Which law applies?
| Subject of the contract | Governing law |
|---|---|
| Sale of goods (movable, tangible) | UCC Article 2 |
| Services, real estate, employment, intangibles | Common law |
| Mixed contract | Whichever element predominates |
Formation: offer, acceptance, consideration
- Offer — definite terms, communicated, showing present intent to contract
- Acceptance — under common law it must mirror the offer; under the UCC, additional terms between merchants can become part of the contract unless they materially alter it, the offer limits acceptance, or timely objection is made
- Consideration — bargained-for exchange. Past consideration is not consideration. Under the UCC a modification needs no new consideration (good faith is enough); under common law a modification generally does.
IMPORTANT — the mailbox rule: Acceptance is effective when dispatched; revocations, rejections, and counteroffers are effective when received. So an acceptance mailed before a revocation arrives creates a contract.
Statute of Frauds — "MY LEGS"
- Marriage — contracts in consideration of marriage
- Year — cannot be performed within one year
- Land — interests in real property
- Executor — personal promise to pay estate debts
- Goods $500 or more (UCC)
- Suretyship — promise to answer for another's debt
Remedies
| Remedy | Purpose |
|---|---|
| Compensatory damages | Put the injured party where performance would have |
| Consequential damages | Foreseeable special losses the breaching party knew of |
| Liquidated damages | Agreed amount — enforceable only if reasonable, not a penalty |
| Specific performance | For unique goods and real estate; never for personal services |
| Rescission / restitution | Unwind the contract and restore what was given |
EXAM TIP: A contract induced by fraud, duress, or undue influence is generally voidable by the injured party (not automatically void). A contract with an illegal purpose is void.