely loss!
300
According to UCC §2-204, when do open terms not defeat contract formation?
When the parties objectively intended to contract and there is a reasonably certain basis for granting a remedy.
300
A manufacturer agrees to sell a retailer “all the steel parts it produces this year.” What kind of contract is this?
An output contract, because the seller promises to sell its entire production to the buyer.
Purpose: to secure a stable supply relationship between the buyer and the seller.
300
What must a UCC writing include at minimum to satisfy §2-201?
The UCC writing must indicate a contract for sale and state the quantity term.
300
Why was the wage increase in Alaska Packers unenforceable?
Workers demanded more money to perform duties they were already obligated to perform (pre-existing duty rule).
300
What happens when a party continues to perform even though a condition has failed to occur?
They have waived the condition.
300
What are the two elements for duress?
(1) Improper threat that gives party (2) no reasonable alternative
300
A buyer contracts for a limited-edition machine that is unavailable anywhere else. The seller breaches, and the buyer cannot cover by finding a substitute. What remedy may the buyer request under UCC §2-716?
Specific performance–the goods are unique or the buyer’s inability to cover shows “other proper circumstances.”
Courts grant this remedy only when the situation is "special, exceptional, or unique" enough that money damages are inadequate.
(Loveless v. Diehl (land), Cumbest v. Harris (stereo), Sedmak v. Charlie's Chevrolet (limited edition Corvette).
300
Why are advertisements generally treated as preliminary negotiations rather than offers?
Because a reasonable person understands that the advertiser does not intend to be bound to everyone who responds, requiring further assent before a contract forms. (Leonard v. Pepsico, Nebraska Seed Co. v. Harsh).
300
A flour company fails to deliver a shipment to a bakery. The bakery immediately buys flour at a slightly higher market price to avoid shutting down operations. Would the bakery be able to recover the difference?
Yes, the bakery reasonably mitigated by covering promptly, so it may recover the price difference. (Luten Bridge Co v. Rockingham Co; Parker v. 20th Century Fox).
400
DAMAGES are recoverable only if foreseeable: (Hadley, §351)
1. __________ of breach, or
2. __________
DAMAGES are recoverable only if a foreseeable: (Hadley, §351)
1. natural consequence of breach, or
2. special circumstance(s) that the breaching party would have reason to know
Courts never ask whether breach was foreseeable (they always assume breaches are possible); they ask whether the LOSS resulting from breach was foreseeable at formation.
400
In Nguyen v. Barnes & Noble, what was the court’s main reason for refusing to enforce the terms of the website’s browsewrap agreement?
There was no evidence the user had actual or constructive notice of the terms, so no valid assent.
400
In a requirements contract (where the buyer promises to purchase all the goods it requires from the seller), how is the quantity term determined?
The buyer’s actual good-faith needs. (Eastern Air Lines v. Gulf Oil)
Buyer cannot demand quantities unreasonably disproportionate to past needs or estimates.
Example: “I will buy all the jet fuel I require this year from you.”
400
A buyer orally orders custom-engraved trophies. The seller begins production. The buyer cancels. Is the contract enforceable?
Yes—specially manufactured goods fall under an exception to the SoF.
400
This type of consideration exists when a person gives up the right to sue based on a claim they honestly believe is valid, even if the claim later turns out to have no legal merit.
Good-faith forbearance as consideration. (Dyer v. National By-Products).
400
What doctrine applies when one party makes clear before their performance is due that they will not perform?
Anticipatory repudiation.
400
Both parties sign a contract believing a painting is an original, but it later turns out to be a replica. What defense could allow rescission?
Mutual mistake.
400
A food company agrees to buy “standard-grade sugar” from a supplier but does not define “standard-grade.” When a dispute arises, the supplier argues the term is too vague. Is the contract enforceable?
Yes—because both parties (food company and supplier) operate in the same industry, trade usage and UCC gap-fillers can supply a reasonable quality standard, allowing enforcement when the parties intended to contract.
400
A bakery and a grocery chain sign a note saying they “hope to work out a deal” and that any agreement will be “subject to a final written contract.” The note does not include key terms like price or quantity. The grocery chain later decides not to go forward. Is the note enforceable?
No—because the note shows no present intent to be bound and leaves out essential terms, so it does not create a contract. (Empro).
400
A football player breaches his contract with one team and signs with another. The original team wants a court order forcing him to play for them. What principle from Dallas Cowboys v. Harris applies?
Courts won’t order specific performance for personal service contracts, even when the services are valuable or unique (risks indentured servitude) but MAY grant an injunction preventing person from working for a competitor. (Dallas Cowboys v. Harris)
500
Under CCC v. Dempsey & §349, the court divides damages into four buckets: lost profits, pre-contract expenditures, attorney fees, and post-contract expenditures. Which two categories are generally recoverable?
(1) lost profits proven with REASONABLE CERTAINTY* and
(2) post-contract expenses incurred to further the deal (e.g. hiring temps only for that contract, purchasing materials to produce contracted goods)
damages must be foreseeable and reasonably certain, not speculative
*some variation of 'reasonable certainty' needed to get points
500
In unilateral contracts like Carbolic Smoke Ball, what completes acceptance?
Full performance of the requested act.
500
A factory agrees to sell a buyer “all the candles it produces in December.” The factory decides to triple production because demand is high. Must the buyer take the increased quantity?
Yes—as long as the increase is made in good faith, the buyer must purchase the seller’s entire output.
500
Under the Parol Evidence Rule, prior terms can come in to interpret the contract only when what is present?
Ambiguity
500
What doctrine allows enforcement when one party reasonably relied on a promise despite the lack of a writing?
Promissory estoppel may allow enforcement despite the Statute of Frauds.
500
A builder finishes 97% of a home, leaving only minor cosmetic work undone. The homeowner refuses to pay anything. What doctrine determines whether the builder can still recover?
The doctrine of substantial performance.
500
What defense applies when a party’s free will is overwhelmed because they were vulnerable and subjected to overpowering persuasion?
Undue influence, which invalidates agreements formed under vulnerability and overpersuasion.
500
What is the modern focus in evaluating certainty in contract formation?
Not whether any information is missing, but whether the court can determine breach and provide a remedy.
500
How does the UCC define a merchant for purposes of §2-205?
A person who regularly deals in goods of the kind involved in the transaction.
500
A bakery and a grocery chain sign a memo agreeing on the quantity of bread to be delivered each week and the delivery schedule. The memo states “details to follow,” but both parties begin preparing for the arrangement. Later, the grocery chain claims the memo was not a contract because it expected a longer, formal agreement.
Does the memo create an enforceable contract?
Yes—because the parties agreed on essential terms and their outward conduct showed present intent to be bound, even though they planned to finalize additional details later. (Arnold Palmer).
600
What two factors determine whether a stipulated damages clause is a reasonable estimate rather than an unenforceable penalty?
(1) Ascertainability of damages and (2) proportionality—meaning damages were hard to estimate and the amount chosen was a reasonable forecast. (Wassenaar, Lake River).
600
What do Empro and Arnold Palmer teach courts to look for when deciding whether parties intended to be bound?
Manifest intent to contract, not preliminary negotiation.
600
A farm signs an output contract to sell all the tomatoes it “produces this season.” A storm destroys the crop and the farm produces zero tomatoes. Is the farm in breach?
No—producing nothing due to good-faith circumstances (like weather) is permissible.
600
What’s the difference between a complete integration and a partial integration?
A complete integration has all the terms and BLOCKS extra ones; a partial integration is missing some terms and allows consistent additions.
600
A plumber agrees to fix pipes for $5,000. After opening the walls, unforeseen asbestos doubles the job difficulty. Parties agree to increase price to $7,500. Enforceable?
Yes—under §89, modification is fair due to unanticipated conditions.
600
What are the injured party's options in response to material breach?
(1) suspend performance and terminate the contract; OR (2) treat as partial breach and continue performance.
ALL breaches may give rise to claim for damages, whether material or not!
600
What mistake doctrine allows rescission only when both parties are mistaken about a basic assumption?
Mutual mistake.
600
What is the maximum time a firm offer can be irrevocable under UCC §2-205?
Three months.
600
If a student voluntarily sends a professor an unsolicited study guide and later demands compensation, why can't the student recover?
Gratuitous, unrequested services do not support restitution—there is no unjust enrichment when the provider expected no payment.
600
A contract sets a liquidated damages amount that seemed fair when signed, but the real loss at breach is much smaller. Under the prospective approach, should the court consider the smaller actual loss?
No—under the prospective approach, the court looks only at what things looked like when the contract was made. (i.e. it doesn't include the actual harm at breach–ONLY what was known at FORMATION)
Note: Cal. Civil Code §1671 is prospective! “under the circumstances existing at the time the contract was made”
700
Under Parker v. 20th Century Fox, what type of substitute employment is an employee NOT required to accept in order to mitigate damages?
different or inferior
700
Even when an option contract exists, what must the offeree still do to form a contract?
The offeree must still make a valid acceptance (clear and unconditional agreement to the terms of the offer) that meets the requirements for acceptance.
An option contract only prevents the offeror from revoking the offer—it does not create a contract by itself. The offeree still must accept the offer in a manner that satisfies the rules of acceptance for the underlying contract.
700
When do additional terms between merchants become part of a contract under UCC §2-207?
When they don’t materially alter the contract and the offeror does not object.
700
When both parties attach different meanings to a key term and neither knows of the other’s meaning (Raffles), what happens to the contract?
No contract is formed because there is no mutual assent to the same term.
700
A company promises an employee a bonus “for all your hard work.” The employee turns down another job because of that promise. The company later refuses to pay. The promise had no consideration. What doctrine might still enforce it, and why?
Promissory estoppel, because the employee reasonably and detrimentally relied on a clear promise, and enforcement may be needed to avoid injustice.
Promissory estoppel = Clear promise + foreseeable reliance + actual detrimental reliance + injustice avoided only by enforcement
700
A contractor fails to meet a condition for progress payments, but the owner knowingly continues paying without objection. What legal consequence follows?
The owner has waived the condition through continued performance and acceptance. (Clark v. West)
700
A buyer signs a contract after the seller makes a statement that is literally true but strategically omits a crucial fact that would change the buyer’s decision. What defense could the buyer assert?
Misrepresentation by omission when disclosure is necessary to prevent a misleading impression.
700
A photographer fully performs a contract and delivers the images, but the client fails to pay. Can the photographer choose restitution damages instead of expectation?
No–under Restatement §373, once the photographer (the injured party) has fully performed and the only remaining obligation is payment, restitution is not available. The photographer is entitled to the contract price (expectation damages)
700
How do courts judge intent?
Objective/outward manifestations (what parties said or did). How a reasonable person would interpret the exchange. (Embry v. Hargadine, Lucy v. Zehmer).
700
A contract’s liquidated damages clause seemed reasonable when signed, but the actual loss at breach is much smaller. Under the prospective-retrospective approach, would the court look only at formation or also at actual damages?
Under the prospective-retrospective approach, the court would look at both what the parties anticipated when they made the contract (expected loss at formation) and what the actual damages turned out to be at breach.
(This is what the courts in Wassener did. Restatement §356 also falls under prospective-retrospective approach because it mentions both “anticipated or actual” loss caused by the breach and the difficulties of proof of loss).
800
A business signs a hybrid contract (goods + non-goods) for consulting services plus specialized goods. Services are the majority of the deal. After the goods turn out defective, the buyer sues. Does the UCC's Article 2 still apply to the goods portion?
Yes. The UCC's Article 2 still applies to the goods portion of a hybrid contract even when non-goods predominate.
800
A seller offers to sell a laptop for $800. The buyer replies, “Would you consider taking $700?” Later, before the seller responds, the buyer says, “Okay, I accept the $800.” Is the acceptance valid, or was the original offer terminated?
The acceptance is valid because “Would you consider taking $700?” was an inquiry, not a counteroffer, so the original $800 offer remained open.
800
A seller knows the buyer interprets “premium apples” to mean a specific grade, but the seller uses a different meaning and stays silent. Whose meaning prevails?
The buyer’s meaning, because the seller knew of the misunderstanding and failed to clarify.
800
A contract appears complete, but one party argues that a term has a special meaning in the industry. What type of evidence is this, and is it potentially admissible?
Extrinsic evidence (usage of trade), and yes — to interpret meaning, not add terms.
800
A father promises his daughter $50,000 because he “feels she deserves it.” She quits her job expecting payment. Enforceable?
Yes under promissory estoppel (reliance).
800
What must a party have before requesting adequate assurance?
The party must have reasonable grounds for insecurity about the other side’s performance.
800
A seller mistakenly types $5,000 instead of $500,000 in a contract. The buyer instantly accepts and refuses to correct the price. Under what circumstances may the seller rescind?
Rescission is allowed for unilateral mistake where the other party knew or should have known of the error.
800
A tutor orally promises to teach for 18 months, and the student orally promises to pay $4,000 at the end. After the tutor fully performs, the student refuses to pay because there was no writing. Can the tutor recover?
Yes—full performance by one party can remove the contract from the Statute of Frauds.
800
Under UCC §2-201(2), what happens when a merchant receives a written confirmation and fails to object within 10 days?
A merchant’s confirmation satisfies the Statute of Frauds against the recipient. It proves there was a contract.
800
What must a writing generally include to satisfy the Statute of Frauds?
A sufficient writing must identify the parties, the subject matter, and indicate a contract was formed.
900
A doctor performs life-saving emergency services to an unconscious person with no opportunity for consent. The person eventually dies. Can the doctor still recover for damages? Why or why not?
Yes–the law imposes a quasi-contract to prevent unjust enrichment, and recovery is for the reasonable value of the services, not the patient’s survival or the operation’s success. (Cotnam v. Wisdom Supreme Court).
900
A homeowner emails a contractor with a detailed offer for renovation work. Before the contractor accepts, the homeowner unexpectedly passes away. The contractor later sends an acceptance. Is the contractor’s acceptance effective?
No—the offer terminated upon the homeowner’s death because an offer ends when the offeror dies or becomes incapacitated.
900
A contract says “Seller will provide software” but does not specify the version number. Both parties intended the latest version, and this is standard in the industry. Will a court accept that understanding?
Yes—usage of trade and intent allow courts to fill minor gaps.
(UCC §1-303 lets courts interpret contracts using the parties’ behavior and industry customs. In order: express terms > course of performance > course of dealing > usage of trade)
900
What must a writing generally include to satisfy the Statute of Frauds?
A sufficient writing must identify the parties, the subject matter, and indicate a contract was formed.
900
A homeowner offers a gardener $500 if the gardener “continues doing exactly what you have already agreed to do under our current contract.” The gardener keeps performing the same duties and later demands the extra $500. Is the homeowner’s new promise enforceable?
No—performing a pre-existing duty is not valid consideration, so the new promise is unenforceable.
900
What do we call a breach that allows the nonbreaching party to collect damages but still requires them to complete their side of the contract?
A partial (immaterial) breach.
900
A music festival is canceled due to a sudden government ban on large gatherings. Vendors can still technically show up, but no customers may attend. What defense excuses their obligations?
Frustration of purpose because the core value of performance has been destroyed. (purpose is gone)
900
Free question :)
We got this!!!!!
900
When a written contract is a complete integration, when may a court admit “consistent additional terms” from prior negotiations?
A court may not admit them because a complete integration is the exclusive statement of all terms. HOWEVER, Even in a complete integration, courts may admit parol evidence to (1) interpret AMBIGUOUS terms, (2) show fraud/illegality/duress, (3) prove a condition precedent, (4) to show writing was not intended as a final agreement or (5) explain course of dealing/performance/usage (UCC only).
900
A seller receives a justified demand for assurance and responds after 45 days. How does the UCC treat the delay?
A response after more than 30 days is deemed inadequate and constitutes repudiation.
1000
Under Vines v. Orchard Hills, what two elements guide the court in assessing whether a liquidated damages clause is enforceable?
Reasonableness requires both difficulty of ascertaining damages (ascertainability) and proportionality between stipulated damages and expected harm.
1000
A golf company and a manufacturer sign a letter listing the price, product design, and production schedule. It says they will “prepare a full contract later.” Before that happens, the manufacturer backs out. Does the letter of intent possibly count as a contract?
Yes, because it includes essential terms and shows outward intent to be bound. (Arnold Palmer).
A letter of intent can be binding if it shows agreement on essential terms and an outward intent to contract.
1000
A buyer agrees to purchase “regular shipments” of goods. In past contracts, “regular shipments” always meant every two weeks. What meaning applies?
Every two weeks—course of dealing can give meaning to uncertain terms.
(UCC §1-303 lets courts interpret contracts using the parties’ behavior and industry customs. In order: express terms > course of performance > course of dealing > usage of trade)
1000
What are the three ways courts treat different terms in acceptance or confirmation under §2-207?
(1) knock-out rule: conflicting terms cancel each other out; replaced by UCC gap filler provisions if necessary
(2) ignore different terms in acceptance/confirmation. OFFEROR's terms control
(3) treat different terms same as additional terms under 2-207(2) (aka as proposals for modification of contract).
BETWEEN MERCHANTS, incorporated into contract automatically unless §2-207(2)(a)-(c) exception:
(a) the offer says “only my terms,”
(b) the term would materially alter the deal, or
(c) the offeror objects
1000
A contractor is halfway through a building project when global steel prices unexpectedly triple. Contractor requests a 20% price increase, showing evidence that the project will otherwise cause massive loss. Owner agrees in writing. Is the modification enforceable?
Yes under Restatement §89—unanticipated circumstances + fair modification.
No if contractor threatened breach without justification → economic duress.
1000
When does a breach permit the other party to terminate the agreement?
When breaching party has not substantially performed or is the equivalent to a failure of a constructive condition on the other party's remaining duties
1000
A manufacturer contracts to ship goods by a specific cargo ship. Before loading, the ship sinks unexpectedly. All alternative shipping routes cost 12× more due to a sudden embargo.
Impracticability, because performance has become impossible or unreasonably burdensome due to an unforeseen event.
(ability is gone)
1000
A contract says the contractor must pay for “all loss,” but the contractor claims both parties meant only third-party loss. Can extrinsic evidence come in?
Yes—PG&E allows evidence to show the language is reasonably susceptible to that meaning.
1000
If the seller fails to deliver conforming goods and the buyer chooses not to “cover,” what remedy remains available to compensate them for the breach?
The buyer may seek market-price damages, measured by the difference between the market price at the time of breach and the contract price.
1000
Two businesses sign a fully integrated contract for the supply of “premium-grade steel.” The buyer introduces evidence of trade usage showing that “premium-grade” in the steel industry means a specific ASTM rating. The seller argues parol evidence bars it. Is the evidence admissible?
Yes—usage of trade may be used to interpret terms even in a complete integration.