Contracts and Sales
Contracts questions split between common law (services, land, employment) and UCC Article 2 (goods). Identify the subject matter first; it determines formation, statute of frauds, parol evidence, and remedies.
Formation and defenses
- Common law: offer, acceptance (mirror image), consideration. UCC 2-206 permits acceptance by prompt shipment; 2-205 makes a merchant's signed firm offer irrevocable for up to three months without consideration.
- 2-207: a definite and seasonable expression of acceptance forms a contract even with additional terms; between merchants the new terms enter unless they materially alter the deal or the offer limits acceptance.
- Statute of frauds: land, one year, suretyship, marriage, executor; UCC 2-201 requires a writing signed by the party charged and a quantity term, with exceptions for merchant confirmations, specially manufactured goods, admissions, and part performance.
Performance and remedies
- Perfect tender, with the seller's right to cure; installment contracts use the substantial impairment standard.
- Expectation damages put the plaintiff where performance would have; consequential damages must be foreseeable under Hadley.
- Buyer's cover (2-712) and seller's resale (2-706); liquidated damages must be a reasonable forecast of a hard-to-estimate loss.
Worked example
Seller contracts to deliver 500 units at $20 each. Buyer repudiates before delivery, and Seller resells the units for $15 each. Seller's damages are contract price minus resale price ($5 × 500 = $2,500), less expenses saved, plus incidental damages. Seller does not recover lost profits as a lost-volume seller unless it could have made both sales.
Traps
Applying UCC parol evidence rules to a services contract; treating price as an essential term on a sale of goods; forgetting that a merchant confirmation must be one the recipient had reason to know about and did not object to; assuming a liquidated damages clause is enforceable because the parties agreed to it.