Contracts
Contracts
Contracts questions test formation, enforceability, performance, and remedies under common law and UCC Article 2. Identify the governing regime first: goods are UCC; services, land, and suretyship are common law.
Formation and terms
- Offer requires definite terms and intent to be bound. The UCC fills gaps for price, place, and time.
- Acceptance is a mirror image at common law. UCC section 2-207 allows additional or different terms between merchants unless they materially alter the contract.
- Consideration must be bargained for; promissory estoppel substitutes when injustice can be avoided only by enforcement.
Defenses and interpretation
- Statute of frauds: land, suretyship, marriage, one year, and goods of $500 or more. Writing, signature, and quantity are required under the UCC.
- Parol evidence bars contradictory prior or contemporaneous terms in a fully integrated writing; consistent additional terms may be admitted if the writing is partial.
- Impossibility, impracticability, and frustration discharge duties. UCC section 2-209 allows modification without consideration.
Breach and remedies
- Anticipatory repudiation excuses the other party; a demand for adequate assurance is available under UCC section 2-609.
- Expectation damages place the plaintiff where performance would have. UCC buyers may cover and recover the difference. Consequential damages require foreseeability (Hadley v. Baxendale).
- Liquidated damages are enforceable if reasonable in light of anticipated harm and difficult to estimate.
Worked example
A merchant orders 1,000 widgets at $10 each; the seller ships 1,000 at $12. Under UCC section 2-207, shipment operates as acceptance. The $12 term is a proposal between merchants, but a price increase materially alters the contract, so $10 governs.
Traps
- Applying mirror-image acceptance to a UCC sale.
- Awarding consequential damages without a foreseeability finding.
- Missing that the statute of frauds is an affirmative defense that can be waived.