Is there a contract?

1. Note whether this transaction is governed by UCC or the Restatement.

2. Does the Statute of Frauds apply? The contract must be in writing if it is in regard to land, if by its nature it takes more than one year to perform, or if it is in regard to goods of greater than $500 value.

Was there an Offer? Were the terms specific? Did the offer indicate the party’s intent to be bound?

Was there an Acceptance?

Was there acceptance to exact terms of the offer pursuant to mirror image rule? If not, can UCC 2.207 or the parties’ performance

be used to imply a contract?

Was the acceptance made according to offer’s to instructions (note silence can never be acceptance)?

Was the acceptance made within time specified? Does the mailbox rule apply?

No

NoNo contract

Yes

No Was there reliance so that §90 Promissory Estoppel applies?

Was there benefit conferred?

No

Was there Consideration? Was there legal detriment?

Are all of the material terms agreed on?

YesYes

Yes No

THERE IS AN ENFORCEABLE CONTRACT What are Material Terms? Unilateral or Bilateral? Was there an outright

breach or is it another problem?

Were parties far enough in negotiations to implicate a contract to negotiate in Good Faith? Was such a contract explicit?

Was an option created by partial performance of acceptance?

Yes

No

No

Yes

NoYes

NoYes

Yes No

Yes

Was there Substantial Breach?

Was there fraud, duress or unconscionability?

Breach is excused

Was there a change in circumstances or failure of a substantial assumption of the contract?

Breach is excused

Could there be a waiver? Was the breach excused by implication of past performance?

Breach is excused

Breach unexcused; victim can recover – GO TO DAMAGES

Is there vagueness/ambiguity in contract?

Can the Parol Evidence rule apply to clarify situation?EXCEPTIONS TO PAROL EVIDENCE -

fraud/duressunclear termsscribner’s error

Can the Courts fill in vague/ambiguous terms (Note: the court will not fill in material terms) according to:

Writing in the contract Past performance of the contract Past dealing in other contracts Usage/Custom

If courts cannot interpret contract themselves and parol evidence cannot be admitted, the contract will be void for vagueness.

NoYes

Yes No

Unilateral R153Mutual

R152

Was there Mistake?

Was the mistake Scribner’s Error or General Unilateral?

Was the mistake as to a basic assumption?

Contract Voidable

Contract enforceableRisk allocation: R154, always restitution and fairness Did the other party

know or have reason to know of the mistake?

If parties have agreed to terms, and only the written document is defective, a meeting of minds occurred and the contract is enforceable on original understood terms. R155

S.E.G.U.

Contract is voidable under R153

Contract is voidable if party does not bear risk of mistake by R154. Also note that risk is allocated depending on fairness; court will also see whether risk has been allocated contract itself.

Was there a SURPRISE?

If contract term is unconscionable, court will refuse to enforce it. R208, U2.302

Could also argue breach of good faithU1.203, R 205

Did dealings breach Good Faith?

There is a warranty of good faith in every contract negotiation process

R205, U1.203

Yes No

No Yes

No Yes

No Yes

If covered by UCC, 2.209

If covered by Restatement, §148

Is MODIFICATION or WAIVER an issue?

Under the UCC, no consideration is necessary for a waiver if it is in good faith AND it is written

Was there consideration given for the modification?

Was the modification sought in good faith due to changed circumstances?

Modification is enforceable

Modification is enforceable

Was the modification based on Waiver?

Modification is unenforceable

Was waiver revoked with sufficient notice?

Waiver is enforceable

Waiver properly revoked; modification unenforceable

No Yes

Yes

No

No Yes

Equitable – when remedy at law is inadequate

Legal

Remedies

DAMAGES SPECIFIC RELIEF

Injunction Specific Performance

Look to Expectation Damages which are the benefit of the bargain, intended to put the victim where he would be if the contract had been performed:

Are they either: $0 or negative in amount; Uncertain (i.e., new venture); or Excessive given circumstances?

Expectation Damages awarded

Reliance damages awardedintended to put the victim where he would be had the contract never been made. These can include: Lost opportunity Difference between market

value and value as is

Is there a liquidated Damages Clause in the contract?

Are the liquidated damages a fair estimate of expectation damages?

Court will enforce

liquidated damages

Is specific performance of the contract will be awarded ONLY if:

Contract is clear The remedy at law is

inadequate There is mutuality of

performance Uniqueness makes it

impossible to assess damages

NOTE: No punitive damages No damages for mental distress Has everyone mitigated/covered? RESTITUTION always an option

NoYes

NoYes

Restitution Damages

Has there been: Unjust Enrichment; Partial Performance; OR Benefit knowingly conferred but

not under contract?

No Restitution damages Is Plaintiff the breacher?

Damages will be the amount of benefit conferred, regardless to whether Lower price was specified in contract; or Contract would have resulted in a loss

Damages will be benefit conferred but limited to contract price