Mod|f|cat|on and D|scharge

When Lhe modlflcaLlon occurs ls lmporLanL

parLles had an orlglnal conLracL and changed Lhe duLles !"#$%" Lhe agreemenL was execuLed, all Lhe
elemenLs of ModlflcaLlon are saLlsfled
8efore compleLlng performance (durlng, LxLCu1C8? CCn18AC1)
o uCC 2-209
! no conslderaLlon-Cood lalLh
o noL ln Lhe uCC--
! Cld common law, noL conslderaLlon, no modlflcaLlon
! 8esLaLemenL 39 modlflcaLlon enforceable lf falr and equlLable
Pow Lo geL around Lhe old rule (noL uCC)
o Cffer someLhlng new or dlfferenL
o MuLual recesslon"lL could be argued LhaL ln a momenLary gap before Lhey enLered Lhe
new conLracL, Lhe parLles lmpllclLly agreed LhaL Lhe old conLracL was no longer blndlng
on Lhem
AfLer one parLy has fully performed (Accord and SaLlsfacLlon)
o Cood falLh, falr deallng ln Lrade, and honesLy
no Cral ModlflcaLlon Clause
! AccepLlng an oral modlflcaLlon walves Lhe clause
o lor example accepLlng a paymenL

lf a credlLor ls owed $1000 and recelves a check for $700, Lhen wlLhouL any oLher knowledge, Lhe
credlLor would reasonably belleve LhaL Lhe $700 ls mere|y a part payment toward the debt of 51000.
accepLance by lnacLlon" uLLlng Lhe check ln a drawer
Watk|ns & Sons, Inc.
! lalnLlff ls excavaLlng for defendanL hlLs granlLe, wanLs 9xs Lhe orlglnal amounL
! Crally agreed Lo Lhls
o Was orlglnal agreemenL resclnded?
! ?es, lL was resclnded by new Pampshlre
! 1he promlse Lo pay more ln exchange for dlscharge of an obllgaLlon ls a valld
promlse
reex|st|ng duty ru|e: ls LhaL you can'L modlfy wlLhouL conslderaLlon (noL enforceable unless
conslderaLlon)
AusLln v. Laurel
Lconomlc uuress
o Crdlnary damages for breach would noL be adequaLe Lhey couldn'L have obLalned Lhe
good from an alLernaLlve source
o CourL sald LhaL was lndeed economlc duress and LhaL AusLln had coerced Lhem lnLo Lhe
deal-1herefore Lhls was noL ln good falLh
8uyer may have wa|ved th|s r|ght. A wa|ver |s a know|ng re||nqu|shment of a r|ght.
A parLy who has made a walver affecLlng an excecuLory porLlon of Lhe conLracL may reLracL Lhe
walver by reasonab|e not|f|cat|on recelved by Lhe oLher parLy LhaL sLrlcL performance wlll be
requlred of any Lerm walved, unless Lhe reLracLlon would be un[usL ln vlew of a maLerlal change
of poslLlon ln rellance on Lhe walver.
Accord and Sat|sfact|on
After fu|| performance by one party
Accord: 1he agreemenL under whlch Lhe credlLor agrees Lo dlscharge Lhe enLlre debL upon parL paymenL
CredlLor can'L accepL as parL paymenL because LhaL would be changlng Lhe Lerms of Lhe offer
ln an accord (or subsLlLuLed conLracL) lssue, look for Lhese facLs:

1. 1here ls a duLy arlslng elLher from a LorL or from a conLracL LhaL ls parLlally execuLed, LhaL ls, lL has
been performed by one of Lhe parLles. 1he parLy who has performed ls a credlLor.

2. 1he parLles enLer lnLo a conLracL LhaL dlscharges Lhe duLy of Lhe debLor.

3. 1he debLor agrees Lo glve Lhe credlLor some performance (or promlse).

Cons|derat|on: uebLor agrees Lo do someLhlng addlLlonal or dlfferenL, because of Lhe pre-exlsLlng duLy
rule C8 an unllquldaLed debL C8 a dlspuLed debL
Sat|sfact|on: 1he performance
CnL? ALlLS 1C ACCC8u
1here ls nC conslderaLlon lf lL's a llquldaLed and undlspuLed debL
1here lS conslderaLlon lf lL ls unllquldaLed or dlspuLed debL
llquldaLed: parL paymenL does noL equal conslderaLlon
courLs analyze Lhe law accordlng Lo accord and saLlsfacLlon
klbler v. lrank
lalnLlff agreed Lo harvesL wlLh agreed prlce
8llled Lhe defendanL
uefendanL senL a check for less Lhan bllled and sLaLed lL was for full paymenL
CourL sald check was noL an offer of an accord because accord had Lo be enLered lnLo knowlngly
and we don'L know LhaL Lhey acLually read lL and knew whaL lL meanL

Ant|c|patory kepud|at|on and Assurances of erformance 27
WheLher a promlsor repudlaLes by word, acL, sllence, or lnacLlon, hls anLlclpaLory repudlaLlon wlll only
be acLlonable lf he communlcaLes lL Lo Lhe promlsee ln deflnlLe and unequlvocal Lerms, and Lhe
promlsee acLs upon lL, prlor Lo Lhe Llme LhaL Lhe promlsor's performance ls due under Lhe conLracL.
CAn'1 8L An1lClA1C8? 8LuulA1lCn unLLSS l1 lS A MA1L8lAL 88LACP, lf lL occurred aL Lhe
Llme of for performance would lL excuse Lhe oLher parLy?... ?es, Lhen maLerlal
LkkLSS Ck IMLILD
Lxpress: verbally or ln wrlLlng sLaLes LhaL Lhey clearly and unequlvocally wlll noL perform
lmplled: uoes someLhlng LhaL puLs Lhe power Lo perform ouL of hls conLrol even lf he doesn'L
say anyLhlng Lo Lhe oLher parLy
o kenLucky Porse Case
keasonab|e Grounds for Insecur|ty:
8easonable commerclal sLandards
o ?ou can flrsL have experlence someLhlng or hear someLhlng as long as lL ls reasonable
uemand for explanaLlon of
o ClrcumsLances LhaL gave rlse Lo Lhe lnsecurlLy
o Pow Lhe clrcumsLances have changed
o Pow Lhe parLy plans on maklng good
! 2 Lhlngs ln response for adequaLe assurance
ClrcumsLances came up explalned.
Pow Lhey are or lnLend Lo change ln order Lo honor Lhe conLracL/
resolve lssues and honor Lhe conLracL
Demand for adequate assurance
musL be ln wrlLlng, under Lhe uCC-2-209
Common law does noL have Lo be ln wrlLlng


Consequent|a| damages:
Arlse from Lhe breach buL were reasonably foreseeable Lo Lhe breachlng parLles aL Lhe Llme Lhe
conLracL was formed.
8reachlng parLy had Lo know or should have known LhaL such damages would occur from a
breach aL Lhe Llme Lhe conLracL was formed. (Padley v. 8axendale)
AcLual knowledge C8 consLrucLlve knowledge
o MusL be broughL up ln Lhe complalnL, ln order Lo puL Lhe oLher parLy on noLlce


What are you ent|t|ed to do when someone repud|ates? kestatement 2S7
uo noLhlng
Cancel and reLaln
Sell and geL Lhe dlfference beLween conLracL and resale plus damages
8esLaLemenL 230

Warrant|es:
When a promlsor makes a promlse Lo answer for an evenL LhaL mlghL or mlghL noL occur LhaL ls beyond
human conLrol, Lhe common law calls Lhls a warranLy.
2-313 express warranLy: afflrmaLlon of facL or promlse made by seller Lo buyer made Lhe basls
of Lhe bargaln
o A sLaLemenL LhaL can be proven ln facL or someLhlng LhaL Lhe seller promlses
8uyer relles on warranLy as parL of Lhe deal, lf Lhey buyer knew he was geLLlng someLhlng
dlfferenL Lhan whaL Lhe buyer promlsed Lhen he doesn'L geL Lhe warranLy
1lmlng, basls of bargaln, parole evldence
o lf [usL before you buy someLhlng and slgn a wrlLlng Lhen glven a warranLy lL probably
lsn'L a basls of Lhe bargaln
CAn1 LlMl1 CCnSuML8 L8SCnAL ln!u8?
IMLILD
lmplled warranLy of ownershlp
lmplled warranLy of lnLellecLual properLy rlghLs/1lLle
o lree of llens and encumberances
Merchantab|||ty 2-314
o Coods LhaL are flL for Lhe ordlnary purposes of whlch Lhe goods are used
o noL LhaL goods are flL for any speclal purpose
o lmplled warranLy of merchanLablllLy applles only Lo merchanLs who sell a parLlcular klnd of good
D|sc|a|mers of |mp||ed warranty of Merchantab|||ty
o Speclflc
o Consplcuous-ln wrlLlng
o And lnclude Lhe word merchanLablllLy
o LxCL1lCn: use expresslons llke as |s Lo dlsclalm Lhe lmplled warranLles of merchanLablllLy and
flLness for a parLlcular purpose

UCC 2-31S |mp||ed warranty of f|tness for a part|cu|ar purpose
o Any se||er can glve Lhls warranLy NC1 SLCLIIC 1C MLkCnAN1S
o 8uyer lnforms seller
o Seller selecLs sulLable goods
o MuS1 uSL 1PL8L A8L nC WA88An1lLS ACCL1 Cn 1PL lACL PL8LCl
o robably slmllar Lo ulsclalmers for merchanLablllLy
D|rect Damages from breach of express warranty
o urchase prlce of producL
o 8epalr prlce
o CosL of parLs
A|so ||m|t consequent|a| damages:
LkCL1: In[ur|es caused by consumer products (Uncons|onab|e)
UCC 2-719 --Where c|rcumstances cause an exc|us|ve or ||m|ted remedy to fa|| |ts essent|a| purpose
remedy may be had as prov|ded |n th|s act
o Pollday 8ambler
Unant|c|pated Lvents
unforeseen evenL occurs and rlsk ls noL allocaLed performance can be |mpract|cab|e (Se||er) 261
1. LvenL afLer conLracL lormaLlon
2. erformance lmpracLlcable because of Lhe evenL (lM8AC1lCA8LL/ LvenL frusLraLes Lhe
prlnclple purpose of Lhe conLracL (l8uS18A1lCn CnL?)
a. SlgnlflcanLly more dlfflculL or nearly lmposslble Lo perform
3. nonoccurrence of Lhe evenL was a baslc assumpLlon of Lhe parLles when they entered Lhe
conLracL.uld Lhey belleve LhaL lL would noL occur aL Lhe Llme of Lhe conLracL?
4. arLy seeklng Lo be dlscharged dld noL carry Lhe rlsk of Lhe evenL's occurrence
Was a buyer's purpose frustrated? (8uyer on|y)-- 26S
LlemenLs same as lmpracLlcablllLy excepL Lhe parLy seeklng Lo be dlscharged musL show LhaL a cerLaln
evenL frusLraLed Lhe purpose of Lhe conLracL. rlnclpal purpose
When lmpracLlcablllLy or frusLraLlon excuse performance Lhe parLy ls noL ln breach, Lherefore Lhe oLher
parLy can noL sue for expecLancy.
o CLher parLy can ask for resLlLuLlon or rellance
ke||ance:
1. romlse
2. 8easonably expecL Lo commence acLlon or forebearnce
3. AcLually has Lo produce acLlon or forebearnce
4. LnforcemenL musL be only way Lo avold ln[usLlce
a. uamages ls exLenL of rellance
Mutua| recess|on:
o uoes noL have Lo be ln wrlLlng
o unless sLaLuLes of frauds applles
Damages are the remedy for breach of prom|se
economlc wasLe" docLrlne, when Lhe cosL of repalr exceeds Lhe value Lo be resLored by Lhe repalr, Lhe
ln[ured parLy may geL noL Lhe cosL of repalr buL Lhe dlfference ln value beLween whaL Lhey were
promlsed and whaL Lhey goL.
1he general rule ls LhaL a promlse Lo do someLhlng on Llme ls merely a promlse for whlch Lhe remedy for
breach ls damages
a breach of prom|se-damages
Mater|a| breach-relleves obllgaLlon Lo perform
lor a conLracL Lo be dlvlslble, Lhe performance of one parLy musL be dlvlslble lnLo performances LhaL are
Lhe agreed equlvalenL" of a performance by Lhe oLher parLy
IMCSSI8ILI1
rule does noL apply when performance ls rendered lmposslble by Lhe conLracLor's own acL or
fallure Lo acL, or Lhe acLlons or fallure of Lhose bound Lo hlm
when a parLy makes conLracLual obllgaLlons LhaL lnvolve a Lhlrd parLy, Lhe parLy cannoL clalm
lmposslblllLy due Lo problems arlslng from Lhelr own Lhlrd parLy arrangemenL.
GCCD IAI1n- UCC 1-304, 1-201
8equlres peoples Lo acL honesLly
o Cb[ecLlve SLandard" Commerclal sLandard" LxperL LesLlmony"
o Sub[ecLlve" roof of ulLerlor moLlve
! Cnly really use lf someone admlLs Lo someLhlng
8ad falLh, 8esLaLemenL 203
CAn nC1 dlsclalm dlllgence, reasonableness, and care
rom|se and Cond|t|on Chapter 2S
uove v. 8ose Acre" Lxpress condlLlon upheld
8onus SLrucLure, was noL golng Lo be lefL ouL hlgh and dry lf he dld noL fully perform
CpLlonal, volunLary
no doubL he was aware of Lhe Lerms and LhaL Lhey were upheld sLrlcLly
PCW CAn ?Cu 8C1LC1 ?Cu8SLLl ln A CCn18AC1 WPL8L C8Lul1 lS 8LlnC Lx1LnuLu?
-8LCul8L lnS1ALLMLn1 A?MLn1S
-?Cu CAn CCn18AC1 1C uLMAnu 1PL MCnL? ul8Cn1

lnuLLnuLn1 8CMlSLS: PAvL 1C 8L L8lC8MLu LvLn ll 1PL C1PL8 A81? uCLS nC1 L8lC8M

uLLnuLn1 8CMlSL: PAvL 1C 8L L8lC8MLu CnL? ll 1PL C1PL8 A81? L8lC8MS

Substant|a| performance
1. 8roken promlse= uamages
2. unsaLlsfled CondlLlon=erformance excused
Lxpress Cond|t|on: Clearly sLaLed ln Lhe conLracL.
LlLher lL's done or lLs noL, no substant|a| performance
LxcepL ln LhaL Cardozo case where LhaL happened.
o uoes Lhe parLy recelve someLhlng LhaL serves Lhe essenLlal purpose of whaL was
promlsed? (!acobs).
! lumber may noL have been parLlcularly aware of Lhe requlremenLs
! ulssenL clalms Lxpress CondlLon
Imp||ed Cond|t|on: l'm obllgaLed Lo perform lf you perform and vlce versa, noL sLaLed ln Lhe conLracL buL
expecLed anyways-lMLlLu-found by Lhe courL

Amb|gu|ty: olnLs Lo promlse over condlLlon.Lhls ls more falr, per 8esLaLemenL 227

Immater|a| breach, lf a breach ls lmmaLerlal Lhere ls subsLanLlal performance
o non breacher sLlll has pay, buL can subLracL Lhe damages
Mater|a| 8reach
o non breacher does noL have Lo perform
o Cl A 8CMlSC8? CCnul1lCn, Lhey have Lhe cholce Lo be excused from performance or
seek damages
When |s t|me mater|a|?
Speclal for Lhe day
1lme for performance ls a promlse, Lherefore you musL perform buL you can geL damages for
delay. uL Lhe requlremenL ln Lhe conLracL abouL whaL happens ln Lhe lnsLance of laLe.

kLS1A1LMLN1 1LS1 141
Can Lhe ln[ured parLy be compensaLed?
Wlll Lhe breachlng parLy cure hls fallure?
Was Lhe breachlng parLy acLlng ln good falLh?
WhaL wlll Lhe ouL of pockeL loss be?


INS1ALLMLN1 CCN1kAC1S:

Code says slngle shlpmenL, however, you can conLracL separaLe shlpmenLs
2-612(b)
8uyer may re[ecL any lnsLallmenL nonconformlng lf Lhe nonconformlLy subsLanLlally lmpalrs Lhe
value of LhaL lnsLallmenL and cannoL be cured
llsL ask lf Lhey can re[ecL Lhe lnsLallmenL, Lhen ask lf Lhey can re[ecL Lhe whole conLracL, Cnly lf
Lhe value of Lhe whole conLracL ls lmpalred

kLLILI IkCM nAkSn LIILC1S CI CCNDI1ICNS

kest|tut|on: Cenerally a breachlng parLy can recover for Lhe beneflL Lhey conferred Lo Lhe oLher
parLy
8esLlLuLlon LxpecLancy of Lhe non-breachlng parLy comes before resLlLuLlon for Lhe breachlng
parLy
o 8esLlLuLlon value of beneflL conferred less damages, no more Lhan Lhe porLlon of Lhe
conLracL performed.
WAIVLk:

1hunderblrd Case
o AuLo loan case, laLe paymenLs agreed upon ln Lhe presence of a no oral modlflcaLlon
clause.
o 8epeaLedly accepLed laLe paymenLs Lherefore walved Lhelr rlghL Lo repossess Lhe car
! noL a modlflcaLlon, [usL a walver
o no more mlsLer nlce guy leLLer, may reLracL a walver upon proper noLlce
o uamages: Money lnLeresL LhaL would have accrued (lnLeresL) beLween due saLe and pay
daLe

DIVISIA8LL CCN1kAC1
Lqual prlces
Can'L be Llme based-Can be performance based lf lL ls of equal value?

UCC rom|se and Cond|t|on

uCC 2-601-noL exacLly whaL was ordered
8e[ecL whole-Cnly lf Lhere ls a (defecL subsLanLlally lmpalrs value)
1. 8LASCnS lC8 8LvCklnC Al1L8 ACCL1AnCL
1. uefecLs were Lo be cured ln reasonable Llme
2. redlcaLed Assurance of conformlLy
3. uefecL dlfflculL Lo dlscover
2. 8eLLer for buyer Lo re[ecL non-conformlng goods because Lhen LhaL puLs Lhe seller ln
breach. 8emedles for breach seller (S, Cover, MarkeL)
AccepL Whole
AccepL commerclal and re[ecL Lhe resL,

lor non-dellvery or by repudlaLlon by Lhe seller
2-713 (1)
o MarkeL rlce (Llme of breach)- rlce of conLracL + lncldenLals + ConsequenLlal - savlngs

Inc|denta|s: 2-71S(1) 8uyer's Inc|denta| and Consequent|a| Damages.
(1) lncldenLal damages resulLlng from Lhe seller's breach lnclude expenses reasonably lncurred
ln lnspecLlon, recelpL, LransporLaLlon and care and cusLody of goods rlghLfully re[ecLed, any
commerclally reasonable charges, expenses or commlsslons ln connecLlon wlLh effecLlng cover
and any oLher reasonable expense lncldenL Lo Lhe delay or oLher breach.
SLorage, shlpplng cosLs eLc.

ALLorney's fees are noL lncldenLal damages
ulfference ln purchase prlce, also noL lncldenLal damages

Consequent|a|
ConsequenLlal damages resulLlng from Lhe seller's breach lnclude:
any loss resulLlng from general or parLlcular requlremenLs and needs of whlch Lhe seller aL Lhe
Llme of conLracLlng had reason Lo know and whlch could noL reasonab|y be prevented by cover
or otherw|se, and
ln[ury Lo person or properLy proxlmaLely resulLlng from any breach of warranLy.


8as|c kemed|a| Concepts:
8ecovery of Lhe plalnLlff ls sub[ecL Lo several resLrlcLlons
1. CausaLlon
2. 8easonable CerLalnLy
3. Can'L be speculaLlve
4. uamages have Lo be foreseeable
3. non breachlng parLy has Lhe duLy Lo mlLlgaLe damages

Lxpectancy: Where would Lhe parLy have been had Lhe conLracL been performed?
WhaL would Lhe proflL have been?

kemed|es Under the UCC
SLupld formulalc approach
lncldenLal: dlrecLly caused by Lhe harm of Lhe breach. sLorage or shlpplng cosLs posslbly (8easonable,
LxLM1 l8CM lC8LSSLA8lLl1? 8LCul8LMLn1)
ConsequenLlal: uamages due Lo noL recelvlng whaL was ln Lhe conLracL .sales posslbly(lorseeable)

G|v|ng the 8uyer a kemedy when the Se||er |s |n 8reach and Se||er has goods
Spec|f|c erformance
o Money damages noL adequaLe
o uCC 2-716" unlque goods or oLher proper clrcumsLances"
Cover
o Same goods somewhere else and Lhen seeklng damages beLween conLracL prlce and Lhe
prlce Lo cover.
o UCC 2-712 ICkUMULA: CCVLk kICL- CCN1kAC1 kICL+INC. & CCNS. - LkLSNSLS
SAVLD 8 8kLACn
Market
o UCC 2-713 ICkMULA: MAkkL1 kICL - CCN1kAC1 kICL + INC. & CCNS. - LkLNSLS
SAVLD 8 8kLACn
o lf markeL prlce ls above conLracL prlce buyer suffers a loss even lf he or she does noL
cover
o MA8kL1 8lCL WPLn 8u?L8 LLA8nLu Cl 1PL 88LACP!
! up ln Lhe alr abouL lf lLs aL Lhe Llme of repudlaLlon (clear and unequlvocal
sLaLemenL of repudlaLlon)
! C8 Lhe daLe of acLual breach (performance daLe)

Se||er |s |n breach 8uyer has goods
value of promlsed goods mlnus- value of acLual/accepLed goods
o usually ln Lhe evenL LhaL lL ls Loo laLe Lo revoke accepLance
o UCC 2-714(2)&(1)

When 8uyer |s |n breach and 8uyer has the goods

kecover Contract r|ce CNL
o lf Lhe seller dellvered , someLlmes you can geL conLracL prlce wlLhouL dellverlng ln cases
such as a neon slgn because Lhere ls noL markeL.
o UCC 2-709
! CCN1kAC1 kICL + INC.




8uyer In 8reach Se||er has Goods

kesa|e
o 1he seller resale's Lhe goods Lo someone else
o UCC 2-706 (1)
! CCn18AC1 8lCL- 8LSALL 8lCL + lnC - LxLnSLS SAvLu
o WhaL lf Lhese goods aren'L ready for resale?
! I1 DLLNDS UCC 2-704
Chose Lhe opLlon LhaL would mlLlgaLe Lo Lhe greaLesL exLenL
8easonable commerclal [udgmenL"
Market
o 1he buyer can elLher resale or Lake Lhe markeL prlce and recover Lhe dlfference
! More reasonable opLlon mlLlgaLe Lhe besL LhaL Lhey can
o UCC 2-708
! CCn18AC1 8lCL - MA8kL1 8lCL + lnC. - Savlngs
MarkeL prlce derlved from Lhe MA8kL1 8lCL aL Lhe Llme of Lhe 1LnuL8
o When Lhe buyer was supposed Lo geL Lhem or Lransferred Lo a carrler

CALCULA1IING LIUDA1LD DAMAGLS
8easonable efforL Lo esLabllsh acLual damages
uamages had Lo be dlfflculL Lo calculaLe ln Lhe beglnnlng
SomeLlmes lL ls resLrlcLed Lo noL exceed acLual damages

ILDLkAL Ak8I1kA1ICN:
ArblLraLlon clauses on Lhelr face are noL unenforceable
MonLana Case
o Say you can noL have an arblLraLlon clause ln your conLracL unless you puL lL on
Lhe fronL page and underllne lL
o SLaLuLe" WenL Lo Supreme CourL because Lhere ls lederal LeglslaLlon LhaL
supersedes lL.
As a maLLer of law an arblLraLlon clause ln a conLracL of adheslon ls noL per se unenforceable
valld, lrrevocable, and enforceable

CnCICL CI LAW

MusL be a reasonable connecLlon for cholce of law
?ou're noL allowed Lo choose Lhe law of a [urlsdlcLlon who's law conLradlcLs a pollcy of Lhe
[urlsdlcLlon's law LhaL would apply lf Lhere were no cholce of law clause.