Welcome to my 1L Contracts course.
This is an introductory course on the legal rules relating to the enforcement of contracts. Contracts play a central role in modern capitalism, and this course provides an overview of the formal doctrines by which that role is made manifest most publicly. We also spend time considering how these formal legal institutions interact with society and the economy, for better or for worse. Because this is an introductory course, there are a number of aspects of contract law and practice that are not considered here in depth. The corpus of American contract law comprises volumes, and therefore no attempt is made to familiarize the student with it in its entirety. Rather, a framework is provided by which you may navigate through more detailed issues encountered during practice.
It is important to bear in mind that this course is also designed to teach you legal analysis, along with the other courses in the first year curriculum. So, one way to think about the class is that it teaches legal methods in the context of contract law.
This webpage provides the key information you will need for the course. Within this introduction are a series of items that provide the key policies and expectations of the course. Following that is a list of the reading assignments by date. And finally are entries for each day of the course -- these entries will often include additional materials that are either required or supplemental readings different from the casebook.
I will be available from 2:30pm to 3:30pm on Tuesdays for standing office hours. However, please do not hesitate to contact me to set up a meeting at a different time -- just send me an email. Once we have a date/time set, it is helpful if you can then send me a calendar invitation reflecting our arrangement.
By the end of the course, you should have developed the following substantive competences:
Identify and apply the requirements for creating an enforceable agreement;
Interpret the obligations set forth in a contract;
Identify a breach of a contract provision;
Determine the steps for enforcing a contract;
Understand the basic defenses to contract formation and enforcement; and
Calculate damages and/or determine what is required to obtain an equitable remedy.
While accomplishing those substantive goals, you will also build intuition regarding a number of additional topics, which relate more broadly to the legal enterprise, such as:
How contracts are designed;
How legal precedent develops over time;
How to craft persuasive legal arguments; and
How trial courts and appellate courts interact.
Your final grade in this course will be based primarily upon a 3-hour, limited open-book essay examination, which is scheduled for some time at the end of the semester, as determined by the Law School’s administration. Participation credit may also be available from time to time -- this will amount to no more than 5% of your total grade for the course.
The practice of law remains an in-person, oral experience in many respects. Boards of directors bring in counsel to consult with them during a board meeting. Lawyers appear before a judge to argue a motion. A judge consults with her clerks in chambers to work through a difficult issue. A partner meets with her team to discuss ways to structure a transaction. These are all situations where an attorney must participate in legal analysis orally, and one is often put on the spot to answer a tricky question. Our classroom -- even an attenuated one during the Covid-19 pandemic -- provides a way for us to simulate these discussions in a safe environment.
For that simulation to be meaningful, it has to be (1) rigorous and (2) shared. Part of the professor’s job is ensuring the rigor. But the burden of making our class a shared experience largely falls on the students’ shoulders. Therefore, it is not enough for you only to be physically present in class. You have to be an active participant, engaged in our discussions on a daily basis. Engagement involves: (1) preparing for class by reading the assigned materials and formulating comments/questions; (2) answering and asking questions during class time; and (3) discussing concepts in your assigned small groups when the opportunity arises. In-class small groups will be used throughout the semester as a method for consolidating student learning after key issues are introduced and discussed. There will be no direct assessment of small group participation, but those who actively contribute to their groups will likely find that they will be more prepared when called upon in class.
In accordance with the Law School’s Policies and Procedures, and particularly those relating to Covid-19, students with irregular attendance and/or poor participation may earn themselves a reduction in their final grade for the class.
Mastering law school is in many respects a personal journey, and what works for one student may not necessarily work for another. There is no formula for success, but here are some basic guidelines:
Preparation is a necessary condition for success. Great lawyering is all about preparation, coupled with some quick wits. So, you need to bear down in the library until you fully understand the cases, both individually and how they work together.
Practice is a way to clarify your thinking. Our classroom is a laboratory in which you have the chance to try out your arguments in front of the class. That can be a bit intimidating, but it is designed to be a feedback mechanism.
You should start putting together an outline of the course early in the semester. I recommend outlining the cases before class, and then revise your outline afterwards in order to incorporate insights from class discussion.
You should do practice exams in order to get accustomed to the class format. Do not wait until the day before the test to take a practice exam for the first time.
You should take advantage of office hours. They are there for you. When you come to office hours, it is helpful to have a targeted question in mind.
You are welcome to use whatever technology you would like to take notes and participate in class. I will simply note that a growing body of research suggests that, for median learners, handwriting notes is often more effective than taking notes on a laptop. However, I leave it up to you to take notes and study how you see best.
When we are in-person, I ask that you do not use your technology in a way that disrupts others -- so, silence your phones and don't use websites that will be distracting for the people sitting behind you. When we are using Zoom, you're encouraged to turn your camera on to give us all a sense of community, although I realize circumstances certainly arise when a student may find it best to keep their camera off. Also, when on Zoom, if you are not participating in a class discussion, please mute your microphone.
Covid-19
While COVID-19 conditions persist and until further notice, students and faculty are required to wear masks at all times during class; faculty are not at liberty to waive this expectation. Students who feel sick, including exhibiting symptoms commonly associated with COVID-19 (fever; cough; shortness of breath/difficulty breathing; chills; muscle pain; sore throat; new loss of taste or smell; etc.) should not attend class and should work with their instructor to develop a study plan for the duration of the illness.
Preventing Sexual Harassment
In accordance with Title IX of the Education Amendments of 1972, Brigham Young University prohibits unlawful sex discrimination against any participant in its education programs or activities. The university also prohibits sexual harassment-including sexual violence-committed by or against students, university employees, and visitors to campus. As outlined in university policy, sexual harassment, dating violence, domestic violence, sexual assault, and stalking are considered forms of "Sexual Misconduct" prohibited by the university.
University policy requires all university employees in a teaching, managerial, or supervisory role to report all incidents of Sexual Misconduct that come to their attention in any way, including but not limited to face-to-face conversations, a written class assignment or paper, class discussion, email, text, or social media post. Incidents of Sexual Misconduct should be reported to the Title IX Coordinator at t9coordinator@byu.edu or (801) 422-8692. Reports may also be submitted through EthicsPoint at https://titleix.byu.edu/report or 1-888-238-1062 (24-hours a day).
BYU offers confidential resources for those affected by Sexual Misconduct, including the university's Victim Advocate, as well as a number of non-confidential resources and services that may be helpful. Additional information about Title IX, the university's Sexual Misconduct Policy, reporting requirements, and resources can be found at http://titleix.byu.edu or by contacting the university's Title IX Coordinator.
Students with Disabilities
Brigham Young University is committed to providing a working and learning atmosphere that reasonably accommodates qualified persons with disabilities. If you have any disability which may impair your ability to complete this course successfully, please contact the University Accessibility Center (UAC), 2170 WSC or 422-2767. Reasonable academic accommodations are reviewed for all students who have qualified, documented disabilities. The UAC can also assess students for learning, attention, and emotional concerns. Services are coordinated with the student and instructor by the UAC. If you need assistance or if you feel you have been unlawfully discriminated against on the basis of disability, you may seek resolution through established grievance policy and procedures by contacting the Equal Employment Office at 422-5895, D-285 ASB.
Mental Health
Mental health concerns and stressful life events can affect students’ academic performance and quality of life. BYU Counseling and Psychological Services (CAPS, 1500 WSC, 801-422-3035, caps.byu.edu) provides individual, couples, and group counseling, as well as stress management services. These services are confidential and are provided by the university at no cost for full-time students. For general information please visit https://caps.byu.edu; for more immediate concerns please visit http://help.byu.edu.
Deliberation Guidelines
To facilitate productive and open discussions about sensitive topics about which there are differing opinions, members of the BYU community should: (1) Remember that we are each responsible for enabling a productive, respectful dialogue. (2)To enable time for everyone to speak, strive to be concise with your thoughts. (3) Respect all speakers by listening actively. (4) Treat others with the respect that you would like them to treat you with, regardless of your differences. (5) Do not interrupt others. (6) Always try to understand what is being said before you respond. (7) Ask for clarification instead of making assumptions. (8) When countering an idea, or making one initially, demonstrate that you are listening to what is being said by others. Try to validate other positions as you assert your own, which aids in dialogue, versus attack. (9) Under no circumstances should an argument continue out of the classroom when someone does not want it to. Extending these conversations beyond class can be productive, but we must agree to do so respectfully, ethically, and with attention to individuals' requests for confidentiality and discretion. (10) Remember that exposing yourself to different perspectives helps you to evaluate your own beliefs more clearly and learn new information. (11) Remember that just because you do not agree with a person's statements, it does not mean that you cannot get along with that person. (12) Speak with your professor privately if you feel that the classroom environment has become hostile, biased, or intimidating. Adapted from the Deliberation Guidelines published by The Center for Democratic Deliberation. (http://cdd.la.psu.edu/education/The%20CDD%20Deliberation%20Guidelines.pdf/view?searchterm=deliberation%20guidelines)
Our casebook will be Scott & Kraus, Contract Law and Theory (5th Ed. 2013). We will also often reference the Uniform Commercial Code (“UCC”) and the Restatement (Second) of Contracts (“Restatement”), which can be found in their entirety on Westlaw. From time to time, we will also read additional materials, which will be identified in the reading assignments and posted in the class details below.
The reading assignments for the course are as follows. Please note that I post readings in two-week increments approximately 1 week in advance. For a combination of paternalistic reasons and a desire to maintain flexibility over the topics covered in the course, I will not post reading assignments further in advance.
August 23, 2022 | Orienting Ourselves: See class details below for materials.
August 25 and 26, 2022 | Introduction: Scott & Kraus 1-39.
August 30, 2022 | Introduction: Scott & Kraus 42-65.
September 1, 2022 | Introduction: Scott & Kraus 66-84.
September 2, 2022 | Introduction: Scott & Kraus 84-118.
September 6, 2022 | Consideration: Scott & Kraus 131-142.
September 8, 2022 | Consideration: Scott & Kraus 143-151.
September 9, 2022 | Promissory Estoppel: Scott & Kraus 152-169.
September 13, 2022 | Offers: Scott & Kraus 203-214.
September 15, 2022 | Acceptance and Revocation of Offers: Scott & Kraus 217-245.
September 16, 2022 | Counteroffers: Scott & Kraus 246-273
September 20, 2022 | Counteroffers: Scott & Kraus 246-273
September 22, 2022 | The Sociality of Contract: Scott & Kraus 281-283; see class details below for additional materials
September 23, 2022 | Preliminary Negotiations and Agreements: Scott & Kraus 283-314
September 27, 2022 | Preliminary Negotiations and Agreements: Scott & Kraus 283-314
September 29, 2022 | Output, Requirements, and Exclusive Dealings: Scott & Kraus 316-331, 336-342
September 30, 2022 | Review Session
Fall (Placement) Break
October 11, 2022 | Exclusive Dealings and Termination: Scott & Kraus 343-368
October 13, 2022 | Covenants Not to Compete and Renegotiation: Scott & Kraus 372-386
October 14, 2022| Interpretation: Scott & Kraus 537-552
October 18, 2022 | Interpretation: Scott & Kraus 553-565
October 20, 2022 | Interpretation: Scott & Kraus 568-582
October 21, 2022 | Class Cancelled
October 25, 2022 | Interpretation: Scott & Kraus 585-604
October 27, 2022 | Conditions: Scott & Kraus 613-629, 636-639
October 28, 2022 | Conditions: Scott & Kraus 639-647
November 1, 2022 | Conditions: Scott & Kraus 639-647
November 3, 2022 | Conditions Recap and Sample Midterm Review
November 4, 2022 | Measuring Compliance: Scott & Kraus 669-683
November 8, 2022 | Mistake: Scott & Kraus 691-723
November 10, 2022 | Impossibility and Frustration of Purpose: Scott & Kraus 727-734, 759-769
November 11, 2022 | Anticipatory Breach and Introduction to Remedies: Scott & Kraus 775-787; 841-859
November 15, 2022 | Reliance, Restitution, and Punitive Damages: Scott & Kraus 865-884, 887-891
November 17, 2022 | Limitations on Compensation: Scott & Kraus 914-927
November 18, 2022 | Limitations on Compensation: Scott & Kraus 929-955
November 22, 2022 | Excusing Performance in the Covid-19 Pandemic: See below for reading materials.
November 29, 2022 | Formation Defenses: Scott & Kraus 401-403; 420-432; 464-478
December 1, 2022 | Formation Defenses: Scott & Kraus 403-414; 501-507
December 2, 2022 | Formation Defenses: Scott & Kraus 480-495; Additional materials posted below
Today's course is (hopefully) a gentle introduction to some of the key themes in the class. We will introduce ourselves to the concept of a market and other key elements of economic organization. In that context, we will also introduce the idea of legal institutions and how they provide the infrastructure for those forms of organization.
Class assignment: Please submit at least one agreement that is interesting, bizarre, troubling, etc. using this intake form. Your submissions will be compiled into a database that we will reference throughout the semester. Please submit your agreement by 11pm MT on Monday, August 22, 2022.
Required Materials:
Read this ancient Babylonian model grain loan agreement and this agreement for the manumissions of a man named Abum-Waqar and a woman named Amat-Samas, who were enslaved.
Please review Harvard College's Tuition and Fees in preparation for a class discussion. Then read the first three pages (the "Nature of the Action") in this recently filed complaint.
Supplemental Materials:
If you're interested in ancient Babylonian contracting, Gabriella Spada's work is a good place to start.
Today, we begin working through the casebook's long introduction. I like many things about our casebook, and this introduction is one of them. In a way, it is a course within a course. We touch upon many (though not all) of the key doctrines we will explore as the semester proceeds. This is useful, because it is often hard to separate contract doctrines from one another in the real world. A fact pattern may raise a formation issue, an interpretation issue, and a remedies issue that are interwoven with one another. The casebook's introduction gives us an orientation that we can use throughout the semester to see those connections as we encounter them.
The introduction also nicely presents the key question that will animate our discussions over the semester: Why are some promises enforced and others not? We will begin our investigation with perhaps the most fundamental question of all: What is a promise? and the related issue of when a promise is too indefinite to enforce.
Required Reading: Scott & Kraus 1-39.
Slides for Today's Class: The Sources and Functions of Contract Law
Class Recordings:
Supplemental Reading:
Orin Kerr's How to Read a Legal Opinion is an excellent guide.
One thing you should start thinking about is preparing an outline of the course. The outline summarizes the key doctrines you've learned, but, importantly, it also identifies connections between them. We'll talk about how to do this in class.
Today, we take our first look at the doctrine of consideration, working through one of the many chestnuts of the 1L Contracts course: Hamer v. Sidway. The doctrine of consideration provides one part of the answer to the course's fundamental question: Why are some promises enforced and others not? As we will see today and explore in more detail in about one week, the doctrine of consideration is also a good example of how we often have different ways of approaching an issue in contract law. In that respect, ask yourself whether Hamer v. Sidway is rightly decided. What about St. Peters v. Pioneer Theatre?
We will then switch gears and explore the doctrine of unconscionability by reading the lower court's and court of appeal's decisions in Williams v. Walker-Thomas. This combination of cases raises a number of important issues beyond just the nuts and bolts of the unconscionability doctrine. How should we balance, if at all, the different values that animate contract law? Which institution -- our courts or our legislatures -- is best situated to address a given social problem? As we will see, however, Williams v. Walker-Thomas may also introduce the possibility of a quite different way of thinking about contract law -- a fourth approach in addition to the three theories introduced in the last class. To begin exploring this possibility, ask yourself, Who was Williams in the eyes of the judges who decided these decisions? Who is Williams in your eyes?
Required Reading: Scott & Kraus 42-65.
Class Recording: Tuesday, August 30, 2022
For in-class exercise: AWS Service Terms
Supplemental Reading:
Anne Fleming, The Rise and Fall of Unconscionability as the 'Law of the Poor,' 102 Geo. L. J. 1383 (2014)
Alan Schwartz, A Re-examination of Nonsubstantive Unconscionability, 63 Va. L. Rev. 1053 (1977)
Jerry Shannon, Dollar Stores, Retailer Redlining, and the Metropolitan Geographies of Precarious Consumption, Annals of the American Association of Geographers (2020)
In today's class we return to the problem of risk allocation introduced in the first day of class. Now, we will focus upon the role of law and the courts in allocating risk between parties. When parties clearly allocate a risk in their agreement, and that possibility actually comes to pass, then the court's role in enforcing the original allocation of that risk should be straightforward. Except that, as we will see, perhaps enforcement in that situation is more complicated than it at first seems. We will then tackle the question of what courts should do when parties do not allocate a risk. We will use a concept from contract economics -- the idea of contractual incompleteness -- to think about this situation. Should the courts allow the costs to lie where they fall when an incomplete agreement does not allocate a risk? Or should it try to "make things right" between the parties? Or should it be more concerned about shaping the behavior of parties participating in the market going forward?
Required Reading: Scott & Kraus 42-77.
Class Recording: Thursday, September 1, 2022
Slides: Introduction to Risk Allocation
This class introduces us to the remedies that are available when a contract is breached. Two key lessons emerge from the readings. First, the remedial doctrines in contract law are another example of default rules, which parties can modify by their agreements. For instance, parties can say nothing about any potential remedies in their contract, in which case the default remedy of compensatory damages will likely apply. Or, they could specify in their agreement what the remedy should be in the event of a breach -- i.e., they can use a "liquidated damages" provision. In this respect, the issues with respect to contractual incompleteness and the use of default rules to fill gaps in agreements that we have explored in other areas of contract law also apply to remedies.
The second lesson is that the remedies doctrines indicate yet another limit on the state's enforcement of promises. As we will learn in the classic Hadley v. Baxendale case, compensatory damages are limited by the forseeability of a breach's consequences. Relief is circumscribed in that respect, though, as our discussion of Hadley will illustrate, exactly identifying the line between foreseeable and unforeseeable consequences is often easier said than done.
Required Reading: Scott & Kraus 84-118.
Class Recording: Friday, September 2, 2022
We know now that formation of an enforceable agreement includes three primary elements: Offer, Acceptance, and Consideration. We begin our in-depth analysis of formation issues by starting at the back with Consideration. Our focus today will be on understanding the limits of the doctrine. What does it mean that the courts will not scrutinize consideration? Is that true? How do we reconcile cases with similar facts but one court finds consideration while the other does not? Ultimately, questions like this lead to this fundamental issue: What purpose(s) does this doctrine serve, and are they worth pursuing?
Required Reading:
September 6: Scott & Kraus 131-142.
September 8: Scott & Kraus 143-151.
Class Recordings:
Materials for Class Discussion:
M & L's "Walking Home Rules"
Slides for both classes: Exploring Consideration
In today's class we consider the doctrine of promissory estoppel and whether the doctrine is a prudent addition to U.S. contract law. Central to the doctrine of promissory estoppel is the concept of reliance, which is a word we have already used in the context of remedies. The notion of reliance is going to pop up from time to time over the duration of the semester. It is important to keep track of how it is being used. Here, reliance serves as an alternative to the standard consideration requirement.
Required Reading:
Scott & Kraus 152-169
Scott & Kraus 203-214.
Class recordings:
Slides for Today's Class: Promissory Estoppel
Having explored the consideration and promissory estoppel doctrines, we now move on to the other basic requirements of contract formation: Offer and acceptance. As we will see, these doctrines can appear deceptively simple. Identifying the line between invitations to negotiate and genuine offers, which can be accepted, can be difficult. The cases we read will illustrate the importance of reading decisions closely, which includes carefully tracking the communications of each party and parsing their language and behavior.
Required Reading: Scott & Kraus 217-245
Slides: Offer and Acceptance
Class recording: Thursday, September 15, 2022
In these readings, we further complicate the context in which negotiations between parties mature into enforceable agreements. We introduce the traditional common law rule of counteroffers and then explore the possibility that reliance upon an offer might act as an alternative to acceptance. Then we consider how courts should handle situations where the parties exchanged conflicting terms during negotiations but then proceeded as if they had an enforceable agreement. Finally, we analyze whether the addition of terms after acceptance, a phenomenon common with the sale of certain products, should be included in an agreement between parties. In short, we find that modern commercial practice finds many ways to complicate the simple offer/acceptance two-step, and that the law struggles to formulate a fully effective response.
Required Reading: Scott & Kraus 246-273
Supplemental Materials: David Lee Roth on the Van Halen M&Ms Contract Rider
Slides: Counteroffers
Class recordings:
By this point in the class, students have now been introduced to the basic principles and rules for forming agreements that will typically be enforced by the state. Of course, as we have learned, there are many difficult issues with respect to formation, and a client seeking enforcement of an agreement through the legal system may encounter many twists and turns. But, by and large, students have a sense of what it will take to properly form a contract.
This class introduces an additional possibility: That the enforcement of contractual obligations might be undertaken through means other than the state's coercive power. Parties may resort to forms of self-help, such as threatening a breaching party that they will no longer trade with them unless they comply with their contractual obligations. Or, a party may disparage a breaching party's reputation in the market, thereby raising their cost of exchange in future deals. In other words, formal law enforced by courts is not the only enforcement tool in a party's toolbox.
The possibility of "extra-legal" or "informal" sanctions raises a number of important questions. Are they available in all markets, small and large alike? Are they available to, and do they operate the same for, all communities within a market equally? If extra-legal sanctions are available in a market, what is their relationship to formal law and legal institutions? Are extra-legal sanctions more accurate than formal law? Does formal law "crowd out" informal sanctions, or does formal law support informal sanctions?
These questions are important, because the possibility of extra-legal sanctions raises another possible limit to the state's enforcement of promises. Perhaps the state doesn't need to enforce all promises in part because other enforcement tools are available.
Required Reading:
Scott & Kraus 281-283
Then please choose to skim (i.e., read enough to pull out the argument and its key elements) one of the following:
Douglas Allen, Information Sharing During the Klondike Gold Rush, 67 Journal of Economic History 944 (2007)
Patricia Williams, Alchemical Notes, 22 Harv. Civil Rights-Civil Liberties L. Rev. 401 (1987)
Darren Thiel, Contacts and Contracts: Economic Embeddedness and Ethnic Stratification in London's Construction Market, 11 Ethnography 443 (2010)
Finally, please watch this short trailer for Barak Richman's Stateless Commerce.
Supplemental Reading:
If you're empirically minded and interested in informal enforcement, this is an interesting study of stateless enforcement in Pakistan (with some fascinating pictures in the appendix).
Slides: Introduction to Relational Contracts and Preliminary Agreements
Class recording: September 22, 2022
In this class, we return once again to the problem of uncertainty. We begin with the question of whether one party's reliance on the other party's representations during negotiations is a basis for enforceability, exploring the issue through the well-known Hoffman v. Red Owl case. We then turn to the enforceability of devices known as "preliminary agreements," which parties use to structure complex negotiations and perhaps address a version of the hold-up problem that arises as parties invest more resources into a bilateral negotiation process. These issues once again raise that central problem of identifying the limits of state enforcement of promises -- put simply, should the state's enforcement apparatus extend to preliminary negotiations?
Required Reading:
Scott & Kraus: 283-314
Supplemental Materials:
For a discussion of the type of damages awarded In the enforcement of preliminary agreements and of the controversial Siga v. Pharmathene case, see Philip Richter, Negotiation in Good Faith -- Siga v. Pharmathene (2016).
For additional insight on the reasons preliminary agreements are used in complex corporate transactions, see Cathy Hwang, Deal Momentum, 65 UCLA L. Rev. 376 (2018).
Class recording: September 27, 2022
The cases for this class introduce some of the problems that uncertainty creates for transaction design. A common way to appreciate uncertainty's challenges is to notice that in many long-term contracts it becomes more difficult to anticipate future events, thereby rendering contracts "incomplete." Uncertainty can be acute in the short-term also, and one shouldn't make the mistake that all relational contracts are long-term deals, or vice versa. That uncertainty is what leads parties to use mechanisms for relational contracting -- perhaps they use more standard-like terms, because specifying rule-like performance obligations is too costly ex ante, or perhaps they rely upon informal sanctions. The cases for today provide some real world examples of how parties cope with uncertainty, and how courts approach the problem of enforcing obligations in light of that uncertainty.
Required Reading:
Scott & Kraus: 316-331, 336-342
Slides: Output, Requirements, and Exclusive Dealings
Class recording: September 29, 2022
Thanks to everyone who attended for the wonderful questions!
Class recording: September 30, 2022
These cases continue the theme from the previous class: We are largely still focused on the question of how contracting parties cope with the problem of contractual incompleteness. The cases for today, however, direct the students' attention to parties' use of standard-like terms ("best efforts" and "good faith") and how court's enforce them.
Required Reading: Scott & Kraus: 343-368
Class recording: October 11, 2022
Today's materials conclude our discussion of the relational aspects of contracting, and we use this as an opportunity, in part, to focus upon a problem that bedevils contract design: The possibility of renegotiation. At first glance, renegotiation sounds like a good thing -- when unexpected things happen in a contractual relationship, the parties can work things out by renegotiating the agreement. However, today's reading raises the possibility that renegotiation has a dark side: One party may use the possibility of renegotiation to extract more surplus from the contractual relationship without offering anything in return. In that light, ask yourself as you read the classic Alaska Packers case: Who is cheating whom?
At the end of today's discussion, students will also be introduced the basic structural elements of a complex business agreement: A deal between Tesla Motors and Panasonic for the development and production of advanced batteries. This gives us another opportunity to think about how parties address some of the challenges we have highlighted in this chapter, and this also provides a chance to explore the practice of transactional law.
Required Reading:
Scott & Kraus 372-386
In-Class Materials:
Slides: Introduction to Transaction Design
Class recording: October 13, 2022
These readings introduce the heart of the course: The principles and doctrines of contract interpretation. Understanding the different approaches to contract interpretation and their differing policy justifications provides a lens for organizing the primary themes of the class. The student who works through the details of textualism and contextualism and their respective rationales will make a lot of progress toward understanding the fundamental questions presented in the course. Interpretation disputes also comprise the bulk of contract cases, and in that respect this section of the course is especially laden with real-world applications.
Students' attention is directed to the casebook's two-step conceptualization of interpretation: First, a court determines the language to be interpreted through application of the parol evidence rule, in either its "soft" or "hard" variations; and second, a court then interprets that language. That two-step approach is not always expressly followed in the cases we read, but it is a useful way to tackle interpretation problems, which, as the student will soon discover, can get very abstract very quickly.
The interpretation debate requires us to think about a number of issues, including the nature of language, the feedback effect different interpretive approaches have on the ex ante contract design process, the ability of generalist courts to "verify" contractual performance in light of ambiguous language, and, of course, What is chicken?
Required Reading:
October 14 - Scott & Kraus: 537-552
October 18 - Scott & Kraus: 553-565
October 20 - Scott & Kraus 568-582
October 25 - Scott & Kraus 585-604
Slides: Determining Contractual Meaning
Class recordings:
Supplemental materials:
Vice Chancellor Laster of the Delaware Court of Chancery on the place of "vibes" in contract interpretation
In this part of the course, we take a closer look at interpretation problems by examining contractual conditions. This includes understanding how express and implied conditions operate, how contractual covenants differ from conditions, and how conditions are waived.
Required Reading:
October 27: Scott & Kraus 613-629, 636-639
October 28 and November 1: Scott & Kraus 639-647
Slides: Modification and Waiver
Class recordings:
November 1, 2022
November 3, 2022
This class asks us to dig deeper into the issue, first introduced in the classic Jacob & Youngs case that we read earlier this semester, of when performance that is less than consummate is nevertheless substantial enough. We also consider the UCC's alternative approach, which attempts to reach an outcome similar to Cardozo's substantial performance test but through very different means.
Required Reading: Scott & Kraus 669-683
Slides: Tender and Cure under the UCC
Class recording: November 4, 2022
In these classes, we consider situations where a court may determine that performance is excused for reasons either "endogenous" (such as mistake) or "exogenous" (such as impossibility) to the contracting parties. Note the connection to these doctrines to the analysis for implying conditions, which we have discussed earlier in the course.
Reading Assignments:
November 8: Scott & Kraus 691-723
November 10: Scott & Kraus 727-734, 759-769
Slides: Mistake and Excuse
Class Recordings:
Today, we complete our overview of the course's second primary theme -- contractual performance -- with a discussion of anticipatory breach. We then turn to the final main section of the course, where we will explore the potential remedies available for breach of a contractual obligation. We will categorize remedies while also interrogating the limits of that typology. Doctrinal and practical limits to contractual remedies are discussed, and we will once again ask how the doctrines we are examining reflect our underlying theories of contract law. It is useful to keep in mind that we are ultimately analyzing the question that underlies most of this class: What explains the limits to state enforcement of promises? Here, the limits are defined by the relief the state can and should provide.
Reading Assignment: Scott & Kraus 775-787; 841-859
Materials for In-Class Discussion: Template for Sullivan v. O'Connor Remedies Analysis
Class Recording: November 11
In this final section of the course, we will explore the potential remedies available for breach of a contractual obligation. We will categorize remedies while also interrogating the limits of that typology. Doctrinal and practical limits to contractual remedies are discussed, and we will once again ask how the doctrines we are examining reflect our underlying theories of contract law. It is useful to keep in mind that we are ultimately analyzing the question that underlies most of this class: What explains the limits to state enforcement of promises? Here, the limits are defined by the relief the state can and should provide.
Reading Assignments:
November 15: Scott & Kraus 865-884, 887-891
November 17: Scott & Kraus 914-927
November 18: Scott & Kraus 929-955
Materials for In-Class Discussion: Template for Sullivan v. O'Connor Remedies Analysis
Slides: Introduction to Remedies
Class Recordings:
The Covid-19 pandemic is currently testing the excuse doctrines we've been exploring in class. When a pandemic disrupts a contractual arrangement, should the court excuse performance? What policies animate our answers to that question? We will analyze the issues in two environments: First, students' attempts to get out of their housing contracts in spring 2020; and second, acquiring companies' attempts to get out of their M&A contracts during the same time period.
Materials for In-Class Discussion:
Slides: Excuse Doctrines and Covid-19
Supplemental Materials:
Sahalie Donaldson, BYU Students Grapple with Changes, Housing Contracts amid COVID-19, Deseret News (23 March 2020)
Class Recording: November 22
Thanks for all the good questions!
Recording of the review session: November 28
In these classes, we return to the first third of the course: Formation. These doctrines define situations where an agreement is void or voidable even through the technical requirements of formation -- offer, acceptance, and consideration -- are found. The doctrines demonstrate the difference between default and mandatory rules in contract law, and they also supply another fruitful ground to test our theories justifying contract enforcement.
Reading Assignments:
November 29, 2022: Scott & Kraus 401-403; 420-432; 464-478
December 1, 2022: Scott & Kraus 403-414; 501-507
December 2, 2022: Scott & Kraus 480-495 and RR v MH and In re FTR
Slides:
Class Recordings:
Fraud and Capacity: November 29
Duress and Unconscionability: December 1
Illegality and Public Policy: December 2
Supplemental materials:
Forming a study group is a highly recommended way to study for the exam in this course, particularly with respect to practicing issue spotting. I do not highly recommend many commercial outlines or study aids, unless you find yourself struggling to understand the basics of the cases we cover. Below are a number of prior years' exams, which you may find helpful in preparing for this exam.
2020 Final Exam | 2019 Final Exam | 2019 Midterm | 2018 Final Exam | 2017 Final Exam | 2016 Final Exam | 2015 Final Exam | 2014 Final Exam