Contract Law

Quantum Meruit

"as much as he deserved." A reasonable sum of money to be paid for services rendered or work done when the amount due is not stipulated in a legally enforceable contract.

UCC §2-207 Between merchants when additional terms are not to be construed as proposals for addition to the contract

(1) Offer expressly limits acceptance to the terms of the contract, (2) Materially alter it, or (3) Offeror timely objects.

Distress in economic or business

(1) One party threatens to breach the agreement unless they accept demands and (2) party claiming economic duress must show evidence that there is no other options out there for the party to get the work done in a reasonable time and therefore had to agree with the increase. From Austin Instrument v. Loral Corp.

Three basic approaches for rental obligations accruing after the date of trial

(1) The multiple cause of action approach the landlord can recover only those rent that have accrued through the time of trial. That puts a burden for the party to continue bring suits. (2) The anticipatory breach approach the landlord can bring suit prior to the expiration of the lease term and obtain a recovery that includes not only already accrued rents, but also an amount that represents the present value of the amount by which the total of the future rents due under the lease exceeds the fair market rental value of the premises over the same period. The problem with that approach is the court still has to speculate about fair market value of the lease. (3) The retained jurisdiction approach, the landlord is given the ability to immediately seek damages and the court retain jurisdiction over the case and award future damages incurred from lack of paying rent.

When a writing is Sufficient

(1) The writing shows a contract was made and what it is about, (2) It is signed by the promisor, and (3) Cites a quantity term for the contract (court can decide the other missing terms.

Hierarchy of UCC in determining what is a contract

(1) Writing, (2) Course of performance, (3) Course of dealing and (4) trade usage.

Adhesion contract

A contract created by a party in superior bargaining in which the other party is stuck with the contract and the contract is on a take it or leave it basis.

Executory Contract

A contract made by two parties in which the terms are set to be fulfilled at a later date. The contract stipulates that both sides still have duties to perform before it becomes fully executed. The contract is often in place between a debtor or borrower and another party.

Counter-Offer

A counter-offer is an offer made by an offeree to his offeror relating to the same matter as the original offer and proposing a substituted bargain differing from that proposed by the original offer. If there is an acceptance with request of change of term not a condition to their acceptance (more of a suggestion not a take it or leave change) then it is a counter offer that does not invalidate the previous offer (not considered a new contract).

Quasi-Contract Doctor Seeing a Stranger Hurt

A doctor sees a stranger hurt, because their medical expertise he or she can help the stranger. While no implied or expressed contract the stranger could be considered unjustly enriched if the stranger gives nothing for their efforts. In this situation quasi-contract might obligate the stranger to compensate the physician. Different then the violin player because the stranger would likely have contracted doctor's services.

Modification of Executory Contract

A promise modifying a duty under a contract not fully performed on either side is binding if the modification is fair and equitable in view of circumstances not anticipated by the parties when the contract was made; or to the extent provided by statute; or to the extent that justice requires enforcement in view of material change of position in reliance on the promise.

Contract

A promise or set of promises for the breach, which the law gives a remedy, or performance of which the law in some way recognizes as a duty. Promises that are result of bargain and have consideration is a contract.

Warranty

A promise, by one of the contractors, that something in the contract is guaranteed that the thing being sold is as promised or represented.

Mutuality

A returned promise, both sides promised

Bilateral Contract

A set of return promises (I promise to sell you the books for $400 if you promise to pay me that on February 1)

Unilateral contract

A single promise for a certain performance.

Schraeter v. Brighton Travel Bureau

Action by a travel agent against a tour operator for a refund of a trip cancellation fee. The nature of the Kosher Passover vacation at a resort hotel in Puerto Rico was such as to justify a liquidated damages clause based on a sliding scale culminating in forfeiture of 100% of the purchase price for cancellations made as here within 14 days of departure. The court enforced the liquidation damages provision. The clause that calculated the probable loss. As a practical matter the expense would become greater, and the possibility would become less, the closer to the trip the cancellation was made, until a point was reached, 14 days before departure, that any effort to re-book could not be reasonably expected.

Statute of Frauds

Additional requirement to make a contract valid. The requirement that certain contracts for sale of goods need to be in writing signed by the person or entity making the promise to enforce the promise made. Cannot make a contact that is unenforceable enforceable, can make a valid contact unenforceable. Purpose of statute of frauds to prove evidence of a contract. If the parties put it in writing they have thought the seriousness of the contract. Once the party contract completes the performance even after one year then the statute of fraud need not apply and it is contract even absent writing. Partial performance generally speaking is not enough to take the contract out of the statute of frauds, but it may provide an escape from other statute of frauds in certain situations including sale of interest of land. A contract as modified would have to be one under statute of frauds has to be in writing (if the modification meets one of the statute of frauds requirements).

Output Contract

Agreements to sell all goods or services a party may produce or preform.

Allied Grape Growers v. Bronco Wine Company

Allied sells grapes and Bronco buys grapes and turns them to wine. The two parties enter into a written contract for 30,000 tons of a specific type of grapes but not Carnelian. Allied however sends a load of Carnelian grapes, Bronco accepts the first load and refuses the rest. Allied claims a contract for Carnelian and Bronco says no contract and only pay for the grapes they pay as well as claim statute of frauds. Allied claims that partial performance removes it from falling under statute of frauds. A contract for a sale of goods that falls under statute of frauds is enforceable for which payment has been made and accepted or goods which have been received by the buy or accepted by the buyer. Buyer only liable for what he paid and was accepted. However the UCC provides that the principles of law and equity still apply, unless otherwise stipulated, like promissory estoppel (like this case).

Best Efforts

Also known as reasonable efforts. Party to make such efforts as are reasonable in light of that party's ability and the means at their disposal. Also in light of the other party's ability.

Daugherty v. Salt Synopsis of the Rule

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

Modification

An agreement to amend a prior agreement.

At Will

An employer/employee relationship where the parties had not agreed that the relationship end at a certain time either employee or employer can end the relationship at any time and for any reason "at will".

Condition

An event that must occur for performance to be complete.

Mailbox Rule

An offer is considered accepted at the time that the acceptance is mailed (Favors the offeree when the offer is accepted and revoked at the same time.) Mailbox rule doesn't apply if there is a specification on the acceptance to have notice part of the acceptance. If not specified then mailbox rule applies. If not otherwise indicated the medium for acceptance then use whatever is reasonable given the circumstances (it is reasonable if it is the medium used by the offeror, like using a phone to make offer, or custom in the in similar transactions). If you send a rejection and then an acceptance letter which ever received first is what is in force. When offer contract is created then the mailbox rule does not apply. Revocation is once received (not necessarily notified but like received in the fax machine not yet picked up and read). With a cellphone communication the offer is accepted once there is no doubt the party heard either the acceptance or revocation. Its not accepted until received. In rising market mailbox rule favors the buyer and falling seller benefits. Common law decide to put the risk on the offeror because they are the master and can modify the mailbox rule if they want to.

Firm Offers

An offer made by merchant (as a person who deals with the good of a kind and holds himself out as having knowledge or skill peculiar to the practices of goods involved in the transaction), signed writing which by its terms made an express option to keep it open (non-revocable) and the period of the option cannot exceed 3 months (to validate firm options and not long term).

Board of Public Works (Appellant) v. L. Cosby Bernard and Co (Appellee)

Appellant entered a contract with Appellee for architectural services necessary for the construction The estimated cost of the construction was 1.5 million with the plans accepted by the Board. However after hearing that the city could apply for federal funding they made more elaborate plans incorporating the ideas of the mayor, engineer... Whether the Common Council or Board of Works knew of changes is in dispute. It is clear that the Common Council did not appropriate sufficient funds to pay architects' fees for a project exceeding $1.5 million cost. They paid the second claim for $52K and the appellant refused to pay. Any expansion of the project, which caused an expense of funds exceeding those available necessarily, required action by the Common Council, either in form of vote or appropriation sufficient to bring the added expenditure. Since this was not done the contract did not bind the city to an obligation incurred by city officials in excess of the appropriation. Such a finding however is not to say the city is free from escape of payment for any services it actually requested. Looking to the doctrine of Quantum Meruit the city may be liable if the facts are established the justice demands the provider be compensated for the reasonable value of the services: (1) Proof that services rendered in favor of the municipal corp. (2) Service was rendered with full knowledge of governing body of such municipal corp. (3) The governing body of such municipal corporation knowingly accepted the benefits of such services. And (4) The purported contract for such services was not wholly beyond the scope of the municipal corporation powers.

Austin Instrument, Inc. v. Loral Corp.

Appellee had a navy contract to make radar sets. They solicited bids for 40 gear components need to produce them. They entered into a contract with the appellant for the gears. They entered into another contract with the navy and appellant submits bid to all the 40 gears. Appellee was not given the contract for all 40 cause they were not the lower bids. Appellant threatens the appellee if they do not give them all 40 and increase the price they will not make it at all. The appellee could not find another company to do all the bids and then accept appellant. The order is made and the gears shipped with payment then the appellee sues on ground of economic duress. There was economic duress in this case. Appellee was threatened by the Appellant to stop delivery unless prices increased deprived appellee of its free will. Appellee relationship with the government is significant and they do a lot of business with the government and afraid if they do not retain the Appellant hurt the business. Appellee showed they did not have other options; they tried 10 manufactures and couldn't get it done in time. It is a sophisticated item they are producing and shouldn't see vendors unfamiliar or dissatisfied. Appellee had no choice but to accept the raised price. The reason they waited was to not disrupt the delivery in order to complete their job order.

Curtis Co. v. Mason

Appellee is a farmer and asks about the company interest in soybean production and their policy for buying grain. Appellee asked to see a contract form and a confirmation memo that had the terms and at the bottom was a clause that said absent of a response it would be considered an acceptance. Appellee tossed it away and later the appellant claimed there was a contract because lack of response and appellee did not. No contract was formed by mason retention of memo. A party cannot state the agreement to purchase goods on their own terms and thereby unilaterally form a contract. No manifestation of mutual assent.

ARD Dr. Pepper Bottling co. v. Dr. Pepper Co.

Ard was contracted by Dr. Pepper to be the exclusive bottling company and distribute a territory. The contract provided that Ard must accept Dr. Pepper as it's leading drink, promote Dr. Pepper among all other soda. Use modern, automatic, and sanitary bottling equipment as required by Dr. Pepper.Any violation of one or more of the terms within the judgment of Dr. Pepper, when made in good faith, can terminate the license and that judgment shall be made conclusive and final. Dr. Pepeper terminate the contract because the bottling machine and requirement was adequate and it was not modern and sanitary. The subjective standard applies here. The parties clearly expressed a subjective standard to determine violation as they said Dr. Pepper would determine when a violation of the standards was made (The court said even an objective observer would find a violation as well). There is also no acting in good faith and thus the termination is allowed.

Equitable Estoppel

Assume there is not contract. When one allows facts to be represented in a particular way or represents the facts in the particular way and others rely on the factual representation, then the person allowing or representing facts can't turn around and refute the representation of the facts. There is detrimental reliance.

Berrey v. Jeffcoat

Berrey leased a space to Jeffcoat for a restaurant. If they desire to exercise this right to extend they written notify the landlord within 90 days before the expiration of the term. The extension shall be the same except the rent negotiated determining the existing conditions and cost of living increases as of that time. Berrey exercised his option to renew the lease and he installed equipment and made certain improvements to the premises. He notified Jeffcoat in writing of his intent to renew the lease for an additional term of one year. Jeffcoat stated he defaulted because he missed June rent and if Berrey would make up the payment he would renew the lease with a 10% increase. Berry thereafter failed to pay the rent for the month and Jeffcoat filed a complaint for forcible entry or eviction. Berrey may be able to renewal the lease because he might be justified in withholding rent if Jeffcoat made the property unsuitable. Courts are no longer reluctant to supply lease terms when parties agreed to set or renegotiate particular terms in the future and unable to reach the agreement. If the parties cannot agree on rental terms then the court can solve the issues on rental terms.

D&N Boeing v. Kirsch

Boeing was granted the sub distribution right of Yoo-Hoo in Nassau county and a portion of Suffolk. They were required cease distribution of a competitor's chocolate drink and in return their sub distributorship was to be exclusive and would continue so long the satisfactorily distributed the product, exerted their best efforts, and acted in good faith. American bought the franchise of YooHoo kept the same agreement until Joseph's death. Then Kirsch bought it from American, assuming the latter obligation to the plaintiff. Kirsch terminated the agreement stating it wanted to distribute itself and the plaintiff brought an action of breach of contract. Kirsch dismisses the claim because of statute of frauds and it was not in writing. The court held that an agreement that cause for a performance for indefinite period, like the oral licensing agreement here, that could only be terminated within a year by breach of contract or wrongfully terminated it is within the statute of frauds. It was within the New York general obligation one year provision. The only way Boeing could terminate the contract is by not performing in good faith which is a breach and Kirsch could only terminate the contract through wrongful termination or breach. No matter how implausible it is if the contract could be completed within one year in theory, it is not in the statute of frauds.

DF Activities Corporation v. Brown

Brown was an owner of Frank Lloyd Wright chair and plaintiff DF Activities corp. wanted it. They negotiated that they would sell the chair for $60,000. Later he sent a letter to Brown about the agreement and sent the first $30,000. Brown sent the check back and said he made other arrangements because DF took so long to send the check and contract her. Additional discovery is prohibited whenever a defendant raises statute of frauds defense and submits a sworn denial of the contract under the statute of frauds. There is no point in putting her on the stand asking whether she agreed to the contract, she did so in her affidavit. She would deny on the stand or risk perjury.

Burger King Corp. v. Family Dinning, Inc.

Burger King agreed with Family Dining to build and own ten Burger Kings and exchange they can have burger King in an exclusive territory. The first restaurant was completed in time but the next three were delayed and fourth over a year late. Burger King head stated not to worry waives the original building schedule. Then Burger King upper level management changes and the head is replaced. The eighth restaurant was a head of schedule but the final two were behind schedule. Due to the tardiness Burger King informed Family Dining they were defaulting on the agreement, there was a condition the restaurants were completed on schedule. Burger King terminates Family Dining exclusivity agreement. A condition that is enforceable can be waived and its effectiveness is extinguished. The condition was waived when store 2 and 3 were slow and brought to the attention of the Burger King head (who was later replaced) and they said not to worry and waived the condition to build on schedule. Burger King also did not give warning they were changing to enforce the provision now. Family Dinning believed they were getting the exclusive territory to operate the Burger King when building those Burger King's and to take it away from them is unwholesome.

Frigaliment Importing Co. v. B.N.S. Int'l Sales Corp.

Buyer was in Switzerland and seller in NY. The buyer entered into a contract with the seller for chickens for a certain price. When they shipped the chicken the seller sent out stewing hens and buyer complained. They got into an argument what chicken meant. Buyer claimed that "chicken" meant young fryer or broiler, but not a stewing hen. Seller argued that "chicken" meant any kind of chicken. Both parties want to introduce evidence of trade usage to show what "chicken" means to people that buy and sell poultry. There was ambiguity in the meaning of the word chicken, it could signify more than one meaning. Dictionary gives both meanings. The buyer has the burden to prove that chicken meant fryer or boiler as appose to stewing hen. As for the argument that the buyer was new to the industry their lack of knowledge is not a defense, they are assumed to know the usage and trade before entering into the industry. The testimony and trade usage was inconclusive on what chicken meant. Both trade usage for chicken is possible; therefore the buyer failed its burden.

Difference between puff and a statement of fact

Can determine if it is puff or a statement of fact by the nature of the defect and the knowledge of the seller. Subjective aspects like it's a pretty house are not statement fact cause the purchaser can analyze that by himself and form his own opinion (that is puffery). What the seller cannot do is determine what the fabric or mechanics of the car and that is statement of facts. Vague promises aren't likely puff but more specific statements are more likely statement of fact. Buyer sharp and knowledgeable about the goods then the seller's statement are puffery and vice versa is statement of facts.

Carpenter v. Chysler Corporation

Carpenter buying car for his daughter and went to the salesmen saying he needed a reliable. Salesman told it was a good reliable car with no problems and it had problems before in the dealership as well while Carptenter checked the car and the salesmen knew. Carpenter sues the dealer for breach of warranty. Court must determine if there is an expressed warranty and they look to §2-313 to find what an express warranty. Its not necessary in order to create expressed warranty to use guarantee or warranty. Sellers are entitled to puff but a warranty is created when there is a statement of facts. It was a statement of fact when the salesmen said the car was reliable and brand new. Not only did the seller make a statement of fact that was false but also he knew it was false because he knew the car had problems. It is not necessary that the salesmen knew it was false for an expressed warranty, intent besides the claim in breach of warranty.

Kantor v. Boise Cascade Corp.

Company was held to be bound by a promise made by its mill to give an employee a pension, even if the authority did not extend to pensions. Since the manager had express actual authority to oversee the operation of the mill and hire employees he was impliedly authorized to all things necessary to carry out his responsibility

Reliance damages

Compensate the plaintiff for the detriments she suffered in reliance upon the agreement.

Consideration

Consideration a return promise that is bargained for (has to be bargained for) In which the promisee must do something that the promisor wants that promisee to do which is something which there is a legally bounding detriment or benefit of doing something that one is not legally obligated to do, Giving away something someone is not legally obliged to give up, or refrain to do something that one is legally permitted to do. Consideration provides evidence of intent to be bound and that it is serious. Consideration is important because seriousness and enforceable nature of promise and helps courts distinguish between serious and married just. Evidence parties have deliberated.

Vague contracts

Contracts need to be sufficiently definite to show the parties intended to enter into a contract and not too vague that the court cannot fashion a remedy.

What is used to determine what the contract is?

Course of dealing (what they did previously), Course of performance (how they behave in this instance), Usage of trade (customary in the industry). UCC §1-303

Mathis v. St. Alexis Hospital

Decedent died at the defendant a hospital. A year later the plaintiff filed a wrongful death action against the defendant. Before the trial the plaintiff's expert states the death was not a result of any negligence. Plaintiff and defendant enter into a covenant and states in consideration the defendant not seek sanctions or attorney cost the plaintiff agree not to further sue the hospital for wrongful death. Essentially agree not to sue. Next year the plaintiff sent a second wrongful death suit and claims fees and costs). Defendant claims they were entitled to the fees and cost because lawsuit was criminal and frivolous. There was consideration; the plaintiff was not getting a lawsuit by the defendant in exchange for the promise. A promise to forbear pursuit of a legal claim can be sufficient consideration to support a contract when the promisor has a good faith belief in the validity of the claim. As long as it is not frivolous or unlawful and good faith belief being affront the intelligence of ordinary and reasonable layperson.

Bazak International Corp. v. Mast Industries, Inc.

Defendant approached Plaintiff to buy textiles and the plaintiff received a written invoice with no objections to the terms. Defendant never delivered the textiles. The orders included a printed disclaimer that they are only offers and that they are not a contract unless accepted in writing, but the disclaimer was written in terms of Plaintiff being the seller. Plaintiff signed the forms, but Defendant did not sign them. Plaintiff sues breach of contract and the defendant calls upon the statute of frauds. There is a merchant exception to the UCC's statute of frauds provision. The merchant exception allows enforcement of the contract when the contract is between two merchants and a writing confirming the contract, sufficient to bind the sender, is received with reason to know of its contents and is not objected to in writing within ten days it satisfies the statute of frauds even though the recipient does not sign it. The court does not find that the disclaimer on the form prevents it from being a confirmatory writing because the disclaimer clearly indicates it is to apply to situations where Plaintiff is the seller, and not the buyer (as is here). The Court holds that the documents meet all the elements of the merchant exception.

Drennan v. Star Paving Co.

Defendant in the business of paving roads and the plaintiff general contract accepting a bid on a school job. Bids were to be received by the secretary and then they would select the lowest bid once put in a spreadsheet. Defendant submitted the lowest bid and won the paving project. The plaintiff uses the bid in his overall bid and submits it to the school and was accepted. The plaintiff went to the defendant to tell his bill was accepted but the defendant stated he could not do it. The plaintiff looked for other bids for paving but couldn't find it as cheap. Plaintiff sues defendant and wins. The offer was not an irrevocable offer (option contract) because no consideration. This is however promissory estoppel. There was a promise in the bid. Everyone knows the general contract relies on bids when accepting a bid (its custom to do this way), the plaintiff relied on the bid when he submitted his final bid, and the only way to avoid justice is to enforce the promise. Promise is therefore enforceable.

World of Sleep v. Seidenfeld

Defendant incorporated Sleepmasters, which sold bedding, and contracted with plaintiff to receive inventory. Plaintiff sought in addition to the promise by the defendant to pay for the inventory supplied by the plaintiff, to also have a personal guarantee by the defendant that he would pay the debt if Sleepmaster could not. The defendant and Sleepmaster sublet a building leased by the plaintiff. The two parties drafted the guarantee and the plaintiff thought the guarantee in the contract referred to both the debt and sublease; however, it only referred to the sublease. The defendant was aware of the mistake by the plaintiff but he said nothing. Sleepmasters failed and defaulted on the purchasing agreement and the sublease rental agreement, Sleepmaster could not pay its debt. The defendant refuses to pay the debt because it was not in writing. This is a promise to answer the debt for another (defendant answering for Sleepmaster's debt) this falls within the statute of frauds. The contract should be reformed to reflect the intentions of the parties. In this case only one party was mistaken, but the defendant knew of the mistake and acted in bad faith by not bringing up the mistake. Allowing the statue of frauds to invalidate the contract will invite fraud. It would be a statute for frauds not statute of frauds.

Henthorn v. Fraser

Defendant offers to the plaintiff to sell his houses for 750 pounds and the plaintiff said he would take the offer into consideration and the defendant gives the plaintiff a fortnight (2 weeks). Later someone else calls the secretary and offers to buy the houses for 760 pounds and the defendant accepts it. Same day the defendant sends a letter to plaintiff revoking the order. A few hours later the plaintiff sends the letter of acceptance. Later the revocation the letter is posted at the plaintiffs house and didn't see it until 830 by which time the defendant received the acceptance letter. The offer was accepted before the offer was revoked. The acceptance became accepted as soon asthe plaintiff mailed the letter of acceptance. Revocation of an offer is not in force until the party is notified by mail. Mailbox rule.

Crabtree v. Elizabeth Arden Sales Corp.

Defendant was president of a company. Crabtree starts negotiations for a job and offered him a job and they had a memo made on a telephone card, which had the terms of the agreement with a "title of employment agreement with Nate Crabtree". It said two years to make good on it. No signature on the card. A few days later when he went to work he was handed a payroll card that contained a bunch of terms including the compensation and signatures, but nothing saying 2 year contract. The plaintiff was given the initial salary increase but was not given the increase at the end of the year. Crabtree brings claim of breach of contract. Two separate writings may be combined to make a contract. They all have to be connected and relate to the same transaction; can use oral testimony to attest to that. The Court finds in this case that the memo written on the telephone order, the payroll change form initialed by Defendant's general manager, and the paper signed by Defendant's comptroller all refer to the same transaction on their face. It was clear that she acquiesced to the contract. The writings all stated terms of the agreement and the term two years to make good on it. Purpose of the statute of frauds a contract could be more than one writing to peace together the term of the contract. There has to be one signed document, and all the proper documents must clearly relate to the same transaction. The requirement is the signed writing itself establishes the parties entered into some kind of contractual relationship. After you establish that then you go to whether the other writing is going towards the same contract.

Marine Contractors Co., Inc. v. Hurley

Defendant worked for the plaintiff, a company, which had a retirement plan. If an employee leaves the company, not including disability or retirement, the they would receive the money from the plan until after 5 years. The plaintiff entered into an agreement with the company that they would give him the money now if he did not engage in the same business within 100 miles. He broke the agreement. Consideration is satisfied if there is either benefit to the promisor or a detriment to the Promisee. However no need for consideration because the document was a sealed instrument and therefore no need to make it a contract without consideration.

Rescission

Deleting the contract and placing the parties where they were before the contract.

Brewster of Lynchburg, Inc. v. Dial Corp.

Dial is in need for plastic bottles for its soap. They attempted to contract with Brewster agreeing to buy all plastic bottles needed from Brewster. Brewster need new machinery to make the bottles needed by Dial. Dial provides an estimate and states the estimate is not binding. Brewster did not like the estimate agreement because no obligation to purchase and wanted Dial to commit for at least a year with a designated point in time when Dial can terminate the agreement. Dial shuts down its plant before the 1 year anniversary and stopped purchasing bottles from Brewster. Even if Brewster was the contract they followed, under a requirement contract the buyer can reduce the amount purchasing to 0 as long as it is in good faith. No floor to the amount purchased with good faith. Here there was legitimate reason to reduce the amount purchase to 0 and shut down the plant.

Ask Three Questions to determine if contract valid under Statute of Frauds

Does statute of frauds apply (does it have to be enforceable to be writing, if so it is within the statute of frauds). If yes, then ask whether the requirement of writing is met (if so then statute of frauds is satisfied). If no, then are there any exceptions.

Deed

Enforceable absent of consideration because it is very formal instrument and that kind of document is substitute for consideration. Words are often spoken unadvisedly and without deliberation, therefore law says contract by words need consideration. But deed there is deliberation, thinks before he signs, seals it, and hands it over.

Condition

Event not certain to occur but must occur for a contract to perform unless the conditioned is excused. Nonoccurrence of the condition then performance is excused and the contract is no more.

Extrinsic Evidence

Evidence that relates to a contract, but is not contained within the document itself.

Feld v. Henry S. Levy & Sons, Inc.

Feld wanted to buy breadcrumbs from the defendant. Contract required to have 6 months notice before terminated by either party. Plaintiff agrees to buy and defendant agreed to sell all of the breadcrumbs they make. The contract is an output contract. Defendant tries to get a higher price because it was unprofitable. Plaintiff refuses and the defendant stops making breadcrumbs as well sell the ovens and used the room as a computer room. An output contract can be terminated as long as it is in good faith. Good faith is implied, but this was not good faith. They wanted a higher price then what was stipulated in the contract. When they did not get the higher price they quit making breadcrumbs. The reason he wanted higher price was not because it was not economical but because he wanted more profits. Simply reducing the price of the contract because it was unprofitable is not commercially reasonable therefore not in good faith.

Two classes where one party agrees to perform the satisfaction of the other.

First when the undertaking is to do something of such a nature that pleasing the personal taste, fancy or sensibility of the other, which cannot be readily determined by objective standards, must reasonably be considered an element of predominant importance in the performance. In that case the party that something is done for their satisfaction they are the sole judge. The other class involves satisfaction to things as operative fitness, mechanical utility, or structural completion in which the personal sensibilities would not reasonable deemed predominant importance to the performance. Here satisfactory completion of the work is defined by an objective standard applies.

Covered

Found someone else to do a job when the original person refuses to do the job.

Freedom of Contract

Freedom of individuals and groups (such as corporations) to form contracts without government restrictions, freedom to breach contract, freedom to make promise under own will. Promise under coercion is not a valid promise.

Brown Machine v. Hercules, Inc. Synopsis of the Rule

General Rule that a price quotation is not an offer but an invitation to enter into a negotiation. However a quote if detailed enough can amount to an offer creating power of an acceptance. It must reasonably appear from the price quota the agreement to the quota is all that is needed for it to become a contract. For the quote to be a counter offer, the acknowledgement must be expressly conditional and clearly notify the offeror that the offeree will not proceed with the transaction unless the conditions of the counter offer are met. UCC 2-207 Governs when additional terms become part of a contract between merchants

George v. School District No. SR

George was granted a contract extension by the School District as both a math and coach. After the first year George was fired from his coaching job. They then notified him that they are paying less and need him to sign to accept. Plaintiff modified the form he received to say his acceptance was conditioned on him getting the $2,000 and the defendant saw this as a refusal to teach and they hired someone else. Trial Court ruled in favor of George and paid him damages and reinstatement. Under the fair dismissal laws the court could not award reinstatement. Also under this rule the victim of the contract breach must mitigate damages. After he was let go the George worked for the School District as a substitute teacher and was offered a contract for $13,000 but did not accept it. George claimed he did not accept because he was awaiting his suit for reinstatement. We cannot say the course of action chosen was unreasonable. The plaintiff was entitled to his day in court on reinstatement and was not under a duty to accept a job and waive his claim on reinstatement; therefore, he was not under a duty to mitigate

Graham v. Scissor-Tail, Inc.

Graham was a promoter and producer of concerts. He entered into a contract with Russell a musician part of the A.F. of M a union and Scissor Tail, Inc. He signed four contracts for concerts in four states with Russell who used the A.F. of M standard contract. The contract four contracts only had minor differences in the terms. The first concert had a loss and second concert had a gain and there was a question that bears the loss. The contract was an adhesive contract and is not enforceable. It was a contract adhesion the terms were nonnegotiable, performers had to use the form and only incidental terms can be changed. Two judicially imposed limitation on the enforcement of adhesion contracts are first a contract, which does not fall within the reasonable expectation of the weaker party will not be enforced. Second Even if consistent with the reasonable expectations of the parties will be denied enforcement if, considered in its context, it is unduly oppressive or unconscionable. In this case this the terms were unduly unfair and overly oppressive. Also the contract employed an arbitrator who by definition cannot be neutral.

Breach of a contract when unperformed

Greguhn not withstanding, the general rule in the case of a contract that is executory (unperformed) on both sides in the event one party repudiates, the non breaching party is discharged from its obligations and may sue for current and future.

Damages Requirement

Has to be certain (proven to the amount of damages), foreseeable (they have to be foreseen), and proportional (In light of the consideration. Unless in UCC). Also need causation (without this cannot have any of the other three requriments).

Haymore v. Levinson

Haymore a contractor and builder and was contracted by Levinson to build a house. In the contract it was stated that the $3,000 will be held in escrow until satisfactory completion of the work on a list of items attached to the contract. Haymore finished and he wanted the $3,000 but Levison said it wasn't to their satisfaction and Haymore agrees to complete more items and then when he went back to Levison they were not satisfied and had a new list, Haymore sues. This objective standard asks whether the contractor do a workmanlike job, would a reasonable person think the work is done satisfactory. Here the work has been done in a workmanlike manner, two experts said the job was fine and the job was done in such a manner.

Test for competency

He/she has sufficient ability to know what they were doing, does he/she acted in a reasonable way given the circumstances, and the other party had reason to know of his/her condition. However if contract made on fair terms, and the other party was unaware of the condition and the contract has been performed in a way (either in part or whole performance) or circumstances have changed that avoidance would be unjust (can grant relief if justice requires). This is listed in §15 of the restatement.

Hoffman v. Red Owl Stores, Inc.

Hoffman owned a bakery an agent for Red Owl thought he was successful and told Hoffman and his wife and would like them to run a store owner of a Red Owl store. They asked Hoffman to invest $18,000. Hoffman open a grocery store and learn how to operate a grocery store. He sells the bakery but keeps the baking supplies. They decide to open the new Red Owl in Chilton and his family moves to Chilton. He sells his grocery store before the high season, he purchased an option on a lot and then made a $1,000 down payment on the lot. Then Red Owl asks for an extra money for the investment to $24,000. Hoffman's father in law said he would invest but would need to be a partner. After accepting at first Red Owl said the father must give it as a gift and could not be a partner. They then end the agreement after that disagreement and Hoffman seeks damages for all money lost including selling the store, purchasing option on the lot, and down payment. The two parties did not enter into a franchise agreement. The seller did not setup any specifics, too many open terms, such as size of store. No basis for an enforceable contract, terms too vague. However, there was recover based on promissory estoppel. There was a promise made by Red Owl that if he did certain things he would open a store. He relied on the promise, sold the bakery, sold the new store, and moved his family among other things. His reliance was reasonable foreseeable by Red Owl because they told him to buy a store which he did, move to Chilton, which he did, and asked for more money, and he went and asked for more money (told him other things which he followed). , it could have been reasonable expected Hoffman relied on the promise, they moved his family to Chilton. Injustice would result here if not granted some relief because the defendants failure to keep his promise when the plaintiff relied on that promise. He is permitted to recovery all the money he lost in reliance to the promise, however was not able to recover loss from store he received by selling before the summer season because they do not know how much was lost because he never worked during the summer at that store.

Wolfberg v. Hunter

Hunter was a tenant and had a problem with mice and notified his landlord, Wolfberg, and said he would not pay rent until he fixes the problem. The landlord told Hunter to get poison and deduct it from the rent. It did not work and landlord got an exterminator and that did not work. The problem wasn't solved until the landlord and Hunter filled the holes. The landlord filed suit for nonpayment and Hunter countersued for a breach of implied warranty of habitability. The landlord breached the implied warranty of habitability and Hunter could withhold the rent. The landlord is however allowed to receive some money for the value of the contract bestowed on Hunter, the value of a rat filled apartment. The calculation of the damages is the difference between the rental value of the apartment each of the five months in question (330 per month for 1,650) and the value of the defective apartment (525) plus the expenses incurred by the tenants in their efforts to remedy the defective condition, subtracting the amount of rent withheld (990). $1650 - $525 = $1,125 + $195 - $990 = $420 is the amount of damage to Hunter.

Offer Accepted

If an offer is made and accepted then the person making the offer is bounded to the offer.

Mistake of Fact

If there is a mistake of existing fact by a parties then a party is granted relief and they can rescind a contract. A poor prediction will not justify rescinding a contract. The mistaken belief has to relate to a basic assumption (goes to the essence) of the contract and have a material affect on the agreed upon terms.

Option Contract

Is an agreement between a buyer and seller that gives the purchaser of the option the right to buy or sell a particular asset at a later date at an agreed upon price. In writing and signed. (The writing recites a purported consideration for making the offer [payment to keep it open]). Proposes an exchange on fair terms within a reasonable amount of time. Not consider with value of the consideration (the one dollar), concerned with time and fairness of the terms of the deal. Example of unfair time is 20 year option to keep open for a dollar and unfair terms buying property for a fraction of the price). Or an offer made irrevocable by a statute. Once a performance is started an option contract is created and promisor must fulfill the contract and cannot revoke (performer must render complete performance).

Steps When Dealing with Consideration

Is there consideration (if no), is there past consideration (if no), is there promissory estoppel.

Jon-T Farms, Inc. v. Goodpasture, Inc.

Jon-T and Goodpasture entered into a contract to sell 10 million pounds shipped during October and November. Jon-T began shipping by the end delivery period only for 2,023,480 had been shipped and by December 21 Goodpasture accepted a total 4,167,550. Goodpasture bought other grain because he always buys grain and it was not to cover. When a seller's breaches, a buyer is free to choose between damages based upon the difference between the contract price and the cost of cover under §2-712, or damages for non-delivery, consisting of the difference between the market price at the time when the buyer learns of the breach and the contract price under §2-713(1). Although in the overall operation Goodpasture may have brought some grain to compensate for the undelivered Jon-T grain to insure an adequate supply to meet its commitments, up for the specific amount of grain undelivered by Jon-T. In our opinion that the pleadings and evidence show that Goodpsture opted to pursue its remedy for damages, as it had a right to do, pursuant §2-713 because they always buy that grain.

Lake Erie Boat Sales, Inc. v. Johnson

Lake Erie entered into a sales contract with Johnson for the sale of a Boat. The buyers then repudiated because Johnson's heart problems. Lake Erie was able to resale the boat to a third party for the same price as the contract price. Since the market price (resale price) and contract price are the same he would not receive anything under §2-708(1). To recover under §2-708(2) he must show Lake Erie is a loss volume seller and thus recovery under 2-708 (1) is not adequate because they could substitute the third party buyer in place of Johnson. The burden was on the seller to show they were a loss volume seller and they failed that burden. The boat salesman told the seller that they need to buy the boat ASAP because that was the last one. That shows they did not have an unlimited volume of boats and thus could substitute the other buyer in place of Johnson.

Expectation damages formula

Lost value + Other loss - Cost avoided - Loss avoided

Acceptance

Manifestation of assent to the terms thereof made by the offeree in a manner invited or required by the offer.

Offer

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. Offeree is the master of their offer. Offeree has the continuing power to accept the offer as long as not terminated by either rejection or counter offer by offeree (When a contract is modified that is a rejection unless there is intention to renew the old offer by offeree).

Example of Expenses Saved as a Consequence of the Breach

Manufacturing costs if the product has not been manufactured.

Material Breach and Sale of Goods

Material breach requirement does not govern the sale of goods.

Restitution damages

Measured by an amount of money corresponding to any benefit conferred by the plaintiff upon the defendant in the performance of the contract disrupted by the defendant's breach.

Expectancy damages

Measured by an amount of money intended to put the plaintiff in the position he would have been in had the contract been performed.

Ways to invalidate a contract

Minority, fraud, misrepresentation, mistake, and unconscionable.

Reid v. Mutual of Omaha Insurance Company Remedy

Mutual was a tenant and Reid was a landlord. The two parties agreed to enter into a lease for five years. In the adjoining space Reid agreed to lease a space to Intermountain, which was loud and took all the space. Mutual could not work notified the landlord of the problem he did nothing and Mutual moves out with 3 and a half years left. Reid sues for breach and while the suit was going on they remodeled the room leased by Mutual and allowed Intermountain to relet. Intermountain went bankrupt and left. Since we have given a landlord a duty to mitigate damage by finding a substitute tenant such cost incurred in readying the property for the new tenant as well as repairs made are added to damages. Since the lease has not ended at the time of the trial means must be devised to permit recovery of actual losses occasioned by future accruing rents while ensuring that the landlord fulfills its duty to mitigate losses. The court goes through three approaches for rental obligations accruing after the date of trial and select the retained jurisdiction approach. This gives the landlord the ability to immediately seek damages and the court retain jurisdiction over the case and award future damages incurred from lack of paying rent. It allows the court to monitor the situation, including seeing if the landlord mitigates the damages, and award damages if a breach happens again.

Nassau Sports v. Peters

Nassau Sports is the owner of NHL New York Islanders and Defendant is the WHL New York Raiders. Peters is a veteran player who was drafted during an expansion draft by the Islanders. Peters learned of his transfer and tried to get contract with the Islanders but ended up with signing with the NY Raiders. Can't order specific performance for special services. Its illegal to have involuntary servitude in this case, which this is forcing Peters to act a certain way. The court did order that if he were to play Hockey he would have to play for the Islanders, playing anywhere else would violate the contract. The primary requisite for enforcing the option clause is the player of exceptional talent. Here the defendant concedes he is of exceptional ability, the Bruins contract assigned to the plaintiff says that exactly.

Hamer v. Sidway

Nephew was promised by his uncle that if he did refrain from drinking using tobacco, swearing, and playing cards or billboards until he became 21 years of age and then he would pay him $5,000. The nephew preformed the terms of the promise and he sent a letter to his uncle informing him of the performance. Uncle said he would give him the money just once he is a little older. the uncle died and the nephew did not receive the money. Consideration is enough if something is promised, done, forbone, or suffered by the party to whom the promise is made with. He gave up drinking and other bad habits, something he had a legal right to partake in for the $5K. Doesn't matter how tough it was. Nephew's behavior does not need to benefit the uncle as long as the Nephew's behavior is what the uncle wants.

NY Rule Silent on Medium of Acceptance

No medium of acceptance is specified then the same medium or mode the offer was made is what must be used to make the acceptance binding.

Punitive Damages under Contract Law

No punitive damages under contract law (freedom to enter a contract includes freedom to breach if you are willing to pay).

Dispute Over Meaning of Contract

Normally goes against the drafter. Drafter should know to specifically define them and didn't

Oral

Not in writing, a spoken contract. Verbal is both written and oral, not strictly oral.

Type of writing required for Statute of Frauds

Note or Memorandum has to be signed by the person sought to be charged (promisor) requirement is §133 of the little blue book. Writing can be before or after the contract was entered into. It may be peace together from several writings if one of the writings is signed and the terms clearly indicate they were suppose to be connected. Loss of destruction of a memo is not a defense against the memo.

Foxco Industries, LTD. v. Fabric World, Inc.

October 21st the plaintiff agreed to sell 12,000 yards of knitted fabric to the defendant for $36,705 to be delivered January 15th. After a decline in the knitted fabric market the defendant repudiates and the plaintiff rejects the cancellation and stated the manufacturing of the fabric was substantially completed. On November 27th the attorney said the fabric would be completed and if the defendant did not accept they would sell. The plaintiff sold 7,000 yards in September the next year when the market price was 50% less. When case went to trial the plaintiff only had 5,000. The seller could not invoke §2-706 because the seller hadn't given the defendant proper notice. The evidence did show the goods could not be easily sold because they only sell this fabric during the spring buying season, which happens once a year. Under §2709(1b) the seller is only required to make a reasonable effort to resale and that could be adduced from this case. The reason the seller waited to sell the goods till September because there was no market for specialized fabric until the beginning of the spring season. The seller could recover the contract price if resale at a reasonable price is impossible. In this case because of the lack of market until September when the market was 50 % less the seller is entitled to recover the full contract price. The income the seller had gotten from the resale should be deducted from the contract price.

Elements of a Contract

Offer (bargain), acceptance (manifestation of mutual assent to the exchange in manner invited by the offeror), and consideration

Accord and Satisfaction

Offer of the accord (Ill settle for less if you pay me that amount on a certain date, usually earlier). Satisfaction (I.e. performance of promise).

NY Revocation Rule

Offer to enter into a unilateral contract can be revoked up until time performance is completed. However the NY courts hold that the offeror enter into bilateral contract (if you paint the house ill give you the job) the offeree can make an acceptance with a return promise (ill paint your house if you pay me $5) or start performance.

Oloffson v. Coomer

Oloffson was a grain dealer in business of merchandising grain and Coomer was a farmer who supplied corn to Oloffson. Oloffson was considered a merchant and Coomer was not under the UCC. On April 16, 1970, Coomer agreed to sell Oloffson 40,000 bushels of corn, to be delivered in two installments of 20,000 bushels each in October and December of 1970. June 3rd of 1970 Coomer told Oloffson it was too rainy and Oloffson should look elsewhere for corn. Price of corn was higher. Oloffson waited to cover until October 30th and December 15th where corn was even higher. Under UCC Section: 2-610, a buyer is allowed to await a "commercially reasonable time" before taking action in response to an anticipatory breach. Where a repudiation is unequivocal and "cover" is easily and immediately available no waiting period is reasonable. When Coomer told Oloffson on June 3rd it was clear he was repudiating the contract and his reasonable time ended. He waited too long until after Coomer was suppose to deliver and then cover which was too late.

Petterson v. Pattberg

On April 4th defendant writes to plaintiff if you pay the next payment and pay the entire balance and pay early then no more debt. Plaintiff makes the payment same time defendant stated he revoked the offer. He knocks on the door says I have come to make the payment and the defendant says he already sold it. An offer to enter into a unilateral contract can be revoked up till the offer is preformed. Defendant's offer was effectively withdrawn. Pattberg offered to reduce the debt and he is the master of the offeror, that very act and no other must be given. The court said that Pattberg revoked the offer before Petterson made the payment, told him he sold it before Petterson said he had the money. He had to take the money for performance.

Promisee

One agreeing to and giving something for the promise.

Recital of Consideration

Or Purported Consideration. When the contract explicitly says "in consideration for $1". This is not considered adequate consideration unless shown it was bargained for.

Parents and Minor benefits

Parents are liable for necessaries (food...) for minors so when minors are cared for the parents receive a benefit.

Parol Evidence Rule

Parol evidence is evidence leading up to the creation of the contract. A substantive common law rule in contract cases that prevents a party to a written contract from presenting extrinsic evidence that discloses an ambiguity and clarifies it or adds to the written terms of the contract that appears to be whole. Whether and what case oral evidence that can be interpreted to meaning of the contract is allowed to be admitted into the evidence to a written agreement. Governed by UCC §2-202 When contract is complete and exclusive evidence, evidence that is contradicted is excluded. Exceptions evidence on (1) course of dealing, (2) usage of trade, or (3) course of performance, and (4) consistent additional terms unless the court finds it was intended to be complete and exclusive statement of the terms in the agreement (does not apply to three exceptions and described UCC §1-303).

Parrent v. Midway Toyota

Parrent was 15 years old and while working for Toyota he injured his back. He accepted liability that he would be paid for 150 weeks of permanent partial disability benefits. At the negotiation for disability the payment Toyota had adjusters and Parrent had his mother. His mother did not object to him signing when Parrent was given the disability payment contract. The court held Parrent can reopen the negotiations because the mom did not sign the agreement. The court also held there was unequal bargaining power here, the adjuster has done these negotiations many times and Parrent and his mother never have negotiated a disability payment contract. Also since his mother was not his legal guardian he is not bind by her actions (her lack of protest). Therefore the contract is voidable.

Payne v. Sunnyside Community Hospital

Payne was an administrator manager at the hospital and was terminated after 13 years. The hospital stated she was an employment at will. She stated there was a manual of discipline procedure, which the hospital did not follow. The hospital had a disclaimer on the manual stating it she is employment at will and she can quit and they can fire her at anytime. It also says that changes to the policies in the manual must have written intent signed by the CEO. She stated conduct of the hospital contradicts the disclaimer and the procedures were followed and told by multiple higher ups to follow the procedures specifically when discipline and was even helped. The manual was also internally inconsistently. Sufficient confusion about the facts and needs to go to trial and find intent of the parties. Look outside the manual and look to conduct to tell what the terms of the contract.

Musil v. Hendrich

Pigs seemed sick brought it to the seller but said had them on medicated ill. Buyer bought them and about 60 died. Element of illness was clear at the deal, they both expert in pigs and the buyer brought up the sickness, the pigs were medicated, and they said this common for the pigs and not affect the merchantability. He inspected the pigs understood they were sick and bought them anyways no longer an implied warranty of merchantability.

Darner Motor Sales v. Universal Underwriters Ins. Co.

Plaintiff (insured) sought expected coverage under an umbrella insurance policy with Defendant (insurer) to reach the $100,000 for one injury and $300,000 for multiple injuries. The insurance agent said the umbrella policy would allow the plaintiff to reach the 100/300 policy for its lessees when they lease the cars. He was given an agreement and it was too large so the plaintiff did not read it. The agreement said the policy would not cover lessees. A lessee of a car got in an accident and was injured. Because the umbrella policy does not cover lessees the plaintiff had to pay for part the policy did not pay of the judgment. If the insurance agent did say the lessees were covered under the umbrella policy then the insurance company liable for that claim.

McCutcheon v. United Homes Corp.

Plaintiff a tenant of defendant was injured one evening when she fell down an unlighted flight of stairs leading from her apartment that was negligence on the part of the landlord. The month to month rental agreement that included an exculpatory clause that waived liability from the lessor to the lessee injury entering the premise or the building of which the demised premises are a part. A leasor who retains control over the approaches of the common passageways, stairways, and other areas to be used in common by the owner and tenant has a duty to use reasonable care to make them safe conditions. An exculpatory clause of the type that is present here breaks long established common law rules of tort liability that exist in the landlord-tenant relationship.

Ohio Grain Co. v. Swisshelm

Plaintiff alleges that it purchased 1500 bushels of soybeans, at five dollar per bushel to be picked up at defendant's farm. A telephone convo occurred was found that merely the $5 a bushel was discussed and plaintiff had never seen the beans that a written confirmation of sale was sent to defendant by plaintiff, which was not signed or returned. The defendant sold the beans to another after receiving the written confirmation and sold before the arranged delivery. Different types of crops and livestock are not accepted at top price until examination and analysis. It was necessary to specify that the proposed price of $5 should apply and the plaintiff specified it with the confirmation giving the defendant a reasonable time to deny if he did not like and he didn't binding upon him. When determining if the telephone convo was mutual assent the defendant clearly offered to sell for $5 in immediate crash, that is upon delivery, which the plaintiff accepted his offer. The plaintiff relied upon the defendant contract and therefore there is a valid contract.

Krasner v. Berk

Plaintiff and defendant are both doctors and shared office space equally. In late May they agreed to renew the lease. There was a side agreement that if one leasee left, even if incapacitated because they cannot work, the party will continue to pay rent. The defendant later found out he had dementia and he shuts down his practice and moves out. The defendant stopped paying rent when he moves out and a suit follows. The court held the defendant was not competent to make the agreement. It was not reasonable that he wanted to sign the agreement because he expressed intent to shut down his practice before making the agreement (failed (1)(b) of §15). The plaintiff knew of his condition because the wife told him of her worry about the defendant's mental condition.

Minneapolis & ST. L. RY Co. v. Columbus Rollingmill Co.

Plaintiff asks for a quote for steel rails. Defendant stated they do not make steel rails but for iron rails $54 tons for 2,000. Plaintiff sends a letter stating please enter our order for 1,200 of iron rails for march delivery (this is a counter offer cause the quote was for 2,000 and they sent a deliver for 1,200). The defendant stated couldn't do that with that price. The plaintiff then says they'll buy 2,000 rails at that price original and the defendant then refuses. Plaintiff says it is a contract and defendant says there was a counter order and old offer no longer valid. There was no contract made with the original offer they sent a counter offer of 1,200 and rejected the original offer. So long as the offer neither is accepted or rejection the negotiations are open, but counter offer is a rejection. Once it is rejected then like no longer existed. Unless the defendant accepts the new terms in the counter offer then the negotiations end and cannot go back to the original offer.

B&R Textile Corporation v. Paul Rothman Industries LTD.

Plaintiff brought an action to recover damages sustained when the defendant failed to accept approximately 36,000 yards of fabric. Plaintiff resold the goods privately at $.92 a yard without notice to the defendant. Plaintiff sued the defendant for the difference between the contract price and the market price. The plaintiff cannot recover under §2-706 because he did not give notice to the defendant with his private resale. Used §2-708 to figure out damages. The court accepted the market price as the resale price the plaintiff used to sell the rejected goods.

ProCD Inc. v. Zeindenberg

Plaintiff compiled information for more than 3000 telephone directories and your computer database. They then sell versions of the database called select foam on CD ROMs. All of this is trademarked by the plaintiff. They have two different CDs, one for individual person and another for companies. The CD for companies is a lot more expensive. The defendant bought this CD for individuals and decrypted the coding and sold it to companies at a lesser price then what the plaintiff was charging. The license agreement was on the shrinkwrap and pops up once you put the CD in the computer. Defendant sued for copyright infringement and the defendant claimed it was not on the front of the box. Licenses are ordinary contracts accompanying the sale of the product governed the UCC. The buyer must comply with the license terms. The box on the shelf constitutes an offer. Price discriminatory makes sense because consumer uses it on a small scale for less. It makes no sense that all terms be outside the box, that would require small print plus today parties expected to be bound to terms that not apparent on sale. A consumer can open the box read the terms and then return the software and get a refund. If not unconscionable then the court will not enforce them. The customer inspected the package, tried out the software, learned of the license and did not reject the goods (doesn't matter he understood consider the insurance), which the customer could if the license was unsatisfactory. An offer an acceptance without mutual assent at purchase because he does not know until he opens the product

Reilley v. Richards With Dissent

Plaintiff contracted to purchase land to build a house with a stream bordering the land. It was found out before closing that half the land was in a flood hazard area and building on the area depends on the nature and impact on the stream and would need permission. A buyer is entitled to Recession of a real estate purchase contract is proper when there was a mutual mistake to a real estate agreement and no negligence on the part of the plaintiff in failing to discover the mistake. In this case the lack of knowledge that a significant portion of the lot is located in a floodway is a mistake of fact by both parties that goes to the character of the property. The escape clause does not mean the plaintiff assumed the risk. While the plaintiff was a lawyer he had no experience in real estate law and was an unsophisticated party at the time of the transaction. Plaintiff had his builder inspect the property and could not have discovered the floodplain by looking at the property. Dissent: There was no mistake of mutual fact because the plaintiff did not apply for the permit because he didn't want to pay the cost. If he received the permit he could then build on the land. It was a poor prediction by the plaintiff and thus cannot rescind the contract.

WWW Associates, Inc. v. Giancontieri

Plaintiff contracted with Defendants to purchase a parcel of land. Contained in the contract is a "reciprocal cancellation provision" permitting either party to cancel the agreement if litigation against the sellers is not concluded before June 1, 1987. On June 2, 1987, while the litigation was still pending, Defendants cancelled the contract pursuant to the cancellation clause, and Plaintiff initiated this action for specific performance. When parties set down to create a contract and write it out the rule is the agreed upon terms should be enforced. Here, there is no ambiguity in the cancellation clause at issue is clearly meant to apply to both the plaintiff and defendant. Extrinsic and parol evidence is not admissible to create an ambiguity in a written contract, which is complete and clear on its face. The plaintiff wants to look beyond plain language, but that would effectively rewrite the bargain that was struck. Contract seems to be clear and unambiguous on its face and cannot add any evidence.

Hayes v. Plantations Steel Company

Plaintiff declared he was going to retire. Later before his retirement he spoke with Mainelli they spoke of the retirement and he said he would take care of him. They never spoke of the percentage of the salary that he would receive. No formal provision for a pension plan for any employee other than for unionized employees, who benefit from an arrangement through their union. Mainelli son testified that his father authorized a first payment as a token appreciation for many years of service He continued every year showing up at the work to talk to old friends and Mainelli. There was no consideration, the plaintiff retired well before the promise was made. While he may have had the receipt of pension in mind when he made his retirement, his expectation was not based on any statement made by the defendant; he acted on his own initiative. No Promissory Estoppel either. He intended to leave and was not at that time looking for new work and even though the defendants wanted him to stay they did not make the promise to make him stay. For promissory estoppel the promise must induce and action or forbearance. He made the retirement long before the retirement. The payment preciously is insufficient by itself to meet the requirement under the doctrine of promissory estoppel.

S.T. Grand, Inc. v. City of New York

Plaintiff entered a contract with defendant for the cleaning of the Jerome Park Reservoir, no bidding was required. Entire cleaning preformed. Subsequently the plaintiff was convicted of conspiracy to use interstate facilities with intent to violate New York State bribery laws. When the plaintiff sued for the contract the city responded with counter claim and used the defense of the contract being an illegal one. Rule is the city does not need to recognize an illegal contract. The harsh rule is to deter violation of the bidding statutes and will not reward illegal behavior. There is an exception to the rule created in Gersof, which does not apply here in the current case because they could not calculate the damages (no determination the resivoir needed to be cleaned nor any bidding for the job). Moreover the vendor illegally infected the origin of the process not just the final step. Thus the complete fortfiture should be applied, no exception.

Stonecipher v. Pillatsch

Plaintiff entered into a contract for the sale of real estate for $29,5000.The defendant asked for the closing date from July 1st to the 15th and the plaintiff that is subject to the approval of their landlord. Something happened during construction and the defendant asks to push it back to August 1st. The plaintiff is upset with this and ask for their money back and repudiates the contract. The defendant then sent a letter saying they were tendering the possession on July 1st. When a party bound by an executory contract that gives notice of his intention not to comply with his obligations, the other contracting party may accept such notice as an anticipatory breach and treat the contract as ended without waiting for the completion of the contract by its terms. To justify the adverse party in treating a renunciation as an anticipatory breach of a contract there must be a definite and unequivocal manifestation of intention that the party will not render the promised performance when the time fixed for it in the contract arrives. The defendant words constitute repudiation when they changed the date of closing. The defendant did not propose a extension but insisted on the closing date be August 1st. When the defendant tried to go back to the original closing date, it was too late and the plaintiff already cancelled.

Jole v. Bredbenner

Plaintiff is a landlord and the defendant was a tenant. As a result of unemployment the defendant missed several rent. Plaintiff and defendant met and they agreed to regular rent payments on or before the 23rd and apromise when possible pay rent from the paycheck on the 5th. Later sent a letter detailing the agreement, The defendant stated he was moving to Cali and the plaintiff demanded the full rent due. There was no consideration. The defendant had a preexisting duty to do what they were already lawfully obligated to do. The parties did not change the due date for the rent. The third provision does not change the date but make good faith to pay the rent. The defendant was obligated to make timely payments. General good faith compromise in settlement of a debt is enforceable and there is consideration (the agreement to pay the rent at that price). No changes in the terms.

Steps for Quasi Contract/ Unjust enrichment

Plaintiff must have conferred a benefit on the defendant, The defendant must have knowledge of that benefit, Defendant must have retained the benefit, and The circumstance are such that it would be inequitable that the defendant would retain benefit without paying fair value for it (Benefit was not conferred gratuitously [intent to give gift]or officiously) and defendant would be unjustly enriched if not given money).

Hadley v. Baxendale

Plaintiff operated a mill and a crank shaft broke and they need to get it fixed. The defendant was a common carrier and the plaintiff said they needed it ASAP and the defendant said if the shaft would be there by noon it would be delivered next day. It was delivered by noon but because of error the shaft did not come for a couple days and the plaintiff had to shut down business for couple days. The plaintiff sued for loss profits. The plaintiff is not allowed to recover loss profits. Consequential damages could only be recovered when the loss flows naturally from this type of breach or the defendant foresee the consequences of their error. A party is not liable for damages unless they have notice or could have foreseen the damage caused. The defendant did not know their error would cause the plaintiff's to shut down their business.

Vlases v. Montgomery Ward & Co.

Plaintiff placed an order for 2,000 one day old chicks. The chicks were fine the first two weeks but the third week their feathers began to fall out. Plaintiff brought this attention to his feed supplier and they were checked with two of the birds were sick (they had bird cancer) and the sickness could infect the flock and will destroy the flock. Plaintiff brought a claim of negligence and breach of implied warranty of merchantability (UCC §2-314) Bird cancer is virtually undetectable from one day old chicks. This would remove the negligence claim but for the purpose of implied warranty to hold the seller responsible for passing along inferior goods to the unsuspecting buyer. It is not whether the bad goods could have been detected but whether the goods in fact were not fit for their particular purpose when given to the buyer, which they were. Implied warranty of merchantability is strict liability.

Allen R. Krauss co. v. Fox

Plaintiff says he'll buy the property for 265K. Counter offer of $486,000 must be accepted by 5pm on June 3rd (first promise). In order to accept must sign this form and return before 5pm June 3rd with $5,000 deposit (second promise). Plaintiff accepted the counter offer and contacted the Defendant real estate agent saying he is accepting but was told the property is off the market. Plaintiff delivers to the agent at 4:15 any way and to show willing to preform. Plaintiff acceptance was not effective. Revocation was effective when defendant agent told the plaintiff she was taking the offer off the market. Defendant made a promise to sell at $486,000 if meet the condition of before 5 pm with deposit and counter offer (a second promise in this case) to keep open until 5 pm June 3rd. There was no consideration to hold the promise open and thus the promise was not enforceable. In order to make the second promise enforceable they need to pay to keep the offer open or some other consideration. The deposit was a down payment on purchase of land (consideration for the first promise) but not consideration for the second promise.

Gilbert Steel LTD. v. University Construction LTD.

Plaintiff was a steel manufacturer and entered into a written contract with the defendant, a builder, to deliver steel. Contract provided that a certain amount of steel would be delivered to three cites where built for agreed upon price. The Steel was delivered at agreed upon price for two cites. The plaintiff and defendant discuss price increase and enter into a new contract agreeing to the increase of price. Plaintiff then asks for another price increase when the third project was a third finish and a third of the steel delivered. No written contract but the defendant had agreed to pay more. The defendant then refused to pay increase price when it was all delivered and plaintiff sues. For the increase in price the defendant agreed because they need the product and need it delivered then. Defendant defense states there was no consideration for their promise to pay the increased price. There was no consideration, plaintiff not doing something they were not already obligated to do (the delivery of the steel). There is also no consideration by the vague reference that he would give a good price on the steel if they accepted the first increase. Parties are free to terminate an agreement if they both agree to terminate and create a new contract, which, has cross consideration from old agreement and the old agreement no longer enforceable. If that is to be done it must be clearly and unequivocally and this did not happen here because of acrimony on the part of the plaintiff. Plaintiff legally obligated to deliver the steel by contract at the lower price.

Murphy v. American Home Products Corp.

Plaintiff was an assistant treasurer for the defendant. Was fired which he alleges for overcoming accounting improprieties. He states even though it was employment contract for indefinite duration, the law require employer shall deal with the employee with good faith and fair dealing. New York is an employment at will state. In an employment at will the employer has an unfretted power to terminate employment for any reason and it would make no sense to have a provision that would limit that. There was no promise to fire for cause.

Burton v. Atomic Workers Federal Credit Union

Plaintiff was an executive secretary and when a new manager came in she was demoted and later fired. She claims the company told her she would not be fired without cause until she meets retirement age. The company states that she was employment at will (could fire her without cause) and statute of frauds defense (was in the one year rule and not in writing). The employee rebuts with it does not fall within statute of fraud because she could die within the one year and the contract could have been preformed within a year. While she can make that argument even though she worked there for 20 years because the statute of frauds is forward looking. This is within the statute of frauds and needs to be in writing. Possible termination of contract by death of employee does not make the contract performed within a year and follow under statute of frauds. Termination not the same as performance. Promise of employment until 65 or fixed time (unless they start working at 64) it is within the statute of frauds. Remand back to the TC to look at whether statute of fraud applies.

Abrams v. Illinois College of Podiatric Medicine

Plaintiff was at the Illinois College and he failed Physiology 101 and failed to attain a passing grade on re-examination. Plaintiff was told if he passed his reduced spring caseload he would be able to retake Physiology 101 in the summer. He failed two classes the next summer and was dismissed. Plaintiff alleges in the complaint he informed the school of his troubles and the school said not to worry they would help him. He states the promise to help him succeed is a binding oral contract. A binding oral contract cannot arise unless the terms of the alleged agreement are sufficiently definite and certain. These were vague terms and uncertain and prevents from being an enforceable contact. They were merely a desire to do something not an offer creating a power of acceptance. The promise and student handbook was given after he enrolled and paid tuition before; therefore, he did not rely on the promise when he went to Illinois.

Webb v. McGowin

Plaintiff was engaged in clearing the upper floor dropping 75 lbs blocks. He saw the defendant coming toward him when he dropped a block and jumped down and moved the block away (saving the defendant) but suffered serious injuries. The defendant promised the plaintiff he would pay him every two weeks for the bravery. Defendant died and the payments stopped. Defense claimed was no consideration. Plaintiff saved the defendant from death and that is a material benefit with infinitely more value then any financial aid he could receive. A moral obligation is a sufficient consideration to support a subsequent promise to pay where the promisor has received a material benefit. Because plaintiff saved the defendant incurred a benefit that lead to a moral obligation to the plaintiff. The promise and subsequent recurring payments over 9 years show they were not a gift. If McGowin did not promise anything then he has no contract obligation because no promise.

Cash v. Benward

Plaintiff was in military, the defendant was his full time clerk. He needed filling out the application for spousal insurance and the Defendant said she would help him just to turn in the application with money. She did not remember this and he never had his application turned in. He asked the second defendant Mr. Sisk what was up and she said she saw a check on the defendants desk and would look into it. She later came back and gave him the application and told him to do it himself. He didn't his wife died and he sued for breach of contract. Neither the defendant nor Sisk benefit from expression indicating that the defendant would help the plaintiff send the application or Sisk would look into it. Neither were promise for a promise agreement or promises that were not bargained for exchange. One who orally expresses an intention to help or investigate a matter for someone; they do not reasonably believe they are entering a legal contract. Mr. Sisk and the defendant did not show detriment suffered when he made the promise. No bargain or exchange.

Newberger v. Rifkind

Plaintiff was offered stock options not to be given until 5 years. Written option agreements were drafted and accepted by each plaintiff. Plaintiff appeared at the trial that they relied on his option agreement by remaining an employee for the five-year period. They tried to exercise their options and they were denied. Employees who continue to work for a company in exchange for stock options are providing consideration for those stock options. Consideration inherent in stock options when offered to employees.

Severson v. Elberon Elevator, Inc.

Plaintiff was the general manager of a company that owned and operated several Iowa country grain elevators. The defendant operated and was the owner of a country elevator in Elberon. Defendant tried several times to sell the financially troubled elevator before meeting with Plainitiff. Plaintiff claims the parties agreed to an oral contract where they would purchase the physical assets from the defendant for $50,000 and they maintain the written document was paid merely for memorial of the contract. The defendant states the parties had agreed on the price of the physical contract but the essential terms of the contract still need to be negotiated. The record shows the parties intended to enter into an oral contract and a oral contract may exist if the parties intended to have it reduced to writing later. Specific performance is available when the contract involves property, which is unique or possesses special value. Real estate meets that requirement and the court holds when there is a breach in a real estate deal damages are inadequate and specific performance is granted. Real estate was included and an integral part of the purchase. The nature of the asset was also important. The assets as a whole were uniquely suited for operation of county grain elevator only in that location. They would have a different value in a different location. Defendant's financial straits are also a factor to be considered in determining adequate remedy of damages. He is granted specific performance.

Masterson v. Sine

Plaintiffs conveyed a ranch to Defendants by a grant deed, in which they reserved an option to purchase the ranch on or before a date certain for the same amount of money paid by Defendants plus for any improvements. After plaintiff was bankrupt, his trustee in bankruptcy and Rebecca brought a declaratory judgment action to establish their right to enforce the option. Evidence of oral collateral agreements is excluded only when the finder of fact is likely to be misled. When the writing is only a partial integrated parol evidence can use additional terms that was no reduced to written terms. The determination of whether the parties intended the written contract to be a complete integration can often made from the face of the agreement itself. In the present case, the face of the option clause does not explicitly state that it is the complete agreement. The record contains no evidence that the parties knew of the disadvantages of failing to put the whole agreement in the deed. Therefore, the collateral agreement is one that might naturally be made as a separate agreement, and the case is not one in which the parties "would certainly" have included the collateral agreement in the deed. The evidence was admissible to explain the writing.

Power Entertainment v. NFL Properties

Pro Set had a licensing agreement with the NFL to make official NFL cards. Pro Set went into bankruptcy. The owed the NFL $800,000 and Power entertainment started negotiations with the NFL to take over the debt in order to get the licensing agreement. Power entertainment states the NFL said they would transfer the license if they take on Pro Set's debt and Power entertainment agrees. NFL refuses to transfer the license to Power Entertainment and Power Entertainment sues to enforce the contract, NFL claims statute of frauds applies an needs to be in writing. There is a main purpose doctrine or leading object case to get around the Statute of Frauds. This is not a suretyship but a promise made for Power Entertainments own benefit (they get the license). They made it to take over the license not be main debt obligator to Pro Set's debt.

Promissory Estoppel

Promise is enforceable by law when the promisor (person making the promise) makes a promise to the promisee (person being promised) who relies on it to his or her detriment.

NY Statute 5-1105 (Past Consideration)

Promise, In writing, Has to be signed, Has to say the promisor is doing or will do something in exchange for something done in the past. The thing done in the past must have been done, and Except the fact is was done in the past it would be consideration for a contract.

Guarantor/ Surety

Promised to answer for the debt of another. Promise of this kind falls under the statute of frauds and is required to be in writing. The promise has to be with the one handling out the debt. As long as the surety desires to answer for the debt of another there is no need for other consideration.

Why Promise Should Be Enforced

Promisee (beneficiary of contract) intended it to be fulfilled, As a practical matter we have to enforce promise, and brings predictability.

Promisor

Promisor is the one making the promise like uncle in Hamer. For consideration need a benefit, a gain, or advantage

Types of Quasi contract theory

Promissory estoppel and unjust enrichment.

Donovan v. RRL Corporation

RRL made a typographical error in a local newspaper ad with a price significantly less ($12,000). Donavan comes to pay for the car at the ad price but the dealer says no that it was a typographical error would not sell the car for that much, but instead say he would give it to him for a discounted price to what they normally sell it. Ads are usually invitation to receive offers however this ad is an offer not an invitation. The problems usually associated with the treatment of an ad as an offer is not present; this listed a specific quantity. The ad satisfied the statute of frauds and the dealers logo was the signature. There was a mistake by a typographical error in the ad for a discounted price. A unilateral mistake is grounds for a rescission when (1) the defendant made a mistake regarding a basic assumption upon which the defendant made the contract, (2) the mistake has a material effect upon the agreed exchange of performances that is adverse to the defendant, (3) the defendant does not bear the risk of the mistake, and (4) the effect of the mistake is such that enforcement of the contract would be unconscionable. There was no negligence on the part of the seller and this wasn't a case of deceptive advertising but a mistake by the seller.

Contracts not govern by UCC

Real estate transactions, contract for services (like construction contracts), and employment contracts.

Reformation

Refers to the judicial correction or change of an existing document by court order in a way that better expresses the intentions of the parties upon petition of one of the parties to the document. Reformation is an equitable remedy. Evidence that goes toward a party's right to reformation has an exception to the parol evidence rule. Used as a remedy as an error in subscription of the contract it does not reflect the agreement of the parties and thus reform the contract

Acceptance by promise

Require the offeree complete every act essential to the making of the promise.

Acceptance by performance

Requires that at least part of what the offer requests be preformed or tendered and includes acceptance by a performance which operates as a return promise (Also part performance an option contract (promise to hold the offer open) is created when the offeree tenders or begins the invited performance or tender a beginning of it. Therefore the offeror is bounded to offer if performance is completed). Preparation of performance is not considered beginning of performance. When forms disagree but parties preform there may be a contract. (Terms embodied in the last form would be treated as an offer and beginning of performance acting as an acceptance for those terms. Last shot rule favors the buyer). New York there is no partial performance acceptance, they need to full complete performance to have acceptance. Must push the peanut completely across the bridge.

Columbia Nitrogen Corp. v. Royster Co.

Royster's manufactures and markets mixed fertilizer principal components of which nitrogen, phosphate, and potash. Columbia sells phosphate. Royster made an excess of nitrogen and entered into a contract with Columbia to purchase from Royster a minimum of 31,000 tons for three years. The phosphate market plunges and Columbia cannot sell the phosphate refuses to buy the phosphate unless it is a lesser price, Royster refuses. Royster sells the phosphate not bought to another buyer to a lesser price then the contract price. Columbia submitted evidence on usage of the trade and prior course of dealing between the parties that stated the price and quantity terms in contracts for materials in the mixed fertilizer industry are mere projections adjusted according to market price. The evidence is permitted in this case that attest to the terms of the contract. The fact a contract is clear on its face is not grounds for excluding evidence on trade usage and course of dealing (course of performance would also be allowed but that was not submitted in this case). This evidence was consistent with the terms of the contact because there is nothing in the contract that talked about the lowering of prices in the case of market plunges. While there is a merger clause, course of dealing and usage of trade are not addition to the contract but explain what is present.

Gruber v. S-M News Co.

SM News goes to Gruber for Christmas cards and they agree Gruber will produce 90,000 sets of greeting cards and SM New has exclusive distributor, which Gruber gets paid 84 cents for each set. SM news sold very few and Gruber files a suit for breach because SM News did not exercise reasonable diligence and the court agreed. Gruber wants to recover their loss profits. Gruber failed to prove that loss profit was sufficient certainty. They failed to show how many boxes would have been sold if the SM News exercised reasonable diligence. Gruber is able to recover out of pocket expenses, manufacturing costs, or reliance damages.

Parol evidence exception cases

Scott v. Wall, Masterson v. Sine, and Columbia Nitrogen Corp. v. Royster Co.

Reid v. Mutual of Omaha Insurance Company Duty to Mitigate

Since we have claimed this duty the landlord may add the cost of reletting to the amount recoverable from the breaching tenant. The landlord who seeks to hold a breaching tenant liable for unpaid rent has an obligation to take commercially reasonable steps to mitigate its losses, which ordinarily means that the landlord must seek to relet the premises. The landlord must take steps as would be reasonably expected of a landlord letting out a similar property in a same market condition. Since we have claimed this duty the landlord may add the cost of reletting to the amount recoverable from the breaching tenant. In New York the landlord is under no obligation to mitigate the damages by releting.

Cottonwood Mall Company v. Sine

Sine was interested in buying a bowling alley and the one he was looking at had a lease that would expire in two years under Horman. Sine made sure the lease would be renewed and while he refused to resign the lease he was assured the lease would be renewed when it is up. On that assurance he buys $338,000 of stock and was given the assignment of the lease. Before making remodeling he asked Horman if he would renew the lease and he said when its up they will resign on reasonable terms, Sine then makes renovations based on the assurance. Horman sells the property and now Cottonwood mall is the lessor. They tell Sine that the expiration of the lease is soon and he will then be a month to month tenant. Cottonwood mall increases the rent substantial and then terminate the lease. Sine doesn't vacate because they were negotiating terms of a new lease. Negotiations fall apart and they evict Sine and Sine counterclaim to enforce the promise by the original lessor. Not an enforceable promise. The promise was too vague and indefinite and the lease was already fulfilled. A lease must specify the time it is to extend (date of renewal) and rate of rent to be paid with such a degree of certainty and definiteness that nothing is left to for future determination.

Cirillo v. Slomin's Inc.

Slomin's sells an alarm system and sold one to Cirillo. In the process of the sale the Slomin's salesperson it is fail proof because the alarm will operate if lines are cut by alerting Slomin's home office. Cirillo relied on this promise. A burglar cut the telephone wire and robbed the house without noticing Slomin. Slomin had a disclaimer, merger clause, that the homeowner should not rely on the salesperson because they have no authority to make other promises other than in contract, and the subscriber agrees that this was not done. The court allows the evidence of Slomin's promise in because there is a consumer buyer and business seller. This is a situation that the seller providing a boiler plate (similar language used in similar contracts) without any negotiation and thus the statement must be examined more closely. In this case the consumer is reliant on the knowledge of the seller over their product (because of the complexity of an alarm system) and cannot independently verify the seller's claim. In that case a merchant should not be able to waive liability on a claim. To allow this is to reward the ingenuity of draftsmen at the expense of sound public policy and invite fraud.

Collateral

Something pledged as security for repayment of a loan, to be forfeited in the event of a default.

Greenfield v. Phillies Records

Spector began using new recording technology and licensing master recording of their vocal performance for use in movie and television production and he was paid for that giving no royalties to the plaintiff. The meaning of a contract is construed to the intent of the parties and when a contract is clear, complete, and unambiguous on its face then you enforce it according to the plain meaning and a court is not free to alter the contract to reflect personal notions of fairness and equity. The contracts silence on synchronization and domestic licensing does not create an ambiguity. Ronettes agreement, convey virtually unfettered reproduction rights to license holders in the absence of specific exceptions to the contrary and thus the defendant is able to, because they have ownership over the recording to reproduce and use it for synchronization.

Bulley & Andrews, Inc. Symons Corp.

Symons contracted with Bulley to build an office and factory addition which provided for vast amounts of architectural concrete work to be done. The contract said to use Symons tie rods and rustication strips, it cross-referenced Symons catalog (depicted both looped tie rods and threaded tie rods) and said to use the tie rods and rustication strips in the catalog. The contract did not specify which tie rods. Symons provided threaded tie rods but Bulley thought it was the standard looped tie, those would be cheaper. Bulley did not protest when Symons brought the threaded tie rods, representatives for both parties where at the construction site and saw the tie rods being used. Due to the fact that Bulley did not protest or express any doubt to the Symons their acts themselves resolved the ambiguity to what types of tie rods to be used. Since both kinds of tie rods depicted in the catalog there was an ambiguity to what type of tie rods to be used and thus look to course of performance, the non-protest when presented with the threaded tie rods. Moving toward the rustication strips part of the contract. There was only one type of the rustication strips in the catalog, but there were different kind of rustication strips presented at the sight. Since Bulley accepted the different rustication strips from those depicted in the catalog and used those strips they accepted a modification to the offer.

Liquidated damages

Terms in a contract that state what the damages will be if there is a breach. This leaves out the court and litigation. Court will uphold liquidated when the intended liquidated damages, the amount of liquidated damages reasonably approximates the amount of damages at the time the parties entered into the contract the damage the breach will cause, and the actual damages would be difficult to ascertain.

Tower City Grain v. Richman

The Richmans entered into an oral contract to sell 10,000 bushels of wheat to Tower City Grain. Delivery was made upon availability of storage or rail transportation. Richman inquired about when to delivery on several occasions but given excuses why not. Richman refused to deliver the 10,000 bushels of wheat to Tower because of the delay in calling for the delivery and a breach of contract was asserted. The old rule that courts cannot remedy specific performance in the case of fungible goods was replaced by the UCC with a more liberalized discretion to grant specific performance in a greater number of situations. To get a remedy of specific performance the party seeking the relief must show that damages are inadequate. Usually specific performance is given when the goods are unique like real estate, which had sentimental value as distinguished from market value. That is not the case here these goods are not unique. The fact Tower wants specific performance and that Richman have in their possession the type and quantity of wheat called for in the contract is not adequate to have a ruling of specific performance. It was an abuse of discretion that the trial court ordered specific performance.

Unconscionability

The basic test in the light of the general commercial background the clauses are so one sided it is unconscionable. Broken into two types of unconscionable Procedurally unconscionable (problems with the bargaining process where one party has unequal bargaining power) and Substantively unconscionable (quality, character, and wholesomeness of the terms of the contract itself). In some jurisdictions need both for unconscionability.

When is there an Anticipatory Repudiation

The breach occurs when the buyer learns of the repudiation (date party announces he won't perform), buyer learns of the repudiation plus a commercially reasonable time, and when performance is actually due.

Dursteler v. Dursteler

The contract specified a $10,000 down payment and would make periodic payments thereafter. They had a contract but there was a lot of missing terms It also setup an interim partnership where the buyer would learn how to operate the ranch. The seller moved his family out of the ranch and the buyer moved his family to the ranch. The deal fell through. Contract failed for indefiniteness. So vague the court could not fashion a remedy. There was recovery under unjust enrichment for the down payment, feed they paid for, and building the roof subtracting. The roof repair amount however is remanded for further repair because they are unsure the benefit the value conferred (may have paid too much for the roof to be repaired).

Hawkins v. McGee

The defendant a surgeon operates on the plaintiff hand. The defendant told the plaintiff and his father that the plaintiff would be in the hospital for no more than 4 days and a couple days of rest and the hand is back to 100%. The surgery was done and the hand was hairy and never a 100%. Had the defendant just said it would be four days rest and then could go home and wait a couple days then it would be perfect that would be mere prediction. The defendant however guaranteed the 100% perfect hand and he is liable for the damages. The guarantee, a statement of facts, turned the puffery into a warranty. The damages is the difference between value of the expected hand and the value of the hairy hand the plaintiff actually ended up into.

Harrington v. Taylor

The defendant assaulted his wife and the wife fought back with an axe. The plaintiff prevented the defendant's wife from striking the defendant in the head with an axe by blocking the axe with his hands, which cause mutilation. Defendant promised to pay the plaintiff for the damage done to her hand, but did not pay the full amount promised and refused to pay the rest. The court held that there was no consideration for the promise and that the plaintiff had not engaged in her humanitarian act with an expectation of compensation. Humanitarian act voluntary is not consideration. His intention is less clear cause he immediately stopped making payments.

Schott v. Westinghouse Electric Corporation

The defendant had a suggestion program where the employees could suggest to the employer ways that the company can increase production and reduce costs. The suggestion system awards employees giving them a range from 5 to 15,000 for suggestions that are adopted. Suggestions must be submitted to this form and when suggestions will be taken the employee will be notified. The plaintiff submitted a suggestion and they informed him they rejected it. The plaintiff filed a complaint, which averred that the company had adopted his suggestion and he wants 20% of what they saved. Here the suggestion committee can reject suggestion and if it doesn't meet their standards and they reject it in good faith then there is no compensation. No contract. There was a quasi contract, which is obligations created by law for reasons of justice. They are found absence of expressed contract and sometimes contrary to their intention. The failure of the acceptance of the suggestion is not determinative of appellant's quasi-contractual cause of action. In this case there was a unjust enrichment. His claim that the company had savings based on his basic-idea shows that the company has been unjustly enriched at the expense of the plaintiff. His suggestion is not a gratuity nor the suggestion program was it clear that the benefit was conferred officiously (voluntarily).

Ricketts v. Scothorn

The defendant was a grandfather promised in a note to pay to the plaintiff his granddaughter $2,000 to be at 6% interest per annum (every year). The grandfather said his granddaughter should not work. The plaintiff then quit her job. The defendant wished he would have paid the full promise before he died. Once he died the payments stopped, and she had to get a job again while she litigated. Promise not supported by consideration, no bargain, didn't require her to quit the job. However, they used equitable estoppel. If the grandfather intended, foresaw her quitting her job (rely to her detriment), and she acted relying on his facts (quitting her job) then under equitable estoppel he cannot escape the obligation to pay. That would be grossly inequitable.

Wood v. Lucy, Lady Duff-Gordon

The defendant was a popular name in fashion she employed the plaintiff. He was to have exclusive right, subject always to her approval, to place her endorsement on others designs and other things. They would split profits in half. The exclusive rights was supposed to last at least a year in there after from year-to-year unless terminated by notice of 90 days. Defendant placed her endorsements on fabrics without his knowledge and without profit, claimed no consideration in promise. Today no longer follow the rigid rule that the precise word was the talisman and every slip was fatal, boarder today.While he does not explicitly bind himself to anything, it is implied. Here compensation is tied to his efforts, where she gets half. Without an implied promise, the transaction cannot have such business efficacy, as both parties must have intended that all events it should have. This document is instinct with obligations and has implied consideration. This is what the parties intended when the contract was made, but not written.

Bachewicz v. American National Bank & Trust Co.

The defendants, Statesman and his associates, agree to sell a 90 unit house for $1.8 million on October. The closing was to be on December. The defendants have a falling out and Statesman backs out of the contract. Statesman buys out his associates' ownership and sells it to a third party a year after the breach for $2.2 million. Plaintiff sues for damages for the difference between his contract price and the sale price to the third party. The proper measure for damages for breach of contract for a sale of real estate is the difference between the contract price and the fair market price at the time of the breach. Therefore in a rising market the buyer will receive damages and in a falling market the buyer will not. In this case the date of breach was December because that was when the conveyance was to be made and that is the general rule. It is not the date when the seller makes an anticipatory repudiation. The plaintiff has the burden and failed to show the fair market value date of the breach. The market value a year later was too far ahead to be the determination of the fair market value at the time of the breach (a year earlier). You can bring expert evidence to show the market value at the date of the breach. Under these circumstances the best evidence for the fair market value at the date of the breach is the contract price.

Merger Clause

The entire deal in the document and no other agreements or deals made outside the document.

Main purpose or leading object rule

The main purpose was for own benefit and not to be a surety. Three factors used by the Texas courts determine the main purpose doctrine applies: (1) whether the promisor intended to become primarily liable for the debt in effect making it his original obligation, rather than to become a surety for another; (2) whether there was consideration for the promise; and (3) whether the receipt of the consideration was promisor's main purpose or leading objection in making the promise. Does not apply to New York.

Duty to Mitigate

The nonbreaching party cannot recover damage the nonbreaching party could have reasonably avoided. Not an affirmative duty, in that if they fail to do it they will have to pay a penalty. The penalty is not recovering full damages.

Mirror Imaging Rule

The offeree acceptance of a contractual offer by the offeror must be positive, unconditional, unequivocal, and unambiguous, and must not change, add to, or qualify the terms of the offer. Cannot have additional terms or different terms altering the contract. Offer by buyer and seller in his response must be mirror images. Replaced by UCC §2-207.

Revocation

The offeree's power of acceptance is terminated when the offeror displays a manifestation of an intention not to enter into the proposed contract. Revocation must be communicated to offeree before part performance, tender, or acceptance. So if the offeror sold the magazine to someone else, there must evidence of that to the offeree.

Goldstein v. Stainless Processing Co.

The parties entered into a contract for Goldstein to buy and Stainless sell 20,000 pound of nickel for $4.60 per pound. Multiple suggestions were made and rejected to protect each party. It was finally agreed that Stainless that Goldstein send a $20,000 check which Stainless would hold in escrow. That they would hold the check until Goldstein evaluated the material and made sure everything was ok and then they would send back the check and Goldstein would send a certified check. Goldstein sent the check but immediately went to the bank to cancel it and when Stainless received the escrow check they immediately deposited. The check bounced. Stainless notified Goldstein they were canceling the sales order. The price of nickel increased by the time Goldstein entered into a new contract for the nickel they needed and seeks to recover the additional payment. Stainless had bargained for a valid check and they did not get a valid check. Since they did not get what they bargained for Stainless under UCC §2-610 had a right to cancel.

Jolley v. Clay

The plaintiff and defendant are the surviving children of Dahlia Clay who when she died had 20 acre parcel land. Defendant was the personal representative of Dahlia Clay's estate. Plaintiff contends that they agreed with Dahlia to buy the land for $10,000 and they gave her a payment of $5,500 and then later tended $4,500 to her. Plaintiff also contends that they made improvements on the land, paid taxes and paid half of the purchase price. Defendant claims the statue fraud applies and the contract is not valid. The plaintiff actions constitute partial performance under the contract and the trial court has discretion to order specific performance (made improvements and paid taxes), despite the lack of writing.

Vista St. Clair Inc. v. Landry's Commercial Furnishing, Inc.

The plaintiff bought carpet to be put in an apartment building. After a couple of months the carpet became discolored, and it was claimed because it was defective. There were talks between the plaintiff and the defendant for three years about how they will replace the carpet. The plaintiff decides to replace it themselves and wants damages as the difference between the price of the carpet to replace and the value of the carpet if it had been as warranted. To calculate damages on warranted goods is the difference between the value as the good as warranted and the value of the goods as is. In the case where the value of the goods as is, is zero then the recovery could be the full price to replace.

Jacob & Youngs v. Kent

The plaintiff built a country residence for $77,000. One of the specifications was to have the plumbing pipes from Reading, Pa. The plaintiff only used one shipment from Reading and all other pipes were a different manufacturer. The defendant objected and refused to pay the rest. Since the pipe is identical and not much different from Reading the defendant cannot repudiate the contract. Equity and fairness dictate that one who unintentionally commits a trivial wrong will not be condemned to a fate so clearly out of proportion with the transgression. When there is an exchange of promise and both promises dependent on each other, if one party fails to perform then the other party is free to repudiate. Only a breach that is substantial and material can justify a repudiation. The lawyers however can write into the contract that every condition, no matter how trivial, must be met or recovery can be had, must have reason.

Sullivan v. O'Connor

The plaintiff claimed the defendant entered into a contract when he promised the plaintiff that after the plastic surgery on her nose her beauty and appearance would be improved. This was not achieved after the surgery, her nose was deformed, cause her pain to body and mind, and to subject her to damage and expense. She wanted to recover for the difference between the nose she got and what she expected, pain and suffering, and out of pocket expenses. The words were not specific to constitute a warranty. The judge did allow the plaintiff damages received in pain and suffering as well as out of pocket expenses. She would not receive pain and suffering for her first two surgeries because she was told it would take two surgeries. She is however able to receive pain and suffering damages for the third surgery. The out of pocket expenses is what she paid the doctor. This protects her restitution damages. She gets damages for disfiguration calculated by the value she had and the values she got.

Hochster v. De La Tour

The plaintiff had contracted in April to serve as the defendant's courier during his travels in Europe beginning in June. On May the defendant repudiated the contract and plaintiff brought suit. The court held that once the defendant anticipatorily repudiated the contract that discharged the plaintiff from his obligations with the plaintiff, he could go find another job. The plaintiff could also bring an immediate action for breach of contract and seek current and future damages (This is the general rule that most courts follow, unlike Greguhn which is an exception to the general rule).

Draft Systems v. Rimar Manuf

The plaintiff manufactures kegs and uses nylon tubing in the keg, which was bought from the defendant. It was the wrong tubing and produced wild beer (beer that is all foam) and is undrinkable. The plaintiffs customers when they received the kegs and saw them defective they sent the kegs back and the plaintiff has to refund the money. Plaintiff sues the defendant for breach of warranty and loss profits. The plaintiff is able to recover the interest charges, loss profits, and percentage of the manufacturing costs.

Horn v. Buschwick

The plaintiff repairs the defendant's roof. Plaintiff sends a bill to defendant and defendant states it is way too much and the plaintiff sends a revised bill. Defendant still says it is too much and then defendant sends a full payment of $500 check to the plaintiff with on the back this it says payment in full. Plaintiff printed the words under protest, endorsed the check, and deposited. Question is whether they can pursue the remainder it thinks it is owed after depositing the check. Under the UCC §1-308 plaintiff could reserve its right. The creditor has a reasonable expectation to keep the partial payment without forfeiting the right to obtain the balance. Does not apply to accord and satisfaction (This was not enacted in NY).

Jones v. Dressel

The plaintiff signed a contract with Free Flight, when he was 17, to use the recreational skydiving facilities that included an airplane to ferry the skydivers to the parachute-jumping site. There was an exculpatory clause that waived Free Flight from all liability for loss while on the premise or while participating in any of the activities listed by the agreement. Plaintiff turned 18 and was injured after crashing in a plane once it took off. Plaintiff sued alleging negligence and wanton misconduct. Jones asserts three grounds for reversal of summary judgment. First he disaffirmed in a reasonable time, exculpatory is void as a matter of public policy, and third the injuries sustained because of the plane crash does not fall within scope of the agreement. He ratified the contract by accepting the benefits of the contract when he used Free Flight's facilities. In determining whether an exculpatory agreement is valid there are 4 factors to consider (1) existence of a duty to the public (2) the nature of the service performed, (3) whether the contract was fairly entered into, and (4) whether the intention of the parties is expressed in clear and unambiguous language. The court held that given these four factors the agreement was valid. There was no duty to the public on the part of Free Flight. Free Flight was not a common carrier, carriage by air was incidental to Free Flight's principal business. There are insufficient facts to show Jones and Free Flight affected the public interest. The service provided was not a matter of practice. Because the service provided by Free Flight was not an essential service, because Free Flight was not an essential service it did not possess a decisive advantage of bargaining strength over Jones; and the contract was not an adhesion contract. There was no disagreement between the parties that the contract was fairly entered into and likewise there room in express the parties intention and clear and unambiguous language (contract used the word negligence).

Greguhn v. Mutul of Omaha Insurance Co.

The plaintiff took out two insurance policies against injury. Later the plaintiff hurt his back while working. Defendant began paying out his policy for the accident. The doctor said he had a preexisting condition that was precipitated by the accident. Defendant stopped paying the policy stating it was a preexisting condition. The TC erred in giving the lump sum for future benefits. The court orders the defendant pay past payments due and the defendant resume the payments of the policy. If the defendant does not pay again then the plaintiff just needs to file another action and will order the past payments due and order specific performance to continue making payments of the policy if need be.

Daugherty v. Salt

The plaintiff was an 8 year old boy whose aunt made a promissory note for $3,000 payable at her death or before because she was pleased with how he turned out. She gave it to her nephew and told him not loose this, it will be valuable someday. The note was the voluntary and unenforceable promise, it was a gift. The child not a creditor and Aunt was not paying a debt. There was not consideration because there was no detriment or benefit by the boy.

Weiner v. McGraw-Hill, Inc.

The plaintiff was in talks to join the defendant when they told him they do not fire without just cause. He signed and submitted an application that said employment would be subject to the employer handbook, which said that firing would not be done without just cause (unless necessary). The plaintiff worked for 8 years and had some pay raises before getting fired for lack of application. The fact the plaintiff was free to leave and lack of mutuality does not invalidate this as a contract. You need to look for whether there is consideration because that is a requisite in a contract (if there is consideration then no need for mutuality). There was consideration. Plaintiff consideration: He did give up previous employment and worked at defendant. Defendant Consideration: they wont fire him and pay him. No need for mutuality.

Jones v. Star Credit Corp.

The plaintiffs were welfare recipients and agreed to purchase a home freezer as a result of a visit from a salesman. The price for the freezer was $900 (actually worth $300) and $500 in interest for extending credit to Jones. The plaintiff paid to where there was a balance of $819.81. This sale is unconscionable as a matter of law. The disparity between $300 and $900, includes a healthy profit margin and is on its face exorbitant. Credit is extended to many consumers including welfare recipients and there may be an increase in price to afford the seller some protection from accepting the risk the consumer might default. However neither of these premises can make this a respectable sale. There is an importance of keeping the integrity of the agreement and still as in here there is a concern the uneducated and illiterate are victim of gross inequality in bargaining power. Having already paid $600 for a $300 freezer the seller is more than enough compensation.

When resale is impossible (having a sign of john's store) and the market is thin or nonexistent the remedy is ?

The remedy is specific performance

Walker & Co. v. Harrison

The two parties enter to construct and display a neon sign. The defendant would put his sign up and the plaintiff would clean and repair the billboard. Shortly after the first payment the sign was hit by a tomato along with graffiti and spider webs. Defendant called the plaintiff multiple times and could not get a hold of the plaintiff. Defendant stopped paying for the billboard and sent a telegram to the plaintiff. A week after the plaintiff was notified by the telegram the plaintiff cleaned the sign. Repudiation of a contract is a remedy for an injured party in the event of the other contractor committed a material breach. However if the party repudiates on his own justification that there was a material breach and there was not material breach he himself commits a material breach and then is the aggressor, not an innocent victim. The court concluded the defendant had breached by sending the telegram and not paying. While the plaintiff's lack of response is irritating this was not a material breach that justified repudiation because the plaintiff cleaned the sign a week after receiving the telegram.

Under §2-711 When a Seller Repudiates or Delivers Non Confirming Goods

Then, apart from specific performance, the buyer has two choices of remedy (1) to cover(the difference between the contract price and price of cover) or (2) seek damages (in form of the difference between the contract price and market price).

Peppercorn Theory

There was a bargain if the person initiates the promise. It shows a manifestation that she wanted it or sought the peppercorn. As long as they have proper mental state, no intent. Court only looks for existence of consideration not the adequacy. Even a peppercorn can suffice as consideration if it is bargained for. The fact it was a sham deal does not make a peppercorn the consideration because they knew of it for a pretense. I.e. a peppercorn for $200,000 then it is not bargained for and no consideration. Have to show she really wanted the item that seems cheap.

Leonard v. Pepsico

There was a commercial where among other things they had a harriet jet for 7,000,000 pepsipoints. After seeing the jet the defendant he wanted the jet so he got acouple investers (friends) to pay for the 7 mil pepsipoints with the ten pespi points he wanted and filled out the order form writing one harriet jet and that he is paying for the reminder harriet jet. The defendant rejected saying only things from the collection and on the order form may be redeemed and the ad was fantasy and a joke. General rule is an ad does not constitute is not an offer, unless the words used are very plain, clear, and leaves nothing open for negotiation. The ad is not definite because it left the details of the offer to separate writing in the Catalog, where the jet was absent. Even if the jet was in the catalog the absence of the words that brings limitation (first come first serve) does not lead a customer to reasonable believe that the shopkeeper intended to expose the risk of multitude of acceptances resulting in number of contracts exceeding the inventory.

Rogers v. Runfola &Assoc.

Thomas Runfola was the sole properieter for Runfola & Assoc. and hired two employees Marrone and Rogers who were trained by Runfola. They each signed a contract with a covenant not to compete. The two employees resigned and started their own company and Runfola sought to enforce the covenant not to compete. Covenant not to complete is reasonable if the restraint is no greater than is required for the protection of the employer, does not impose undue hardships on the employee, and is not injurious to the public. A covenant not to compete, which imposes unreasonable restrictions upon an employee, will be enforced to the extent necessary to protect employer's legitimate interests. The restraint is an unreasonable if there is undue hardship on the employee and burden the public. Court reporting is a unique profession in which you go to school and for the appellee is the only profession they are proficient. Imposing such space and time restrictions, as the covenant imposes, is unreasonable and will create an undue hardship on appellees. Runfola did however play a large role in their development and spent considerable amount of money for the training. Much of the training benefited the appellee. The employer would then not want to compete against individuals they trained. Looking at the hardship and interests we modify the restriction as to space and time set forth. We modify the covenant not to compete. We hold that for one year the appellees stop their business with anyone in Columbus and cannot divert clients that have employed Runfola for a year. Two years was unreasonable. We remand to the trial court to access damages.

Requirement for Exchange (To Bargain For)

To bargain for is to manifest an intention to induce or entice the other side to preform or return promise and be induced by it. If it is sought by the promisor in exchange for his promise and is given by the promisee in exchange for that promise.

Requirement contracts

To buy everything a company needs from a seller and the company exclusively gets that product from the seller. Can reduce its requirement to 0 as long as it does so in good faith.

Quote

Typically quotes are not an offer, just cause it says it's a quote, doesn't mean its just a quote.

UCC Gap fillers

UCC supplied provision when not provided in a contract (i.e. not provided delivery time UCC says reasonable time by using the times the parties usually have delivery.

Additional terms in acceptance or confirmation

UCC §2-207 Battle form to help determine if it is a contract or not and the what terms in the contract. I have that in a flow chart showing how it works.

Defines Merchantability

UCC §2-314 (2)

What happens when a buyer accepts goods but does not pay for them (no rejection or repudiation)?

UCC §2-709 governs this and they may bring an action for the price (sue to recover the price in the contract plus incidental damages).

When Statute of Frauds applies

Under New York general laws of obligation 5-701 a1 a performance that takes a year or more to complete is required to be in writing. The time period starts when the contract is made (not when performance started) and ends when the performance of the contract is complete. If any possible (not reasonable) means the contract can be performed within a year then it does not fall under the one-year statute of frauds requirement. A lifetime employment is specified that it is within the statute of frauds even though the life time might not be 1 year. Under UCC if it is over $500 sale of goods then it falls within the statute of frauds.

Untied Airlines, Inc. v. Austin Travel Corp.

United leases out its CRS and ABS to business that Austin Travel Corp. soon took over. Austin wanted to cancel the agreement to use the system with United. United sues for the liquidated damages for the breach. It is commonplace for contracting parties to determine in advance the amount of compensation due in a case of a breach of contract and the liquidated damages would be upheld. Liquidated damages must be reasonable proportion to the probable loss and the amount of actual loss is incapable or difficult of precise estimation. The liquidated fixed in the Apollo contract were reasonable. This was a material breach because they breached the contract.

Scott v. Wall

Wall entered into a contract to sell a restaurant to Scott. The offer is subject to the purchaser to obtain an acceptable lease for no less than 3 years and if they cannot then the deal is done. Wall was unable to negotiate a lease but Scott was . Scott was anxious to close the deal and orally promised that if Wall would sign the closing documents Scott would return the down payment and release Wall from the transaction should he not be able to obtain an acceptable lease and Wall agreed. Wall couldn't find an acceptable lease and defaulted on the note. The parol evidence rule only applies when the parties intended the contract to be final integration. Parol evidence is allowed to show that a written instrument is not to be binding except the happening of a certain event. That does not contradict or vary the terms of the written instrument but merely show what must occur to make the agreement take effect. Because the extrinsic evidence was offered to establish the conditional nature of the parties' promissory note, this is not barred by the parol evidence rule. When evidence is to prove the contract is conditional on whether a defendant can get an acceptable lease it should be allowed. It is not to bury the agreement but determining whether the agreement has gone into affect at all.

Third Story Music v. Waits

Warner would not accept the deal to compile an album of previous work unless Waits agreed and he did not consent. TSM brings a suit for breach of implied covenant of good faith and fair dealing. For an implied covenant to apply the implications (1) must arise from the language used or it must be indispensable to effectuate the intention of the parties. (2) must appear from the language used that it was so clearly within the contemplation of the parties that they deemed it unnecessary to express it. (3) implied covenants can only be justified on legal necessity. (4) a promise can be implied only where it can be rightfully assumed that it would have been made if attention had been called to it. (5) There can be no implied covenant where the subject is completely covered by the contract.

Scheirman v. Coulter Synopsis of Rule

Was sold tupperware told it was only sold here cheaper. Found it cheaper elsewhere. An expressed warranty is for the goods themselves and the statement of the price does not give rise to an expressed warranty.

Steps for promissory estoppel (If yes to all then promissory estoppel)

Was there a promise, Is it a promise that the promisor should reasonably expect to induce action or refrain by the promisee, Did it induce such action or refrain by the promisee, Can injustice only be avoided by the enforcement of the action, and Remedy may be limited as justice may require.

Weaver v. American Oil Co.

Weaver was leasing an Oil station from American Oil. American Oil had a contract with a hold harmless clause the stated would hold AMOCO from harm over neglience and also indemnify the oil company for any negligence on the part of the oil company occurring on the leased premises. Weaver did not graduate high school and was not told to get a lawyer to review the contract when he signed. Someone sprays the assistant with gasoline and they are injured. The contract is void and therefore unconscionable. It was procedurally unconscionable because the contract Weaver was given no choice but to accept or walk away and a contract of adhesion, it was not bargained for, was told to sign here without given an opportunity to read it (even if he did read probably couldn't understand it because of his lack of education), and the contract was hidden as it was small print with no title. It is substantively unconscionable because he receives very little out of the contract while being exposed for a lot. It is unwholesome to allow someone who delivers gasoline to place liability on someone else who would probably be a victim.

Implied in Fact Contract

When agreement is manifested by conduct the contract is implied in fact.

Anticipatory Repudiation

When either party repudiates (manifestation they cannot perform) the contract with respect to a performance not yet due the loss of which will substantially impair the value of the contract to the other. If a party anticipatorily repudiates a contract that is considered a breach. This repudiation has to be unequivocal or clear.

Quasi-Contract (Implied in Law)

When no agreement is manifested by word, no promise, but court imposes obligation. Theory grounded in equity to do justice. Remedy is in restitution.

Integrated vs. Non integrated

When parties intend that a writing is not a final embodiment of their agreement that instrument is said to be non integrated. Parole evidence is not concerned with non integrated instruments. When a written agreement is final and exclusive it is completely integrated. When the written instrument is final but not exclusive the instrument is partly integrated. The effect on the parole evidence rule varies on whether it is integrated or not. When an agreement is completed integration it supersedes all prior that contradict or supplement the agreement. If an instrument is a partial integration it supersedes all prior made agreements that contradict any of its terms; it wont however supersede agreements that supplement. If an instrument is not integrated then it supersedes nothing.

Expressed Contract

When party manifests his intention for the contract by word.

Course of performance

When the contract is made and until the contract is complete.

Breach of warranty

When the statement becomes the basis of the bargain (like a seller shows a sample and says could sell 100 just like it) then it is a statement of fact and failure to give the same product then breach. Statement of value (including price) is not a warranty. When you have a statement of fact it creates the warranty. UCC §2-313 Describes express warranty. Reliance on facts can create a warranty if the reliance on the seller statement is reasonable. The buyer gets the benefit that they relied on the warranty and job of the seller his statement was not relied upon by the buyer.

Last shot doctrine

When you accept a counter offer by preforming and not objecting to it. No verbal acceptance.

Williams v. Walker-Thomas Furniture Co.

Williams enters into an installment contract with Walker, which had a provision that contained a boiler plate language which stated all payments now and hereafter made by [purchaser] shall be credited pro rata on all outstanding leases, bills, and accounts due the Company by [purchaser] at the time each such payment is made. The contract was unconscionable. What is unconscionable about this case was there was no bargaining power; it was the only furniture store in the neighborhood. Also Williams was poor and uneducated when she entered into the contract. She also was not aware of the terms or their meanings when she signed the agreement. In this contract there was elements of both procedurally and substantively unconscionable. Unconscionability has often been held where there is an absence of meaningful choice on the part of one of the parties together with contract terms, which are unreasonably favorable to such party. Also in cases when the party does not understand the terms a contract is unconscionable.

Monge v. Beebe Rubber co. With Dissent

Working in a factory at night while going to school the plaintiff wanted a raise and put in a request to work in another machine. She got the new job and the forman asked her on a date, she said no. She was put on another machine with a lesser pay. Her overtime was cancelled while other workers were not. She said she needed the overtime pay and was told to sweep the floor by the foremen but was told to also clean the washrooms and ridiculed. She also was told to make her own boxes, which would slow down her production, when told the foremen she was out. She complained to her union steward the foremen ordered her back to the work and fired her when she refused to comply. She complained to her union and was reinstated with a warning. She passed out one day at work and was hospitalized for 4 days but did not show up to work for a couple days after she left and was fired. She states she was fired in bad faith. When the termination is motivated by bad faith or malice is not the best interest of the economic system or public good. The foreman's conduct clearly show the dismissal was maliciously motivated. When the termination is motivated by bad faith or malice is not the best interest of the economic system or public good. The foreman's conduct clearly show the dismissal was maliciously motivated. Dissent: The foreman was not acting in malice, gave her overtime the only way he could. She was fired for not showing up for work is not in bad faith or because she did not go on a date with the foreman.

Woyma v. Ciolek

Woyma was a school teacher driving students to a fieldtrip and was hit by Shackelford. She thinks she is uninjured and Shackelford's insurance co. gives her $25 in medical expenses and signs a release excluding all claims and includes a merger clause. Woyma started to have back pains and looks to rescind the contract. The court can rescind the contract because of mutual mistake between the releaser and releasee of a fact of material to the release such as the nature, extent or gravity of the releaser's injury.

NY obligation law §5 -1103

Writing substitutes consideration when a breach is made it can be discharged without consideration if there is writing, signed by the party against who sought to enforce the charge.

Thompson v. Estate of Coffield Synopsis of the Rule

You can admit extrinsic parol evidence if it goes to the assent of the parties. To obtain reformation the party seeking reformation must provide writing that needs to be reformed, the writing does not reflect what either parties intended, and the reason the writing does not reflect what the parties intended was because of a mutual mistake or mistake by one party and bad faith or inequitable conduct by the other party. In this case the expressed terms do not accurately represent the intent of the parties, there was a mistake by both parties.

Agent

You tell someone to sell your car you are obligated to the sale which Frank negotiates on John's behalf. If stranger sells it without any authority John will not be bound. An agent's authority to act for a principal can be expressed, but often is implied or apparent.

Merchant

a person who deals with the good of a kind and holds himself out as having knowledge or skill peculiar to the practices of goods involved in the transaction

NY and Seal Consideration

follows common law rule that consideration is required for an enforceable promise. They abolished the seal rule, and haven't replaced it with anything. A signed writing does not substitute or equal a seal.

Fraud and the Restatement

§164. If a party's manifestation of intent is induced on fraud or material misrepresentation the contract is voidable.