Contract Law Overview

Overview

This lecture provides a systematic framework for analyzing contract law essay questions, emphasizing issue spotting, key rules, contract formation, performance, remedies, and defenses under both Common Law and UCC Article 2.

AFTER Framework for Contracts Essays

Always start by identifying Applicable Law: Common Law (services, real estate) or UCC Article 2 (goods).
Formation: Analyze offer, acceptance, consideration, capacity, legality, Statute of Frauds, and formation defenses.
Third Party Issues: Check for assignments, delegations, third-party beneficiaries, and liability types.
Excuse or Performance: Assess substantial performance vs. perfect tender, breach type, conditions, discharge methods, and anticipatory repudiation.
Remedies: Identify expectation, reliance, restitution, equitable remedies, UCC-specific remedies, and related limitations.

Common Law vs. UCC Article 2 Distinctions

Common Law governs services, real estate, and intangibles; UCC Article 2 covers sales of goods (tangible, movable).
UCC allows for gap fillers and flexible contract modifications; Common Law requires new consideration.
Mirror image rule applies in Common Law; UCC 2-207 allows acceptance with different terms.
Substantial performance is the standard in Common Law; UCC requires perfect tender for goods.

Contract Formation Essentials

A valid contract needs a definite offer, proper acceptance, consideration, and capacity.
Consideration must be a bargained-for exchange with legal and actual value.
Contracts may be bilateral (promise for promise) or unilateral (promise for act).
Contracts can be valid, void, voidable, or unenforceable.

Third Party Rights

Assignment transfers contract rights; delegation transfers duties (with original party liability unless novation).
Intended beneficiaries have enforceable rights; incidental beneficiaries do not.
Third-party rights vest upon reliance, assent, or contract terms restricting modification.

Performance and Breach

Substantial performance (minor deviations) allows recovery minus damages in services.
Perfect tender rule (UCC): buyer may reject goods failing to conform in any way.
Breach can be material (excuses performance) or minor (damages allowed but not excuse).

Defenses and Discharge

Common defenses: misrepresentation, mistake, incapacity, Statute of Frauds, illegality, duress, unconscionability, misunderstanding.
Statute of Frauds requires writing for marriage, suretyship, contracts >1 year, goods $500+, real estate.
Contracts can be discharged by impossibility, frustration, rescission, or agreement.

Remedies

Expectation damages put plaintiff in as-good-as performance position (LICEM: Loss + Incidental + Consequential – Expenses saved – Mitigation).
Reliance damages reimburse pre-performance expenditures.
Restitution recovers unjust benefits conferred.
Liquidated damages enforce preset amounts if not punitive.
Equitable remedies (specific performance, injunction) are available when legal remedies are inadequate; subject to equitable defenses (unclean hands, laches).

Key Terms & Definitions

Consideration — Bargained-for exchange of value in a contract.
Anticipatory Repudiation — Clear indication by a party not to perform when due.
Substantial Performance — Good faith performance with minor deviations from contract.
Perfect Tender — Goods must exactly match contract terms under UCC.
Assignment — Transfer of contractual rights.
Delegation — Transfer of contractual duties.
Third-Party Beneficiary — Non-party with enforceable rights under the contract.
Statute of Frauds — Law requiring certain contracts to be in writing.
Expectation Damages — Money awarded to place plaintiff as if contract had been performed.
Liquidated Damages — Pre-agreed sum for breach, enforceable if reasonable.

Action Items / Next Steps

Practice applying the AFTER method to sample essay questions.
Review Common Law vs. UCC comparison charts.
Memorize key terms, defenses, and the Statute of Frauds categories.
Complete assigned readings or problems on contract remedies.