Contracts Cases

First Federal Savings and Loan Ass'n of Pittston v. Reggie

All claims of fraud must go to the jury. Parole evidence should be admitted at trial to attempt to prove fraud. When fraud is proven, fraud always renders a contract unenforceable, regardless of any express written intent to be bound or otherwise.

United States v. Stump Home Specialties Manufacturing

This is a diversity action, so the judge (Posner) must apply state law The black letter rule is that a contract cannot be modified without new consideration Posner does not like the common law doctrine of consideration and in this excerpt expresses why: THE LAW DOES NOT REQUIRE THAT CONSIDERATION BE ADEQUATE: a "mere peppercorn" is enough consideration But, in Posner's opinion, SLIGHT consideration is COERCION

Eiland v. Wolf

A medical student was dismissed and sued his school for breach of contract, arguing that the school's student handbook was a contract University of Texas Medical School Student Handbook Handbook contained a DISCLAIMER: "The provisions of this catalog [...] do not constitute an irrevocable contract" And anyways, the terms of the handbook give the University BROAD DISCRETION to dismiss a student for basically ANY REASON HOLDING: A basic requisite of contract is the intent to be legally bound and there is no evidence of any intent to be legally bound here.

Food Fair Stores v. Blumberg

Business decision to open an additional location is not a breach of good faith.

Jolles v. Wittenberg

Chooses to slightly modify the minority rule in Smith v. Wheeler: HOLDING: Recitals of nominal consideration are valid even if unpaid WHEN SEALED.

Morris v. Mack's Used Cars

Issue: Can a party disclaim liability under the Tennessee Consumer Protection Act by disclaiming liability in accordance with the Uniform Commercial Code? Holding: A party cannot disclaim liability under the Tennessee Consumer Protection Act by disclaiming liability in accordance with the Uniform Commercial Code. Facts:

Evenson v. Colorado Farm Bureau Mutual Insurance Co.

Different result from Ferrera on similar facts: here, the disclaimer was clear but UNCONSPICUOUS, and the company took ACTIONS inconsistent with the disclaimer: Company ACTIONS treat the employee manual disciplinary policy as MANDATORY → Here, there was an enforceable contract.

Wood v. Lucy, Lady Duff-Gordon

Issue: (1) Can a contract be enforced when there is no evidence of a promise, exchanged as consideration, in the explicit terms of the contract? (2) Whether a promise to use reasonable efforts may be implied from the entire circumstances of the contract. Holding: (1) A contract may be enforced when there is no evidence of a promise, exchanged as consideration, in the explicit terms of the contract. (2) A promise to use reasonable efforts may be implied from the entire circumstances of a contract. Facts: Wood (plaintiff) entered into a contract with Lucy, Lady Duff-Gordon (Lady Duff-Gordon) (defendant), whereby Lady Duff-Gordon agreed to grant Wood the exclusive right to place her endorsement on others' clothing designs. She also granted Wood the exclusive right to market her designs and sell them. In return, Lady Duff-Gordon would receive 50 percent of the profits from Wood's efforts with regard to her endorsements and designs. Wood agreed to keep records of all accounts and to take out all patents, copyrights, and trademarks necessary to protect Lady Duff-Gordon's designs. Lady Duff-Gordon later entered into a contract with another company whereby she placed her endorsement on others' clothing designs. Wood filed suit, claiming breach of contract. Lady Duff-Gordon filed a motion for demurrer, arguing that there was no enforceable contract for lack of consideration.

Eastern Air Lines, Inc. v. Gulf Oil Corp.

Issue: (1) Is a contract that measures the quantity of goods in terms of a buyer's good-faith requirements valid, as long as the demanded quantity is not unreasonably disproportionate to any stated estimate or comparable prior demands? (2) May a party avoid performance under a contract where pricing conditions in the market have made the contract less profitable? Holding: (1) Under Section 2-306 of the Uniform Commercial Code, a contract that measures the quantity of goods in terms of a buyer's good-faith requirements is valid, as long as the demanded quantity is not unreasonably disproportionate to any stated estimate or comparable prior demands. (2) Under Section 2-615 of the Uniform Commercial Code, a mere showing of unprofitability, without more, will not excuse performance of a contract. Facts: Gulf Oil Corp. (Gulf) (defendant) executed a contract with Eastern Airlines (Eastern) (plaintiff) under which it was to provide jet fuel to Eastern. The contract provided that Eastern would purchase from Gulf any jet fuel it needed in certain cities. In turn, Gulf would make the necessary arrangements to satisfy Eastern's reasonable, good-faith jet-fuel needs in those cities. The contract also provided that payment would be calculated according to a price escalation provision tied to postings in Platt's Oilgram Crude Oil Supplement. During the period of energy crises in 1973 and 1974, Gulf repudiated its contract with Eastern. In defending against an action for breach of contract, Gulf alleged that the contract was not binding because it lacked mutuality of obligation and that Eastern had breached the contract by changing its fuel requirements from city to city depending on the price of fuel, a practice known in the airline industry as "fuel freighting."

Michelle Marvin v. Lee Marvin

Issue: (1) Is an award of support intended to make whole a party who acted in reliance upon his or her understanding of the terms of a cohabitating romantic relationship an appropriate equitable remedy?(2) Does nonmarital cohabitation confer any rights, in equity or law, for economic remedies upon the termination of the relationship? Holding: (1) An award of support intended to make whole a party who acted in reliance upon his or her understanding of the terms of a cohabitating romantic relationship is not an appropriate equitable remedy.(2) Nonmarital cohabitation does not confer any rights, in equity or law, for economic remedies upon the termination of the relationship. Facts: Michelle Marvin (plaintiff) and Lee Marvin (defendant) met in June 1964 and began living together in October 1964. The parties lived together until mid-1970 when Lee ended the relationship and living arrangement. The parties had agreed to live together unmarried as long as they each enjoyed the other's company and affection. Upon the termination of their relationship and living arrangement, Michelle filed an action against Lee for property and support. Michelle alleged that the parties had an express agreement that she would give up her career in order to become a companion and homemaker for Lee and that Lee agreed to care for her financially for the rest of her life. Michelle also alleged that the parties had an implied agreement for Lee to support her and that Michelle had given up her career as a dancer, which she could not easily reenter years later, in reliance on that agreement. On a prior appeal, it was determined that Michelle could proceed against Lee on her claims of breach of an express contract and implied contract. Lee denied the existence of an express contract and denied that he had any understanding of an implied agreement.

CBS, Inc. v. Ziff-Davis Publishing Co.

Issue: Can a buyer maintain an action upon a breach of an express warranty when he cannot establish reliance upon the terms of the contract to which he now objects? Holding: A buyer is not required to establish reliance upon the terms of the contract to which he now objects and may maintain his action upon a breach of an express warranty regarding those terms. Facts: CBS, Inc. (CBS) (plaintiff) agreed to buy several businesses from Ziff-Davis Publishing Co. (Ziff-Davis) (defendant). Ziff-Davis supplied financial information to CBS, which included express warranties regarding the truthfulness of the information. CBS conducted its own investigation of the financial information and found that it was not truthful. CBS informed Ziff-Davis of its findings. Ziff-Davis responded and stated that CBS's findings were meritless. CBS acknowledged that there was a dispute between the parties, but stated that it decided to go forward with the deal due to the time, effort, and money that had been spent on the transaction. Upon closing the deal, the parties agreed that the decision to close did not constitute a waiver of any rights or defenses either party may have. CBS filed suit, alleging that Ziff-Davis breached warranties regarding the business's profitability. Ziff-Davis moved to dismiss alleging that CBS had not established reliance upon the warranties. The trial court granted the motion to dismiss. CBS appealed. The appeals court affirmed the trial court decision. CBS appealed to the Court of Appeals of New York.

Stilk v. Myrick

Issue: Can a contract for services be modified without the payment of additional consideration? Holding: A contract for services cannot be modified without the payment of additional consideration. Facts: Stilk (plaintiff) took a job as a sailor on a ship traveling from London through the Baltic Sea to St. Petersburg and back. He and the captain agreed that he would be paid five pounds a month. During the voyage, two sailors deserted. After the captain failed to find replacements, he entered an agreement with Stilk and the rest of the crew in which he promised that, if he could not hire two new sailors in Gottenburgh, Sweden, he would divide the wages of the missing crew members among the remaining ones. The captain failed to find new sailors at Gottenburgh, and Stilk and the other eight crew members brought the ship back to London. When they arrived home, the captain refused to pay the extra wages. Stilk sued in the High Court of Justice, King's Bench Division.

Ramirez v. Autosport

Issue: Can a party rescind a contract when the goods delivered do not conform precisely to the contract and the seller has not cured the defects within a reasonable time? Holding: A party may rescind a contract when the goods delivered do not conform precisely to the contract and the seller has not cured the defects within a reasonable time. Facts: The Ramirezes (plaintiffs) purchased a camper from Autosport (defendant). The delivery date was set and the Ramirezes arrived to get the camper on that date. However, they noticed several defects with the camper and did not accept it that day. The Ramirezes wanted the camper for summer vacation and contacted Autosport several times to inquire as to when it would be ready. Each time they called they were told the camper was not ready. The Ramirezes visited Autosport on the date on which they were told they could finally pick up the camper, but when they arrived to do so they were left to wait in Autosport's showroom for over an hour. The Ramirezes visited Autosport one more time, but the parties could not reach an agreement. The Ramirezes filed suit seeking rescission of the contract. Autosport counterclaimed. The trial court held in favor of the Ramirezes, awarding them their trade-in van. Autosport appealed. The Appellate Division affirmed. Autosport appealed to the Supreme Court of New Jersey.

B&B Equipment Co. v. Bowen

Issue: Can a party rescind a contract when the other party has materially breached the contract? Holding: A party may rescind a contract when the other party has materially breached the contract. Facts: Three partners, Braymen, Jaecques, and Hughes, owned B & B Equipment Co. (BB) (plaintiff). Braymen wanted to retire so Jaecques and Hughes sought out a partner to replace him. Jaecques and Hughes entered into an agreement with Bowen (defendant) to replace Braymen. However, Bowen did not have the necessary $15,000 to buy Braymen's 100 shares of stock. Therefore, BB bought the stock from Braymen on behalf of Bowen, for which Bowen gave BB $2,500 and a promissory note for $12,500. Bowen and the other partners agreed that he would be entitled to all dividends on the 100 shares, but that he would turn over the dividends until the note was paid. Bowen's duties under the agreement were to take over all corporate recordkeeping and bookkeeping and to do anything else that needed to be done. After time, Bowen's performance became unsatisfactory to the other partners. Jaecques and Hughes informed Bowen that he was discharged. Bowen informed BB's attorney that he would surrender all of his interest in the corporation for a particular sum. BB's attorney responded by stating the agreement had been rescinded and repaid the original $2,500 and all additional sums that Bowen had paid toward the stock purchase. Bowen responded and the parties came to an impasse.

Union Carbide Corp. v. Oscar Mayer Foods Corp.

Issue: Can a party to a contract between two merchants be required to honor terms that were not contained in the offer, but added with the acceptance of the offer, when those terms would materially alter the contract? Holding: Terms added to the contract through an acceptance that materially alters the contract will not become part of the contract if those terms would cause unreasonable surprise, unless consent to the terms can be inferred. Facts: Union Carbide Corp. (Union) (plaintiff) entered into a contract to sell Oscar Mayer Foods Corp. (Oscar Mayer) (defendant) sausage casings. The parties performed under the contract when Oscar Mayer would send in purchase orders and Union would send the casings to Oscar Mayer containing an invoice. The invoices provided an indemnity clause, stating that the buyer would pay the seller all government taxes the seller "may be required to pay." The price for the casings under the contract included two one-percent sales taxes. A competitor began undercutting Union's price, claiming that based upon its location its customers only had to pay one of the one-percent sales taxes. Union changed locations and then claimed that its customers, including Oscar Mayer, did not have to pay either of the one-percent sales taxes. Eight years later, the state tax authorities assessed Union $88,000 in back taxes on the sales to Oscar Mayer, and charged $55,000 in interest thereon. Union paid the tax authorities then filed suit against Oscar Mayer for indemnity on the tax liability.

Schneider v. Miller

Issue: Can a party to a contract rely upon an implied warranty when that warranty has been expressly disclaimed in the contract? Holding: A party to a contract cannot rely upon an implied warranty when that warranty has been expressly disclaimed in the contract. Facts: Schneider (plaintiff) visited the used car lot owned by Miller (defendant). Schneider test drove a car and, upon returning to the lot, asked Miller about a squeaking sound. Miller told Schneider that the brakes needed to be replaced, the trunk would need to be repaired, and that the engine would need to be rebuilt. The parties negotiated and settled on a price. Schneider signed a bill of sale for the car acknowledging that the car was sold "as is," with no warranty. Schneider took the car to a repair shop to have the brakes and trunk repaired. It was discovered that the frame was rusted and Schneider deemed the car not safe to drive. Schneider attempted to return the car for the full purchase price, but Miller refused. Schneider filed suit for breach of warranty and violation of Ohio's Consumer Protection Act (CPA), among other claims. After a bench trial, the trial court entered judgment in favor of Miller on the breach of warranty claim because the car was sold "as is," without any warranty. The trial court also denied Schneider's claim that Miller had engaged in unfair and deceptive practices under the CPA. Schneider appealed to the Court of Appeals of Ohio.

Alden v. Vernon Presley

Issue: Can a promisee enforce a promise when the reliance is not reasonable and detrimental? Holding: A promise is not enforceable under a theory of promissory estoppel unless one's reliance thereon is reasonable and detrimental. Facts: Alden's (plaintiff) daughter had dated and become engaged to Elvis Presley. Because of the relationship with her daughter, among other things, Presley had offered to pay for Alden's divorce from her husband, to purchase the husband's equity in the home and to pay off the remaining debt on the home. Based upon these promises, Alden filed for divorce. Presley died before he could pay off the debt on the home, but fulfilled all of his other promises. Presley's estate (defendant) refused to accept responsibility for the debt. As a result of this refusal, Alden settled with her husband by assuming the debt for the house and responsibility for the mortgage. However, Alden later refused to honor the agreement, which was never binding as the agreement was never submitted to the court. Alden filed suit. The trial court held for Presley's estate, holding that the promise to pay the debt was merely a gift that was not fulfilled. Alden appealed. The court of appeals affirmed the trial court holding there was no gift. However, the court of appeals reversed the trial court decision regarding promissory estoppel, holding that Mrs. Alden had undergone sufficient forbearance in reliance upon Presley's promise. Presley's estate appealed to the Supreme Court of Tennessee.

Hill v. Gateway 2000, Inc.

Issue: Can a purchaser be bound under the Uniform Commercial Code to an agreement that is included in the product packaging and provides the purchaser time to review the agreement and reject it by returning the product? Holding: Under the Uniform Commercial Code, a purchaser may be bound to terms included in product packaging if the purchaser has an opportunity to review the agreement and reject it by returning the product. Facts: Rich and Enza Hill (plaintiffs) ordered a computer from Gateway 2000, Inc. (Gateway) (defendant) by phone. Gateway shipped the computer and included in the box a written agreement which the Hills could reject by returning the computer in 30 days. The agreement also contained an arbitration clause. The Hills kept the computer for more than 30 days without returning it, and later filed suit in federal court alleging RICO violations against Gateway on behalf of themselves and a class of purchasers. Gateway sought to compel arbitration and the district court denied Gateway's request.

Schwedes v. Romain

Issue: Can a real estate contract be enforced when it has not been reduced to writing and the party seeking enforcement has not partially performed? Holding: A real estate contract cannot be enforced when it has not been reduced to writing and when the party seeking performance has not partially performed. Facts: Romain and Mudgett (defendants) sent a letter to the Schwedes offering to sell a piece of property for a specified price. The Schwedes (plaintiffs) communicated acceptance of the offer to Romain by telephone. Romain hired Hoover, an attorney, to close the transaction. Hoover ordered title insurance, prepared the deeds, and scheduled the closing date. At some point, Hoover contacted the Schwedes by telephone to inform them that the closing date would be postponed. During the call, the Schwedes offered to pay the full purchase price, but Hoover told them to wait until the closing. Before the closing could take place, Romain and Mudgett sold the property to a third party. The Schwedes filed suit against Romain, seeking specific performance or damages for breach of contract. Romain moved for summary judgment, which was granted.

Aller v. Aller

Issue: Can a sealed instrument be enforced without providing evidence of consideration? Holding: A sealed instrument may be enforced without evidence of consideration. Facts: When Mary Ann Aller died, her husband Peter Aller (defendant) provided notes to two of Mary Ann's daughters promising them money from the estate. Specifically, Peter's note to Angelina Aller (plaintiff) promised under seal to pay her $312.61, "for value received." When Peter gave Angelina and her sister the notes, he told them, "Now here, girls, is a nice present for you." Angelina filed suit against Peter seeking to enforce the note. Peter argued in defense that Angelina couldn't maintain her action because the note was a gift and lacked consideration. After a trial, a verdict was reached in Angelina's favor, and the trial court allowed a rule to show cause why a new trial should not be granted.

Seaver v. Ransom

Issue: Can a third-party beneficiary sue to enforce a contract made for that party's benefit? Holding: A third-party beneficiary can sue to enforce a contract made for that party's benefit. Facts: Judge Beman drafted his wife's will according to her instructions, giving $1000 to Ms. Beman's niece, Marion Seaver (plaintiff), $500 to Ms. Beman's sister, $100 each to another sister and her son, and the house to her husband for life, with the remainder to charity. When Judge Beman read the will to her, Ms. Beman decided to leave the house to Seaver, but she feared she would die before another will could be executed, so Judge Beman promised her he would bequeath to Seaver in his own will a sum equal to the value of the home. When Judge Beman died it was discovered that the will contained no such gift to Seaver. Seaver sued Matt Ransom (defendant), the executor of Beman's estate, for the value of the home. The trial court found for Seaver, and the appellate division affirmed. Ransom appealed to the New York Court of Appeals.

Harrell v. Sea Colony, Inc.

Issue: Can an agent be held personally liable on a contract entered into by a principal whose identity is known to the third party and does a party commit anticipatory breach by requesting to cancel the contract? Holding: An agent cannot be held personally liable on a contract entered into by a principal whose identity is known to the third party, and a party does not create anticipatory breach by requesting to cancel the contract. Facts: Harrell (plaintiff) entered into a contract with Sea Colony, Inc. (Sea Colony) (defendant) to buy a condominium unit that Sea Colony would construct. Harrell paid a deposit on the unit and provided Sea Colony with a promissory note for the balance. The contract provided that Sea Colony would choose the attorney's office at which closing would occur upon written notice to Harrell of substantial completion of the unit. In April, Sea Colony requested Harrell to choose which of two attorney's offices at which he preferred the closing to take place, but Harrell did not respond. On May 28, Harrell requested to assign or cancel the contract, but was told that he could not by an agent of Carl M. Freeman Associations, Inc. (Freeman) (defendant), an agent for Sea Colony. However, the agent sent Harrell a letter in July enclosing a cancellation request form to be completed by Harrell. Harrell completed and returned the form, but included a statement on the form that he was making the cancellation contingent upon his receipt of the deposit. In August, Sea Colony entered into an agreement to sell the unit to another party. Sea Colony later informed Harrell that they accepted his cancellation of the contract, but would keep his deposit. Sea Colony returned Harrell's promissory note for the balance of the purchase price & enclosed Harrell's completed cancellation request form, but contingenc

Boone v. Coe

Issue: Can damages be recovered for breach of a contract within the statute of frauds if the breaching party does not benefit from the breach? Holding: Damages cannot be recovered for breach of a contract within the statute of frauds if no benefit is conferred on the breaching party. Facts: J.F. Coe (Coe) (defendant) entered into a verbal contract with W.H. Boone and J.T. Coe (Boone) (plaintiffs). Under the contract, Coe would lease his farm to Boone for a period of one year, starting whenever they arrived at the farm. Coe said that he would have a house ready for Boone to live in and would furnish supplies for them to build a barn. In exchange, Boone was to cultivate certain portions of the farm for the year. When Boone arrived at the farm, the house was not ready to be inhabited and supplies for the barn were not there. Boone brought suit, seeking damages for the cost and time it took to travel from their former home in Kentucky to the farm in Texas, as well as the cost of giving up their home and business in Kentucky. The trial court found in favor of Coe because the oral agreement fell within the statute of frauds and was unenforceable. Boone appealed.

New York Central Iron Works Co. v. United States Radiator Co.

Issue: Can definite terms be implied in a contract when it does not expressly contain definite terms. Holding: Definite terms will not be implied when a contract does not expressly contain them, but each party to a contract is required to perform under the contract in good faith and reasonably. Facts: United States Radiator Co. (Radiator) (defendant) entered into an executory contract whereby it agreed to supply New York Central Iron Works Co. (Iron Works) (plaintiff) with all of its radiator needs for the year for a specified price. Radiator supplied the radiator needs for the year until it had delivered 48,000 feet of radiation. This was the most Iron Works had required in the past, but Iron Works continued to send in orders. Radiator refused to fill the additional orders, which would have put the yearly total at over 100,000 feet of radiation. Iron Works filed suit for damages for breach of the contract.

Sisters of St. Joseph of Peace, Health, and Hospital Services v. Russell

Issue: Can one who is not a party to a contract, a third party, bring suit under the contract when the promisor to the contract intends to satisfy a duty of the promisee owed to that third party? Holding: One who is not a party to the contract, a third party, may bring suit under the contract when the promisor intended to satisfy a duty the promisee owed the third party. Facts: Russell (defendant) was injured while at work. Russell was unsure who his employer was at the time of his injury and, therefore, filed four separate workers' compensation claims. A workers' compensation referee determined that one of the employers, insured by Aetna Casualty & Surety Company (Aetna), was the employer for workers' compensation purposes. Russell and Aetna sought review of that decision. In the meantime, the four possible employers and their insurers, including Aetna, entered into a Disputed Claim Settlement (DCS) agreement with Russell, which was approved by the Workers' Compensation Board (Board). Sisters of St. Joseph of Peace, Health, and Hospital Services (St. Joseph) (plaintiff) provided medical care for Russell's injuries. St. Joseph filed suit against Russell and Aetna for the medical expenses. St. Joseph claimed, among other things, that it was a third-party beneficiary to the DCS agreement. At trial, among other things, Russell testified that St. Joseph's treatment saved his life. The jury returned a verdict for St. Joseph's on its claim against Aetna. Aetna appealed. The court of appeals reversed. St. Joseph appealed to the Supreme Court of Oregon.

Thompson v. Libbey

Issue: Can parol evidence be introduced to establish terms of a written contract that is intended to constitute the entire agreement or to prove that the written contract is not intended to constitute the entire agreement? Holding: When the written agreement is intended to be the entire agreement, parol evidence cannot be introduced to establish terms of the agreement and parol evidence cannot be introduced to establish whether or not the contract is intended to be the entire agreement. Facts: Thompson (plaintiff) agreed to sell Libby (defendant) logs that he owned. The agreement was thereafter memorialized by a written contract. The written contract did not provide a warranty, including a warranty regarding the quality of the logs. Thompson filed suit and the matter went to trial. The trial court permitted Libby to introduce testimony for the purpose of proving a verbal warranty.

Hobbs v. Massasoit Whip Co.

Issue: Can silence be taken as acceptance of an offer if the parties have a prior history of similar dealing that would indicate that the party would decline the offer if it did not want to accept? Holding: Conduct which looks like acceptance is acceptance. Facts: The plaintiff shipped eel skins to the defendant and the defendant kept the skins for several months without notifying the plaintiff of whether the defendant had accepted and agreed to pay for the shipment. The skins were eventually destroyed because of this delay. Previously, the plaintiff had shipped skins in the same manner to the defendant about four or five times, and the defendant accepted and paid for the shipment each time.

Newman & Snell's State Bank v. Hunter

Issue: Can something that does not have any value constitute consideration? Holding: Something that does not have value cannot constitute consideration. Facts: Hunter (defendant) is the widow of Mr. Hunter, who owed money to Newman & Snell's State Bank (the Bank) (plaintiff) at the time of his death. This debt was evidenced by a note, which was secured by shares of stock in Mr. Hunter's company, Hunter Company, which was insolvent. Mr. Hunter's assets were insufficient to pay this debt, his widow's allowance, or even his funeral expenses. Hunter gave the Bank a note promising to pay for her husband's debt, for which the Bank surrendered the husband's note. The Bank sued Hunter to collect on the note.

James Baird Co. v. Gimbel Bros., Inc.

Issue: Can the doctrine of promissory estoppel be asserted to compel performance if the promisee has not provided consideration to the promisor? Holding: The doctrine of promissory estoppel cannot be asserted to compel performance if the promisee has not provided consideration to the promisor. Facts: Gimbel Bros, Inc. (defendant) submitted a bid to James Baird Co. (Baird) (plaintiff) and other contractors, offering to supply the linoleum for a construction contract for a quoted price. Gimbel's offer stated, among other things, that Gimbel was making the offer at the stated price "for reasonable . . . prompt acceptance after the general contract has been awarded." In calculating its offer, Gimbel had underestimated by half the amount of linoleum required for the project. Upon realizing its mistake, Gimbel sent a notice to all of the contractors that Gimbel was withdrawing the old offer and would substitute a new offer to supply the linoleum for twice the price of the original offer. Before receiving Gimbel's notice of withdrawal, Baird submitted its bid for the construction contract using Gimbel's original quoted price. Baird was awarded the construction contract. Baird formally accepted Gimbel's original offer two days after Gimbel's withdrawal of the offer. Gimbel refused to recognize the contract. Baird filed suit for breach of contract.

Empro Manufacturing Co. v. Ball-Co Manufacturing, Inc.

Issue: Is a letter of intent binding if the agreement in the letter is subject to various conditions including a more formal and definitive agreement? Holding: No. Both parties' objective manifestations of intent to be bound must be shown for a binding contract to be formed. Facts: Empro Manufacturing (Empro) (plaintiff) drafted a letter of intent to buy Ball-Co Manufacturing's (Ball-Co) (defendant) assets and plant. The letter of intent provided general terms and conditions and stated that the agreement in the letter was subject to a definitive Asset Purchase Agreement and various conditions, including the approval of Empro's board of directors and shareholders. During subsequent negotiations, it became clear that Ball-Co wanted to retain a security interest in the land under the plant, but Empro refused. Ball-Co then started negotiating with a different company and when Empro found out, it brought suit and filed for a temporary restraining order.

Goldberg 168-05 Corp. v. Levy

Issue: Do all contracts include an implied covenant of good faith and fair dealing? Holding: All contracts include an implied covenant of good faith and fair dealing. Facts: Goldberg 168-05 Corp. (Goldberg) (plaintiff) leased property to Joseph Levy (defendant) for commercial purposes. The lease provided that, in addition to a set rental fee, Levy would pay a percentage of the profits from the clothing store that would occupy the space. The lease also provided that, in the event that the gross sales from the clothing store did not meet a certain threshold, Levy could cancel the lease. Levy provided notice that he intended to terminate the lease in accordance with the agreement due to poor sales. Levy then left the premises and refused to pay further rental fees. Goldberg brought a breach-of-contract suit against Levy, claiming that Levy negligently or willfully mismanaged the store, rendering it unprofitable, and intentionally diverted sales to another of his nearby stores to bring sales below the threshold for lease cancellation. Levy moved to dismiss the complaint for failure to state a claim on which relief could be granted.

Pelc v. Simmons

Issue: Do expressions like "as is" or "with faults" exclude all implied warranties? Holding: Unless the circumstances indicate otherwise, all implied warranties are excluded by expressions like "as is," "with faults," or other language which in common understanding calls the buyer's attention to the exclusion of warranties and makes plain that there is no implied warranty. Facts: Mark Simmons (defendant) sold a used car to Aubree Pelc (plaintiff). The car had a sign on it that stated "sold as is." During negotiations, Simmons stated that he had rebuilt the engine and that the only thing wrong with the car was the air conditioning. After buying the car, Pelc had numerous problems with it and unsuccessfully attempted to get her money back from Simmons. Pelc brought suit. The circuit court ruled in favor of Pelc. Simmons appealed.

Sally Beauty Co. v. Nexxus Products Co.

Issue: Does Section 2-210 of the Uniform Commercial Code permit delegation of an obligor's performance under an exclusive-distribution agreement to a wholly-owned subsidiary of a direct competitor without the obligee's consent? Holding: Under Section 2-210 of the Uniform Commercial Code, an obligor's performance under an exclusive-distribution agreement may not be delegated to the wholly-owned subsidiary of a direct competitor unless the obligee consents. Facts: In 1979, Best Barber & Beauty Supply Company (Best) entered into a contract with Nexxus Products Co. (Nexxus) (defendant), a California producer of hair-care products. The contract provided that Best would promote and be the exclusive distributor of Nexxus products in Texas. The letter agreement between Best and Nexxus was executed following several days of meetings between Nexxus's vice president and Best's president. In 1981, Sally Beauty Company, Inc. (Sally) (plaintiff) purchased Best and merged the businesses. As a result of the merger, Sally received assignment, as successor-in-interest, of all of Best's contracts, including the contract with Nexxus. Following the acquisition and merger, Nexxus renounced its agreement with Best because Sally was a wholly owned subsidiary of Alberto-Culver, another hair-care-product producer that was a direct competitor of Nexxus. Sally sued Nexxus alleging, among other things, breach of contract.

Oswald v. Allen

Issue: Does a contract exist between two parties if their understandings of the agreement differ? Holding: No contract exists between two parties if their understandings of the agreement differ. Facts: Dr. Oswald (plaintiff) was a coin collector from Switzerland who spoke practically no English. He was interested in buying Jane Allen's (defendant) collection of Swiss coins. Oswald traveled to the United States and the two parties met at a bank where the coins were stored in two different collections—the Swiss Coin Collection and the Rarity Coin Collection. Oswald was shown both collections but did not realize they were two separate collections. The price was negotiated through an interpreter. During negotiations, no one realized that there was an ambiguity with using the phrases "Swiss coins" and "Swiss Coin Collection." Oswald wrote a letter to Allen confirming the purchase of "all your Swiss coins" and arranging delivery. Allen wrote back regarding the delivery arrangements only. Allen later wrote that she had miscalculated the number of coins to be sold and permitted Oswald to re-examine them. Oswald sent a letter in response stating his understanding of the agreement and asked Allen to sign it as a formality only. Allen then informed Oswald that she would not sell the coins because her children did not want her to do so.

Ferrera v. A. C. Nielsen

Issue: Does a discharged employee have a claim for breach of contract under an employee handbook that contains a clear and conspicuous disclaimer of the employer's intent to enter into a contract limiting its right to discharge employees? Holding: An employee does not have a claim for breach of contract under an employee handbook that contains a clear and conspicuous disclaimer of the employer's intent to enter a contract limiting its right to discharge employees. Facts: Nielsen (defendant) suspended Ferrera (plaintiff) for falsifying a time card. Nielsen had an employee handbook that provided that it reserved the right to discharge employees when, in Nielsen's opinion, it was warranted. The handbook also contained a disclaimer stating that the handbook did not constitute a contract. The disclaimer was on the first page of the handbook and was headed by the word "important," which was written in capital letters. Ferrera signed an acknowledgement stating that she had received and read the handbook. Ferrera brought suit for wrongful discharge. Nielsen moved for summary judgment. The trial court entered summary judgment for Nielsen, holding that the handbook did not constitute a contract because it contained a disclaimer. Ferrera appealed to the Court of Appeals of Colorado.

Carlill v. Carbolic Smoke Ball Co.

Issue: Does a general advertisement of an award constitute an offer that is capable of being accepted and binding the offeror in a valid contract, provided at least contemporaneous notice and some consideration are present? Holding: A general advertisement of an award constitutes an offer that is capable of being accepted and binding the offeror in a valid contract, provided at least contemporaneous notice and some consideration are present. Facts: The owners of Carbolic Smoke Ball Co. (Carbolic) (defendants) manufactured the Carbolic Smoke Ball and advertised it as a preventative measure against influenza. Carbolic placed an advertisement in several London newspapers saying that one hundred pounds would be paid to any person who purchased a Carbolic Smoke Ball and still contracted influenza. The advertisement further stated that Carbolic had deposited one thousand pounds in a local bank to demonstrate its seriousness in the matter. Carlill (plaintiff) purchased a Carbolic Smoke Ball and later contracted influenza despite using the ball as directed by Carbolic's instructions.

Goodman v. Dicker

Issue: Does a misrepresentation that induces detrimental reliance by a plaintiff estop the defendant from denying that a contract exists? Holding: A misrepresentation that induces detrimental reliance by a plaintiff estops the defendant from denying that a contract exists. Facts: Goodman (defendant) was a distributor for Emerson Radio and Phonograph Corporation. With Goodman's encouragement, Dicker (plaintiff) applied for a dealer franchise to sell Emerson products. Goodman told Dicker that Dicker would be granted a franchise and would receive an initial order of thirty to forty radios. Dicker hired salesmen and started soliciting radio orders from customers. Dicker did not receive any radios. After some time, Goodman reported that Dicker would not be getting a radio franchise after all. Dicker sued Goodman for breach of contract. The trial court held that Dicker had not proven the existence of a contract. Nevertheless, Goodman's statements and behavior had caused Dicker to take action in reliance on Goodman's representations. Goodman was thus estopped from denying the existence of a contract. The court awarded Dicker $1500 in damages, which covered Dicker's $1150 in cash outlays and loss of $350 anticipated profits. Goodman appealed to the United States Court of Appeals for the District of Columbia Circuit.

Lane Enterprises, Inc. v. L. B. Forester Co.

Issue: Does a party commit anticipatory breach by failing to provide requested adequate assurances of performance? Holding: A party commits anticipatory breach of a contract by failing to provide requested adequate assurances of performance. Facts: L.B. Foster Co. (Foster) (defendant) was to manufacture and supply steel components for the construction of a bridge in Ohio. Foster entered into an agreement with Lane Enterprises, Inc. (Lane) (plaintiff) for Lane to clean and coat the bridge components for Foster in two separate orders. The agreement was confirmed by Foster's purchase order, which also specified that the coating must meet the standards of and gain approval from the applicable state department. After Lane completed its first coating process, the state inspector found contaminants under the coating but allowed shipment pending approval and re-application of the coating. Lane informed Foster of the contaminants and inquired whether Lane should begin on the second order or whether Foster would be hiring a different company for the second order. Lane then re-coated and delivered the parts, but the state inspector again found contaminants on the parts and informed Lane that the coating procedure did not meet the state's standards for approval. The state department rejected the parts but indicated that it would accept the parts if Lane performed field repairs.

Scott v. Crown

Issue: Does a party have a right to demand an assurance of performance under the contract when he has reasonable grounds to do so, but has not done so adequately? Holding: A party has a right to demand an assurance of performance under the contract when he has reasonable grounds to do so, but his request must be adequate. Facts: Crown Company (Crown) (defendant) entered into several contracts with Scott (Plaintiff) to purchase grain. The contracts provided that payment would be conditioned upon Scott's delivery of the total quantity of grain purchased. The first of these contracts was completed, with delivery and payment made with no problems. The parties entered into two subsequent contracts under which Scott refused to perform. Scott had suffered nonpayment on an unrelated contract. When Scott was addressing the nonpayment with his banker, the banker told Scott that Crown was not the "best grain trader." An agent for the Department of Agriculture had told Scott that there was a complaint against Crown for failing to pay to other farmers. When Crown sent trucks to load the grain, Scott refused. Scott told Crown's driver that he had some questions to settle with Crown. Scott tried contacting Crown by telephone several times, but was unsuccessful. Crown did contact Scott through letter, stating that it had not breached the contract, but that Scott had by failing to deliver the grain. Crown sent a second letter stating that he considered the contracts breached, but that he would still perform if Scott would deliver the grain. Scott sent a letter to Crown insisting that Crown provide an adequate assurance of performance by paying for the grain before delivery. Scott sent this letter to Crown two weeks after he had refused to load the grain. Crown cancelled the contracts. Scott filed suit, alleging breach of contra

Mutual Life Insurance Co. of New York v. Tailored Woman

Issue: Does a party to a contract break the covenant of good faith and fair dealing by exercising rights under the contract? Holding: A party to a contract does not break the covenant of good faith and fair dealing when exercising rights under the contract. Facts: Mutual Life Insurance Co. of New York (Mutual) (plaintiff) leased commercial space to Tailored Woman (defendant) under two leases. In accordance with the first lease, Tailored Woman occupied the basement and first through third floors of a building that Mutual owned. The lease provided that Tailored Woman would sell the same or similar merchandise that it had at its previous location, namely furs. The lease provided that Tailored Woman would pay a set rental fee and a percentage of profits from the business. The lease also provided that Tailored Woman would not divert sales from these floors. Tailored Woman then entered into a second lease with Mutual, whereby Mutual agreed to lease the fifth floor of the building to Tailored Woman. This second lease provided that Tailored Woman would pay a set rental fee, but did not require Tailored Woman to pay a percentage of profits. The second lease provided that Tailored Woman could sell women's merchandise on the fifth floor, without limitation as to the type of merchandise. The second lease provided that the parties agreed that it would not interfere with the first lease. Without notice to Mutual, Tailored Woman moved the portion of its business selling furs to the fifth floor of the building and refused to pay a percentage of profits from those sales. Mutual brought suit seeking the percentage of sales that were due to it under the first lease.

Allegheny College v. National Chautauqua County Bank of Jamestown

Issue: Does a party's acceptance of a portion of a pledged donation constitute sufficient consideration to enforce the promise to pay the remainder of the donation? Holding: A party's acceptance of a portion of a pledged donation constitutes sufficient consideration to enforce the promise to pay the remainder of the donation. Facts: In 1921, Mary Yates Johnston promised to have $5,000 out of her estate given to Allegheny College (College) (plaintiff) 30 days after her death in order to establish the Mary Yates Johnston Memorial Fund, a scholarship in her memory. She wrote a letter instructing the executor of her estate to do so. In 1923, she gave $1,000 to the College to be set aside for that purpose. However, in 1924, she informed the College that she was revoking her promise. Then, 30 days after Johnston's death, the College sued the executor of her will, National Chautauqua County Bank (Bank) (defendant), to recover the remaining $4,000. The trial court found in favor of the Bank, and the appellate court affirmed. The College appealed.

Hamer v. Sidway

Issue: Does a party's agreement to incur a detriment constitute adequate consideration? Holding: A party's agreement to incur a detriment constitutes adequate consideration. Facts: Louisa Hamer (plaintiff) received several assignments of $5,000 and interest from William E. Story II (Story). Story made the assignments based on money he was to receive from his uncle, William E. Story, Sr. Several years previously, Story's uncle promised him that if he would abstain from "drinking, using tobaccos, swearing, and playing cards or billiards for money" until he reached 21 years of age, he would be paid $5,000. Story agreed and fully honored the promise by abstaining from these things until after his twenty-first birthday. At that time, Story wrote to his uncle and informed him that he had upheld his promise. His uncle wrote back and said that he was entitled to the $5,000 and that the money was being held for him at a bank. However, Story's uncle said that it would not be paid to him until he felt Story was capable of "taking care of it." Story agreed, and the money remained at the bank. Story's uncle died without paying him the money, and this claim was brought by Hamer to Franklin Sidway (defendant), the executor of Story's uncle's estate. The executor rejected the claim, and Hamer brought suit in New York state court seeking to enforce the promise to Story.

Dyer v. National By-Products, Inc.

Issue: Does a party's forbearance from filing an unmeritorious legal claim that the party in good faith believes to be valid constitute consideration for a settlement? Holding: Forbearance from filing an unmeritorious legal claim that the party in good faith believes is valid constitutes sufficient consideration for a settlement agreement. Facts: Dale Dyer (plaintiff) worked for National By-Products Inc. (National) (defendant) as a foreman. In 1981, Dyer lost a foot in a workplace accident. Dyer was given a leave of absence with pay until he returned to work in August 1982. Dyer was laid off the following March. Dyer sued for breach of an oral contract, claiming that National had promised him lifetime employment in exchange for his agreement not to litigate his claim for personal injury. National denied the agreement. After discovery, National moved for summary judgment. The trial court granted the motion, holding that (1) Dyer made no reciprocal promise to work for National for life and (2) Dyer did not forbear from bringing a legitimate claim because workers' compensation was his sole remedy for the injury. Dyer appealed to the Iowa Supreme Court, arguing that his forbearance from bringing what he reasonably and in good faith believed to be a valid claim was sufficient consideration for National's promise of lifetime employment.

Royal Business Machines, Inc. v. Lorraine Corp.

Issue: Does a seller create an express warranty by making an affirmation of fact or promise that relates to the goods and becomes part of the basis of the bargain between the seller and the buyer? Holding: A seller creates an express warranty by making an affirmation of fact or promise that relates to the goods and becomes part of the basis of the bargain between the seller and the buyer. Facts: Royal Business Machines, Inc. (Royal) (defendant) sold Lorraine Corp. (Lorraine) (plaintiff) numerous copying machines over a span of 18 months. Lorraine filed suit for breach of warranties and fraud. Lorraine alleged that Royal breached the following express warranties: (1) that the machines and component parts were of high quality, (2) that repair frequency would be very low, (3) that replacement parts would be readily available, (4) that the cost of maintenance and supplies would remain low, (5) that the machines had been tested extensively and were ready for the market, (6) that the machines would bear out substantial profits, (7) that the machines were safe and could not cause fires, and (8) that necessary service calls would remain low. After a bench trial, the court awarded compensatory and punitive damages to Lorraine. Royal appealed to the United States Court of Appeals for the Seventh Circuit.

Brian Construction and Development Co. v. Brighenti

Issue: Does additional compensation constitute sufficient consideration to support a subsequent agreement made by parties to a contract that changes the work to be done under the contract? Holding: When an unforeseen, burdensome condition arises during the performance of a contract, the promise of additional compensation in return for the promise to do the additional work is a separate, valid agreement. Facts: The plaintiff was assigned a contract to construct a post office building. The plaintiff then entered into a subcontract with the defendant to perform all excavation necessary to complete the job. The defendant started work, but encountered considerable rubble where he was excavating and had to excavate much more than was contemplated in the contract. The rubble was not known or anticipated by the plaintiff or the defendant at the time they made the contract, and the labor and cost to remove it was not included in the contract. The parties orally agreed that the defendant would get rid of the discovered rubble in exchange for an increased contract price. However, eventually the defendant stopped work and refused to continue. The plaintiff brought suit. The trial court found in favor of the defendant. The plaintiff appealed.

Ypsilanti v. General Motors (Mich. Appeals Ct.)

Issue: Does one engaging in exaggeration when making assurances make a promise that is enforceable in an action for promissory estoppel? Holding: Statements made by one engaging in exaggeration when making assurances does not make a promise that is enforceable in an action for promissory estoppel. Facts: General Motors (GM) (defendant) ran a manufacturing plant in the town of Ypsilanti (plaintiff), called the Willow Run plant. GM sought a tax abatement from Ypsilanti in order to make improvements at the plant. Ypsilanti granted two tax abatements under Michigan statutes providing for them. At a public meeting regarding the abatements, GM's plant manager stated that the completed project would allow Willow Run to continue production and that continuous employment could be maintained. GM later decided to move its manufacturing from the Willow Run plant to another location outside of Ypsilanti. Ypsilanti brought suit alleging breach of contract, promissory estoppel, unjust enrichment, and misrepresentation. The trial held that no contract was formed, but held in Ypsilanti's favor under the theory of promissory estoppel. GM appealed to the Court of Appeals of Michigan.

Harris v. Watson

Issue: For policy reasons, will a promise to pay additional money during times of danger constitute adequate consideration to support a contract and be upheld? Holding: For policy reasons, a promise to pay additional money during times of danger does not constitute adequate consideration to support a contract and will not be upheld. Facts: Harris (plaintiff) was a seaman on Watson's (defendant) ship. During the voyage, when the ship was in danger, Watson promised to pay Harris an extra five guineas (a type of British coin). Watson failed to pay and Harris sued.

Jacob & Youngs v. Kent

Issue: If a party substantially performs its obligations under a contract, will that party be forced to bear the replacement cost needed to fully comply with the agreement? Holding: If a party substantially performs its obligations under a contract, that party will not be forced to bear the replacement cost needed to fully comply with the agreement but instead will owe the non-breaching party the difference in value between full performance and the performance received. Facts: Jacob & Youngs (Jacob) (plaintiff) is a general contractor that built a country residence for Kent (defendant). The contract stated that Jacob was to be paid $77,000, and one specification in the contract was that all pipes used be manufactured in Reading, Pennsylvania. Jacob completed work in June 1914. In March 1915, Kent noticed that some of the pipe was manufactured in other places besides Reading. Kent demanded the pipe be replaced. Replacement of the pipe, however, would require substantial additional work and expense by Jacob. Additionally, the existing pipe was of the same quality as Reading pipe and was supplied based on an innocent mistake by Jacob caused by the inattention of its subcontractor. Jacob left the existing pipe untouched and asked for a certificate from Kent that the final payment of $3,483.46 was due. Kent refused to supply the certificate, and Jacob brought suit to recover damages. At trial, Jacob was not allowed to introduce evidence that the pipe installed was of the same quality as Reading pipe, and the jury entered a verdict for Kent. The appellate court reversed and granted a new trial.

Dahl v. Hem Pharmaceuticals

Issue: If one party makes a promise in exchange for another party's act or performance, and the other party completes that act or performance, is there a binding contract between the parties? Holding: If one party makes a promise in exchange for another party's act or performance, and the other party completes that act or performance, there is a binding contract between the parties. Facts: Dahl and several others (the patients) (plaintiffs) suffered from chronic fatigue syndrome. The patients participated in a double-blind experiment by HEM Pharmaceuticals Corp. (HEM) (defendant) to test Ampligen, a new medication. HEM promised to provide a years' supply of Ampligen to any patient who completed the testing. The patients were free to withdraw from the experiment at any time. Over the course of several months, the patients were given either periodic injections of Ampligen or a saline solution. At the end of the testing, the Federal Drug Administration determined that Ampligen was not safe for use, but that testing could continue. HEM refused to provide the years' supply of Ampligen to the patients who had completed the trials. The patients brought an action against HEM to compel it to provide the medication.

Step-Saver Data Systems, Inc. v. Wyse Technology

Issue: If one party to an agreement unilaterally incorporates materially different additional terms into the parties' agreement over several transactions, does this bind the other party to those terms? Holding: Under the Uniform Commercial Code, additional terms that materially alter an agreement must be assented to by both parties in order to be binding, and a unilateral course of conduct is not sufficient to establish both parties' assent to the additional terms. Facts: Between August 1986 and March 1987, Step-Saver Data Systems, Inc. (Step-Saver) (plaintiff) purchased software from The Software Link, Inc. (TSL) (defendant) for incorporation into a system Step-Saver sold to law and medical offices. (Wyse Technology, a co-defendant, was successful at the trial court and on appeal.) While the documents exchanged during the order process had identical terms, a licensing agreement printed on the top of each software box (box-top license) contained a disclaimer of warranties and stated that opening the box constituted acceptance of the licensing agreement terms. In March 1987, Step-Saver stopped selling its system due to problems with TSL's software and later sued TSL for breach of warranties and indemnification. TSL argued that the disclaimer of warranties in the box-top license was binding, and Step-Saver argued that the box-top license materially altered the parties' agreement.

Alaska Packers' Ass'n v. Domenico

Issue: If parties enter a new agreement under which one party agrees to do no more than he was already obligated to do under an existing contract, is the new agreement enforceable? Holding: If parties enter a new agreement under which one party agrees to do no more than he was already obligated to do under an existing contract, the new agreement is unenforceable for lack of consideration. Facts: In March 1900, Alaska Packers' Association (APA) (defendants) contracted with a group of sailors (plaintiffs) to sail between San Francisco and Alaska, and en route perform regular duties as well as other duties requested by the captain or agents of APA. APA agreed to pay each sailor $50 for the season and two cents per salmon they assisted in catching. The following month, APA entered similar contracts with another group of sailors (plaintiffs), who would perform similar work and receive $60 for the season and two cents per salmon. After arriving in Alaska, the sailors stopped working and demanded $100 for the season in order to resume their work. Being unable to hire replacement sailors, an APA representative in Alaska signed a new contract agreeing to the higher pay. However, the APA representative told the sailors that he did not have the authority to alter their original contracts with APA. When the sailors returned to San Francisco, APA paid the sailors only their original contract price of $50 or $60. The sailors sued APA in admiralty to recover the full amount payable under the new agreement, alleging they had demanded the new contract price because APA had provided them faulty fishing nets. This fact was heavily contested, and the trial court determined that APA had not provided faulty fishing nets to the sailors.

Ypsilanti v. General Motors

Issue: Is a promise enforceable if a promisor induces one to take action that is definite and substantial and the only way to avoid injustice is to enforce the promise? Holding: A promise is enforceable if it induces action of a definite and substantial nature and the only way to avoid injustice is to enforce the promise. Facts: General Motors (GM) (defendant) ran a manufacturing plant in the town of Ypsilanti (plaintiff), called the Willow Run plant. GM sought a tax abatement from Ypsilanti in order to make improvements at the plant. Ypsilanti granted two tax abatements under Michigan statutes providing for them. At a public meeting regarding the abatements, GM's plant manager stated that the completed project would allow Willow Run to continue production and that continuous employment could be maintained. GM later decided to move its manufacturing from the Willow Run plant to another location outside of Ypsilanti. Ypsilanti brought suit alleging breach of contract, promissory estoppel, unjust enrichment, and misrepresentation.

Frigaliment Importing Co. v. B.N.S. International Sales Corp.

Issue: If the parties to a contract subjectively, but in good faith, construe an ambiguous term differently, may courts look to external factors to determine the proper interpretation of the term? Holding: If the parties to a contract subjectively, but in good faith, construe an ambiguous term differently, courts may look to external factors to determine the proper interpretation of the term. Facts: Frigaliment Importing Co. (Frigaliment) (plaintiff), a Swiss company, offered to buy chicken for $0.33/lb. from B.N.S. International Sales Corp. (BNS) (defendant), an American corporation. The negotiations were primarily in German, but Frigaliment used the English word "chicken" to mean young chickens, instead of the German word "huhn," which includes stewing chickens (fowl). Frigaliment intended to purchase only young chickens suitable for broiling and frying (broilers). BNS, which was new to the trade, interpreted Frigaliment's order for "chickens" as encompassing all types of chicken. The market rate for fowl at the time was $0.30/lb., while broilers were between $0.35 and $0.37/lb. Both the cablegrams exchanged by the parties and the contracts stated that the chicken was to be "Grade A, Government Inspected," and the Department of Agriculture's regulations were incorporated by reference. BNS shipped primarily fowl to Switzerland. After the first shipment, Frigaliment complained but allowed BNS to make the second shipment. After Frigaliment found fowl in the second shipment, Frigaliment sued BNS for breach of warranty, claiming that BNS delivered goods that did not meet the description in the contract.

Nebraska Seed Co. v. Harsh

Issue: Is a contract created when someone accepts the terms of an invitation to negotiate a contract? Holding: No. Acceptance of a proposal to begin bargaining cannot create a contract, even if the proposal was sent to specific persons, rather than to the public generally. Facts: Harsh (defendant), a farmer, sent a letter to Nebraska Seed Co. (Nebraska) (plaintiff) stating that he had "about 1800 bu. or thereabouts" of seed to sell and the price he would like to sell it for. Nebraska replied, stating that it would accept the offer of 1800 bu. of seed for the price quoted by Harsh. Nebraska also asked Harsh how soon he could load the seed. Nebraska sent a second letter the same day confirming the first letter and instructing Harsh to ship the seed right away. Nebraska paid for the seed, but Harsh refused to deliver. Harsh denied that he had entered into a contract with Nebraska.

Greiner v. Greiner

Issue: Is a contract formed when one merely promises to convey a specific tract of land, inducing substantial action or forbearance by another? Holding: A contract is formed when one promises to convey a specific tract of land and another is induced by the promise to substantially act or forbear. Facts: Frank Greiner (defendant) was disinherited by his father. Maggie Greiner (plaintiff), Frank's mother, promised him that, if he would move, she would give him property, though she did not specify what or how much property. Frank moved and began to occupy an 80-acre tract of land, though a deed was never executed. Maggie did say that she was going to give Frank a deed. Maggie filed an action against Frank to recover possession of the 80-acre tract. The trial court entered judgment for Frank and ordered Maggie to execute a deed conveying the land to Frank. Maggie appealed.

Johnson v. Otterbein University

Issue: Is a contract promising to pay a sum of money enforceable because it requires the promisee to use the money in a particular way? Holding: A contract promising to pay a sum of money to the promisee and instructing the promisee to use the money in a particular way is unenforceable for lack of consideration. Facts: Johnson (plaintiff) provided to Otterbein University (Otterbein) (defendant) a note promising to pay a sum of money for the sole purpose of allowing Otterbein to pay its debt. Johnson did not pay the note. Otterbein brought suit in the court of common pleas. Judgment was entered for Otterbein. Johnson moved for a new trial, but was overruled. Johnson appealed to the district court, which affirmed the court of common pleas. Johnson appealed.

Riley v. Capital Airlines, Inc.

Issue: Is a contract that has not been reduced to writing enforceable when the contract, by its terms, cannot be performed within one year? Holding: The statute of frauds will void a contract that has not been reduced to writing if it cannot, by its terms, be performed within one year. Facts: L. G. Riley (plaintiff) agreed by oral contract to supply water methanol to Capital Airlines, Inc. (Capital) (defendant) for five years, with an option to renew. Riley purchased equipment in order to fulfill the contract according to Capital's specifications. Capital denied that it entered into the contract, but that if it did, the contract was barred by the Alabama's statute of frauds. Riley filed suit for breach of contract.

Wagner v. Lectrox Corp.

Issue: Is a contract under seal unenforceable for want of consideration? Holding: A contract, despite a lack of consideration, is enforceable if it is under seal. Facts:

Caspi v. Microsoft Network LLC

Issue: Is a forum selection clause that parties have been given reasonable notice of valid if the clause is not a result of fraud or overweening bargaining power, enforcement of the clause would not violate public policy, and enforcement of the clause would not seriously inconvenience trial? Holding: A court will invalidate a forum selection clause that parties have been given reasonable notice of only if the clause is a result of fraud or overweening bargaining power, enforcement of the clause would violate public policy, or enforcement of the clause would seriously inconvenience trial. Facts: Caspi and other Microsoft customers around the country (plaintiffs) brought suit against Microsoft Network LLC (Microsoft) (defendant) in New Jersey for breach of contract and fraud, among other claims, in regards to the membership agreement of Microsoft's online service. Microsoft filed a motion to dismiss on account of the forum selection clause contained in the agreement. The clause stated that the State of Washington had jurisdiction over all disputes arising out of the membership. In signing up for Microsoft's service, the plaintiffs had to navigate through various screens clicking "I Agree" before they could proceed. The plaintiffs had an opportunity to scroll through the agreement before accepting, but claimed they did not get sufficient notice.

Schnell v. Nell

Issue: Whether a promise to make a gift is enforceable. Holding: A promise to make a gift for nominal consideration or out of moral obligation is unenforceable for lack of consideration. Facts: Schnell (defendant) entered into an agreement with his heirs including Nell (plaintiffs) to give them each $200. Schnell stated that his late wife had had such a gift in her will but did not have enough money to make the bequest. The agreement stated that as consideration Nell et. al. would each pay Schnell one cent. Nell et. al. brought suit when Schnell refused to make the payment. The court struck Schnell's defense that the agreement was void for lack of consideration. Schnell appealed.

Pitts v. McGraw-Edison Co.

Issue: Is a promise enforceable under the doctrine of promissory estoppel if the promisee does not change circumstances in response to the promise? Holding: A promise is not enforceable under the doctrine of promissory estoppel if the promisee does not change circumstances in response to the promise. Facts: L. U. Pitts (plaintiff) was an independent contractor for McGraw-Edison Company (defendant). Pitts and McGraw did not have an employment contract, and the relationship was terminable by either party at will. Pitts did not make any contributions to a retirement fund during his relationship with McGraw. When Pitts was 67 years old, McGraw sent a letter informing him that he would be retiring and would be replaced. The letter stated that "to make the matter of retirement a little less distasteful," McGraw would pay Pitts his typical one percent commission on sales in his territory. McGraw made these payments for five years but then discontinued the payments. Pitts brought suit, claiming that the letter from McGraw constituted an offer that he accepted by retiring. The district court dismissed the complaint. Pitts appealed, claiming he was entitled to continued payments under the doctrine of promissory estoppel because he retired in reliance on the promise in the letter from McGraw.

Boothe v. Fitzpatrick

Issue: Is a promise made upon a past consideration enforceable if the defendant receives a valuable pecuniary benefit at the expense of the plaintiff? Holding: A promise made upon a past consideration is enforceable if the defendant receives a valuable pecuniary benefit at the expense of the plaintiff. Facts: In September 1860, the defendant's bull escaped and entered onto the plaintiff's land. The plaintiff kept and maintained the bull. In November 1860, the plaintiff found out that the defendant was the owner. The defendant told the plaintiff that he would take the bull back and pay the plaintiff for keeping and maintaining the bull. The defendant did not take the bull back until May 1861. The plaintiff brought suit against the defendant to recover a reasonable fee for taking care of the bull. The defendant argued that any care the plaintiff provided prior to the defendant's promise to pay was a moral obligation on past consideration and thus the defendant was not liable for such care. The trial court found in favor of the plaintiff. The defendant appealed.

Sun Printing & Publishing Association v. Remington Paper & Power Co., Inc.

Issue: Is a sales contract calling for parties to agree on the price and length of time the price will apply in the future binding if the parties do not subsequently agree on the terms? Holding: To constitute a binding contract, the terms of each element of the contract must be sufficiently specific. Facts: The parties entered into a 16-month contract in which the plaintiff agreed to buy from the defendant 1,000 tons of paper per month at a specific price for the first four months. At the conclusion of the four months, the price of the paper and the length of time that price was to apply was to be agreed upon by the parties for the remaining 12 months on the contract. The new price was not to be higher than the price charged by Canadian Export Paper, a third party paper company. Both parties performed their parts of the contract during the first four months, however, no new price or time period for the new price was ever agreed upon. As a result, the defendant did not deliver any more paper. The plaintiff brought suit, alleging that Canadian Export Paper's price automatically applied if no agreement was reached.

Lefkowitz v. Great Minneapolis Surplus Store

Issue: Is an advertisement a binding offer if it is clear, definite, and explicit, and leaves nothing open for negotiation? Holding: An advertisement constitutes a binding offer if it is clear, definite, and explicit, and leaves nothing open for negotiation. Facts: On April 6, 1956, Great Minneapolis Surplus Store, Inc. (defendant) published a newspaper advertisement stating that on the upcoming Saturday at 9:00 am, it would sell three fur coats described as "Worth to $100" for $1 each. The advertisement stated that the coats would be sold on a "first come, first served" basis. On April 13, 1956, the store published a similar advertisement with similar terms offering to sell a black lapin stole worth $139.50 for $1. On each sale date, Morris Lefkowitz (plaintiff) was the first person to present himself at the store and offer to buy the advertised items. However, the store refused to sell him the items on the ground that a "house rule" dictated that the offers were intended for women only.

Federal Deposit Insurance Corp. v. Barness

Issue: Is an agreement lacking consideration enforceable if it explicitly states that the signer promises to pay the money owed? Holding: An agreement that lacks consideration and explicitly provides that the signer intends to pay money is not enforceable because it does not evidence the signer's intention to be legally bound. Facts: Barness (defendant) executed a promissory note to Centennial Bank. The Federal Deposit Insurance Corp. (FDIC) (plaintiff) acquired the note when Centennial Bank closed and sought enforcement of the note. The note contained the words, "the Undersigned [...] promises to pay to the order of Centennial Bank [...]." FDIC brought suit. Barness argued that the note lacked consideration.

Kay v. Kay

Issue: Is an agreement lacking consideration nevertheless enforceable if it states that the party agrees to be legally bound thereby? Holding: An agreement stating that the party agrees to be bound is not unenforceable due to a lack of consideration. Facts: Mr. and Mrs. Kay entered into a separation agreement. Mr. Kay agreed to pay a certain amount to Mrs. Kay each week. No consideration was provided for the contract, but the contract stated that Mr. Kay agreed to be bound by the agreement. Mr. Kay failed to pay under the contract. Mrs. Kay filed a complaint in equity, seeking specific performance of future performance, as well as recovery of past payments not received. The chancellor enforced the contract. Mr. Kay took exceptions to the chancellor's ruling, but those exceptions were denied. Mr. Kay appealed.

Klocek v. Gateway

Issue: Is the purchaser of a good required to comply with terms that are added to the agreement through a form memorializing the agreement, where the form states that failure to return the goods constitutes acceptance? Holding: Additional or different terms provided in the acceptance do not become terms of the contract unless acceptance is made expressly conditional upon acceptance of the additional terms or the non-merchant offeror expressly agrees to the additional terms. Facts: Klocek (plaintiff) ordered a computer from Gateway (defendant). Gateway included its Standard Terms in every shipment of a new computer. At the top of the first page of those terms Gateway informed the purchaser that keeping the computer beyond five days constituted acceptance of the terms and conditions. Included in the Standard Terms was an arbitration clause. Klocek and others filed suit in the United States District Court against Gateway and others regarding the purchase of Gateway computers. Gateway moved to dismiss, requesting that the arbitration clause be enforced.

In re Nance

Issue: Is an assignment of "future wages" effective under Mass. Gen. Laws Ann. Chapter 154 section three when the wages have already been earned, but not yet paid? Holding: Mass. Gen. Laws Ann. Chapter 154 section three applies to assignments of all future wages over $3,000, regardless of whether the wages have already been earned at the time of the assignment. Facts: Yes. Mass. Gen. Laws Ann. chapter 154 governs assignments of wages for the purpose of protecting "the wage earner." The use of "future wages" in section two of this statute and "wages or salary to be earned in the future" in section three of this statute is merely a different way of saying the same thing, where the latter is more specific. The only distinction between the two sections is that section two is simply limited in application to smaller loans, under $3,000, and section three applies to all other loans. It is not true that section two applies to all wages to be paid out in the future while section three applies to wage payouts for work completed after the assignment. This interpretation cannot stand because it would invalidate several of section three's requirements for making a valid assignment. Reading section three to apply to deferred income for work that was already completed at the time of the assignment would cause several problems with application of the statute. In the current matter, because the "Assignment of Contract" covered income to be earned in the current and future football seasons at that time, it was an "assignment of or order for future wages" and thus subject to Mass. Gen. Laws Ann. chapter 154 section three. None of the numerous requirements thereunder for a valid assignment were met with this document and therefore the "Assignment of Contract" is invalid.

C. R. Klewin, Inc. v. Flagship Properties, Inc.

Issue: Is an oral contract unenforceable under the statute of frauds if it does not expressly state the period of time in which the contract is to be performed? Holding: A contract does not fall within the statute of frauds' one year provision unless, by the specific terms of the contract, it is impossible for performance to be completed within one year. Facts: C.R. Klewin, Inc. (Klewin) (plaintiff) entered into an oral agreement with Flagship Properties, Inc. (Flagship) (defendant) to act as construction manager for Flagship's housing construction project at the University of Connecticut. At a meeting between Klewin and Flagship representatives, Klewin agreed to be paid a percentage fee for construction management services, and the meeting concluded with the statement, "We've got a deal." After completing the first stage of the work, for which the parties had a separate written agreement, Flagship replaced Klewin as construction manager with another firm. Klewin sued Flagship for, inter alia, breach of contract. Flagship moved for summary judgment claiming that the oral agreement was unenforceable because it fell within the Statute of Frauds, and therefore must be in writing to be enforceable. Flagship argued the agreement fell within the Statute because it could not be performed within one year due to the size of the project and because the parties anticipated the project to be completed within 3-10 years.

Thomas v. First National Bank of Scranton

Issue: Is consideration required for the terms of an agreement that explicitly states the signor intends to be legally bound? Holding: When an agreement explicitly states that the signor of the contract intends to be legally bound consideration is not required. Facts: Thomas (plaintiff) wrote a check, drawing on his account at First National Bank of Scranton (First National) (defendant). Thomas went to First National to stop payment on the check. Thomas signed the "Request to Stop Payment" form provided by the bank. The form provided that First National would not be responsible if the check was paid "through inadvertence, accident or oversight." The form provided that Thomas agreed to be legally bound to the terms of the contract. The check was paid and drawn on Thomas's account "through inadvertence, accident or oversight." Thomas brought suit to recover the money paid for the check. The trial court held that First National was required to pay Thomas the amount of the check.

Carnival Cruise Lines, Inc. v. Shute

Issue: Is enforcement of a forum selection clause against a party who had no opportunity to negotiate the clause fundamentally unfair? Holding: A forum selection clause is not fundamentally unfair solely because the clause was not negotiated. Facts: Eulala and Russel Shute (plaintiffs) purchased tickets through a travel agent in Washington state for a cruise operated by Carnival Cruise Lines, Inc. (Carnival) (defendant). Only after purchasing their tickets from the travel agent did the Shutes receive paper tickets containing a form contract with a forum selection clause requiring all disputes to be brought in Florida. The form contract was comparable to form ticket contracts used by other cruise lines. The face of the ticket warned that passage was subject to acceptance of the terms of the ticket contract and the Shutes admitted having been made aware of the forum selection clause. The ticket contract also contained a provision that no refunds were available for the tickets once purchased. While on the cruise in international waters, Mrs. Shute fell during a tour of the ship and the Shutes sued Carnival for damages in District Court in Washington. Carnival moved to dismiss citing the forum selection clause, and asserted a lack of personal jurisdiction in Washington.

Moore v. Elmer

Issue: Is past consideration sufficient for enforcement of a contract? Holding: Past consideration is not sufficient for enforcement of a contract unless the parties agreed prior to performing that compensation therefore would be provided at a later time. Facts: Moore (plaintiff), a psychic, predicted that Elmer (defendant) would die before the year 1900. Elmer entered into an agreement and provided a note whereby he promised to pay Moore the balance of her mortgage note if her prediction came true. Elmer died before 1900. Moore sued for enforcement of the agreement.

Smith v. Wheeler

Issue: Is the mere recitation that consideration has been paid sufficient consideration under the contract? Holding: The mere recitation that consideration has been paid is sufficient to constitute consideration under the contract. Facts: Wheeler (plaintiff) and Smith (defendant) entered into an option contract whereby Smith had one year to buy a piece of property. The option agreement provided that consideration of $1.00 was paid for the option, but it was never actually paid. Wheeler, through his attorney, informed Smith that because the $1.00 was never paid that he was considering the option void. Wheeler later informed Smith by letter that he was intending to sell the property to another individual. Smith informed Wheeler by letter that he intended to exercise the option and enclosed the $1.00. Smith also informed Wheeler that he was prepared to pay the full purchase price for the property and he scheduled the closing date. Wheeler refused delivery of the letter. Wheeler filed a declaratory judgment action seeking to have the option declared void. The trial court granted Wheeler's motion for judgment on the pleadings.

Cohen v. Clark

Issue: Is there a good-faith defense to breach of contract? Holding: There is no good-faith defense to breach of contract. Facts: Karen Cohen (plaintiff) rented an apartment from 2800-1 LLC (landlord) (defendant) in reliance on the no-pet policy in the written rental agreement Cohen signed in November 2015. Cohen had a severe, medically documented allergy to pet dander. The rental agreement stated that the only exception to the no-pet policy was for reasonable accommodations. In January 2016, David Clark (defendant) entered a lease with the landlord containing the same no-pet policy. Subsequently, with the support of his psychiatrist, Clark requested a reasonable accommodation to have an emotional-support animal (ESA), a dog, to help manage his chronic mental illness. The landlord contacted the Iowa Civil Rights Commission (ICRC) and a staffer advised that the landlord needed to try and reasonably accommodate both Cohen's allergies and Clark's ESA. The ICRC did not issue a formal finding that allowing the ESA despite Cohen's severe allergies would be a reasonable accommodation. The landlord allowed the ESA and attempted to mitigate Cohen's allergies by having Clark and Cohen use different staircases and providing an air purifier in Cohen's apartment. The mitigation efforts were ineffective in preventing Cohen's allergic reactions. Cohen sued the landlord, seeking damages for breach of the no-pet clause of the rental agreement. The landlord argued that Clark's ESA request had to be granted because it was a reasonable accommodation under the Iowa Civil Rights Act.

Vlases v. Montgomery Ward & Co.

Issue: May a buyer support a claim for a breach of the implied warranty of merchantability or the implied warranty of fitness for a particular purpose if the seller could not have discovered the defect in the goods provided to the buyer? Holding: A buyer may support a claim for a breach of the implied warranty of merchantability or the implied warranty of fitness for a particular purpose even if the seller could not have discovered the defect in the goods provided to the buyer. Facts: Paul Vlases (plaintiff) purchased 2,000 one-day-old chicks by catalog from Montgomery Ward & Co. (Montgomery Ward) (defendant). By the third week after delivery, the chicks began to appear ill. It was later discovered that the entire flock was infected with leukosis, a type of bird cancer, which killed the chickens or caused the remaining chickens to be destroyed. Vlases sued Montgomery Ward for breach of warranty. Experts on both sides testified that there was no way of determining whether newly hatched chicks have leukosis and that there is no medication to prevent the disease. The jury found that the chicks were infected with leukosis when they were delivered and returned a verdict in favor of Vlases. Montgomery Ward appealed.

The Original Great American Chocolate Chip Cookie Co. v. River Valley Cookies, Ltd.

Issue: May a franchisor terminate a franchise agreement for good cause? Holding: A franchisor may terminate a franchise agreement for good cause. Facts: In 1985, The Original Great American Chocolate Chip Cookie Co. (Cookie Co.) (plaintiff) entered into a franchise agreement with the Sigels (defendant) for the operation of a Cookie Co. store in a shopping mall in Illinois. Between 1987 and 1991, the Sigels committed a number of material breaches to the franchise agreement. The Sigels failed to furnish insurance certificates indicating that the Cookie Co. was an additional insured on their insurance. The Sigels paid nine invoices late, and on seven occasions sent the Cookie Co. checks that bounced. The Sigels failed the Cookie Co.'s in-store inspections, and an independent auditor found that the Sigels had underreported their gross sales to the effect of dispossessing the Cookie Co. of almost $3,000 in royalties. As a result, the Cookie Co. terminated the franchise agreement, which was permitted in the event of three or more violations within a 12-month period, without the requirement of notice or opportunity to cure. The Sigels nevertheless continued to operate their store and sold cookies using batter not supplied from the Cookie Co. The Cookie Co. sued to enjoin the Sigels' violation of its trademarks and moved for a preliminary injunction. The Sigels counterclaimed, arguing that the franchise agreement had been terminated in violation of both the franchise agreement and the Illinois Franchise Disclosure Act and moved for a preliminary injunction directing the Cookie Co. to restore their franchise. The district court granted the Sigels' motion and denied that of the Cookie Co. The Cookie Co. appealed.

Petterson v. Pattberg

Issue: May an offer for a unilateral contract be revoked if the offeror knows of the offeree's imminent intention to accept? Holding: Any offer to enter into a unilateral contract may be withdrawn before the act requested to be done has been performed. Facts: Petterson owned a property upon which the defendant owned a bond secured by a mortgage. The mortgage was payable to the defendant in quarterly installments, but the defendant offered to grant Petterson a $780 reprieve on the total mortgage if he paid it off in full by a certain date. Petterson went to defendant's house with cash prepared to pay off the entire mortgage before the date. Before Peterson tendered any money, the defendant informed him that he had sold the mortgage to a third party and thus revoked his offer. Consequently, Petterson had to pay the third party the full price of the mortgage. The executrix of Petterson's will (plaintiff) brought suit against the defendant for the $780 lost.

Kelly Health Care v. The Prudential Insurance Co. of America

Issue: May documents in which an insured authorizes an insurance carrier to pay health care benefits directly to a provider constitute an assignment and thus be enforceable by the health care provider? Holding: An agreement authorizing an insurer to pay health care benefits directly to a health care provider is not an assignment when the documents evidencing the agreement do not evidence any intent to assign the agreement and the insured retains the power to revoke the agreement at any time. Facts: Kelly Health Care (Kelly) (plaintiff) provided health care services to Green. The Prudential Insurance Co. of America (Prudential) (defendant) provided a health insurance policy to Green. Green signed two separate documents providing, in pertinent part, that Green understood insurance proceeds from Prudential may be paid directly to Kelly. Prudential never received one of these documents and only received the second several months after Kelly began providing services to Green. Kelly submitted Green's health care bills to Prudential and Prudential refused to pay. Kelly brought suit against Green and Prudential. The trial court granted a default judgment against Green. Kelly pursued its suit against Prudential, arguing that the documents evidenced that Kelly was Green's assignee. Prudential filed a motion for summary judgment. The trial court found that the documents were an authorization, rather than an assignment, and granted

Ricketts v. Scothorn

Issue: May equitable estoppel prevent a promisor of an otherwise unenforceable gratuitous promise from revoking the promise where the promisee foreseeably and reasonably relied on the promise to her detriment?Holding: Equitable estoppel prevents a promisor from revoking an otherwise unenforceable gratuitous promise if the promisee foreseeably and reasonably relied on the promise to her detriment. Facts: Katie Scothorn (plaintiff) quit her job and left her profession as a bookkeeper after her grandfather gave her a promissory note promising to pay her $2,000 on demand and 6% annual interest. At the time of giving her the note, her grandfather stated that he did not want his grandchildren to work, and upon receiving the note, Scothorn quit her job. Neither the terms of the note nor her grandfather's statements obligated her to quit her job in order to receive the promised sum, although this appeared to be her grandfather's intention. Her grandfather paid one year's interest on the note, but had not paid the balance by the time of his death. Scothorn sued Andrew D. Ricketts (defendant), the executor of her grandfather's estate, for breaching the terms of the promissory note. The trial court entered judgment in favor of Scothorn, and Ricketts appealed.

Carter Baron Drilling v. Badger Oil Corp.

Issue: May extrinsic evidence of trade usage or of the parties' course of dealing be admissible? Holding: Extrinsic evidence of trade usage or of the parties' course of dealing may be admissible. Facts: The contract between Badger Oil Corporation (Badger) (defendant) and Carter Barron Drilling (Carter Barron) (plaintiff) stipulated that Badger, as operator of a mine owned by Knee Hill Energy, Inc., would pay Carter Barron, the contractor, to drill for oil and gas on the property. Badger relied on its payments from Knee Hill Energy to pay Badger's contractors. As a result, when Knee Hill Energy fell behind in its payments to Badger, Badger was unable to pay Carter Barron's drilling bill. Carter Barron sued Badger for breach of contract. Badger proffered evidence that, within the oil and gas industry, the common understanding was that in such situations, a contractor's only recourse was to recover directly from the owner. Carter Barron disputed Badger's description of industry practice and moved for summary judgment.

Weinberg v. Edelstein

Issue: Must a contract be enforced when the terms at issue are vague? Holding: A contract will not be enforced when the terms of the contract at issue are vague. Facts: Weinberg (plaintiff) entered into a commercial lease that entitled him to sell ladies dresses, among other things. The lease included a covenant stating that the landlord would not allow any other leased space in the same building to sell ladies dresses. Edelstein (defendant) was assigned a lease for retail space in the same building for the purpose of selling women's clothing, including skirts and blouses. The assignor had sold skirt-blouse combinations. Edelstein began selling matching skirts and blouses. Weinberg felt that the skirt-blouse combinations were dresses, the sale of which was restricted by the covenant. Weinberg filed suit, seeking an injunction to restrain Edelstein from selling the skirt-blouse combinations.

Embry v. Hargadine, McKittrick Dry Goods Co.

Issue: Regardless of the parties' subjective or actual intent, if a reasonable man could infer from their conduct intent to enter into a binding and enforceable contract, is a binding and enforceable contract presumed to exist? Holding: Regardless of the parties' subjective or actual intent, if a reasonable man could infer from their conduct intent to enter into a binding and enforceable contract, a binding and enforceable contract is presumed to exist. Facts: Embry (plaintiff) was employed by Hargadine, McKittrick Dry Goods Co. (McKittrick) (defendant). Embry stated that near the termination of the written contract, he attempted on several occasions to convince the company's president, Thos. H. McKittrick, to employ him for an additional year under the same terms. Embry stated that he informed McKittrick that if his contract was not renewed, he would leave his position. Embry states that in response to his statement, McKittrick assured him to go about his business without worry. Embry indicated he relied on this statement as a manifestation of intent by McKittrick to reemploy him for an additional year. McKittrick agreed that Embry gave him an ultimatum, but he denied Embry's recounting of their conversation. Rather, McKittrick said he told Embry that Embry should go and get his men on the road, but McKittrick would have to take up the contract matter with Embry at a later time, because McKittrick was preparing for a stockholders' meeting. Approximately two months after this conversation occurred, Embry's employment with McKittrick was terminated.

Hoffman v. Red Owl Stores, Inc.

Issue: To support an action for promissory estoppel, must a promise contain all of the essential details of the proposed transaction between the promisor and the promisee, so as to be equivalent to an offer that would result in a binding contract between the parties if accepted by the promisee? Holding: To support an action for promissory estoppel, a promise need not contain all of the essential details of the proposed transaction between the promisor and the promisee, so as to be equivalent to an offer that would result in a binding contract between the parties if accepted by the promisee. Facts: To support an action for promissory estoppel, must a promise contain all of the essential details of the proposed transaction between the promisor and the promisee, so as to be equivalent to an offer that would result in a binding contract between the parties if accepted by the promisee?

Trident Center v. Connecticut General Life Insurance Co.

Issue: Under California law, must extrinsic evidence be admitted to interpret the terms of an agreement whose terms are clear and unambiguous? Holding: Under California law, a contract must be interpreted in light of any relevant evidence of the parties' intent, including evidence extrinsic to the written agreement itself, even if the agreement is clear and unambiguous on its face. Facts: Trident Center (Trident) (plaintiff), a partnership of two law firms and an insurance company, obtained financing from Connecticut General Life Insurance Company (CGLI Co.) (defendant) for construction of an office building complex. The promissory note set the interest rate at 12¼ percent for 15 years, and provided that Trident could not prepay in the first 12 years of the note. The note also provided that, in the event of a default during the first 12 years, CGLI Co. could accelerate payment of the full amount due and charge a 10 percent prepayment fee. When interest rates dropped a few years later, Trident sought to refinance the loan to obtain a better interest rate, but CGLI Co. insisted that the loan could not be prepaid until after the first 12 years of the note. Trident brought an action against CGLI Co. seeking a declaration that it could prepay the loan before the first 12 years of the note had concluded. Trident claimed that the contract terms were ambiguous, and that the parties had agreed that Trident could prepay at any time. CGLI Co. moved to dismiss the complaint on the ground that the contract clearly and unambiguously prevented Trident from prepaying the note in the first 12 years.

Stop & Shop, Inc. v. Ganem

Issue: When a commercial lease requires that a portion of sales be paid as all or part of a rental fee, can the lessor require the lessee to continue to operate the business during the lease term or prohibit the lessee from operating competing businesses during the lease term if those requirements are not explicitly provided in the lease? Holding: When a commercial lease requires that a portion of sales be paid as all or part of a rental fee, the lessor cannot require the lessee to continue to operate the business during the lease term nor prohibit the lessee from operating competing businesses during the lease term unless those requirements are explicitly provided in the lease. Facts: Ganem (defendant) leased commercial space to Stop & Shop, Inc. (Stop & Shop) (plaintiff). The lease provided that Stop & Shop would pay a set rental fee. Stop & Shop also agreed to pay a percentage of sales, but only if total sales exceeded a set figure. The lease did not require the property to be used for any specific purpose. The lease did not prohibit Stop & Shop from opening competitive businesses in other locations. The lease did require Stop & Shop to maintain accurate accounting of its sales and to provide those to an accountant each year. When Stop & Shop entered into the lease, it was operating a grocery store chain, which was known to Ganem. The commercial space had previously been leased for the purposes of operating a grocery store. After entering into the lease, Stop & Shop opened two grocery stores that competed with the location at issue. Stop & Shop later decided to close its grocery store at the location at issue, but otherwise intended to comply with the terms of the lease. Stop & Shop filed suit for declaratory relief.

Morton v. Lamb

Issue: When parties to a contract have agreed to concurrent acts, must one party perform when the other party will not or is not able to perform at the same time? Holding: When parties to a contract have agreed to concurrent acts, neither party is required to perform when the other party will not or is not able to perform at the same time. Facts: Lamb (defendant) had agreed to sell Morton (plaintiff) corn. The parties intended that Morton would pay for the corn when Lamb delivered it. Lamb did not deliver the corn to Morton on the date the parties had agreed upon. Lamb argued that he was not satisfied that Morton would have paid for the corn upon delivery.

ProCD, Inc. v. Zeidenberg

Issue: Whether a "shrinkwrap license" provided within a package and not printed on the outside constitutes an enforceable contract. Holding: Shrinkwrap licenses included within a product's packaging are enforceable unless their terms are objectionable on grounds applicable to contracts in general, such as violating a positive rule of law or being unconscionable. Facts: ProCD (plaintiff) sells a software product known as its SelectPhone database. The product consists of a detailed address directory and is sold to both commercial and non-commercial users. To make more profit, ProCD engages in price discrimination by charging a higher price for commercial users. It enforces its price discrimination scheme by including a license within the software package that limits use of SelectPhone to non-commercial purposes. The license terms are printed in the manual located inside the SelectPhone software packaging, and also pop up on the computer screen whenever the product is run. Matthew Zeidenberg (defendant) purchased SelectPhone and ignored the license agreement. He started his own company to sell the information contained in SelectPhone to commercial users at a cheaper price than that charged by ProCD. ProCD brought suit against Zeidenberg in federal district court for breach of contract.

Feinberg v. Pfeiffer Co.

Issue: Whether a gratuitous (and thus unenforceable) promise is nevertheless made enforceable by the promisee's reasonable and detrimental reliance on the promise. Holding: A gratuitous (and thus unenforceable) promise is nevertheless transformed into a binding and enforceable contract if the promisee reasonably and detrimentally relies on the promise. Facts: Feinberg (plaintiff) was an employee of Pfeiffer Co. (Pfeiffer) (defendant) for thirty-nine years. Feinberg acquired significant amounts of stock during her tenure and received large bonuses in addition to her salary in her later years of employment. Two years before her retirement, Pfeiffer's board of directors adopted a resolution designed to thank Feinberg for her years of service to the company. Her salary was increased from $350.00 per month to $400.00 per month. Upon retiring, Feinberg would be paid $200.00 per month for life. The terms of the resolution did not change Feinberg's ability to retire or leave her position at will, however, or Pfeiffer's ability to discharge her at any time. On the day the resolution was passed, Feinberg was informed by Pfeiffer's president of her new salary increase and lifetime pension. Feinberg then continued her employment with Pfeiffer for an additional two years, at which time she retired. She immediately began receiving payments of $200.00 per month pursuant to the resolution. A few months after Feinberg's retirement, Pfeiffer's president died and was succeeded by his widow and then his son-in-law. Both successors viewed the payments to Feinberg as unnecessary gifts, and ultimately decided to reduce the payments to $100 per month. Feinberg declined to accept the reduced amount, and brought suit to enforce the former Pfeiffer president's promise. The trial court ruled for Feinberg and awarded damages. Pfeif

Raffles v. Wichelhaus

Issue: Whether a mutual misunderstanding of the parties invalidates a contract. Holding: There is no contract if there is a mutual misunderstanding by both parties as to the meaning of a term of an agreement. Facts: Wichelhaus (defendant) entered into a contract to buy 125 bales of cotton from Raffles (plaintiff). Under the terms of the contract, the cotton was to arrive from Bombay via the ship Peerless. Raffles delivered the cotton to a ship named Peerless, which departed from Bombay in December. Wichelhaus refused to pay. Wichelhaus argued that the cotton was to be delivered by a different ship also called Peerless, which had departed Bombay in October. Raffles sued for breach of contract.

Mills v. Wyman

Issue: Whether a promise based on a moral obligation but made without legal consideration constitutes an enforceable contract. Holding: A promise based on a moral obligation but made without legal consideration does not constitute an enforceable contract unless it is tied to a preexisting legal obligation. Facts: On February 5, 1821, Mills (plaintiff), a Hartford, Connecticut resident, came upon Levi Wyman, the son of Wyman (defendant). Levi was twenty-five years old and had just returned from a voyage at sea. He was extremely ill, and was taken in and cared for by Mills, a stranger, for fifteen days. Levi then died. His father, Wyman, lived in Massachusetts and wrote to Mills upon hearing of Levi's death. Wyman promised to pay Mills for the expenses he incurred while taking care of Levi. However, Wyman later refused to pay and Mills brought suit to enforce Wyman's promise. The court of common pleas held for Wyman and ruled the promise unenforceable. Mills appealed.

Kirksey v. Kirksey

Issue: Whether a promise to provide free land for a residence that is fulfilled for a finite amount of time and then revoked is gratuitous and thus unenforceable after revocation. Holding: A promise to provide free land for a residence that is fulfilled for a finite amount of time and then revoked is gratuitous and thus unenforceable despite inducing the promisee to move residences in reliance on the promise. Facts: Antillico Kirksey (Antillico) (plaintiff) was the wife of Henry Kirksey, the brother of Kirksey (defendant). Antillico and Kirksey lived approximately sixty miles apart. In 1840, Henry died, and Kirksey wrote a letter to Antillico. He stated that he felt bad for the situation of Antillico and her children, and promised that if she would come see him, he would provide her with a place to raise her family on his land. A month after receiving the letter, Antillico moved her family to Kirksey's land. Kirksey provided them with a comfortable house on his land for two years. However, for the third year, he provided them with an uncomfortable house in the woods. After that year, he asked them to leave. Antillico brought suit seeking performance of Kirksey's promise. At trial, the jury found for Antillico and awarded her $200 in damages. Kirksey appealed.

Lawrence v. Fox

Issue: Whether a promise to repay a debtor's obligation to a creditor in consideration for a sum of money received from the debtor is valid. Holding: A promise to repay a debtor's obligation to a creditor in consideration for a sum of money received from the debtor is valid. Facts: Holly loaned Fox (defendant) $300. Holly owed the same amount to Lawrence (plaintiff). Holly had promised to pay Lawrence the next day. Fox then promised to pay the $300 to Lawrence. When Fox did not pay Holly, Lawrence sued. Fox argued that that there was no proof that Holly was indebted to Lawrence, his agreement with Holly to pay Lawrence was void for lack of consideration, and there was no privity between the Fox and Lawrence. The jury found in favor of Lawrence, and Fox appealed.

Dickinson v. Dodds

Issue: Whether an offer may be revoked by the offeror without an express or actual statement of revocation communicated to the offeree. Holding: An offer may be revoked by the offeror without an express or actual statement of revocation communicated to the offeree provided there has been no meeting of the minds and the offeree is aware of conduct by the offeror demonstrating intent to revoke the offer. Facts: On June 10, 1874, John Dodds (defendant) drafted a documented which stated his willingness to sell a piece of property to George Dickinson (plaintiff). The document stated that the offer would be open until 9AM on June 12, 1874. On Thursday, June 11, Dickinson was informed by his agent that Dodds changed his mind and actually intended to sell the property to Thomas Allen (defendant). Dickinson immediately went to the home of Dodd's mother-in-law where Dodds was staying and dropped off a document expressing his intent to accept Dodds' offer to sell the property. Dodds never received this document from his mother-in-law. At 7AM on the morning of June 12, Dickinson and his agent both found Dodds at a train station and provided him with duplicate copies of the document accepting Dodds' offer to sell. Dodds stated that it was too late and he had already sold the property to Allen.

Ardente v. Horan

Issue: Whether conditional acceptance of an offer creates a valid contract. Holding: A valid acceptance that is capable of forming a valid contract must be definite and unequivocal and must not impose additional conditions or limitations on the offer, unless such conditional language is clearly independent of the actual acceptance. Facts: William and Katherine Horan (defendants) offered to sell residential property in the city of Newport. Ernst Ardente (plaintiff) bid $250,000 for the property. The Horans' attorney communicated that the bid was acceptable and prepared a purchase and sale agreement which he forwarded to Ardente. Ardente executed the agreement, and his attorney forwarded it back to the Horans. Ardente also included with the agreement a check for $20,000 and a letter asking if certain furniture and fixtures were a part of the transaction and requesting that they remain with the property. The Horans refused to sell the items listed by Ardente and returned the unsigned purchase and sale agreement and the $20,000 deposit to Ardente. The Horans refused to sell the property to Ardente, and Ardente brought suit seeking specific performance.

Drennan v. Star Paving Co.

Issue: Whether detrimental reliance by one party on another party's offer, without formal acceptance of the offer, is sufficient to make the offer irrevocable. Holding: An offer which the offeror should reasonably expect to induce definite and substantial reliance by the offeree, and which does induce such reliance is binding on the offeror and enforceable even without consideration if enforcement is necessary to prevent injustice to the offeree. Facts: Drennan (plaintiff), a general contractor, was preparing a bid for a school construction project. As was customary, Drennan solicited bids from subcontractors to perform the paving work necessary for the project. Star Paving Co. (Star) (defendant) contacted Drennan and submitted a bid of $7,131.60 for the paving work. This was the lowest bid, and Drennan relied on Star's bid when computing his own bid for the project. Drennan's bid was lowest and he was ultimately awarded the general contract. Drennan promptly informed Star it was awarded the subcontract. However, Star informed Drennan that it had made a mistake in computing its bid and could only complete the work for $15,000. Drennan stated this was unacceptable and proceeded to look for another subcontractor to perform the paving work. After months of searching, Drennan awarded a new subcontract to a company bidding $10,948.60 for the project; the lowest bid found by Drennan. Drennan brought suit against Star to recover damages caused by Star's failure to perform work as specified in its bid. The trial court awarded Drennan $3,817.00, or the difference between Star's bid and the final cost of paving to Drennan, plus costs. Star appealed.

Masterson v. Sine

Issue: Whether evidence of a separate oral agreement is admissible to prove the terms of a written contract when it is unclear whether the written contract is intended by the parties to be complete. Holding: Even when it is unclear whether a written contract is intended by the parties to be complete, evidence of a separate oral agreement may be admissible to prove the terms of the contract if the oral agreement is something that would naturally be made as a separate agreement by the parties given their actual situation and circumstances when drafting the written contract. Facts: Dallas Masterson and his wife Rebecca Masterson (plaintiff) owned a ranch as tenants in common. On February 25, 1958, they conveyed the ranch to Medora and Lu Sine (defendants) through a grant deed which reserved the option for the grantors to purchase the property back within ten years of the date of conveyance. The deed stated that the Mastersons could exercise this option by paying the same amount of consideration as was provided by the Sines, minus any depreciation in the value of the property. Medora Sine is Dallas Masterson's sister and the wife of Lu Sine. After the conveyance, Dallas declared bankruptcy, and a bankruptcy trustee took over his estate. The trustee and Rebecca Masterson brought a declaratory relief action to establish their right to enforce the option to repurchase the property conveyed to the Sines.

Pacific Gas and Electric Co. v. G. W. Thomas Drayage & Rigging Co.

Issue: Whether extrinsic evidence is admissible to prove the meaning of contractual terms when the intent of the parties to the contract is ambiguous. Holding: If a preliminary consideration of all credible evidence offered to prove the intent of the parties still leaves contractual terms fairly susceptible to at least two rational interpretations, extrinsic evidence relevant to prove either of these meanings is admissible. Facts: In 1960, G.W. Thomas Drayage & Rigging Co. (Thomas) (defendant) entered into a contract with Pacific Gas & Electric Co. (PG&E) to provide labor and equipment necessary to remove and replace the upper cover for PG&E's steam turbine. Thomas agreed to perform the work at its own risk and expense and to indemnify PG&E for any "loss, damage, expense and liability resulting from injury to property" or any other act associated with performance of the contract. During performance, the cover fell and damaged part of the exposed rotor of PG&E's turbine. PG&E brought suit to recover $25,144.51 in damages. The trial court awarded judgment for PG&E on the ground that Thomas' indemnity provision protected PG&E from damage to its own property. The trial court concluded that the "plain meaning" of the indemnity provision in Thomas' contract was to permit indemnification of damage to PG&E's property in addition to the property of third parties. The trial court admitted no extrinsic evidence on this issue. Thomas appealed, arguing that the extrinsic evidence should be admissible to show that the "plain meaning" of the indemnity clause was that it should only apply to damage of the property of third parties, not PG&E.

Albert Hochster v. Edgar de la Tour

Issue: Whether one party to an agreement who is informed by another party to the agreement that the second party intends to breach the agreement may immediately file suit for damages in anticipation of the breach. Holding: When one party to an agreement is informed by another party to the agreement that the second party intends to breach the agreement, the first party has an option to file suit for damages immediately in anticipation of the breach, or to wait until the act was supposed to be done. Facts: In April 1852, De la Tour (defendant) entered into a contract to pay Hochster (plaintiff), a courier, to accompany him on a trip. The trip was to begin on June 1, 1852. However, on May 11, 1852, De la Tour wrote to Hochster and informed him that he changed his mind and would no longer need Hochster's services. Hochster brought suit against De la Tour on May 22, 1852 to recover damages in anticipation of the future breach on June 1. Additionally, Hochster obtained employment with another party commencing on July 4, 1852. At trial, the jury found for Hochster, and De la Tour appealed.

Lucy v. Zehmer

Issue: Whether the actual mental assent of the parties to an agreement is necessary to form a valid and enforceable contract. Holding: The objective, outward expression of a party's intent to be bound in an agreement, as opposed to that party's subjective mental assent to the agreement, is all that matters when determining the existence of a valid and enforceable contract. Facts: Zehmer (defendant) was drinking alcohol in a bar and was approached by his acquaintance, Lucy (plaintiff). Lucy was also drinking, and bought additional drinks for Zehmer. The two began conversing, and Lucy offered to purchase a farm owned by Zehmer for $50,000. Lucy had offered to purchase the same farm several times on previous occasions, and Zehmer always refused. On this particular occasion, Zehmer and Lucy spoke for forty minutes about Lucy's purchasing the farm, and Zehmer expressed doubt that Lucy could come up with the $50,000. Lucy stated he could, and invited Zehmer to write out a contract for sale. Zehmer drafted an agreement on the back of a bar receipt stating his intention to sell the farm to Lucy for $50,000. Zehmer's wife signed the agreement, but neither party communicated to Lucy that they intended it to be a joke. Zehmer completed the agreement and gave it to Lucy, who offered Zehmer $5 to close the deal. At this point, Zehmer realized Lucy was serious and stated that he intended the agreement to be a joke. upon completion of a title check, Lucy again stated his intention to purchase the farm from Zehmer pursuant to their agreement. Zehmer refused, and Lucy sued for specific performance.

Webb v. McGowin

Issue: Whether the conferring of a material benefit or undertaking of a detriment by a promisee is sufficient consideration to enforce a promisor's subsequent promise to pay based on the benefit or detriment. Holding: When a promisee confers upon a deceased promisor a benefit that is material and substantial, and is conveyed upon the person of the promisor and not merely his estate, the promisee is entitled to recognition and compensation from the promisor's estate either by an executed payment or an executory promise to pay. Facts: Joe Webb (plaintiff) and J. Greeley McGowin were both employed at a lumber mill. On August 3, 1925, Webb was dropping large, pine blocks from the upper floor of the mill to the ground. This was the usual and ordinary method of clearing the mill floor. Just as Webb was about to drop a block, he saw McGowin on the floor below and knew that if the block dropped, it could seriously harm McGowin. Webb chose to fall with the block and thus divert it from striking McGowin. In doing so, however, Webb suffered serious bodily harm that left him unable to perform physical labor for the rest of his life. McGowin recognized that Webb saved his life and agreed to pay Webb $15 every two weeks to sustain him since he could not work. McGowin paid these payments until his death, at which point the executors of his estate, N. Floyd McGowin and Joseph F. McGowin (defendants), refused to continue making payments to Webb. Webb brought suit to recover the unpaid installments accruing from the time payments stopped to the time of the suit. The McGowins demurred. The trial court entered a judgment of nonsuit against Webb. Webb appealed to the Alabama Court of Appeals.