Contracts Cases

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

A contract does not fall within the statute of frauds' one year provision unless, by the specific terms of the contract, it is impossible for performance to be completed within one year.

Lake River Corp. v. Carborundum Co.

A court will not enforce a liquidated damages clause that amounts to a penalty. (Squib, only covered reasoning not case in full)

Hobbs v. Massasoit Whip Co.

Acceptance by silence is allowed only when "course of dealings that establishes a pattern that imposes a duty" and when an unreasonable amount of time has passed If a stranger sends you eel skins you don't have to do anything but when you have a history of paying for unsolicited eel skins it's a different story!

Scholl v. Hartzel

Corvette Case #1: Facts: Defendant put up a newspaper for the sale of a Corvette. Plaintiff and defendant entered into a contract for the car and the plaintiff gave the defendant a $100 deposit. Defendant changed his mind about the sale and returns the deposit. Plaintiff filed an action in replevin for possession of the car. Rule: The corvette is not unique enough and the plaintiff does not have a sufficient connection for specific performance claims. In addition, an action of replevin is not appropriate for an unexecuted contract.

Sedmak v. Charlie's Chevrolet, Inc.

Corvette Case #2: Facts: -Plaintiffs and defendant entered a contract to purchase a limited edition Corvette for $15K. The defendant breached the contract they told the Plaintiffs that they could not purchase the car at the $15K price, but instead could bid on the car. -The court ordered specific performance on behalf of the plaintiffs - Mileage, condition, ownership, and appearance made it difficult, if not impossible, to obtain a replication without expense, delay, or inconvenience. Rule: The court may decree specific performance as a buyer's remedy for a breach of contract in the sale of goods where the goods are unique or in other proper circumstances (i.e., rule in UCC § 2-716).

Carlill v. Carbolic Smoke Ball Co.

Facts: -Defendant placed an advertisement offering payment to anyone who became sick after using its product, which plaintiff did, so she tried to cash out. -Courts ruled that she was entitled to the payment. The defendant did not require notice of acceptance because in a unilateral contract, the conditions for acceptance are outlined and there is no other way to accept the contract besides performance. Rule: -A continuing offer (the ad, in Carlill) that is a unilateral contract may be accepted by performance of the condition named in the offer (getting sick, in Carlill). -Connects to R2K § 54: o You don't need to notify the offeror right away, but the offeror needs to know at some point about the acceptance through performance. If the offeror doesn't learn about completion of performance, the contractual duty is discharged.

Carnival Cruise Lines v. Shute

Forum Selection Clause Case #1: Facts: -The Shutes bought cruise tickets (departing from CA, going to Mexico) through a travel agent in WA. The plaintiff slips and falls on the cruise, sues for negligence in WA. -Carnival Cruise requests summary judgement because of the forum clause in the contract that said if a party wants to litigate a case, it needs to be in FL. The court says the clause is enforceable because the plaintiffs did technically see it, and there aren't signs of bad faith. Rule: -If a forum selection clause is fair, that contract clause is enforceable (R2K § 211 relevant here)

Caspi v. Microsoft Network

Forum Selection Clause Case #2: Facts: -The plaintiffs asserted breach in the way that Microsoft had "rolled over" membership into more expensive plans. Microsoft moved to dismiss the complaint because a forum selection clause said that litigation needed to happen in WA. The plaintiffs said they didn't receive adequate notice of the clause so they shouldn't be bound to it. -However, the court ruled that there was nothing weird about how the forum selection clause was presented -> formatting/placement was all normal. The party COULD have had notice, they just didn't read carefully. Rule: -Even if the party does not receive blatant notice, forum-selection clauses are enforceable as long as they were not purposefully concealed.

Groves v. John Wunder Co.

Groves v. John Wunder Co. - The Gravel Case: Facts: -Willful breach of contract for failing to return land at uniform grade - defendant went against the contract by removing the richest gravel and leaving the land uneven because it would cost $60,000 to do, and the value of the land would end up being $12,160 Rule: -Contract breach damages should be calculated by expectation damage, not by the difference in market value of the property. -Cost of performance v. value rule - rules in favor of cost of performance -Donweber thinks this case was wrongly decided - thinks the court should have decided in accordance with the value rule.

Harris v. Watson

Ship Contract Modification Case #1: Facts: -The plaintiff was a seaman on the defendant's ship. During a trip when the ship was in danger, the defendant promised to pay the plaintiff an extra five guineas. The defendant never paid the plaintiff. -The court rules for the plaintiff. If sailors could take advantage of the captain in times of need, sailors might let the ship sink unless their demands are met. For policy concerns of extortion, this cannot be allowed. Rule: -New offers made in times of need cannot be enforced for policy concerns of coercion.

Stilk v. Myrick

Ship Contract Modification Case #2: Facts: -The plaintiff was working on the defendant's ship. During the trip, two seamen deserted. The defendant told the plaintiff that the deserters' wages would be divided equally among the remaining crewmen. The defendant never paid, so the plaintiff sued. -The court argues that while there was consideration for the initial contract, there was no exchange for the additional promise. -In addition, there are often dangers on ships, so this is part of the deal when working out at sea and therefore should just fall under the initial contract. Rule: -A contract cannot be modified without additional consideration for the new contract terms.

Alaska Packers' Assn. v. Domenico

Ship Contract Modification Case #3: Facts: -The plaintiffs and defendants entered a fishing contract (payment: $50/season and 2 cents for each red snapper). While the plaintiffs were fishing, they ran into other fishermen also hired by the same company, but those fishermen were being paid more ($60/season, 2 cents for each red snapper). -The plaintiffs stopped working and demanded to resume. The defendant would be unable to hire replacement sailors, so they agreed to the higher pay demand, with the representative warning that he didn't have the authority to enter new contracts. -Court explains that a party cannot benefit from their own bad faith by refusing to perform in order to coerce another party. -Even though the sailors relied on the representative's promise to pay them more, the sailors were already obligated to perform the duties for which the additional pay that was promised. Rule: -A contract lacks consideration when a party incurs no additional responsibilities under the new agreement.

Stop & Shop, Inc. v. Ganem

Stop & Shop is a leasee in a percentage lease - there is a flat rate for rent in addition to additional payments if their sales go above a certain amount. -The lease doesn't have any specifications for how the land is to be used by the leasee. -Plaintiff wants to stop operating the store -> The plaintiff isn't making a long of money there, they want to move to a location, but they'll pay the flat monthly rent until the lease is up. § Defendant resents this -> Even if they aren't making a lot of money right now, the defendants want the CHANCE to make money on the percentage lease. § The plaintiff believes that all he needs to do is pay the rent. BUT the defendant believes that the percentage lease terms indicate that they need to operate a business. · Rule: -An omission to specify an agreement in a written lease is evidence that there was no such understanding. Justice, common sense and the probable intention of the parties to understand the contract terms and whether their actions are in good/bad faith. § Is opening the business in other locations good/bad faith with this agreement? They had a sound business reason for doing this - they weren't doing well! If they were doing well and wanted to leave, that would indicate potential bad faith.

Schneider v. Miller

The "As-Is" Car Case: · Facts: o Plaintiff visited a used car lot owned by the defendant - test drove a car, inspected it, etc. The defendant discussed what would need to be repaired/replaced (trunk, brakes, engine). Plaintiff bought the car, acknowledging that it was sold "as is," with no warranty. o Plaintiff took the car to a repair shop, and it was deemed the car not safe to drive. Plaintiff attempted to return the car for the full purchase price -> defendant refused. · Rule: A party to a contract cannot rely upon an implied warranty when that warranty has been expressly disclaimed in the contract -> UCC § 2-316 o Yet again, words have meaning! If it is sold "as-is," it means just that.

Mills v. Wyman

The Bad Dad Case: Facts: -The defendant's son got sick at sea. The plaintiff nursed him back to life. The plaintiff wrote to the defendant. The defendant wrote back and promised to pay for those expenses. Defendant never paid -> the plaintiff sued. -Defendant's argument: there was no consideration; the plaintiff makes the argument that parents have a moral obligation to their children, so this responsibility should enforce the promise. -Court rules for the defendant, explaining that there is a disconnect between the caretaker/father that cannot be bridged by the moral obligation between the father/son (son if of age). The promisee's benefit was conferred to the son, not the promisor. Rule: -Moral obligations standing alone are NOT sufficient to support consideration.

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

The Bad Parol Evidence Case: Facts: -Plaintiff and defendant entered a contract about repairing a steam turbine. The defendant agreed to perform the work at its own risk and to compensate the plaintiff for any damage/injures should they arise. -Normally, this is for third parties. That is why they are trying to include external evidence to essentially say "we know this isn't what the words say, this is what we meant!" The judge expands his Masterson ruling and said because words have no fixed meaning, extrinsic evidence can be added as long as it is relevant/reasonable. Rule: -Parol evidence may be admitted if it is relevant to prove the meaning of a term of the agreement and the meaning is "reasonably susceptible." -Donweber says that Justice Traynor went off the deep end with this ruling

Shirley MacLaine Parker v. Twentieth Century-Fox Film Corp.

The Big Country, Big Man Case: Facts: -Parker signed a contract to perform in the musical "Bloomer Girl." 20th century Fox breaches by saying they will no longer be producing that film. Instead, they offer her a role in "Big Country," which she refused. Rule: -The general rule: the measure of recovery by a wrongfully discharged employee is the amount of salary agreed upon minus the amount which the employer affirmatively proves the employee has earned or with reasonable effort might have earned from other employment -An alternative employment option can only mitigate damages in an employer contract breach if the option is substantially similar. First you need to analyze whether or not the two options are comparable: -If yes, you can analyze if the given party reasonably declined the other offer. -If not, the new employment option cannot mitigate damages.

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

The Box Top Agreement Case: Facts: -After the plaintiff and defendant entered a contract, the defendant included a box-top (aka shrink wrap) agreement on the product they shipped to the plaintiff. After many issues with the software, the plaintiff sued the defendant, but the defendant claims the box-top agreement takes away their liability because the contract (with their box-top terms) was accepted when the plaintiff opened the box. The plaintiff says the terms were a material alteration of the contract that was not agreed to. -The debate here: we know there was a contract here because of the performance that has already occurred. But what terms were agreed to? -UCC § 2-207 - Tells us how to deal with additional terms included in contract acceptance - Court ruled in favor of the plaintiff - their performance indicates a contract, and the defendant's language was not strong/clear enough to show that the contract acceptance hinged on the inclusion of their box-top agreement. Even if there were some gaps left open, there is enough of a contract to enforce (relating back to UCC § 2-204) Rule: -Terms of a box-top license should be negotiated between two parties clearly before they are enacted. If a contract has clearly been formed, UCC § 2-207 voids any terms that require conditional acceptance that were not expressly agreed to in order to avoid a battle of the forms.

Chicago Coliseum Club v. Dempsey

The Boxing Case: Facts: -Dempsey repudiates contract he made with the CCC. The CCC files for an injunction to ensure he doesn't do a different tournament. Rule: -If a contract is breached, the non-breaching party is entitled to damages for expenses paid for between the contract signing and breach. The non-breaching party is NOT entitled to damages for any actions that occurred before the contract signing, remedies that are difficult to calculate and uncertain (like profits), or damages they took at their own risk (like attorney fees). -Things done for preparation of contract performance are recoverable; damages incurred for contract preparation are NOT recoverable.

Britton v. Turner

The Breaching Employee Case: Facts: -The plaintiff agreed to work for 1 year. He worked for ~9.5 months and then quit. Even though he quit breached the contract, he is suing for money equivalent to the 9.5 months of work he DID complete. The defense argument is that they money would be paid once the WHOLE year of work done. Rule: -If you breach a contract and you have already conferred a benefit, as long as the benefit is 1) over and above the damage that you've caused; and 2) the benefit isn't completed different than what was contracted for, you get to recover the benefit (relates to R2K 374). -Quantum meruit - means "as much as he deserved," this allows a party who has provided a benefit to sue for the value of the benefit they've conferred (if the other party accepted), even if that party hasn't satisfied the contract. -This amount is reduced by any damages that result from the party failing to satisfy the contract.

Kirksey v. Kirksey

The Brother-In-Law Farm Case: Facts: -Plaintiff was married to the defendant's brother. The plaintiff's husband and one of her children dies -She lived on public land with her family. The defendant wrote her saying that if she came to him, he would provide her with a place to raise her family. -Key quote: "If you will come down and see me, I will let you have a place to raise your family..." This looks like a bargain! But this is a conditioned gift because he doesn't benefit or care if she comes to see him (no exchange). -She moved with her family to the defendant's land. He provided them with a comfortable house for two years. For the third year, he provided them with an uncomfortable house. After that year, he asked them to leave. Rule: -If a defendant's promise is a conditioned gift, they are not liable for damages if they revoke the offer. -WARNING: This ruling occurred before promissory estoppel was developed as a rule of law. This case would have been decided differently with that practice.

J.O Hooker v. Roberts

The Cabinets Case: Facts: - JO Hooker was a contractor who hired Roberts as a subcontractor agreement to complete cabinets. A dispute came up regarding who was supposed to dispose of the old cabinets. Hooker then faxed Roberts saying the contract was "null and void" -> Roberts filed for breach of contract. The court decided the following regarding the damages: -Storage: no damages awarded -> Roberts was planning on storing the cabinets had there been no breach of contract -Administrative time for Roberts' general manager: reliance damages awarded -Lost profits: expectation damages awarded Rule: -When determining the damage amount for expectation interest, costs that the promisee was accounting for within the contract should not be awarded through damages (similar concept to Hawkins v. McGee seen in R2K § 349). -UCC: deals with the sale of goods -> NOT services

Ramirez v. Autosport

The Camper Gone Wrong Case: · Facts: -The plaintiffs purchased a camper from the defendant. When the plaintiffs went to get it, they noticed several defects (wet seats, open windows, etc.) and did not accept it that day. They kept following-up about when it would be ready -> took a long time. -They were then told they could finally come get it, waited over an hour for assistance. The plaintiff and defendant then couldn't come to an agreement -> the plaintiff wanted their trade-in back, but the defendant already sold it. · Rule: -A party may rescind a contract when the goods delivered do not conform precisely to the contract and the seller has not cured the defects within a reasonable time. § Because of the defendant having plenty chances to make it right as the seller, the buyer is entitled to the perfect tender rule.

Frigaliment Importing v. BNS International Sales Corp.

The Chicken Case: Facts: -The plaintiff entered a contract to buy chicken from the defendant. During negotiations, the plaintiff used the English word "chicken" to mean young chickens, instead of the German word "huhn," which includes stewing chickens (fowl). -The plaintiff only wanted to buy young chickens. The defendant interpreted "chickens" as encompassing all types of chicken. -After the first shipment, the plaintiff complained but allowed the defendant to make the second shipment. After there was more fowl in the second shipment, the plaintiff sued the defendant for breach of warranty. -Justice Friendly analyzes the contract itself, correspondence between the parties, market price, technical meaning, and contract performance in order to rule in favor of the defendant. Rule: -If the parties to a contract subjectively, but in good faith, construe an ambiguous term differently, courts may look to external factors to determine the proper interpretation of the term.

Peevyhouse v. Garland Coal Mining Co.

The Coal Case: Facts: -Plaintiff leased 60 acres of farm to the defendant to mine coal deposits for five years. -Lease expressly provided that the defendant would fill in pits and smooth the surface at conclusion of operations. It would cost $29,000 to complete that contract term, but change the land value only by $300 if the defendant performed. Rule: -When the cost of performance for expectation damages is grossly disproportionate to the economic benefit, a party is limited to recover the loss in value. -Jacob & Youngs v. Kent: Outlines the same rule

Oswald v. Allen

The Coins Case: Facts: -The Plaintiff and defendant enter negotiations for coins. Oswald looks at the Swiss Coin Collection and the Rarity Coins collection, but only looks at the ones that are Swiss coins within the rarity collection (even though that collection contains more than just Swiss coins). There is also a language barrier. They agree that the defendant will sell the plaintiff the "Swiss coins." Plaintiff thought that meant all of the coins (Swiss + Rarity collection), but the defendant thought that just meant the coins in the Swiss Collection. Rule: -No contract exists if 1) the parties did not mutually assent; 2) objective indications can help explain each party's subjective intentions; and 3) it is clear that each party had no reason to believe the other party thought differently.

Kemble v. Farren

The Comedy Show Case: Facts: -Defendant agreed to perform at plaintiff's Theatre Royal, with a clause that whichever party didn't fulfill the contract should pay the other a sum of 1000£. Defendant breached during the 2nd season of the contract. Plaintiff sued for 1000£, saying that this was a liquidated damages clause, and not a penalty clause. Rule: -Even if you say "this isn't a penalty clause," does NOT mean a given clause is liquidated damages. The clause was in fact a penalty clause, because the clause extends to whatever the breach, no matter what its nature (it didn't differentiate between small and big breaches).

Vines v. Orchard Hills

The Condo Case: Facts: -The Vines contracted to buy a condo and paid a 10% down payment (it was a liquidated damages provision). They then learned that they needed to move. In the time since they bought the contract, the condo value had more than doubled. Because Orchard Hills can now sell the condo for more, the Vines feel they are entitled to recover their down payment. -The court does not rule in favor of the Vines because they lack information on the initial value of the condo, so a concrete comparison and determination of unjust enrichment cannot be made. Rule: -The purchaser's right to recover in restitution benefits hinges on their ability to show that the seller has been unjustly enriched.

Morton v. Lamb

The Corn Case: · Facts: -Lamb had agreed to sell Morton corn. The parties intended that Morton would pay for the corn when Lamb delivered it. Lamb did not deliver the corn to Morton on the date the parties had agreed upon. Lamb argued that Morton didn't have the money to pay -> Morton sued. § The Morton is not able to say that he would be able to pay Lamb -> he cannot maintain the action. · Rule: -When parties have agreed to concurrent acts/dependent promises, neither party is required to perform when the other party will not or is not able to perform at the same time.

Hadley v. Baxendale

The Crankshaft Case: Facts: -A broken crankshaft halted work at a mill. It was shipped to an engineer for modeling the replacement. The plaintiff said that they needed it to be sent immediately, but didn't explain why it needed to be sent quickly. The return shipment was delayed -> the plaintiff sued for lost profits. Rule: -A party is only liable for damages that could have been foreseen at the time of the contract signing. -If there are special circumstances, they need to be communicated to the other party.

Vokes v. Arthur Murray, Inc.

The Dance Lessons Fiasco Case: · Facts: -Plaintiff is a widow, 51, no family (lonely) and wanted to become a dancer. She made 14 contracts with Arthur Murray Davenport to take dance lessons. She was induced to purchase thousands of hours of dance lessons for $31,000+ - Her claim is that based on false representations by the sellers on her ability, she was induced to purchase these hours. § What were the misrepresentations? "Grace and poise," "rapidly improving and developing in her dancing skill," "rapidly progressing" § Nothing wrong with being a bad dancer, but this woman was being told exactly what she wanted to hear because of the position she is in. § Is this opinion or fact? A misrepresentation usually needs to be proven FALSE. Otherwise, we can't show whether or not it is in accord with the facts. · Rule: -R2K § 169 -> Statement of a party having superior knowledge may be regarded as a statement of fact although it would be considered as opinion if the parties were dealing on equal terms. § Even if there is no duty to disclose facts within his knowledge, if he undertakes to disclose must disclose the whole truth. -Damages the plaintiff will have to pay for what she had received according to the court, but she will get the money back for her lessons that are yet to occur.

Brian Construction and Development Co. v. Brighenti

The Death Star in the Ground Case: Facts: -The plaintiff and defendant entered into a subcontract. The defendant started work, but had to excavate much more than was expected when they outlined the contract. -The parties orally agreed that the defendant would get rid of the rubble in exchange for an increased contract price. However, eventually the defendant stopped work and refused to continue -> the plaintiff suffered damages as a result. Rule: -When something unforeseen, burdensome condition arises contract performance, the promise of additional compensation in exchange for the promise to do additional work is a separate, valid agreement.

B&B Equipment Co. v. Bowen

The Delinquent Third Partner Case: · Facts: -There were 3 partners in an equipment business (plaintiff). 1 of them wanted to retire, so they contacted the defendant about replacing him. The defendant did not have the necessary $15,000 to buy the retiree's stock shares. So, the plaintiff bought the stock on the defendant's behalf, and Bowen would eventually pay it back. o The defendant started doing shady stuff/bad work -> doing side business activities. The plaintiff fired him, and a suit started regarding the stock payments. · Rule: -A party may rescind a contract when the other party has materially breached the contract. § The defendant's leadership was clearly the main point of the contract, and his performance was not satisfactory, even when the stock arrangement was very favorable to him!

Inman v. Clyde Hall Drilling Co.

The Derrickman in Alaska Case: · Facts: -Plaintiff worked for Defendant as a derrickman. The contract had a provision stating that an employee must provide written notice to the employer within 30 days after a claim arises and said, "written notice was a condition precedent to any recovery." -The plaintiff was fired -> served the defendant for breach of contract, but failed to provide written notice as required by the contract. -The plaintiff says that this violates public policy -> However, there isn't evidence that this provision was included to take advantage of employees (there could be other reasons why they had this included, the plaintiff was also aware of this clause in his contract) -Donweber thinks that this is mislabeled in the contract -> the issue is that the plaintiff didn't provide written notice within, so the defendant no longer has to perform. § Both parties have already performed. Conditions precedent § Donweber believes this relates back to the burden of proof - who has the burden of raising the issue? Because they are saying condition precedent, it is up to the plaintiff to raise and prove it. · Rule: Because courts generally let parties agree to their own contract terms, in order to void a condition on public policy terms, the claim needs to be clear with substantial evidence.

Greiner v. Greiner

The Disowned Child/Land Case: Facts: -Mr. Greiner died, and the plaintiff was disinherited. The mother (defendant) wanted to try to make it right. Frank wanted land -> she said she has land she can give him. -She did NOT condition that "if you move back, you get the land" - it is a gift. -Frank acts in reliance on her gratuitous promise of her giving land - > he moves back to Mitchell county. -Another sibling gets involved, tells the mother not to give Frank the land -> Frank sues. Rule: -If a gratuitous promise changes the promisee's position to their disadvantage in reliance on the promise, it is enforceable. *Same concept of last case -> just different circumstances with land.*

Petterson v. Pattberg

The Doorstep Dupe Case: Facts: -Pattberg owned Petterson's mortgage and offered a discount on the condition that it was paid on a certain date. The plaintiff was approaching the defendant's home with the payment, but then the defendant says that he can't/won't accept the modified deal anymore. -The plaintiff then sues for $780 in damages, but the court rules in favor of the defendant because there was no tender, so the defendant could still revoke the offer (Petterson did not say, "here is the money, take it"). Rule: -An offer to enter into a unilateral contract can be revoked any time prior to performance (in this case, tender of the money)

Clark v. West

The Drunk Author Case: · Facts: -West (as in Westlaw West!) entered into a contract with Clark, which said that Clark would write law books for publication by West. West was to pay Clark $2 per page for each book written. However, the contract contained a condition which provided that if Clark abstained from drinking while writing, he would receive $6 per page. -Clark failed to abstain from drinking while writing. However, Clark believed West waived this provision by accepting work from Clark. Clark says that West knew he was drinking at the time and still accepted the copies and said he'd be paid at the $6 rate. -Clark claimed that West breached the contract by copyrighting the book in the name of a third party and brought an action to recover $$$ due to him under the contract. -The court rules that Clark needs evidence to back up his claims that West knew -> if he can prove it, he'll win the suit. · Rule: -If you expressly abandon a contract term through a waiver, you cannot later try to take back the waiver, as that would penalize the party who relied on the waiver.

Lucy v. Zhemer

The Drunk Farmer Case: Facts: -Lucy and Zehmer were drinking. Lucy said he would buy Zehmer's farm for $50,000 - Zehmer thought he was kidding. Lucy wrote up an agreement, Zehmer asked for edits, signed, and also had his wife sign. -Lucy and his brother try to prepare to close the sale, Zehmer then says no, he never actually intended to sell the farm. Lucy sues for specific performance (because this transaction involves land). Rule: -Again, inner (unexpressed) intentions don't matter! Even if you were personally joking, a contract can still be legitimate.

Embry v. McKittrick Dry Goods Co.

The Employment Contract Debate Case: Facts: -Embry had been working for McKittrick, and his contract was about to expire. He kept reaching out to McKittrick to discuss the contract, making it clear that if he didn't have a contract, he'd leave to find another job (this is an ultimatum - BOTH parties agree on this). -According to Embry, McKittrick told him now to worry and keep working -> Embry took that to mean his contract was renewed. McKittrick says that he told Embry that they would need to discuss this at a later date. -Embry was let go -> Embry sues for wrongful termination of employment (saying his conversation with McKittrick constituted a contract renewal) Rule: -Inner (unexpressed) intentions of the parties don't matter! -There needs to be a meeting of the minds -Additional point - reasonable man rule for contract formation: If a reasonable man would consider a given response/action as a clear offer, then the statement constitutes a contract offer.

Wood v. Lucy, Lady Duff-Gordon

The Exclusive Dealings Contract Case Facts: -Lucy created an employment contract with Wood giving him exclusive right to enter into endorsements on her behalf, to put her designs on sale, and to authorize others to use her designs. Lucy went ahead and placed her own endorsements on certain items without Wood's knowledge. Lucy argues that the contract is invalid because Wood didn't bind himself to anything. Rule: -The court inserts the term "reasonable efforts" into the contract. Even if there is no promise, if the promise to use reasonable efforts is implied, then there is an enforceable contract. The intentions/actions of the parties reveal the value and duties of the contract.

Webb v. McGowin

The Falling Pine Block Case: Facts: -The plaintiff and defendant were both employed at a lumber mill. One day, just as the plaintiff was about to drop a pine block, he saw the defendant. The plaintiff chose to fall with the block and to divert it from striking the defendant. -In doing so, the plaintiff suffered serious bodily harm -> he was now crippled. The defendant was grateful and agreed to pay him $15 every 2 weeks for life. -The defendant made the payments until death, but then the executor refused to keep them up. The court ruled there was sufficient consideration because the benefit was so material (his life), even though the exchange was in the past. Rule: -If a benefit is so material and substantial, a promisee is entitled to subsequent exchanges from the promisor (including when the promisor has passed away, and the benefit would need to be administered from the estate).

Masterson v. Sine

The Family Farm Case: Facts: -Plaintiffs conveyed a ranch to defendants (both parties related) through a grant deed which gave the plaintiffs the option to buy back the land later. -After the conveyance, one of the plaintiffs declared bankruptcy. The bankruptcy trustee and the other plaintiff brought a declaratory relief action to enforce the option to repurchase the property. -The trial court admitted extrinsic evidence for the language of the deed, but not to show that the parties intended to keep the property within the family (and therefore could not be exercised by the bankruptcy trustee). The defendants then sued. Rule: -If the written agreement is silent on a specific issue, parol evidence may be admitted to prove something related to that silence.

Bush v. Canfield

The Flour Case: Facts: -There was a contract for Canfield to deliver 2,000 barrels of superfine flour at the rate of $7/barrel - to be delivered on or before May 1. Bush paid $5,000 in advance, would pay the rest ($9,000) at a later date -Canfield breached the contract - Bush sued. -At the time the contract was supposed to happen, the rate of flour was $5.50/barrel. -Because the difference was $3,000 between the new, cheaper price vs. the old price, under expectation damages, the plaintiff (non-breaching party) would have sustained a $3,000 loss had the contract been performed (paying $14,000 for 2000 barrels of flour, when it is only worth $11,000), and the defendant (breaching party) would have GAINED $3,000. -Expectation recovery would be $2,000 for the plaintiff/nonbreaching party ($5,000 deposit - $3,000 loss = $2,000). -The defendant claims that to do anything more would put the plaintiff in better position than if the contract had been performed. Rule: -When expectation damages would benefit the breaching party and harm the non-breaching party, restitution damages may be a better alternative for compensation. This case is all about the difference between expectation and restitution damages. -Restitution here trumps reliance, and isn't limited by the expectation principle. -Why don't we limit restitution interest? To prevent "unjust enrichment"—we don't want to award the defendant/breacher more than the non-breaching party, especially when there is an alternative damages option. -The victim of the breach has a choice between whether to receive expectation interest or restitution interest. In the majority of cases, expectation is higher, but when there is a losing contract with partial performance, restitution is higher than expectation and reliance!

Pitts v. McGraw-Edison Co.

The Forced Retirement Case: Facts: -The plaintiff was an independent contractor for the defendant. McGraw sent a letter informing him that he would be retiring (a forced retirement). To make the retirement less distasteful, the defendant would pay the plaintiff his typical 1% commission on sales in his territory (note: no language of exchanged in letter). -The defendant made these payments for 5 years and then stopped. The plaintiff sued. -The court rules that because the plaintiff was being fired, he didn't lose anything through the forced retirement that he would have otherwise lost. Rule: -If a gratuitous promise does NOT change the promisee's position to their disadvantage, it is not enforceable. Think of this as going hand-in-hand with the Feinberg case - this case distinguishes that case.

Hochester v. De La Tour

The Future Breach Case · Facts: -The defendant entered into a contract to pay the plaintiff (a courier) to accompany him on a trip. However, the defendant informed the plaintiff that he would no longer need his services. -Plaintiff sued to recover for damages in anticipation of the breach. In the meantime, he also got other employment for when he was supposed to be traveling with the defendant. Court rules in favor of the plaintiff -> sorry defendant, you made it clear you were going to breach, suck it up and pay the consequences. · Rule: -When a party is informed that the other party intends to breach the agreement, the first party has an option to either file suit for damages immediately in anticipation of the breach, or to wait until the act was supposed to be done. § Because he got other employment (and we assume that the damages were comparable), he would then receive damages for the period he was unemployed (they'd stop once he got employment).

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

The Gas/Requirements Contract Case: Facts: -Eastern and Gulf had a requirements contract for fuel for several years. In 1974, Gulf told Eastern that it needed to pay more for its fuel or else Gulf would no longer supply it (price of fuel skyrocketed). -Eastern filed for breach of contract. At trial, Gulf argues that the contract lacks mutual obligation and is indefinite due to no set quantity. Rule -A party needs to abide by a contract even if it is no longer as favorable to them, unless the contracted goods are now far out of proportion. -Requirement contracts are not indefinite just because they intend to fulfill the entire good faith requirements of a certain party.

Arnold Palmer Golf Co. v. Fuqua Industries, Inc.

The Golf Merch Case: Facts: -There is a signed memorandum of intent between the plaintiff and defendant for a business deal (also a press release from the defendant announcing the deal). The defendant backs out of the agreement, but the plaintiff seeks to enforce the contract. -District court entered summary judgment for the defendant. Some phrasing/actions imply that the memorandum of intent was binding, other pieces do not. Holding: -The decision should have gone to the jury to determine if a contract existed. Court believes that there is a factual issue to see if the parties contractually obligated themselves to prepare a definitive agreement in accordance with the understanding of the parties contained in the memo. -Arnold Palmer represents an unclear case regarding the letter of intent, where the jury is needed to clarify.

Scott v. Crown

The Grain Assurance Case: · Facts: -Crown Company entered into several contracts with Scott for grain. The contracts provided that payment would be conditioned upon Scott's delivery of the grain. The first of these contracts was completed with no problems. -Then, Scott had suffered nonpayment on an unrelated contract (was feeling vulnerable). His banker also said that Crown was not the "best grain trader." -When Crown sent trucks to load the grain, Scott refused, and told Crown's driver that he had some questions to settle with Crown. -Scott tried contacting Crown by telephone several times. Then there was a long back and forth via letters that resulted in this dispute · Rule: -A party has a right to demand an assurance of performance under the contract when he has reasonable grounds to do so, but the request must be adequate. § Scott didn't request in writing, it was 2 weeks late, it wasn't completely clear that he was asking for assurance -> NOT adequate assurance.

Hawkins v. McGee

The Hairy Hand Case: Facts: Defendant promised plaintiff a "100%" perfect hand. Operation made it significantly worse, producing a non-functional "hairy hand." Rule: -A promisee is entitled to damages that are worth the difference of the value sought in the contract and the current value (promised value - current value). -This lays the groundwork for expectation interest - attempting to compensate for promised value. -No pain and suffering damages included - he would have experienced pain and suffering during the surgery, regardless of whether or not his hand turned out perfectly.

Wassenaar v. Towne Hotel

The Hotel Case: o Facts: The plaintiff was hired by the defendant. The plaintiff's contract said that if he was fired before the 3-year term was up, the defendant would pay for his remaining salary during the contract term. Plaintiff got fired after 21 months, was unemployed for at least 2+ months -> he sued for damages allotted in contract. Rule: Reasonable test for when to allow a liquidated damages clause: 1. Did the parties intend to provide damages as a penalty? This is often ignored because it has little bearing on whether or not the damages are actually reasonable. 2. Is the injury of the breach hard to calculate? The more difficult it is to estimate damages, the more likely it is that the stipulated damages will appear reasonable, and vice versa. 3. Are the stipulated damages a reasonable forecast of the harm resulting from the breach? If the clause demands much more $$$ than actual damages, then it will be deemed unreasonable and a penalty. Once a liquidated damages clause is considered valid, a plaintiff has no duty to mitigate. Prospective approach v. retrospective approach: Kemble looks at things ONLY at the time of K formation (no hindsight). Wassenaar looks at BOTH times (allow hindsight), using a broader timeframe.

Chirichella v. Erwin

The Housing Agreement Case: · Facts: -The Chirichellas entered into a contract to sell their home to the Erwins. The contract set to close the by a specified date (the same date as the date their new home was going to be ready). But, the new home fell through, and the Chirichellas then refused to sell their home because they hadn't closed with the Erwins yet. The Erwins filed suit for specific performance. · Rule: -The specification of the date of closing in a real estate contract is not a sufficient condition precedent (It's not a condition -> it's an approximate timeframe for when would be ideal for the performance will take place). § They understand the intention of the parties by analyzing the words within the contract: no words used that typically indicate a condition. § Examples of condition words: if, when, after, subject to, until, as soon as

Seaver v. Ransom

The Intended Beneficiary Case: Facts: -Judge Beman drafted his wife's will according to her instructions. When he read the will to her, she said she wanted to leave the house to her niece, but feared she would die before another will could be executed. Therefore, Judge Beman promised he would give the niece a sum equal to the home's value in his will. -When Judge Beman died, he didn't do that - the niece/plaintiff sued the executor. Rule: -Any third person who a contract was intended to benefit can sue to enforce that contract. This case expands Lawrence v. Fox and creates rights for third party beneficiaries.

Nurse v. Barns

The Iron Mill Case: Facts: -The plaintiff made a contract with the defendant to lease an iron mill for six months for 10£. The defendant breached contract. -Damages were awarded to the plaintiff for 500£ for "loss of stock laid within" to compensate for the value of the items that could have been made if the plaintiff still had access to the mill. Rule: -If a party suffers further losses due to another party's failure to fulfill the contract, they are entitled to damages that value those losses (i.e., consequential losses).

Boone v. Coe

The Kentucky to Texas Move Case: Facts: -The plaintiff and defendant entered a verbal contract: the defendant would lease his farm to the plaintiff for one year, starting whenever they arrived at the farm. The defendant would have a house ready and would provide supplies for building a barn. In exchange, the plaintiff would tend to the farm. -Because the one year lease didn't start until they arrived, the finished performance would happen AFTER a year from the contract formation -> therefore, the SoF applies, and the contract is unenforceable. -No reliance damages because a benefit was not conferred to the defendant -> Donweber feels that is unfair. Rule: Damages cannot be recovered for breach of a contract within the statute of frauds if no benefit is conferred on the breaching party.

Loveless v. Diehl

The Land Specific Performance Case: Facts: -The Lovelesses rented their farm to the Diehls. The lease said there would be an option to buy the at the end of the term. The Diehls spent some $ improving the land, wanted to purchase it, but couldn't afford it. -They made a deal with Dr. Hart for him to pay the Lovelesses the price of the land, and the Diehls an additional $1,000. Lovelesses breach the contract by saying they will no longer give the opportunity to purchase -> the Diehls sue for specific performance. Rule: Specific performance is the presumed remedy available in contracts involving the sale of land

Lefkowitz v. Great Minnesota Surplus Store, Inc.

The Lapin Stole Case: Facts: -Lefkowitz saw 2 ads in the newspaper: one offering 3 brand new fur coats for $1, first come first served. Another offering scarves and a black lapin stole for $1 each, first come first served. Each time he arrived at the store first. Each time he was refused, with the response that the "offer was intended for women." The plaintiff sued for breach of contract. Rule: -When an advertisement is: 1) clear and leaves nothing to negotiation and 2) only requests performance, the performance is considered acceptance of a valid unilateral contract.

Empro Manufacturing v. Ball Co.

The Letter of Intent Case: Facts: -Empro is interested in buying Ball Co., and sends Ball a "letter of intent. The letter stated "Empro's purchase shall be subject to the satisfaction of certain conditions precedent to closing including, but not limited to approval by shareholders and board of directors." Ball Co. backs out of the contract negotiations -> Empro sues. -Court holds that the "subject to" language of the letter of intent made clear that Empro was not bound by the preliminary negotiations, Ball would not be bound either. While preliminary negotiations CAN bind parties if they are definitive enough, the letter of intent here did not do so. Rule: -Parties, who have made their pact "subject to" a later definitive agreement (here: the approval of shareholders), have manifested intent NOT to be bound. -This connects to R2K § 27: If the party knows or has reason to know that the other party regards the agreement as incomplete, then no obligation exists Empro represents a clear cut case where the letter of intent is clearly unenforceable.

KGM Harvesting Co. v. Fresh Network

The Lettuce Case: Facts: -Buyer and seller had a lettuce contract at a fixed price. When the price of lettuce rose dramatically, the seller refused to provide the lettuce because it would be a profit loss for them, even though that was the contractual agreement. -The buyer then had to get lettuce at market value (much higher price), to make their contractual agreements with third parties. Seller then went on to sell their lettuce at a MUCH higher price. Rule: -If a buyer has to cover due to a breach of contract, they are entitled to the difference between the cost of cover and the contract price. Even if a party couldn't afford a substitute, they are still entitled to that difference and can also claim incidental/consequential damages in addition to that. If a party receives windfall with cover damages, so be it -> they are entitled to that cover to put them in the position they would have been in. -In a commercial breach of contract case, the benefit of the buyer must be given to fully compensate for the breach. Good or bad faith do not have a place in commercial contract rulings.

Thompson v. Libbey

The Logs Case: Facts: -The plaintiff (seller) and defendant (buyer) entered a contract for logs, but the defendant breached the contract by refusing to pay, stating that they had an oral agreement about the log quality and this should be a factor in the contract. He wanted to admit oral evidence for this discussion -> Supreme Court of Minnesota said no. Rule: -If the written agreement appears to be a complete expression of the agreement, parol evidence cannot be admitted.

Neri v. Retail Marine Corp.

The Lost Volume Seller Case: Facts: -Neri bought a boat from Retail Marine for $12,587.40; Neri paid a deposit of $4,250. -Neri sent a letter rescinding the contract because he had to undergo surgery. Retail Marine already ordered and received the boat. Neri sued to recover his deposit. The boat was sold ~four months later at the same price. Rule: -A lost-volume seller is entitled to damages that are equal to the lost profits and incidental damages incurred if the initial damages calculations were not sufficient to put them in the position they would have been in had the contract been performed (UCC § 2-708 - connects to expectation damages). -If Neri purchased and Retail Marine's later buyer also bought, Retail Marine would have sold 2 boats, not 1.

McGee v. United States Fidelity & Guaranty Co.

The McGee Insurance Case: Facts: -While Hawkins v. McGee was pending, Fidelity sent notice to McGee, saying they would not cover damages/attorney fees for Hawkins v. McGee, claiming that insurance policy does not cover special contracts - only malpractice, error, or mistake. McGee settles suit with Hawkins for $1,400 and sues Fidelity to recover the settlement and legal fees. Rule: -Damages from special contract breaches do not fall under malpractice insurance - remember the distinction between tort and contract cases.

Nebraska Seed Co. v. Harsh

The Millet Seed Case: Facts: -Nebraska Seed Co. received a letter from Harsh, explaining that they had millet seed for sale. Nebraska Seed Co. sent a letter back saying they accepted the offer and asked how soon they could move forward. Harsh said that he wouldn't deliver the seed (must have already coordinated a better deal). The Seed Co. then sued Harsh for damages due to the failure of delivery (trying to claim cover). Rule: -A person can't be subject to contract enforcement just by their invitation to engage in a contract - a contract proposal is not equivalent to a contract. -An offer needs to be specific and make all of the details clear! (in this case, no set amount, date, etc.)

Austin Instrument v. Loral Corp.

The Navy Duress Case: · Facts: -Loral receive a big contract from the Navy for radars and awarded Austin a subcontract to supply 23 parts. A year later, there was another contract awarded to Loral and Austin submitted a bid for all 40 components. Loral told them that they would only contract with the lowest bid. Austin countered saying that if Loral did not give them the entire contract, they will raise the prices for the first contract or stop delivery. § Anticipatory Repudiation: Austin's actions could give rise to a cause of action by Loral due to anticipatory repudiation. -Loral tried to find other subcontractors but could not do so. They agreed to the demands of Austin to avoid default on the contract with the navy. § (Threat derives the other party of free will. If there were available alternatives no threat of free-will) · Rule: -A contract is voidable on the ground of duress when it is established that the party making the claim was forced to agree to it by means of a wrongful threat precluding the exercise of free will. § Economic Duress Definition - the wrongful threat precluding the exercise of free will. You must establish that (1) there is threat to breach the contract, (2) you can't cover, & (3) damages aren't going to make you whole. · Dissent: Disputes of fact at the trial court level were already decided for Austin. The Supreme Court here acts as if these facts were established and undisputed.

Hamer v. Sidway

The No Drinking/Smoking/Gambling Case: Facts: -The defendant (uncle) tells the plaintiff (nephew) that if he abstains from drinking/smoking/gambling until he is 21, he would pay him $5,000. -Once the plaintiff turns 21, he writes to his uncle letting him know that he completed his contract performance. The uncle put the money in the bank to gain interest, but then the uncle died -> he never actually paid the nephew. -The defense argues that the nephew wasn't harmed by the performance of his promise (he benefitted by not drinking/smoking/gambling) and claims there was no consideration. The court disagrees - rules for the nephew. Rule: -A party's agreement to incur a detriment can constitute adequate consideration. -This case modernized the theory of exchange: -Doesn't have to just be a benefit and detriment - you can abstain from behavior and it can be considered a benefit to someone else. -Thinking about what a given party seeks for their benefit is important for consideration!

Ricketts v. Scothorn

The No Grandchildren Work Case: Facts: -The plaintiff quit her job after her grandfather came in where she worked, stated that he did not want his grandchildren to work, and gave her a note promising to pay her $2,000 and 6% annual interest (gratuitous promise). -Her grandfather had not paid the balance by the time of his death -> the plaintiff sued her grandfather's executor. Rule: -If a gratuitous promise changes the promisee's position to their disadvantage in reliance on the promise, it is enforceable.

Lawrence v. Fox

The OG Third Party Beneficiary Case: Facts: -Plaintiff = Lawrence; defendant = Fox; other party that is very involved = Holly -Holly loans $300 to Fox, but still owes $300 to Lawrence. -Fox promises to Holly that he will repay the money to Lawrence the next day, discharging Holly's debt. -Fox had no promise made to Lawrence. Lawrence is the third party beneficiary of the contract between Holly and Fox. -Fox never delivers to Lawrence. Lawrence wants to recover. Rule: -If third parties benefit from a given contract, they can sue the promisor (this is the birth of the third-party beneficiary rule in the US)

White v. Corlies & Twifft

The Office Space Case: Facts: -Corlies & Twifft wanted a quote for office specs from White. The defendants liked the quote, so they told him in a letter "upon agreement to....you can begin at once." The plaintiff then didn't respond and started the performance (buying lumber and beginning work). -When the defendants didn't get a response, they revoked the offer. When the plaintiff got notice of the contract being revoked, he sued for breach of contract. -Plaintiff didn't properly accept (like the mirror rule requires) -> mental agreement from the plaintiff is not enough! Rule: -Acceptance to a bilateral contract must be manifested by an appropriate act, and needs to be communicated to the offeror within a reasonable time

Dickinson v. Dodds

The Option Contract Case: Facts: -The defendant offered to sell property to the plaintiff, saying the offer would expire in 2 days. The plaintiff was informed by third party that defendant was offering/selling the property to someone else. The plaintiff went to the defendant's home and delivered his acceptance to the defendant's mother-in-law. -A third-party agent tried to hunt the defendant down to deliver the plaintiff's acceptance, but the defendant had already signed a contract for the sale of the property to another person. The Plaintiff is seeking specific performance of the contract. Holding: -Was the defendant's letter a valid offer? Yes (R2K § 24). -However, the plaintiff's acceptances were invalid because he knew that the defendant had already sold the property. This means that there could not have been a meeting of the minds! The offer was revoked from the plaintiff before he tried to accept (R2K § 43). -The option of keeping the deal open was a separate contract that lacked consideration to keep the contract open. There was an exchange of money for the land, but no exchange for the option. This is why the option was invalid. -When you think of option contracts, think of Dickinson v. Dodds.

Sun Printing & Publishing Ass'n v. Remington Paper & Power Co.

The Paper Case: Facts: -Sun Printing had a contract to buy paper from Remington. The price and duration of price was set for the first three months with an agreement to agree on the price and duration of price for the remainder of the contract later. Remington later said without set terms, the contract was imperfect, and they no longer had a contractual obligation. Sun Printing tried to concede to paying the highest possible price each month for the remainder of the contract. When Remington refused to perform, Sun Printing sued. -This was an agreement to agree or at a later date on 1) price and 2) duration. Because both of those factors depend on each other and there aren't enough guidelines, the contract is unenforceable. Rule: -In order for a contract to be valid, there cannot be the need to gap fill multiple key terms.

Raffles v. Wichelhaus

The Peerless Case: Facts: -Defendant entered into a contract with the plaintiff to buy cotton. The cotton was to arrive on a ship named Peerless. The plaintiff delivered cotton to the defendant from a ship named Peerless, but the defendant wanted cotton from a ship also called Peerless that departed in October. This Peerless ship left in December. Rule: -Since there was no meeting of the minds due to a mutual misunderstanding of meaning by both parties, there was no contract. BAD LAW ALERT.

Feinberg v. Pfeiffer Co.

The Pension Case: Facts: -The plaintiff employed by the defendant for 39 years. To thank her, the defendant offered her a pension that she would receive whenever she resigned. -The pension is NOT an inducement to quit. They are making a gratuitous promise. -When she retired, she got the payments. When a new person became president of the company, they tried to stop/cut the payments in half, saying there was no consideration. Rule: -If a gratuitous promise changes the promisee's position to their disadvantage in reliance on the promise, it is enforceable.

Howard v. Federal Crop Insurance Crop.

The Plowing Gone Wrong Case: · Facts: -Plaintiff's tobacco crops were damaged by heavy rains. They filed a claim with their insurer (defendant). -The Howards plowed the fields to plant a cover crop for soil preservation. The defendant denied the Howards' claim, asserting that the insurance policy required an inspection prior to destroying a crop for which a loss is claimed. § Paragraph 5(b) of the Howards' policy stated that "[i]t shall be a condition precedent to the payment of any loss that the insured . . . furnish any other information regarding the manner and extent of loss as may be required by [FCIC]." § Paragraph 5(f) of the policy stated that "[t]he tobacco stalks . . . with respect to which a loss is claimed shall not be destroyed until [FCIC] makes an inspection." § Because they included "condition precedent" in 5b, the omission from 5f is telling. -Therefore, the court ruled for the plaintiff -> saying it wasn't a condition precedent, but a promise. This means that the insurance company still had to perform, but they are still entitled to recover damages from the breach (the higher cost of inspecting the crop). · Rule: -A contract provision will not be construed as a condition precedent in the absence of language requiring this.

Rockingham County v. Luten Bridge Co.

The Pointless Bridge Case: Facts: -A construction contract was created in January to build a bridge. In February, Rockingham tells Luten that they don't want the bridge anymore and to stop building. -Luten completes the bridge anyway, finishing in November, and then sues for damages to account for ALL work done on the bridge (expectation damages). Bridge serves no purpose, no roads lead to it. Rule: -A non-breaching party is only entitled to the damages for: (1) expenses incurred prior to the breach of contract (reliance damages); (2) profits that would have resulted from the completed contract (expectation damages). They are not entitled to damages that cover expenses AFTER the breaching party notified them of the contract cancellation.

Moore v. Elmer

The Psychic Case: Facts: -The plaintiff was a psychic, and she predicted that the defendant would die before 1900. The defendant promised to pay the plaintiff's mortgage if the prediction came true. -However, everything the clairvoyant did for the defendant was in the past - he is trying to make an exchange for something that has already happened. -She did the services and then he LATER made the promise. In the moment, the promise wasn't induced BECAUSE of his promise with the mortgage note. Rule: -Past consideration is generally not sufficient for enforcement of a future contract.

Ardente v. Horan

The RI Mansion Case: Facts: -The Horans are selling their mansion, Ardente wants to buy. Ardente bids, the Horans accept. The plaintiff's lawyer then sends the Horans a letter inquiring about some of the personal property in the house, asking if that would remain with the real estate. Defendants say no, cancel entire transaction and plaintiff seeks specific performance. -Courts find that the Horans' conduct is justified because the letter asking about personal property functioned as a counter-offer which could then be rejected by the defendant. It was a qualified acceptance - not a complete acceptance like the mirror rule requires. Rule: -An acceptance with limitation or upon condition is deemed a counteroffer, which requires acceptance from the original offeror before an enforceable contract exists (R2K § 61).

N.Y. Central Iron Works Co. v. United States Radiator Co.

The Radiator Case: Facts: -The defendant entered a contract to supply the plaintiff with all of their radiator needs. This contract had existed for many years: the price was set, but the quantity was not set. -One year, the plaintiff ordered way more radiation than before. The defendant refused to provide radiation over the total amount that the plaintiff had ordered the previous year. The defendant wants the court to insert the term that the quantity be limited to what they had provided in previous years. -The court agrees with the plaintiff that the defendant most likely isn't playing fair, but because this is at the appellate level and they didn't make the argument of good faith/fair dealing at the trial court, their hands are tied. Rule: -Good faith is an immutable rule in contracts. A party can assert that a contract is not valid due to the need for good faith/fair dealing. However, they need to assert that argument in order for the contract to be void.

Webster Street Partnership v. Sheridan

The Renting to Babies Case · Facts: -Two minors entered into a lease with Webster Street. They paid a security deposit and rent for a bit then they were unable to pay, the defendant sued. § Defendant sued for the benefit of the bargain (expectation) and unpaid rent for months the boys already lived in the apartment (restitution), but this could also classify as reliance (he relied on the fact that the minors were going to continue to pay rent). § Defense: they are minors, so therefore the contract is voidable · Rule: -A minor does not have the capacity to bind himself absolutely by a contract. BUT the minor may be liable for necessaries furnished to him. § Necessaries: something the minor must have an actual need for. This requires assessment of facts depending on the child for rank, social position, health, fortune, or other circumstances. · Basis of this rule: minors don't know what they are doing! They don't have experience. · This place to live was not necessary - the minors weren't in need of a place to live (because they volunteered to leave home, and could go back there) · Donweber thinks the court got this wrong They did NOT consider what the adult supplied the infant: rental value of that apartment (a place to sleep for 2 months when he could have rented to someone else).

Royal Business Machines, Inc. v. Lorraine Corp.

The Salesy Copy Seller or Warranties Case: · Facts: -The defendant sold the plaintiff copying machines. The plaintiff wasn't satisfied, and sued for breach of warranties/fraud, alleging that the defendant breached 8 express warranties (pg. 815). -The court uses the decisive test to distinguish between warranties and "mere puff" from the seller: did the seller assert a fact that the buyer didn't have knowledge on to know any better OR did they just state their opinion? Rule: If a seller makes an affirmation of fact (for which there are substantial findings) that relates to the goods and becomes part of the basis of the bargain between the seller and the buyer, they have created an express warranty. If the seller states their opinion about a product -> NOT a warranty.

Kingston v. Preston

The Silk Apprentice Case: · Facts: -Plaintiff was the apprentice for a silk merchant (defendant). They made a deal that the plaintiff would pay a security and the defendant would sell him the business. The plaintiff sued, arguing that the defendant refused to sell the business (independent covenant). The defendant explained that the plaintiff never paid the security, and that he wouldn't give his business over after that (dependent covenant). -The court analyzing the essence of the contract -> the whole point is the exchange of the security for the business · Rule: -When one party's performance under a contract is dependent on the prior performance of the other party, the other party's performance will be excused unless the performance is satisfied (it would be unfair to force the defendant to perform when the plaintiff didn't perform here).

The Case of Mary Clark, a Woman of Colour

The Slavery Case: -There is a general rule against specific performance in personal services contracts. -Such a performance, if enforced, would become a state of servitude (slavery).

Schwedes v. Romain

The Sly Attorney Case: Facts: -The defendant offered a piece of property at a set price to the plaintiffs. The plaintiffs, accepted, started communicating with the defendant's attorney, offered to pay but the attorney said they didn't need to yet. Before the closing, the defendants sold the property to a third party. -The court rules for the defendants for a few reasons: there can't be specific performance because there was no valid contract yet, the plaintiffs hadn't paid yet, and real estate contracts are subject to SoF unless they are in writing. Rule: -A real estate contract cannot be enforced when it is not in writing and when performance has not yet to occurred. -Donweber feels that this was wrongly decided: we have evidence and the plaintiffs want to enforce the contract -> they were trying to perform.

Cumbest v. Harris

The Stereo Case: Facts: Cumbest built a high-power stereo, Harris tries to run off with it. Court declared that this property is of such sentimental/unique value that money is not a sufficient remedy -> only specific performance will do (falls under the § 2-716 exception). Rule: Specific performance can be awarded in breach of contract cases involving personal property when said property is unique/rare/personally irreplaceable.

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

The Uncertain Employer Case: Facts: -Russell was injured at work, but didn't know who his employer was. Aetna was responsible and entered into a DCS agreement with Russell (this is essentially a settlement agreement). -The hospital sues Russell (but knows he doesn't have much money, so is essentially trying to get money from Aetna). -Aetna tried to claim that the hospital wasn't a third party beneficiary for the case (tries to say they were an incidental beneficiary, not intentional). The court ruled that the agreement terms and context (life-saving operation) clearly indicated otherwise. Rule: -Any third person who a contract was intended to benefit can sue to enforce that contract. This case expands Lawrence v. Fox and creates rights for third party beneficiaries.

Zelnick v. Adams

Why are legal services considered a necessary: sometimes people 18 and under need a lawyer and need to be represented (right to representation is protected constitutionally in a criminal context, but minors may need it in other contexts!)

Jacob & Youngs v. Kent

· Facts: -Jacob & Youngs built a house for Kent. One specification in the contract was that all pipes were to be Reading pipe. Jacob completed the work -> 9 months later, Kent noticed that some of the pipe was not Reading pipe. -Kent demanded the pipe be replaced, but this would essentially require demolishing the house/a ton of extra work for Jacob, and the pipe was the same quality. The mistake was an earnest one. Kent refused to pay the final payment. · Rule: -If a party substantially performs its obligations under a contract, that party will not be forced to bear the replacement cost needed to fully comply with the agreement but instead will owe the non-breaching party the difference in value between full performance and the performance received. § They can get a remedy for the breach BUT the contractor still gets payment for his work (entitled to damages for the difference in value, but that is like nothing here because the pipes are the same quality -> this is nominal damages). § There was a promise to pay for the house, not JUST for Reading pipe. § Using reading pipe = independent covenant, which does not excuse performance, but for which Kent can sue for. § We are also using the difference in value so we aren't wasteful -> tying back to Peevyhouse

Vlases v. Montgomery Ward & Co.

· Facts: -Plaintiff worked on building a chicken coop for 3 years, and then purchased 2,000 one-day-old chicks from the defendant. It was later discovered that the entire flock was infected with bird cancer :( -Plaintiff sued the defendant for breach of warranty. Experts on both sides testified that there was no way of determining whether newly hatched chicks have cancer/no medication to prevent the disease. § The defendant argues that because he didn't know and acted in good faith, he shouldn't be at fault. · Rule: -A buyer can sue for breach of the implied warranty even if the seller could not have discovered the defect in the goods provided. § The purpose of implied warranties: to protect an unsuspecting buyer if they receive inferior goods. The buyer is relying on the seller for these pieces of knowledge.

Spooner v. Reserve Life Ins. Co.

· Facts: -Reserve Life Insurance Co. issued a bulletin about bonuses, but stated that they would be voluntary and that Reserve may withhold/decrease/discontinue it without notice, among other things. Spooner sued to enforce the promise of a bonus in the bulletin. · Rule: -A promise that is not definite and says performance is at the discretion of the promisor is not enforceable. § If the promise is illusory, it is not a promise at all -> there is nothing to rely upon here. Typically, bonuses cases involve a written contract that is being relied upon. -Even though this does seem like fraud, Spooner can't prove that the insurance co. knew they weren't going to fulfill the promise

Hoffman v. Red Owl Stores, Inc.

· Facts: o Hoffman owned a bakery but wanted to operate a grocery store. He contacted Red Owl, saying he only had $18,000 and the rep would be sufficient. o The rep advised Hoffman to do all sorts of things (buy a small grocery store, sell grocery store and bakery, buy vacant lot, move family, etc.), which Hoffman did in reliance on the rep's advice/promise. o After all of that, they said it would actually cost $34,000. o There wasn't a contract because many terms were missing (size, cost, design, layout of building), but Hoffman hoped to recover because of his reliance on the promise Rule: -The two major requirements for determining whether or not promissory estoppel can be used as a remedy: § Analyzing the nature of the promise involved § Was the reliance reasonable? -A promissory estoppel claim is NOT a breach of contract claim. Promissory Estoppel is used to prevent injustice.

Alden v. Presley

· Facts: · Alden's daughter was engaged to Elvis. Presley had offered to pay for Alden's divorce from her husband and to assume the mortgage on their house · Alden filed for divorce and assumed all of the debt on the property. Presley died before he could pay off the debt on the home -> the estate then refused to pay. However, the divorce agreement was never binding (it was not submitted to the court). · That said, Alden refiles for divorce AGAIN and seeks the SAME property settlement that was outlined last time, even though she knows the estate revoked their promise on paying the debt. · Rule: -A promise is not enforceable under promissory estoppel unless one's reliance is reasonable (If the reliance is not reasonable -> no injustice to prevent). § Revocation of the promise = a change in circumstances. As a matter of law, the change of circumstances would have voided the agreement and required that new terms were agreed to -> Alden could have undone the promise without incurring any injustice, yet didn't do so. § Because she relies on the promise after it has been revoked, her reliance is not reasonable. There wasn't anything left for her to rely upon.

Halbman v. Lemke

· Once the minor disavows the contract, they get their money back but they have to return any objects but does not have to account for any depreciation/diminution in value this refines the outcome of the Webster St. Partnership v. Sheridan.