Contract Law - Advanced Topics & Exam Preparation

Lecture Summary:

This lecture provides a summary of key concepts from a law school lecture on advanced contract law and exam preparation. It covers contract discharge, UCC Article 2 (sales of goods), and exam strategies.

I. Discharge of Contracts

Concept: Contractual obligations end when a contract is discharged.

Ways a Contract is Discharged

Impossibility: Performance becomes objectively impossible due to unforeseen events that occur after contract formation (e.g., subject matter destruction, party death in personal service contracts, new laws making performance illegal).

Impracticability: Performance is technically possible but unreasonably expensive or burdensome due to unforeseen circumstances that significantly alter the expected performance and were not contemplated by the parties when the contract was made.

Frustration of Purpose: An unforeseen event undermines the contract's principal purpose, even if performance remains possible. The frustrated purpose must have been a basic contract assumption, and the event must not be the fault of the party seeking discharge.

Accord and Satisfaction: An accord is an agreement to accept a different performance than originally promised; satisfaction is the execution of that performance. The new agreement (accord) must have consideration.

Novation: Substitution of a new party for an original party, creating a new contract and discharging the old one. Requires all parties' consent.

Modification: Mutual agreement to alter the original contract's terms. The original contract remains in effect with altered terms and generally requires consideration, unless under the UCC, which allows good faith modification without consideration.

II. UCC Article 2: Sales of Goods

Scope: Governs contracts for the sale of goods (tangible, movable property). Does not cover real estate, services, or intangible property.

Key Differences from Common Law: Focuses on flexibility and commercial efficiency.

Key Provisions:

Acceptance: Can be made in any reasonable manner, deviating from the common law's "mirror image rule."

Modification: Allowed without new consideration if done in good faith.

Implied Terms: The UCC often fills contract gaps with implied terms (e.g., reasonable price, place of delivery, time for performance).

Warranties:

Express Warranties: Created by the seller's affirmations, descriptions, or samples.

Implied Warranty of Merchantability: Goods must be fit for their ordinary purpose.

Implied Warranty of Fitness for a Particular Purpose: Applies when the seller knows the buyer's specific needs and recommends a product.

Risk of Loss:

Shipment Contract: Risk transfers to the buyer upon delivery of goods to the carrier (default rule).

Destination Contract: Risk transfers when goods are delivered to the buyer.

Title Transfer: Title generally transfers when the parties intend it to, often upon delivery of the goods. Can differ from risk of loss allocation.

III. Exam Strategies & Comprehensive Review

IRAC Method (Essay Questions):

Issue: Identify the legal question.

Rule: State the applicable legal principle.

Application: Apply the rule to the facts, analyzing arguments for both sides.

Conclusion: Summarize your findings clearly.

Multiple Choice Strategies:

Read Carefully: Pay attention to qualifiers like "always" or "never."

Eliminate Wrong Answers: Discard options that contradict established rules or misstate facts.

Choose the Best Answer: Select the response that directly applies the legal rule to the facts.

Key Areas for Review:

Offer, acceptance, and consideration, including nuances like conditional acceptances.

Breach and remedies, distinguishing material from minor breaches.

UCC provisions, including key distinctions from common law.

Defenses such as impossibility and impracticability.

Focus on detailed outlines with case examples (e.g., Hawkins v. McGee, Hadley v. Baxendale).

Key Takeaways:

Understanding contract discharge is critical for