Contracts

§ 32: Invitation of Promise or Performance (Cook v Coldwell Banker/Frank Laiben Co., Unilateral Contract)

In case of doubt an offer is interpreted as inviting the offeree to accept either by promising to perform what the offer requests or by rendering the performance, as the offeree chooses. Does not always provide the offeror with protection against revocation of the offer Does not apply when it is clear that the offeror sought an act and an act in exchange for her promise of performance without making any return promise to complete his performance

Promissory Fraud (Aceves v US Bank)

A breach of promise may be fraudulent, if the promisor did not intend to perform the promise at the time the promise was made

Lancellotti v Thomas (Restitutionary Damages)

A breaching party is entitled to restitution in excess of the loss caused by the breach

Aceves v US Bank NA (Detrimental Reliance, Promissory Estoppel, Commercial Context)

A chapter 7 bankruptcy case is converted to a chapter 13 case when a mortgagor in default states a claim of promissory estoppel where the mortgagor has, in reliance on the mortgagee's promise to reinstate and modify the mortgage, foregone the opportunity to save the mortgagor's home.

Crabby's Inc. v. Hamilton (Computing the Value of Expectation Damages)

A condition in a real estate contract is waived when the buyer clearly, unequivocally and decisively shows his/her intentional relinquishment of the benefit of the condition After a breach of contract for the sale of a property, the sales price obtained from a willing buyer for the sales of the real property represents the substantive evidence of the property's fair market value where the subsequent sale is made just under a year after the breach

§ 237: Effect on Other Party's Duties of a Failure to Render Performance (Sackett v Spindler)

A condition of each party's remaining duties to render performances to be exchanged under an exchange of promises that there be no uncured material failure by the other party to render any such performance due at an earlier time

Unilateral Contract (Cook v Coldwell Banker/Frank Laiben Co.)

A contract in which only one party makes an express promise, or undertakes a performance without first securing a reciprocal agreement from the other party. When the party to whom an engagement is made, makes no express agreement on his part, the contract is called unilateral, even in cases where the law attaches certain obligations to his acceptance.

§ 174: When Duress by Physical Compulsion Prevents Formation of a Contract

A contract is void if made under actual physical compulsions, though coercion involving a threat of physical harm may also be deemed to result in ineffectual assent

Normile v Miller (Offer and Acceptance; Bilateral Contracts)

A counteroffer acts as a rejection of the original offer and does not contain the terms of the original offer. The counteroffer, like the original offer, must be accepted before it is revoked. In the law of contracts, the mirror image rule, also referred to as an unequivocal and absolute acceptance requirement, states that an offer must be accepted exactly with no modifications.

Drennan v Star Paving Co. (Promissory Estoppel, Offeree's Reliance on an Unaccepted Offer as Limitation on Revocability)

A general contractor may enforce a subcontractor's bid where there is reasonable detrimental reliance under a theory of promissory estoppel.

§ 2-306. Output, Requirements and Exclusive Dealings (Wood v Lucy, Lady Duff Gordon)

A lawful agreement by either the seller or the buyer for exclusive dealing in the kind of goods concerned imposes unless otherwise agreed an obligation by the seller to use best efforts to supply the goods and by the buyer to use best efforts to promote their sale.

Detrimental Reliance (Pop's Cones, Inc. v. Resorts International Hotel, Inc.; Acevez v US Bank)

A legal principle used to force one party to perform its obligations under a contract on the ground that nonperformance would leave the other party in a prejudicial position. It is applied when the second party's reliance on performance was 1. reasonably foreseeable 2. actual reliance occurred 3. the result of reliance was prejudicial to the relying party 4. and injustice can only be prevented by enforcing the contract.

§ 26: Preliminary Negotiations

A manifestation of willingness to enter into a bargain is not an offer if the person to whom it is addressed knows or has reason to know that the person making it does not intend to conclude a bargain until he has made a further manifestation of assent.

Izadi v. Machado Ford, Inc. (Offer and Acceptance; Bilateral Contracts)

A misleading advertisement may operate as an offer based on the misunderstood meaning even if the party creating the advertisement does not subjectively intend for it to be an offer Plaintiff is able to proceed with the breach of contract claim because the offer may have been what he thought it to be when objectively considered and Defendant may have made the advertisement intentionally misleading.

Webb v McGowin (Moral Obligation [Accepted]; Promissory Restitution)

A moral obligation is a sufficient consideration to support a subsequent promise to pay where the promisor has received a material benefit.

Competency and Capacity

A natural person who enters a contract possesses complete legal capacity to be held liable for the duties he or she agrees to undertake, unless the person is a minor, mentally incapacitated, or intoxicated.

Nanakuli Paving and Rock Co. v. Shell Oil Co. (Parol Evidence; Trade Usage)

A party is always held to conduct generally observed by members of his chosen trade because the other party is justified in so assuming unless he indicates otherwise This case demonstrates that courts will look outside the written agreement to industry practices, trade usage, the parties' course of dealing with each other in business, and to how the parties perform their contracts with each other to determine the terms of their agreement

§ 201: Whose Meaning Prevails

A party is bound to the other party's meaning if the first party either knew or had reason to know of the second party's meaning while the second party did not know or have reason to know of the first party's interpretation

Odorizzi v Bloomfield School District (Duress and Undue Influence)

A party may rescind an agreement by showing such agreement was the result of undue influence.

Syester v Banta (Misrepresentation and Nondisclosure)

A party to an agreement may rescind such agreement and recover damages if the agreement was fraudulently entered into. In order to successfully assert a claim of fraud, all elements of the claim must be met 1. A representation was made 2. The representation was false. 3. The representation, when made, was either known to be false or made recklessly without knowledge of its truth. 4. The representation was made with the intention that the other party rely on it. 5. The other party did, in fact, rely on the representation. 6. The other party suffered damages as a result of relying on the representation.

Retraction of Anticipatory Repudiation (Truman L. Flatt and Sons co. v Schupf)

A party who commits an anticipatory repudiation may change her mind and retract the repudiation so long as the other party has not relied to his detriment on the repudiation or notified the repudiating party that he is treat the repudiation as final

Pop's Cones, Inc. v. Resorts International Hotel, Inc. (Promissory Estoppel, Offeree's Reliance on an Unaccepted Offer as Limitation on Revocability)

A plaintiff may survive a motion for summary judgment on a promissory estoppel claim by presenting evidence allowing a reasonable jury to find that a defendant made a promise with the expectation that a plaintiff would rely on that promise and that a plaintiff did reasonably and detrimentally rely on a defendant's promise. Disregards jurisprudence, requiring a "clear and definite promise" in the interest of avoiding injustice

§ 86: Promise for Benefit Received (Webb v McGowin)(Material Benefit)

A promise made in recognition of a benefit previously received by the promisor from the promisee is binding to the extent necessary to prevent injustice.

Illusory Promise (Marshall Durbin Food Corp v Baker)

A promise that is unenforceable due to indefiniteness or lack of mutuality, where only one side is bound to perform. An example of this would be an agreement between a seller and buyer which states that the seller "agrees to sell all of the ice cream he wants to" to the buyer. business law. contracts.

§ 90: Promise Reasonably Inducing Action or Forbearance (Harvey v Dow; King v Trustees of Boston University; Katz v Danny Dare, Inc.; Aceves v US Bank NA)

A promise which the promisor should reasonably expect to induce action or forbearance on the part of the promisee or a third person and which does induce such action or forbearance is binding if injustice can be avoided only by enforcement of the promise. The remedy granted for breach may be limited as justice requires

§ 139: Enforcement by Virtue of Action in Reliance (Alaska Democratic Party v Rice)

A promise which the promisor should reasonably expect to induce action or forbearance on the part of the promisee or a third person and which does induce the action or forbearance is enforceable notwithstanding the Statute of Frauds if injustice can be avoided only by enforcement of the promise.

Alaska Democratic Party v Rice (Statute of Frauds, Scope and Application, Promissory Estoppel)

A proven section 139 claim has the effect of rendering the oral contract, which would have been invalid under the statute of frauds, legally enforceable on the terms established by D A claim for promissory estoppel may be brought in an employment situation, even if the agreement is unenforceable under the statute of frauds

§ 59: Purported Acceptance Which Adds Qualifications (Normile v Miller)

A qualified acceptance constitutes only a counter offer, and such will have the same effect as a rejection, insofar as the original power of acceptance is concerned

§ 250: When a Statement or an Act Is a Repudiation (Truman L. Flatt and Sons co. v Schupf; Sacket v Spindler)

A repudiation is a statement by the obligor to the obligee indicating that the obligor will commit a breach that would of itself give the obligee a claim for damages for total breach under § 243, or a voluntary affirmative act which renders the obligor unable or apparently unable to perform without such a breach.

§95: Requirements for Sealed Contract or Written Contract or Instrument

A rule for enforcement of instruments under seal, but that rule can have effect only where the common law relating to seals has not been displaced by statutes abolishing or weakening the seals legal effect

Coastal Steel Erectors v. Blair (Restitutionary Damages)

A subcontractor may recover in quantum meruit (a reasonable sum of money to be paid for services rendered or work done when the amount due is not stipulated in a legally enforceable contract) for the value of labor and equipment furnished, regardless of whether he would be entitled to recover for suit on the contract. To avoid unjust enrichment

Parol Evidence Rule (Thompson v Libby [Classic Approach])

A substantive common law rule in contract cases that prevents a party to a written contract from presenting extrinsic evidence that discloses an ambiguity and clarifies it or adds to the written terms of the contract that appears to be whole.

Partial Integration

A writing that is intended to be final but not complete because it deals with some but not all aspects of a transaction between the parties

Ray v William G. Eurice & Bros., Inc. (Objective Theory)

Absent of fraud, duress or mutual mistake, a contract is valid Unilateral mistake, unlike mutual mistake, does not prevent the meeting of the minds required for contract formation (Objective test)

Acceptance (Normile v Miller)

Acceptance of an offer is the expression of assent to its terms.

Dougherty v Salt (Consideration)

Although a note states that value has been received, if value has not in fact been received, the note is unenforceable as a contract for lack of consideration.

Patent Ambiguity

Ambiguity which is apparent on the face of an instrument to anyone perusing it, even if he be unacquainted with the circumstances of the parties. In the case of a patent ambiguity, parol evidence is admissible to explain only what has been written, not what the writer intended to write.

§ 58: Necessity of Acceptance Complying with Terms of Offer (Normile v Miller)

An acceptance must be unequivocal and unqualified in order for contract to be formed

Bilateral Contract

An agreement formed by an exchange of a promise in which the promise of one party is consideration supporting the promise of the other party.

Walker v Keith (Mutual Assent; Illusory Promise[Agreement to Agree])

An agreement to agree simply does not fix an enforceable obligation Under the traditional approach, there must be substantial certainty as to the material terms for an agreement to be enforceable. Courts using the traditional approach will not enforce an agreement if a material term is indefinite or ambiguous.

Lonergan v Scolnick (Offer and Acceptance; Bilateral Contracts)

An invitation for offers does not operate as an offer to create an enforceable contract.

Morin Building Products v Baystone Construction (The Implied Obligation of Good Faith)

An objective standard of reasonableness is the proper standard to employ in a construction contract for commercial building. The contract is ambiguous because of the qualifications with which the terms artistic effect and decision as to acceptability are hedged about and the circumstances suggest that the parties probably did not intend to subject the plaintiff's right to aesthetic whim

§ 24. Offer Defined (Lonergan v Scolnick)

An offer is the manifestation of willingness to enter into a bargain, so made as to justify another person in understanding that his assent to that bargain is invited and will conclude it.

§ 87: Option Contract (Drennan v Star Paving)

An offer which the offeror should reasonably expect to induce action or forbearance of a substantial character on the part of the offeree before acceptance and which does induce such action or forbearance is binding as an option contract to the extent necessary to avoid injustice.

Loss Avoided

Any loss avoided by the salvaging or reallocation of resources that would have been devoted to performance

UCC 2-103 (Nanakuli v Shell; Frigialment Imports)

As requiring not merely honesty but also the observance of reasonable commercial standards of fair dealing in the trade

Truman v Schupf (Anticipatory Repudiation)

Because plaintiff had timely retracted any alleged repudiation of the contract, the trial court erred in granting summary judgment for D on the basis plaintiff repudiated the contract

Post judgment Interest

Compensates the successful party for the loss of use of money from the trial court's original judgment until the time the judgment is actually paid—including the period during which appeals are pending Meaning you may be entitled to collect interest on the amount due to you from the time the case is settled to the time the settlement is actually paid to you (post-judgment) Typically, in a contract action, interest would be payable from the date the debt was due

Conduct Amounting to an Anticipatory Repudiation (Hornell Brewing Co. v. Spry; § 250. When a Statement or an Act Is a Repudiation)

Conduct that renders the obligor unable or apparently unable to perform may amount to repudiation Conduct must indicate that performance is a practical impossibility

Quid Pro Quo

Consideration by another term Something for something

Consideration

Consideration must be of value, and is exchanged for the performance or promise of performance by the other party (such performance itself is consideration). The consideration given by the promisor must induce the promisee to incur a legal detriment and/or provide a legal benefit to the promisor, either or both of which are sufficient to induce the promisor to make the promise.

Credit Bureau v. Pelo (Quasi Contract Theory, Restitution in the Absence of a Promise)

D is legally obligated to pay for medical services provided to him under an implied contract in law or quasi contract theory

§ 351: Unforeseeability and Related Limitations on Damages (Hadley v Braxendale, Florafax v. GTE)

Damages are not recoverable for loss that the party in breach did not have reason to foresee as a probable result of the breach when the contract was made. Loss may be foreseeable as a probable result of a breach because it follows from the breach in the ordinary course of events, or as a result of special circumstances, beyond the ordinary course of events, that the party in breach had reason to know. A court may limit damages for foreseeable loss by excluding recovery for loss of profits, by allowing recovery only for loss incurred in reliance, or otherwise if it concludes that in the circumstances justice so requires in order to avoid disproportionate compensation.

Walser v Toyota Motor Sales, USA Inc. (Reliance Damages)

Damages from a promissory estoppel claim may properly be limited to out-of-pocket expenses

Expectation Damages (Crabby's, Handicapped, Hadley, Florafax)

Damages recoverable from a breach of contract by the non-breaching party. An award of expectation damages protects the injured party's interest in realizing the value of the expectancy that was created by the promise of the other party.

Consequential Damages (Other Loss); (Florafax International Inc. v GTE Market Resources; Hadley v Baxendale)

Damages that accrue after the breach Utilities, interest, mortgages, taxes, etc.. Subject to certain conditions Foreseeable The harm must be measured with reasonable certainty The duty to mitigate damages

Park 100 v Kates (Misrepresentation and Nondisclosure)

Defendant's signature on the guaranty was obtained by fraud and misrepresentation. While the general rule is that a person is bound by their signature, where the signature is procured by fraud, the defrauded party will not be bound

Restitutionary Damages (Coastal Steel Erectors, Lancellotti v Thomas)

Designed to restore the injured party or the party who suffered damages, to the position they were before the formation of the contract. Parties that want restitution cannot seek lost profits or earnings caused by the breach.

Objective Interpretation (Ray v William G. Eurice & Bros., Inc.)

Does not relieve oblvious party Rather it is determined by the parties conduct, not their intentions.

Kelsey-Hayes co. v Galtaco (Modification, Duress)

Duress can exist in the absence of an illegal threat, the threat must merely be wrongful

Consideration (Hamer v Sidway; Dougherty v Salt)

Each party to a contract must provide something of value that induces the other to enter the agreement.

Totem Marine Tug and barge, Inc. v. Alyeska Pipeline Service Co. (Economic Duress, Duress and Undue Influence)

Economic duress exists where 1. one party involuntary accepts the conditions of the other party, 2. circumstances permitted no alternative, and 3. such circumstances were the result of coercive acts of the other party. A party may rescind an agreement if they can show that they entered into such agreement under economic duress.

§ 205: Duty of Good Faith and Fair Dealing § 1-304: Obligation of Good Faith

Every contract imposes upon each party a duty of good faith and fair dealing in its performance and its enforcement. Every contract or duty within the Uniform Commercial Code imposes an obligation of good faith in its performance and enforcement. Breach of Implied Covenant

§ 229: Excuse of a Condition to Avoid Forfeiture (J.N.A. Realty Corp v Cross Bay Chelsea, Inc.)

Excuse of a Condition to Avoid Forfeiture To the extent that the non-occurrence of a condition would cause disproportionate forfeiture, a court may excuse the non-occurrence of that condition unless its occurrence was a material part of the agreed exchange.

Commerce Partnership v Equity Contracting (Quasi Contract Theory, Restitution in the Absence of a Promise)

For a subcontractor to recover from an owner under a quasi contract, the subcontractor must show that the owner did not pay anyone for the services rendered by the subcontractor.***

Stechschulte v Jennings (Misrepresentation and Nondisclosure, Bargaining Misconduct)

Fraud by Silence (Non-disclosure) 1. The D had knowledge of material facts that the P did not have and could not have discovered by the exercise of reasonable diligence 2. The D was under an obligation to communicate the material facts to the P 3. The D intentionally failed to communicate to the P the material facts 4. The P justifiably relied upon the D to communicate the material facts to the P 5. The sustained damages as a result of the D's failure to communicate the material facts the P

Statute of Frauds (Crabtree v Elizabeth Arden Sales Corp; Beaver v Brumlow)

Generally speaking, a statute of frauds requires that certain contracts be in writing and signed by the parties.

Pennsy Supply, Inc. v. American Ash Recycling Corp. of Pennsylvania (Consideration)

Grounding contracts and warranty claims brought by the disposer, constitutes sufficient ground for relief of a manufacturer's legal obligation, to dispose of a material classified as hazardous waste, such that the cost of disposal is avoided by the manufacturer. The detriment P now suffers was the same detriment which induced D to give out the substance free of charge.

UCC 1-201(19) (Seidenberg v Summit Bank)

Honesty in fact, suggesting that at a minimum lying and other kinds of deceiving should be regarded as bad faith

§ 208. Unconscionable Contract or Term (Williams v Walker-Thomas Furniture Co.)

If a contract or term thereof is unconscionable at the time the contract is made a court may refuse to enforce the contract, or may enforce the remainder of the contract without the unconscionable term, or may so limit the application of any unconscionable term as to avoid any unconscionable result.

§ 374. Restitution in Favor of Party in Breach (Lancellotti v Thomas)

If a party justifiably refuses to perform on the ground that his remaining duties of performance have been discharged by the other party's breach, the party in breach is entitled to restitution for any benefit that he has conferred by way of part performance or reliance in excess of the loss that he has caused by his own breach.

§ 164: When a Misrepresentation Makes a Contract Voidable (Syester v Banta)

If a party's manifestation of assent is induced by either a fraudulent or a material misrepresentation by the other party upon which the recipient is justified in relying, the contract is voidable by the recipient

The Material Benefit Rule (Webb v McGowin)

If a person receives a material benefit from another, other than gratuitously, a subsequent promise to compensate the person for rendering such benefit is enforceable A moral obligation is a sufficient consideration to support a subsequent promise to pay where the promisor has received a material benefit.

§ 2-302: Unconscionable Contract or Clause. (Williams v Walker-Thomas Furniture Co.)

If the court as a matter of law finds the contract or any clause of the contract to have been unconscionable at the time it was made the court may refuse to enforce the contract, or it may enforce the remainder of the contract without the unconscionable clause, or it may so limit the application of any unconscionable clause as to avoid any unconscionable result.

Full Performance Exception to Market Value Restitution

If the nonbreaching party has fully performed his obligations under the contract and the breaching party's only remaining duty of performance is the payment of a liquidated or specified sum of money, the nonbreaching party may not elect a restitutionary recovery but is limited to expectation damages

The Duty to Mitigate Damages (Rockingham County v Luten Bridge Co.)

If the plaintiff in a contract action reasonably could have mitigated his damages, but fails to do so, then he will be unable to shift that portion of his loss to the defendant and will be forced to absorb it himself

§ 79: Adequacy of Consideration; Mutuality of Obligation (Dohrmann v Swaney; Rejects This Notion; Relies on the Comment Regarding Gross Inadequacy)

If the requirement of consideration is met, there is no additional requirement of (a) a gain, advantage, or benefit to the promisor or a loss, disadvantage, or detriment to the promisee; or (b) equivalence in the values exchanged; or (c) "mutuality of obligation."

Material Breach (Sackett v Spindler)

In contract law, a "material" breach of contract is a breach (a failure to perform the contract) that strikes so deeply at the heart of the contract that it renders the agreement "irreparably broken" and defeats the purpose of making the contract in the first place.

Hamer v Sidway (Consideration)

In general, a waiver of any legal right at the request of another party is sufficient consideration for a promise

Requirement for Certainty (Florafax International Inc. v GTE Market Resources)

In order to survive a case for damages for lost profits, you have to be able to prove with reasonable certainty the profits lost, they cannot be speculative

Prejudgment Interest

Interest accruing on the amount of a legal award from the time of the injury or damage to the time the judgment is entered by the court.

Undue Influence (Odorizzi v Bloomfield School District)

Involving the excessive pressure by a dominant party in overcoming the will of a vulnerable person

Latent Ambiguity (Frigaliment Importing Co. v BNS International Sales Corp.)

Latent ambiguity is an ambiguity that does not readily appear on the face of a document. The ambiguity becomes apparent only in the light of knowledge gained from a collateral matter. Extrinsic evidence can be used to clarify latent ambiguities, but not patent ambiguities

General Measure of Damages (Crabby's Inc. v. Hamilton;)

Loss in value + other loss - cost avoided - loss avoided

Florafax International Inc. v GTE Market Resources (Restriction on Recovery of Expectation Damages; Foreseeability, Certainty and Causation)

Lost profits are recoverable so long as they are: foreseeable when the contract was made; they directly or proximately result from the breach and they are capable of accurate estimation

§ 27: Existence of Contract Where Written Memorial is Contemplated (Quake Construction, Inc. v. American Airlines, Inc; Agreement to Agree[Postponed Bargaining])

Manifestations of assent that are in themselves sufficient to conclude a contract will not be prevented from so operation by the fact that the party also manifest an intention to prepare and adopt a written memorial thereof; but the circumstances may show that the agreements are preliminary negotiations

§ 347: Measure of Damages in General

Measure of Damages in General Subject to the limitations stated in §§ 350-53, the injured party has a right to damages based on his expectation interest as measured by the loss in the value to him of the other party's performance caused by its failure or deficiency, plus any other loss, including incidental or consequential loss, caused by the breach, less any cost or other loss that he has avoided by not having to perform.

Pre-existing Duty Rule (Alaska Packers Ass. v Domenico)

Merely promising to perform in existing obligation will not serve as valid consideration for additional return compensation from the other party That is, once a party agrees to do something under a contract, that party cannot change the terms without consideration and expect the new terms to be enforceable.

Crabtree v Elizabeth (Statute of Frauds, Scope and Application)

More than one document may be linked together either expressly or impliedly by the subject matter and occasion to supply a memo to satisfy the statute of frauds

Wood v Lucy, Lady Duff Gordon (The Rationale for Implied Terms the Obligation of Good Faith)

Mutuality or a return promise may be implied from the circumstances surrounding the contract and the nature of the whole writing

Written Instrument (Statute of Frauds)

Not every contract need be in writing to be valid and binding on both parties. But nearly every state legislature has enacted a body of law that identifies certain types of contracts that must be in writing to be enforceable. (statute of frauds)

§ 256: Nullification of Repudiation or Basis for Repudiation (Truman L. Flatt and Sons co. v Schupf)

Nullification of Repudiation or Basis for Repudiation The effect of a statement as constituting a repudiation under § 250 or the basis for a repudiation under § 251 is nullified by a retraction of the statement if notification of the retraction comes to the attention of the injured party before he materially changes his position in reliance on the repudiation or indicates to the other party that he considers the repudiation to be final.

Elements of a Contract

Offer*, Acceptance*, Consideration*, Mutuality of Obligation, Competency and Capacity, Written Instrument

Rockingham County v Luten Bridge Co. (Restriction on Recovery of Expectation Damages; Mitigation of Damages)

Once a contract is breached, the non-breaching party has a duty not to increase the resulting damages

Hornell v. Spry (Anticipatory Repudiation)

One party may demand assurances from another party when there are reasonable grounds for insecurity regarding that party's performance and the demanding party may suspend its performance until it has received such assurances

Offeror

One who makes an offer to another.

Other loss

Other loss involves two types of damages, incidental and consequential. a. Incidental Costs incurred in a reasonable attempt to avoid loss, even if unsuccessful. b. Consequential Costs or injury to persons or property resulting from breach.

enXco v Northern States (Express Conditions)

P can't win under temporary impracticality because P could have submitted the application sooner to obtain the contract, and avoid the shit that happened P can't win under disproportionate forfeiture because they retained the assets, and may use them in future projects, also D didn't receive anything for nothing

Mills v. Wyman (Moral Obligation [Denied], Promissory Restitution)

Past consideration and moral obligation alone are insufficient consideration to make a promise enforceable

Plowman v Indian Refining Co. (Consideration [Past Consideration])

Past consideration of past performance is not consideration. Something that which has been delivered before the promise is executed, and, therefore, made without reference to it, cannot properly be legal consideration Appreciation of past services of pleasure afforded the employer thereby is not a sufficient consideration

Offeree

Person who either accepts or does not accept the offer

Frigaliment Importing Co. v BNS International Sales Corp. (Principles of Interpretation)

Plaintiff has not sustained its burden of persuasion that the contract used chicken in the narrower sense To interpret a disputed term in a contract, the court will consider: (1) the language of the contract, (2) the preliminary negotiations, (3) trade usage, (4) legal standard, (5) course of performance, and (6) maxims

Cook v Coldwell (Offer and Acceptance; Unilateral Contracts)

Plaintiff stayed with company in hopes of receiving the promised bonus, and was even paid part of the bonus This constitutes that the evidence was sufficient to make a submissible case for breach of a unilateral contract An offer to enter into a unilateral contract may not be revoked once the offeree has made substantial performance

Katz v Danny Dare, Inc. (Detrimental Reliance, Promissory Estoppel, Commercial Context)

Plaintiff voluntarily retired in reliance on the promise of a pension from D Promissory estoppel requires 1. a promise 2. reasonable and detrimental reliance on the promise 3. and injustice that can only be avoided by enforcing the promise.

§77: Illusory and Alternative Promises (Marshall Durbin Food Corp v Baker)

Provides that a promise, even if bargained for, will not serve as consideration if it is illusory, if it makes performance entirely optional with the promisor

§ 45: Option Contract Created by Part Performance or Tender (Cook v Coldwell Banker/Frank Laiben Co.)

Provides that when an offeree tenders or begins the requested performance under a unilateral contract, the offeror becomes bound and cannot revoke her offer so long as the offeree timely completes performance in accordance with the terms of the offer

Subjective Interpretation

Relieves party that mistakenly went under contract without fully understanding what they were signing Relies on intention rather than conduct

Complete Integration

Refers to writing that is intended to be a final and exclusive expression of the agreement of the parties

The Miller Act (United States ex rel. Coastal Steel Erectors, Inc. v. Algernon Blair Inc.)

Requires prime contractors on some government construction contracts to post bonds guaranteeing both the performance of their contractual duties and the payment of their subcontractors and material suppliers.

Cost Avoided

Savings to the plaintiff from not having to perform further

Past Consideration (Plowman v Indian Refining Co.)

Services already performed, could be at best, past consideration, which is a self contradictory term

Economic Duress and Undue Influence (Totem Marine Tug and Barge, Inc. v. Alyeska Pipeline Service Co.; Odorizzi v Bloomfield School District)

Some agreements should not be enforceable because of the situation in which they were made The courts recognized relief against coercion under the doctrine of undue influence Courts have broadened the definition of undue influence to include Threats to persons property Economic duress

Durbin v Baker (Consideration and an Illusory Promise)

Sufficient consideration to create an enforceable contract where one party has made an illusory promise and the second party has made a promise of a unilateral contract that is contingent on the first party's performance where the first party has performed to fulfillment of the contingency supports an agreement. Also contains a recital of consideration, in the amount of ten dollars

Thompson v Libby (Parol Evidence Rule [Classical Approach])

The Court found that the evidence of a warranty was inadmissible under the parol evidence rule because it added or varied the terms of the parties written contract The parol evidence rule prevents extrinsic evidence from being used to contradict or vary the terms of a written contract that is intended as the full expression of the parties' agreement.

Sateriale v RJ Reynolds Tobacco Co. (Mutuality of Obligation; Offer and Acceptance; Unilateral Contracts)

The common law rule accepts offers for a reward, including offers of a reward for the redemption of coupons Court holds that the P's have adequately alleged the existence of an offer to enter in to unilateral contract There is no mutuality of obligation, because D retained a right to terminate the program, relieving themselves of the duty to perform under the contract

Harvey v Dow (Promissory Estoppel; Detrimental Reliance)

The court must consider the alleged promisor's conduct as well as any generalized promises the promisor has made when considering a claim of promissory estoppel, in determining if all of the promisor's actions, taken together, constitute a "promise" to the claimant.

§ 175: When Duress by Threat Makes a Contract Voidable (Odorizzi v Bloomfield)

The court's test has three elements A wrongful or improper threat A lack of reasonable alternative Actual inducement of the contract by threat

Hadley v Baxendale (Restriction on Recovery of Expectation Damages; Foreseeability, Certainty and Causation)

The damages to which a nonbreaching party is entitled are those arising naturally from the breach itself or those that are in the reasonable contemplation of the parties at the time of contracting.

Mailbox Rule (Lonergan v Scolnick)

The default rule under contract law for determining the time at which an offer is accepted, states that an offer is considered accepted at the time that the acceptance is mailed.

Forfeiture (enXco Development Corp. v Northern States Power Co.[Denied, Retained Assets]; J.N.A. Realty Corp v Cross Bay Chelsea, Inc. [Allowed, Made Substantial Improvements])

The denial of compensation that results when the obligee loses it's right to the agreed exchange after it has relied substantially, as by preparation or performance on the expectation of that exchange

Loss in Value

The difference between the value to the injured party of the performance he should have received and that of any performance he did receive. Example: If the defendant paid the plaintiff $100 of a $1,000 debt, the loss in value is $900.

Relevance of Trade Usage (Nanakuli Paving and Rock Co. v. Shell Oil Co.; Frigaliment Importing Co. v BNS International Sales Corp.)

The existence of of a relevant trade usage can overcome even the apparently unambiguous Modern view is that trade usage can be used both to interpret an ambiguous term and also to determine whether a contract provision is ambiguous in the first place Section 1-303 of the UCC, defines usage of trade and generally provides that evidence of trade usage should be relevant to the interpretation of the parties agreement

Sherrod v Morrison (Parol Evidence [Denied])

The fraud exception to the statute of frauds only applies where the fraud does not directly relate to the subject of the contract. The parol evidence rule applies, because the written assignment supersedes all previous oral agreements

§ 349: Damages Based On Reliance Interest (Wartzman v Hightower Productions Ltd., Walser v Toyota)

The injured party has a right to damages based on his reliance interest, including expenditures made in preparation for performance or in performance, less any loss that the party in breach can prove with reasonable certainty the injured party would have suffered had the contract been performed.

Tacit Agreement Test (Hadley v Baxendale)

The injured party would be required to show not only that the special circumstances were brought to the attention of the other party, but also that the other party assumed consciously the liability in question

Sackett v Spindler (Material Breach)

The letter that D's attorney wrote to P's attorney did not constitute an unlawful repudiation of the contract, and was therefore not a breach of contract by D, and thus did not discharge P's duty to perform the contract or, alternatively, to respond to D in damages

King v Trustees of Boston University (Charitable Subscription, Promissory Estoppel)

The letters could have been read to contain a promise supported by consideration or reliance, therefore being submitted to the jury is correct The Court determined that there was evidence that could support a finding of clear donative intent supported by consideration or reliance Consideration on the part of BU was weighed by the court, not supposed to do that (Dohrmann) The Court notes that Defendant indexed the papers, made them available to researchers, and trained staff to care for the papers and assist researchers.bvvb

Fraudulent Misrepresentation (Syester v Banta)

The making of a false statement; With knowledge that the statement is false or with reckless disregard as to whether or not the statement is false or true; With the intent that the listener rely on the statement; With the result that the listener relies on the statement; With the consequence that the listener is harmed.

Joyner v Adams (Principles of Interpretation, Contract Construction)

The maxim for construing an agreement against the drafter applies to contract construction, but not contract interpretation. Court erred in applying the rule to award damages for plaintiff

Jacob & Youngs v. Kent (Material Breach)

The measure of damages for a trivial and innocent omission is not the cost of replacement but the difference in value

Moral Obligation (Mills v. Wyman[Denied]; Webb v McGowin [Allowed])

The mills court holds that the law will not necessarily enforce every promise, regardless of the morality of failing to honor a promise seriously made Material Benefit Rule

Handicapped Children's Education Board v Lukaszewski (Computing the Value of Expectation Damages)

The non-breaching party is entitled to full compensation for the loss of the benefit of the bargain

Quake Construction v. American Airlines, Inc (Agreement to Agree)

The parties intent, based on the letter of intent alone, is ambiguous Parol evidence of intent may be introduced to show intent when a writing is ambiguous. Letters of intent may be enforceable if the parties intend them to be binding.

Two situations where promissory estoppel can overcome the statute of frauds (Alaska Democratic Party v Rice)

The plaintiff detrimentally relied on the def's misrepresentation that a writing had been created that would comply with the statute of frauds The plaintiff similarly relied on a promise by the def to create such a memorandum

The Doctrine of Avoidable Consequences (Rockingham County v Luten Bridge Co; Wartzman v Hightower Productions Ltd. [Denied (As a Defense) Due to P's Breach])

The plaintiff may not recover for those injurious consequences of the defendant's breach that the plaintiff herself could be reasonable action have avoided

§ 36: Methods of Termination of the Power of Acceptance (Normile v Miller)

The power of acceptance created by an offer will be terminated by the offeree's rejection

Promissory Estoppel (Harvey v Dow)

The promise relied on by the promisee need not be express but may be implied from a party's conduct

Beaver v Brumlow (Statute of Frauds, Scope and Application, Promissory Estoppel)

The statute of frauds does not bar the specific performance of an oral contract for the sale of land, where the terms of contract other than the purchase price have been proved, part performance to the agreement by both parties have occurred, the part performance refers unequivocally to the sale of the land through possession and the making of improvements and a remedy of law would not be adequate.

Advertisements as Offers (Lonergan v Scolnick; Izadi v. Machado Ford, Inc.)

The traditional rule is that advertisements are merely invitations to offers, but not offers In order to be an offer there must be some language of commitment or some invitation to take action without further communication

Wartzman v Hightower Productions Ltd. (Reliance Damages)

The unfortunate oversight on which this case was based was a costly one, but it was made by one who was hired precisely for the purpose of averting the consequent losses, it is he who must bear them*** In the event of a breach of contract, damages for expenses incurred in reliance on the contract are recoverable, less any loss that would have resulted if the contract had been performed.***

Alaska Packers' Ass. v Domenico (Modification, Pre Existing Duty Rule)

There can be no consideration for a modified contract that arises from a coerced promise for increased compensation for performing what one is already obligated to perform.

Baird v. Gimbel (Promissory Estoppel, Offeree's Reliance on an Unaccepted Offer as Limitation on Revocability)

There is not the least reason to suppose that the D meant to subject itself to such a one sided obligation A general contractor cannot enforce a bid made by a subcontractor as a bilateral contract when the general contractor is under no obligation to use the subcontractor's bid if awarded the job and the general contractor did not accept the subcontractor's bid before it was revoked. A general contractor is also unable to enforce the subcontractor's bid based on promissory estoppel when there is no consideration

Construction Against Drafter (Joyner v Adams)

They eventually broke the tie claiming that there was no meeting of the minds and applied the rule that contractual ambiguity should be resolved against the party that drafted the language in question Other courts have agreed that the maxim should be limited in its application to cases where one party can fairly be regarded as solely responsible for the language in question Court decisions also emphasize that the rule should be used only when other means of interpretation cannot resolve an ambiguity

§ 71. Requirement of Exchange; Types of Exchange (Pennsy v Ash)

To constitute consideration, a performance or a return promise must be bargained for. A performance or return promise is bargained for if it is sought by the promisor in exchange for his promise and is given by the promisee in exchange for that promise. The performance may consist of an act other than a promise, or a forbearance, or the creation, modification, or destruction of a legal relation.

Threat of Criminal Proceedings

To threaten criminal proceedings in order to get a contract signed will normally render an agreement unenforceable

Taylor v State Farm Mutual Automobile Insurance Co. (Parol Evidence [Allowed])

Under the Corbin view, a court first looks at all the evidence to determine the intent of the parties' and the extent of integration in the written document, then the court applies the parol evidence rule to exclude any extrinsic evidence that varies or contradicts the written document.

Mutuality of Obligation (Sateriale v RJ Reynolds Tobacco Co.)

Under this doctrine, both parties must be bound to perform their obligations or the law will treat the agreement as if neither party is bound to perform. Does not apply to unilateral contracts

Quasi Contract (Credit Bureau v. Pelo, Commerce v Equity Contracting

Unjust Enrichment or Contract Implied by Law: represents an obligation imposed by law to avoid injustice, not a contractual obligation created by voluntary consent

Reliance Damages (Wartzman v Hightower Productions Ltd., Walser v Toyota)

When expectation damages aren't conceivable, this is generally the substitute The measure of compensation given to a person who suffered an economic harm for acting in reliance on a party who failed to fulfill their obligation

Riverisland Cold Storage inc. v. Fresno (Parol Evidence [Allowed; to Prove Fraud in the Procurement of the Contract])

When fraud is proven it cannot be maintained that that the parties freely entered into an agreement reflecting a meeting of the minds Parol Evidence is deemed admissible for the purpose of proving fraud, without restriction, in the restatements

UCC §2-202: Final Written Expression: Parol Evidence (Thompson v Libby; Classical Approach)

When the parties to a contract have mutually agreed to incorporate a final version of their venture agreement in a writing, neither party will be permitted to contradict or supplement that written agreement with extrinsic evidence (written or oral) of prior agreements or negotiations between them

J.N.A. Realty v Cross Bay Chelsea, Inc. (Express Conditions)

Where a tenant would suffer a forfeiture, he is entitled to equitable relief where the default has not prejudiced the landlord and it is a result of an honest mistake.

Williams v Walker-Thomas Furniture Co. (Unconscionability)

Where the element of unconscionability is present at the time a contract is made, the contract should not be enforced.

Dohrmann v Swaney (Adequacy of Consideration)

Where there is substantial failure of consideration for a contract, particularly where the inadequacy is accompanied by other inequitable or unconscionable features, a court of equity may rescind or cancel the contract. If the amount of consideration is grossly inadequate that it shocks the conscience of the court, the contract fails.

§ 176: When is a Threat Improper

While threats to engage in litigation or to refuse to honor a contractual obligation are not per se improper, such threats may be improper if the circumstances show that the threat was made in bad faith

Leibel v Raynor Manufacturing Co. (The Rationale for Implied Terms)

§ 2-309(3): Absence of Specific Time Provisions; Notice of Termination. Termination of a contract by one party except on the happening of an agreed event requires that reasonable notification be received by the other party and an agreement dispensing with notification is invalid if its operation would be unconscionable

Seidenberg v Summit Bank (The Implied Obligation of Good Faith)

§ 205: Duty of Good Faith and Fair Dealing Every contract imposes upon each party a duty of good faith and fair dealing in its performance and its enforcement. § 1-304: Obligation of Good Faith. Every contract or duty within the Uniform Commercial Code imposes an obligation of good faith in its performance and enforcement. Breach of Implied Covenant (1) permits the inclusion of terms and conditions which have not been expressly set forth in the written contract (For a K to have "business efficacy," implied terms may be required)(Parol Evidence); (2) allow redress for the bad faith performance of an agreement even when the defendant has not breached any express term of the contract; (3) permit inquiry into a party's exercise of discretion expressly granted by a contract's terms. (Bad Faith) Decided by the trier of fact