George Mason School of Law
Contracts II
Conditions
F.H. Buckley
[email protected]
1
Stees
 What are the possible legal outcomes
here?
Third and Minnesota, St Paul
2
Stees
 What are the possible legal outcomes
here?
 The quicksand put an end to the contract
and no one is liable in damages
3
Stees
 What are the possible legal outcomes
here?
 The quicksand put an end to the contract
and no one is liable in damages
 Builder assumes risk and is liable in
damages for non-completion
4
Stees
 What are the possible legal outcomes
here?
 The quicksand put an end to the contract
and no one is liable in damages
 Builder assumes risk and is liable in
damages for non-completion
 Owner assumes risk
 and is liable for seller’s damages
 or for contract price
5
Stees
 What are the possible legal outcomes
here?
 Can you tell which from the language of
the contract?
6
Stees
 The quicksand put an end to the contract
and no one is liable in damages
 Mistake: Restatement § 152(1)
7
Stees
 The quicksand put an end to the contract
and no one is liable in damages
 Mistake: Restatement § 152(1)
 Is this a case of Restatement § 154(b)? Or (c)?
8
Stees
 The quicksand put an end to the contract
and no one is liable in damages
 Mistake: Restatement § 152(1)
 Is this a case of Restatement § 154(b)? Or (c)?
 See Illustration 5
9
Stees
 The quicksand put an end to the contract
and no one is liable in damages
 Mistake: Restatement § 152(1)
 Is this a case of Restatement § 154(b)? Or (c)?
 Frustration: Restatement § 261
 Futurity?
10
Stees
 The quicksand put an end to the contract
and no one is liable in damages
 Mistake: Restatement § 152(1)
 Is this a case of Restatement § 154(b)? Or (c)?
 Frustration: Restatement § 261
 Futurity? Sed Restatement § 266(1)
11
Stees
 The quicksand put an end to the contract
and no one is liable in damages
 Mistake: Restatement § 152(1)
 Is this a case of Restatement § 154(b)? Or (c)?
 Frustration: Restatement § 261
 Futurity? Sed Restatement § 266(1)
 Condition: Restatement § 224.
12
Stees
 The quicksand put an end to the contract
and no one is liable in damages
 Mistake: Restatement § 152(1)
 Is this a case of Restatement § 154(b)? Or (c)?
 Frustration: Restatement § 261
 Futurity? Sed Restatement § 266(1)
 Condition: Restatement § 224.
 Futurity? See § 224 cmt b.
13
Stees
 Condition: Restatement § 224.
 What kind of a condition?
 Condition Precedent
 Condition Subsequent
 What’s the difference?
 Restatement § 224, cmt e; Restatement § 230.
14
George Mason School of Law
Contracts II
Conditions
F.H. Buckley
[email protected]
15
Stees
 On a “regret contingency,” what are the
possible legal responses?
 A taxonomy of remedies
 Of promises and conditions
16
Stees
 What are the possible legal outcomes
here?
Third and Minnesota, St Paul
17
Stees
 What are the possible legal outcomes
here?
 The quicksand put an end to the contract
and no one is liable in damages
 Builder assumes risk and is liable in
damages for non-completion
 Owner assumes risk
 and is liable for seller’s damages
 or for contract price
18
Putting an end
to the contract
 The quicksand put an end to the contract
and no one is liable in damages
 Mistake: Restatement § 152(1)
 Frustration: Restatement § 261
 Condition: Restatement § 224.
 Should it matter which of these doctrines is
invoked?
19
Stees
 What did the court decide?
20
Stees
 What did the court decide?
 If no mistake, frustration or condition is
invoked, how would you decide who is liable?
21
Stees
 What did the court decide?
 If no mistake, frustration or condition is
invoked, how would you decide who is liable?
 Cardozo at p. 66: “Intention not otherwise revealed
may be presumed to hold in contemplation the
reasonable and probable”
 And what does that mean?
22
Stees
 What did the court decide?
 If no mistake, frustration or condition is
invoked, how would you decide who is liable?
 Cardozo at p. 66: “Intention not otherwise revealed
may be presumed to hold in contemplation the
reasonable and probable”
 And what does that mean?
 It overlaps with our sense of fairness?
23
Stees
 What did the court decide?
 If no mistake, frustration or condition is
invoked, how would you decide who is liable?
 Cardozo at p. 66: “Intention not otherwise revealed
may be presumed to hold in contemplation the
reasonable and probable”
 Explicit bargains: CP Clare at p. 79
24
Stees
 What did the court decide?
 If no mistake, frustration or condition is
invoked, how would you decide who is liable?
 Cardozo: “Intention not otherwise revealed may be
presumed to hold in contemplation the reasonable
and probable”
 Restatement: The intentions of the parties governs
 Mistake: Restatement § 154
 Frustration: Restatement § 261
 Condition: Restatement § 226-27
25
Stees
 What did the court decide?
 If no mistake, frustration or condition is
invoked, how would you decide who is liable?
 Cardozo: “Intention not otherwise revealed may be
presumed to hold in contemplation the reasonable
and probable”
 Suppose you knew or could reasonably predict
how the parties would have bargained ex ante on
formation of contract? Would you have any
reason to second-guess this?
26
Stees
 What did the court decide?
 If no mistake, frustration or condition is
invoked, how would you decide who is liable?
 Cardozo: “Intention not otherwise revealed may be
presumed to hold in contemplation the reasonable
and probable”
 And just how would the parties have bargained
ex ante?
27
Stees
 What did the court decide?
 If no mistake, frustration or condition is
invoked, how would you decide who is liable?
 Cardozo: “Intention not otherwise revealed may be
presumed to hold in contemplation the reasonable
and probable”
 And just how would the parties have bargained
ex ante
 Force majeur clauses
 Assignment of risk
28
Stees
 What did the court decide?
 If no mistake, frustration or condition is
invoked, how would you decide who is liable?
 Cardozo: “Intention not otherwise revealed may be
presumed to hold in contemplation the reasonable
and probable”
 When to gap-fill?
29
Stees
 What did the court decide?
 Why not split liability down the middle?
30
Stees
 What did the court decide?
 Why not split liability down the middle?
31
Rule
Precaution
Cost
Harm
Liability on A
only
80
100
Liability on B
only
80
100
Joint Liability
80
50/50
Stees
 I agree to sell you my car, and tender
delivery immediately. If no more is
said, when do you have to pay?
32
Stees
 I agree to sell you my car, and tender
delivery immediately. When do you
have to pay?
 Restatement § 234(1)
33
Stees
 I agree to sell you my car, and tender
delivery immediately. When do you
have to pay?
 Tender of delivery by seller and tender of
payment by buyer are mutual conditions
 UCC §§ 2-507(1), 2-511(1)
 Both parties to stand “ready, willing and able” to
perform
34
Stees
 I agree to sell you my car, and tender
delivery immediately. When do you
have to pay?
 Restatement § 234(1)
 When I agree to build you a house,
when do you have to pay?
35
Stees
 I agree to sell you my car, and tender
delivery immediately. When do you
have to pay?
 Restatement § 234(1)
 When I agree to build you a house,
when do you have to pay?
 Restatement § 234(2), illustration 9
 The “work before pay” rule
36
Paradine v. Jane
 I agree to rent your house, but am
prevented from doing so by war
Prince Rupert
37
Ready, willing and able:
Bell v. Elder
 What was the risk in question?
38
Bell v. Elder
 What was the seller’s obligation in
question?
39
Bell v. Elder
 What was the seller’s obligation in
question?
 To supply water
 It didn’t do so but was “ready, willing and
able” to do so on tender of the price
 And that’s all that was needed
40
What does a promise mean?
 Jacob & Youngs v. Kent
 What was the breach?
 What remedy does the Π seek?
41
What is a condition?
 What are Dependent vs. Independent
Promises?
Benjamin Cardozo
42
What is a condition?
 What are Dependent vs. Independent
Promises?
 Dependent promises as “conditions”
 Tender of price and of delivery under Article 2
 Independent promises as mere “promises”
43
What is a condition?
 What are Dependent vs. Independent
Promises?
 Dependent promises as “conditions”
 Tender of price and of delivery under Article 2
 Independent promises as mere “promises”
 I know Cardozo called it a “promise” but I’m
going to call it a “warranty”.
44
What is a condition?
 What are Dependent vs. Independent
Promises?
 Why did it matter whether the obligation to
supply Reading Pipe was a condition or a
warranty?
45
What is a condition?
 Why did it matter whether the obligation
to supply Reading Pipe was a condition
or a warranty?
 So how does one tell?
46
What is a condition?
 Why did it matter whether the obligation
to supply Reading Pipe was a condition
or a warranty?
 Wait a minute—what about Coasian
bargaining?
47
What is a condition?
 Why did it matter whether the obligation
to supply Reading Pipe was a condition
or a warranty?
 Wait a minute—what about Coasian
bargaining?
 Assume:
 Value of house with Reading pipe is $77,000
 Value of house with Cohoes pipe is $76,900
 Cost of replacement is $10,000
48
What is a condition?
 Why did it matter whether the obligation
to supply Reading Pipe was a condition
or a warranty?
 Assume:
 Value of house with Reading pipe is $77,000
 Value of house with Cohoes pipe is $76,900
 Cost of replacement is $10,000
 So what would a Coasian bargain look like,
given those numbers?
49
What is a condition?
 What are Dependent vs. Independent
Promises?
 So how does one tell?
 Just what do you think the parties intended?
 Venial faults and oppressive retribution
50
What is a condition?
 What are Dependent vs. Independent
Promises?
 So how does one tell?
 Would Cardozo permit the parties to bargain
around this?
 “It is a condition of the contract, failure of which will
permit the owner to rescind, that the pipe be
Reading Pipe.”
51
The perfect tender rule
 UCC § 2-601
 Should goods be treated differently?
 Is there a stronger reason to put the onus on
the parties to opt out?
52
What is a condition?
 “I promise to buy your car if it passes
inspection.”
 If it doesn’t pass inspection, must I pay the
price?
 No, since passing the inspection is a condition
53
What is a condition?
 “I promise to buy your car if it passes
inspection.”
 If it doesn’t pass inspection, must I pay the
price?
 If it doesn’t pass inspection, are you in
breach?
Yes, if you have promised it would; no,
otherwise
54
What is a condition?
 “I promise to buy your car if it passes
inspection.”
 So a condition might be a promise—or it
might not.
55
A Taxonomy
 “I promise to buy your car if it passes
inspection.”
 So a condition might be a promise—or it
might not.
 “Pure conditions”: Conditions precedent or
conditions subsequent
 Promissory conditions
 Mere warranties
56
Divisibility
 Suppose that a builder contracts to
build seven motels in seven different
cities.
 Separate payment and completion
schedule for each motel.
 Builder defaults on last motel.
 Could buyer rescind on all?
57
Divisibility
 Suppose that a builder contracts to
build seven motels in seven different
cities.
 Separate payment and completion
schedule for each motel.
 Builder defaults on last motel.
 Could buyer rescind on all?
 Restatement § 240.
58
Divisibility
 Same case, but now:
 All motels built to the same specifications
 Builder to be paid $7M for the seven
motels.
59
Divisibility
 Same case, but now:
 All motels built to the same specifications
 Builder to be paid $7M for the seven
motels
 Restatement § 240, illustration 5
60
John. v. United Advertising
 Are highway signs
different?
61
John v. United Advertsing
 Are highway signs different?
 Is this like losing your GPS signal at a
crucial point?
 “Take the first available U-Turn”
 A “material failure” under Restatement §
237?
 Trial court’s finding of no damages
62
John v. United Advertsing
 Are highway signs different?
 Supposing the contract had omitted the
divisibility clause?
63
Buffalo Seminary
 Really not severable?
 Incentive problems?
64
Divisibility
 UCC § 2-307
 A general presumption against divisibility
 Onus on seller to specify if delivery in
lots. UCC § 2-612
 Qu. If not and partial delivery tendered.
UCC § 2-601
65
George Mason School of Law
Contracts II
Conditions
F.H. Buckley
[email protected]
66
Promises and Conditions
Conditions
67
Non-promissory
Promissory
No liability if occurrence
Restatement §§ 224, 225(2)
Liability if occurrence
Restatement § 225(3)
Promises and Conditions
Conditions
Non-promissory
(related to Mistake
and Frustration)
68
Promissory
Promises and Conditions
Conditions
Non-promissory
Forfeiture
69
Promissory
Promises and Conditions
Conditions
Non-promissory
Promissory
Promisee’s Election
Forfeiture
(Rescission)
70
Damages
Promises and Conditions
Conditions
Non-promissory
Promissory
Promisee’s Election
Forfeiture
(Presumption against Forfeiture:
UCC §§ 227(1), 229)
71
Damages
Promises and Conditions
Promises
Conditions
72
Warranties
Promises and Conditions
Promises
73
Conditions
Warranties
Dependent Promises
Independent Promises
Promises and Conditions
Promises
Conditions
Election
Forfeiture
74
Damages
Warranties
Promises and Conditions
Promises
Conditions
Warranties
Election
Forfeiture
75
Damages
Damages only
Conditions and promises
 I bargain for delivery of 500 tons of
copper, delivery by January 5. You
deliver 400 on that date.
 Assume that the price of copper has
fallen. Can I reject the tender?
76
Conditions and promises
 I bargain for delivery of 500 tons of
copper, delivery by January 5. You
deliver 400 on that date.
 Assume that the price of copper has
fallen. Can I reject the tender?
 UCC § 2-601 “reject the whole”
77
Conditions and promises
 I bargain for delivery of 500 tons of
copper, delivery by January 5. You
deliver 400 on that date.
 Assume that the price of copper has
fallen. Can I reject the tender?
 UCC § 2-601 “reject the whole”
 So the obligation to deliver 500 is a
condition
78
Conditions and promises
 I bargain for delivery of 500 tons of
copper, delivery by January 5. You
deliver 400 on that date.
 Assume that the price of copper has
risen. Can I accept the 400?
79
Conditions and promises
 I bargain for delivery of 500 tons of
copper, delivery by January 5. You
deliver 400 on that date.
 Assume that the price of copper has
risen. Can I accept the 400?
 UCC § 2-601(c) “accept any commercial
unit”
80
Conditions and promises
 I bargain for delivery of 500 tons of
copper, delivery by January 5. You
deliver 400 on that date.
 Assume that the price of copper has
risen. Can I accept the 400?
 Can I also sue for damages for the 100?
 UCC § 2-711(1)(b)
81
Conditions and promises
 I bargain for delivery of 500 tons of
copper, delivery by January 5. You
deliver 400 on that date.
 Assume that the price of copper has
risen. Can I accept the 400?
 Can I also sue for damages for the 100?
 So the obligation to deliver 500 tons is both
a promise and a (promissory) condition
82
Howard: Condition or Promise
 What kind of condition is 5(b)?
83
Howard
 Condition precedent in clause 5(b)
 If this is not met, can Howard recover?
84
Howard
 Condition precedent in clause 5(b)
 If this is not met, can Howard recover?
 If this is not met, is Howard liable in
damages?
85
Howard
 Condition precedent in clause 5(b)
 If this is not met, can Howard recover?
 If this is not met, is Howard liable in
damages?
 Qu. Clause 5(f)?
86
Howard
 Condition precedent in clause 5(b)
 If this is not met, can Howard recover?
 If this is not met, is Howard liable in
damages?
 Qu. Clause 5(f)
 If this is not met, Can Howard recover?
87
Howard
 Condition precedent in clause 5(b)
 If this is not met, can Howard recover?
 If this is not met, is Howard liable in
damages?
 Qu. Clause 5(f)
 If this is not met, Can Howard recover?
 If this is not met, is Howard liable in
damages?
88
Howard
 The presumption against forfeiture
 Restatement § 227 (formerly §261)
89
Howard
 The presumption against forfeiture
 Restatement § 227 (formerly §261)
 227(1): a presumption that a warranty and
not a promissory or non-promissory
condition
90
Howard
 The presumption against forfeiture
 Restatement § 227 (formerly §261)
 227(1): a presumption that a warranty and
not a promissory or non-promissory
condition
 227(3): a presumption that a promissory
and not a non-promissory condition
91
Howard
 Insurance law: contra proferentum
rule of Restatement § 206


92
Illustrations on p. 635
Rhode at 638
Pay-if-paid clauses
 Main Electric at 637
 But see Restatement § 227, Illus. 1
93
Conditions precedent and subsequent
 What’s the difference?
94
Conditions precedent and subsequent
 What’s the difference?
 CP: no performance due before event
 Restatement § 224
 CS: Performance is due, but event
extinguishes duty and claim for breach
 Restatement § 224 cmt e, 230
95
Conditions precedent and subsequent
 What’s the difference?
 Restatement § 230(2)
 Good faith
 No materially increased burden
96
Conditions precedent and subsequent
 Gray v. Gardner
 Contract void if greater quantity of
sperm oil arrives between April 1 and
October 1
 For whose benefit was this?
97
Conditions precedent and subsequent
 Gray v. Gardner
 Contract void if greater quantity of
sperm oil arrives between April 1 and
October 1
 Was there a valid contract between April
1 and October 1?
98
Conditions precedent and subsequent
 Gray v. Gardner
 Contract void if greater quantity of
sperm oil arrives between April 1 and
October 1
 Was there a valid contract between April
1 and October 1?
 Δs argued not but Parker said yes—a
condition subsequent
 Which means that onus of proof on buyer
99
Drafting CP and CS clauses
 Draft the Gray v. Gardner promise
 as a CP
 as a CS
100
Attorney-approval clauses
 I agree “subject to my lawyer’s
approval.”
 A valid condition subsequent?
 Or not an acceptance and promisor can
revoke offer: Gaglia
101
Modification, Waiver,
Estoppel: Clark v. West
The dirty little secret of textbook publishing revealed
102
Modification, Waiver,
Estoppel
 What are Modifications?
103
Modification, Waiver,
Estoppel
 Modifications are bilateral agreements
to vary obligations under a contract
 Promises are modified
104
Modification, Waiver,
Estoppel
 Modifications are bilateral agreements
to vary obligations under a contract
 What are Waivers?
105
Modification, Waiver,
Estoppel
 Modifications are bilateral agreements
to vary obligations under a contract
 Waivers are unilateral acts by one
party to excuse another’s
performance of an obligation
 Conditions are waived
106
Modification, Waiver,
Estoppel
 Modifications are bilateral agreements
to vary obligations under a contract
 Waivers are unilateral acts by one
party to excuse another’s
performance of an obligation
 (Promissory) Estoppel bars a
promisor from enforcing a right
where he knows that a promisee has
detrimentally relied on him.
107
Modification, Waiver,
Estoppel at common law
108
Agreement
Required?
Reliance
required?
Modification
yes
no
Waiver
no
no
Estoppel
no
yes
Clark v. West
 What was the promise?
109
Clark v. West
 What was the promise?
 Now you know why textbooks are so
long.
 Facts alleged on 647
 Would this be enough for an estoppel?
 A waiver?
110
Clark v. West
 § 1-107. Waiver or Renunciation of
Claim or Right After Breach. Any claim
or right arising out of an alleged
breach can be discharged in whole or
in part without consideration by a
written waiver or renunciation signed
and delivered by the aggrieved party.
111
Clark v. West
 Election waivers: Lee v. Casualty at
p.656
 Estoppel waivers: Wisconsin Knife?
112
The UCC:
Wisconsin Knife Works
 What was the contract?
Spade Bits
113
Wisconsin Knife Works
 What was the contract?
 Six Purchase Orders in Aug 1981 for
delivery in Oct-Nov
 New purchase orders in July 1982
 Seller not able to deliver until December
1982—13 months late
 Jan 1983—buyer rescinds after 50%
completion under original orders
114
Wisconsin Knife Works
 How does the UCC change things?
115
Wisconsin Knife Works
 Modifications are binding w/o
consideration. UCC § 2-209(1)
116
Wisconsin Knife Works
 Modifications are binding w/o
consideration. UCC § 2-209(1)
 Opportunism is addressed not by the
consideration doctrine but by good fatih
requirements
 Comment 2
117
Post-contractual
opportunism
 Buyer agrees to purchase a specially
designed computer software program.
Seller spends six months on this.
With one month to go, buyer seeks a
modification of the price.
118
Post-contractual
opportunism
 How does modification open the door
to post-contractual opportunism?
 Did Alaska Packers offer much
protection?
 2-209(1)?

Would a modification only in writing help solve the
problem?
119
Post-contractual
opportunism
 How does modification open the door
to post-contractual opportunism?
 Did Alaska Packers offer much
protection?
 2-209(1)?

1-203. Obligation of good faith. Every contract or duty
within this Act imposes an obligation of good faith in its
performance or enforcement.
120
Wisconsin Knife Works
 UCC § 2-209(2)?????
121
Wisconsin Knife Works
 UCC § 2-209(2)
 Merchant-consumer contracts that
specify a need for signed modifications
can’t be modified orally
122
Wisconsin Knife Works
 UCC § 2-209(2)
 Merchant-consumer contracts that
specify a need for signed modifications
can’t be modified orally
 What’s the purpose of this, per
Easterbrook?
123
Wisconsin Knife Works
 UCC § 2-209(2)
 Merchant-consumer contracts that
specify a need for signed modifications
can’t be modified orally
 But must be separately signed by the
consumer if on a form supplied but the
merchant
124
Wisconsin Knife Works
 UCC § 2-209(2)
 Merchant-consumer contracts that
specify a need for signed modifications
can’t be modified orally
 But must be separately signed by the
consumer if on a form supplied but the
merchant
 Just what does this proviso add?
125
Wisconsin Knife Works
 UCC § 2-209(2)
 Merchant-consumer contracts that
specify a need for signed modifications
can’t be modified orally
 But must be separately signed by the
consumer if on a form supplied but the
merchant
 Posner: Must the anti-modification clause be
separately signed?
126
Wisconsin Knife Works
 UCC § 2-209(2)
 Merchant-consumer contracts that
specify a need for signed modifications
can’t be modified orally
 Need not be signed if between merchants?
 Is this inconsistent with the first part?
127
George Mason School of Law
Contracts II
Conditions
F.H. Buckley
[email protected]
128
PP. 644-59
 My bad…
129
The presumption against forfeiture
 In favor of promises, not nonpromissory conditions
 In favor of warranties, not promissory
conditions
130
Loss of the right to rescind:
Modification, Waiver, and Estoppel
131
Agreement
Required?
Reliance
required?
Modification
yes
no
Waiver
no
no
Estoppel
no
yes
Wisconsin Knife Works
 What was the evidence of
modification or waiver here?
132
Wisconsin Knife Works
 What was the contract?
 Six Purchase Orders in Aug 1981 for
delivery in Oct-Nov
 New purchase orders in July 1982
 Seller not able to deliver until December
1982—13 months late
 Jan 1983—buyer rescinds after 50%
completion under original orders
133
Wisconsin Knife Works
 What was the evidence of
modification or waiver here?
 Was an unwritten modification valid?
 Was waiver available? UCC § 2-209(4)
134
Wisconsin Knife Works
 What was the evidence of
modification or waiver here?
 Was an unwritten modification valid?
 Was waiver available? UCC § 2-209(4)
 So does waiver eat up modification?
135
Wisconsin Knife Works
 What was the evidence of
modification or waiver here?
 Was an unwritten modification valid?
 Was waiver available? UCC § 2-209(4)
 So does waiver eat up modification?
 Posner: Not if waiver requires reliance
136
Wisconsin Knife Works
 What was the evidence of
modification or waiver here?
 Was an unwritten modification valid?
 Was waiver available? UCC § 2-209(4)
 So does waiver eat up modification?
 Posner: Not if waiver requires reliance
 And was there reliance here?
137
Wisconsin Knife Works
 What was the evidence of
modification or waiver here?
 Was an unwritten modification valid?
 Was waiver available? UCC § 2-209(4)
 So does waiver eat up modification?
 Posner: Not if waiver requires reliance
 And was there reliance here?
 NMC’s work from July ‘82 on?
138
Wisconsin Knife Works
 What was the evidence of
modification or waiver here?
 Was an unwritten modification valid?
 Was waiver available? UCC § 2-209(4)
 Easterbrook on waiver: 2-209(5) implies
that waiver does not ordinarily require
reliance
139
Wisconsin Knife Works
 What was the evidence of
modification or waiver here?
 Was an unwritten modification valid?
 Was waiver available? UCC § 2-209(4)
 Easterbrook on waiver: 2-209(5) implies
that waiver does not ordinarily require
reliance
 What instead it requires is an “intentional
relinquishment of a known right.”
140
Wisconsin Knife Works
 What was the evidence of
modification or waiver here?
 Was an unwritten modification valid?
 Was waiver available? UCC § 2-209(4)
 Easterbrook on waiver: 2-209(5) implies
that waiver does not ordinarily require
reliance
 What instead it requires is an “intentional
relinquishment of a known right.”
 And might work even if modification doesn’t.
141
Modification and Waiver
in the UCC
 Modifications are binding w/o
consideration. UCC § 2-209(1)
 Modifications can be barred by
express agreement, UCC § 2-209(2)
 Unless signed written modification
 But waivers still permitted. UCC § 2209(4)
 Tho’ these can be retracted unless other
parties changes position. UCC § 2-209(5)
142
Why no waiver in Suzuki?
143
Why no waiver in Suzuki?
 Termination clauses and agency costs
 Wisconsin Fair Dealership Law, 1974

144
135.03 Cancellation and alteration of dealerships. No
grantor, directly or through any officer, agent or employee, may
terminate, cancel, fail to renew or substantially change the
competitive circumstances of a dealership agreement without good
cause. The burden of proving good cause is on the grantor.
Why no waiver in Suzuki?
 Free riding in franchises
Dirty Macdonalds restaurant
145
George Mason School of Law
Contracts II
Warranties
F.H. Buckley
[email protected]
146