Contracts: Formation, Defenses, and Remedies
Formation
Begin with mutual assent: offer, acceptance, and consideration. An offer must be definite and communicated; acceptance must mirror the offer unless the UCC's § 2-207 battle-of-the-forms rule applies. Consideration is a bargained-for exchange; promissory estoppel substitutes where injustice would otherwise result. Watch the mailbox rule, option contracts, and the UCC firm offer.
Defenses
Identify capacity, duress, undue influence, misrepresentation, mistake (mutual versus unilateral), unconscionability, and the Statute of Frauds. The Statute of Frauds categories: marriage, year, land, executor, surety, sale of goods over $500. The writing must be signed by the party to be charged and state the essential terms.
Performance, Breach, and Remedies
Classify conditions (precedent, concurrent, subsequent) and the perfect tender rule under the UCC versus substantial performance under common law. Anticipatory repudiation, adequate assurances, and excuse doctrines (impracticability, frustration, impossibility) are frequently tested. Remedies: expectation, reliance, restitution, specific performance, liquidated damages (reasonable forecast versus penalty), and the duty to mitigate.
Traps
The biggest traps are the UCC/common law divide, the difference between modification (needs consideration at common law, not under the UCC) and waiver, and third-party beneficiary vesting. Do not confuse condition precedent with promise.
Rule of Thumb
Worked example: A agrees to sell a car to B for $10,000; B sends a signed note. Later A refuses. Under the UCC, the signed note satisfies the Statute of Frauds as to quantity, and B may recover expectation damages, the difference between contract price and market price, plus incidental damages.