RESTATEMENT (SECOND) OF CONTRACTS

 

 

RESTATEMENT (SECOND) OF CONTRACTS

(Selected Sections)

 

TABLE OF CONTENTS

Chapter 1……………………………………………………………………………………… 5

MEANING OF TERMS………………………………………………………………… 5

  • 1. Contract Defined……………………………………………………. 5

Chapter 2……………………………………………………………………………………… 5

FORMATION OF CONTRACTS—PARTIES AND CAPACITY……………….. 5

  • 15. Mental Illness or Defect…………………………………………… 5

Chapter 3……………………………………………………………………………………… 5

FORMATION OF CONTRACTS—MUTUAL ASSENT…………………………. 5

TOPIC 2. MANIFESTATION OF ASSENT‐‐IN GENERAL…………………. 5

  • 20. Effect of Misunderstanding……………………………………… 5

TOPIC 3. MAKING OF OFFERS…………………………………………………. 6

  • 24. Offer Defined…………………………………………………………. 6
  • 25. Option Contracts……………………………………………………. 6
  • 26. Preliminary Negotiations…………………………………………. 6
  • 27. Existence of Contract where Written Memorial is Contemplated…………………………………………………………………… 6
  • 30. Form of Acceptance Invited……………………………………… 6
  • 32. Invitation of Promise or Performance……………………….. 6
  • 33. Certainty……………………………………………………………….. 7
  • 34. Certainty and Choice of Terms; Effect of Performance or Reliance…………………………………………………………………………… 7

TOPIC 4. DURATION OF THE OFFEREE’S POWER OF ACCEPTANCE. 7

  • 35. The Offeree’s Power of Acceptance………………………….. 7
  • 36. Methods of Termination of the Power of Acceptance…. 7
  • 38. Rejection……………………………………………………………….. 7
  • 39. Counter‐offers………………………………………………………… 8
  • 40. Time when Rejection or Counter‐offer Terminates the Power of Acceptance…………………………………………………………. 8
  • 41. Lapse of Time…………………………………………………………. 8
  • 42. Revocation by Communication from Offeror Received by Offeree…………………………………………………………………………….. 8
  • 43. Indirect Communication of Revocation…………………….. 8
  • 45. Option Contract Created by Part Performance or Tender 8
  • 46. Revocation of General Offer…………………………………….. 9
  • 48. Death or Incapacity of Offeror or Offeree………………….. 9

TOPIC 5. ACCEPTANCE OF OFFERS…………………………………………… 9

  • 50. Acceptance of Offer Defined; Acceptance by Performance; Acceptance by Promise ……………………………….. 9
  • 51. Effect of Part Performance without Knowledge of Offer 9
  • 52. Who May Accept an Offer……………………………………….. 9
  • 53. Acceptance by Performance; Manifestation of Intention not to Accept…………………………………………………………………….. 9

 

 

RESTATEMENT (SECOND) OF CONTRACTS

  • 54. Acceptance by Performance; Necessity of Notification to Offeror 10
  • 55. Acceptance of Non‐Promissory Offers 10
  • 56. Acceptance by Promise; Necessity of Notification to Offeror 10
  • 58. Necessity of Acceptance Complying with Terms of Offer 10
  • 59. Purported Acceptance Which Adds Qualifications…………………………………………………………………. 10
  • 60. Acceptance of Offer Which States Place, Time or Manner of Acceptance…………………………………………………………………….. 10
  • 61. Acceptance Which Requests Change of Terms 11
  • 62. Effect of Performance by Offeree Where Offer Invites Either Performance or Promise 11
  • 63. Time when Acceptance Takes Effect 11
  • 69. Acceptance by Silence or Exercise of Dominion……………………………………………………………………….. 11

Chapter 4………………………………………………………………………………………………… 11

FORMATION OF CONTRACTS—CONSIDERATION……………………………………………………………………. 11

TOPIC 1. THE REQUIREMENT OF CONSIDERATION………………………………………………………………… 11

  • 71. Requirement of Exchange; Types of Exchange………………………………………………………………………… 11
  • 73. Performance of Legal Duty 12
  • 74. Settlement of Claims 12
  • 77. Illusory and Alternative Promises………………………………………………………………………… 12
  • 79. Adequacy of Consideration; Mutuality of Obligation………………………………………………………………………. 12
  • 81. Consideration as Motive or Inducing Cause 13

TOPIC 2. CONTRACTS WITHOUT CONSIDERATION………………………………………………………………… 13

  • 82. Promise to Pay Indebtedness; Effect on the Statute of Limitations……………………………………………………………………… 13
  • 83. Promise to Pay Indebtedness Discharged in Bankruptcy…………………………………………………………………….. 13
  • 84. Promise to Perform a Duty in Spite of Non‐Occurrence of a Condition……………………………………………………………………….. 13
  • 86. Promise for Benefit Received………………………………………………………………………… 14
  • 87. Option Contract…………………………………………………………………………. 14
  • 89. Modification of Executory Contract…………………………………………………………………………. 14
  • 90. Promise Reasonably Inducing Action or Forbearance…………………………………………………………………… 14

Chapter 5………………………………………………………………………………………………… 14

THE STATUTE OF FRAUDS…………………………………………………………………………………. 14

TOPIC 8. CONSEQUENCES OF NON‐COMPLIANCE……………………………………………………………………… 14

  • 139. Enforcement by Virtue of Action in Reliance 15

Chapter 6………………………………………………………………………………………………… 15

MISTAKE……………………………………………………………………………….. 15

  • 152. When Mistake of Both Parties Makes a Contract Voidable 15
  • 153. When Mistake of One Party Makes a Contract Voidable 15
  • 154. When a Party Bears the Risk of a Mistake 15
  • 158. Relief Including Restitution; Supplying a Term 16

Chapter 9………………………………………………………………………………………………… 16

THE SCOPE OF CONTRACTUAL OBLIGATIONS…………………………………………………………………………. 16

TOPIC 1. THE MEANING OF AGREEMENTS…………………………………………………………………….. 16

  • 201. Whose Meaning Prevails 16
  • 204. Supplying an Omitted Essential Term 16

RESTATEMENT (SECOND) OF CONTRACTS

TOPIC 2. CONSIDERATIONS OF FAIRNESS AND THE PUBLIC INTEREST…………………………………………………………………………… 16

  • 205. Duty of Good Faith and Fair Dealing 16
  • 208. Unconscionable Contract or Term 17

TOPIC 3. EFFECT OF ADOPTION OF A WRITING……………………………………………………………………………. 17

  • 209. Integrated Agreements……………………………………………………………………. 17
  • 210. Completely and Partially Integrated Agreements……………………………………………………………………. 17
  • 211. Standardized Agreements……………………………………………………………………. 17
  • 213. Effect of Integrated Agreement on Prior Agreements (Parol Evidence Rule) .. 17
  • 214. Evidence of Prior or Contemporaneous Agreements and Negotiations…………………………………………………………………… 18
  • 215. Contradiction of Integrated Terms 18
  • 216. Consistent Additional Terms 18
  • 217. Integrated Agreement Subject to Oral Requirement of a Condition……………………………………………………………………….. 18

TOPIC 5. CONDITIONS AND SIMILAR EVENTS……………………………………………………………………………… 18

  • 224. Condition Defined 18
  • 225. Effects of the Non‐Occurrence of a Condition……………………………………………………………………….. 19
  • 229. Excuse of a Condition to Avoid Forfeiture……………………………………………………………………….. 19

Chapter 10………………………………………………………………………………………………. 19

PERFORMANCE AND NON‐PERFORMANCE………………………………………………………………………. 19

TOPIC 1. PERFORMANCES TO BE EXCHANGED UNDER AN EXCHANGE OF PROMISES………………………………………………………………………….. 19

  • 234. Order of Performances………………………………………………………………….. 19

TOPIC 2. EFFECT OF PERFORMANCE AND NON‐PERFORMANCE…………………………………………………………………… 19

  • 236. Claims for Damages for Total and for Partial Breach 19
  • 237. Effect on Other Party’s Duties of a Failure to Render Performance…………………………………………………………………… 19
  • 238. Effect on Other Party’s Duties of a Failure to Offer Performance…………………………………………………………………… 20
  • 210. Part Performances as Agreed Equivalents…………………………………………………………………….. 20
  • 241. Circumstances Significant in Determining Whether a Failure is Material 20
  • 242. Circumstances Significant in Determining When Remaining Duties are Discharged……………………………………………………………………. 20
  • 243. Effect of a Breach by Non‐Performance as Giving Rise to a Claim for Damages for Total Breach 20

TOPIC 3. EFFECT OF PROSPECTIVE NON—PERFORMANCE…………………………………………………………………… 21

  • 250. When a Statement or an Act is a Repudiation……………………………………………………………………. 21
  • 251. When a Failure to Give Assurance May be Treated as a Repudiation……………………………………………………………………. 21
  • 253. Effect of a Repudiation as a Breach and on Other Party’s Duties 21
  • 256. Nullification of Repudiation or Basis for Repudiation……………………………………………………………………. 21

Chapter 11………………………………………………………………………………………………. 22

IMPRACTICABILITY OF PERFORMANCE AND FRUSTRATION OF PURPOSE……………………………………………………………………………….. 22

  • 261. Discharge by Supervening Impracticability………………………………………………………………. 22
  • 265. Discharge by Supervening Frustration……………………………………………………………………… 22
  • 266. Existing Impracticability or Frustration……………………………………………………………………… 22
  • 272. Relief Including Restitution; Supplying a Term 22

Chapter 14………………………………………………………………………………………………. 23

CONTRACT BENEFICIARIES……………………………………………………………………….. 23

 

 

  • 302. Intended and Incidental Beneficiaries…………………. 23
  • 309. Defenses Against the Beneficiary………………………… 23
  • 311. Variation of a Duty to a Beneficiary…………………….. 23
  • 313. Government Contracts………………………………………. 24

Chapter 15………………………………………………………………………………… 24

ASSIGNMENT AND DELEGATION………………………………………………. 24

TOPIC 1. WHAT CAN BE ASSIGNED OR DELEGATED…………………. 24

  • 317. Assignment of a Right………………………………………… 24
  • 318. Delegation of Performance of Duty……………………… 24
  • 321. Assignment of Future Rights……………………………….. 24
  • 322. Contractual Prohibition of Assignment………………… 25

TOPIC 2. MODE OF ASSIGNMENT OR DELEGATION…………………. 25

  • 328. Interpretation of Words of Assignment; Effect of Acceptance of Assignment 25 TOPIC 3. EFFECT BETWEEN ASSIGNOR AND ASSIGNEE …………………………………………………. 25
  • 332. Revocability of Gratuitous Assignments………………. 25
  • 333. Warranties of an Assignor………………………………….. 26

TOPIC 4. EFFECT ON THE OBLIGOR’S DUTY…………………………….. 26

  • 336. Defenses Against an Assignee…………………………….. 26
  • 338. Discharge of an Obligor after Assignment…………….. 27

Chapter 16………………………………………………………………………………… 27

REMEDIES……………………………………………………………………………… 27

TOPIC 2. ENFORCEMENT BY AWARD OF DAMAGES…………………. 27

  • 317. Measure of Damages in General…………………………. 27
  • 348. Alternatives to Loss in Value of Performance……….. 27
  • 349. Damages Based on Reliance Interest…………………… 28
  • 350. Avoidability as a Limitation on Damages……………… 28
  • 351. Unforeseeability and Related Limitations on Damages 28
  • 352. Uncertainty as a Limitation on Damages……………… 28
  • 353. Loss Due to Emotional Disturbance…………………….. 28
  • 335. Punitive Damages……………………………………………… 28

TOPIC 4. RESTITUTION…………………………………………………………. 29

  • 371. Measure of Restitution Interest………………………….. 29
  • 373. Restitution When Other Party is in Breach……………. 29
  • 371. Restitution in Favor of Party in Breach…………………. 29
  • 376. Restitution When Contract is Voidable………………… 29
  • 377. Restitution in Cases of Impracticability, Frustration, NonOccurrence of Condition or Disclaimer by Beneficiary … 29

 

Chapter 1   MEANING OF TERMS

 

§ 1.       Contract Defined

 

A contract is a promise or a set of promises for the breach of which the law gives a remedy, or the performance of which the law in some way recognizes as a duty.

 

 

Chapter 2

FORMATION OF CONTRACTS—PARTIES AND CAPACITY

 

 

§ 15.     Mental Illness or Defect

 

  • A person incurs only voidable contractual duties by entering into a transaction if by reason of mental illness or defect
    • he is unable to understand in a reasonable manner the nature and consequences of the transaction, or
    • he is unable to act in a reasonable manner in relation to the transaction and the other party has reason to know of his condition.
  • Where the contract is made on fair terms and the other party is without knowledge of the mental illness or defect, the power of avoidance under Subsection (1) terminates to the extent that the contract has been so performed in whole or in part or the circumstances have so changed that avoidance would be In such a case a court may grant relief on such equitable terms as justice requires.

 

 

Chapter 3

FORMATION OF CONTRACTS—MUTUAL ASSENT

 

TOPIC 2. MANIFESTATION OF ASSENT‐‐IN GENERAL

 

  • 20. Effect of Misunderstanding

 

  • There is no manifestation of mutual assent to an exchange if the parties attach materially different meanings to their manifestations and
    • neither party knows or has reason to know the meaning attached by the other; or
    • each party knows or each party has reason to know the meaning attached by the
  • The manifestations of the parties are operative in accordance with the meaning attached to them by one of the parties if
  • that party does not know of any different meaning attached by the other, and the other knows the meaning attached by the first party; or

 

 

  • that party has no reason to know of any different meaning attached by the other, and the other has reason to know the meaning attached by the first

 

 

TOPIC 3. MAKING OF OFFERS

 

  • 24. Offer Defined

 

An offer is the manifestation of willingness to enter into a bargain, so made as to justify another person in understanding that his assent to that bargain is invited and will conclude it.

 

 

§ 25.     Option Contracts

 

An option contract is a promise which meets the requirements for the formation of a contract and limits the promisor’s power to revoke an offer.

 

 

§ 26.     Preliminary Negotiations

 

A manifestation of willingness to enter into a bargain is not an offer if the person to whom it is addressed knows or has reason to know that the person making it does not intend to conclude a bargain until he has made a further manifestation of assent.

 

 

§ 27.     Existence of Contract where Written Memorial is Contemplated

 

Manifestations of assent that are in themselves sufficient to conclude a contract will not be prevented from so operating by the fact that the parties also manifest an intention to prepare and adopt a written memorial thereof; but the circumstances may show that the agreements are preliminary negotiations.

 

 

§ 30.     Form of Acceptance Invited

 

  • An offer may invite or require acceptance to be made by an affirmative answer in words, or by performing or refraining from performing a specified act, or may empower the offeree to make a selection of terms in his
  • Unless otherwise indicated by the language or the circumstances, an offer invites acceptance in any manner and by any medium reasonable in the

 

 

§ 32.     Invitation of Promise or Performance

 

In case of doubt an offer is interpreted as inviting the offeree to accept either by promising to perform what the offer requests or by rendering the performance, as the offeree chooses.

 

 

 

 

§ 33.     Certainty

 

  • Even though a manifestation of intention is intended to be understood as an offer, it cannot be accepted so as to form a contract unless the terms of the contract are reasonably
  • The terms of a contract are reasonably certain if they provide a basis for determining the existence of a breach and for giving an appropriate
  • The fact that one or more terms of a proposed bargain are left open or uncertain may show that a manifestation of intention is not intended to be understood as an offer or as an

 

 

§ 34.     Certainty and Choice of Terms; Effect of Performance or Reliance

 

  • The terms of a contract may be reasonably certain even though it empowers one or both parties to make a selection of terms in the course of
  • Part performance under an agreement may remove uncertainty and establish that a contract enforceable as a bargain has been
  • Action in reliance on an agreement may make a contractual remedy appropriate even though uncertainty is not

 

 

TOPIC 4. DURATION OF THE OFFEREE’S POWER OF ACCEPTANCE

 

  • 35. The Offeree’s Power of Acceptance

 

  • An offer gives to the offeree a continuing power to complete the manifestation of mutual assent by acceptance of the
  • A contract cannot be created by acceptance of an offer after the power of acceptance has been terminated in one of the ways listed in §

 

 

§ 36.     Methods of Termination of the Power of Acceptance

  • An offeree’s power of acceptance may be terminated by
    • rejection or counter‐offer by the offeree, or
    • lapse of time, or
    • revocation by the offeror, or
    • death or incapacity of the offeror or
  • In addition, an offeree’s power of acceptance is terminated by the non‐occurrence of any condition of acceptance under the terms of the

 

 

§ 38.     Rejection

 

  • An offeree’s power of acceptance is terminated by his rejection of the offer, unless the offeror has manifested a contrary
  • A manifestation of intention not to accept an offer is a rejection unless the offeree manifests an intention

 

 

to take it under further advisement.

 

 

§ 39.     Counter‐offers

 

  • A counter‐offer is an offer made by an offeree to his offeror relating to the same matter as the original offer and proposing a substituted bargain differing from that proposed by the original
  • An offeree’s power of acceptance is terminated by his making of a counter‐offer, unless the offeror has manifested a contrary intention or unless the counter‐offer manifests a contrary intention of the

 

 

§ 40.     Time when Rejection or Counter‐offer Terminates the Power of Acceptance

 

Rejection or counter‐offer by mail or telegram does not terminate the power of acceptance until received by the offeror, but limits the power so that a letter or telegram of acceptance started after the sending of an otherwise effective rejection or counter‐offer is only a counter‐offer unless the acceptance is received by the offeror before he receives the rejection or counter‐offer.

 

 

§ 41.     Lapse of Time

 

  • An offeree’s power of acceptance is terminated at the time specified in the offer, or, if no time is specified, at the end of a reasonable
  • What is a reasonable time is a question of fact, depending on all the circumstances existing when the offer and attempted acceptance are
  • Unless otherwise indicated by the language or the circumstances, and subject to the rule stated in 49, an offer sent by mail is seasonably accepted if an acceptance is mailed at any time before midnight on the day on which the offer is received.

 

 

§ 42.     Revocation by Communication from Offeror Received by Offeree

 

An offeree’s power of acceptance is terminated when the offeree receives from the offeror a manifestation of an intention not to enter into the proposed contract.

 

 

§ 43.     Indirect Communication of Revocation

 

An offeree’s power of acceptance is terminated when the offeror takes definite action inconsistent with an intention to enter into the proposed contract and the offeree acquires reliable information to that effect.

 

 

§ 45.     Option Contract Created by Part Performance or Tender

 

  • Where an offer invites an offeree to accept by rendering a performance and does not invite a promissory acceptance, an option contract is created when the offeree tenders or begins the invited performance or tenders a beginning of
  • The offeror’s duty of performance under any option contract so created is conditional on completion or

 

 

 

§ 46.     Revocation of General Offer

 

Where an offer is made by advertisement in a newspaper or other general notification to the public or to a number of persons whose identity is unknown to the offeror, the offeree’s power of acceptance is terminated when a notice of termination is given publicity by advertisement or other general notification equal to that given to the offer and no better means of notification is reasonably available.

 

 

§ 48.     Death or Incapacity of Offeror or Offeree

 

An offeree’s power of acceptance is terminated when the offeree or offeror dies or is deprived of legal capacity to enter into the proposed contract.

 

 

TOPIC 5. ACCEPTANCE OF OFFERS

 

  • 50. Acceptance of Offer Defined; Acceptance by Performance; Acceptance by Promise

 

  • Acceptance of an offer is a manifestation of assent to the terms thereof made by the offeree in a manner invited or required by the
  • Acceptance by performance requires that at least part of what the offer requests be performed or tendered and includes acceptance by a performance which operates as a return
  • Acceptance by a promise requires that the offeree complete every act essential to the making of the promise.

 

 

§ 51.     Effect of Part Performance without Knowledge of Offer

 

Unless the offeror manifests a contrary intention, an offeree who learns of an offer after he has rendered part of the performance requested by the offer may accept by completing the requested performance.

 

 

§ 52.     Who May Accept an Offer

 

An offer can be accepted only by a person whom it invites to furnish the consideration.

 

 

§ 53.     Acceptance by Performance; Manifestation of Intention not to Accept

 

  • An offer can be accepted by the rendering of a performance only if the offer invites such an
  • Except as stated in 69, the rendering of a performance does not constitute an acceptance if within a reasonable time the offeree exercises reasonable diligence to notify the offeror of non‐acceptance.
  • Where an offer of a promise invites acceptance by performance and does not invite a promissory

 

 

acceptance, the rendering of the invited performance does not constitute an acceptance if before the offeror performs his promise the offeree manifests an intention not to accept.

 

 

§ 54.     Acceptance by Performance; Necessity of Notification to Offeror

 

  • Where an offer invites an offeree to accept by rendering a performance, no notification is necessary to make such an acceptance effective unless the offer requests such a
  • If an offeree who accepts by rendering a performance has reason to know that the offeror has no adequate means of learning of the performance with reasonable promptness and certainty, the contractual duty of the offeror is discharged unless
    • the offeree exercises reasonable diligence to notify the offeror of acceptance, or
    • the offeror learns of the performance within a reasonable time, or
    • the offer indicates that notification of acceptance is not

 

 

§ 55.     Acceptance of Non‐Promissory Offers

 

Acceptance by promise may create a contract in which the offeror’s performance is completed when the offeree’s promise is made.

 

 

§ 56.     Acceptance by Promise; Necessity of Notification to Offeror

 

Except as stated in § 69 or where the offer manifests a contrary intention, it is essential to an acceptance by promise either that the offeree exercise reasonable diligence to notify the offeror of acceptance or that the offeror receive the acceptance seasonably.

 

 

§ 58.     Necessity of Acceptance Complying with Terms of Offer

 

An acceptance must comply with the requirements of the offer as to the promise to be made or the performance to be rendered.

 

 

§ 59.     Purported Acceptance Which Adds Qualifications

 

A reply to an offer which purports to accept it but is conditional on the offeror’s assent to terms additional to or different from those offered is not an acceptance but is a counter‐offer.

 

 

§ 60.     Acceptance of Offer Which States Place, Time or Manner of Acceptance

 

If an offer prescribes the place, time or manner of acceptance its terms in this respect must be complied with in order to create a contract. If an offer merely suggests a permitted place, time or manner of acceptance, another method of acceptance is not precluded.

 

 

§ 61.     Acceptance Which Requests Change of Terms

 

An acceptance which requests a change or addition to the terms of the offer is not thereby invalidated unless the acceptance is made to depend on an assent to the changed or added terms.

 

 

§ 62.     Effect of Performance by Offeree Where Offer Invites Either Performance or Promise

 

  • Where an offer invites an offeree to choose between acceptance by promise and acceptance by performance, the tender or beginning of the invited performance or a tender of a beginning of it is an acceptance by
  • Such an acceptance operates as a promise to render complete

 

 

§ 63.     Time when Acceptance Takes Effect

 

Unless the offer provides otherwise,

  • an acceptance made in a manner and by a medium invited by an offer is operative and completes the manifestation of mutual assent as soon as put out of the offeree’s possession, without regard to whether it ever reaches the offeror; but
  • an acceptance under an option contract is not operative until received by the

 

 

§ 69.     Acceptance by Silence or Exercise of Dominion

 

  • Where an offeree fails to reply to an offer, his silence and inaction operate as an acceptance in the following cases only:
  • Where an offeree takes the benefit of offered services with reasonable opportunity to reject them and reason to know that they were offered with the expectation of
  • Where the offeror has stated or given the offeree reason to understand that assent may be manifested by silence or inaction, and the offeree in remaining silent and inactive intends to accept the
  • Where because of previous dealings or otherwise, it is reasonable that the offeree should notify the offeror if he does not intend to
    • An offeree who does any act inconsistent with the offeror’s ownership of offered property is bound in accordance with the offered terms unless they are manifestly But if the act is wrongful as against the offeror it is an acceptance only if ratified by him.

 

 

Chapter 4

FORMATION OF CONTRACTS—CONSIDERATION

 

TOPIC 1. THE REQUIREMENT OF CONSIDERATION

 

§ 71.     Requirement of Exchange; Types of Exchange

 

  • To constitute consideration, a performance or a return promise must be bargained

 

 

  • A performance or return promise is bargained for if it is sought by the promisor in exchange for his promise and is given by the promisee in exchange for that
  • The performance may consist of
    • an act other than a promise, or
    • a forbearance, or
    • the creation, modification, or destruction of a legal
  • The performance or return promise may be given to the promisor or to some other It may be given by the promisee or by some other person.

 

 

§ 73.     Performance of Legal Duty

 

Performance of a legal duty owed to a promisor which is neither doubtful nor the subject of honest dispute is not consideration; but a similar performance is consideration if it differs from what was required by the duty in a way which reflects more than a pretense of bargain.

 

 

§ 74.     Settlement of Claims

 

  • Forbearance to assert or the surrender of a claim or defense which proves to be invalid is not consideration unless
    • the claim or defense is in fact doubtful because of uncertainty as to the facts or the law, or
    • the forbearing or surrendering party believes that the claim or defense may be fairly determined to be
  • The execution of a written instrument surrendering a claim or defense by one who is under no duty to execute it is consideration if the execution of the written instrument is bargained for even though he is not asserting the claim or defense and believes that no valid claim or defense

 

 

§ 77.     Illusory and Alternative Promises

 

A promise or apparent promise is not consideration if by its terms the promisor or purported promisor reserves a choice of alternative performances unless

  • each of the alternative performances would have been consideration if it alone had been bargained for;

or

  • one of the alternative performances would have been consideration and there is or appears to the parties

to be a substantial possibility that before the promisor exercises his choice events may eliminate the alternatives which would not have been consideration.

 

 

§ 79.     Adequacy of Consideration; Mutuality of Obligation

 

If the requirement of consideration is met, there is no additional requirement of

 

  • a gain, advantage, or benefit to the promisor or a loss, disadvantage, or detriment to the promisee; or
  • equivalence in the values exchanged; or
  • “mutuality of ”

 

 

§ 81.     Consideration as Motive or Inducing Cause

 

  • The fact that what is bargained for does not of itself induce the making of a promise does not prevent it from being consideration for the
  • The fact that a promise does not of itself induce a performance or return promise does not prevent the performance or return promise from being consideration for the

 

 

TOPIC 2. CONTRACTS WITHOUT CONSIDERATION

 

§ 82.     Promise to Pay Indebtedness; Effect on the Statute of Limitations

 

  • A promise to pay all or part of an antecedent contractual or quasi‐contractual indebtedness owed by the promisor is binding if the indebtedness is still enforceable or would be except for the effect of a statute of
  • The following facts operate as such a promise unless other facts indicate a different intention:
    • A voluntary acknowledgment to the obligee, admitting the present existence of the antecedent indebtedness; or
    • A voluntary transfer of money, a negotiable instrument, or other thing by the obligor to the obligee, made as interest on or part payment of or collateral security for the antecedent indebtedness; or
    • A statement to the obligee that the statute of limitations will not be pleaded as a

 

 

§ 83.     Promise to Pay Indebtedness Discharged in Bankruptcy

 

An express promise to pay all or part of an indebtedness of the promisor, discharged or dischargeable in bankruptcy proceedings begun before the promise is made, is binding.

 

 

§ 84.     Promise to Perform a Duty in Spite of Non‐Occurrence of a Condition

 

  • Except as stated in Subsection (2), a promise to perform all or part of a conditional duty under an antecedent contract in spite of the non‐occurrence of the condition is binding, whether the promise is made before or after the time for the condition to occur, unless
  • occurrence of the condition was a material part of the agreed exchange for the performance of the duty and the promise was under no duty that it occur; or
  • uncertainty of the occurrence of the condition was an element of the risk assumed by the
    • If such a promise is made before the time for the occurrence of the condition has expired and the condition is within the control of the promisee or a beneficiary, the promisor can make his duty again subject to the condition by notifying the promisee or beneficiary of his intention to do so if
  • the notification is received while there is still a reasonable time to cause the condition to occur under the antecedent terms or an extension given by the promisor; and
  • reinstatement of the requirement of the condition is not unjust because of a material change of position by the promisee or beneficiary; and
  • the promise is not binding apart from the rule stated in Subsection (1).

 

 

§ 86.     Promise for Benefit Received

 

  • A promise made in recognition of a benefit previously received by the promisor from the promisee is binding to the extent necessary to prevent
  • A promise is not binding under Subsection (1)
    • if the promisee conferred the benefit as a gift or for other reasons the promisor has not been unjustly enriched; or
    • to the extent that its value is disproportionate to the

 

 

§ 87.     Option Contract

 

  • An offer is binding as an option contract if it
    • is in writing and signed by the offeror, recites a purported consideration. for the making of the offer, and proposes an exchange on fair terms within a reasonable time; or
    • is made irrevocable by
  • An offer which the offeror should reasonably expect to induce action or forbearance of a substantial character on the part of the offeree before acceptance and which does induce such action or forbearance is binding as an option contract to the extent necessary to avoid

 

 

§ 89.     Modification of Executory Contract

 

A promise modifying a duty under a contract not fully performed on either side is binding

  • if the modification is fair and equitable in view of circumstances not anticipated by the parties when the contract was made; or
  • to the extent provided by statute; or
  • to the extent that justice requires enforcement in view of material change of position in reliance on the promise.

 

 

§ 90.     Promise Reasonably Inducing Action or Forbearance

 

  • A promise which the promisor should reasonably expect to induce action or forbearance on the part of the promisee or a third person and which does induce such action or forbearance is binding if injustice can be avoided only by enforcement of the The remedy granted for breach may be limited as justice requires.
  • A charitable subscription or a marriage settlement is binding under Subsection (1) without proof that the promise induced action or forbearance.

 

 

Chapter 5

THE STATUTE OF FRAUDS

 

TOPIC 8. CONSEQUENCES OF NON‐COMPLIANCE

 

 

§ 139.  Enforcement by Virtue of Action in Reliance

 

  • A promise which the promisor should reasonably expect to induce action or forbearance on the part of the promisee or a third person and which does induce the action or forbearance is enforceable notwithstanding the Statute of Frauds if injustice can be avoided only by enforcement of the The remedy granted for breach is to be limited as justice requires.
  • In determining whether injustice can be avoided only by enforcement of the promise, the following circumstances are significant:
    • the availability and adequacy of other remedies, particularly cancellation and restitution;
    • the definite and substantial character of the action or forbearance in relation to the remedy sought;
    • the extent to which the action or forbearance corroborates evidence of the making and terms of the promise, or the making and terms are otherwise established by clear and convincing evidence;
    • the reasonableness of the action or forbearance;
    • the extent to which the action or forbearance was foreseeable by the

 

 

Chapter 6

MISTAKE

 

 

§ 152.  When Mistake of Both Parties Makes a Contract Voidable

 

  • Where a mistake of both parties at the time a contract was made as to a basic assumption on which the contract was made has a material effect on the agreed exchange of performances, the contract is voidable by the adversely affected party unless he bears the risk of the mistake under the rule stated in §
  • In determining whether the mistake has a material effect on the agreed exchange of performances, account is taken of any relief by way of reformation, restitution, or

 

 

§ 153.  When Mistake of One Party Makes a Contract Voidable

 

Where a mistake of one party at the time a contract was made as to a basic assumption on which he made the contract has a material effect on the agreed exchange of performances that is adverse to him, the contract is voidable by him if he does not bear the risk of the mistake under the rule stated in § 154, and

  • the effect of the mistake is such that enforcement of the contract would be unconscionable, or
  • the other party had reason to know of the mistake or his fault caused the

 

 

§ 154.  When a Party Bears the Risk of a Mistake

 

A party bears the risk of a mistake when

 

  • The risk is allocated to him by agreement of the parties, or
  • he is aware, at the time the contract is made, that he has only limited knowledge with respect to the facts to which the mistake relates but treats his limited knowledge as sufficient, or
  • the risk is allocated to him by the court on the ground that it is reasonable in the circumstances to do

 

 

§ 158.  Relief Including Restitution; Supplying a Term

 

  • In any case governed by the rules stated in this Chapter, either party may have a claim for relief including restitution under the rules stated in § 240 and
  • In any case governed by the rules stated in this Chapter, if those rules together with the rules stated in Chapter 16 will not avoid injustice, the court may grant relief on such terms as justice requires including protection of the parties’ reliance

 

 

Chapter 9

THE SCOPE OF CONTRACTUAL OBLIGATIONS

 

TOPIC 1. THE MEANING OF AGREEMENTS

 

§ 201.  Whose Meaning Prevails

 

  • Where the parties have attached the same meaning to a promise or agreement or a term thereof, it is interpreted in accordance with that
  • Where the parties have attached different meanings to a promise or agreement or a term thereof, it is interpreted in accordance with the meaning attached by one of them if at the time the agreement was made
  • that party did not know of any different meaning attached by the other, and the other knew the meaning attached by the first party; or
  • that party had no reason to know of any different meaning attached by the other, and the other had reason to know the meaning attached by the first
  • Except as stated in this Section, neither party is bound by the meaning attached by the other, even though the result may be a failure of mutual

 

 

§ 204.  Supplying an Omitted Essential Term

 

When the parties to a bargain sufficiently defined to be a contract have not agreed with respect to a term which is essential to a determination of their rights and duties, a term which is i~èasonab1e in the circumstances is supplied by the court.

 

 

TOPIC 2. CONSIDERATIONS OF FAIRNESS AND THE PUBLIC INTEREST

 

§ 205.  Duty of Good Faith and Fair Dealing

 

Every contract imposes upon each party a duty of good faith and fair dealing in its performance and its enforcement.

 

 

§ 208.  Unconscionable Contract or Term

 

If a contract or term thereof is unconscionable at the time the contract is made a court may refuse to enforce the contract, or may enforce the remainder of the contract without the unconscionable term, or may so limit the application of any unconscionable term as to avoid any unconscionable result.

 

 

TOPIC 3. EFFECT OF ADOPTION OF A WRITING

 

§ 209.  Integrated Agreements

 

  • An integrated agreement is a writing or writings constituting a final expression of one or more terms of an agreement.
  • Whether there is an integrated agreement is to be determined by the court as a question preliminary to determination of a question of interpretation or to application of the parol evidence
  • Where the parties reduce an agreement to a writing which in view of its completeness and specificity reasonably appears to be a complete agreement, it is taken to be an integrated agreement unless it is established by other evidence that the writing did not constitute a final

 

 

§ 210.  Completely and Partially Integrated Agreements

 

  • A completely integrated agreement is an integrated agreement adopted by the parties as a complete and exclusive statement of the terms of the
  • A partially integrated agreement is an integrated agreement other than a completely integrated
  • Whether an agreement is completely or partially integrated is to be determined by the court as a question preliminary to determination of a question of interpretation or to application of the parol evidence

 

 

§ 211.  Standardized Agreements

 

  • Except as stated in Subsection (3), where a party to an agreement signs or otherwise manifests assent to a writing and has reason to believe that like writings are regularly used to embody terms of agreements of the same type, he adopts the writing as an integrated agreement with respect to the terms included in the
  • Such a writing is interpreted wherever reasonable as treating alike all those similarly situated, without regard to their knowledge or understanding of the standard terms of the
  • Where the other party has reason to believe that the party manifesting such assent would not do so if he knew that the writing contained a particular term, the term is not part of the

 

 

§ 213.  Effect of Integrated Agreement on Prior Agreements (Parol Evidence Rule)

 

  • A binding integrated agreement discharges prior agreements to the extent that it is inconsistent with them.
  • A binding completely integrated agreement discharges prior agreements to the extent that they are within its

 

 

  • An integrated agreement that is not binding or that is voidable and avoided does not discharge a prior agreement. But an integrated agreement, even though not binding, may be effective to render inoperative a term which would have been part of the agreement if it had not been

 

 

§ 214.  Evidence of Prior or Contemporaneous Agreements and Negotiations

 

Agreements and negotiations prior to or contemporaneous with the adoption of a writing are admissible in evidence to establish

  • that the writing is or is not an integrated agreement;
  • that the integrated agreement, if any, is completely or partially integrated;
  • the meaning of the writing, whether or not integrated;
  • illegality, fraud, duress, mistake, lack of consideration, or other invalidating cause;
  • ground for granting or denying rescission, reformation, specific performance, or other

 

 

§ 215.  Contradiction of Integrated Terms

 

Except as stated in the preceding Section, where there is a binding agreement, either completely or partially integrated, evidence of prior or contemporaneous agreements or negotiations is not admissible in evidence to contradict a term of the writing.

 

 

§ 216.  Consistent Additional Terms

 

  • Evidence of a consistent additional term is admissible to supplement an integrated agreement unless the court finds that the agreement was completely
  • An agreement is not completely integrated if the writing omits a consistent additional agreed term which

is

  • agreed to for separate consideration, or
  • such a term as in the circumstances might naturally be omitted from the

 

 

§ 217.  Integrated Agreement Subject to Oral Requirement of a Condition

 

Where the parties to a written agreement agree orally that performance of the agreement is subject to the occurrence of a stated condition, the agreement is not integrated with respect to the oral condition.

 

 

TOPIC 5. CONDITIONS AND SIMILAR EVENTS

 

§ 224.  Condition Defined

 

A condition is an event, not certain to occur, which must occur, unless its non‐occurrence is excused, before performance under a contract becomes due.

 

 

§ 225.  Effects of the Non‐Occurrence of a Condition

 

  • Performance of a duty subject to a condition cannot become due unless the condition occurs or its non‐ occurrence is
  • Unless it has been excused, the non‐occurrence of a condition discharges the duty when the condition can no longer
  • Non‐occurrence of a condition is not a breach by a party unless he is under a duty that the condition

 

 

§ 229.  Excuse of a Condition to Avoid Forfeiture

 

To the extent that the non‐occurrence of a condition would cause disproportionate forfeiture, a court may excuse the non‐occurrence of that condition unless its occurrence was a material part of the agreed exchange.

 

 

Chapter 10 PERFORMANCE AND NON‐PERFORMANCE

TOPIC 1. PERFORMANCES TO BE EXCHANGED UNDER AN EXCHANGE OF PROMISES

 

§ 234.  Order of Performances

 

  • Where all or part of the performances to be exchanged under an exchange of promises can be rendered simultaneously, they are to that extent due simultaneously, unless the language or the circumstances indicate the contrary.
  • Except to the extent stated in Subsection (1), where the performance of only one party under such an exchange requires a period of time, his performance is due at an earlier time than that of the other party, unless the language or the circumstances indicate the

 

 

TOPIC 2. EFFECT OF PERFORMANCE AND NON‐PERFORMANCE

 

§ 236.  Claims for Damages for Total and for Partial Breach

 

  • A claim for damages for total breach is one for damages based on all of the injured party’s remaining rights to
  • A claim for damages for partial breach is one for damages based on only part of the injured party’s remaining rights to

 

 

§ 237.  Effect on Other Party’s Duties of a Failure to Render Performance

 

Except as stated in § 240, it is a condition of each party’s remaining duties to render performances to be exchanged under an exchange of promises that there be no uncured material failure by the other party to render

 

 

any such performance due at an earlier time.

 

 

§ 238.  Effect on Other Party’s Duties of a Failure to Offer Performance

Where all or part of the performances to be exchanged under an exchange of promises are due simultaneously, it is a condition of each party’s duties to render such performance that the other party either render or, with manifested present ability to do so, offer performance of his part of the simultaneous exchange.

 

 

§ 210.  Part Performances as Agreed Equivalents

 

If the performances to be exchanged under an exchange of promises can be apportioned into corresponding pairs of part performances so that the parts of each pair are properly regarded as agreed equivalents, a party’s performance of his part of such a pair has the same effect on the other’s duties to render performance of the agreed equivalent as it would have if only that pair of performances had been promised.

 

 

§ 241.  Circumstances Significant in Determining Whether a Failure is Material

 

In determining whether a failure to render or to offer performance is material, the following circumstances are significant:

  • the extent to which the injured party will be deprived of the benefit which he reasonably expected;
  • the extent to which the injured party can be adequately compensated for the part of that benefit of which he will be deprived;
  • the extent to which the party failing to perform or to offer to perform will suffer forfeiture;
  • the likelihood that the party failing to perform or to offer to perform will cure his failure, taking account of all the circumstances including any reasonable assurances;
  • the extent to which the behavior of the party failing to perform or to offer to perform comports with standards of good faith and fair

 

 

§ 242.  Circumstances Significant in Determining When Remaining Duties are Discharged

 

In determining the time after which a party’s uncured material failure to render or to offer performance discharges the other party’s remaining duties to render performance under the rules stated in § 237 and 238, the following circumstances are significant:

  • those stated in § 241;
  • the extent to which it reasonably appears to the injured party that delay may prevent or hinder him in making reasonable substitute arrangements;
  • the extent to which the agreement provides for performance without delay, but a material failure to perform or to offer to perform on a stated day does not of itself discharge the other party’s remaining duties unless the circumstances, including the language of the agreement, indicate that performance or an offer to perform by that day is

 

 

§ 243. Effect of a Breach by Non‐Performance as Giving Rise to a Claim for Damages for Total Breach

 

 

  • With respect to performances to be exchanged under an exchange of promises, a breach by non‐ performance gives rise to a claim for damages for total breach only if it discharges the injured party’s remaining duties to render such performance, other than a duty to render an agreed equivalent under 240.
  • Except as stated in Subsection (3), a breach by nonperformance accompanied or followed by a repudiation gives rise to a claim for damages for total
  • Where at the time of the breach the only remaining duties of performance are those of the party in breach and are for the payment of money in installments not related to one another, his breach by non‐ performance as to less than the whole, whether or not accompanied or followed by a repudiation, does not give rise to a claim for damages for total
  • In any case other than those stated in the preceding subsections, a breach by non‐performance gives rise to a claim for total breach only if it so substantially impairs the value of the contract to the injured party at the time of the breach that it is just in the circumstances to allow him to recover damages based on all his remaining rights to

 

 

TOPIC 3. EFFECT OF PROSPECTIVE NON—PERFORMANCE

 

§ 250.  When a Statement or an Act is a Repudiation

 

A repudiation is

  • a statement by the obligor to the obligee indicating that the obligor will commit a breach that would of itself give the obligee a claim for damages for total breach under 243, or
  • a voluntary affirmative act which renders the obligor unable or apparently unable to perform without such a

 

 

§ 251.  When a Failure to Give Assurance May be Treated as a Repudiation

 

  • Where reasonable grounds arise to believe that the obligor will commit a breach by non‐performance that would of itself give the obligee a claim for damages for total breach under 243, the obligee may demand adequate assurance of due performance and may, if reasonable, suspend any performance for which he has not already received the agreed exchange until he receives such assurance.
  • The obligee may treat as a repudiation the obligor’s failure to provide within a reasonable time such assurance of due performance as is adequate in the circumstances of the particular

 

 

§ 253.  Effect of a Repudiation as a Breach and on Other Party’s Duties

 

  • Where an obligor repudiates a duty before he has committed a breach by non‐performance and before he has received all of the agreed exchange for it, his repudiation alone gives rise to a claim for damages for total breach.
  • Where performances are to be exchanged under an exchange of promises, one party’s repudiation of a duty to render performance discharges the other party’s remaining duties to render

 

 

§ 256.  Nullification of Repudiation or Basis for Repudiation

 

 

  • The effect of a statement as constituting a repudiation under § 250 or the basis for a repudiation under 251 is nullified by a retraction of the statement if notification of the retraction comes to the attention of the injured party before he materially changes his position in reliance on the repudiation or indicates to the other party that he considers the repudiation to be final.
  • The effect of events other than a statement as constituting a repudiation under 250 or the basis for a repudiation under § 251 is nullified if, to the knowledge of the injured party, those events have ceased to exist before he materially changes his position in reliance on the repudiation or indicates to the other party that he considers the repudiation to be final.

 

 

Chapter 11

IMPRACTICABILITY OF PERFORMANCE AND FRUSTRATION OF PURPOSE

 

§ 261.  Discharge by Supervening Impracticability

 

Where, after a contract is made, a party’s performance is made impracticable without his fault by the occurrence of an event the non‐occurrence of which was a basic assumption on which the contract was made, his duty to render that performance is discharged, unless the language or the circumstances indicate the contrary.

 

 

§ 265.  Discharge by Supervening Frustration

 

Where, after a contract is made, a party’s principal purpose is substantially frustrated without his fault by the occurrence of an ‐event the non‐occurrence of which was a basic assumption on which the contract was made, his remaining duties to render performance are discharged, unless the language or the circumstances indicate the contrary.

 

 

§ 266.  Existing Impracticability or Frustration

 

  • Where, at the time a contract is made, a party’s performance under it is impracticable without his fault because of a fact of which he has no reason to know and the non‐existence of which is a basic assumption on which the contract is made, no duty to render that performance arises, unless the language or circumstances indicate the
  • Where, at the time a contract is made, a party’s principal purpose is substantially frustrated without his fault by a fact of which he has no reason to know and the non‐existence of which is a basic assumption on which the contract is made, no duty of that party to render performance arises, unless the language or circumstances indicate the

 

 

§ 272.  Relief Including Restitution; Supplying a Term

 

  • In any case governed by the rules stated in this Chapter, either party may have a claim for relief including restitution under the rules stated in 240 and 377.
  • In any case governed by the rules stated in this Chapter, if those rules together with the rules stated in Chapter 16 will not avoid injustice, the court may grant relief on such terms as justice requires including protection

 

 

of the parties’ reliance interests.

 

 

Chapter 14

CONTRACT BENEFICIARIES

 

§ 302.  Intended and Incidental Beneficiaries

 

  • Unless otherwise agreed between promisor and promisee, a beneficiary of a promise is an intended beneficiary if recognition of a right to performance in the beneficiary is appropriate to effectuate the intention of the parties and either
  • the performance of the promise will satisfy an obligation of the promisee to pay money to the beneficiary; or
  • the circumstances indicate that the promisee intends to give the beneficiary the benefit of the promised
  • An incidental beneficiary is a beneficiary who is not an intended

 

 

§ 309.  Defenses Against the Beneficiary

 

  • A promise creates no duty to a beneficiary unless a contract is formed between the promisor and the promisee; and if a contract is voidable or unenforceable at the time of its formation the right of any beneficiary is subject to the
  • If a contract ceases to be binding in whole or in part because of impossibility, illegality, non‐occurrence of a condition, or present or prospective failure of performance, the right of any beneficiary is to that extent discharged or
  • Except as stated in Subsections (1) and (2) and in 311 or as provided by the contract, the right of any beneficiary against the promisor is not subject to the promisor’s claims or defenses against the promisee or to the promisee’s claims or defenses against the beneficiary.
  • A beneficiary’s right against the promisor is subject to any claim or defense arising from his own conduct or

 

 

§ 311.  Variation of a Duty to a Beneficiary

 

  • Discharge or modification of a duty to an intended beneficiary by conduct of the promisee or by a subsequent agreement between promisor and promisee is ineffective if a term of the promise creating the duty so
  • In the absence of such a term, the promisor and promisee retain power to discharge or modify the duty by subsequent agreement.
  • Such a power terminates when the beneficiary, before he receives notification of the discharge or modification, materially changes his position in justifiable reliance on the promise or brings suit on it or manifests assent to it at the request of the promisor or
  • If the promisee receives consideration for an attempted discharge or modification of the promisor’s duty which is ineffective against the beneficiary, the beneficiary can assert a right to the consideration so received. The promisor’s duty is discharged to the extent of the amount received by the

 

 

  • The rules stated in this Chapter apply to contracts with a government or governmental agency except to the extent that application would contravene the policy of the law authorizing the contract or prescribing remedies for its
  • In particular, a promisor who contracts with a government or governmental agency to do an act for or render a service to the public is not subject to contractual liability to a member of the public for consequential damages resulting from performance or failure to perform unless
    • the terms of the promise provide for such liability; or
    • the promisee is subject to liability to the member of the public for the damages and a direct action against the promisor is consistent with the terms of the contract and with the policy of the law authorizing the contract and prescribing remedies for its

 

 

 

Chapter 15

ASSIGNMENT AND DELEGATION

 

TOPIC 1. WHAT CAN BE ASSIGNED OR DELEGATED

 

  • 317. Assignment of a Right

 

  • An assignment of a right is a manifestation of the assignor’s intention to transfer it by virtue of which the assignor’s right to performance by the obligor is extinguished in whole or in part and the assignee acquires a right to such
  • A contractual right can be assigned unless
    • the substitution of a right of the assignee for the right of the assignor would materially change the duty of the obligor, or materially increase the burden or risk imposed on him by his contract, or materially impair his chance of obtaining return performance, or materially reduce its value to him, or
    • the assignment is forbidden by statute or is otherwise in‐ ‐operative on grounds of public policy, or
    • assignment is validly precluded by

 

 

§ 318.  Delegation of Performance of Duty

 

  • An obligor can properly delegate the performance of his duty to another unless the delegation is contrary to public policy or the terms of his
  • Unless otherwise agreed, a promise requires performance by a particular person only to the extent that the obligee has a substantial interest in having that person perform or control the acts
  • Unless the obligee agrees otherwise, neither delegation of performance nor a contract to assume the duty made with the obligor by the person delegated discharges any duty or liability of the delegating

 

 

§ 321.  Assignment of Future Rights

 

  • Except as otherwise provided by statute, an assignment of a right to payment expected to arise out of an

 

 

existing employment or other continuing business relationship is effective in the same way as an assignment of an existing right.

  • Except as otherwise provided by statute and as stated in Subsection (1), a purported assignment of a right expected to arise under a contract not in existence operates only as a promise to assign the right when it arises and as a power to enforce

 

 

§ 322.  Contractual Prohibition of Assignment

 

  • Unless the circumstances indicate the contrary, a contract term prohibiting assignment of “the contract” bars only the delegation to an assignee of the performance by the assignor of a duty or
  • A contract term prohibiting assignment of rights under the contract, unless a different intention is
  • does not forbid assignment of a right to damages for breach of the whole contract or a right arising out of the assignor’s due performance of his entire obligation;
  • gives the obligor a right to damages for breach of the terms forbidding assignment but does not render the assignment ineffective;
  • is for the benefit of the obligor, and does not prevent the assignee from acquiring rights against the assignor or the obligor from~ discharging his duty as if there were no such

 

 

TOPIC 2. MODE OF ASSIGNMENT OR DELEGATION

 

  • 328. Interpretation of Words of Assignment; Effect of Acceptance of Assignment

 

  • Unless the language or the circumstances indicate the contrary, as in an assignment for security, an assignment of “the contract” or of “all my rights under the contract” or an assignment in similar general terms is an assignment of the assignor’s rights and a delegation of his unperformed duties under the
  • Unless the language or the circumstances indicate the contrary, the acceptance by an assignee of such an assignment operates as a promise to the assignor to perform the assignor’s unperformed duties, and the obligor of the assigned rights is an intended beneficiary of the

Caveat: The Institute expresses no opinion as to whether the rule stated in Subsection (2) applies to an assignment by a purchaser of his rights under a contract for the sale of land.

 

 

TOPIC 3. EFFECT BETWEEN ASSIGNOR AND ASSIGNEE

 

  • 332. Revocability of Gratuitous Assignments

 

  • Unless a contrary intention is manifested, a gratuitous assignment is irrevocable if
    • the assignment is in a writing either signed or under seal that is delivered by the assignor; or
    • the assignment is accompanied by delivery of a writing of a type customarily accepted as a symbol or as evidence of the right
  • Except as stated in this Section, a gratuitous assignment is revocable and the right of the assignee is terminated by the assignor’s death or incapacity, by a subsequent assignment by the assignor, or by notification from the assignor received by the assignee or by the

 

 

  • A gratuitous assignment ceases to be revocable to the extent that before the assignee’s right is terminated he obtains
    • payment or satisfaction of the obligation, or
    • judgment against the obligor, or
    • a new contract of the obligor by
  • A gratuitous assignment is irrevocable to the extent necessary to avoid injustice where the assignor should reasonably expect the assignment to induce action or forbearance by the assignee or a sub‐assignee and the assignment does induce such action or
  • An assignment is gratuitous unless it is given or taken
    • in exchange for a performance or return promise that would be consideration for a promise; or
    • as security for or in total or partial satisfaction of a preexisting debt or other

 

 

§ 333.  Warranties of an Assignor

 

  • Unless a contrary intention is manifested, one who assigns or purports to assign a right by assignment under seal or for value warrants to the assignee
  • that he will do nothing to defeat or impair the value of the assignment and has no knowledge of any fact which would do so;
  • that the right, as assigned, actually exists and is subject to no limitations or defenses good against the assignor other than those stated or apparent at the time of the assignment;
  • that any writing evidencing the right which is delivered to the assignee or exhibited to him to induce him to accept the assignment is genuine and what it purports to
    • An assignment does not of itself operate as a warranty that the obligor is solvent or that he will perform his obligation.
    • An assignor is bound by affirmations and promises to the assignee with reference to the right assigned in the same way and to the same extent that one who transfers goods is bound in like
    • An assignment of a right to a sub‐assignee does not operate as an assignment of the assignee’s rights under his assignor’s warranties unless an intention is manifested to assign the rights under the

 

 

TOPIC 4. EFFECT ON THE OBLIGOR’S DUTY

 

  • 336. Defenses Against an Assignee

 

  • By an assignment the assignee acquires a right against the obiigor only to the extent that the obligor is under a duty to the assignor; and if the right of the assignor would be voidable by the obligor or unenforceable against him if no assignment had been made, the right of the assignee is subject to the
  • The right of an assignee is subject to any defense or claim of the obligor which accrues before the obligor receives notification of the assignment, but not to defenses or claims which accrue thereafter except as stated in this Section or as provided by
  • Where the right of an assignor is subject to discharge or modification in whole or in part by impossibility, illegality, non‐occurrence of a condition, or present or prospective failure of performance by an obligee, the right of the assignee is to that extent subject to discharge or modification even after the obligor receives notification of the
  • An assignee’s right against the obligor is subject to any defense or claim arising from his conduct or to which he was subject as a party or a prior assignee because he had

 

 

§ 338.  Discharge of an Obligor after Assignment

 

  • Except as stated in this Section, notwithstanding an assignment, the assignor retains his power to discharge or modify the duty of the obligor to the extent that the obligor performs or otherwise gives value until but not after the obligor receives notification that the right has been assigned and that performance is to be rendered to the
  • So far as an assigned right is conditional on the performance of a return promise, and notwithstanding notification of the assignment, any modification of or substitution for the contract made by the assignor and obligor in good faith and in accordance with reasonable commercial standards is effective against the The assignee acquires corresponding rights under the modified or substituted contract.
  • Notwithstanding a defect in the right of an assignee, he has the same power his assignor had to discharge or modify the duty of the obligor to the extent that the obligor gives value or otherwise changes his position in good faith and without knowledge or reason to know of the
  • Where there is a writing of a type customarily accepted as a symbol or as evidence of the right assigned, a discharge or modification is not effective
  • against the owner or an assignor having a power of avoidance, unless given by him or by a person in possession of the writing with his consent and any necessary endorsement or assignment;
  • against a subsequent assignee who takes possession of the writing and gives value in good faith and without knowledge or reason to know of the discharge or

 

 

Chapter 16 REMEDIES

TOPIC 2. ENFORCEMENT BY AWARD OF DAMAGES

 

  • 317. Measure of Damages in General

 

Subject to the limitations stated in § 350—53, the injured party has a right to damages based on his expectation interest as measured by

  • the loss in the value to him of the other party’s performance caused by its failure or deficiency, plus
  • any other loss, including incidental or consequential loss, caused by the breach, less
  • any cost or other loss that he has avoided by not having to

 

 

§ 348.  Alternatives to Loss in Value of Performance

 

  • If a breach delays the use of property and the loss in value to the injured party is not proved with reasonable certainty, he may recover damages based on the rental value of the property or on interest on the value of the
  • If a breach results in defective or unfinished construction and the loss in value to the injured party is not proved with sufficient certainty, he may recover damages based on
    • the diminution in the market price of the property caused by the breach, or
    • the reasonable cost of completing performance or of remedying the defects if that cost is not clearly disproportionate to the probable loss in value to
  • If a breach is of a promise conditioned on a fortuitous event and it is uncertain whether the event would have occurred had there been no breach, the injured party may recover damages based on the value of the

 

 

 

§ 349.  Damages Based on Reliance Interest

 

As an alternative to the measure of damages stated in § 347, the injured party has a right to damages based on his reliance interest, including expenditures made in preparation for performance or in performance, less any loss that the party in breach can prove with reasonable certainty the injured party would have suffered had the contract been performed.

 

 

§ 350.  Avoidability as a Limitation on Damages

 

  • Except as stated in Subsection (2), damages are not recoverable for loss that the injured party could have avoided without undue risk, burden or
  • The injured party is not precluded from recovery by the rule stated in Subsection (1) to the extent that he has made reasonable but unsuccessful efforts to avoid loss.

 

 

§ 351.  Unforeseeability and Related Limitations on Damages

 

  • Damages are not recoverable for loss that the party in breach did not have reason to foresee as a probable result of the breach when the contract was
  • Loss may be foreseeable as a probable result of a breach because it follows from the breach
    • in the ordinary course of events, or
    • as a result of special circumstances beyond the ordinary course of events, that the party in breach had reason to
  • A court may limit damages for foreseeable loss by excluding recovery for loss of profits, by allowing recovery only for loss incurred in reliance, or otherwise if it concludes that in the circumstances justice so requires in order to avoid disproportionate compensation.

 

 

§ 352.  Uncertainty as a Limitation on Damages

 

Damages are not recoverable for loss beyond an amount that the evidence permits to be established with reasonable certainty.

 

 

§ 353.  Loss Due to Emotional Disturbance

 

Recovery for emotional disturbance will be excluded unless the breach also caused bodily harm or  the contract or the breach is of such a kind that serious emotional disturbance was a particularly likely result.

 

 

§ 335.  Punitive Damages

 

Punitive damages are not recoverable for a breach of contract unless the conduct constituting the breach  is

 

 

 

TOPIC 4. RESTITUTION

 

  • 371. Measure of Restitution Interest

 

If a sum of money is awarded to protect a party’s restitution interest, it may as justice requires be measured by either

  • the reasonable value to the other party of what he received in terms of what it would have cost him to obtain it from a person in the claimant’s position, or
  • the extent to which the other party’s property has been increased in value or his other interests

 

 

§ 373.  Restitution When Other Party is in Breach

 

  • Subject to the rule stated in Subsection (2), on a breach by non‐performance that gives rise to a claim for damages for total breach or on a repudiation, the injured party is entitled to restitution for any benefit that he has conferred on the other party by way of part performance or
  • The injured party has no right to restitution if he has performed all of his duties under the contract and no performance by the other party remains due other than payment of a definite sum of money for that

 

 

§ 371.  Restitution in Favor of Party in Breach

 

  • Subject to the rule stated in Subsection (2), if a party justifiably refuses to perform on the ground that his remaining duties of performance have been discharged by the other party’s breach, the party in breach is entitled to restitution for any benefit that he has conferred by way of part performance or reliance in excess of the loss that he has caused by his own
  • To the extent that, under the manifested assent of the parties, a party’s performance is to be retained in the case of breach, that party is not entitled to restitution if the value of the performance as liquidated damages is reasonable in the light of the anticipated or actual loss caused by the breach and the difficulties of proof of

 

 

§ 376.  Restitution When Contract is Voidable

 

A party who has avoided a contract on the ground of lack of capacity, mistake, misrepresentation, duress, undue influence or abuse of a fiduciary relation is entitled to restitution for any benefit that he has conferred on the other party by way of part performance or reliance.

 

 

§ 377. Restitution in Cases of Impracticability, Frustration, NonOccurrence of Condition or Disclaimer by Beneficiary

 

A  party  whose  duty  of  performance  does  not  arise  or  is  discharged  as  a  result  of  impracticability      of

 

 

performance, frustration of purpose, non‐occurrence of a condition or disclaimer by a beneficiary is entitled to restitution for any benefit that he has conferred on the other party by way of part performance or reliance.

0 Comments

Leave a reply

Your email address will not be published. Required fields are marked *

*

CONTACT US

Got a suggestion? Want to start a new group? Drop us a line! We love feedback.

Sending

©2019 thelaw.agency | Website Design by Santa Barbara Web Design & Marketing

People Who Like Thisx

Loading...
or

Log in with your credentials

or    

Forgot your details?