Basically, two elements are necessary to constitute consideration: (i) there must be a bargained-for exchange between the parties; and (ii) that which is bargained for must be considered of legal value or, as it is traditionally stated, it must constitute a benefit to the promisor or a detriment to the promisee.

The benefit to the promisor need not have economic value; for example, peace of mind may be sufficient for consideration.

Promissory estoppel is considered a substitute for consideration. Thus, consideration is not necessary if the facts indicate that the promisor should be estopped from not performing.

a promise is enforceable if necessary to prevent injustice if: (i) the promisor should reasonably expect to induce action or forbearance; (ii) of a definite and substantial character; (iii) and such action or forbearance is in fact induced

Unless properly disclaimed, this warranty is included in every contract for the sale of goods.

A warranty of title is included in every contract for the sale of goods. Any seller of goods warrants that the title transferred is good, that the transfer is rightful, and that there are no liens or encumbrances against the title of which the buyer is unaware at the time of contracting.

A condition precedent means that a contract will not become effective until the condition has occurred.

Under a condition subsequent, a party is not obliged to perform until the happening of a certain event. This type of condition limits or modifies a duty under an existing or formed contract. A contingency clause might be included in such an existing contract.

Parole Evidence Rule: 

completely integrated writing

vs.

partially integrated writing

shipment contract

vs.

destination contract

In a shipment contract, the risk of loss passes to the buyer when the goods are delivered to the carrier. Any loss incurred en route is borne by the buyer.

The risk of loss does not pass to the buyer until thegoods are tendered to the buyer under a destination contract.

Corbin test

vs.

Williston test

The Corbin test takes into account the specific circumstances of the transaction involved and asks whether parties like these situated as they are would naturally and normally include in their writing the extrinsic matter that is sought to be introduced.

Courts applying the Williston testlook only at the face of the written agreement and decide whether contracting parties (in general) would include the term sought to be proved.

Both tests consider expressions made both prior to the writing and contemporaneous withthe writing.

Under the doctrine of part performance, conduct that unequivocally indicates that the parties have contracted for the sale of the land will take the contract out of the Statute of Frauds.

Requires at least two of the following: payment (in whole or in part), possession, and/or valuable improvements.

Any affirmation of fact or promise made by the seller, any description of the goods, and any sample or model creates an express warranty if it is part of the basis of the bargain.

A statement purporting to be only the seller’s opinionor commendation of the goods is not a statement of fact and does not create an express warranty.

To satisfy the Statute of Frauds, there must be one or more writings signed by the person sought to be held liable on the contract that reflect the material terms of the contract.

The Statute of Frauds does not require a formalwritten contract signed by both of the parties. For example, a letter, receipt, or a check containing the material terms (e.g., quantity for sale of goods) and signed by the party to be charged satisfies the Statute of Frauds.

The needed signature need not be handwritten, but the document or documents must include the material terms of the contract, not just acknowledge the existence of the contract.

Generally, the Statute of Frauds requires that suretyship promises be in writing and signed by the party to be held liable. However, there is an exception for suretyship promises that primarily serve the pecuniary interest of the promisor; they are not within the Statute of Frauds.

Right of Inspection

(Article 2)

Unless the contract provides otherwise, the buyer has a right to inspect the goods at the buyer's own expensebefore she pays.

Under Article 2, expenses of inspection must be borne by the buyer but may be recovered from the seller if the goods do not conform and are rejected.

“An agreement to rescind is itself a binding contract supported by consideration” is a true statement. The consideration is the giving up by each party of her right to counterperformance from the other.

A third-party beneficiary contract may not be discharged by mutual rescission if the third-party beneficiary’s rights have vested, regardless of whether he is a creditor or donee beneficiary.

Once an offeree of a unilateral contract has fully performed, the contract can be rescinded, but only if the rescission promise is supported by :

1. An offer of new consideration by the nonperforming party;

2. Elements of promissory estoppel; or

3. Manifestation of an intent by the offeree to make a gift of the obligation owed to her.

A mutual rescission agreement may be oral, even if the contract to be rescinded expressly states that it can be rescinded only by a writing.

the place of delivery is the seller’s, NOT the buyer’s, place ofbusiness.

The tender must be at a reasonable hour. The seller must give the buyernotice reasonably necessary to enable her to take possession of the goods, and the seller must put and hold conforming goods at the buyer’s disposition for a time sufficient for the buyer to take possession.