USE COMMON SENSE!!!!

Make conclusions while you are reading fact patterns

STUDY OPTIONS, OPTION K S, FIRM MERCHANT OFFER RULES and how it deviates form the common law 1) 2) 3) 4) Identify subject matter of K immediately Circle dates Note if K is oral or in writing Note terms of offer and acceptance

5 Key areas of UCC 1) K formation 2) Defenses to formation & SOF s 3) K terms (condition questions, shifting questions, mistake, parole evidence) 4) Third party issues 5) Breach and Remedies 1) answer K s question according to the prevailing model rules, pick an answer that is the OPPOSITE of the common law a. modern trend moral/past consideration is a valid substitute for consideration under the prevailing modern trend (not a valid substitute at common law) b. preexisting duty rule does not apply when duty owed to a third person 2) moral obligation a. if you have a debt that is barred by the SOL s or bankruptcy proceeding, you wont get paid b. however, if the debtor IN WRITING promises to pay the amount owed or a lessor amount than the debtor will be obligated to pay amount indicated in that writing i. moral obligation is the indicator that obligates debtor to pay you due owe money but don t have to pay because of a technical difficulty but you put in writing that you promise to pay, due to moral obligation, you will be obligated to pay the money you promised to pay as evidenced by that writing 3) prior dealings a. leasing company had never objected before b. in absence of a notification with a good faith reason why the agreement is cancelled, there is a binding K

c. quasi-k only available when no agreement b/w parties d. this is a K there is a writing and agreement by past prior dealings 4) oral agreement a. valid binding distributorship agreement b. oral k s are fine as long as it doesn t violate the SOF s The gourmet food store owner is likely to prevail, because she and the corporation s president formed a contract when they agreed on all salient points after negotiations. One element of their agreement was that the terms would be put in writing, a process sometimes called memorial- izing the agreement. The writing does not constitute the agreement itself, but is merely a written record of it. Another element of their oral agreement concerned when it would take effect: on completion of the memorialization. The general counsel s failure to initial the writing, whether deliberate or inadvertent, was not the failure of a condition, but rather a breach of the oral agree- ment that he would do so. (A) is incorrect because the oral agreement was already in effect at the time the writing was mailed. The processes of offer and acceptance took place during the oral negotiations. Even if the mailing of the writing could somehow be seen as an offer, there are no facts, such as detrimental reliance, that show it to be irrevocable. (C) is incorrect because the better view, as described above, is that the writing was a memorial of the existing oral agreement. Even if the requirement of the general counsel s initialing were an express condition, the corpora- tion s president would probably not be permitted to prevent the occurrence of the condition and then claim the benefit of its nonoccurrence. (D) is incorrect because acceptance had already taken place on the parties reaching an oral agreement. This choice appears to invoke the mailbox rule but gets it wrong, since a mailed acceptance is generally effective on posting (which occurred prior to the phone call), not on receipt. In any event, the mailbox rule is not applicable to these facts.

5) valid outputs K a. if they had told the k can be cancelled at any time, that would be illusory b. as long as a reasonable time frame cant cancel, not illusory 6) fine line rule whenever a general contractor relies on the number (the bid) of the subcontractor in calculating their bid to the developer/owner, it creates an OPTION between the general contractor and the subcontractor a. general contractor relied on the subcontractors bid in her bid to the developer subcontractor liable b/c i. subcontractor created an option to be held open ii. an option needs no consideration (option K s do)

7) another K b/w a general and subcontractor a. general relying on electricion s bid b. general decide to go with a different electricion c. general contractor is allowed to go to other bidders subcontractor only liable if general contractor accepts bidders offer (relies on bid) 8) don t go with unjust enrichment ever when their actuall is a K unjust enrichment applies when no agreement b/w parties 9) TPB is a TPB when ACTUALLY mentioned in the K

a. Vesting question i. Wife turned down work from 2 prospective clients relied on agreement that she would be getting so much work form the mechanic there is your vesting b. can she enforce the K? i. NO her husband BREACHED the K ii. IF THERE IS A BREACH BY ONE OF THE CONTRACTING PARTIES, THE K IS SUSPENDED AND OTHER PARTY DOES NOT HAVE TO LIVE UP TO HIS END OF THE BARGAIN The facts indicate that the fleet owner and the mechanic entered into a valid contract that required the mechanic to render some performance to the wife. The wife is an intended third-party beneficiary because (i) she was expressly designated in the contract, (ii) some performance is to be made directly to her, and (iii) she stands in such a relationship to the promisee (she is the fleet owner s wife) that an intent to benefit her can be inferred. She can enforce the contract because her rights have vested; she has materially changed position in justifiable reliance on the promise by turning down work from two prospective clients because of the time the mechanic s ads would take. However, when the third-party beneficiary sues the promisor on the contract, the promisor may assert any defenses to formation or performance that he would have been able to assert against the promisee, including failure of a condition. The mechanic s promise to perform by placing all of his ads with the wife during the term of the agreement was dependent on the condition that the fleet owner have all of his buses repaired by the mechanic. The fleet owner s failure to fulfill this condition excused the mechanic s duty to continue to place ads with the wife, and the mechanic will be able to assert this defense to performance against the wife. (A) is incorrect because
the wife s partial performance does not create a duty for the mechanic to continue placing the ads. The mechanic s duty is also dependent on performance by the fleet owner. (B) is incorrect because the wife s detrimental reliance only establishes that her rights in the contract have vested. Thus, she can bring a contract action against the mechanic, but the mechanic will have a defense. (C) is incorrect because a third party can acquire rights in a contract as an intended beneficiary even though she provided no consideration. The fact that the wife may be a donee beneficiary would not prevent her from enforcing the contract.

10)astrology didn t find out about the agreement b/w singer and designer until AFTER singer broke off agreement with designer a. if TPB didn t know about their rights their rights couldn t have vested 11)ALL K S ARE ASSIGNABLE; ALL K S ARE DELEGABLE a. EXCEPT i. Unique personal services K s AND ii. Long term requirements K s b. when you assign your rights, you receive NO further benefit form those rights c. when duties are delegated, the delegating party remains secondarily liable 12)bank assigned the right to get paid from the job done by the mechanic a. only the bank can sue for that money b. bank can sue car dealer b/c car dealer is secondarily liable as a surety c. car collector is primarily liable as the principal d. the bank is the third party beneficiary b/w the car dealer and car collector 13)shipment of nonconforming goods a. perfect tender rule (2-601) b. seller must deliver perfect tender to the buyer i. if no perfect tender, it is acceptance and breach ii. EXCEPTION if nonconforming goods are shipped w/an accommodation = counteroffer that b can accept or reject BUT CANNOT SUE UNDER NO BREACH OF K

14)BATTLE OF THE FORMS UCC a. B/W MERCHANTS i. Material alteration SO doesn t come part of the K ii. A change is material if it effects Remedies, K breach iii. Here, we have an $8,000K and one party is trying to limit liability to $200 the additional term is material it changed liablility it does not become part of the K because it would have substantially changed the allocation of economic risks and benefits and impaired an otherwise available remedy 15)K Modifications a. Common law

NEED CONSIDERATION for MODIFICATION

b. UCC NO CONSIDERATION for MODIFICATION if entered into in GOOD FAITH i. UNLESS within SOF s and violates SOF s ii. Here, it was a sale of goods for $500 or more and modification was in writing need a writing 16) Detrimental reliance (promissory estoppel) a. party making the promise MUST anticipate the other party reasonably relying on that promise