This lecture text explores contract interpretation, discussing how courts determine the meaning of agreements using the plain meaning rule and extrinsic evidence, such as course of performance, course of dealing, and usage of trade, while also considering the parol evidence rule. It then differentiates performance obligations under common law and the U.C.C., contrasting substantial performance with the perfect tender rule, and introducing the concept of conditions. The material further explains breach, including material versus minor breaches and anticipatory repudiation, before outlining the rights of third parties through assignment, delegation, and third-party beneficiary contracts, finally addressing ways performance may be excused due to impossibility, impracticability, or frustration of purpose.

This conversation provides a comprehensive overview of contract law remedies, focusing on what happens when a contract is breached. It covers legal remedies, including expectation damages, incidental and consequential damages, the duty to mitigate, and equitable remedies like specific performance and rescission. The discussion also touches on restitution, quasi-contracts, liquidated damages, and the limitations that can affect the recovery of damages. The importance of understanding these concepts for law students and practitioners is emphasized throughout.

Takeaways

Understanding remedies is crucial for contract law.

Expectation damages aim to put the non-breaching party whole.

Incidental damages cover reasonable costs incurred due to a breach.

Consequential damages depend on foreseeability at the time of contracting.

The duty to mitigate prevents unnecessary loss escalation.

Equitable remedies are granted at the court's discretion.

Specific performance is used when money damages are inadequate.

Restitution prevents unjust enrichment, focusing on the defendant's gain.

Liquidated damages must be reasonable and not punitive.

Various doctrines can limit the recovery of damages.

According to the plain meaning rule, courts interpret unambiguous contract language according to its ordinary meaning, without considering outside evidence.

If contract language is ambiguous, courts may consider extrinsic evidence such as prior negotiations, drafts, industry standards, or other contemporaneous writings to determine the parties' intent.

Course of performance refers to the parties' behavior under the current contract, while course of dealing refers to their conduct in previous contracts. Both provide insight into the parties' understanding of terms.

The parol evidence rule's purpose is generally to prevent parties from using prior or contemporaneous oral or written statements to contradict or change the terms of a complete and final written contract.

Common law substantial performance allows enforcement if the essential purpose is met with minor deviations, while the U.C.C.'s perfect tender rule requires goods to conform exactly to contract terms for the buyer to be obligated to accept them.

Under the perfect tender rule, a seller might satisfy their obligation despite nonconforming goods by exercising their right to "cure" the defective tender within the contract performance period.

A condition precedent is an event that must occur before a party is obligated to perform. An example from the source is a loan disbursement being conditioned on providing proof of income.

A material breach is a serious violation going to the essence of the contract that excuses the non-breaching party's performance, while a minor breach is less significant and only entitles the injured party to damages.

Upon anticipatory repudiation, the non-breaching party can treat it as a breach and sue immediately, suspend performance and wait, or urge performance and await retraction.

An assignment is a transfer of rights under a contract, while a delegation is a transfer of duties. In a delegation, the original party typically remains liable unless a novation occurs.