1. Note whether this transaction is governed by UCC or the Restatement.

2. Does the Statute of Frauds apply? The contract must be in writing if it is

in regard to land, if by its nature it takes more than one year to perform, or
if it is in regard to goods of greater than $500 value.

Is there a contract?
Was there an Offer?
• Were the terms specific?
• Did the offer indicate the party’s intent to be bound?
No

Was there an Acceptance?

• Was there acceptance to exact terms of the offer

pursuant to mirror image rule?
• If not, can UCC 2.207 or the parties’
No
performance be used to imply a contract? No contract

• Was the acceptance made according to offer’s to

instructions (note silence can never be acceptance)?

• Was the acceptance made within time specified?

• Does the mailbox rule apply?
No

Yes
Was there justified,
No detrimental reliance so that
Was there Consideration?
§90 Promissory Estoppel
-bargained for; has legal value
applies?

Was there benefit conferred?

Yes Yes

Are all of the material terms agreed on?

No
Yes No

THERE IS AN ENFORCEABLE • Were parties far enough in

CONTRACT negotiations to implicate a
Yes
• What are Material Terms? contract to negotiate in Good
• Unilateral or Bilateral? Faith? Was such a contract
• Was there an outright explicit?
breach or is it another • Was an option created by
problem? partial performance of
acceptance?
 Was there Substantial Breach?

Yes

Was there fraud, duress or

unconscionability?

Yes No

Breach is Was there a change in circumstances

excused or failure of a substantial assumption
of the contract?

Yes No

Breach is Could there be a waiver? Was

excused the breach excused by
implication of past performance?

Yes No

Breach is Breach unexcused; victim can

excused recover – GO TO DAMAGES

Is there vagueness/ambiguity in contract?

Can the Courts fill in vague/ambiguous terms Yes
(Note: the court will not fill in material terms)
according to:
• Writing in the contract
• Past performance of the contract
• Past dealing in other contracts
• Usage/Custom
No
Can we use Parol Evidence to clarify?
-fully integrated(FI) writing? (4crns v Corbin)
-merger clause implies full integration
-if NOT FI: consistent, additional terms?
-different terms are not considered
-naturally or certainly expected inclusion?
-if YES, then don’t allow terms

If courts cannot interpret

contract themselves and parol
evidence cannot be admitted,
the contract will be void for
vagueness.
 Was there Mistake?
Unilateral
Mutual R153
R152

Was the mistake as to Was the mistake

a basic assumption? Scribner’s Error or
General Unilateral?
Yes No
G.U. S.E.
Contract Contract enforceable
Risk allocation: R154, always
Voidable restitution and fairness If parties have agreed to
Did the other party
terms, and only the written
know or have reason document is defective, a
to know of the meeting of minds occurred
mistake? and the contract is
enforceable on original
Yes No understood terms. R155

Contract is voidable under Contract is voidable if party does not bear risk of
R153 mistake by R154. Also note that risk is allocated
depending on fairness; court will also see whether
risk has been allocated contract itself.

Was there a SURPRISE?

If contract term is Could also argue breach of

unconscionable, court will good faith
refuse to enforce it. U1.203, R 205
R208, U2.302

Did dealings breach Good Faith?

Yes
There is an implied warranty of Valid Excuse of
good faith in every contract performance
R205, U1.203
 Is MODIFICATION or WAIVER an issue?

If covered by If covered by
UCC, 2.209 Restatement, §148

Under the UCC, no Was there consideration given

consideration is necessary for for the modification?
a waiver if it is in good faith
AND it is written No Yes

Was the modification sought Modification is

in good faith due to changed enforceable
circumstances?
No Yes

Was the modification Modification is

based on Waiver? enforceable

No Yes

Modification is Was waiver

unenforceable revoked with
sufficient notice?

Yes No

Waiver properly revoked; Waiver is

modification unenforceable enforceable
 Remedies
Legal Equitable – when remedy at
law is inadequate

DAMAGES SPECIFIC RELIEF

Is there a liquidated Damages

Clause in the contract? Injunction Specific Performance
Yes
No
Is specific performance of the
Are the liquidated damages contract will be awarded ONLY if:
a fair estimate of expectation
• Contract is clear
damages?
• The remedy at law is
inadequate
No Yes • There is mutuality of
performance
• Uniqueness makes it
impossible to assess
Look to Expectation Damages which Court will
damages
are the benefit of the bargain, intended enforce
to put the victim where he would be if liquidated
the contract had been performed: damages

Are they either:

• $0 or negative in amount;
• Uncertain (i.e., new venture); or
• Excessive given circumstances?
No Yes

Expectation Reliance damages awarded

Damages awarded intended to put the victim where
he would be had the contract
never been made.
These can include:
• Lost opportunity
• Difference between market
value and value as is

NOTE:
• No punitive damages
• No damages for mental distress
• Has everyone mitigated/covered?
• RESTITUTION always an option
 Restitution Damages

Has there been:

• Unjust Enrichment;
• Partial Performance; OR
• Benefit knowingly conferred but
not under contract?
Yes No

Is Plaintiff the breacher? No Restitution damages

Yes No

Damages will be benefit Damages will be the amount of benefit

conferred but limited to conferred, regardless to whether
contract price • Lower price was specified in contract; or
• Contract would have resulted in a loss