Contracts - MEE Rule Statements to Remember Flashcards
Can a party recover restitution if they breached, but still conferred a material benefit on the other party?
Most courts hold that recovery in restitution is **only available **if the breach **was not willful. **
Consequently, a party who intentionally furnishes services that are materially different from what was promised cannot recover anything in restitution unless the non-breaching party has accepted or agreed to accept the substitute performance.
What is a material breach?
a material breach of contract occurs when the non-breaching party does not receive the substantial benefit of the bargain. The material breach allows the non-breaching party to withhold any promised performance and to pursue remedies for the breach, including damages.
The breaching party who failed to substantially perform generally cannot recover contract damages, but may be able to recover through restitution.
Construction Contracts - Measure of Damages
general measure of damages for a contractor’s failure is:
(1) [ contract price ] - [ cost of construction by another builder + any progress payments made to the breaching builder + compensation for delay in completion of the construction ]
When will damages constitute waste?
When a breach results in a defective or unfinished construction, if the award of damages based on the cost to fix or complete the construction would result in economic waste, then a court may instead award damages equal to the diminution in the market price caused by the breach.
Economic waste occurs when the cost to fix or complete the** construction is clearly disproportional** to any economic benefit or utility gained as a result.
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Expectation vs. Compensatory Damages
Compensatory damages are meant to compensate the non-breaching party for actual economic losses.
Expectation damages are intended to put the non-breaching party in the same position as if the contract had been performed. Expectation damages must be calculated with **reasonable certainty. **
Nonbreaching party: duty to mitigate
A party to a contract must avoid or mitigate damages to the extent possible by taking steps that do not involve undue risk, expense, or inconvenience.
A non-breaching party is held to a standard of reasonable conduct in preventing loss. The non-breaching party’s failure to mitigate does not give the breaching party a right to sue the non-breaching party for such failure; it only reduces the non-breaching party’s damages recovery.
Article 2 - definition of “goods”
Article 2 of the Uniform Commercial Code (UCC) applies to transactions in goods. Goods are ‘things moveable’ at the time of identification to the contract.
A contract under Article 2 may be made in ‘**any manner sufficient to show agreement, including conduct by both parties which recognizes the existence of such a contract.’ **
When can a buyer revoke acceptance of goods?
1) the nonconformity substantially impairs the value to him;
(2) he accepted the goods because he had a **reasonable belief the nonconformity would be cured **(and it wasn’t), or he didn’t discover the nonconformity because the nonconformity was difficult to discover, or because of seller’s assurances;
(3) he revokes within a reasonable time after he discovers or should’ve discovered the nonconformity; and
(4) he revokes before any substantial change in condition of the goods which is not caused by their own defect
UCC Contracts - additional requirements beyond the SOF
A contract for the sale of goods for a price of $500 or more is not enforceable unless
(1) there’s a writing signed by the party against whom enforcement is sought indicating a contract for the sale of goods has been made between the parties.
(2) The writing need not contain all terms of the contract, but it’s not enforceable beyond the quantity of the goods shown.
EXCEPTIONS:
- merchant confirmatory memo,
- part performance,
- specially manufactured goods, and
- judicial admissions.
Statute of Frauds Exceptions
A contract that is suppsoed to be in writing under SOF, but isn’t, can still be enforceable if:
M.A.P.S
Confirmatory Memo between merchants: if one sends another a writing signed by him within a reasonable time showing there is a contract and the other fails to object in writing to the contents of the writing within 10 days of receipt.
Judicial Admissions: if one admits a contract in a pleading or testimony.
Part performance: if one pays for or accepts a part of a contract, it is enforceable up to that amount.
Specially manufactured goods: goods that are specially manufactured for the buyer and not suitable for sale to others in the seller’s ordinary course of business and the seller has made a substantial beginning, then the entire contract is enforceable.
Essential Terms of Offer - UCC
ONLY the QUANTITY is the essential term, the UCC will back fill the rest if they are missing
Essential Terms - Common Law
Under the common law, the essential terms are:
(1) parties
(2) subject matter
(3) price
(4) quanitty
MIssing terms usually ok if there is an intent to K, court will imply missing terms
When a contract is outside the SOF
A contract for the sale of goods is outside the UCC Statute of Frauds to the extent that goods are received and accepted, and to the extent that payment has been made and accepted
UCC - Memo for Sale of Goods over $500 requirements
1 indicate that a contract has been made,
(ii) identify the parties,
(iii) contain a quantity term, and
(iv) be signed by the party to be charged.
**A “signature” is any authentication that identifies the party to be charged—e.g., a letterhead on the memorandum.
Enforcement of the agreement is limited to the quantity term actually stated in the memorandum.
When can a confirmatory memo be an enforceable contract?
In contracts between merchants for the sale of goods for $500 or more, if a memorandum sufficient against one party is sent to the other party who has reason to know its contents, and the receiving party does not object in writing within 10 days, then the contract is enforceable against the receiving party even though he has not signed it.
Note!: A merchant is a person who regularly deals in the type of goods involved in the transaction or otherwise by his occupation holds himself out as having knowledge or skill peculiar to the practices or goods involved in the transaction.
