Do NOT forget your commonsense; if someone breaches its most likely going to mean they will lose!!

Contracts Checklist

1. Applicable Law (UCC sale of goods or common law) 4. Performance

2. Formation (offer, acceptance, consideration or 5. Remedies for Unexcused nonperformance
consideration substitute & no formation defense) 6. Excuse of Non performance
3. Terms 7. Third Party Beneficiaries

I. Vocabulary
A. Contract: a legally enforceable agreement
B. Bilateral Contract: exchange of mutual promises
C. Unilateral Contract: the offer expressly requires performance as the only method of acceptance (reward, prize, contest)
D. Quasi Contract: where a contract fails, courts may impose a quasi-contract to prevent unjust enrichment (equitable remedy)
1. RULE:
a. п conferred a benefit on Δ;
b. п reasonably expected to be paid; &
c. Δ is unjustly enriched by not compensating п (recovery is measured by the benefit conferred)
II. Applicable Law
A. UCC Article 2 – Sale of Goods
1. Good: moveable, tangible property
2. Merchant: one who regularly deals in goods of the kind (or) who hold themselves out as having special knowledge/skill
peculiar to those goods. The UCC has special rules governing transactions between merchants
B. Common Law (real estate or services contracts)
C. Hybrid Transaction: predominant purpose
III. Formation
A. Offer:
1. Manifestation of intent to be bound;
2. In definite & certain terms (vague or ambiguous terms are illusory);
a. An offer is NOT required to contain all of the material terms (missing terms to be supplied by the court)
b. Common Law Exception: real estate transactions MUST contain price & description
c. UCC Exception: Quantity term MUST be stated (missing terms to be supplied by the court)
i. Requirement/Output Contracts: quantity pursuant to buyer’s needs or seller’s output (exclusively or non-
exclusively); be wary of illusory contracts; increases allowed if 1) proportionate & 2) made in good-faith
3. Creating power of acceptance in the offeree
a. Advertisements, invitations to deal (or) preliminary negotiations are NOT offers
b. Exception: a response to a very specific inquiry may be construed as an offer, as opposed to a mere price quote
B. Termination of Offer: an offer may be accepted so long as it has NOT been terminated
1. Revocation (by offeror): unequivocal words/conduct evidencing the termination of an offer effective when received
a. Irrevocable Offers: an offer cannot be revoked is one of the following:
i. Option: 1) promise to keep an offer upon & 2) supported by consideration
ii. Firm Offer: 1) offer, 2) by a merchant, 3) in a signed writing, 4) which by its terms gives assurance that it will
be held open is 5) irrevocable for the time stated (or if no time is stated, for 3 months)
iii. Detrimental Reliance: detrimental reliance (foreseeable) & enforcement is necessary to avoid injustice
iv. Unilateral Contract/Beginning Performance: unilateral contract are irrevocable for a reasonable period of
time for the offeree to complete performance (exception: mere preparation)
2. Rejection (by offeree) or Lapse of Time: effective when received
a. Express/Direct
b. Counteroffer (as opposed to mere bargaining): terminates the prior offer and creates a new offer
c. Conditional Acceptance (as opposed to mere preferences): terminates the prior offer and creates a new offer
d. Mirror Image (common law): acceptance adding “new” terms terminates the prior offer and creates a new offer

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 e. Battle of the Forms (UCC): if between merchants the new terms become part of the contract UNLESS 1) material
alteration (substantially effects a party’s risks or remedies), 2) the offer expressly limits acceptance to its terms (or)
3) offeror objects within a reasonable time
3. Operation of Law
a. Death or Incapacity
i. Exception: option contract or part performance of offer to enter into a unilateral contract
b. Destruction of subject matter of the contract
c. Supervening illegality
C. Acceptance:
1. Manifestation of assent to the terms of the offer (common law mirror image; UCC battle of the forms supra);
2. By the person to whom the offer was made (offers are NOT assignable);
3. With knowledge of the offer; &
4. UNLESS specifically limited by offeror, by any reasonable means:
a. Later Conduct (by offeror) Implying a Contract notwithstanding an improper response by the offeree
i. Battle of the Forms supra: new contract, inconsistent terms knock each other out, UCC fills the gaps
b. Promise to Perform (by offeree): acceptance of bilateral contract only (acceptance upon completion of
performance under a unilateral contract)
i. An offer calling for the shipment of goods may be accepted by a promise to ship
c. Starting to Perform (by offeree): acceptance of bilateral contract only (acceptance upon completion of
performance under a unilateral contract)
d. Complete Performance (by offeree): acceptance for both bilateral & unilateral contracts; notice may be required
e. Mailbox Rule: acceptance is generally effective when mailed; all other communication are effective when received
i. Exception: if rejection is sent before acceptance, neither is effective until received
f. Nonconforming Tender: acceptance & breach UNLESS offeree is making a mere accommodation, then no breach
& it operates as a counteroffer (noting that the offeror can either accept or reject the accommodation; should they
reject, they will have no further remedy)
D. Consideration: bargained for exchange of legal value; courts generally do NOT inquire into the adequacy of consideration,
however, if only one party is bound to perform the promise is illusory and is unenforceable for lack of consideration
1. Adequate Consideration
a. Performance or Promise to Perform: a promise can be consideration for another promise UNLESS illusory
b. Forbearance or Promise to Forbear: giving up something you have the legal right to do
2. Inadequate Consideration
a. Past Consideration/Moral Consideration: NOT consideration UNLESS
i. Expressly requested & there is an expectation of payment
b. Preexisting Duty Rule (MODIFCIATION): new/additional consideration is required UNLESS
i. Unforeseen circumstances (or) third party promise to pay
ii. No additional consideration is required, only good faith modification for the sale of goods
c. Part Payment to Release Debt (MODIFICATION): if debt is due & undisputed partial payment is NOT
consideration for release of that debt, however, EARLY payment IS CONSIDERATION for release of debt
3. Consideration Substitutes: there is a legally enforceable agreement even though there is no new consideration
a. Promissory Estoppel: 1) promise, 2) detrimental reliance (foreseeable) & 3) enforcement is necessary to avoid
injustice
b. Promise to Pay Legal Obligation now Barred by SOL: 1) writing 2) enforceable as to those new terms
E. Formation Defenses – “CSIMMMUD”
1. Lack of Capacity: person without capacity has the right to disaffirm the contract to avoid liability
a. Minor
i. Implied affirmation (ratification) upon reaching the age of majority
b. Mentally incompetent
c. Intoxicated (if other party had reason to know)
d. Quasi-Contract liability to pay reasonable value for necessaries
2. Statute of Frauds: for certain agreements to be enforceable they must be 1) in writing & 2) signed by party against
whom enforcement is sought (if a contract falls within the SOF but is satisfied, it is enforceable = no SOF defense; if a
contract falls within the SOF but it NOT satisfied, it is unenforceable = SOF operates as a defense to contract formation)
a. Agreements within the SOF

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 i. Promise to Answer for the debts of another (exception: “main purpose” of guarantor was to benefit themselves)
ii. Promise by Executor to pay Decedent’s Debts Personally
iii. Promises made in consideration of Marriage
iv. Promises that by its terms cannot be competed within (1) year (starting from the date of the agreement; lifetime
contracts are not within the SOF nor are tasks)
v. Transfers of an interest in real estate (exception: leases for (1) year or less)
vi. Sale of goods for $500+
b. Satisfying the SOF
i. Writing (common law): 1) parties, 2) subject matter & 3) signed by the party against whom enforcement is
sought (UCC): 1) quantity term & 2) signed by the party against whom enforcement is sought (merchants
exception: if a writing in confirmation of an agreement is received within a reasonable time, it satisfies the SOF
UNLESS objected to in writing within 10 days. NOTE: the Equal Dignity Rule states that written
authorization is required to act for someone else if the underlying contract is within the SOF
ii. Judicial Admission: the party asserting the SOF defense admits to an agreement in a pleading, response to
discovery (or) while giving testimony
iii. Performance: 1) transfer of an interest in real estate (part performance by buyer if at least two of the following
are satisfied: a) full/part payment, b) possession or c) improvements) 2) services contract (full performance by
either party) (or) 3) UCC: part/full performance of specially manufactured goods
3. Illegality:
a. Illegal Subject Matter: void
b. Illegal Purpose: enforceable only by the party unaware of illegality
4. Misrepresentation (concealment): false assertion (or) concealing material facts that were reasonably relied upon
5. Misunderstanding (ambiguity):
a. Material terms open to 2+ reasonable interpretations;
b. Each party attaches a different meaning to those terms; &
c. Neither party knows (or has reason to know) that the terms are capable of 2+ reasonable interpretations
6. Mistake of Fact: a contract will NOT be avoided by unilateral mistake [except where the non-mistaken party knew (or
should have known) of the mistake], however it may be avoided where:
a. Both parties are mistaken as to the contractual terms (NOT what something is worth or the need to enter into a K);
b. Materially affects their agreement; &
c. Neither party bears the risk
7. Unconscionability: all/part of an agreement may be unenforceable if the contract terms are incredibly one-sided
8. Duress:
a. Improper threat; &
b. No reasonable alternative

IV. Terms
A. Contractual Interpretation:
1. Contracts are construed as a whole according to the ordinary meaning of its words
2. Ambiguities are interpreted against the drafter
3. Courts may look at course of performance, course of dealings or trade custom/usage to determine the parties intent
4. Courts generally want to find a valid/enforceable agreement
B. Parol Evidence Rule: evidence of prior/contemporaneous written/oral statements are inadmissible to contradict, modify, or
vary the contractual terms where an agreement was intended by the parties as their complete/final agreement
1. Exceptions (the following are admissible)
a. Formation Defenses (“CSIMMMUD”)
b. To explain/supplement with evidence of the parties course of performance, course of dealings or trade custom/usage
i. Course of Performance: same parties/same contract
ii. Course of Dealing: same parties/different but similar contract
iii. Custom/Usage in the Industry: different but similar parties/different but similar contracts
c. Subsequent Modifications
C. Seller’s Delivery Obligations (common carrier)
a. Shipment Contract: seller completes deliver upon 1) tendering the goods to the common carrier, 2) making
reasonable accommodations for their shipment & 3) notifying the buyer
b. Destination Contract: seller completes delivery when goods are delivered to buyer’s location
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 D. Risk of Loss (conducted in the following order):
a. Agreement between parties controls
b. Breach: breaching party will be liable for ANY uninsured loss
c. Delivery via common carrier (see supra)
d. Merchant Seller: risk of loss passes upon buyers actual receipt of goods or Non-Merchant Seller: risk of loss passes
upon tender of delivery to buyer
E. Warranties
1. Express Warranty: must become part of the basis-of-the-bargain
a. Affirmation of fact/promise; or
b. Description of the goods; or
c. Model/sample
d. Exception: statements of puffery or mere opinion
2. Implied Warranty of Merchantability: if goods are sold by a merchant seller (deals in goods of the kind) it is implied
that they will be fit for their ordinary purpose
3. Implied Warranty of Fitness for a Particular Purpose:
a. Buyer with a particular purpose;
b. Relies on seller’s knowledge (& seller has reason to know of buyer’s reliance), it is
c. Implied that such goods are fit for that particular purpose
4. Limitations on Warranties:
a. Disclaimers
i. Express Warranties CANNOT be disclaimed
ii. Implied Warranties may be disclaimed if 1) conspicuous & 2) mentions the word “merchantability” or simply
sold “as is” or “with all faults”
b. Limiting Remedies
i. Remedies for both express & implied warranties may be contractually limited if NOT unconscionable
ii. Where a consumer suffers a personal injury, if is prima face unconscionable to enforce a remedial limitation

V. Performance
A. Sale of Goods Concepts (UCC)
1. Perfect Tender: seller’s performance must be perfect, otherwise breach & buyer may accept all, reject all or accept any
commercial unit and reject the rest
2. Rejection (of goods): if nonconforming goods, buyer has the option to:
a. Accept all & sue for damages;
b. Reject all & sue for damages; or
c. Accept any commercial unit & reject the rest & sue for damages
3. Cure: a seller that fails to deliver conforming goods may cure if:
i. Reasonable grounds (based on past dealings) to believe improper tender was acceptable with an allowance (or)
ii. Time for performance has not yet expired
4. Installment Sales Contracts: requires delivery in separate lots to be separately accepted; buyer may reject an
installment ONLY if there has been a SUBSTANTIAL IMPAIRMENT & the installment cannot be cured
5. Acceptance (of goods): once goods are accepted, they can no longer be rejected
a. Payment without an opportunity to inspect the goods is NOT acceptance
b. Retention of the goods after having a reasonable opportunity to inspect (or) using goods in a manner inconsistent
with seller’s ownership is deemed acceptance of those goods
6. Revocation (of the acceptance of goods): 1) nonconformity substantially impairs the value of the goods to him/her & 2)
made within a reasonable time after discovery of the nonconformity

VI. Remedies (for Unexcused Nonperformance) [See also infra]

A. Legal
1. Damages
a. Compensatory (certainty rule)
i. Expectation: “In California, money damage rules for breach of contract are based on protecting the expectation
interest. That means, a person making a contract will expect it to be performed without being breached. More
specifically, money damages are based on how much it would take to put п in the same financial position they
would have been if the contract has been performed without breach.” [1) causation, 2) foreseeability, 3)
certainty & 4) unavoidability]
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 ii. Reliance: put п in the same position as if the contract had never happened
iii. Incidental: costs incurred as a result of the breach (i.e. storage fees or cost of covering)
iv. Consequential: 1) related damages & 2) foreseeable at the time of contract formation
b. Nominal: awarded where п has suffered no actual injury; awarded to establish/vindicate п’s right
c. Liquidated: the parties may fix damages where it would be 1) difficult to ascertain & 2) reasonable in light of the
circumstances (a non-breaching party may recover either liquidated damages (or) if not available, actual damages,
but NEVER both)
d. Damages relating to the Sale of Goods
i. Seller Breach: Buyer keeps = FMV (conforming) – Value as delivered
ii. Seller Breach: Seller keeps = Mkt. Price – Contract Price (or) Replacement (cover) price – Contract Price
iii. Buyer Breach: Buyer keeps = Contract Price
iv. Buyer Breach: Seller keeps = Contract Price – Mkt. Price at time/place of delivery (or) Contract Price – Resale
(cover) Price
B. Restitutionary
1. Legal
a. Restitutionary Damages/Quasi-Contract: п recovering the value of the benefit conferred on Δ
b. Replevin
i. Entrustment (right of a BFP): the original owner’s rights are cutoff if the following is satisfied 1) True owner
leaves their goods, 2) with a merchant (who deals in goods of the kind); & 3) who wrongfully sells the goods to
a BFP
c. Ejectment
2. Equitable
a. Constructive Trust
b. Equitable Lien

C. Equitable
1. Specific Performance – “CCIMFD” : generally
a. Contractual Validity
b. Conditions of п satisfied
c. Inadequate Legal defense
d. Mutuality of Remedies
e. Feasibility of Enforcement
f. Defenses
i. Legal: 1) SOF, 2) misrepresentation or 3) mistake
ii. Equitable: 1) unclean hands, 2) laches or 3) unconscionability
2. Rescission – “GD”
3. Reformation – “VGD”
4. Reclamation: seller’s ability to get back unpaid for goods purchased on credit
a. Buyer is insolvent when the goods were received;
b. Seller demands return within 10 days (or within a reasonable time if buyer expressly stated they were solvent at the
time of contracting); &
c. Buyer still possesses the goods at the time of demand
d. NOTE: successfully reclaiming the goods excludes all other remedies
VII. Excuse for Nonperformance
A. Improper Performance (by another party)
1. Breach
a. Material: non-breaching party is excused from performing and may sue for breach
i. Where there has been substantial performance by the breaching party (non-breaching party obtained a
substantial benefit) there cannot be a material breach & the non-breaching party may NOT be excused from
performing, although they may still sue for damages
b. Nonmaterial (minor): non-breaching may sue for breach but they are NOT excused from performing
B. Nonoccurrence of a Condition
1. Conditions: mutually agreed upon contractual language limiting the parties’ obligations. Good-faith & fair-dealing are
implied conditions in all contracts. If a condition does NOT occur, contractual performance is excused, in other words

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 there is no breach for nonperformance. On the other hand, promises are unconditional & failure to perform according to
its terms constitutes a breach. NOTE: it’s not starting on time that’s crucial but finishing on time “time is of the essence”
a. Anticipatory Repudiation: unequivocal words/conduct evidencing the party is no longer going to perform made
before performance is due
i. The non-repudiating party may:
⇒ Assert breach & sue
⇒ Suspend performance & wait to sue
⇒ Treat the repudiation as an offer to rescind
⇒ Ignore & encourage performance
ii. The repudiating party may retract their repudiation so long the non-repudiating party does NOT materially rely
on the repudiation
iii. Demanding Adequate Assurance: if a party has reasonable grounds for insecurity they may demand adequate
assurance, and if commercially reasonable, suspend their performance until such assurance is forthcoming.
NOTE: expressions of doubt does NOT constitute an anticipatory repudiation
2. Excusing Non-Occurrence of a Condition
a. Good-Faith/Avoidance of Forfeiture
b. Waiver: by the person benefiting from condition/protected by a condition
c. Estoppel: a person is estopped from asserting a condition after waiving it
C. Later Contract:
1. Rescission (see also supra): both parties may agree to rescind if performance is still executory, thereafter, discharging all
contractual duties (cancelling the contract)
2. Accord & Satisfaction: new agreement (accord) is performed (satisfaction) performance of the original obligation is
excused; however, if the new agreement (accord) is NOT performed (satisfied) the other party may sue on either the
original obligation (or) on the new agreement (accord), BUT never both
a. Accords must be supported by new consideration UNLESS the original obligation was for the sale of goods (good-
faith only)
b. A valid accord does NOT discharge the original obligation, rather it suspends it until the new agreement is
performed (satisfied) or not performed.
c. NOTE: if an accord agreement is breached by a creditor by suing on the original obligation the debtor may seek to
have the action enjoined by raising the accord agreement as an equitable defense
3. Modification (substituted agreement): agreement by the parties to an existing obligation to impose an alternative
agreement
a. New consideration required UNLESS the original obligation was for the sale of goods (good-faith only)
4. Novation (substituted party): agreement by all parties to an existing obligation to substitute a new party; same
performance/different party
D. Later unforeseen Event:
1. Impossibility (objective): cannot be done
a. Death, Sickness or Incapacity
i. Unique personal service contract: excuse from performing if too sick/injured & they will NOT be liable for
damages UNLESS the contract provides otherwise
b. Illegality: the subsequent creation of law making performance of the contract illegal
c. Destruction of subject matter
2. Impracticability (subjective): extreme & unreasonable
3. Frustration of purpose:
a. Supervening act/event not foreseeable at the time of contract formation; &
b. Destroyed the contractual purpose

VIII. Third Party Rights/Duties

A. Third Party Beneficiaries:
1. Vocabulary
a. Third party beneficiary: able to enforce an agreement because the contracting parties entered into it for their benefit
b. Promisor: person making the promise that benefits the third party
c. Promisee: person who obtains the promise that benefits the third party
d. Intended/Incidental: only intended beneficiaries have contractual rights
e. Donee/Creditor: intended beneficiaries are either donee’s or creditors
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 2. Vesting of Third Party Rights
a. RULE: an agreement to cancel or modify a contract affecting a third party beneficiary is valid so long as third party
beneficiaries rights have NOT vested. Vesting occurs when the third party beneficiary either 1) knows & assents,
2) detrimentally relies or 3) sues on the contract
b. Once the third party beneficiary’s rights have vested, the contract cannot be canceled or modified without their
consent. NOTE: the parties may, by agreement, determine whether/when a third party beneficiary’s rights vest (life
insurance polices or employee benefit plans)
3. Bringing Suit
a. Beneficiary may sue Promisor
b. Promisee may sue Promisor
c. Donee beneficiary CANNOT sue Promisee
d. Creditor beneficiary may sue Promisee but ONLY on a preexisting debt
4. Defenses
a. If a Promisor is sued by a third party beneficiary, they may assert any defense they would have had against the
Promisee
B. Assignments: transfer of contractual rights/benefits to a third party; may be oral; no consideration is required; only
gratuitous assignments are revocable (unless obligor has already performed or detrimentally relied)
1. Vocabulary
a. Assignor: party to the contract who later transfer their rights/benefits under the contract to a third party
b. Assignee: not a party to the original contract; able to enforce the contract pursuant to a valid assignment
c. Obligor: other party to the contract
2. Assignee Rights
a. Assignee can sue the obligor
b. Assignor for consideration CANNOT recover from obligor
c. Obligor has same defenses against assignee as against assignor (they may directly offset damages against assignee)
d. Payment by Obligor to assignor is effective until obligor knows of assignment
e. Implied warranties of assignor in an assignment for value; assignor warrants that
i. The right assigned actually exists,
ii. Not subject to any defenses by the obligor; &
iii. Assignor will do nothing to impair the value of the assignment
3. Multiple Assignments
a. Gratuitous: last in time prevails; a gratuitous assignment followed by another revokes the previous one
b. For value (consideration): first in time prevails
4. Limitations On Assignment: absent an agreement, all contracts are assignable except long term contracts or unique
personal services contracts. Generally, the right to receive goods under a requirements contract is NOT assignable
because the obligor’s duties could change significantly (except where there has been a good-faith limitation)
a. Prohibition: contractual language prohibiting the RIGHT to assign but NOT the POWER to assign. Thus, assignor
is liable for breach of contract but an assignee who doesn’t know of the prohibition can still enforce the assignment
b. Invalidation: contractual language invalidating any assignment, meaning there is neither a right nor a power to
assign. Thus, the assignor is in breach and the assignee has no right to enforce the assignment
i. Ex: “all assignments pursuant to the terms herein are void
C. Delegation of Duties: transfer of contractual duties/burdens to a third party
1. Vocabulary
a. Delegating Party: party to the contract who transfers their contractual duties/burdens
b. Delegatee: third party now responsible to oblige for performing the delegating parties duties/burdens
c. Obligee: the one to whom contractual duties are owed
2. Relationship of Assignment & Delegation: a contract creates both rights & duties, thus be wary of transfers involving
one or the other, or both
3. Failure of Third Party Performance
a. Delegating Party always remains liable
b. Delegatee for consideration is liable
4. Limitations on Delegation: absent an agreement, all contracts are delegable except long term contracts, unique personal
services contracts or delegation would change the obligee’s obligations

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 Remedies
Approaching a remedies question
1) Determine the substantive area of law involved (torts, contracts or property)
2) Make sure the п has a case (tort committed or contract breached)
3) Determine what potential remedies warrant a discussion (legal, restitutionary or equitable)

Contract Remedies

Issue Checklist

Legal Remedies
Damages
Compensatory
Expectation
Reliance
Incidental
Consequential
Nominal

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 Liquidated
Restitutionary
Legal
Restitutionary Damages/Quasi-Contract
Replevin
Ejectment
Equitable (inadequate legal remedies)
Constructive Trust
Equitable Lien
Equitable
Specific Performance – “CCIMFD”
Contractual Validity
Conditions of п Satisfied
Inadequate Legal Remedy
Mutuality of Remedies
Feasibility of Enforcement
Defenses
Legal
SOF
Misrepresentation
Mistake
Equitable
Unclean Hands
Laches
Unconscionability
Rescission – “GD”
Reformation – “VGD”

Personal Property Real Property/Land Sale Construction Contract Personal Service/Employment K

Compensatory Damages Compensatory Damages Compensatory Damages Compensatory Damages

Restitution Restitution Restitution Restitution
Specific Performance Specific Performance Specific Performance (limited) Specific Performance
Rescission Rescission
Reformation Reformation

A. Legal remedies
1. Damages
a. Compensatory
i. Expectation: putting п in the position they would have been in had the contract been performed without breach:
1) causation, 2) forseeability (tested at time of formation), 3) certainty & 4) unavoidability (mitigation; the
burden is on Δ to allege no/less recovery for avoidable damages)
ii. Reliance
iii. Incidental
iv. ***CONSEQUENTIAL DAMAGES: 1) related & 2) foreseeable at the time of formation
b. Nominal: awarded where п has no actual injury; to establish/vindicate п’s rights
c. Liquidated damages: 1) damages are very difficult to ascertain at time of contract formation & 2) reasonable in
light of the circumstances (a non-breaching party may recover either liquidated damages (or) if not available, actual
damages, but NEVER both)
d. Punitive Damages: to punish & deter (not available in a vacuum): NOT allowed, however if Δ’s conduct is willful,
their actions may be classified as a tort & recovery would be allowed under a tort theory.

B. Restitutionary remedies:

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 1. Legal restitutionary remedies (п cannot get both compensatory & restitutionary damages, pick the higher amount)
a. Restitutionary damages: Quasi-K: reimbursing п with the value of the benefit conferred on Δ; 1) п conferred a
benefit on Δ, 2) п reasonably expected payment & 3) Δ realizes an unjust enrichment by not having to compensate п
b. Replevin: п recovers possession of specific personal property
i. 1) п has the right to possession & 2) Δ is wrongfully withholding
ii. Entrustment: п’s rights are cutoff if sold to a BFP (pays for value & takes title w/out notice of wrongdoing)
c. Ejectment: п recovers possession of specific real property
i. 1) п has the right to possession & 2) Δ is wrongfully withholding
2. Equitable restitutionary remedies (inadequate legal remedy)
a. Constructive trusts: imposed on improperly acquired property to which Δ has title; court treats it as if held in
trust with the duty to return the property to п
b. Equitable liens: imposed on improperly acquired property to which Δ has title; immediate court directed sale
i. Two Fact Patterns → (1) K unenforceable, (2) K breached
Unenforceable: lack of capacity, SOF, illegality, misrepresentation, misunderstanding or mistake of fact
i. п can get restitutionary for property/money given or services rendered to Δ in the value of the benefit conferred;
п can also get the property back if unique
ii. K is breached by п: Traditional Rule: No recovery; Modern Trend: Recovery allowed but it cannot be greater
than K price

C. Equitable remedies
1. Specific performance: defendant is required to perform the contract – “CCIMFD”
a. Contractual Validity: п must show the k terms were certain & definite
b. Contract Conditions of п Satisfied: – watch out for land sale contracts
i. Deficiencies – Seller cannot deliver the agreed upon consideration – about quantity of land
∗ If S = п they can enforce if the defect is minor
⇒ BUT cannot enforce if major UNLESS they can cure before date of closing
∗ If B is п they can enforce even if defect is major (UNLESS very major)
⇒ Abatement of the Purchase price: lower the purchase price (abatement) to reflect that amount of land
actually getting
ii. Time is of the essence (buyer does not meet contract condition of timely performance)
∗ There will be a land sale contract, the k will contain an express time of the essence clause which will
contain a forfeiture provision (forfeiture of all performance rendered to date if performance is not timely),
there will have been some partial performance by п which is now potentially subject to forfeiture
(triggering the time of the essence clause and its forfeiture provision). Seller will want to keep both the land
and any performance rendered to date. Thus, buyer will bring a lawsuit for specific performance, result?
⇒ Equitable maxim: “Equity abhors forfeitures” (thus SP will almost always be rewarded)
a. How to avoid forfeiture (facts to consider)
i. Loss to seller is small
ii. Tardiness is de minimis
iii. Waiver (seller has accepted late payments in the past)
iv. Buyer would suffer undue hardship
∗ NOTE: if contractual performance is still executory, the time is of the essence clause will be strictly
enforced; the modern trend is to give restitutionary relief if SP is not granted
c. Inadequate legal remedy alternative:
i. Damages are too speculative,
ii. Δ is insolvent,
iii. Multiple suits are necessary, (or)
iv. UNIQUENESS [real property is always unique]; every parcel of land is deemed unique
∗ Seller’s Rule: S can get SP for land even though they are only getting money
⇒ Personal property (generally not unique and damages are adequate), exceptions: one of a kind/rarity,
personal significance to buyer [sentimental value] or circumstances which make the chattel unique at
the time of LITIGATION (K for the purchase of oil, after K formation, price of gas goes up 10x)
∗ NOTE: Liquidated damage clauses does not make money damages adequate; SP is still available UNLESS
clause provides that liquidated damage is only/exclusive remedy, then no SP
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 d. Mutuality of remedy
i. Common Fact Pattern: A is a minor & enters into K to buy land from B. B refuses to convey. B says “I
couldn’t enforce against A so he cannot enforce against me.”
∗ First: Determine and discuss that there is a mutuality fact pattern
∗ Second: Ct will reject the mutuality argument if it feels secure the P can & will perform
∗ Third: Grant SP: also, have a decree provided for simultaneous performance
e. Feasibility of enforcement: in order to grant specific performance, the court must be able to enforce the K &
supervise problems that may arise
f. Defenses: a party guilty of misconduct will be barred form obtaining specific performance
i. ***SOF (generally involves an oral land sale contract
∗ RULE for Part Performance: satisfies SOF if (2 of the 3)
a. Payment, in part or in whole
b. Possession
c. Improvements
ii. Misrepresentation (concealment): false assertion or concealing a material fact that was reasonably relied upon
iii. Mistake:
iv. Unclean Hands: п’s alleged improper conduct is related to the lawsuit
v. Laches: unreasonable delay by п which unduly prejudices Δ
vi. Unconsionability: all/part of the agreement may be unenforceable if K terms are incredibly one-sided
g. Specific problems with SP
i. Equitable conversion – involves land sale contract for the period of time between K signing & closing
∗ Determine if the land sale contract in your question is valid enforceable contract
a. YES. Equitable conversion occurs upon execution where the property interest of buyer and seller
are regarded as switched. Thus, B will be regarded as having the real property interest (SP right to
land) & the S will be regarded as having the personal property interest (SP right to $)
h. Specific Performance Fact Patterns
i. ***Death
ii. Damage/Destruction
a. Risk on buyer – majority
b. Risk on seller – modern
c. Right to insurance proceeds is whoever has the risk of loss gets it
iii. Employment/Services contracts
∗ RULE: generally NO SP, however covenants not to compete are SP if 1) legitimate interest, 2) unique
services & 3) reasonable in geographical & durational scope

2. Rescission (“GD”): both parties agree to cancel the contract when performance is still executory, thereby, discharging all
contractual duties
a. Grounds for rescission
i. Failure of consideration, lack of capacity, illegality, misrepresentation, misunderstanding, mistake,
unconscionability or duress
ii. Mistake of Fact: a contract will NOT be avoided by unilateral mistake (exception: if the non-mistaken party
knew of should have known of the mistake). However, mutual mistake will avoid a contract where material
both parties are mistaken as to the contractual terms, it materially affects their agreement and neither party bears
the risk (exception: if collateral facts (quality, desirability, or fitness of property for a particular purpose)
rescission denied)
b. Defenses
i. Unclean hands
ii. Laches
NOTE: Negligence is NOT a good defense; п must elect between damages & rescission; cannot get both

3. Reformation: changes a written agreement to conform with the parties’ original understanding – “VGD”
i. Contractual Validity
ii. Grounds for reformation
∗ Misrepresentation – granted
∗ Mutual mistake – granted
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 ∗ Unilateral mistake – denied (exception: unless the non-mistaken party knew)
iii. Defenses
* Unclean hands
* Laches
* Invalid Defenses
-Negligence
-SOF
-Parol Evidence Rule

NOTE: tortious interference with contract: 1) valid contract, 2) Δ’s knowledge of contract, 3) intentional interference, 4) inducing
breach & 5) damages

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