Contract Case List
Miliken v. Jacono
D's failed to disclose that there had been a murder/suicide in the house by the previous owners. P bought the house and didn't become aware of it until after she moved in. Hold: Fraud from real estate is only liable for failing to reveal objective material defects. To allow disclosure of psychological defects opens up a lot of disclosures that sellers would need to reveal and it becomes a slippery slope. No duty to disclose psychological defects under RESDL.
Indiana-American Water v. Town of Seelyville
Facts: 25 year contract to purchase water, but halfway through developed own well. Hold: Town's development of their own water supply did not constitute a breach of the terms or the town's obligation of good faith
SR International v. WTC
Facts: 9/11 and insurance is claiming that it was 1 occurrence while building owners are claiming 2. (To collect more from insurance) Rule: When contract is ambiguous, court may use subjective manifestations of assent to assist in determining the intentions of the previous and ongoing negotiations.
Germantown v. Rawlinson
Facts: An investigator came to Rawlinson's home & got him & his wife (who was already upset & fragile from a miscarriage a month before and suddenly hearing the news that her husband was a liar and an embezzler) to sign two judgment notes: one for $160k and one for whatever else he took that would later be determined. Hold: i. Misrepresentation 1. Fraudulently misrepresented the liability was only $160k a. misrepresentation by nondisclosure 2. Fraud in the inducement: had to sign something w/o opportunity to know the character of the document or its essential terms. 3. Fraud in the factum: substitution of one document for another 4. Concealment: "you don't need a lawyer" = concealment 5. Justified in relying on express or implied agreements. a. Here the other elements affect the court's decision - the court cuts her some slack. ii. Duress 1. Improper threat for which the victim didn't have any reasonable alternative? Yes improper threat: had to sign the contract, If she didn't sign the note then they'd institute criminal proceedings against the husband; No reasonable alternative: Yes, court talked about Hallmark type "picture of a family" and that she had no reasonable alternative but to sign because if she didn't this would place a lot of stress on her marriage and on the tranquility of the Rawlinson household. 2. Improper use of the criminal process for private benefit a. "so long as you continue to cooperate you don't need a lawyer."
WTC v. Hartford Fire Insurance
Facts: At 9/11, new purchase of WTC didn't yet have policy (only the binders). Did insurer owe $3.5 million or $7 million? It depended on whether the attack was one "occurrence. Hold: There was sufficient intent to be bound. Occurrence is ambiguous, allowing consideration of extrinsic evidence (reversed summary judgment). If the court had decided the agreement was too definite to enforce here, the insurance company would just refund the premium and not pay out at all. If there is sufficient intent to be bound, courts will struggle to find a way to enforce K.
Danzig v. Danzig
Facts: Attorney Jeffrey Danzig enlisted Steven Danzig to help him recruit clients & said he would pay a portion of any fees. When he didn't pay him for one, Steven sued. Hold: the relevant statute (forbidding an attorney from paying a finders' fee) was focused on conduct by attorneys rather than the general public; enforced contract to prevent the attorney from profiting from his illegal arrangement (court's discretion!). Lawyer was more culpable than the brother here. They're enforcing the illegal K here because a court may choose to enforce a contract despite the fact that it is illegal or against public policy if the court determines that the parties are not equally culpable (in pari dilecto)
Garwood Packaging Inc. v. Allen
Facts: GPI flopped on marketing its food packaging system and were broke. It engaged Martin to help find investors. Martine told GPI that his employer Allen would consider investing $2 million of its own money in GPI IF another investor could be found who would make a comparable investment. Martin told GPI the deal with Hobart Corp would go through come hell or high water. It didn't. Rule: Not a promise by Martin and so no promissory estoppel claim. The promise did not induce reasonable reliance on the part of GPI.
Fletcher Harlee Corp. v. Pote Concrete
Facts: General contractor (Fletcher) solicited bids from subcontractors. Pote submitted price quote and stipulated that quote was solely for information purposes. Fletcher accepted the bid, and Pote increased the price of their work. Rule: 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. D's response could be no more than a counteroffer because its terms were materially different than the solicitation letter. D's response was NOT an acceptance. It was a counteroffer.
Hawkins v. McGee
Facts: Hawkins had a lot of scar tissue on his right-hand palm. Hawkins underwent an operation by Dr. McGee. Before the operation, Dr. McGee stated, "I will guarantee to make the hand a 100% perfect hand or a 100% good hand. Hawkins was unsatisfied with the operation and has a hairy and unusable hand. Hawking sued McGee. Rule: The measure of recovery is based on what the Defendant should have given the plaintiff not what the plaintiff should have given the defendant.
Landis v. William Fannin Builders
Facts: Husband and wife had a K with D to construct their home. Dispute arose over 2 batches of siding applied to the home that were stained differently. Tried a lot of things to fix the patchwork appearance: attempted to remove siding to help match it, applying a second coat of stain, but nothing worked. Ultimately used a solid stain to cover it. Hold: This is a material breach
International Casings Group Inc. v. Premium Standard Farms
Facts: International Casings group had a contract with Premium Standard Farms for the sale of all of their output of hog casings. Standard Farms was selling casings to a 3rd party. There was an exchange of emails between P and D about the contract. Rule: A signature includes any symbol by a party with present intention to authenticate a writing. [UCC 1-201 subsection 39]. UETA, "an electronic signature is a electronic sound, symbol, or process attached to a record and is adopted by a person with the intent to sign a record."
Jacob & Youngs v. Kent
Facts: JY built a country residence for K and K was mad some of the pipe was not Reading pipe. If JY had to re-do the work, great expense for nothing. Use of different pipe was not intentional conduct no fraudulent. Clause: "All wrought-iron pipe must be well galvanized, lap welded pipe of the grade known as 'standard pipe' of Reading manufacture." Hold: For JY; using reading pipe is not a condition to pay. The measure of damages is not the cost of replacement (huge!) but the difference in value (none). They used substantial performance here. Rule: Where the breaching party has substantially performed it's entitled to payment of the K. In the reasoning they talked about, that condition was met even though they didn't use the reading pipe because the difference was so trivial.
Glover v. Jewish War Veterans
Facts: Jewish war vets posted offer for reward for info on apprehension and conviction of persons guilty of murder of one of its members. Glover gave police info without knowing that the reward was offered. Rule: A person cannot accept an offer unless they know of its existence.
Kessler v. National Presto Industries
Facts: Kessler was canning pickles using a pressure cooker and Kessler alleged that she let the steam escape and checked that the pressure gauge read zero before opening up the lid. Pan exploded and she was burned. Kessler met with a representative of a home insurance company and signed a release all claims document. Kessler signed it presumably for her friend and so her friend's insurance policy premium won't increase. Kessler did not intend the release to apply to the manufacturer Rule: For the most part, inadequacy of a contract does not void consideration!
Koch v. Construction Technology
Facts: Koch completed all work. CTI only paid $40k less than due because MHA hadn't yet paid CTI in full. Who takes the risk for the owner paying late or not at all. Hold: The language in the contract does not establish a condition precedent. Language is not clear. It was the intention of the parties that the subcontractor would be paid by the general contractor for the labor and materials put into the project. Rule: Conditions precedent are not favored & will not be upheld unless clear language supports them. Apples force in "pay when paid" contexts (majority jurisdictions do not release the contractor from obligation in case of nonperformance by the owner).
Krell v Henry
Facts: Krell owned a flat which overlooked the route being taken for the coronation procession of King Edward VII. Krell and Henry entered into a K for the use of the flat during the procession days. But after K was made, the coronation was postponed because King Edward became sick. Hold: Both parties contracted under the assumption that the reason they were entering into the deal is to provide a viewing space for the procession. Performance of the K would be excused where a change in circumstances following the K defeated the mutually understood purpose of the K. Frustration of purpose!
Birchwood Land Co. v. Krizan
Facts: Krizan purchased a landlocked parcel where she had an implied access easement over the portion of the adjacent parcel that is owned by Birchwood. Birchwood built a road for her and ran sewer and water lines to connect it because Birchwood wanted to develop his property. After completing the improvements, Krizan was going to develop her property and Birchwood sued wanting her to pay for the expense of the sewer, water, and road construction costs. Hold: No unjust enrichment claim because Birchwood was a volunteer and he was going to do it anyway.
Trinity Homes, L.L.C v Fang
Facts: P's agent alleged that he placed the purchase and sale agreement in fax machines and faxed to D's agent. No verification that fax was transmitted or received. Later, P received call by D's agent that the D's did not want to sell the property nor enter into a contract with P. Rule: The burden is on the complainants to prove by a preponderance of the evidence that the fax transmission of the agreement was actually made and accomplished. Transmitting the fax was like mailing an acceptance under the mailbox rule, where an offer is accepted when deposited in the mail.
Hamer v. Sidway
Facts: The uncle promised his nephew that if he refrained from drinking, using tobacco, swearing, and playing cards he would pay him $5,000. When nephew did this he sent the uncle a letter and the uncle said that he would pay him when he thinks that the nephew is capable of taking care of the money. The uncle dies before giving Willie the money. Rule: Forbearance satisfies the exchange! Doesn't matter if performance benefitted the promisor. You need benefit to the promisor or detriment to the promise!
Diversified Group v. Sahn
Facts: There is a statute against selling scalped tickets. Coleman sold season tickets to Sahn. In turn, Sahn sold some tickets to Haber. Then the team finds out and voids the tickets. Hold: Upheld the contract in violation of a scalping law where both parties knew the activity was illegal, to prevent the selling party from profiting from its illegal contract.
Carlil v Carbolic Smoke Ball Company
Facts: They issued an ad saying any person who contracts influenza, colds, or any disease caused by getting a cold after using the smoke ball 3 times daily for 2 weeks will receive a reward of 100 pounds. Performance based ads are offers that anyone who performs the conditions in the ad and anyone who performs the condition accepts the offer. Unilateral contract b/c the offeree completed the performance by using the smoke balls and the offeror just needed to pay.
Carlisle v. T&R Excavating
Facts: They were married and Ms. Carlisle began doing all of the bookkeeping for T & R. Husband offered to pay her for her work, but she refused so instead he offered to do her work for her on her building. They entered into a separation agreement in which provided that repayment for the wife's services would be that the husband would provide construction services to the wife's business and the wife would reimburse for the cost of materials. Rule: A benefit needs to be something regarded by the promisor as beneficial enough to induce his promise. A desire to help is not consideration for a contract.
Sherwood v. Walker
Facts: Thought the cow was barren, made a deal, then found out the cow was pregnant. The Court says that there was not really a mistake about the thing sold, but the nature of the thing sold (or the "substance" of the agreement). Hold: This was a mutual mistake. A party who has given a consent to a contract for sale may refuse to execute it, or he may avoid it after it has been completed, if the assent was founded, or the contract made upon the mistake of a material fact, such as the subject matter, the price, or some collateral fact materially inducing the agreement
Schnabel v. Trilegiant Corp.
Facts: Trilegian operated a "Great Fun" program that offers goods and services at a discount. First month of program is free but after customers are charged a monthly membership fee. P enrolled in the program and did not realize they would be paying a monthly membership fee and did not even realize the program they enrolled in was operated by a party other than the merchant they bought goods from. Rule: Deny arbitration because the email does not put recipients on inquiry notice of the terms. To determine inquiry notice you have to look at whether the reasonable person in the position of the parties would have known about the terms and the conduct required of them to assent.
United Airlines v. Good Taste
Facts: United Airlines awarded Saucy sisters the catering K after they bid the lowest on United's in-flight catering. In order to meet the operation requirements of United for contracting caterers, Saucy Sisters expanded its operation by spending roughly 1 million dollars. Catering agreement was signed and performed for approx. a year. United gave Saucy Sisters 90 day notice of termination by which it notified them that its performance under the agreement would terminate. Question about the meaning of a 90-day termination clause- majority and dissent agree on duty of good faith but interpret terms differently. Hold: Goal of achieving higher profits from a lower bidding supplier is not inherently impermissible and does not amount to opportunistic advantage taking. The law of Illinois does not provide a measure of protection against a termination specifically motivated by bad faith and accompanied by opportunistic advantage taking. Dissent: this contract is silent on what the grounds are for contract termination and therefore we the court will decide: in the absent of an agreement we go to the general duty of good faith which requires the contract not terminate if it runs counter to the reasonable expectation of the parties. They wanted to apply something like Atwater here!!
Zaretsky v. William Goldberg Diamond
Facts: WGDC consigned a diamond to Derek Khan, a celebrity fashion stylist. Khan was only authorized to sell the diamond if WGD approved the sale and set out specific terms prior to the sale which Khan never got this agreement. After a Feb. 2003 consignment, Khan failed to return the diamond in a timely manner and WGDC filed a police report. In March 2003 the diamond surfaced on the legitimate market and in late 2003 the diamond was purchased by another diamond merchant and the Walshes bought it and gave it to their children. Rule: The entrustment provision in UCC 2-403(2) is limiting to merchants who deals in the goods of that kind in UCC 2-104(1).
Konic International Corporation v Spokane Computer Services, Inc
Facts: What is "fifty-six twenty?" Hold: It was a misunderstanding = no meeting of the minds = no contract. Differing interpretations of a central contract term there is no reason to prefer one interpretation over the other.
White v. Village of Homewood
Facts: White sustained injuries when she fell from the horizontal bars as part of a physical agility test to become a firefighter/paramedic for the Homewood Fire Department. Before the test, White signed an agreement that released them from liability. White said she signed it only to obtain employment. Rule: No consideration when a party is doing what they are already legally obligated to do because they did not experience detriment.
Worchester Heritage Society v. Trussell
Facts: Worchester Society rescued a historic home & sold it to Trussell on the condition he restore the outside within a year. 5 years outside was still not completely restored. Hold: Not a material breach (rescission isn't appropriate).
Myskina v. Conde Nast Publications
Facts: Writing at issue: a release P had to sign before photos. P trying to introduce evidence that she expressed reservations & only agreed after assurance photos would be used 1x. Before shooting Myskina signed the release form and she claimed she would not have signed the release had it been explained to her because she doesn't speak English. Hold: the purported oral agreement contradicts the plain language of the Release. Judge says writing is fully integrated (writing doesn't mention alleged oral agreement, straightforward transaction, words say: "irrevocably consent"). Not allowed to put the oral agreement in as Parol evidence.
Lucy v. Zehmer
Facts: Zehmer owned a piece of property that Lucy wanted to buy. He and Lucy both signed a napkin which had specific details. Zehmer also had his wife sign it. Zehmer later contended that he was joking and that he didn't really want to sell. Rule: Actual intent is unimportant... manifestation of intent is key. Objective assent prevails over subjective manifestation of assent. If there is no indication that the offer is evidently in jest, and that an objective reasonable person would find that the offer was serious then there may be a valid offer.
In re House of Drugs
Factual complaints of π are what they should have been (and prob were) aware of before k (they were businessman and their investigation into the shopping mall should have led them to the financial stability of the large tenants), so no fraudulent misrepresentation. Lessee claimed that the lessor had committed fraud by failing to disclose at the time of entering the lease that 2 of the largest tenants in the mall were about to go out of business.
Rodi v. SNESL
Not accredited law school, promise accreditation several ways. Court finds not enough info for possible fraudulent misrepresentation because it was unreasonable for his to rely on the statements of the law school and he couldn't have transferred to another law school anyways!
Stambovsky v. Ackley
Poltergeist house, Court allows for rescission because seller created a public belief about house being haunted and possessed, and so they owe a duty to the buyer. The court used equitable principles to block specific performance of a tainted contract a. Condition created by the seller b. Materially impairs value c. Within the knowledge of seller or unlikely to be discovered by prudent purchaser with due care
Lefkowitz v. Great Minneapolis Surplus Store
Rule: Ads in the newspaper that included the quantity of items, price, place, and because it said first come first served, it was a specific person. Ads were a binding offer. Rule: An ad may be considered an offer when it promises something in exchange for a clear, definite action, and leaves nothing open for negotiation.
Atwater Creamery v. Western National
Facts: Atwater had a burglary of $15k+ of chemicals but insurance company refused the claim b/c insurer definition of burglary req. "evidence of forcible entry," which was questionable. The insurance policy contained an evidence of forcible entry requirement in the definition of burglary. There were no visible marks of physical damage to the exterior and the point of entrance or to the interior at the point of exit as req. by the definition under the policy. Hold: In favor of Atwater- they get the coverage! Says language is not ambiguous, then interprets contrary to policy language. Policy was within the reasonable expectations of the insured that this event type that occurred here would be covered (Atwater reasonably expected that its burglary insurance policy with western would cover the burglary that occurred). A burden is placed on the insurance company to communicate coverage and exclusions of policies accurately and clearly.
Babcock V Hitachi America
Facts: Babcock conracted with Hitachi for a catalytic system at their plant. Didn't work the way they were guaranteed it would and tried to return. Hitachi argues that the price quotation was the offer and the purchase order was the acceptance. Babcock contends that it's the purchase order that was the offer and Hitachi accepted by shipping the product Rule: 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. Detailed terms and conditions constitute an offer.
Pacific Gas v. GW Thomas
Facts: Basically what happened is that D entered into a K with P to furnish the labor and equipment necessary to remove and replace part of a turbine. D agreed to perform the work at its own risk and expense and to indemnify P against all loss, damage, expense, and liability resulting from injury to property arising out of or in any way connected with the performance of the K. During the work, cover fell on the exposed rotor of the turbine and cost 25K in damages. Isolated words (Clause in a contract) state they will "indemnify against all loss, damage, expense and liability..." : Competing interpretations: PGE want this to cover injury to our own property, GW Thomas says clause is only meant to cover 3rd party liability (says this is the industry standard and wanted to rely on extrinsic evidence: prior course of dealing) Hold: Allow the extrinsic evidence here. It's relevant to explain the meaning of the words. Said that only focusing on the written word for meaning can lead to attribution that was never intended. Words do not have absolute meanings!! (They don't have the same meaning for everyone!)
Hendricks v. Behee
Facts: Behee made an offer to purchase real estate from Smiths on March 2nd. The Smiths signed the offer. Before Behee was notified of Smiths acceptance to the offer, Behee withdrew the offer by notifying a real estate agent. Rule: There is no contract until acceptance of the offer is communicated to the offeror.
Cherry v. McCall
Facts: Cherry's bought house from the McCall's that turned out to have a walled-in room in the basement filled with damp and moldy & rusty trash & plumbing appliances & fixtures. Hold: Court held it was not a mutual mistake because the Cherry's had allocated the risk to themselves by signing an "as is" clause. The risk of the mistake was allocated to the Cherry's by agreement when they K to accept the property in its current condition.
City of Scottsbluff v. Waste Connections of Nebraska
Facts: City switched from Waste Connections to a cheaper solid waste removal option. They did find a cheaper option but the cheaper option would not come into effect for another year. They told Waste Connections and Waste Connections after already agreeing to the short-term contract increased the price by 41%. City objected to the price increase, but Waste Connections refused to reduce the price and City paid it until their new contract. City sued. Hold: Yes; Waste Connections liable. Ct. here said unjust enrichment and said that it was unjust because they were under duress. Ct. chose unjust enrichment but it wasn't really a proper use of the doctrine. It was very nebulous the way they said that it was unjust because they were under duress.
Cooke v. Goethals
Facts: Cookes agreed to purchase property from Goethalses but the Cookes couldn't get financing for it until the Goethals resolved a lot line adjustment issue. After Goethals assured Cooke's that the lot line adjustment would not be a problem the parties agreed to a 30-year amortization of the purchase price to est. the Cooke's monthly payment of $350 with an interest rate and taxes included. No written agreement to the terms here. Rule: Sufficient partial performance there needs to be: (1) delivery and assumption of actual and exclusive possession, (2) payment or tender of consideration, (3) and the making or permanent, substantial, and valuable improvements in accordance with the contract.
Hodge v. Craig
Facts: Craig and Hodge met and were in an off and on-again relationship. Ms. Hodge had sex with Mr. Craig and Mr. Hay during the period when her son was conceived. Ms. Hodge told Craig that she believed she was pregnant and said that she was sure that he was the father. They married, and Craig raised the son: he paid child support when they divorced and made regular visits to see Kyle. Kyle was not his son. Hold: Ms. Hodge intentional misrepresented Kyle's paternity to Mr. Craig. a. Ms. Hodge asserted a misrepresentation of fact: she said, "The baby could be no one else's and he was the father" which induced him to marry her, raise the child as his own, undergo a vasectomy in the belief that he had a child and did not want more, and he paid child support and continued caring for the child based on the justifiable reliance that Kyle was his son. b. The victim was innocent: He had no reason to know that the representation of him being the father was false AND: sleazy behavior: she made this representation to him recklessly not knowing that it could be true or false.
Raffles v Wichelhaus
Facts: D agreed to buy some cotton arriving from Bombay on the ship Peerless. Apparently, there were 2 ships one leaving Bombay in October and another leaving Bombay in December. The cotton market tanked and D refused to accept the cotton that arrived by the later ship claiming that he had meant the earlier ship when he had agreed to make his purchase. Rule: Where parties attach materially different meanings to important contract terms and neither knows nor has reason to know of the misunderstanding, no contract results.
Congregation Kadimah v. DeLeo
Facts: Decedent on his death bed was visited by the Congregation's spiritual leader and during the visits he made an oral promise to give the Congregation $25,000. The oral promise was made in front of other witnesses and the Congregation planned to use the money to create a library. Rule: If nothing is given or received in exchange for a promise, traditional contract doctrine refused to the enforce the promise b/c of lack of consideration. No strings attached to a promise = no bargain for an exchange.
Wholesale Sand & Gravel v. Decker
Facts: Decker and Whole Sale entered into a K where Wholesale agreed to perform gravel work on Decker's property. There was no completion date for the work on the K. WholeSale's president believed that they had 90 days to complete the work but told Decker that the driveway portion would be done within an week. Wholesale ran into difficulties doing the work because of the wetness of the ground. So, Wholesale Pres. Decided to wait until the ground was dryer. Decker contacted the president 3 times enquire about the work and lack of activity at the site. Pres. Said he'd get right on it on first 2 phone calls and then on the 3rd call Decker said that he would terminate the K if they weren't on the site the next day. They didn't appear at the site and Decker terminated the K and hired a new contractor to finish the work. Wholesale sued for breach of K. Hold: Wholesale through its conduct gave a definite inability or unwillingness to perform within a reasonable time and so repudiation can be made! Words or conduct evidencing inability to perform must be definite and absolute! implied their refusal to perform (not explicit, but implied).
DeFontes v. Dell
Facts: Dell offers consumers as part of their purchases, an optional service contract for on-site repair of its products. Parties that opt to pay for the service contracts are charged a tax which is either paid to the state directly or collected by a 3rd party service provider and then remitted to the state. Rule: Burden falls on the seller in layered contracting to show that the buyer has accepted the seller's terms after delivery. Seller must show that they reasonably invited acceptance by making clear in the terms of the agreement that: (1) by accepting the defendant's product consumers were accepting the terms and conditions contained within AND (2) the consumer could reject the terms and conditions by returning the product.
Conwell v. Gray Loon
Facts: Design and launch of website, paid in full. Entered into 2nd agreement for modifications to site. GL took down site when Conwell didnt pay. Rule: Where close questions arise about whether a transaction involved the transfer of goods or performance of services, courts commonly choose one or the other by asking what the predominant thrust was.
Carrig v. Gilbert
Facts: Developer had a K with builder to build 35 houses. After building 20 houses the builder refused to build anymore. Hold: The court awarded the developer expectation damages for the additional cost it incurred in having the remaining 15 homes be built by someone else. The builder's failure to build the 15 houses remaining was a material breach. The court found K to be divisible because it treated houses as distinct units.
Drennan v. Star Paving Co.
Facts: Drennan is a licensed contractor who was preparing a bid on the school job and he received bids from subcontractors. He received a bid from Star Paving Co. and they were the lowest bid for the paving. He submitted his bid to the school and his bid was the lowest and so he got the job. The next morning P went to Star Paving Co. office and they told him that they made a mistake on the bid and refused to carry out the job on the original bid price. Rule: Reasonable reliance on an offer makes the offer irrevocable.
Odorizzi v. Bloomfield School District
Facts: Elementary teacher arrested, charged for homosexual activity. Upon release on bail, after not sleeping for 40 hours, the principal and superintendent came to his house & convinced him to resign immediately to avoid being fired & scandal of publicizing his homosexuality. Hold: No duress because it was not unlawful: publicizing something is not unlawful! But he did meet rescission!!! (Basically doesn't satisfy duress because it wasn't unlawful and it doesn't satisfy misrep. Because he wasn't justified in relying!) ii. Hold: It had both the objective and subjective elements of undue influence. Unfair persuasion: time and place of the exchange, he was weak because he had no sleep for 40 hours and the exchange occurred at his apartment and he couldn't leave. He was imprisoned within his own home. Person has to be in a position of vulnerability: Owes a fiduciary duty to you: you would expect that an employer will look out for your best interests.
Estate of Nelson v. Rice
Facts: Estate sale accidentally sells buyer 2 pieces of original art that Christie's sells for over $1 million. Estate sold it for $60 Rice. Estate sues and says mutual mistake. Hold: it was the estate's responsibility & they had conscious ignorance by proceeding even though they knew they didn't have all the information. The Estate bore the risk of the mistake as to the painting's value! The estate appraiser told them that she did not appraise fine art and that she had limited knowledge about seeing if there was any fine art.
Clark v. Wallace County Cooperative
Facts: Farmer & grain elevator make agreement that farmer will deliver certain amount of corn, but there was a freeze and the farmer didn't raise that amount, so he just delivered all he had not the amount specified under the K. Clark only delivered 2,207.41 bushels of corn when he agreed to sell 4,000 bushels of corn. Clark sued stating that he was excused form delivering the remaining 1,329.59 bushels because of the freeze and that they should pay him the whole price under the agreement. Hold: farmer is not excused under impracticability- the farmer could have found the corn elsewhere, this is one of the risks a farmer takes. There is a difference between subjective and objective impracticability. Only objective impracticability may relieve a party of his or her contractual obligations. No objective impracticability here because Clark only had to deliver 4,000 bushels and he could have done this by going to another source. Also said that the seller had reason to know of the impracticability because farmers can foresee September freezes will reduce their corn yields.
Conrad v. Fields
Facts: Fields and Conrad met when they were neighbors in an apartment complex in the early 90's. Fields became rich and promised to pay Conrad's tuition and other expenses associated with law school. Conrad quit her job to attend law school but he stopped payment on the check for the second payment. He told Conrad that his assets had been frozen and so he told her that when she graduated law school and passed the bar exam he would pay for her tuition. Rule: All elements of promissory estoppel are met. (4)
Mackay v. Four Rivers Packing
Facts: Four Rivers operates an onion packing plant and GM hired Mackay to be a field man. Mackay alleged that Four Rivers offered him a long term employment contract to be a field man until his retirement. River denies this. Mackay was diagnosed with diabetes and he was fired without notice. Rule: If it possible to perform fully a contract within 1 year, the contract does not fall within the SOF. The Court only cares about possibility and NOT probability.
Oppenheimer v. Oppenheim
Facts: Lessee of 33rd floor in bldg & moved away. 29th floor lessee entered agmnt to sublease subject to delivery of a written consent of the main landlord delivered by a certain date. But only verbal consent was given by deadline & sublessee attempted to refuse the contract. Hold: a contract was never formed. a. What kind of clause is this clause? Is this a promise or condition? b. If we interpret as a condition, that means if its not satisfied to a necessary degree, anything obligations conditioned on that condition go away. c. Court looks to a presumption against conditions, looks to language, and in some degree acknowledges circumstances that would be relevant. Here, the condition was provided in the clearest language (that the parties did not intend to form an agreement unless and until defendant received written notice of the prime landlord's consent.)
Lhoka v. Geographic Expeditions
Facts: Lhotka went on a mountain climbing trip sponsored by GeoEx and died on the trip due to an altitude related illness. Before going on the trip, parties are required to sign a K that contained a dispute resolution clause that stated that in the event of a dispute parties would go first to mediation in SF and if mediation didn't solve the problem then they would go to binding arbitration and maximum liability would be the cost of the trip purchased. Holding: agreement is unconscionable and unenforceable. Procedural element of unconscionability because there was a lack of negotiation and parties had no choice but to sign it if they were to go on the trip. Substantive element: it reallocated risk in an objectively unreasonable manner here! Limitation on damages here (Note: not in line with Feldman v. Google, but difference is that Carnival Cruises and Feldman v Google did not cap damages)
Harris v. Time Inc.
Facts: Little boy opens envelope to receive advertised, free calculator watch. Rule: An advertisement is not typically treated as an offer, but an invitation to bargain. There is however, a fundamental exception to the rule - an advertisement can constitute an offer if it calls for performance of a specific act without further communication and leaves nothing for further negotiation.
Lively v. Ijam
Facts: Lively was the owner of a small business and bought a computer on behalf of a client. He received the computer and returned it to Ijam a short while later for repair. Ijam never returned the laptop to him. Rule: The forum selection clause in the invoice did not alter the terms of the contract between Lively and Ijam. Lively is not bound by the forum selection clause because it's not part of the contract. If P was a merchant = forum selection clause materially altered the contract and so it was not part of the contract. If P was not a merchant = lively did not expressly agree to the terms and so the terms do not become part of the contract. Non-merchants when there are additional terms it becomes part of the contract if the buyer expressly agrees to the terms. (Application of 2-207)
Terry Barr Sales Agency v. All-Lock
Facts: Looking at the reasonable expectations of the parties. All-lock Co. was a manufacturer of locks and latches for automobiles. All-lock entered in an oral agreement with Terry Barr Sales Agency. Barr would sell All-Lock's products to car manufacturers in exchange for a commission. A 1994 All-Lock terminated the oral agreement with Barr and refused to pay post-termination commissions after 90 days. Terry Barr said they were to get the commissions for life and the difficult part is getting the client in the door. Hold: Reversed summary judgement. Jury is allowed to consider all circumstances to determine what the terms of the K are.
Fiege v. Boehm
Facts: Louise testified that she had sex with the defendant in his car and that he agreed to pay all her medical and hospital expenses to compensate her for loss of salary caused by pregnancy and birth, and to pay her $10 a week for the support of the child on the condition that she would not institute bastardy proceedings against him. D got blood tests and found out that it was not possible for him to be the father and so he stopped paying. Rule: Forbearance to prosecute does not constitute consideration if the charge is totally unfounded. In this case, both parties thought the charge to be true, thus consideration was given.
Lyon v. Belosky Construction
Facts: Lyon hired slew of professionals to help build a custom home, but they put the roof in the wrong place and nobody noticed until the end. Hold: Lyons entitled to damages to replace the roof b/c the defendants "at the very least" acted negligently.
Roth v. Malson
Facts: Malson was selling land and P made offer. Malson counters. P wanted to accept the counter but instead signed the wrong part of the contract, noted that he wanted to change a small detail as well. D rejected the counter to counter offer. Rule: An acceptance must be absolute and unqualified. A qualified acceptance is a new offer. Under the objective test, the court must determine the reasonable meaning of the response to an offer.
Martin v. Little Brown
Facts: Martin noticed that a book plagiarized another book & notified the publisher of the first book, and offered to send details. The publisher accepted the details and sued for copyright infringement. Martin sued to receive 1/3 of the copyright suit judgment. Hold: Martin was a volunteer & cannot be reimbursed under UE, and there was no contract for payment. Facts were insufficient to establish a contractual relationship. Initial letter did not suggest a desire to negotiate; and appellees response was not an offer. Payment was never discussed and he never said that he intended to be paid.
Masterson v. Sine
Facts: Mastersons conveyed land w/ an option to repurchase within 10 years. Mr. Masterson went bankrupt. But the wife and the trustee in bankruptcy brought a claim to show that they have the right to enforce the option to get the house back if they choose to do so. Hold: Appropriate to introduce extrinsic evidence to see what's meant by the phrases used in the contract. Option clause in the deed does not explicitly provide that it contains the complete agreement. The option could have been a separate agreement. The judge is telling us that this evidence is partially integrated so it's appropriate to supplement it. Dissent: Agrees that even if an agreement is integrated, if a term in the writing is ambiguous you can explain it by reference to extrinsic evidence, but he doesn't think the writing here is in any way ambiguous. Wants a hard, 4 corners approach. You're allowing language into an option that as clear! It wasn't ambiguous so you're contradicting the nature of the grant. You should only look at the K!
Mattson v. Rachetto
Facts: Mattson and Rachetto were law partners and the Mattsons deeded a tract of land on the Mattsons' family farm to the Rachettos free of charge. Rachettos built a house on it and made it their home. 10 years later Rachettos approached the Mattson's wanting to buy the land that was an adjoining tract to serve as a buffer between their new home and a subdivision nearby. Mattsons agreed to sell them the tract at a bargain price but insisted that that Rachettos lease the tract back to them to allow them to cultivate hay and graze livestock on that property. 12 years later Rachettos discovered that the law prohibited long term agricultural leases and he built an electric fence around the property. Hold: Parties had made a K under a mutual misapprehension of the law and rescinded the agricultural lease and the sale of the buffer tract!
Morales v. Sun Contractors Inc.
Facts: Morales didn't speak english when he signed an employment agreement with arbitration clause. Rule: What is essential is not assent but rather what the person to whom a manifestation is made to is justified as regarding as assent.
In Re Morton Shoe Company
Facts: Morton shoe company pledged $10,000 per year to Combined Jewish Philanthropies. They made contributions for 3 years but they didn't pay the last 2 pledges totaling $20,000. Morton went bankrupt and CJP filed a proof of claim which the debtor objected to. Rule: Where there is detrimental reliance a charitable pledge is enforceable by promise.
Taylor v. Caldwell
Facts: Music hall burned down before musician could perform during the time of the performance. No provision in the K excusing the owner from their obligation to furnish the hall under this circumstance. Hold: Since the owner's performance was objectively impossible, he was excused from his obligation to do so or pay damages for failing to do so. Also, its destruction was caused by no fault to the owner.
Nguyen v Barnes & Noble, Inc.
Facts: Nguyen purchases 2 touchpads at the discounted price and received an email confirming the transaction that day. The next day Nguyen was informed that his order was cancelled due to unexpectedly high demand. The website's term of use was available through a hyperlink. Nguyen did NOT read the hyperlink Rule: Where a website makes its terms of use available through a hyperlink on every page of the website but does NOT provide users notice to nor prompts them to take an action that they assent to the terms- this is insufficient to give rise to constructive notice.
Farnum v. Silvano
Facts: Old lady sold her house for an irrationally low price to the guy who mowed her lawn. But she sold it during a moment of lucidity. Farnum is 90 years old and she sold it for 65K when it was worth 115K. Hold: More is needed than a moment of lucidity for the capacity to enter a contract. It requires an ability to understand the nature and quality of the transaction by understanding the context and implication of the decision. Rescission allowed, Farnum gets house back & Silvano gets restitution. She had to restore Silvano to the status quo by refunding the price, adjusted for the rent. Landscaper was aware of her incompetence. Also in Farnum's circumstance it was not rational to part with a major asset for such a low price because of the growing need for cash for her health maintenance.
James v. McDonald's Corp.,
Facts: P alleges she won the grand prize. McD wants to arbitrate, P says that she didn't know about arbitration clause. Rule: Contract doesn't need to be read to be effective. People who accept the contract take the risk that unread terms may be unwelcome. Question of whether or not a party is liable for assent depends on duty to read.
Feldman v. Google
Facts: P argued that even if the agreement were controlling, it is a K of adhesion and is unconscionable and so forum selection clause is unenforceable. Hold: Forum selection clause was justified for business reasons: D had an interest where its users are located all over the world. (Also looked at Carnival Cruise Lines case where cruise line had a special interest in limiting forums because it could be subject to suit from passengers in many different areas!) Also forum selection clause dispels confusion over where suits are to be brought and so internet users will have reduced rates for services, because of savings enjoyed by internet service providers by limiting the forums. Same in Carnival.
Allegeheny College v. National Chautauqua County Bank
Facts: P wanted to start a college fund. Gave the college a down payment. D revoked promise and died 30 days later. P sued under promissory estoppel. Rule: To be enforceable a promise must be supported by some kind of consideration; it must be a bargained-for-exchange. This means that there must be some detriment or benefit to one party resulting from inducement by the other party.
Steinberg v. United States
Facts: P was not allowed into the Pres. Inaugural Address festivities and claimed that the US govt. breached their contract. He obtained 2 tickets form his congressman and he went to DC to attend the inauguration. Never told that there was a possibility that he would not have gained admittance. Rule: Detriment to a party may serve as consideration ONLY if it's bargained for.
Quigley v. KPMG
Facts: P was terminated from his position as a senior manager after working there for 18 years. He sued D. D sought to compel arbitration based on a contract that P signed in 1984 when he was promoted to senior manager. Quigley argued he was under duress when h signed the K because he needed the job. Hold: "economic duress" is not just needing to work to make a living & that if he was so under duress he needed to say so & signature was in consideration for work advancement. He could have signed up for the job somewhere else. It was not improper or unlawful for an employer to require you to sign an arbitration agreement: he could've easily walked away. Economic duress: when one of the parties commits a wrongful or unlawful act or threat that deprives the other of his unfettered will.
Wood v. Lucy, Lady Duff-Gordon
Facts: P was to have the exclusive right subject to her approval to endorse products in her name, and use her name as an endorsement, and to have the exclusive right to place her designs on sale or to license others to market them. Rule: Although consideration between parties of a contract may not be explicitly stated in the writing of the agreement, it may be found implicitly via the surrounding circumstances.
Anderson v. Douglas & Lomason Co.
Facts: P worked for DLC and was caught stealing a box of pencils. Searched his home and garage and found no company property. DLC asked P to resign and when he refused, fired him. Rule: For a contract to arise, the handbook must be sufficiently definite in its terms to create an offer, and it must be communicated to and accepted by the employee.
White City v. PR Restaurants
Facts: PR restaurants operates the chain of "Panera Bread" restaurants. One restaurant is located in White City shopping center. In its lease with the shopping center PR negotiated an exclusivity clause. Later White shopping center entering into negotiations with a Qdoba franchise. PR sued saying that Mexican style food products falls within the lease restrictions! Conflicting meaning about the word "sandwiches". Hold: Lease does not provide a definition for sandwiches. Evidence on both sides is balanced and so it's not clear that Panera met their burden of proof here. PR was aware of the existence of Mexican-style restaurants near the shopping center which sold burritos. PR did not give evidence that the parties intended the term sandwiches to include burritos, tacos, quesadillas. Sandwiches under the normal dictionary definition does not normally include burritos, tacos, and quesadillas.
Pride v. Lewis
Facts: Pride's placed home for sale. On closing date, despite having placed deposit, D didn't show up. Rule: Silence is not equivalent to acceptance of the contract.
Pro CD v. Zeidenberg
Facts: ProCD sold its software to businesses and consumers. Zeidenberg bought the consumer package from a store but he ignored the license restriction and formed a company that resold the information on the internet for a price lower than what ProCD charged its business customers. Rule: Transaction was a rolling contract and so acceptance is stretched out so at the point of acceptance, the terms would be included. [Point of acceptance here begins at the cash register but is not completed until the customer has time to read the terms and not to return the product]. Language in contract was clear that if you returned it in a certain time you'd get a refund. Accept arbitration provision.
Kakaes v. George Washington
Facts: Prof at GW wanted tenure through specific perf. Rule: Spec. Perf. is extreme remedy to be left for discretion of court.
Feingold v. Pucello
Facts: Pucello was in a car accident & his co-worker connected him with attorney Feingold. They talked on the phone, and Feingold did a lot of work but as soon as he heard the rate Pucello decided to go with other counsel, Feingold sued for his services provided. Hold: No restitution- F did not confer any benefit on P & unethical late disclosure of fee, he was an officious (no justification for providing benefit without agreement) intermeddler (no reasonable opportunity to prevent the benefit from being given nor to return it). Not a volunteer b/c clear expectation of payment. By Feingold working on the case without agreement he proceeded at his own risk. No meeting of the minds here and so no K and no obligation to reimburse for his work on the case.
Sarvis v. Vermont State Colleges
Facts: Right after Sarvis got out of prison for bank fraud, he applied to be a Community College Professor. College fired Sarvis when they found out about his lies. Hold: Sarvis' knew his misrepresentations were false and deceptive and offered solely to affect the hiring decision, and justified the termination. a. Sarvis asserted a misrepresentation of that fact which induced the school to hire him based on their justifiable reliance. b. All intertwined: the more likely something is fraudulent or material, the more likely the court will say they are justifiable in relying on it, etc.
CNA International v. Phoenix
Facts: River Phoenix a young actor died due t a drug overdose and he died before completing 2 films. CNA international reinsurance Co. had to pay out. CAN sued for breach of K based on an actor loan-out agreement which was signed by the actor wi a general obligation not to do anything which would deprive the parties to the agreement of its benefits. Hold: Doctrine of impossibility applies here when impossibility is the fault of the person obligated to perform the personal services of the K. Clear and unambiguous rule that death renders a personal services K impossible to perform. The parties also could have provided specifically for the contingency loss due to illegal drugs: they did it to flying in an airplane. Also, Ct was worried about people now suing others for dying of lung cancer from smoking cigarettes for example and that this would create a lot of litigation.
SCI Minnesota v. Washburn
Facts: SCI sold Crystal Lake cemetery to Corinthian in a stock sale agreement. The agreement was for all shares but did not include the 2 vacant lots in Colorado and Burnsville. Corinthian then sold it to Washburn. SCI and Corinthian both sued Washburn wanting rescission. Hold: They are not entitled to reformation of the agreement and rescission. Ct. said no mistake here period. K's subject matter was the stock of the bank and the purchaser received the shares of the stock that he intended to buy and without fraud or inequitable conduct there's no rescission.
Bert Allen Toyota v. Grasz
Facts: Sale price of a Toyota given to P was an error due to a computer mistake. Representative refused to deliver the truck as promised. Hold: Rescission of a K is not allowed if an error of the price could have been detected. Rescission of K is inappropriate unless it meets a 4-part test: 1) the mistake was of so fundamental character that the minds of the parties have not met, 2)there was no gross negligence on the part of P, 3)no intervening rights have accrued, 4)the parties may still be placed in status quo.
Wood v. Boyton
Facts: Seller sells a stone for $1 to a jeweler thinking it's topaz, turns out to be a diamond. Hold: Not a mistake. No mistake as to the identity of the thing sold - it was a rock.
Dickinson v Dodds
Facts: Selling of property, opened offer until Friday to accept. Buyer heard that seller was discussing with a different buyer. Buyer left acceptance letter with sellers wife, but seller did not receive it. Rule: An offer is revoked when the offeree learns facts about the continued existence of an offer. To be a contact, there must be a continuance of the same mind between the parties at the time of the agreement.
Audio Visual v. Tanzer
Facts: Tanzer made a contract with Audio Visual Artistry to install a smart-home system for a fee. After problems arose, Tanzer fired AVA and requested a final billing. AVA sent a bill that reflected the total cost of the project which was increased from the original proposal because of changes to the system and an outstanding balance. Rule: In applying the predominant purpose test the court looks to 4 factors, "(1) The language of the parties' contract, (2) the nature of the business of the supplier of the goods and services, (3) the reason the parties entered into the contract (i.e. what each bargained to receive), (4) the respective amounts charged under the contract for the goods and services.
