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Inside Contract Law
2
EDITORIAL ADVISORS
Vicki Been
Elihu Root Professor of Law
New York University School of Law
Erwin Chemerinsky
Dean and Distinguished Professor of Law
University of California, Irvine, School of Law
Richard A. Epstein
James Parker Hall Distinguished Service Professor of Law
University of Chicago Law School
Peter and Kirsten Bedford Senior Fellow
The Hoover Institution
Stanford University
Ronald J. Gilson
Charles J. Meyers Professor of Law and Business
Stanford University
Marc and Eva Stern Professor of Law and Business
Columbia Law School
James E. Krier
Earl Warren DeLano Professor of Law
The University of Michigan Law School
Robert H. Sitkoff
John L. Gray Professor of Law
Harvard Law School
Kent D. Syverud
Dean and Ethan A. H. Shepley University Professor
Washington University School of Law
Elizabeth Warren
Leo Gottlieb Professor of Law
Harvard Law School
3
Inside Contract Law
What Matters and Why
Michael B. Kelly
Professor of Law
University of San Diego School of Law
4
© 2011 Aspen Publishers. All Rights Reserved.
http://lawscholl.aspenpublishers.com
No part of this publication may be reproduced or transmitted in any form or by any means, electronic or
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publication should be mailed to:
Aspen Publishers
Aspen Publishers
PO Box 990
Frederick, MD 21705
1234567890
E-ISBN: 978-1-4548-2763-4
5
E-ISBN: 978-1-4548-2763-4
1. Contracts—United States—Outlines, syllabi,etc. I. Title.
KF801.Z9K455 2011
346.7302—dc22
2010048024
6
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7
To the little men who brighten my days
and inspire my thoughts, Logan and Preston
8
Summary of Contents
Preface
Acknowledgments
PART 3. REMEDIES
Monetary Relief
Injunctions and Specific Relief
9
Contents
Preface
Acknowledgments
10
Chapter 2. Assent and Definiteness
A. Offer and Acceptance
B. Offers
1. The Objective Approach and Its Implications
a. Misunderstood Assent
c. Form Contracts
2. The Master of the Offer
3. Definiteness
a. Definiteness as a Requirement of Formation
b. Definiteness as a Requirement of an Offer
4. Written Memorial Contemplated and Preliminary Agreements
a. Written Memorial Contemplated
b. Preliminary Agreements
5. Advertisements
6. UCC: Auctions
C. Revocation
1. Receipt
2. Option Contracts and Irrevocable Offers
3. UCC: Firm Offers
D. Acceptance
1. Acceptance or Counteroffer?
a. Rejection and Counteroffer: The Mirror Image Rule
b. Acceptance: Proposal to Modify
c. Counteroffer Without Rejection: Equivocal Communications
2. Timing of Assent
a. Time of Acceptance: The Mailbox Rule
b. Lapse of Time
c. Rejection and Counteroffer
d. Death or Incapacity
e. Conditions
3. Acceptance by Performance
a. Offers Inviting Promise or Performance
b. Offers Requiring Acceptance by Performance: Unilateral Contracts
4. Acceptance by Silence
a. Offeree Intends Silence as Acceptance
11
b. Prior Dealings
c. Accepting Benefits Without Objection
5. UCC: The Battle of the Forms
a. Assent Under §2-207
b. Confirming Memoranda
c. Applying §2-207
d. Proposed Revisions to §2-207
12
5. Ratification
C. Incapacity
1. Guardianship
2. Mental Illness or Defect
a. Mental Illness or Defect
b. Severity of the Mental Illness or Defect
c. Incapacity Caused by the Mental Illness or Defect
d. Notice of the Incapacity
3. Intoxication
4. Infancy
5. Restitution for Incapacity
6. Disempowerment
D. Misrepresentation
1. Structure of Misrepresentation
2. Initial Step: Identify the Error
3. Misrepresentation
a. Assertions Inferred from Promises and Opinions
b. Assertions Inferred from Silence
4. Inducement
5. Fraudulent or Material
a. Material
b. Fraudulent
6. Justifiable Reliance
a. Reliance on Facts
b. Reliance on Opinions
7. Third-Party Misrepresentations
8. Misrepresentation Affecting Validity
E. Mistake
1. Mutual Mistake
a. Mistake
b. Shared Mistake
c. Mistake Involving Existing Facts
d. Mistake of Basic Assumption
e. Material Effect on the Exchange
f. The Risk of the Mistake
13
2. Unilateral Mistake
3. Misrepresentation or Mistake
F. Duress
1. Identify the Threat
2. Improper Threat
a. Crime or Tort
b. Criminal Prosecution
c. Abuse of Civil Process
d. Breach of Good Faith Under a Contract
e. Threats Applicable If the Deal Is Unfair
3. Inducement
4. Lack of Reasonable Alternatives
5. Duress by Third Parties
6. Physical Compulsion
G. Undue Influence
1. Unfair Persuasion
2. Vulnerability
a. Domination
b. Relation of Trust
3. Inducement
4. Third-Party Undue Influence
14
b. Factors Against Enforcement
2. Working with the Rules
3. Commonly Discussed Policies
a. Policies Involving Families
b. Policies in Restraint of Trade
4. Restitution Under Public Policy
D. Statutes of Frauds
1. Agreements to which the Statute of Frauds Applies
2. Adequacy of a Signed Writing
a. UCC: Content of a Writing
b. Content of a Writing Under the Common Law
c. UCC: Silence as a Writing
3. Exceptions to Statutes of Frauds
a. Full Performance
b. Restitution for Partial Performance
c. Action in Reliance
15
b. Resolving Internal Conflicts
c. Primacy of Express Terms
d. Presumption of Legality
e. Interpretation Against a Party
B. Parol Evidence
1. Integration
2. Prior and Contemporaneous Communications
3. Permissible Purposes
4. Extrinsic Evidence and Misrepresentation
5. Extrinsic Evidence and Interpretation
a. Confining Extrinsic Evidence
b. Expanding Ambiguity
C. Mistake of Integration; Reformation
D. Implied Duties (Gap Filling)
1. Generally
2. UCC Default Terms
a. Open Price Term
b. Place for Delivery
c. Time for Performance
d. Time for Payment
E. Good Faith
F. UCC: Warranties
1. Express Warranties
2. Implied Warranties
3. Disclaiming Warranties
G. UCC: Requirements and Output Contracts
1. Illusoriness and Definiteness
2. Limiting the Quantity
a. Good Faith
b. Unreasonably Disproportionate
c. Unexpectedly Small Quantities
3. Exclusive Dealing and Best Efforts
16
2. Identifying Conditions
3. Effect of Conditions
4. Interpretation: Condition or Promise
5. Waiver and Estoppel
6. Judicial Forgiveness
7. Subsequent Events Altering Duties
B. Order of Performance
C. Material Breach and Substantial Performance
1. Identifying Material Breach
a. Extent of the Loss
b. Adequacy of Compensation
c. Extent of Breaching Party’s Forfeiture
d. Likelihood of Cure
e. Extent of Good Faith
2. Suspension and Discharge of Performance
a. Factors Justifying Cancellation
b. Effect on Substitute Arrangements
c. Timeliness as a Contract Requirement
3. Effect of Discharge
a. Claims by the Breaching Party
b. Damage Claims by the Discharged Party
c. Restitution Claims by the Discharged Party
d. Restatement (Third) and Rescission for Material Breach
4. Divisibility
D. UCC: Perfect Tender
E. Prospective Nonperformance (Repudiation and Assurances of Performance)
1. Identifying Repudiation
2. Effect of Repudiation
3. Retraction
4. Remedies After Repudiation
5. Assurances of Performance
F. Excuse: Impracticability and Frustration
1. Impracticability
2. Establishing the Excuse of Impracticability
a. What Makes Performance Impracticable?
b. When Is Nonoccurrence of an Event a Basic Assumption?
17
c. When Is Performance Required Despite Impracticability?
d. When Is a Party Responsible for Impracticability?
e. Existing Impracticability
3. Frustration
a. Establishing Frustration
b. What Substantially Frustrates the Parties’ Principal Purpose?
c. Existing Frustration
G. Untangling Claims of Excuse
1. Procedure for Claiming Excuse
2. Partial Excuse
3. Temporary Excuse
4. Restitution Following Excuse
PART 3. REMEDIES
18
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