Under the ucc when is an acceptance effective

Unless otherwise agreed, tender of delivery of the goods is a condition of the buyer's duty to pay, and tender of payment for the goods by the buyer is a condition of the seller's duty to complete delivery. While it is possible that a seller and buyer may make other contractual arrangements regarding payment, where payment is due upon delivery, the buyer does not have the right to keep or dispose of the goods unless he or she pays for the goods. As to the form of payment, the UCC allows for payment "by any means or in any manner current in the ordinary course of business," unless the seller demands payment in cash.

Depending on the specific circumstances, "any means" could mean bank checks, credit cards, or other methods of payment. The UCC gives a buyer a right to inspect goods prior to accepting or paying for them, and a buyer is not required to pay for goods that he or she does not accept.

More specifically, before making payment, the buyer has the right to inspect the goods "at any reasonable place and time and in any reasonable manner. In cases where the seller ships the goods to the buyer, the buyer has the right under the UCC to perform the inspection after the goods have arrived at their destination. Be aware that the UCC distinguishes between a buyer paying for goods and a buyer "accepting" goods.

Acceptance is discussed below. The buyer is responsible for any costs associated with inspecting goods. However, if the goods do not conform to the contract, the buyer has the right to recover inspection costs from the seller. Notwithstanding the general rule allowing the buyer to inspect to goods before making payment, the UCC has a few specific exceptions where the buyer must pay before making any inspection.

Perhaps the key exception is where the contract is for goods delivered C. General contract law, as opposed to the UCC, commonly allows for a party to fulfill contractual obligations through substantial performance.

This means that it may suffice if a party substantially, though not exactly or perfectly, meets the requirements of the contract. For contracts for the sale of goods, however, the UCC requires "perfect tender" by the seller. As mentioned above, tender means, in essence, the delivery of goods to the buyer, and perfect tender means delivering goods that precisely meet the terms of the contract.

According to the UCC, if the goods as tendered "fail in any respect to conform to the contract," the buyer has various options, including rejecting the goods. If a buyer wants to reject goods because they do not conform to the contract, the rejection must occur before the buyer accepts the goods. This prompts the question as to when acceptance occurs.

According to the UCC, acceptance occurs when the buyer:. A different section of the UCC reinforces the second of these listed scenarios; Section states that a rejection must occur within a reasonable time after the delivery of the goods, and, moreover, that the buyer must seasonably reasonably promptly notify the seller of the rejection. What is a reasonable opportunity to inspect, or a reasonable time after delivery of the goods, will vary depending on the specific details of each situation.

On a state-by-state basis there may also be case law that would provide further guidance. Apart from the foregoing rules on rejection, there are additional rules for a buyer who rejects goods.

These include requirements that the buyer properly notify the seller of the rejection and that the buyer give the seller an opportunity to cure whatever problem or defect non-conformity in the goods led to the rejection. Rejection occurs before a buyer accepts the goods, whereas revocation refers to situations where a buyer has already accepted the goods. Satisfaction of third person: If the duty of performance is expressly conditioned on the satisfaction of some independent third party e.

But this judgment must be made in good faith. Use in bilateral conditions: Remember that a constructive condition is a condition which is not agreed upon by the parties, but which is supplied by the court for fairness. The principal use of constructive conditions is in bilateral contracts where each party makes a promise to the other.

No language of condition is used anywhere in the document. Where the intent is not clear, the court supplies certain presumptions, as discussed below. Periodic alternating: The parties may agree that their performances shall alternate. This is true of most installment contracts. No order of performance agreed upon: If the parties do not agree upon the order of performance, there are several general presumptions courts use: [ - ]. This applies to contracts for services — a party who is to perform work must usually substantially complete the work before he may receive payment if the parties do not otherwise agree.

Tender of performance: Courts express this by saying that where the two performances are concurrent, each party must "tender" i. Example: Seller contracts to sell Blackacre to Buyer. Since each performance can occur simultaneously, the court will presume that simultaneity is what the parties intended.

If Seller fails to show up with a proper deed, Buyer will not be able to sue Seller for breach unless Buyer shows that he tendered the certified check, i. Independent or dependent promises: In the normal bilateral contract, the court will presume that the promises are in exchange for each other. Independent promises: But in a few situations, circumstances may indicate that the promises are intended to be independent of each other. Here, the court will not apply the theory of constructive conditions.

Real estate leases: For instance, promises in the typical real estate lease are generally construed as being independent of each other. But a growing minority of courts have rejected this rule of independence. Divisible contracts: A divisible contract is one in which both parties have divided up their performance into units or installments, in such a way that each part performance is roughly the compensation for a corresponding part performance by the other party.

If a contract is found to be divisible, it will for purposes of constructive conditions be treated as a series of separate contracts. Payment on the entire contract is due when all work is done. Contractor completes the deck but never even starts on the kitchen.

If the contract is not divisible, Contractor will be found to not have substantially performed the whole, and he will not be able to recover on the contract for the work on the deck though he will be able to recover the fair value of what he has done on a quasi-contract or restitution theory. Test for divisibility: A contract is divisible if it can be "apportioned into corresponding pairs of part performances so that the parts of each pair are properly regarded as agreed equivalents.

Therefore, the court would probably find that the contract was divisible. Employment contracts: Most employment contracts are looked on as being divisible. Usually, the contract will be divided into lengths of time equal to the time between payments. Fairness: The court will not find a contract to be divisible if this would be unfair to the non-breaching party.

For instance, even though the contract recites separate prices for different part performances, requiring the non-breaching party to pay the full stated price for the part performance received may deprive him of fair value. Example: A construction contract requires Owner to pay one-tenth of the contract price for each of 10 weeks of estimated work. The first week, Contractor does everything scheduled for that week, but the scheduling is very light, consisting mainly of site preparation.

If Contractor breaches after the first week, the court will probably not find the contract divisible, since a finding of divisibility would require Owner to pay one-tenth of the contract price for performance that represents less than one-tenth of the full job. If, on the other hand, the defect is so substantial that it cannot be cured within a reasonable time, or if the defaulter fails to take advantage of a chance to cure, the other party is then completely discharged , and may also sue for breach.

Factors regarding materiality: Here are some factors that help determine whether a breach is material i. Deprivation of expected benefit: The more the non-breaching party is deprived of the benefit which he reasonably expected , the more likely it is that the breach was material.

Part performance: The greater the part of the performance which has been rendered, the less likely it is that a breach will be deemed material. Thus a breach occurring at the very beginning of the contract is more likely to be deemed material than the same "size" breach coming near the end.

Likeliness of cure: If the breaching party seems likely to be able and willing to cure , the breach is less likely to be material than where cure seems impossible.

Willfulness: A willful i. Delay: A delay, even a substantial one, will not necessarily constitute a lack of substantial performance.

The presumption is that time is not "of the essence" unless the contract so states, or other circumstances make the need for promptness apparent. Even if the contract does contain a "time is of the essence" clause, a short delay will not be deemed "material" unless the circumstances show that the delay seriously damaged the other party. Material breach in contracts for the sale of goods: The UCC imposes special rules governing what constitutes substantial performance by a seller of goods and thus when a buyer can reject the goods.

Not so strict: But in reality, there are loopholes in this "perfect tender" rule. Also, the buyer must follow strict procedures for rejecting the delivery, and the seller generally has the right to "cure" the defect.

See below. Mechanics of rejection: The buyer may "reject" any non-conforming delivery from the seller. As noted, in theory this right exists if the goods deviate in any respect from what is required under the contract. Time: Rejection must occur within a "reasonable time" after the goods are delivered.

The buyer must give prompt notice to the seller that buyer is rejecting. Must not be preceded by acceptance: The buyer can only reject if he has not previously "accepted" the goods. Revocation of acceptance: Even if the buyer has "accepted" the goods, if he then discovers a defect he may be able to revoke his acceptance. If he revokes, the result is the same as if he had never accepted — he can throw the goods back on the seller and refuse to pay. Revocation vs. Beyond contract: Even after the time for performance under the contract has passed, the seller has a limited right to cure: he gets additional time to cure once the time for delivery under the contract has passed, if he reasonably thought that either: 1 the goods, though non-conforming, would be acceptable to the buyer; or 2 the buyer would be satisfied with a money allowance.

Installment contracts: The Code is more lenient to sellers under installment contracts i. In the case of an installment contract, "the buyer may reject any installment which is non-conforming if the non-conformity substantially impairs the value of that installment and cannot be cured So a slight non-conformity in one installment does not allow the buyer to reject it, as he could in a single-delivery contract.

Cancellation of whole: The buyer has the right to cancel the entire installment contract if the defect is grave enough: cancellation of the whole is allowed if the defective installment "substantially impairs the value of the whole contract.

Example: Seller contracts to deliver a computer, as well as a customized disk drive to work in the computer. Seller delivers a defective disk drive and fails to cure. Buyer can probably cancel the whole contract, since the defect in the disk drive substantially impairs the value of the whole contract, including the computer, to him.

Introduction: In some instances, the non-occurrence of a condition is "excused , " so that the other party nonetheless must perform. Implied promise of cooperation: Courts sometimes express this concept by saying that each party makes the other an "implied promise of cooperation. P lives with D for seven years, at the end of which D unreasonably forces P to leave the house.

Five years later, D dies. Waiver: A party who owes a conditional duty may indicate that he will not insist upon the occurrence of the condition before performing. In this event, the party is said to have waived the condition.

Minor conditions: Generally, the court is much more likely to find that the condition is waived if it is a minor one, such as a procedural or technical one. Continuation of performance: If a promisor continues his own performance after learning that a condition of duty has failed to occur, his conduct is likely to be found to operate as a waiver of the condition.

Owner gives notice three weeks after a fire. Insurer sends an adjuster, attempts to make a settlement, and otherwise behaves as if it is not insisting on strict compliance with the notice provision.

This continuation of performance will probably be found to be a waiver of the timely-notice condition. Right to damages not lost: When a party continues his own performance after breach, or otherwise waives a condition, he has not necessarily lost his right to recover damages for breach of the condition. General effect of prospective breach: If a party indicates that he will subsequently be unable or unwilling to perform, this will act as the non-occurrence of a constructive condition, in the same way as a present material breach does.

In other words, the other party has the right to suspend his own performance. Distinction: Where the party indicates that he will refuse to perform, this is called an "anticipatory repudiation" of the contract. If he indicates that he would like to perform but will be unable to do so, this is an indication of "prospective inability to perform" but not repudiation; however, the consequence is still that the other party may suspend performance.

Insolvency or financial inability: If a party is insolvent or otherwise financially incapable of performing, this will entitle the other party to stop performance. Cancellation: If the prospective inability or unwillingness to perform is certain or almost certain, the other party can not only suspend her performance, but can actually cancel the contract. But where it is not so clear whether the first party will be unable or unwilling to perform, the other party may only suspend performance.

If the first party fails to provide these assurances, this failure will itself be considered a repudiation, entitling the innocent party to cancel. Example : Buyer places two orders separate contracts with Seller, one for shipment on July 1 and the other for shipment on September 1.

Each shipment is to be paid for within 30 days. Seller ships the first order promptly, and by August 28 the bill is almost one month past due. Seller may in writing demand assurances that Buyer will pay for both the first order and the second order in a timely fashion.

If Buyer fails to respond, Seller may cancel the second contract, and sue for breach of both. But if Buyer furnishes reasonable assurances — as by demonstrating that non-payment of the first invoice was a clerical omission, and immediately rectifying it — Seller must reinstate the second contract.

General rule: If a party makes it clear, even before his performance is due, that he cannot or will not perform, he is said to have anticipatorily repudiated the contract. This is sometimes called the rule of Hochster v. De La Tour. Example: Star promises Movie Co. On June 1, Star announces to the press that he is going to live abroad for a year beginning the next day and will not do the movie. Under the rule of Hochster v. De La Tour , Movie Co. What constitutes repudiation: An anticipatory repudiation occurs whenever a party clearly indicates that he cannot or will not perform his contractual duty.

Statement: Sometimes, the repudiation takes the form of a statement by the promisor that he intends not to perform. The above example illustrates this. But the fact that the promisor states vague doubts about his willingness or ability to perform is not enough. Voluntary actions: The repudiation may occur by means of an act by the promisor that makes his performance impossible. Example : Seller contracts to convey Blackacre to Buyer, the closing to take place on July 1.

On June 15, Seller conveys Blackacre to X. This is an anticipatory repudiation by action, and Buyer may sue immediately, rather than waiting until July 1. Prospective inability to perform: Something analogous to anticipatory repudiation occurs when it becomes evident that the promisor will be unable to perform, even though he desires to do so.

When this occurs, all courts agree that the promisee may suspend her performance. But courts are split on whether the promisee may bring an immediate suit for breach, as she is allowed to do where the repudiation is a statement or a voluntary act.

Here, even though the repudiation is not "anticipatory," the other party may cancel the contract and bring an immediate suit for breach, just as in the anticipatory situation.

Retraction of repudiation: A repudiation whether anticipatory or occurring after the time for performance may normally be retracted until some event occurs to make the repudiation final.

Mitigation required: After a repudiation occurs, the repudiatee may not simply ignore the repudiation and continue the contract, if this would aggravate her damages. That is, the repudiatee must mitigate her damages by securing an alternative contract, if one is reasonably available.

If she does not do this, she cannot recover the damages that could have been avoided. Repudiation ignored, then sued on: Most courts hold that the repudiatee may insist on performance , at least for a while, rather than canceling the contract. Then, if the repudiator fails to retract the repudiation, the repudiatee may sue without being held to have waived any rights. The reason is that the ordinary rule allowing immediate suit is designed to give the innocent party a chance to avoid having to render his own performance; where the innocent party does not owe any performance, the rationale does not apply.

Payment of money: This exception means that an anticipatory repudiation of an unconditional unilateral obligation to pay money at a fixed time does not give rise to a claim for breach until that time has arrived. Installments: This also means that if a debtor fails to pay a particular installment of a debt, and says that he will not make later payments, the creditor cannot bring suit for those later installments until they fall due.

But lenders ordinarily avoid this problem by inserting an "acceleration clause" into the loan agreement, by which failure to pay one installment in a timely manner causes all later installments to become immediately due; such acceleration clauses are enforceable. UCC damages for repudiation: Pay special attention to damages suffered by a buyer under a contract for the sale of goods, where the seller has anticipatorily repudiated the contract.

Meaning: The phrase "time when the buyer learned of the breach" is ambiguous. Most courts hold that this phrase means "time when the buyer learned of the repudiation. Nature of Statute of Frauds: Most contracts are valid despite the fact that they are only oral. A few types of contracts, however, are unenforceable unless they are in writing. Contracts that are unenforceable unless in writing are said to fall "within the Statute of Frauds. Five categories: There are five categories of contracts which, in almost every state, fall with the Statute of Frauds and must therefore be in writing: [].

Suretyship: A contract to answer for the debt or duty of another. Marriage: A contract made upon consideration of marriage. Land contract: A contract for the sale of an interest in land. One year: A contract that cannot be performed within one year from its making. General rule: A promise to pay the debt or duty of another is within the Statute of Frauds, and is therefore unenforceable unless in writing. This is called the "main purpose" rule.

Example: Contractor contracts to build a house for Owner. In order to obtain the necessary supplies, Contractor seeks to procure them on credit from Supplier. Owner, in order to get the house built, orally promises Supplier that if Contractor does not pay the bill, Owner will make good on it. So it is enforceable even though oral.

Contract made upon consideration of marriage: A promise for which the consideration is marriage or a promise of marriage is within the Statute. If Tycoon changes his mind, Starlet cannot sue to enforce either the promise of marriage or the promise to convey the beach house, since the consideration for both of these promises was her return promise to marry Tycoon.

Conversely, if Starlet changes her mind, Tycoon cannot sue for breach either. Exception for mutual promises to marry: But if an oral contract consists solely of mutual promises to marry with no ancillary promises regarding property transfers , the contract is not within the Statute of Frauds, and is enforceable even though oral.

That is, an ordinary oral engagement is an enforceable contract. Generally: A promise to transfer or buy any interest in land is within the Statute. The Statute does not apply to the conveyance itself which is governed by separate statutes everywhere but rather to a contract providing for the subsequent conveyance of land.

Conversely, if O refuses to make the conveyance even though A tenders the money, A cannot sue O for breach. Interests in land: The Statute applies to promises to transfer not only a fee simple interest in land, but to transfer most other kinds of interests in land. Leases: For instance, a lease is generally an "interest in land," so that a promise to make a lease will generally be unenforceable if not in writing.

One year or less: But most states have statutes making oral leases enforceable if their duration is one year or less. Mortgages: A promise to give a mortgage on real property as security for a loan also usually comes within the Statute. Contracts incidentally related to land: But contracts that relate only incidentally to land are not within the Statute.

Thus a contract to build a building is not within the Statute, nor is a promise to lend money with which the borrower will buy land. Part performance: Even if an oral contract for the transfer of an interest in land is not enforceable at the time it is made, subsequent acts by either party may make it enforceable.

Conveyance by vendor: First, if the vendor under an oral land contract makes the contracted-for conveyance, he may recover the contract price. Such a vendee may then obtain specific performance a court order that the vendor must convey the land even though the contract was originally unenforceable because oral. Taking possession and making improvements: For instance, if the vendee pays some or all of the purchase price, moves onto the property, and then makes costly improvements on it, this combination of facts will probably induce the court to grant a decree of specific performance.

Payment not sufficient: Usually, the fact that the vendee has paid the vendor the purchase price under the oral agreement is not by itself sufficient to make the contract enforceable. Instead, the vendee can simply recover the purchase price in a non-contract action for restitution. General rule: If a promise contained in a contract is incapable of being fully performed within one year after the making of the contract, the contract must be in writing.

Time runs from making: The one-year period is measured from the time of execution of the contract , not the time it will take the parties to perform. Example : On July 1, , Star promises Network that Star will appear on a one-hour show that will take place in September, This contract will be unenforceable if oral, because it cannot be performed within one year of the day it was made.

The fact that actual performance will take only one hour is irrelevant. Impossibility: The one-year provision applies only if complete performance is impossible within one year after the making of the contract. The fact that performance within one year is highly unlikely is not enough. The promise is nonetheless enforceable, because viewed as of the moment the promise was made, it was possible that it could be completed within one year — the fact that it ended up not being performed within one year is irrelevant.

Impossibility or other excuse: It is only the possibility of "performance , " not the possibility of "discharge , " that takes a contract out of the one-year provision. Thus the fact that the contract might be discharged by impossibility , frustration , or some other excuse for non-performance will not take the contract out of the Statute.

Fulfillment of principal purpose: It will often be hard to tell whether a certain kind of possible termination is by performance or by discharge. The test is whether, if the termination in question occurs, the contract has fulfilled its principal purpose. If it has fulfilled this purpose, there has been performance; if it has not, there has not been performance. Using this rule gives these results:. Personal service contract for multiple years: A personal services contract for more than one year falls within the one-year rule and is thus unenforceable unless in writing even though the contract would terminate if the employee died.

The reason is that when the employee dies, the contract has merely been "discharged", not performed. Lifetime employment: A promise to employ someone for his lifetime is probably not within the one-year provision, since if the employee dies, the essential purpose of guaranteeing him a job forever has been satisfied. So an oral promise of a lifetime job is probably enforceable. Termination: Courts are split about whether the existence of a termination clause that permits termination in less than a year will remove a more-than-one-year contract from the one-year provision.

Example: Boss orally hires Worker to work for three years. Their oral agreement allows either party to cancel on 60 days notice. Courts are split on whether this contract is within the one-year agreement and must therefore be in writing. The Second Restatement seems to say that the giving of 60 days notice would be a form of "performance," so that this contract will be enforceable even though oral — Worker might give notice after one month on the job, in which case the contract would have been "performed" within three months of its making, less than one year.

Full performance on one side: Most courts hold that full performance by one party removes the contract from the one-year provision. This is true even if it actually takes that party more than one year to perform. Applies to all contracts: The rule that a contract incapable of performance within one year must satisfy the Statute applies to all contracts including those that just miss falling within some other Statute of Frauds provision.

Specially manufactured goods: No writing is required if the goods are to be specially manufactured for the buyer, are not suitable for sale to others, and the seller has made "either a substantial beginning of their manufacture or commitments for their procurement. Estoppel: A writing is also not required "if the party against whom enforcement is sought admits in his pleading, testimony or otherwise in court that a contract for sale was made , but the contract is not enforceable under this provision beyond the quantity of goods admitted.

Goods accepted or paid for: Finally, no writing is required "with respect to goods for which payment has been made and accepted or which have been received and accepted. Buyer then sends a check for this amount in advance payment. Once Seller takes the check and deposits it in the bank, Seller loses his Statute of Frauds defense. General requirements for: Even if there is no signed "contract," a signed "memorandum" summarizing the agreement may be enough to meet the Statute of Frauds.

A memorandum satisfies the Statute if it: 1 reasonably identifies the subject matter; 2 indicates that a contract has been made between the parties; 3 states with reasonable certainty the essential terms of the contract; and 4 is signed "by or on behalf of the party to be charged. Signature: Because of the requirement of a signature "by the party to be charged," some contracts will be enforceable against one party, but not against the other. UCC: Under the UCC, a writing satisfies the Statute if it is "sufficient to indicate that a contract for sale has been made between the parties and [is] signed by the party against whom enforcement is sought Omissions: Even if the writing contains a mistake as to a term, there will often be enough to satisfy the Statute, under the UCC.

For instance, a mistake on price or quantity, or even description of the item, will not be fatal but plaintiff may only recover for the quantity actually stated in the memorandum.

Contrast this with non-UCC cases, where a major mistake is likely to invalidate the memorandum. Confirmation: Under the UCC, there is one situation in which a memorandum will be enforceable even against a party who does not sign it: if the deal is between merchants , one merchant who receives a signed confirmation from the other party will generally be bound, unless the recipient objects within 10 days after receiving the confirmation.

Example : Buyer and Seller are both merchants i. Immediately after receiving the order, Seller sends a written confirmation, correctly listing the quantity and price. Assume that this confirmation constitutes a memorandum which would be enforceable by Buyer against Seller. Unless Buyer objects in writing within 10 days after receiving the memo, he will be bound by it, just as if he had signed it.

Oral rescission: Where a contract is in writing, it can be orally rescinded i. Generally, this is true even if the original written agreement contains a "no oral modifications or rescissions" clause. Sale of goods: But a contract for the sale of goods can alter this result. Modification: Application of the Statute of Frauds to oral modifications is trickier.

General rule: Generally, to determine whether an oral modification of an existing contract is effective, the contract as modified must be treated as if it were an original contract. This is true whether the original contract is oral or written. Consequence: If the modifications are unenforceable under this test, the original contract is left standing.

That is, the modification is treated as if it never occurred. Reliance on oral modification: But if either party materially changes his position in reliance on an oral modification, the court may enforce the modification despite the Statute. Modification of contracts under UCC: Contracts under the UCC work pretty much the same way: if the contract as modified would if it were an original contract have to meet the Statute of Frauds, the modification must be in writing.

Also, a written "no oral modifications" clause is generally effective, just as is a "no oral rescissions" clause. Quasi-contractual recovery: A plaintiff who has rendered part performance under an oral agreement falling within the Statute of Frauds may recover in quasi-contract for the value of benefits he has conferred upon the defendant. After Tenant has occupied the premises for two months, Tenant moves out. Where one party to an oral agreement foreseeably and reasonably relies to his detriment on the existence of the agreement, the court may enforce the agreement notwithstanding the Statute, if this is the only way to avoid injustice.

Example: P works for an established company, and has good job security. He orally accepts a two-year oral employment agreement with D, another company. By leaving his present employer, P loses valuable pension and other rights. Once P leaves the old employer to take the job with D, a court may well apply promissory estoppel to hold that the P-D agreement is enforceable notwithstanding non-compliance with the Statute of Frauds, since injustice cannot be otherwise prevented.

Misrepresentation regarding Statute: Courts are especially likely to apply promissory estoppel where the defendant has intentionally and falsely told the plaintiff that the contract is not within the Statute, or that a writing will subsequently be executed, or that the defense of the Statute will not be used. Degree of injury and unjust enrichment: The more grievously the plaintiff is injured or the more extensively the defendant is unjustly enriched by application of the Statute, the more likely the court is to allow promissory estoppel to be a substitute for compliance with the Statute.

Distinction: Distinguish between a suit brought on the contract , and a suit brought off the contract, i. Suit on the contract: Where the parties have formed a legally enforceable contract, and the defendant but not the plaintiff has breached the contract, the plaintiff will normally sue "on the contract.

Quasi-contract: But in other circumstances, the plaintiff will bring a suit in "quasi-contract. Situations where a quasi-contract recovery may be available include:.

Where the parties are discharged because of impossibility or frustration of purpose;. Where plaintiff has herself materially breached the contract.

Two types: Sometimes the court will award "equitable remedies" instead of the usual remedy of money damages. There are two types of equitable relief relevant to contract cases: 1 specific performance ; and 2 injunctions. Specific performance: A decree for specific performance orders the promisor to render the promised performance.

Example : A contracts to sell Blackacre to B on a stated date for a stated price. A then wrongfully refuses to make the conveyance. A court will probably award specific performance. That is, it will order A to make the conveyance. Injunction: An injunction directs a party to refrain from doing a particular act.

It is especially common in cases where the defendant is sued by his former employer and charged with breaching an employment contract by working for a competitor. Example: D signs a contract with P, his employer, providing that D will not work for any competitor in the same city for one year after termination. D then quits and immediately goes to work for a competitor. If P sues on the non-compete, a court will probably enjoin D from working for the competitor for the year.

Limitations on equitable remedies: There are three important limits on the willingness of the court to issue either a decree of specific performance or an injunction: [ - ]. Inadequacy of damages: Equitable relief for breach of contract will not be granted unless damages are not adequate to protect the injured party. Two reasons why damages might not be adequate in a contracts case are: 1 because the injury cannot be estimated with sufficient certainty; or 2 because money cannot purchase a substitute for the contracted-for performance.

Example of 2 : Each piece of land is deemed "unique", so an award of damages for breach by the vendor in a land sale contract will not be adequate, and specific performance will be decreed. Difficulty of enforcement: Finally, the court will not grant equitable relief where there are likely to be significant difficulties in enforcing and supervising the order.

Land-sale contracts: The most common situation for specific performance is where defendant breaches a contract under which he is to convey a particular piece of land to the plaintiff. Breach by buyer: Courts also often grant specific performance of a land-sale contract where the seller has not yet conveyed, and it is the buyer who breaches.

Example : A contracts to sell Blackacre to B. If A fails to convey, a court will order him to do so in return for the purchase price. If B fails to come up with the purchase price, the court will order him to pay that price and will then give him title. No specific performance: Courts almost never order specific performance of a contract for personal services.

This is true on both sides: the court will not order the employer to resume the employment, nor will it order the employee to perform the services. Injunction: But where the employee under an employment contract breaches, the court may be willing to grant an injunction preventing him from working for a competitor. Sale of goods: Specific performance will sometimes be granted in contracts involving the sale of goods. This is especially likely in the case of output and requirements contracts, where the item is not in ready supply.

Three types: There are three distinct kinds of interests on the part of a disappointed contracting party which may be protected by courts: [].

Expectation: In most breach of contract cases, the plaintiff will seek, and receive, protection for her "expectation interest. In other words, the plaintiff is given the "benefit of her bargain , " including any profits she would have made from the contract.

Reliance: Sometimes the plaintiff receives protection for his reliance interest. Here, the court puts the plaintiff in as good a position as he was in before the contract was made.

To do this, the court usually awards the plaintiff his out-of-pocket costs incurred in the performance he has already rendered including preparation to perform. When reliance is protected, the plaintiff does not recover any part of the profits he would have made on the contract had it been completed.

Restitution is designed to prevent unjust enrichment. When used: The restitution measure is most commonly used where: 1 a non-breaching plaintiff has partly performed, and the restitution measure is greater than the contract price; and 2 a breaching plaintiff has not substantially performed, but is allowed to recover the benefit of what he has conferred on the defendant.

They had clicked on the Download button, but hidden below it were the licensing terms, including the arbitration clause. The federal court of appeals held that there was no valid acceptance.

If a faxed document is sent but for some reason not received or not noticed, the emerging law is that the mailbox rule does not apply. A person has to have fair notice that his or her offer has been accepted, and modern communication makes the old-fashioned mailbox rule—that acceptance is effective upon dispatch—problematic. See, for example, Clow Water Systems Co. National Labor Relations Board , 92 F. The Restatement, Section 69, gives three situations, however, in which silence can operate as an acceptance.

The first occurs when the offeree avails himself of services proffered by the offeror, even though he could have rejected them and had reason to know that the offeror offered them expecting compensation. The second situation occurs when the offer states that the offeree may accept without responding and the offeree, remaining silent, intends to accept.

The third situation is that of previous dealings, in which only if the offeree intends not to accept is it reasonable to expect him to say so. As an example of the first type of acceptance by silence, assume that a carpenter happens by your house and sees a collapsing porch.

He spots you in the front yard and points out the deterioration. I can fix that porch for you. Somebody ought to. He goes to work. To illustrate the second situation, suppose that a friend has left her car in your garage. The third situation is illustrated by Section 9.

Without an acceptance of an offer, no contract exists, and once an acceptance is made, a contract is formed. If the offeror stipulates how the offer should be accepted, so be it. If there is no stipulation, any reasonable means of communication is good. Offers and revocations are usually effective upon receipt, while an acceptance is effective on dispatch.

The advent of electronic contracting has caused some modification of the rules: courts are likely to investigate the facts surrounding the exchange of offer and acceptance more carefully than previously.

But the nuances arising because of the mailbox rule and acceptance by silence still require close attention to the facts. Previous Section. Table of Contents. Next Section. Understand who may accept an offer. Know when the acceptance is effective. Recognize when silence is acceptance. General Definition of Acceptance To result in a legally binding contract, an offer must be accepted by the offeree.

Who May Accept? When Is Acceptance Effective?