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Acing Contracts Outline
Offer and Acceptance Checklist
I. Common Law I.A. Offer – has the offeror made an offer? Has a
manifestation of willingness to enter a bargain been made so as to justify the offeree in understanding that her assent to the bargain is invited and, if given, would conclude it? To determine whether an offer capable of acceptance has been made, consider the following:
I.1. Intent – was there intent to make an offer? The words or conduct used in the proposal must be words of offer and not just words of preliminary negotiation.
I.a. Language – what words were used? Were they words of promise and commitment or invitations to negotiate? “I bid,” suggests an offer whereas “are you interested?” suggests preliminary negotiations.
I.b. Surrounding circumstances – what were surrounding circumstances? Were the parties intoxicated or at a party? Words may sound like an offer but clearly be made in jest. Surrounding circumstances may alter the normal meaning of words
I.c. Advertisements to the Public – to whom were the offer made? Proposals made ot the public or a large group of person (such as advertisements, circulars, price quotations) are more likely to be considered in invitations to make an offer
I.2. Definite and Certain Terms – are the terms sufficiently clear and definite so that a court could determine what the parties intended and fix damages in the event of breach?
I.d. Yes. If such significant terms as the parties to the contract the subject matter of the contract,
the time for performance, and the price to be paid are identified, then it is more likely to be an offer.
I.e. No. If essential terms are missing or vague, then the offer may fail for indefiniteness unless it can be cured. Even if some terms have been left open, it may still be possible to meet the requirement for definiteness by the time for performance arrives. Ask the following:
I.i. Indefinite Term Cured – can the indefinite term be cured by the conduct of the parties through full or part performance? Restatement 34
I.ii. Missing Term Implied – can be missing term(s) be implied from the usages of trade to which the parties are subject, by a prior course of dealing between the parties, or by a course of performance between them after the agreement?
I.iii. Gap Filler – can the missing term be cured by the court with “gap filler”?
I.3. Communicated – has the offer been communicated to one capable of acceptance?
I.f. Yes. If so, then the power of acceptance has been created in the offeree.
I.g. No. If not, then there is no power of acceptance.
I.B. Acceptance – has there been a valid acceptance? Has the offeree manifested assent to the offer? In order for a contract to be formed, there must be an acceptance of the offer on the same terms and in the manner requested or authorized by the offeror. To determine whether there has been a valid acceptance, consider the following:
I.4. Who is accepting the Offer – is the proper party accepting the offer? Only the party with the “power of acceptance” can accept the offer. Ask the following:
I.h. Invited to Accept? Only the party to whom the offer is made has the power of acceptance. A purported acceptance by one not invited by the offeror is not an acceptance but may itself amount to an offer
I.i. Knowledge of the Offer? Only one with knowledge of the offer and who acts with that knowledge has the power to accept. This is the case in reward claims: one cannot receive the reward unless she knew of the offer of reward and acted with intent to accept it.
I.5. Manner of Acceptance – has the offeree accepted the offer in the manner required by the offer?
I.j. Acceptance by Promise? Does the offer invite acceptance by a return promise? If so, then ask if the following have been met to determine whether there has been a valid acceptance by a promise:
I.iv. Was there an Expression of Commitment? The offeree must express an unequivocal intent to be bound.
I.v. Was it Unconditional? The offeree’s expression of assent cannot be conditional o some further act by either party
I.vi. Was it a “mirror-image” of the Offer? The acceptance must be on the same terms as proposed in the offer and cannot vary them. If the terms of the acceptance vary from the terms of the offer, then it is a counteroffer
I.k. Acceptance by Performance? Does the offer invite acceptance by performance and no promise is invited?
I.vii. Yes. If so, then the offeree can accept only by performing the act the
promisor is seeking and cannot accept by promising the performance. Here, the act requested and performed as consideration for the offeror’s promise also constitutes acceptance.
I.viii. No. If the manner of acceptance is not specified, then the offeree can choose whether to accept by promise or by performance
I.l. By Silence? Has the offeree accepted by virtue of her silence?
I.ix. No. THE GENERAL RULE IS THAT SILENCE IS NOT ACCEPTANCE.
I.x. Yes. Silence can act as acceptance but in a very limited set of circumstances. Restatement 69. Ask the following:
• Has the offeree taken the benefit of services when she has had a reasonable opportunity to reject them and reason to know that payment was expected and has not done so? If so, then there is an acceptance.
• Has the offeror stated or given the offeree reason to understand that assent may be manifested by silence or inaction and the offeree in remaining silent or inactive intends to accept? If so, then there is an acceptance.
• Have there been prior dealings between the parties such that it would be reasonable for the offeree to notify the offeror if she did not
intend to accept? If so, then there is an acceptance.
• Has the offeree exercised dominion over the goods or property by acting in a way that inconsistent with the offeror’s ownership? If so, then there is an acceptance.
I.m. Manner Not Specified? If the offer does not specify the mode of acceptance, then acceptance may be given in any manner and by any medium reasonable in the circumstances. Restatement 30(2)
I.6. Notice of Acceptance – is the offeree required to give notice of acceptance to the offeror?
I.n. Acceptance by Promise? Does the offer invite acceptance by promise?
I.xi. Yes. Unless the offer indicates otherwise, it is essential to an acceptance by promise either that the offeree “exercise reasonable diligence to notify the offeror that the offer has been accepted or that the offeror receives the acceptance seasonably.” Restatement 56
I.xii. No. If not, then proceed to the next question
I.o. Acceptance by Performance? Does the offer invite acceptance by performance? If the offer invites acceptance by providing a performance, then no notification is necessary to make it effective unless one of the following is applicable. Ask:
I.xiii. Does the offer request a notification? If so, notification is necessary for a valid acceptance. Restatement 54(1)
I.xiv. Does the offeree have reason to know that the offeror will not learn of the
acceptance with “reasonable promptness and certainty” without notice? If so, the offeror’s duty will be discharged unless: Restatement 54(2)
• The offeree exercises reasonable diligence to notify the offeror, or
• The offeror learns of the performance within a reasonable time, or
• The offer indicates that notification of acceptance is not required
I.7. When Acceptance is Effective – when does acceptance take effect? This question is closely related to the method of acceptance but sufficiently separate to require its own consideration. To determine the effective date of acceptance, consider the following:
I.p. Instantaneous Communication – were the parties in direct communication with each other at the time by phone, in person, or communicated by electronic means? If so, then acceptance occurs as soon as it is manifested.
I.q. Invited by the Offer – was the acceptance made in a manner and by a medium invited by the offer? If so, it is effective as soon as it is put out of the offeree’s possession, “without regard to whether it ever reaches the offeror.” This is referred to as the “mailbox rule” where acceptance is effective upon dispatch if the letter was properly stamped an addressed. If properly dispatched, it is effective, even if it was received after the offer terminated or was never received by the offeror. Restatement 63
I.r. Where Offeree sends both an Acceptance and Rejection – has the offeree mailed a rejection and then changed her mind and mailed an acceptance or vice versa? Since a rejection
terminates the power of acceptance, you must consider the question in terms of when a rejection becomes effective:
I.xv. Rejection sent before Acceptance? A rejection does not terminate the offeree’s power of acceptance until it is received, but any acceptance dispatched by the offeree after she ahs dispatched the rejection is not effective unless the acceptance is received by the offeror before she receives the rejection. Restatement 40
I.xvi. Acceptance sent before Rejection? The contract is binding as soon as the acceptance is dispatched and the subsequently dispatched revocation of acceptance does not undo the acceptance, whether it is received by the offeror before or after her receipt of the acceptance
I.s. Acceptance of Option Contract - - an acceptance of an option is effective upon receipt by the offeror, not upon dispatch. Restatement 63(b)
I.8. Termination of the Power of Acceptance – does the offeree have the power of acceptance? For an acceptance to be valid, it must be made while the power of acceptance is still in effect. Does the offeree still have the power of acceptance or ahs the offer terminated?
I.t. Lapse of Time – has the offer lapsed either because the time specified in the offer for acceptance has passed or, if no time was specified, then a reasonable time has passed? Ask:
I.xvii. Was the Offer sent by mail? If so, then it is seasonably accepted if an acceptance is mailed at any time before midnight on the day on which the offer is received. Restatement 41(3)
I.xviii. Was the offer made during Direct Negotiations? Where the parties bargain face-to-face or over the telephone, the time for acceptance ends with the conversation unless a contrary intention is indicated. Restatement 41
I.u. Rejection – has the offeree failed to accept the offer before it lapsed or has she communicated to the offeror that she does not intend to accept?
I.xix. Yes. If so, the power of acceptance is terminated and the offer can no longer be accepted.
I.xx. No. If not, then the offeree may still accept unless the power of acceptance has terminated in another way. Proceed to the next question
I.v. Counter-offer – has the offeree declined the contract on the terms proposed in the offer and suggested different terms?
I.xxi. Yes. If so, then the offeree’s power of acceptance is terminated. A valid acceptance must be the “mirror image” of the offer. However, is it possible it was not a counter-offer but a mere inquiry? A mere inquiry about the possibility of different terms or a comment about the terms is not ordinarily a counter-offer.
I.xxii. No. If not, then the offeree still has the power of acceptance unless it has terminated in another way. Proceed to the next question
I.w. Death or Mental Disability – has the offeror or offeree died or become mentally incapacitated before the offer has been accepted? Restatement 48
I.xxiii. Yes. If so, then the power of acceptance is terminated unless it its an option contract. Notice of the offeror’s death is not necessary to terminate the offeree’s power of acceptance. Restatement 48
I.xxiv. No. If not, then the offeror has the power of acceptance unless it was terminated in another way
I.x. Revocation – has the offeror revoked the offer? The offeror may revoke the offer at any time before acceptance, even if the offer says it will remain open, unless it is an option contract or a “firm offer” (if so proceed to PartB.6.a. and Section II, Part A.2). If the offeror indicates intent not to make the proposed contract, then it may be a revocation even without the words, “I revoke.” However, the revocation is not effective until the offeree receives it. Ask:
I.xxv. Was the Revocation Received?
• Yes. If so, then the offeree’s power of acceptance is terminated
• No. If not, then it is not effective unless it was an indirect revocation. Proceed to the next question
I.xxvi. Was it an Indirect Revocation? Has the offeror behaved in a way inconsistent with an intent to enter the contract and the offeree has acquired reliable information to that effect?
• Yes. If so, there was a revocation and the offeree cannot accept
• No. If it was a mere rumor or heard from an unreliable source, then the
power of acceptance is not terminated
I.xxvii. Was it the Revocation of a General Offer? Was it the revocation of an offer made by a newspaper or advertisement? If so, then the revocation should be made in the same manner in which the offer was made so as to give it equal publicity.
I.9. Option Contracts and Irrevocable Offers – was there a promise to keep an offer open for a stated period of time?
I.y. Was it an Irrevocable Offer? While the general rule is that offers are freely revocable, there are certain conditions, which if met, make the offer irrevocable. Ask the following:
I.xxviii. Consideration – did the offeree give consideration in exchange for the promise ot keep the offer open?
• Yes. If so, then the offer is irrevocable. It may also be said that an option contract was formed
• No. If not, an option might be binding even without consideration. Proceed to the next question.
I.xxix. Statute – is there a state statute which permits the creation of irrevocable offers without consideration? For the UCC’s “firm offer,” proceed to Section II, Part A.2
• Yes. The offer is irrevocable without consideration if it is made in a writing signed by the offeror which states that it is irrevocable
• No. If not, then proceed to the next question
I.xxx. Restatement (Second) of Contracts – does the jurisdiction follow the Restatement view which finds a valid option if the promise is in a writing signed by the offeror, recites a purported consideration, and proposes a fair exchange within a reasonable time? Restatement 87(1)(a)
• Yes. If so, then the offer is binding as an option contract. Even nominal consideration will be sufficient to support a short-time option proposing a fair exchange
• Recital and no Consideration? Was there a recital of consideration and no payment was actually made? Courts differ in the effect given to a recital without actual payment. Some have held the recital to have no effect while others have found that the recital makes the offer irrevocable, either as a promise to pay or an acknowledgment of payment.
• Gross Disparity between Payment and Value of Option? If so, then this may indicate it was a mere formality, pretense, or sham and will not constitute consideration. Restatement 87
• No. If not, an option contract was not formed in this manner. However, an option might be formed under the rule in the next question
I.xxxi. Offer for a Unilateral Contract – has the offeree partially performed the requested performance? Ask the following:
• Common law? Does the jurisdiction follow the traditional common law view? If so, then the offer may be revoked at any time before performance of the requested act has been completed
• Restatement (Second)? Does the jurisdiction follow the Restatement view? If so, then once the offeree begins to perform the requested act, the offer becomes irrevocable. The Restatement uses the term “option contract” but the meaning is the same as making the offer irrevocable. However, the offeree must begin the actual performance and not make mere preparations to perform. The offeror’s own duty to perform is conditional on the offeree’s completing performance as specified in the offer
• Reliance that is not Part Performance? Did the offeror make an offer, which she should reasonably expect to induce reliance on the part of the offeree before acceptance and which did induce such reliance? If so, then it is binding as an option contract to the extent necessary to avoid injustice. Restatement 87(2)
I.xxxii. Bid on Construction Contract – did a subcontractor submit a bid to a general contractor in connection with a bid on a construction contract?
• No. If not, the inquiry ends here • Yes. If so, is the subcontractor’s bid
revocable? Unless the parties have agreed otherwise, the subcontractor’s offer is irrevocable until the general contractor has had a reasonable opportunity to notify the subcontractor of the award and accept the offer. This is based on a reliance theory. Restatement 87(2)
I.z. Was an Irrevocable Offer Accepted? An acceptance under an option contract is not effective until received by the offeror. Restatement 63(b)
I.aa. Was an Irrevocable Offer Terminated? I.xxxiii. Lapse of Time – has the offer
lapsed? • Yes. If so, the irrevocable offer has
terminated • No. If not, then the irrevocable offer
has not terminated unless it has terminated in another way. Proceed to the next question
I.xxxiv. Revocation – has the offer been revoked? If the offer is irrevocable, then even a purported revocation by the offeror has no effect on the offeree’s power of acceptance.
I.xxxv. DeathorIncapacity – has the offeror died or become incapacited? The option survives the death or incapacity of the offeror.
I.xxxvi. RejectionorCounter-offer – has there been a rejection or counter offer? The power of acceptance under an option contract is not terminated by rejection or counter offer
II. Sale of Goods I.C. “Bargain of the parties in fact” – is there an agreement
between the parties? Have the parties, as a practical matter, reached sufficient agreement for contract liability to arise?
I.10. Agreement – has there been an offer and acceptance? A contract for the sale of goods may be made in any manner sufficient to show agreement. Consider the following:
I.bb. Conduct – does the conduct of both parties recognize the existence of a contract? UCC 2-204 (1)
I.xxxvii. Yes. If so, then there is a contract even if the moment of its making its undetermined
I.xxxviii. No. If not, the parties may not have intended a contract and none will have been created
I.cc. Indefiniteness – were one or more terms left open? A contract for the sale of goods does not fail for indefiniteness if the parties have intended to make a contract and there is a reasonably certain basis for giving an appropriate remedy. UCC 2-204(3)
I.dd. Acceptance – has the offeror specified a method of acceptance?
I.xxxix. Yes. If so, then the offer may be accepted only in the manner invited by the offer
I.xl. No. If not, then the offeror may accept “in any manner and by any medium
reasonable in the circumstances.” UCC 2-206(1)(a)
I.ee. Acceptance by Promise to Ship or Shipment – was an order or other offer to buy goods for prompt or current shipment accepted either by a prompt promise to ship or by the prompt or current shipment of conforming goods?
I.xli. Yes. If so, it was an acceptance I.xlii. No. It was a shipment of non-
conforming goods. This is not an acceptance if the shipment of non- conforming goods is an accommodation to the offeror as allowed under UCC 2-206(1) (b). Ask: did the seller seasonably notify the buyer that the shipment of non- conforming goods was offered only as an accommodation to the buyer and not an acceptance?
• Yes. If so, then the seller’s shipment of non-conforming goods is not an acceptance
• No. If not, then the seller’s non- conforming shipment is an acceptance and a breach of contract
I.11. “Firm Offer” – did a merchant offer to buy or sell goods in a signed writing which promised to hold the offer open? UCC 2-205
I.ff. Yes. If so, then the offer is not revocable for lack of consideration during the time state or if no time is stated for not more than three months
I.gg. No. If not, then the offer is revocable any time before acceptance unless it is made irrevocable under one of the other exceptions. See Section I Part B.6.a
I.12. “Battle of the Forms” – have one or both parties used oral or written communications in the process of
forming a contract where the writings exchanged may have been preprinted order and confirmation forms containing standard, boiler-plate terms? If so, then a conflict between them is possible since such standard terms are usually designed to protect the interests of that party. In such cases, the provisions of UCC 2-207 may be implicated. Ask the following:
I.hh. Acceptance – is the response to the offer “a definite and seasonable expression of acceptance” or “a written confirmation” of a prior oral agreement?
I.xliii. Yes. If so, proceed to Part A.3.b.
I.xliv. No. If not, then no contract has been formed by the writings of the parties. Proceed to Part A.3.c. to determine whether the conduct of the parties recognizes the existence of a contract
I.ii. Terms in Acceptance – does the acceptance/confirmation state terms “additional to or different from” the offer?
I.xlv. Yes. If so, then ask: is acceptance of the offer “expressly conditional” on the offeror’s assent ot the additional or different terms?
• Yes. If so, then ask, did the offeror expressly assent?
• Yes. If so, a contract has been formed. The contract terms are those that are agreed upon.
• No. If not, then no contract has been formed by the writings of the parties. Proceed to Part A.3.c. to determine whether the conduct of the parties
recognizes the existence of a contract
I.xlvi. No. If the response is a definite and seasonable expression of acceptance and it is not expressly conditional on assent to new terms, it is an acceptance even though it sates terms different from or additional to those in the offer. There is a contract and the next question is to determine its terms. Ask: are both parties merchants?
• Yes. If so, then the agreed upon terms are included and additional terms become part of the contract as well unless:
• The offer was expressly limited to its terms;
• The additional term(s) materially alters the contract; or
• The offeror has already given notice of objection to the additional term(s) or it is given within a reasonable time after notice is received. UCC 2-207 (2)
• No. If not, then the agreed upon terms are included and additional terms are merely proposals for addition to the contract
• No. If not, then there is a contract and it consists of the agreed upon terms
I.jj. Conduct – does the conduct of the parties “recognize the existence of a contract? Has there been a tender and acceptance of performance?
I.xlvii. Yes. If so, a contract ahs been formed by the parties’ conduct. Its terms are those upon which the parties writings agree and that the UCC’s “supplementary terms.” Missing terms may be supplied by an applicable trade usage or course of dealing or performance between the parties
I.xlviii. No. If not, then no contract has been formed
A. Consideration – is there consideration to support the promise? 1. “Bargained For” Exchange – has something, either
another promise or a performance, been sought by the promisor and given in exchange for that promise?
1.a.Yes. If so, then the parties have bargained for the exchange of promises or performances such that each induces the other and the consideration requirement is met
1.b. No. If the performance or return promise is not sought by the promisor in exchange for her promise and given by the promise in exchange for that promise, then there is no consideration
2. Promises that are not “Bargained For” – if the promise is not sought by the promisor and given by the promise in exchange for that promise, then what type of promise is it?
1.c.Gratuitous Promise – is the promise one to make a future gift where the promisor asks for and receives nothing in exchange? If so, then the promise is not legally enforceable. However, it is only the promise to make a gift, not the making of the gift that is unenforceable for lack of consideration. Once made, the promisor cannot rescind the gift for lack of consideration
1.d. Past considerations – has the promise already taken the action before the promise is made? If so, then the promisor cannot be seeking to induce it and it is not consideration. However, there are exceptions for promises to perform what are considered “moral obligations” Ask: is the promise one made under the following circumstances?
2.i. Debt barred by Statute of Limitations – has a debtor promised to
pay a debt that has been barred by the statue of limitations? If so, the promise is enforceable absent the exchange element. Restatement 82(1)
2.ii. Antecedent Indebtedness – has a debtor voluntarily acknowledged an antecedent debt? If so, any action is based on the new promise and recovery is limited to its term. Restatement 82(2)
2.iii. Debt Discharged in Bankruptcy – has a debtor promised to pay a debt that has been discharged in bankruptcy or one that is not yet discharged but is dischargeable in bankruptcy proceedings begun before the promise is made? If the promise is express and voluntary, it is binding Restatement 83
2.iv. Material Benefit – is the promise one made in recognition of a benefit previously received by the promisor from the promise where enforcement is necessary to prevent injustice? If so, the promise is binding. Restatement 86
1.e.Illusory Promise – does the promise by its terms make performance entirely optional with the promisor? If so, then there is no commitment as to future behavior and the promise is illusory. However, if the promisor has limited its discretion in some way, then the promise is not illusory. Ask: are there limits to the party’s discretion?
2.v. Requirements and Output Contracts – is there a term which measures its quantity by the seller’s requirements or the buyer’s output? If so,
it means such as may occur in good faith and is therefore enforceable
2.vi. Reasonable Efforts – is there an implied promise to use “reasonable efforts” as in an “exclusive dealings” agreement? If so, then the obligation to use best efforts prevents the promise from being illusory and the promisor is bound
2.vii. Good Faith – is there an obligation to act in good faith? Where a party is entitled to exercise discretion over its performance, that discretion is not unlimited because it must be done reasonably and in good faith. The obligation to act in good faith keeps the promise from being illusory
1.f. Conditional Promise – has the promisor conditioned its promise?
2.viii. On an Event? If the promise is based on a condition which must occur and the promisor knows at the time of making the promise that the condition cannot occur, then no commitment has been made because no duty of immediate performance can ever arise. Restatement 76
2.ix. On Personal Satisfaction? If the promisor’s obligation to perform is conditioned on satisfaction with the other party’s performance, then the promisor must act in good faith where the performance involves matters of personal taste and must be reasonable where the performance is of a technical or commercial nature.
1.g. Settlement of Claims – is the promise one to forbear from bringing or to surrender a claim or defense, which is invalid? If so, it is not
consideration unless the claim or defense is doubtful or the forbearing a party believes that the claim or defense maybe found to be valid
B. Promissory Estoppel – if there is no consideration, has there been reliance? There are some promises, which, although the promisor makes them without bargaining for anything in return, nonetheless induce the promise to rely to her detriment. In such circumstances, recovery may be available on a reliance basis. Ask: are the elements of promissory estoppel as set forth in Restatement 90 satisfied? 1. Promise – has a promise been made? Did the promisor use clear
and definite language such that a reasonable person in the position of the promise would be justified in believing a commitment had been made?
1.a.b. If not, then there is no basis for recovery 1.b. Yes. If so, then there may be a basis for recovery under
promissory estoppel. If the promise is a charitable pledge, then the promise is enforceable under Restatement 90 without proof of reliance and your inquiry ends here. If your jurisdiction does not follow the Restatement view, then reliance on the promise by the charitable institution is required. Proceed to the next question.
2. Foreseeability of Reliance – did the promisor have reason to expect the promise to rely on the promise?
1.c.No. If the promisor had no reason to expect any reliance or not the kind of reliance that resulted, then the promisor is not bound
1.d. Yes. If so, then the promisor may be bound if the other requirements are met. Proceed to the next question.
3. Justified Reliance – did the promise induce actual reliance and was the reliance justified?
1.e.No. If the reliance was not induced by the promise, then it is not enforceable
1.f. Yes. If the promise actually relied on the promise and that reliance was reasonable based on the nature of the promise, then the promise may be enforceable if all the elements are satisfied. Proceed to the next question
4. Avoiding Injustice – are the circumstances such that injustice can be avoided only by enforcement of the promise?
1.g. No. If not, then the promise is not enforceable. 1.h. Yes. If so, and all the other requirements are met, then
the promise is enforceable. Proceed to the next question to determine the applicable remedy
5. Recovery may be Limited – what is the appropriate form of relief? The remedy may be limited, as justice requires. This means that the promise may not receive full contractual relief which would include her expectation damages but may be limited to reimbursement of the actual loss expended in reliance on the promise
C. Modification - is there consideration to support a promise modifying a duty under a contract not fully performed by either party? 1. Pre-existing Duty – is a party promising to perform a duty that she
already owes? 1.a.Yes. If so, then the party has a pre-existing duty and there is
no consideration to support the promise 1.b. No. If not and the party is promising to perform a duty
not already owed ot the promisor, then there is consideration to support the promise
2. Modern Trend – does the jurisdiction allow for a departure form a strict application of the pre-existing duty rule as reflected in Restatement 89 where a modification may be enforceable without consideration? If so, then a modification is binding absent consideration fi all of the following requirements are met:
1.c.Voluntary – did the parties voluntarily agree to the modification?
1.d. Executory – is the contract still executor on both sides (each side still owes a performance)?
1.e.Unanticipated Circumstances – were the underlying circumstances prompting the modification unanticipated by the parties?
1.f. Fair and Equitable – is the modification fair and equitable? 3. Sales of Goods – is there a modification for a contract involving a
sale of goods? If so, then consideration is not required under UCC 1
2-209 although the Code requires the modification to meet the test of good faith. Ask: was the modification made in good faith?
1.g. Yes. If so, then the modification is enforceable 1.h. No. If the party acted in bad faith to escape a
performance due under the original contract terms, then the modification is not enforceable
Statute of Frauds
A. Type of Contract – assuming a valid contract was formed, does it fall within the statute of frauds? Only certain categories of contracts are required to be in writing to be enforceable. To determine whether a writing is required, ask what type of contract it is:
A.a. Is it a contract for a sale of an interest in land? A.b. Is it a contract for a sale of goods for $500 or more? A.c. Is it a contract that cannot be performed within a year of
its making? A.d. Is it a contract to answer for the debt of another? A.e. Is it a contract made in consideration of marriage? A.f. Is it a contract by an executor or administrator to answer
for the duty of their decedents? 1. Yes. If your answer is “yes” to any of the above, then the
contract must be in writing. Further, the requirements of the statute apply separately so that if more than one requirement applies to a single contract, then all must be met. Proceed to Part B.
2. No. If not, then the contract does not need to be in writing to be enforceable and the analysis ends here
B. Written Memorial – is there a writing or record sufficient to satisfy the requirements of the statute? Where a contract is required to be in writing, it must be in a permanent, written form, contain the essential terms, and be signed by the party to be charged. The requirements of the Code are similar and any differences will be addressed where applicable.
A.g. Form of Writing/Record – is there a written memorial of the parties’ agreement? Is there some form of a writing even if it appears on a napkin, as an internal memorandum, a document written for some other purpose, a check, or a series of separate writings, which when considered together, provide evidence of the parties agreement?