UCC
Battle of the Forms (UCC...)
What is 2-207?
The four TYPES of misrepresentation.
Misrepresentation types:
A lie
Concealment
Non-disclosure
Half truth
They sold the farm for a joke.
Lucy v. Zhemer
Illusory Promise
something for nothing
When one cannot suspend their performance or cancel contract.
Minor Breach.
2-207(3), aka...
The knockout rule.
Rolling Contracts
Goods are received/paid for before all of the terms have been received by buyer.
Different judicial approaches to these types of contracts (contrast Hill and Klocek – same facts, different outcomes)
They didn't get the house because they asked about the furniture.
Ardente v. Horan
Counteroffer Rule
When a seller agrees to sell every item of a given product that it makes to a particular buyer.
Output Contract: UCC 2-306
The 3 excuses.
Excuses: something changes after the parties entered into the contract that was not foreseen.
Impossibility, Impracticability, Frustration of Purpose
Describe a Firm Offer: UCC 2-205
1) by a merchant,
2) in a signed writing, that
3) will be held open/is not revocable for lack of consideration,
4) for a reasonable time, (but no longer than 3 months; but any such term of assurance on a form supplied by the offeree must be separately signed by the offeror).
The four ELEMENTS of Misrepresentation: R-2 164(1)
1. There must be a misrepresentation
2. Misrepresentation must be either fraudulent or material
3. Misrepresentation by one party must induce the other party to manifest assent
4. Other party’s reliance on misrepresentation must be justified
The oil company hated Hawaii's paving industry customs.
Nanakuli Paving v. Shell
an example of how an express term that seems like it gives one party (Shell) unlimited discretion (to set the price) can be cut down by usage and modified by good faith.
When a buyer agrees to purchase all of its requirements only from one seller
Requirements Contract
It is intended to put non breaching party into the same economic position they would have been in had there been no breach,
Expectation Damages.
Exceptions to the Statute of Frauds?
(UCC 2-201(2) (merchant exception) and
2-201(3)(a) (specialty production that can’t be resold) and
2-201(3)(b) (admission in court that there was a K – e.g. Conagra v. Nierenberg).
Option Contract
Where an offer invites an offeree to accept by rendering a performance does not invite promissory acceptance, an option contract is created when the offeree tenders or begins the invited performance.
e.g. Offer asks for painter to paint a fence and payment to be made after the painting of the fence. The painter (offeree) can chose to paint or not.
Ebooks won.
Random House v. Rosetta Books.
A contract in which the term of price is not agreed upon at the outset.
Open Price K
Damages that are one step removed from the performance of the K
Consequential Damages
(included in expectation damages).
Under UCC Parol Evidence Rule 2-202, this kind of evidence is always let in
Usage
R2-36 - Methods of Termination of Power of Acceptance
A rejection or counteroffer
Which must be distinguished from: a mere inquiry, an acceptance coupled with a proposal for another agreement, or a grumbling acceptance.
Mirror Image Rule (common law rule) – if acceptance is not unequivocal and does not exactly mirror the offer or in any way suggests that it is conditional on new terms being included in the deal, it is not an acceptance but a counteroffer. At common law, this is true even if the new terms are minor (e.g. Ardente v. Horan)
Lapse of Time
Time specified in offer or
If no time is specified, a reasonable time under the circumstances.
Revocation (by offeror) UNLESS offer is irrevocable OR offer has already been accepted.
Revocation can be express or implied / indirect (implied = if offeror takes a definite action inconsistent with an intention to enter into the proposed contract and offeree acquires reliable information to that effect)
Death or incapacity of the offeror or offeree.
A claimant must show that a consequential damages loss was foreseeable to both parties at the time of contracting in order to recover.
Hadley v Baxendale
When are posted communications effective?
1. When received in the case of: offers, rejections, counteroffers, and revocations.
2. When sent in the case of: acceptance unless offeror provides otherwise in offer (mailbox / dispatch rule).
money damages awarded to the aggrieved party that attempt to put the breaching party in the same position in which the breaching party would have been if there had never been a contract
(i.e. return to the aggrieved party money damages equal to the value of goods and services conferred upon the breaching party).
Restitution Damages.