ISSUE CHECKLIST

1. What law applies?

2. Mutual assent?
a. Offer, acceptance, acceptance varying offer,
3. Modification?
4. Basis for enforcement?
a. Consideration, black letter exception, promissory restitution, promissory estoppel, restitution, warranty
5. Defenses to enforcement?
a. SoF, 2-207, last shot rule, conditions, duress, undue influence, misrepresentation, loss of power of avoidance,
surprising terms in adhesion K, unconscionability, public policy, good faith and fair dealing, unilateral mistake,
impossibility, impracticability, avoidability, warranty
6. Breach?
7. Remedies for breach?
8. Damages?
9. Limits to damages?

(1) Applicable Law

Does UCC Article 2 apply to this transaction? (if not, use R2K)
 Predominant Purpose Test
(2) Bargain Context or Promissory Estoppel Framework?
 Have the parties engaged in a bargain?

(3) Mutual Assent: Bargain Context? Was there mutual assent?

Was there a promise and consideration?
 Offer: Was there an offer? Is there a manifestation of intent to enter into a contract? Five elements.
o Merchant’s Firm Offer (UCC): Is the offer irrevocable on the grounds that it is a merchant’s firm offer?
o Option Contract?
 Go through Offer/Acceptance
 If UCC, merchant’s firm offer?
o Has the offer been terminated? (lapse, revocation by offeror, death, rejection by offeree)
o *Look at all potential offers, inquiries, and promises
o *If consideration is absent there wasn’t an offer  analyze if promise can be enforced by other means (every P
needs C)
 Acceptance: Was there acceptance?
o Which ways does the offeror say offeree can accept? *bilateral or unilateral K from acceptance?
 Can the offer be accepted by promise? Was it?
 Can the offer be accepted by starting performance? Was it?
 Can the offer be accepted by completed performance? Was it?
 Was there a shipment of goods in response to the offer?
 Can the offer be accepted by silence? Was it?
o How does offeree accept? ^
 Did acceptance take effect?
o When did the offeree accept?
o Mailbox Rule: Was any part of the exchange through the mail? Was by mail reasonable?
o Does the acceptance 100% match the offer? If not, are any of the below triggered?
o Counteroffer
o Last Shot Rule: Is there complete/part performance? What did last writing state as terms of offer?
o 2-207 (UCC): Is there a battle of forms in a goods contract?
 Termination of Offer
o Has the offer lapsed?
o Was the offer revoked?
o Did the offeror or offeree die?
o Was the offer/power of acceptance terminated?
(3) Mutual Assent: Promissory Estoppel Framework?
Was there a promise and no consideration?
 Promise: (1) manifestation (2) of intention to act or refrain from acting in a specified way (3) so made as to justify a
promise in understanding that a commitment has been made?
o Manifestation: What is shown externally; not secret intention
o To act or refrain from acting: as opposed to just a statement of opinion
o Commitment: as opposed to just a statement of present intention

(4) Enforcement of a Promise/Bargain? How to Enforce a Promise?

 (1) Consideration: Was the promise exchanged for something identifiable (consideration) as part of a bargained-for
exchange?  If yes, “supported by consideration”
 (2) Black Letter Exception
o Is there a promise to pay a pre-existing debt after statute of limitations has expired?
o Was there medical care given by a professional?
o Was there a person performing your legal duty in an emergency? (ex. caring for child)
 (3) Promissory Restitution: Was there a promise to pay for a past benefit? *check multifactor test
 (4) Promissory Estoppel: Did the promisee do or refrain from doing something because of a promise? *check multifactor
test
o Conditional gift promise does not induce performance
**Warranties
(4) Enforcement Without a Promise: Is there unjust enrichment?  restitution
o Was there a benefit conferred resulting in unjust enrichment?
o Professional services for the protection of someone’s life?
o Did someone perform under an agreement that is not enforceable because of indefiniteness or Statute of Frauds?

Modification? Is a modification enforceable?

 Duress: Is the modification unenforceable because of duress?
 Pre-Existing Duty Rule? Is the modification unenforceable because of pre-existing duty?
 Did someone promise to do something in return for exactly what they were already obligated to do
under a contract? (waiving a condition can be seen as consideration)
 Does an exception to the pre-existing duty rule apply?
 Good faith test? (UCC version of pre-existing duty rule)
 Statute of Frauds? Does the SoF apply to the modification?

Defenses to Enforcement: Statute of Frauds Is the K Only Enforceable With a Signed Writing?
o Covered by statute?
o Can the contract be completed within one year of the date of the agreement?
o Is the contract for a transfer of land?
o Does the contract make someone liable for another’s performance?
o Sale of goods worth $500 or more?
o Is the SoF satisfied by a sufficient signed writing against the party charged?
o Do any exceptions apply?
o Check outline—different exceptions for UCC and R2K

Defenses to Enforcement: Dispute Over What Writings Mean? Did the Acceptance 100% Match the Offer?
 UCC 2-207? Does the term (ex: arbitration clause) enter the K under 2-207?
 Assuming clause/term entered, was it enforceable?
o If adhesion clause, do unconscionability analysis
 Last Shot Rule? Does the term enter the K under the last shot rule?

Defenses to Enforcement: Dispute Over What Writings Mean? Agreement Not Fully Embodied in the Writing?
 Parol Evidence Rule: Are there terms in the agreement that may not be in the writing?
1. Was there a parol agreement?
 2. Is the writing an integration?
3. Is the integration partial or complete?
4. Is evidence of a partial/complete integration admissible to supplement or only interpret writing?
5. Do any exceptions apply?
 **Recall: Parol evidence rule does not apply to claims of modification after adoption of the writing
 Extrinsic Evidence: Is the parol evidence extrinsic evidence that can be admitted to interpret existing terms in a
contract?
 Misunderstanding? Do the parties disagree on what the writings mean?
 1) Is the difference in meaning material?
 2) Is there any reason to believe either party had greater reason to know the other’s meaning?
  When both parties mean materially different things, there is no contract if: (1) Neither party knows
or has reason to know the other’s meaning, or (2) Each party knows or has reason to know the other’s
meaning.

Defenses to Enforcement: Dispute Over What Writings Mean? How to Determine Meaning?
R2K Interpretation
 Is The Integrated Writing Unambiguous?
 Plain Meaning Rule
 Is The Integrated Writing Ambiguous?
 Extrinsic Evidence?
o CA (PG&E) or NY Approach? What extrinsic evidence can the court consider?
 “Rules” in Aid of Interpretation? What meanings are reasonably possible?
 Objectively Reasonable Meaning? Is there an objectively reasonable meaning?
o Did the parties actually share a meaning or did one party know or have reason to know the
other’s meaning?
 Which evidence prevails? (Standards in Interpretation)
o Did the parties actually share a meaning or did one party know or have reason to know the
other’s meaning?
 Did All Other Modes of Interpretation Fail? (Maxims for Interpretation)
o Gap fillers?
 Reformation? Does the writing need to be reformed because of mistake or fraud?

UCC Interpretation
 Big 3: Is “Big 3” evidence admissible to interpret the ________ term in the writing?
 Course of Performance: Does the conduct of the parties in performing a contract after its execution inform
how to interpret?
 Course of Dealings: Does the parties conduct under other transactions with each other constitute a course
of dealing relevant to interpreting this contract?
 Trade Usage: Is the trade usage provided (could be an opinion) relevant to interpreting the contract?

 Which evidence prevails? (Standards in Interpretation)

o Under the UCC, contradictions involving Big 3 evidence are resolved according to the following hierarchy:
express terms, course of performance, course of dealing, trade usage.

Defenses to Enforcement/Basis for Enforcement: Dispute Over What Writings Mean? Were There Any Warranties?
 Warranty:
 Express Warranty? Can any terms/promises or terms be seen as an express warranty?
 Puffery? Are any affirmations about the goods not considered express warranties?
 Breach? Was the express warranty breached?
o If the parties have a true shared meaning, it will prevail. If not, then if one party has greater
reason to know the other’s meaning than vice versa, then the meaning of the party with less
reason to know the other’s meaning will prevail. Parties generally have reason to know
objectively reasonable meanings.
 Implied Warranty?
  Implied Warranty of Merchantability? Absent disclaimer, did an implied warranty of merchantability
apply?
 Implied Warranty of Fitness for a Particular Purpose? Absent disclaimer, did an implied warranty of
fitness for a particular purpose apply?
 Did The Seller Disclaim The Implied Warranties of Merchantability and Fitness For a Particular
Purpose? Give general IRAC then go over each individually
o Did The Seller Disclaim the Implied Warranty of Merchantability Under §2-316(2)?
o Did The Seller Disclaim the Implied Warranty of Fitness For a Particular Purpose Under §2-
316(2)?
 Breach?
o Did The Seller Breach the Implied Warranty of Merchantability?
o The implied warranty of merchantability requires that goods be fit for the ordinary
purposes for which such goods are used.
o Did the Seller Breach the Implied Warranty of Fitness for a Particular Purpose?
o The implied warranty of fitness for a particular purpose requires the goods to fulfill
the buyer’s purpose.

Defenses to Enforcement: Procedural: Was the Process of Making the K Unfair? Victim can keep or avoid K
 Duress: Was there improper threat that induced assent in the absence of reasonable alternatives?
 Was modification not enforceable because of duress?
 Undue Influence: Was there unfair persuasion based on status and bargaining concerns?
 3 elements
 Misrepresentation: Was assent induced by fraudulent or material misrepresentation and justifiably relied on?
 4 elements
 Loss of Power of Avoidance: Did unreasonable delay cause party affected by incapacity, duress, undue
influence, or misrepresentation to lose their power of avoidance?

Defenses to Enforcement: Substantive: Is the K Itself Unfair?

 “Reasonable Expectations”: Were there surprising terms in an adhesion contract?
 Adhesion K:
o Is the contract a contract of adhesion?
o If yes, is the arbitration form enforceable?
o Does if fail to fall within reasonable expectations of weaker party or is it unduly
oppressive?
 Unconscionability: Were the K terms unfair or oppressive?
 Arbitration Agreement? Arbitration clauses are reviewed for unconscionability
 Adhesion K: Commonly applied to adhesion Ks
1. Is the contract/term procedurally unconscionable?
2. Is the contract/term substantively unconscionable?
3. Is there a business justification?
 Public Policy: Is the contract unenforceable on grounds of public policy?
 Is K illegal to perform?
 Good Faith and Fair Dealing: Has the party breached the duty of good faith and fair dealing by not cooperating
in performing the contract?
 2 theories of standard: can contract around vs. cannot contract around bare minimum standards of
good faith

Defenses to Enforcement/Breach: Mistake, Impracticability, and Frustration? Is Non-Performance/Breach Excused? (end of

outline)
 Unilateral Mistake? Is the contract unenforceable because one party made a mistake?
o Traditional Test (Test 1): Is the mistake material and did the other party know of the mistake/have reason to know of
the mistake/or at fault in causing the mistake?
o Modern Expansion Test (Test 2/CA Test): Is the five-element test met?
 Impossibility? Is performance objectively impossible?
 Avoidance? Does the party want to avoid the K?
 Impracticability? Has the K become extremely and unreasonably difficult or costly to perform?
o Hell or High Water? Die the parties contract around the impracticability/risk?
o Force Majeure? Is ther an express contract provision excusing a party in case of an occurrence causing
impracticability or impossibility?
***Remember: Excused Non-Performance is Still Non-Performance

Modifying the Writing?

 Parties can’t contract away freedom to modify contract (so provisions saying” this K cannot be modified except
in writing” are traditionally not given effect)
 Under UCC, parties can agree that Ks can be modified only by a signed writing
 Gap fillers?

Conditions? Must an event occur in order for performance to be due? Is a party protected by an express condition?
 (1) What type of condition?
 Express Condition? Was it an express condition?
o  Only strict satisfaction of the condition prompts duty to perform
o Does the nonoccurrence of the express condition discharge the duty to perform?
 Constructive Condition? Is this a bilateral contract?
o Assumption that if you have not done your part in some major way, then I don’t have to
continue doing my part (less emphasis on strict satisfaction than with express conditions)
o If you substantially comply with your side of the K, that is enough to satisfy the constructive
condition. They can sue you for breach b/c you didn’t perform everything but they have to
go through with the K because you substantially performed
 (2) Waiver? Did a party waive the condition? Did their waiver set a precedent of waiving?
 If a condition was put into K for one party’s benefit, ONLY the benefitting party can waive it if they
want
 Waiver By Disregarding Nonoccurrence? Did a party disregard a condition not occur such that the
condition is now waived through election?
o Waiver By Performance? Did a party perform despite condition not occurring?
 (3) Material? Was the condition material so that it could not be excused by election or waiver?
 Estoppel: Do you want to enforce the waiver?
 Election: Did you disregard nonoccurrence of a condition after the time for occurrence had expired?
 Prevention/Failure to Cooperate/Duty of Good Faith: Did a breach of duty of good faith contribute to the
condition not occurring?
 Excuse of Condition: Did the breach cause the condition to not occur so that you lsot the protection of the
express condition and have to perform?
 Disproportionate Forfeiture: Is the condition excused for disproportionate forfeiture?

Breach? Did a Party Breach the Contract?

 FIRST: Did a party breach the contract?
 Rule: Performance that does not conform with the terms of the contract is a breach
 UCC  Did the goods fail in any respect to conform?
o “Perfect tender rule”
o UNLESS Installment Contract?  Perfect tender rule doesn’t apply
o Did nonconformity substantially impair the value of the installment and cannot be
cured?
o Consider warranties
 R2K  How big a deal (substantial) was the breach? (Is nonperformance material?)
o Express Condition: Strict satisfaction required or duty to perform is discharged
o Constructive condition: “Substantial performance” means not affected by material breach
o (1) Extent to which injured party is deprived of their reasonably expected benefit under the
contract (most important);
 o (2) Extent to which the injured party can be adequately compensated for the part of the
benefit of which they will be deprived (less important);
o (3) Extent of which the party failing to perform will suffer forfeiture;
o (4) Likelihood that the party failing to perform will cure;
o (5) Extent to which the behavior of the party failing to perform comports with the standard of
good faith and fair dealing (also important)
 SECOND: Was the breach cured or curable?
 THIRD: Was the breach material? (see flowchart)
 FOURTH: Was the breach a condition that must have happened for me to perform?
 FIFTH: Did a party waive the other party’s breach by continuing to perform or allowing continued
performance despite material breach?
 FINALLY! Can the nonbreaching party suspend performance and eventually terminate the contract?
 Is the breach a total breach? (Material and Incurable?)
o Material: Injured promisee can suspend performance immediately and at some point treat as
total if the breach if not cured
o Material + Incurable: Injured promisee can seek damages, refuse to render own performance,
and terminate the contract. Other party can seek restitution.
o See material flowchart
 Is the breach a partial breach? (Breach is not material? Or breach is material but curable?)
o Not Material: Substantial performance is treated as substantial compliance. Entitled to
monetary adjustment to compensate for the deficiency in the performance received from the
breacher.
o Material + Curable: Injured promisee obligated to treat K as in effect, keep performing, and
potentially seek damages if breach is not cured
 **Repudiation?
 Did you declare total breach during a time you’re supposed to be allowing cure?
 Is breaching party protected by defenses to enforcement/breach?
 Is breaching party protected by a condition?

Remedies for Breaching Party? What Can You Get If You Breach? How To Avoid Forfeiture?
 Divisibility? Were there mini-contracts within the contract?
 A contract is divisible if it can be broken down into pairs of part performances and failure
to complete some pairs does not significantly change the value of the others.
 Restitution? Do you want to recover the portion of the K you performed?
 A breaching party that did not engage in fraud or inequitable conduct can recover in
restitution for the portion of the contract that it did perform to combat unjust enrichment.
 How much can you recover in restitution?
o A restitution claimant can recover funds sufficient to avoid unjust enrichment of the other
party
 Waiver/Estoppel/Election: Was the condition waived?
 Hindrance/Prevention? Did a party prevent the other party from performing?
 Breach and Excuse of Condition? Did a party’s breach cause a condition to not occur?
 Excuse to Avoid Disproportionate Forfeiture? Does the court want to excuse an express condition to avoid
disproportionate forfeiture?

Remedies for Non-Breaching Party: What Can You Get If They Breach? You still have to perform but are entitled to
damages
R2K
 Expectation Damages? Do you want to put the injured party in the position they would be if the K had been performed?
 2 formulas you can use to get same result:
o “Where you should be” – “Where you are” or
o Loss in value of performance + Other loss (incidental/consequential) – Cost/loss avoided
 Reliance Damages? Do you want to put the injured party back in the position they would have been in before the K?
 Restitution? Do you want to cover the cost the non-breaching party incurred?
  Punitive Damages? Do you want to punish breaching partyNot usually available for breach unless the breach is a tort
 Specific Performance? Can the party get specific performance of the contract?
UCC
Buyer’s Remedies? Did the seller breach?
 Did the buyer not get or not keep goods?
o Restitution: Recover any amount the buyer actually paid AND Expectation Damages
 What are you owed in expectation damages?
 Cover? Did you actually purchase replacement goods?
 Contract Market Damages? Did you not purchase replacement goods?
 Did the buyer get and keep goods?
o Buyer must pay for nonconforming goods under the contract (liable for K price)
o Buyer can collect breach of warranty damages (Value of Goods as They Should Have Been – Value of Goods as
They Are, unless special circumstances justify a different amount) AND
o Buyer may collect incidental and consequential damages
 Reputation damages?
o Limited by avoidability principle?
Seller’s Remedies? Did the buyer breach?
 Lost Volume Seller? Is the seller a lost volume seller, such that they probably would have made additional sales if the K
had not been breached?
 What damages is the seller entitled to?
o Depends on whether the seller is a lost volume seller (see outline)
o Cover and Windfall? Did seller buy the same item for more money because of the breach?
o Did the seller suffer sentimental value damages?
o Did the seller suffer emotional distress damages?

Limits to Damages: Does the Avoidability, Foreseeability, or Certainty Principle Limit Recovery?
 Avoidability? Could loss have been avoided without undue risk, burden, or humiliation?
 Foreseeability? Were damages a foreseeable or probable result of the breach?
 Certainty? Are you reasonably certain about the loss amount?
 Agreed Remedies Provisions and Liquidated Damages? Are remedies agreed upon reasonable estimates of K damages?