Contracts - Case Studies

CH 1 p. 31 Cobaugh v. Klick-Lewis, Inc. - 1989 9th hole sits a Chevy Beretta and signs saying Hole in One wins car. Golfer hits hole in one, dealer will not deliver car citing contest was 2 days prior.

Advertisements as Offers Unilateral contract - promise of car for performance of hole in one detriment - no legal obligation to hit hole in one benefit - publicity

CH 4 p. 227 Alaska Packers' Ass'n v. Domenico - 1902 US appeals 9th cir 2 workers contract in writing to be paid flat rates of $50 and $60, respectively for fishing season in Alaska, upon arrival, demand wages increased to $100 each. Would have been impossible to replace the workers in remote location for short season of work, they gave in to the demands, had new contracts written, then paid only original contract amounts, workers sued for full $100. They claimed reason for increase in wages was defective fishing nets (conflicting evidence) court found not true, would be counter-productive for the company not to provide every facility necessary to their success as fishermen.

Pre-existing duty rule Revisited Pressure in Bargaining Superintendent told workers he had no power to alter original or make new contract Services bargained for were already contracted - no new consideration = preexisting duty rule Party refusing to perform demands increased $ for already obligated work takes unjustifiable advantage of necessities of other party There cannot be detrimental reliance on an subsisting promise No new benefit to promisor or detriment to the promisee = extortion Nudum pactum - unenforceable promise court will not lend its process to aid in the wrong

CH 5 p. 265 Hopper v. All Pet Animal Clinic - 1993 WY SC Vet goes to work for Clinic with agreement not to compete for 3 years in small animal medicine within 5 miles of city limits of Laramie, WY (basically eliminating all territory). Clinic gets wind she's planning to leave and purchase small animal clinic, offers to release for cash buy out, P denies intention to purchase and disclaims Employment Agreement as "not worth paper written on" states "she can do whatever she wants" D terminates w/30 days notice as req by contract last day to be July 18, she begins operation of diff clinic than accused of purchasing on July 15 within city limits includes small animals. Client list showed 187 overlapping clients. During proceeding, injunction was not sought to cease P's practice & possibly mitigate damages.

Restraints on Trade * Non- Competition Clauses Geographical and durational limits Geographical - 5 miles of city limits found to be resonable Durational 3 yrs found to be excessive reduced to 1 yr

CH 3 p. 136 Warner v. Texas & P. R. Co - 1896 Oral agreement in 1874 Warner will grade ground & put down ties if RR puts down rails and maintains switch so he can operate his lumber biz. Warner buys land, puts up saw mill, buys water rights, builds tram road. 1887 RR tears up switch & ties leaving lands disconnected from transportation req to run biz.

SOF - not to be perf w/in 1 year contract for "as long as needed" and did extend past 1 year so should fall within and require a writing however it was not transferable and therefore since Warner could die and terminate contract at any time, it's not within and oral agreement binding. Also there was no provision that stated it "could not" be performed within a year therefore "as long as needed" could be less than a year

CH 2 p. 98 Steiner v. Mobil Oil Corp. Steiner wants price guarantee to be able to afford purchase of gas station, Mobil has on standard form discounts can be changed at any time, Steiner catches this, calls and says no deal unless guaranteed, is sent letter promising to accept full conditions or contract will be void, letter never makes it to division GM stays in office files, Steiner notified by phone GM has approved, docs are delivered in unmarked manila folder, Steiner signs without rereading all docs and the standard form was used with provision allowing change to discounts.

* Acceptance * UCC 2-207 - new/diff terms 2 merchants Steiner made his acceptance expressly conditional on the discount, which was agreed base on the letter. Then exclusion of letter and using standard form constituted new term which was not expressly conditioned on acceptance so it was subject to inclusion but disqualified as it was material alteration that would have resulted in Steiner not accepting terms.

CH 2 p. 74 Ever-Tite Roofing Corporation v. Green Contract signed for roofing services, required credit check and loan approval. Approved, then trucks and workmen loaded with materials arrive to find another company engaged in work and turned away. Green claims timely notice of offer revocation.

* Acceptance and Revocation of offer No time specified for work to commence, therefore reasonable time must be allowed. Acceptance by commencement of performance via loading trucks and transporting to Green's residence.

CH 2 p. 70 International Filter Co. v. Conroe Gin, Ice, & Light co. - 1925 Salesman makes deal for water softener and filter,

* Acceptance and communication no need to communicate acceptance of unilateral contract

CH 2 p. 53 Lefkowitz v. Great Minneapolis Surplus Store - 1957 MN SC Ad in paper furs for sale for $1 first come first served. Man shows up, turned away, store claims "house rule" only for women

* Advertisements as offers * Rescission/revocation/modification Performance requested was to come to store first, he was first and prepared to offer stated price, entitled to performance No rescission or modification after acceptance

CH 2 p. 55 Donovan v. RRL Corp. - 2001 Ad for used Jaguar priced $12k below intended asking price, customer offers asking price, dealer refuses to sell P. 66 unaware of misprinted price p. 176 ad printed with dealer's logo p. 297 $12k loss

* Advertisements for cars as Offers + Vehicle Code section 11713.1 Must sell for at or below advertised price regardless of whether customer is aware of it unless time lapsed - creates reasonable expectation dealer intends to make offer to sell at that price that invites acceptance by paying the price - ad = manifestation of dealer's willingness to enter into bargain + justifies consumer's understanding assent to bargain is invited and will conclude it - offer accepted when consumer tenders advertised price - statute creates consumer expectation that dealer intends to sell at advertised price * offer containing MISTAKEN TERM - mistake of fact unconscious ignorance that paper misprinted price buyer not aware of mistake when accepted Calif. adopts as law - authorizing rescission for unilateral mistake of fact where enforcement would be unconscionable * SOF authentication req contracts SOG over $500 logo is sufficient for signature requirement * UNCONSCIONABILITY- honest mistake (procedural) lead to overly harsh-one sided terms (substantive) representing a $12k loss to D, prompt notice given, offer to return to status quo for fuel, time & effort in travelling to dealer > law does not penalize for negligence beyond requiring compensation for the loss it has caused

CH 1 p. 23 Mills v. Wyman - 1825 Young man falls ill at sea, taken care of once arrives at shore for 2 weeks by good Samaritan but he dies. Father initially sends letter offering to pay for expenses (out of moral obligation) then refuses. Samaritan sues.

* Bargain for Exchange * Moral Obligation - after the fact promise Services unrequested ~ not bargained for. Gratuitous promises are not enforceable. Past consideration is no consideration.

CH 2 p. 76 Davis v. Jacoby Niece is like daughter to her Aunt and husband, asked via letters to leave home in Canada and come with her husband to take care of them in old age in exchange for becoming sole heir. Husband commits suicide, couple comes to take care of aunt until her death.

* Bilateral vs Unilateral * Peace of mind contract Initial court found unilateral promise to perform for husband who wrote the letter, since promise to perform for him, contract terminated with his death. Appeals court overturns, finds bilateral promise for promise of peace of mind to take care of them, not actual act of care-taking.

CH 4 p. 213 Keifer v Fred Howe Motors, Inc. P & wife went to buy a car. The P was under twenty-one. Question as to whether he was asked about his age and whether he replied that he was "21" court decided P did not orally represent that he was "21"

* Capacity of minors to contract Case discusses the theories behind holding persons of certain age and maturity liable and says a line has to be drawn somewhere. Suggests dealer take matter up with the legislature. Dissenting opinion found liable as car is necessity.

CH 1 p. 7 Hamer v. Sidway - 1891 Refrain from drinking smoking and gambling till age 21

* Consideration - waiver/surrender of a legal right Abstained from things entitled to do

CH 5 p. 300 Bolter v. Superior Court (Harris Research, Inc.) - 2001 CA Appeal Several Chem-Dry franchise owners when agreements lapsed, new agreements were more and more restrictive and Harris threatened to terminate if refused to execute. Orig agreements had jurisdiction in Calif but more recent agreements moved any litigation to Utah. Complaint is breach of franchise contracts and covenants of good faith and fair dealing claiming procedurally unconscionable mandatory arbitration agreements and substantively unconscionable req of Utah litigation.

* Contracts of Adhesion * Unconscionably * Arbitration agreements Arbitration agreements are same as reg contract as far as analysis for validity not per se unconscionable for adhesiveness but rather place and manner Unreasonable hardship for franchisees to travel to Utah - mom and pop small businesses must close down also forbids "class wide" filing, requiring each to litigate and retain individual council Blue pencil rule - strike Utah provision

CH 5 p. 262 Miller v. Radikopf - 1975 Mich SC P claims he & D jointly sold irish sweepstakes tix. For each 20 sold, they got 2 tix. Although each would put his name on one of the tickets, D claims they agreed tix were jointly owned and all winnings would be divided equally. Tic bearing D's name won +$487,000. After D refused to surrender any of the proceeds, Plaintiff commenced this action.

* Illegal contract for reason of public policy State policy against lotteries but Irish Sweepstakes are voluntary programs - receiving a lottery award voluntarily paid is not prohibited. $ legally paid ~ mutual promise contract to share winnings is valid consideration and enforceable - promissory default

CH 5 p. 257 Bovard v. American Horse Enterprises - 1988 Calif Appeals P Bovard, sold D the corporation, American Horse Enterprises, Inc., to James Ralph, who signed several promissory notes in connection with the sale. P sued when D failed to pay the notes. Evidence revealed D is in biz of mfg drug paraphernalia, primarily bongs &roach clips, used to smoke marijuana. The mfg of drug paraphernalia was not itself illegal at the time the parties entered into the contract.

* Illegality A court will not enforce a contract to undertake illegal activities, nor will a court enforce a contract to undertake legal activities if they are contrary to public policy. Whether contract violates public policy involves a degree of subjectivity. Mfg of drug paraphernalia is not itself unlawful, enforcing this contract is clearly against public policy (b/c it encourages use of illegal substance). Denying enforcement puts mfgrsof drug paraphernalia on notice that the judicial system will not protect them.

CH 1 p. 17 Wood v. Lucy, Lady Duff-Gordon - 1917 Fashion designer hires rep to exclusively market her brand in exch for half profits, she does her own marketing and withholds profits.

* Illusory Promise Lady Duff tried to claim no concrete promise by rep - that his efforts would be illusory at his own whim Implied good faith and best efforts by rep

CH 1 p. 16 Strong v. Sheffield - 1895 Strong - creditor - would collect debt from Sheffield "when I want my money"

* Illusory promise At whim of P, would money be demanded, could be at any time. Needs to be specified or reasonable amt of time for a forbearance to = consideration Implied good faith to allow some time for repayment, not immediate demand

CH 1 p. 1 Schaad v. Hazelton - 1946 Daughter took care of mom for oral promise of half of her estate

* Implied In Fact Contracts Intra-family member care taking services are implied non compensatory out of love, friendship and kindness rather than desire for gain Extra-family services - recipient must prove gratutiously

CH2 . 92 Gibbs v. American S & L Gibbs offer to buy home for $180k. Counteroffer from S & L received with additional terms but no mention of price. Counteroffer signed by couple, wife gave to mail clerk, it got postmarked following day. In mean time shortly after hand off to clerk, Mrs. Gibbs got phone call saying error in counteroffer, price was supposed to be higher and is therefore revoked.

* Mailbox rule hand off to 3rd party is not affective dispatch - must be placed in course of transmission

CH 2 p. 46 Lucy v. Zehmer - 1954 Over drinks, Lucy offers to buy farm from Zehmer who thinks it's a joke, writes note agreeing to sell.

* Mental Assent * Apparent Intention External expression controls. Words and acts, have one reasonable meaning undisclosed intention is immaterial - intention to agree manifests

CH 4 p. 216 Ortelere v. Teachers' Ret. Bd P is husband of deceased teacher who 2 months before death, following a leave of absence for mental illness, changed her retirement benefits to exclude him as beneficiary and make fully payable within her lifetime. She had elected to make benefits transferable to him for 40 years prior. Question is whether her mental illness incapacitated her to make that decision.

* Mental incapacity A person incurs only voidable contractual duties by entering into a transaction if by reasons of mental illness or defect (s)he is unable to act in a reasonable manner in relation to the transaction and the other party has reason to know his condition. School board knew of her condition and decision was clearly unwise and foolhardy

CH 4 p. 222 Cundick v. Broadbent Long transaction b/t C & B for sale of livestock & equip, stock & land. Docs prepared by C's counsel, signed by C in presence of counsel & wife. Claim is C was mentally incompetent to contract & overreached by B. No evidence f/ drs or family/friends of mental incompetency during time of transaction (treated previously) other than change in personality. After suit filed, court ordered C examined by neurosurgeons said atrophy of frontal lobes ~ pre-senile/ premature arteriosclerosis & opined on date of transaction C was "confused & befuddled man w/ very poor judgment" unable to handle affairs. Referred to psychologist ~ agreed C was incapable of transacting important business affairs lay testimony about personality change unable to make decisions. Parties had previously dealt - C & B met w/o witnesses drafted 1 pg doc, atty expanded to 11 pg, signed in atty's office by both parties atty & wife present. Atty testified explained in detail & all parties understood. Lamb crop delivered to B + part payment. B offered to call off the deal, C refused parties agreed to raise price, memos signed to amend/modify. W/in yr following stock acquisition, substantial shareholders dividend paid B could've been aware as a director however no way to verify knowledge of anything n/a to C/shareholders and if B had such knowledge and did not disclose, that is not fraud.

* Mental incompetency law was - a lunatic had no mind to make an agreement, contract wholly void but if confused or weak minded incapable of understanding terms & effect of agreement, he could contract but would be voidable at his option. modern rule - contracts never void unless fraud or knowledge of incapacity by other party @ most voidable by deficient party only in accordance with certain equitable principles - mental capacity to contract depends upon whether the allegedly disabled person possessed sufficient reason to enable him to understand nature and effect of act - if person has memory, without prompting, of extent and condition of property, comprehension of how he is disposing of it and to whom and upon what consideration, he is mentally competent to contract - mere weakness of body or mind is not incompetency to contract - can be capable of contracting during lucid periods or by a representative - if mental condition susceptible of being overreached by unscrupulous superior, fraud must be proven here - could not prove fraud or mental incompetency at time of contract, much evidence to the contrary

CH 2 p. 95 Smith v. Holmwood Condition of acceptance to purchase property included consideration of $1k to be tendered with notice. Counter offer accepted by writing, no $

* Mirror image rule * Acceptance must adhere to all prescribed requirements no $1k with written acceptance, no acceptance

CH 4 p. 244 Kannavos v. Annino - 1969 Mass SC Ps purch similar properties f/ D w/understanding (based on ads & representation by selling broker & D), they were income generating multi-unit dwellings & could continue to be owned/operated as such. Income and expense #s provided by broker. D had converted the units from original single family homes w/o permits violating zoning ordinances. D did not disclose permit situation. Ps get notice f/city of zoning/wiring/plumbing violations & mandating correction of illegalities. P's purpose was to rent, no prior real estate experience, unaware of any violations ~ would not have purchased had he had such knowledge.

* Misrepresentation & Concealment - Duty to Disclose everything pointed to these properties as income properties, the first one expressly represented as such, others were said to be similar if he does speak with reference to a given point of information, voluntarily or at the other's request, he is bound to speak honestly and to divulge all the material facts bearing upon the point that lie within his knowledge. b/c vendors did as much as they did do, they were bound to do more half truths

CH 4 p. 248 Reed v. King - 1983 Calif Appeals P purchased home f/ D, unaware a woman & 4 children murdered there 10 yrs prior. D & R/E agent aware but did not disclose to P b/c felt would materially affect home value. They asked neighbors not to tell P. P finds out & sues D & R/E agent for rescission & damages. P paid $76,000 for home allegedly worth $65,000 b/c of murders. Trial court dismissed - found no concealment of a material fact. P appealed.

* Misrepresentation & Concealment of Material Fact * Duty to Disclose Fact known by D - murders - material would have affected decision to purchase and value of property Reversed remanded for proving affect on market value of home by murders and related damages warrant a rescission and judgment for damages

CH 4 p. 252 Vokes v. Arthur Murray Inc Woman encouraged to continue taking dance lessons based on false praise beyond sales puffery when her skills were not developing and D knew this

* Misrepresentation by opinion can be taken as statement of fact in situations of unequal knowledge where if on equal terms it would be considered opinion they did not tell the whole truth

CH 2 p. 61 Elsinore Union Sch. Dist. v. Kastorff 1960 Bid submitted missing $ for plumbing, GC unaware, confirms #s correct, awarded contract, discovers error next morning informs sch board, asks to withdraw, not allowed.

* Mistake in offer (bid) honest mistake not result of neglect of legal duty, enforcement unconscionable (taking advantage of much lower price/no funds allocated to plumbing expected plumbing work to be done) prompt notice given, large % of error ~ material to contract, status quo - go to next bid

CH 5 p. 271 Central Adjustment Bureau, Inc. v. Ingram - 1984 TN SC P - employer CAB home office Dallas, Texas, Ds former employees of CAB who left to form Ingram & Assocs. in direct competition and violation of signed non compete agreements. CAB seeking compensatory & injunctive relief stating D's were liable in tort & for breach of non-competition covenants. Chancellor found covenants unreasonably broad w/ geographical & time limitations and imposed enforcement as modified by injunctive relief. Court of Appeals reversed finding geographic & time limitations unenforceable due to being unreasonably broad. Now before SC to analyze limitations reasonableness.

* Non compete covenants - geographic & durational limitations * Blue pencil rule SC agrees were unreasonably broad, and as modified by Chancellor were rendered reasonable ? is whether Chancellor had authority to modify them prev. all or nothing rule - enforce or rescind trend towards judicial modification - 1. Blue pencil rule - strike out words making restriction unreasonable 2. Rule of reasonableness (trending) enforce non competes to extent reasonably necessary to protect interests w/o imposing undue hardship on employee when public interest not adversely affected

CH 2 p. 110 Dickinson v. Dodds Dodds offered to sell Dickinson property and to hold offer open until Friday 9am. Thursday afternoon, Dickinson learns property has been offered to Allan, he then goes to Dodds residence with acceptance letter which doesn't reach Dickinson, then in morning to train station Dodds tells him he's too late, has sold property.

* Option Contracts - require consideration No consideration ~ no binding agreement to hold offer open. P had reasonable knowledge D intended to sell to someone else.

CH 2 p. 114 Marsh v. Lott 1908 Marsh gives Lott .25 cents in consideration of option to purchase property up to June 1 with 30 day extension for $100k with $30k due upon acceptance. Marsh notifies June 1 wishes to exercise option to extend to June 30. Lott revokes option June 2 and withdraws property from sale.

* Option contracts and consideration trial court found .25 cents inadequate appellate court overturned courts will not inquire as to the adequacy of consideration.

CH 4 p. 230 Borelli v. Brusseau - 1993 CA Appeals P's husband (Borelli) admitted the hospital w/ heart problems promised P (wife) that he would leave her his property in return for her care. He had stroke in hospital & affirmed deal of property for care taking services. P agreed and did take care of him till death. Husband gave P $100,000 and bulk of his estate to his daughter (D). P sued for a specific performance of a promise by her deceased husband to transfer certain property to her in return for her promise to take care of him.

* Pre-Existing Duty Rule - marriage obligations no new consideration - care taking implied in marriage contract dissenting - modern views have changed traditional views of marriage and disallowing such bargains would condemn marriages and can consider parties at arm's length

CH 2 p. 126 Dixon v. Wells Fargo Dixons negotiating a loan modification for their home with Wells Fargo who told them to stop paying their mortgage and understood unpaid payments would be added to new modified note. Wells Fargo requested financial info, Dixons provided. Dixons then notified by the court that Wells Fargo proceeding with foreclosure.

* Pre-contractual liability * Promissory/offertory Estoppel - hadn't begun modification negotiations so agreement to negotiate rather than agreement to agree combination of 2 above rules - found to be an estoppel case and met requirement of pre-contractual liability rule by making a specific promise during negotiations (3) that it benefited from (2)

CH 1 p. 19 Feinberg v. Pfeiffer Co. - 1959 Woman retires based on promise of $200 pension for life upon retirement CH 1 P. 36

* Preexisting Duty Rule After Pres died, wife and son (bean counters) stopped paying claiming she had no right to be paid retirement for doing her job (modification req additional consideration/past services no consideration), but she quit in reliance eventually prevailed on Estopel. * Promissory Estoppel; Reliance as an Alternative to Consideration she quit working at advanced age a detriment to her - would be difficult to find work/comparable position

CH 5 p. 275 Simeone v. Simeone - 1990 PA SC Prenuptial agreement Couple married in 1975 appellant, unemployed nurse 23, appellee neurosurgeon 39 with an income apx $90,000.00 + assets apx $300,000. Eve of Husband's atty presents Wife w/prenuptial agreement w/o counsel she signed. Dispute over advance knowledge of when agreement would be presented. Wife denied having knowledge of agreement, claims signed under adverse circumstances grounds for voiding. Agreement limited Husband to support pymts $200/wk in the event of separation or divorce, subject to a total max pymt $25k. Separation 1982, 1984 divorce proceedings commenced. B/t 2 yr gap Husband made $25k in pymts. In 1985 wife filed a claim for alimony pendent lite but a masters report upheld the validity of the prenuptial agreement and denied said claim.

* Prenuptial agreements witness testimony that wife was aware of agreement (failure to read is not a defense), changes had been made to increase payments to her, she had ample time to seek counsel Analysis of Geyer case - must be reasonable or full financial disclosure and understanding of relinquishing of statutory rights This court majority opinion - agreements based on antiquated view of female as less educated/informed weaker party in marriage inquiry into reasonableness of agreement undermines that which was agreed to in premise of marriage itself change in circumstances should be assumed, if certain contingencies not addressed, risk is assumed, else all would be subject to voiding contracts for unreasonableness Full disclosure found from Husband Duress invalidated based on facts in evidence and time before agreement presented Dissenting opinion - still warrants relief for unfair and inequitable contracts

CH 2 p. 49 Owen v. Tunison - 1932 Letters exchanged re: sale price of property interpreted as offer to sell

* Price quotations Stating a price is not offering to sell

CH 2 p. 51 Harvey v. Facey - 1893 Telegraph asked for lowest price, response quoted price, interpreted as offer and response accepted "offer to sell"

* Price quotations Stating a price is not offering to sell

CH 1 p. 33 Ricketts v. Scothorn - 1898 uncle brings promissory note to niece's work to pay $2k/yr @ 6% and says she doesn't have to work anymore. She quits job.

* Promissory Estoppel; Reliance as an Alternative to Consideration Changes position - becomes unemployed - in reliance on promissory note

CH 1 p. 42 Callano v. Oakwood Park Homes Corp. - 1966 Owners of nursery plant shrubs for pending owner who dies. Home is sold with shrubs. Nursery owners sue Homeowners Assoc. (fail) Should have sued estate

* Quasi/implied contracts * Unjust enrichment Association was not unjustly enriched, home owner would have been. Cannot substitute one promisor or debtor for another

CH 1 p. 39 Cotnam v. Wisdom - 1907 man thrown from street car, doctors perform difficult operation to save life, fail.

* Quasi/implied contracts * Unjust enrichment In an emergency, there is implied contract for necessary medical services that deserve reasonable restitution as customary price regardless of outcome. It would be unjust not to compensate doctors for services despite being unrequested.

CH 1 p. 24 Webb v. McGowin - 1935 Man pushing pine block out of upper floor of mill opts to follow it to the ground to keep it from crushing man below. Man offers to pay lifetime restitution for injuries (crippled for life).

* Relaxation of Past Consideration is No Consideration rule * Moral Obligation - after the fact promise Life has value (existence life insurance is evidence), recipient of life saving action is benefit, injuries - detriment. Benefit to promisor or injury to promisee is sufficient legal consideration for promissor's agreement to pay.

CH 4 p. 233 Watkins & Son, Inc., v. Carrig - 1941 NH SC P is contractor hired to excavate a cellar for D. Soon after work began, solid rock was encountered, P's manager notified D, meeting produced oral agreement for a price 9x > original stated price. Rock was apx 2/3rds of space.

* Relaxation of Pre-existing Duty Rule A promise modifying an executory contract (one that has not been fully performed) is binding if the modification is fair and equitable in view of circumstances not anticipated by the parties when the contract was made. P contracted without conditions at its own risk and would have been held to original price and could not have pleaded mistake however, D for whatever reason, voluntarily consented to special price for excavating rock, he relinquished his right to the original price, excusing P from the original contract by partial rescission and modification.

Ch 2 p. 122 Toys, Inc. v. F.M. Burlington Co. Shopping mall lease 5 years with option to extend 5 more years at prevailing rate applicable then with 1 year notice. Toys gives 1 year notice, tries to negotiate prevailing rate claiming higher than expectation, letters go back and forth including deadlines to accept which Toys misses. Negotiations cease. Mall denies extension claims let counteroffer lapse and indefinite terms made option agreement to agree not offer.

* Requirement of Definiteness * Valid option agreement not necessary to contain all the terms of the contract as long as it contains a practicable, objective method of determining the essential terms

CH 1 p. 29 Harris v. Time, Inc. - 1987 Offer in mail windowed envelope addressed to 3 year old boy displays advertisement - FREE WATCH JUST FOR OPENING ENVELOPE - inside was condition to return certificate to sign up for subscription to Fortune mag. CH 2 p. 55 Harris v. Time, Inc

* Requirement of a Bargain Bargained for act or forbearance = Unilateral Contract * Advertisements as Offers - promise of watch for performance of opening envelope * Value of Consideration Courts do not inquire as to value of consideration however purpose was to get the envelope opened to be exposed to sales pitch

CH 1 p. 28 Kirksey v. Kirksey - 1845 Widow's brother in law invites her to come live with him promises home and land until could raise her family, then asks her to leave.

* Requirement of a Bargain - gratuitous promise (majority) - consideration in form of detriment from leaving her homestead and moving 60 miles (minority)

CH 1 p. 11 Schumm v. Berg - 1951 Support of illegitimate child

* Rest 2nd § 75 mutual promises constitute consideration (Bilateral Contracts) Naming rights are consideration

CH 3 p. 147 Bed Bath & Beyond of La Jolla Inc. v. La Jolla Village Square - 1997 BB & B negotiated & signed lease for space being developed in D's shopping center. D never signed lease and subsequently leased to competitor Linens n Things. Prior to notice of that lease, P was unaware of such negotiations. In lease 2 early termination clauses having to do with construction and permits that could have resulted in a less than 1 year term, overall agreement for over 1 year

* SOF - not to be performed in 1 yr (general) * SOF - Leases for term exceeding 1 year = within (specific) despite contingency clauses making it possible to terminate within less than a year, the SOF provision of leases over 1 year is more specific and specific provisions govern general ones

CH 3 p. 171 Franklin v. Hansen - 1963 D wanted to sell some property, spoke with P - real estate broker. D sends telegram with offer to sell price, no mention of paying P commission. P obtains offer close to asking, contacts D to inform of offer. D "pleasantly surprised" P brings D check + P commission agreement. D refused to sign and states he wants out of sale. P is sues his commission.

* SOF - real estate commissions must be writing no writing, no commission telegram only referenced sale price of property, not paying broker

CH 3 p. 178 Beaver v. Brumlow - 2010 D worked for P who owned large piece of land. D wanted to purchase some land, improve and live there w/wife. P agreed, applied for permission from HOA to have mobile home placed on the land. D & wife cashed in retirement, purchased mobile home, moved on land, made improvements to home, est. water, electric, septic (D signed application for septic system), propane, built shed and landscaped. Apx $85k expended and $400 monthly payments were being made. P sought legal advice about manner to sell property (had mortgage due on sale clause) D quit working for P took job with competition. P stopped cashing checks, attempted to restructure deal as a lease and evict. D argued that they were purchasing the land and that through partial performance an oral agreement was thereby enforceable.

* SOF Excusing the writing requirement move on the land and build something grand part performance makes inequitable to deny enforcement of contract and removes from SOF part performance must be done on faith of existence of contract and unreasonable to presume any other theory

CH 3 p. 185 Monarco v. Lo Greco - 1950 couple married in 1919 wife had 3 children John, Rosie and Christie f/ previous marriage - Rosie married Nick Norcia. Husband had grand-child (P - Carmen Monarco)) - son of a deceased daughter by prev marriage. Couple moves to Calif, invest their assets in half interest in property, Rosie and Nick Norcia got other half interest. Christie, then in early teens, moved with family to Calif. Christie wanted to leave home at age 18, was made an oral promise that if he stayed home and worked, the property would be kept in joint tenancy, passed from survivor to Christie by will less small devices for John and Rosie. Christie eventually became married and proposed to move out again and the parents (D) told him to have his wife move in and continue working with them and they would leave him all of their property upon their passing. Shortly before passing one of the parents decided he did not like the agreement and changed his will to leave the property to his grand-child - P

* SOF Promises not to be performed within lifetime of promisor Excusing the writing requirement via Estoppel for reason of unjust enrichment Christie induced to change position (not leaving home/working for family) in reliance on contract

CH 3 p. 154 Central Ceilings, Inc. v. National Amusements - 2007 National owns theater complex under construction. Employ Old Colony - GC & Central as SubC for large portion of work. Delays ensued, cash flow problems ~ non payment to Central by Old Colony and work stoppage. Mgrs met ~ goal 2 open by Labor Day. Central req National to guarantee payment for work to resume. Such was agreed, orally, by their rep. Work was completed on time. National paid part of the balance, refused a little less than half of the remainder.

* SOF exception - Main Purpose/leading object rule case is not within statue when the purpose and effect of transaction resulted in benefit induced by promise to acquire liability for debt. novation takes out of SOF - new contract - not assuming liability for existing contract (surety) benefit of purchasing debt was getting work done in time for labor day profits

CH 3 p. 209 Sedmak v. Charlie's Chevrolet, Inc. - 1981 Appeals MO Dr. Sedmak called Charlie's Chevrolet to inquire if possible to purchase a new special edition Corvette being built to commemorate it's being selected as the Indy pace car in limited quantity. He's told a deposit would be required. P's wife went to the dealership and gave sales mgr check for a $500 down payment/deposit and was given receipt for that amount bearing name of manager and dealership. When P went to take delivery and complete purchase of vehicle, D argued that the car's rarity had driven the price up and they would not sell it to the P at the originally agreed to price. P sued for specific performance of the agreement.

* SOF excusing the writing requirement - part payment of goods part payment - quantity was in ? can't buy part of a car writing evidenced contract for sale of goods, signed by party to be charged - quantity term could only be one car so writing requirement met...

CH 3 p. 188 Phillipe v. Shappell Industries - 1987 P is real estate broker allegedly hired via oral agreement by D to help purchase property . Those negotiations failed, followed by direct negotiations with owner and ultimate purchase without aid of P. P seeks commission. Courts found in P's favor awarding him a fee. D appealed citing SOF for employing real estate broker for commission. P now appeals to Supreme Court arguing equitable estoppel as defense to SOF citing time invested.

* SOF for broker commission vs Estoppel defense Brokers must be licensed and understand the laws. P should have known writing is required for commission agreements and cannot therefore claim Estoppel due to this specialized knowledge.

CH 3 p. 151 Langman v. Alumni Assoc of U of VA - 1994 Langman Intended to gift property. Deed states subject to lien for $600k & grantee does hereby assume payment of such obligation and agrees to hold the grantors harmless from further liability on such obligation. Almuni Assoc did not sign deed. . For a while P maintains property and payments, then is unable to, property goes into chapter 11, Langman looks to Assoc to make payments, they disclaim responsibility. Langman pays, under reservation of rights and files suit

* SOF surety is w/in requires writing School argues did not sign deed, not responsible for debt under surety clause of SOF. Court clarifies debt was transferred to them by accepting gift. School not acting as surety for established lein, they became grantee because of benefit of the property. Surety receives no direct benefit. Appeals court clarifies that a grantee who assumes mortgage is not a surety. They are promising to pay the bank the debt, not pay the grantor's debt, they are assuming the debt.

CH 3 p. 205 St. Ansgar Mills, Inc. v. Streit - 2000 SC, IA P seller of grains & corn. D owned hog farm purchased grains from P. P and D had a system set up for years where D would call in an order & P's secretary would send written memorandum to be signed by D. Often D failed to sign memorandum. Once a month D would go into P's biz to pay balances. July 1, 1996 D placed phone order for corn to be delivered that December and following May but did not stop by in July rather Aug 10th was next visit where written confirmation was delivered to him. When P went to deliver the grain in December, D rejected the grains. Price of grain had fallen significantly b/t order and delivery. D claims no signed writing against party to be charged as req by SOF for sale of goods over $500 asserting he is not a merchant and notice of confirmation not received w/in reasonable time.

* SOF writing req sale of goods over $500 common law vs. between merchants and 'reasonable time' requirement between merchants of written confirmation 1. D claims he is not a merchant ~ writing must be signed by party to be charged - this was presented as a jury question Bewteen merchants, written confirmation of oral agreement only needs to be signed by sender... 2. Reasonable time - subject to nature, purpose and circumstances UCC to permit expansion of commercial practices through custom and practice of the parties. parties developed a practice of delayed delivery of confirmation long-time amicable business relationship engaged in many similar transactions without incident no reason to be concerned by delay of D to come in to office to sign sent to jury to make call on reasonableness of delay

CH 3 p. 177 JSO Associates, Inc. v. Price - 2008 Parties exchanged numerous emails involving an issue over a finder's fee. Content having met requirements of S.O.F, specific email in question was unsigned except for email address in header. SOF required subscribed authentication

* SOF writing required to be subscribed SOF pre-dated technology - email signature found to be sufficient

CH 3 p. 164 Crabtree v. Elizabeth Arden Sales Corp. - 1953 P leaving reliable employment 4 new field & seeking job security during learning curve, requests 3 yrs @ $25k. C/O f/ Pres. Elizabeth Arden ~ 2 yrs w/ 2 salary and expenses increases. P's responds "interesting" Arden has secretary make memo detailing salary terms [2 years to make good]. 1st payroll change card designates 2 incremental dated salary increases, initialled by GM. 2nd increase doesn't happen. Comptroller signed another payroll change card to correct but Pres. Arden wouldn't sign.

* SOF writing requirement can be pieced together out of separate writings signed and unsigned can be read together so long as refer to same subject matter of no consequence that: 1. payroll cards were not prepared or signed with intention of evidencing contract 2. came into existence subsequent to its execution

CH 3 p. 200 Redke v. Silvertrust - 1971 Mitzi Lee Redke (P) daughter of Ann from previous marriage. Ann married Samuel Hayden @ time of marriage, she had property valued b/t $20k -40k. W/Sam's guidance, property increased to +$1,000,000.00. Ann was ailing, her son Warren recently died suddenly of heart attack. Ann wanted to ensure that Mitzi would be taken care of after her passing. Sam assured Ann no need to involve lawyers, he would leave his share of Ann's property to Mitzi and would see that she received all of Ann's property. After Ann passed, Sam remarried w/in a few months, he changed his will eliminating all provisions for Mitzi and leaving everything to his new wife and natural children.

* SOF writing requirement of will/trust - promise not to be performed in lifetime of promisor vs. Estoppel for unjust enrichment Ann had detrimental reliance on oral promise of Sam when he assured her no need to involve lawyers as she wished to make sure her property would go to her daughter. This resulted in unjust enrichment of Sam and his family heirs. Contract was prevented from being put into writing by fraud.

CH 3 . 168 Brewer v. Horst-Lacumund Co. - 1900 P grower/seller of hops. D interested in batch of hops from samples marked "13". D orally agreed w/P to purchase hops f/ grow 13. Telegrams exchanged. D inspected hops from P and w/o lawful or just cause, rejected & refused to receive hops from P.

* SOF writing requirement sale of goods over $500 and telegrams parol evidence used to connect telegrams and glean intention, subject matter of contract and they stated quantity term

CH 5 p. 282 Matter of Baby M. - p. 282 NJ SC Surrogacy contract For consideration of $10k Mary Beth Whitehead agrees to artificial insemination by another woman's husband, upon successful conception, carry, deliver and surrender to natural father & wife w/ intent thereafter natural mother will be forever separated f/child. Wife is to adopt; couple will be regarded as parents for all purposes. Adopting parent Mrs. Stern, not a party on the surrogacy contract. $ paid to Whitehead stated for sole purpose "Of giving a child to William Stern, its natural and biological father" not for adoption services. $ purported to be "compensation for services and expenses and in no way ... a fee for termination of parental rights or a payment in exchange for consent to surrender a child for adoption". The fee to Infertility Center $7,500 was stated for legal representation, advice, administrative work and other "services". Nevertheless courts stated it seemed clear that money was paid and accepted in connection with an adoption. Courts invalidated the surrogacy contract because it conflicts the law and public policy of New Jersey. "We find the payment of money to a "surrogate" mother illegal, perhaps criminal, and potentially degrading to women." granted custody to natural father and natural mother due to the best interests of the child. The adoption by the wife/stepparent and termination of surrogate mother's parental rights were both voided;

* Surrogacy Contracts conflicts with (1) laws prohibiting the use of money in connection with adoptions; (2) laws requiring proof of parental unfitness or abandonment before termination of parental rights is ordered or an adoption is granted; and (3) laws that make surrender of custody and consent to adoption revocable in private placements adoptions. 1. all parties concede - unlikely that surrogacy will survive without money. 2.. With surrogacy the "problem" is consisting of the purchase of a woman's procreative capacity, at the risk of her life, is caused by and originates with the offer of money. 3. highest bidders will presumably become the adoptive parents regardless of suitability 4. mother's consent to surrender the child is irrevocable, unless it's to an approved agency. In surrogacy consent occurs so early that no amount of advice would satisfy the potential mother's need, yet the consent is irrevocable. Found to be baby selling only mitigating factory is father is one of the buyers however if mother volunteers, is not illegal

CH 3 p. 159 Southwest Engineering Co., Inc. v. Martin Tractor Co. SW wants to submit bid for project @ Air Force Base. Calls Martin for generator & accessory equip. phone quote - $18,500 used in bid, bid accepted. Reps meet to discuss. Price raised to $21,500 agreed upon, cheaper model discussed - Martin writes prices/description of parts & accessories for both models, gives memorandum to SW airport. SW sends letter to accept, Martin replies 3 wks later withdrawing all verbal quotations due to restrictions placed on Caterpillar products, accessories, etc. SW pres and Martin reps meet in person and seem to come to agreement. Subsequent repeated attempts to contact Martin's reps and Mr. Martin himself are to no avail. SW secures generator from diff source at substantially greater cost and seeks damages. p. 175 memorandum contained name of Martin's rep Ken Hurt, Martin Tractor, Topeka, Caterpillar

* UCC 2-201 (1) writing requirement 1. evidences sale of goods 2. signed or authenticated by party to be charged 3. quantity term all 3 criteria met by memorandum - oral testimony by SW rep of Martin rep's stated intention of memorandum satisfied authentication requirement * UCC 2-201 (1) writing requirement authentication does not require subscribed or actual signature, printed name suffices

CH 3 p. 203 Harry Rubin & Sons, Inc. v. Con. P. Co. of Am. - 1959 SC, PA Rubin (P) alleged on 3 diff dates they entered into 3 separate oral agreements with the D all for goods in excess of $500. D failed to seliver a substantial portion of hoops and material per oral agreements. The letter written from P to D stated quantity ordered 30k hoops w/ description, size, & price of hoops. End of letter, "As per our phone conversation of today, it is our understanding that these (the second order for 60k hoops) will be produced upon completion of the present order of 30k hoops."

* UCC 2-201 Non objecting merchant rule Letter had been sent by P met requirements - written confirmation of oral contract sent within reasonable time - sufficient against sender - received - recipient has reason to know of contents - no written objection w/in 10 days

CH 5 p. 288 Tuckwiller v. Tuckwiller - 1967 MO SC Flora Metta Morrison owned 160 acre farm - 1 of 3 tracts of Hudson family farm. Her will of 1961 stated to converted to cash and give to Davidson College to est student loan fund. 1963, health rapidly declining due to parkinson's disease, asked her niece by marriage, Ruby, to quit job and take care of her f/t in exch for 1/2 the farm which Ruby reluctantly agreed to. Writing was created & signed by both parties w/ intention to become part of her will the apt w/atty. To ensure the writing made as official as possible, during the emergency she had ambulance workers sign as witnesses then asked Ruby to date it "so it will come after my will" from that point on her health became grave, she never made it to her attorney and soon passed away.

* Unconscionability Mrs. Morrison was appreciative of care & attn f/Ruby prior to agreement. Although past consideration is no consideration, prior services & past relation of parties may properly be considered in connection w/fairness of the contract & adequacy of consideration. Ruby gave up employment & undertook what was @ time of the contract an obligation of unknown & uncertain duration involving duties which, in the usual course of the disease, would have become increasingly onerous. Properly viewed f/the standpoint of the parties @ time of the agreement, contract deemed fair, not unconscionable, and supported by an adequate consideration

CH 5 p. 292 American Software, Inc. v. Ali - 1996 CA Appeal Ali employed by American Software to sell their operation program & had several large outstanding commissions when she elected to leave for another position w/competing firm. Employment contract stated she was barred f/collecting commissions f/ accounts payable when $ were received outside of 30 days f/vacating her position. She brings action to collect the commissions on grounds that provision in her contract is unconscionable.

* Unconscionably - substantive and procedural elements lacking both procedural - oppression, arising f/≠ bargaining pwr & the absence of real negotiation or meaningful choice & surprise resulting from hiding the disputed term >she had experience with contracts, made adjustments (negotiation) and had atty - comparable bargaining power >no unclear or hidden terms substantive - did not shock conscience >fair and balanced risk of loss - draw vs. paying commissions due > fairly reflective of prevailing practices in employing commissioned sales reps

CH 4. p. 238 Odorizzi v. Bloomfield Sch Dist - 1966 Calif Appeals P - school teacher for D was arrested for homosexual activity followed by questioning, booking and posting bail which kept him up for 40 hours straight. In this condition, unable to think clearly, he was visited at his apt by the superintendent and principal "trying to help and to be acting in his best interest", advised him to "resign immediately" and said "no time to consult an attorney". If he refused, he would be "suspended and dismissed from his position, the proceedings and his arrest would be publicized and impede him from future employment opportunities". He signed the resignation.

* Undue Influence persuasion which tends to be coercive in nature, and overcomes the will without convincing the judgment. the use of excessive pressure to persuade one vulnerable to such pressure applied by a dominant subject to a servient object

CH 2 p. 88 Corinthian Pharmaceutical Systems, Inc. v. Lederle Laboratories Lab makes drug DTP vaccine, price increase pending, Corinthian learns & places phone order gets computer generated tracking # expecting current price. Lab policy price effective upon shipment takes a few days following phone order to process. Ships partial at current lower price as accommodation and states as such with option to ship balance at new price or cancel order.

* acceptance by phone * Shipment of non conforming goods UCC 2-206 (1-b) If the seller seasonably notifies the buyer that the shipment of non-conforming goods is offered only as an accommodation to the buyer, it does not constitute acceptance.

CH 2 p. 82 Allied Steel and Converyors, Inc., v. Ford Motor Company 2 proposals Allied is to provide machinery and optional installation to Ford. Form 3618 supplements Ford's standard liability damage/injury clause making Allied responsible not only for its own employees but also Ford's in connection with Allied's work. 1st proposal 3618 is marked VOID. 2nd proposal (3618 attached not marked VOID) acceptance "should" be executed on acknowledgement copy (signed approval/signature) on form and returning to Allied which happened after work began.

* acceptance effective upon commencement of performance * should vs. must if they said "must" be executed instead of "should" would have been covered offeror merely suggests a permitted method of acceptance, other methods of acceptance are not precluded

CH 2 p. 86 Carlill v. Carbolic Smoke Ball Company product advertises flu prevention and claims if you use it according to directions and get the flu, a reward of L100. refuses to pay reward

* unilateral contract and notice * reward contracts notice of performance and acceptance can be contemporaneous

CH 2 p. 118 Drennan v. Star Paving Drennan - GC uses Star Paving's (sub c) bid of $7,131.60 and gets contract. Goes to office next morning, before he can announce news, he's told of mistake in price and Star refuses to do the work unless paid $15k. Drennan gets work done with diff co for $10,948.60 and sues for diff in cost.

* § 87 - offertory estoppel * § 45 - unilateral offer + part of consideration = contract pending full consideration within stated or reasonable time