Contracts

• (1) There is no manifestation of mutual assent to an exchange if the parties attach materially different meanings to their manifestations and
• (a) neither party knows or has reason to know the meaning attached by the other; or
• (b) each party knows or each party has reason to know the meaning attached by the other.
• (2) The manifestations of the parties are operative in accordance with the meaning attached to them by one of the parties if
• (a) 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
• (b) 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 party.

• (1) 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 certain.
• (2) 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 remedy.
• (3) 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 acceptance.

• (1) No one can be bound by contract who has not legal capacity to incur at least voidable contractual duties. Capacity to contract may be partial and its existence in respect of a particular transaction may depend upon the nature of the transaction or upon other circumstances.
• (2) A natural person who manifests assent to a transaction has full legal capacity to incur contractual duties thereby unless he is
• (a) under guardianship, or
• (b) an infant, or
• (c) mentally ill or defective, or
• (d) intoxicated.

Unless a statute provides otherwise, a natural person has the capacity to incur only voidable contractual duties until the beginning of the day before the person's eighteenth birthday.

• (1) A person incurs only voidable contractual duties by entering into a transaction if by reason of mental illness or defect
• (a) he is unable to understand in a reasonable manner the nature and consequences of the transaction, or
• (b) 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.
• (2) 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 unjust. In such a case a court may grant relief as justice requires.

• A person incurs only
• voidable contractual duties by entering into a transaction if the other party
• has reason to know that by reason of intoxication
• (a) he is unable to understand in a reasonable manner the nature and consequences of the transaction, or
• (b) he is unable to act in a reasonable manner in relation to the transaction.

• (1) 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 § 154.
• (2) 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 otherwise.

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

• A party bears the risk of a mistake when
• (a) the risk is allocated to him by agreement of the parties, or
• (b) 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
• (c) the risk is allocated to him by the court on the ground that it is reasonable in the circumstances to do so.

Where a writing that evidences or embodies an agreement in whole or in part fails to express the agreement because of a mistake of both parties as to the contents or effect of the writing, the court may at the request of a party reform the writing to express the agreement, except to the extent that rights of third parties such as good faith purchasers for value will be unfairly affected.

A misrepresentation is an assertion that is not in accord with the facts.

• A person's non-disclosure of a fact known to him is equivalent to an assertion that the fact does not exist in the following cases only:
• (a) where he knows that disclosure of the fact is necessary to prevent some previous assertion from being a misrepresentation or from being fraudulent or material.
• (b) where he knows that disclosure of the fact would correct a mistake of the other party as to a basic
• assumption on which that party is making the contract and if non-disclosure of the fact amounts to a failure to act in good faith and in accordance with reasonable standards of fair dealing.
• (c) where he knows that disclosure of the fact would correct a mistake of the other party as to the contents or effect of a writing, evidencing or embodying an agreement in whole or in part.
• (d) where the other person is entitled to know the fact because of a relation of trust and confidence between them.

A misrepresentation is fraudulent if the maker intends his assertion to induce a party to manifest his assent and the maker knows or believes that the assertion is not in accord with the facts, or does not have the confidence that he states or implies in the truth of the assertion, or knows that he does not have the basis that he states or implies for the assertion.

• A misrepresentation is material if
• it would be likely to induce a reasonable person to manifest his assent, or if
• the maker knows that it would be likely to induce the recipient to do so.

If a misrepresentation as to the character or essential terms of a proposed contract induces conduct that appears to be a manifestation of assent by one who neither knows nor has reasonable opportunity to know of the character or essential terms of the proposed contract, his conduct is not effective as a manifestation of assent.

• (1) If a party's manifestation of assent is induced by either a fraudulent or a material misrepresentation by the other party upon which the recipient is justified in relying, the contract is voidable by the recipient.
• (2) If a party's manifestation of assent is induced by either a fraudulent or a material misrepresentation by one who is not a party to the transaction upon which the recipient is justified in relying, the contract is voidable by the recipient, unless the other party to the transaction in good faith and without reason to know of the misrepresentation either gives value or relies materially on the transaction.

• (1) An assertion is one of opinion if it expresses only a belief, without certainty, as to the existence of a fact or expresses only a judgment as to quality, value, authenticity, or similar matters.
• (2) If it is reasonable to do so, the recipient of an assertion of a person's opinion as to facts not disclosed and not otherwise known to the recipient may properly interpret it as an assertion
• (a) that the facts known to that person are not incompatible with his opinion, or
• (b) that he knows facts sufficient to justify him in forming it.

• To the extent that an assertion is one of opinion only, the recipient is not justified in relying on it unless the recipient
• (a) stands in such a relation of trust and confidence to the person whose opinion is asserted that the recipient is reasonable in relying on it, or
• (b) reasonably believes that, as compared with himself, the person whose opinion is asserted has special skill, judgment or objectivity with respect to the subject matter, or
• (c) is for some other special reason particularly susceptible to a misrepresentation of the type involve

If conduct that appears to be a manifestation of assent by a party who does not intend to engage in that conduct is physically compelled by duress, the conduct is not effective as a manifestation of assent

• (1) If a party's manifestation of assent is induced by an improper threat by the other party that leaves the victim no reasonable alternative, the contract is voidable by the victim.
• (2) If a party's manifestation of assent is induced by one who is not a party to the transaction, the contract is voidable by the victim unless the other party to the transaction in good faith and without reason to know of the duress either gives value or relies materially on the transaction.

• (1) A threat is improper if
• (a) what is threatened is a crime or a tort, or the threat itself would be a crime or a tort if it resulted in obtaining property,
• (b) what is threatened is a criminal prosecution,

• (c) what is threatened
• is the use of civil process and the threat is made in bad faith, or

• (d) the threat is a
• breach of the duty of good faith and fair dealing under a contract with the
• recipient.

• (2) A threat is improper
• if the resulting exchange is not on fair terms, and

• (a) the threatened act
• would harm the recipient and would not significantly benefit the party making
• the threat,

• (b) the effectiveness of
• the threat in inducing the manifestation of assent is significantly increased
• by prior unfair dealing by the party making the threat, or

• (c) what is threatened
• is otherwise a use of power for illegitimate ends.

• (1) A promise or other term of an agreement is unenforceable on grounds of public policy if legislation provides that it is unenforceable or the interest in its enforcement is clearly outweighed in the circumstances by a public policy against the enforcement of such terms.
• (2) In weighing the interest in the enforcement of a term, account is taken of

• (a) the parties'
• justified expectations,

• (b) any forfeiture that
• would result if enforcement were denied, and

• (c) any special public
• interest in the enforcement of the particular term.

• (3) In weighing a public
• policy against enforcement of a term, account is taken of

• (a) the strength of that
• policy as manifested by legislation or judicial decisions,

• (b) the likelihood that
• a refusal to enforce the term will further that policy,

• (c) the seriousness of
• any misconduct involved
• and the extent to which it was deliberate, and

• (d) the directness of
• the connection between that misconduct and the 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.

• 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 reasonable in the circumstances is supplied by the court.
• 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 rule.

• 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
• expression.

• A completely integrated agreement is an integrated agreement adopted by the parties as a complete and exclusive statement of the terms of the agreement.
• A partially integrated agreement is an integrated agreement other than a completely integrated agreement.
• 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 rule.

• (1)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 writing.
• (2)Such a writing is interpreted whereever reasonable as treating alike all those similarly situated, without regard to their knowledge or understanding of the standard terms of the writing.
• (3)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 agreement.

• 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 scope.

• Evidence of a consistent additional term is admissible to supplement an integrated agreement unless the court finds that the agreement was completely integrated.
• An agreement is not completely integrated if the writing omits a consistent additional agreed term which is
• (a) agreed to for separate consideration, or
• (b) such a term as in the circumstances might naturally be omitted from the writing.

• (1) 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.
• (2) 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 contrary.

• In determining whether a failure to render or to offer performance is material, the following circumstances are significant:
• (a) the extent to which the injured party will be deprived of the benefit which he reasonably expected;
• (b) the extent to which the injured party can be adequately compensated for the part of that benefit of which he will be deprived;
• (c) the extent to which the party failing to perform or to offer to perform will suffer forfeiture;
• (d) 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;
• (e) 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 dealing.

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

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

If the existence of a particular person is necessary for the performance of a duty, his death or such incapacity as makes performance impracticable is an event the non-occurrence of which was a basic assumption on which the contract was made.

• (1) If the court as a matter of law finds the contract or any term of the contract to have been unconscionable at the time it was made, the court may refuse to enforce the contract, or it may enforce the remainder of the contract without the unconscionable term, or it may so limit the application of any unconscionable term as to avoid any unconscionable result.
• (2) If it is claimed or appears to the court that the contract or any term thereof may be unconscionable, the parties shall be afforded a reasonable opportunity to present evidence as to its commercial setting, purpose, and effect to aid the court in making the determination

• Except to the extent that a seller may have assumed a greater obligation and subject to Section 2-614:
• (a) Delay in performance or nonperformance in whole or in part by a seller that complies with paragraphs (b) and (c) is not a breach of the seller's duty under a contract for sale if performance as agreed has been made impracticable by the occurrence of a contingency the nonoccurrence of which was a basic assumption on which the contract was made or by compliance in good faith with any applicable foreign or domestic governmental regulation or order whether or
• not it later proves to be invalid.
• (b) If the causes mentioned in paragraph (a) affect only a part of the seller's capacity to perform, the seller must allocate production and deliveries among its customers but may at its option include regular customers not then under contract as well as its own requirements for further manufacture. The seller may so allocate in any manner that is fair and reasonable.
• (c) The seller must notify the buyer seasonably that there will be delay or nonperformance and, if allocation is required under paragraph (b), of the estimated quota thus made available for the buyer.

• A definite and seasonable expression of acceptance or a written confirmation which is sent within a reasonable time operates as an acceptance even though it states terms additional to or different from those offered or agreed upon, unless acceptance is expressly made conditional on assent to the additional or different terms.
• The additional terms are to be construed as proposals for addition to the contract. Between merchants such terms become part of the contract unless:
• (a) the offer expressly limits acceptance to the terms of the offer;
• (b) they materially alter it; or
• (c) notification of objection to them has already been given or is given within a reasonable time after notice of them is received.
• Conduct by both parties which recognizes the existence of a contract is sufficient to establish a contract for sale although the writings of the parties do not otherwise establish a contract. In such case the terms of the particular contract consist of those terms on which the writings of the parties agree, together with any supplementary terms incorporated under any other provisions of this Act.