Contracts
Contracts tests formation, enforceability, performance, breach, and remedies under common law and Kentucky's version of UCC Article 2. Kentucky's statute of frauds, KRS 371.010, supplies the writing requirements that appear frequently in essay questions.
Formation and consideration
An enforceable contract requires offer, acceptance, consideration, and mutual assent. Consideration is a bargained-for exchange; past consideration and moral obligation generally do not suffice. Under UCC Article 2, a merchant's firm offer can be irrevocable without consideration, and open terms may be filled by the code.
Statute of frauds
KRS 371.010 requires a writing for, among others, promises not performable within one year, surety promises, promises to answer for another's debt, and contracts for the sale of land. The UCC requires a writing for goods priced at $500 or more, with merchant exceptions. Part performance can remove a land contract from the statute in appropriate equity cases.
Performance and breach
Material breach excuses the other party's performance. Anticipatory repudiation permits the nonbreaching party to await performance or sue immediately. Kentucky recognizes the doctrine of substantial performance in construction contracts, allowing the contract price minus damages for defects.
Remedies
Expectation damages place the plaintiff in the position performance would have produced. Consequential damages require foreseeability. Liquidated damages are enforceable if reasonable and not a penalty.
Worked example
Seller orally agrees to sell a Kentucky farm to Buyer for $400,000. Buyer pays $50,000 and takes possession, builds a barn, and pays taxes. Seller repudiates. The oral contract violates KRS 371.010, but Buyer's part performance, possession, and improvements may take the agreement out of the statute of frauds in equity, allowing specific performance or restitution.
Traps
Applying UCC Article 2 to land or services; forgetting the one-year clause measures from contract formation; treating part performance as automatic; confusing expectation and reliance damages.