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U.C.C. Article 2 v. Common Law
Sale of Goods? (movable at time of sale)
U.C.C. Article 2
Service Contracts?
Common Law governs
Look to predominant purpose.
CL: K = offer, acceptance, consideration, no defenses to formation)
promise to enter into K communicated to offeree;
manifestation of intent to be legally bound;
definite and certain material terms; (ad not offer unless specific terms);
judged by objective std.
manifestation of assent to terms of offer in manner prescribed;
communicated in any reasonable manner;
slience can be acceptance if offeree takes offered benefits w/o objection/intent to be bound;
objective std;
Acceptance valid if
made b/f offer terminates.
Mirror-image rule
additional terms in acceptance = rejection + counteroffer
Mailbox rule
acceptance is valid at time of dispatch;
if wrong address: at time of receipt.
Offer sends acceptance first, then rejection second,
K was created upon dispatch of acceptance.
However, if offeror receives rejection FIRST + changes position in reliance = offeree can't enforce K.
Offeree sends Rejection First, then Acceptance Second
Rejection is effective upon dispatch; whichever received first is effective.
Termination of offer
Lapse of Time;
Death of Party;
Lapse of Time
offer automatically terminates when stated time of acceptance expires.
effective when received by offeree;
can be indirect: reliable information offer has been revoked.
UCC (Revocation)
Buyer can return goods substantially unchanged if latent defect substantially impairs value to buyer and
gives notice of revocation w/in reasonable time.
rejection is effective when received by the offeree.
CL: mirror-image rule
Acceptance is valid if accepted all terms of the offer.

Counteroffer: acceptance w/ different terms is counteroffer.
UCC 2-207: Battle of the Forms
UCC: Between merchants, if acceptance is minor change: changes added to K unless objected w/in reasonable time. Material alteration -> extra term not part of K Contradictions -> knock out terms and apply gap fillers. Acceptance conditional upon extra terms -> no K.
Unilateral K:
offer calls for performance;
offeree starts to perform = irrevocable;
offeree must fully perform to create K.
Bilateral K:
offeror and offeree exchange mutual promise.
bargained-for exchange of legal value;
benefit to promisor and legal detriment to promisee;
(consideration exists in promises to pay and promise to perform).
K can be created by conduct of parties.
Unclean hands:
litigant who invokes ct's equitable powers must have clean hands.
is subsequent agmt that alters/changes parties' duties under original K.
CL (Modification)
Consideration is required for an enforceable K modification.
UCC (Modification)
No consideration is required if there is a good faith modification.
Preexisting duty
CL: when offeree has preexisting duty, no consideration.  (moral consideration is not valid).

Modern: preexisting duty doesn't apply to duty owed 3rd person.  (moral consideration is valid).
Accord & satisfaction (A&S)
K may be discharged by A&S;
tender & acceptance "paid in full"
agmt where one party to existing K agrees to different performance instead
is the performance of accord agmt.
Statute of Frauds;
Mistake, misunderstanding;
Fraud, misrepresentation, and nondisclosure;
Incapacity to contract;
Undue Influence;
Illegality, unconscionability, and public policy;
Statute of Frauds:
a promise that can't be performed in 1 year, MUST be signed by person to be bound.
Acronym MYLEGS:
Marriage; Year; Land; Executor; Goods > $500; Surety contract.
Main purpose rule:
oral promise to pay debt of another encorceable if furthers promisor's economic advantage.
Removal from Statute of Frauds (oral K enforceable) IF
admission of earlier agmt;
reliance on oral agmt;
specially manufactured goods (both parties bound)
UCC: merchant confirmation (SoF)
failure to object in writing w/in 10 days binds both parties.
Mistake, misunderstanding
Mutual mistake of fact;
Unilateral mistake of fact;
Duty to mitigate;
Mutual mistake of fact:
of both parties at time K made, as to basic assumption, requires material effect on agreed exchange of performances;
K is voidable;
Narrower definition: party urging narrower definition of term has burden to persuade.
Unilateral mistake of fact:
Ct won't strike UNLESS other party is aware of mistake, or it is obvious.

Not aware at time of agmt that duties under K were not delegable.
Duty to mitigate:
party must mitigate dmgs by attempting to sell item;
if fails to mitigate: can't recover dmgs that would have been avoided by mitigation.
Fraud, misrepresentation, and nondisclosure
Fraudulent Misrepresentation (fraud in inducement/fraud in factum);
Nonfraudulent Misrepresentation;
Right to Rescission;
Fraudulent Misrepresentation:
Fraud in the inducement:
voidable K if justifiably relied on fraudulent misrepresentation.
Fraud in the factum:
void if prevented from appreciating significance of action.
Nonfraudulent Misrepresentation:
justifiably relied;
material = if induced reasonable person to agree or knew info would cause particular person to agree;
contract = voidable.
Right to Rescission:
party may rescind K upon showing of misrepresentation or fraud.
Right to rescind lost if party induced affirms K in question.
Omission: can constitute misrepresentation, particularly where party speaks part of the truth.
improper threat sufficient to support avoidance.
Undue Influence
K is voidable if undue susceptibility to pressure + excessive pressure.
Parol Evidence
If K reflected in fully integrated writing, evidence of earlier/contemporaneous oral agmt is not permitted.
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