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Precontractual Liability And Preliminary Agreements, Alan Schwartz, Robert E. Scott
Precontractual Liability And Preliminary Agreements, Alan Schwartz, Robert E. Scott
Faculty Scholarship
For decades, there has been substantial uncertainty regarding when the law will impose precontractual liability. The confusion is partly due to scholars' failure to recover the law in action governing precontractual liability issues. In this Article, Professors Schwartz and Scott show first that no liability attaches for representations made during preliminary negotiations. Courts have divided, however, over the question of liability when parties make reliance investments following a "preliminary agreement." A number of modern courts impose a duty to bargain in good faith on the party wishing to exit such an agreement. Substantial uncertainty remains, however, regarding when this duty …
Desperately Seeking Consideration: The Unfortunate Impact Of U.C.C. Section 2-306 On Contract Interpretation, Victor P. Goldberg
Desperately Seeking Consideration: The Unfortunate Impact Of U.C.C. Section 2-306 On Contract Interpretation, Victor P. Goldberg
Faculty Scholarship
In Section 2-306, the Uniform Commercial Code's drafters intended to assure that two classes of agreements would be enforceable, even though they might appear on their face to be illusory. Variable quantity (output and requirements) contracts were buttressed by reading in a good faith standard (§ 2-306(1)) and exclusive dealing contracts were made enforceable by reading in a best efforts standard (§ 2-306(2)). This was a big mistake. In this paper I show how these two fixes create problems for interpreting contracts. I use two well-known cases, Feld v. Henry S. Levy & Sons, Inc. and Wood v. Lucy, …