High Court Case Summaries on Contracts (Keyed to Farnsworth, Sanger, Cohen, Brooks, and Garvin, 9th)
Author:
Staff, Publisher's Editorial
Edition:
9th
Copyright Date:
2020
197 chapters
have results for High Court Case Summaries
Peacock Construction Co. v. Modern Air Conditioning, Inc. 261 8 results (showing 5 best matches)
- Two cases, both joined on appeal by the state supreme court after successful motions for summary judgement by the plaintiffs in breach of contract actions which were affirmed by the court of appeals.
- (Boyd) Yes. The trial court’s grant of summary judgement implies that the payment clause was not a condition on Peacock’s (P) obligation to pay his subcontractors. Similarly, the court of appeals follows the majority rule which interprets provisions like the one at issue here as “absolute promises to pay.” Consequently, the owner’s payment to the general contractor merely sets a reasonable time limit on the general contractor’s payment to the subcontractors. Both of these opinions conflict with Florida precedent which calls for an interpretation consistent with the intent of the parties to the contract. This is potentially a factual determination which would be inappropriate for a grant of summary judgement. Peacock (P) argues that, at best, the trial court must hear evidence before granting a directed verdict on the issue. However, this outcome is not required. The general rule is that the interpretation of a document is a question of law rather than a question of fact. It is quite...
- Is it appropriate for a court to grant summary judgement, ruling as a matter of law on an ambiguous condition to a contract?
- Modern Air Conditioning, Inc. (Modern Air) (P) and Overly Manufacturing (Overly) (P) were hired by Peacock Construction Co. (Peacock) (D) as subcontractors on a condominium construction project for which Peacock (D) was the general contractor. Modern Air (P) was hired to install the heating and air conditioning. Overly (P) was hired to install a rooftop swimming pool. Both of their contracts indicated that-final-payment would arrive within thirty days of the completion of their work. The payment clause concluded with the phrase, “written acceptance by the Architect and full payment therefor by the Owner.” This clause provides the central controversy for the actions for breach of contract which both subcontractors brought after the Peacock (D) failed to pay them. Peacock (D) claimed that he never received full payment from the Owner. He argues that the payment clause is a condition precedent to his obligation to pay the subcontractors—a condition which failed. In each case, the trial
- Justice Boyd’s approach to this case should seem familiar. The canon of contract interpretation is brought to bear on one more element of contracts: the condition. As in the cases dealing with the construction bidding process, the courts have found ways of dealing with certain familiar business transactions. Judges can apply a single rule that is based on the most common dealings between parties. As Justice Boyd notes, the parties can always contract around the application of this rule, but they must do so unambiguously. This protects subcontractors, who are the most likely parties to suffer from a misapplication of the rule. In the bidding cases, it seemed as if the subcontractors were being short changed because the general contractors were not obligated to hire them even if they used their bids. Here, Justice Boyd recognizes that it may seem as if general contractors are unfairly bearing all of the risk of non-payment. However, in both cases the court understood that an equitable...
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Colfax Envelope Corp. v. Local No. 458–3M 195 7 results (showing 5 best matches)
- In this case, Colfax (P) was put on notice of a crucial omission when the contract summary did not make any reference to four-color seventy-eight-inch presses. Colfax’s (P) unreasonable behavior was in assuming that this omission had any substantive meaning. Prudence should have led Colfax (P) to make inquiries as to the staffing requirements for the larger presses. As the court notes, the summary is the contract in this case, and the corrected copy of the agreement is only confirmation of the existence of the mistake. The result here may well have been different if Colfax (P) had made inquiries before signing the summary and was given the copy of the final agreement with the typo in response to those inquiries.
- Colfax (P) brought suit for a declaration that it had no collective bargaining agreement because the parties never agreed on an essential term; namely, the staffing requirements. Local 458–3M (D) counterclaimed for arbitration, claiming that Colfax (P) had accepted the new agreement and was therefore bound by the arbitration clause, which required arbitration of disputes arising out of the interpretation of the contract. The district court granted summary judgment for Local 458–3M (D), holding that the staffing requirements in the summary referred unambiguously to sixty-inch presses and had no application to seventy-eight-inch presses.
- The clearest cases in favor of rescission are those in which an offer is garbled in transmission. The case at bar is, at least superficially, one such case. Colfax (P) believes that the term “4C 60 Press-3 Men” means four-color presses printing sheets sixty inches and over, while Local 458–3M (D) believes that it means presses sixty inches and under, down to forty-five inches. The previous agreement allowed the use of three-man crews on four-color presses between forty-five and fifty inches, and Local 458–3M (D) interpreted the change as extending the three-man range to sixty inches. In this case, though, Colfax (P) should have realized that the meaning of the contract was unclear. The expression “4C 60 Press” does not, on its face, refer to a seventy-eight-inch press. The interpretation of Local 458–3M (D) may or may not be the correct one. Although the summary is the contract between the parties, the corrected agreement should have made Colfax (P) certain that its interpretation...
- The collective bargaining agreement in force between 1987 and 1991 set out minimum manning requirements for printing presses. Colfax (P) operated one seventy-eight-inch press that printed in four colors and one that could print in five colors but that was usually used to print in four colors, and it was generally required to man the presses with four employees (five employees were required on the rare occasions that printing was done in five colors). In 1991, Local 458–3M (D) negotiated a new agreement with the Lithographers Association and sent a summary of the changes to Colfax (P). Colfax (P) was asked to indicate whether it agreed to the terms in the summary. The section on manning requirements listed “4C 60 Press-3 Men” and “5C 78 Press-4 Men.” Colfax (P) interpreted this language to mean that only three employees would be required to operate all four-color presses, regardless of size. Based on this interpretation, Colfax (P) approved the terms in the summary. A copy of the...
- Appeal from an order granting summary judgment for Local 458–3M (D).
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Market Street Associates v. Frey 231 5 results
- (Posner) Yes. The district court felt that Market Street (P) had an obligation to remind GE (D) of paragraph 34, even though GE (D) was likely to discover the paragraph when it processed Market Street’s (P) request for financing. It was correct, but this approach has its limits. The duty of good faith does not require parties to look out for each other’s financial well-being. In fact, a party to a contract is fully entitled to take advantage of its superior knowledge or financial position when dealing with another party. A party cannot, however, take advantage of an oversight by the other party which affects its rights under the contract. In this case, it is not clear whether Orenstein took advantage of Erb’s lack of knowledge regarding paragraph 34, or if he simply assumed that GE (D) would discover the paragraph on its own.
- ...required GE (D) to give reasonable consideration to any requests from J.C. Penney for the financing of improvements. In addition, paragraph 34 gave J.C. Penney the right to buy back its property if negotiations for improvements broke down, and if J.C. Penney’s property had an average annual appreciation over 6%. A successor of J.C. Penney’s under one of its leases, Market Street Associates (Market Street) (P), was interested in buying the property back from GE (D). GE’s (D) representative, Erb, did not respond to inquiries. Market Street (P) subsequently sent two letters to Erb, requesting financing for improvements. They never mentioned paragraph 34 in these letters. Erb denied Market Street’s (P) request because they asked for an amount less than the minimum loan of $7 million. Market Street (P) then tried to exercise the buyback option under paragraph 34. GE (D) refused this request as well, forcing Market Street (P) to sue for specific performance. The district court...
- Judge Posner’s opinion in this case is interesting because it demonstrates that law and economics are not ruthless, but simply appreciate efficiency. In other words, there are limits to the sort of behavior that can be tolerated and still maintain a healthy market for contracts. Judge Posner and Judge Easterbrook, his fellow judge on the Seventh Circuit, are respected for their cohesiveness and their clarity, if not yet fully embraced by the entire legal establishment. On a separate note, the district court ultimately found for GE (D) on remand. As it turns out. Orenstein knew that GE (D) was unaware of paragraph 34, but continued to write letters that failed to clarify the parties’ respective rights. This was a violation of the duty of good faith, as described by Judge Posner, and led the district court to deny its request for specific performance.
- COURT OF APPEALS DESCRIBES THE BOUNDARIES OF AN IMPLIED DUTY OF GOOD FAITH
- Appeal from a trial court judgement for the defendant in an action for specific performance on a lease option.
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Bains LLC v. Arco Prod. Co. 353 7 results (showing 5 best matches)
- On the facts of this case, in determining the correct amount of punitive damages, the jury could properly consider not only the one dollar in nominal damages awarded for discrimination under
- REMITTUR: (Latin) “It is sent back.” 1. A judge’s order reducing a judgment awarded by a jury. 2. An appellate court’s transmittal of a case back to the trial court so that the case can be retried, or an order can be entered consistent with the appellate court’s decision (such as dismissing the plaintiff’s case or awarding costs to the winning party on appeal).
- In evaluating the reprehensibility of ARCO’s (D) conduct in this case (
- Guideposts in reviewing excessiveness of punitive damages are: (1) the degree of reprehensibility, (2) the disparity between the harm suffered and the punitive damages award, and (3) the difference between the remedy and the civil penalties authorized or imposed in comparable cases.
- Case Vocabulary
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- This case is an appeal from a grant of summary judgment, so all the court is saying is that South Carolina Electric (P) did not raise an issue of material fact regarding the disclaimer. In other words, the court is not saying that, as a matter of law, the type of disclaimer used by Combustion (D) will always be sufficient, or even that a large business such as South Carolina Electric (P) will not be able to avoid a disclaimer that is legally insufficient. The court is merely holding that South Carolina Electric (P) did not rebut evidence showing that it had actual notice of the disclaimer. The result of this case could well have been different if there had been no proof that the warranty disclaimer language was discussed before the sales agreement was signed.
- Appeal from an order granting summary judgment to Combustion Engineering (D).
- South Carolina Electric (P) brought suit against Combustion (D) for breach of the warranties of fitness for a particular purpose and merchantability, and for negligent design. Combustion (D) moved for, and was granted, summary judgment.
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- State supreme court review of a trial court decision granting summary judgment in the plaintiffs’ favor.
- Several classes of persons lack the capacity to enter into a binding contract. Whereas it may be easy to establish certain statuses—such as minority, which can be verified by a driver’s license in questionable cases—incompetency is not so clear cut. A seller who enters into a good faith transaction with one who seems competent to make the deal, but is under a legal guardianship, has no recourse under the approach adopted by the court in this case.
- The Denisons’ (P) son, who was developmentally disabled, purchased a car from Kenai Chrysler Center (D) using his debit card. When his mother found out, she contacted the dealership and told them her son did not have the capacity to enter into a legal contract, and thus the contract was void. The dealership refused to cancel the deal, saying that they sold cars to “a lot of people who aren’t very smart.” The Denisons (P) sued, seeking a declaration that the contract was void by virtue of their guardianship over their son and an injunction to prevent the collection of further payments under the contract. The Denisons (P) moved for summary judgment and the court granted the motion. Kenai Chrysler (D) appealed, arguing that it was entitled to restitution because it did not know about the son’s incompetency when the sale occurred.
- Case Vocabulary
- RESTITUTION: A common law remedy by which the court can, in its discretion, restore the injured party to a previous position, return something to the rightful owner, or restore the status quo; the measure of actual damages.
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Bloor v. Falstaff Brewing Corp. 233 6 results (showing 5 best matches)
- (Friendly) No. Falstaff (D) argues that the district court held it to a “best efforts” standard which required it to continue marketing Ballantine beer regardless of the consequences. This is not true. The district court did cite to a case which required performance even to the point of financial difficulty or economic hardship. Falstaff (D) cites an alternative case,
- Judge Friendly’s opinion follows a familiar theme in contract law that requires a case-by-case analysis under certain circumstances. However, he never really announces a rule of law that governs this case. Instead, he relies on the findings of the district court, implicitly endorsing a factual inquiry rather than a bright line rule. Judge Friendly may have followed this approach because, as he notes, the specific language in the contract called for a
- ...(Ballantine). The contract required Falstaff (D) to use best efforts to promote Ballantine’s labels and to maintain a high volume of sales. In addition, Falstaff (D) was supposed to pay Ballantine $.50 per barrel in royalties for six years. If Falstaff (D) ever substantially discontinued the sale of Ballantine beer, it would trigger an onerous liquidated damages clause. The Ballantine label had been in trouble for years before Falstaff (D) stepped in. Ballantine had already been taken over once and had failed to turn a profit. Falstaff (D) continued the effort, but Ballantine performed more poorly than any of Falstaff’s (D) other beers. In fact, Falstaff (D) was approaching the point where it would be unable to meet their payroll or other credit obligations. A change in Falstaff’s (D) corporate control, however, resulted in a healthy infusion of cash and a subsequent reduction in its effort to market Ballantine beer. It reduced the advertising budget for Ballantine from $1,...
- Case Vocabulary
- COURT OF APPEALS PERMITS A FACT-SPECIFIC INQUIRY TO DETERMINE A PARTY’S OBLIGATIONS UNDER A BEST EFFORTS CLAUSE
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St. Ansgar Mills, Inc. v. Streit 133 7 results (showing 5 best matches)
- (Cady, J.) No. The question of whether the written confirmation of an oral contract was received in a reasonable time is a question of fact for the jury. The reasonableness of a party’s conduct must be determined according to all of the circumstances of the case. Numerous cases from other jurisdictions have held that the reasonableness of the time of the delivery of a confirmation is a jury question. While some courts have ruled on the reasonableness question as a matter of law, summary judgment on this issue is appropriate only when the evidence is so one-sided that only one party must prevail at trial.
- St. Ansgar (P) brought suit against Streit (D) for breach of contract. Streit (D) moved for summary judgment, claiming that the Statute of Frauds barred enforcement of the agreement. Streit (D) argued that the written confirmation did not meet the requirements of
- Appeal from an order granting summary judgment in favor of Streit (D).
- Was the delay in delivering the confirmation unreasonable as a matter of law, so that Streit (D) was entitled to summary judgment?
- The factors cited by the trial court—the volatility of the market conditions and the high sale price—would normally narrow the amount of time considered reasonable. There are other factors to consider, such as the custom or practice of the parties to delay delivery of the confirmation, the long-standing amicable business relationship between the parties, the numerous similar transactions that were completed without incident, and the fact that St. Ansgar (P) did not suspect the failure of Streit’s (D) father to stop by was a matter of concern. These factors show a genuine dispute over the reasonableness of the delay. In addition, conduct is not rendered unreasonable solely because there is no particular explanation for the conduct. The reasonableness of conduct must be determined by the facts and circumstances existing at the time the conduct occurred. Reversed and remanded.
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Raffles v. Wichelhaus 193 9 results (showing 5 best matches)
- COURT OF EXCHEQUER: A trial level court which existed until 1873. Its jurisdiction was subsequently turned over to the Exchequer Division and then the Queen’s Bench Division of the High Court of Justice.
- Note that the opinions of judges Mellish and Milward appear in the reverse order in your book. Nonetheless, Mellish’s opinion is the decision of the court and Milward’s opinion is, in essence, the dissent. Second, note that the rule of law announced by the court is meant for the exceptional case. Usually, courts require the objective intent of the parties to govern the interpretation of a contract. Occasionally, though, a crucial term in the contract is subject to differing interpretations. If the parties actually interpreted an ambiguous term in different ways, the contract can be voided. Much of the debate regarding this case centers on the importance of the ship’s identity to the contract. It has been argued that Judge Milward’s approach was actually contrary to trade practice at the time. He suggests that the identity of the ship was unimportant as long as the cotton arrived as promised. However, it was apparently common practice for parties to identify a particular ship and a...
- Case Vocabulary
- 2 H. & C. 906, 159 Eng.Rep. 375 (Court of Exchequer 1864)
- EXCHEQUER COURT VOIDS A CONTRACT THAT HINGED ON AN AMBIGUOUS TERM
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C.R. Klewin, Inc. v. Flagship Properties, Inc. 119 8 results (showing 5 best matches)
- CERTIFIED QUESTION: A point of law on which a federal appellate court seeks guidance from wither the U.S. Supreme Court or the highest state court by the procedure of certification.
- Flagship (D) was the developer of a large building project. At a meeting, Klewin (P) quoted a percentage fee for acting as construction manager on the project, and the meeting was concluded with a handshake and the words “we’ve got a deal.” Flagship (D) and Klewin (P) made a written agreement for Klewin’s (P) services for the first phase of construction, which began in May 1987. Flagship (D) became dissatisfied with Klewin’s (P) services, and in March 1988 engaged another firm to act as construction manager. Klewin (P) sued Flagship (D) for breach of contract. Flagship (D) moved for summary judgment, alleging that enforcement of the agreement with Klewin (P) was barred by the Statute of Frauds. The district court granted summary judgment on the ground that the contract was not of indefinite duration or open-ended, because full performance would take place when all the phases of the project were completed. The court also held that, as a matter of law, the contract could not possibly...
- In the case at bar, the only question is what meaning to give the term “possibly” in the application of the Statute of Frauds to contracts “whose contracts cannot possibly be performed within a year.” The district court held that the term includes contracts such as the one involved here, in which no definite time period is specified, but it is realistically impossible for performance to be completed within one year. The correct interpretation, however, is that “possibly” includes only those contracts whose completion within a year would be inconsistent with the express terms of the contract. Flagship (D) argues that this possibility must be a “reasonable” one, but no case law has established a “reasonable possibility” requirement. The one-year provision is an anachronism, and should not be expanded. A collateral inquiry into the reasonable possibility of completion within a year would be such an expansion, and would waste judicial time on an inquiry that has nothing to do with the...
- The court dismisses a reading of the Statute that would require some reasonable probability that performance could be completed within a year before the one-year limitation would not apply. In this case, such a reasonableness requirement probably would have put the contract within the Statute, since even Klewin (P) acknowledged that the full project would take between three and ten years. The court clearly does not approve of the one-year limitation, and that disapproval may be what prevents it from recognizing a time limitation that clearly is implicit in the agreement.
- Case Vocabulary
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Black Industries, Inc. v. Bush 213 8 results (showing 5 best matches)
- (Forman) No. It is not the function of the court to interfere in the contractual relationship of two ordinary businessmen dealing at arm’s length by trying to determine the validity of the contract on the basis of the adequacy of the consideration. To declare a contract void against public policy, the contract must be invalid on the basis of recognized legal principles. The contract here does not fit that description. It is not a contract to pay one of the parties for inducing a public official to act in a certain way; it is not a contract to commit an illegal act;
- Motion for summary judgment in action for breach of contract.
- Case Vocabulary
- THE COURT WILL NOT INTERFERE IN A CONTRACT BETWEEN ORDINARY BUSINESSMEN BY TRYING TO DETERMINE ITS VALIDITY BASED ON THE ADEQUACY OF THE CONSIDERATION INVOLVED
- It is not the function of the court to interfere in the contractual relationship of two ordinary businessmen dealing at arm’s length by trying to determine the validity of the contract on the basis of the adequacy of the consideration.
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In the Matter of Baby M 247 7 results (showing 5 best matches)
- When this case was pending, Whitehead (D) received public support from all parts of the political spectrum. Some prominent feminists, as well as some conservative commenters, criticized the trial court’s apparent rejection of the mother-child bond. Liberal supporters often noted the class distinctions—Whitehead (D) was a high-school dropout married to a sanitation worker, and Stern (P) was a physician married to a biochemist. In 2004, Baby M turned eighteen. She filed court proceedings to terminate Whitehead’s (D) parental rights and formalize her adoption by Stern’s (P) wife.
- The contract conflicts with statutory provisions prohibiting the use of money in connection with adoptions, requiring proof of parental unfitness or abandonment before termination of parental rights or adoption is granted, and making the surrender of custody and consent to adoption revocable in private placement adoptions. Although private placement adoptions are allowed in New Jersey, they are disfavored. Paying or accepting money in connection with a private placement adoption is a high misdemeanor. The evils inherent in baby-bartering are loathsome for many reasons. The child is sold without regard to whether the purchasers will be suitable parents, the birth mother does not receive the benefit of counseling and guidance to assist her in making the decision, and the monetary incentive may make her decision less voluntary. Although the surrogacy contract in the instant case was carefully structured to avoid the statutory prohibition, it seems clear that money was
- ...payment of money in connection with adoptions exists here. First, and perhaps most important, all of the parties concede that it is unlikely that surrogacy will survive without money. If there are no payments, there will be few, if any, surrogates. In an adoption, the adoption itself relieves the mother of the financial burden of supporting an infant and is in some sense the equivalent of payment. Second, the use of money in adoptions does not produce the problem. Conception and, usually, birth occur before the illicit funds are paid. With surrogacy, the problem—the purchase of a woman’s procreative capacity, at the risk of her life—is caused by, and originates with, the offer of money. Third, the prohibition of using money in connection with adoptions means that the financial pressure of an unwanted pregnancy and the resulting support obligation will not lead the mother to the highest-paying, yet ill-suited, adoptive parents. She is just as well-off surrendering her child to an...
- Whitehead (D) delivered a baby girl, Baby M, but she refused to turn the child over to Stern (P). Stern (P) brought an action for specific enforcement of the contract. The trial court upheld the validity of the contract, and awarded custody of Baby M to Stern (P). The trial court also terminated Whitehead’s (D) parental rights.
- Case Vocabulary
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Trident Center v. Connecticut General Life Ins. Co. 179 7 results (showing 5 best matches)
- also chips away at the foundation of the legal system. If courts are unwilling to enforce language arrived at by parties dealing face-to-face, how can courts send anyone to jail for violating statutes that consist of “mere words”? How can courts enforce decrees, or carry out the mandate of higher courts, if “perfect verbal expression” is impossible? But still, that is the law.
- The trial court’s decision is reversed, and the case remanded to allow Trident (P) to introduce extrinsic evidence as to the intention of the parties in drafting the contract.
- (Kozinski, J.) Yes. Under California law, relevant, extrinsic evidence may be always admitted to show the intent of the parties to a written agreement. The traditional rule is that extrinsic evidence may not be used to alter or contradict the terms of a written agreement; however, the California Supreme Court, in the case of
- Trident (P) also claims that the contract in the instant case is ambiguous because a prepayment penalty is imposed in the event of acceleration due to default. Trident (P) claims that this clause gives it the right to prepay. This argument is rejected out of hand.
- Courts nationwide have moved away from the traditional absolute prohibition against extrinsic evidence, but the California courts have gone farther than most, by imposing virtually no restrictions on the situations in which extrinsic evidence may be introduced. It is perhaps going too far to say that written contracts have no significance in California law, but the legal certainty of a written agreement is unquestionably diminished. While as a matter of linguistic theory there may be no reason to prefer written language over other expressions of intent, the written document does give the parties to a contract a clear, definite statement of their rights and obligations. Such a definite statement makes enforcement of the parties’ intent easier, even if less accurate in the abstract.
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- Appeal by rum bottler (D) of U.S. District Court denial of summary judgment.
- ...(P) had a sales agreement. Figgie (P) delivered defective equipment, which Serralles (D) returned in exchange for a refund of the purchase price. Serralles (D) also requested that Figgie (P) pay for alleged losses caused by the failure of the equipment to perform as expected and by the delay in obtaining alternative equipment. Figgie (P) sought a declaratory judgment that Serralles (D) was limited to the exclusive remedy of repair, replacement, or return of the equipment, both under the written terms and conditions of the sales agreement and pursuant to usage of trade in the bottle-labeling industry. Serralles (D) contended that it was entitled to the full array of remedies provided by the South Carolina Uniform Commercial Code (UCC) and moved for summary judgment on that issue. Neither party was able to produce the original sales agreement. Figgie (P) relied upon the standard terms and conditions that purportedly accompanied every sales agreement entered into during the...
- . Further, as the court held here, a limited remedy may be exclusive even if it is imposed by usage of trade rather than by explicit agreement of the parties. However, the UCC also provides that while limitation of damages for commercial loss is permissible, limitation of consequential damages for injury to the person in the case of consumer goods is prima facie unconscionable.
- . In support of its motion for summary judgment, Figgie (P) submitted several affidavits of persons with extensive experience in the bottle-labeling and packaging industry, attesting that sellers in the industry always limit the available remedies in the event of a breach to repair, replacement, or return, and specifically exclude consequential damages. Serralles (D) asserted that it did not “acquiesce” in this practice, but offered no evidence to contradict the affidavits submitted by Figgie (D). Affirmed.
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- Appeal from a trial court grant of summary judgement for the plaintiff in a breach of contract action.
- Note that this case was remanded for a determination as to whether Toys (P) actually exercised the option and whether it later waived the right of renewal. However, in this portion of the opinion, Justice Dooley applies the standard methods of contract interpretation to an option agreement. He examines the terms of the agreement as well as the behavior of the parties in order to determine whether they had a binding contract. His subsequent interpretation stays true to his announced goal of preserving the agreement despite its inherent defects. This goal is also evident in the promissory estoppel cases, which look very much like the court is finding a tacit agreement between the parties in order to compensate the party who was wronged.
- (Dooley) Yes. An option agreement can be binding if it contains all of the material and essential terms to be incorporated in the subsequent agreement. At the very least, it must contain provisions which will help the parties to arrive at these terms. This is consistent with the Restatement (Second) of Contracts approach. The Restatement notes that the terms of a contract may be sufficiently definite even if they permit the parties to arrive at certain terms during the course of performance. In addition, courts will interpret these provisions toward the goal of preserving an enforceable agreement if possible. In this case, the option agreement provided for a negotiation to take place over the new lease rate. Burlington (D) claims that this provision is unenforceable because there was no boundary to the parties’ negotiations. However, the agreement states that negotiations will take place at the then prevailing market rate. This is the premise upon which the parties actually...
- ...lease rate at the mall. Toys (P) responded with a letter which recounted a conversation they had with Burlington’s (D) leasing agent. The leasing agent suggested that Toys (P) would be able to negotiate their lease rate, regardless of the prevailing rate. This suggestion was affirmed by Burlington (D) in their response. They sent Toys (P) a letter inviting them to renegotiate their rate even though the prevailing rate was still binding. In the ensuing negotiation, Toys (P) and Burlington (D) agreed on a rate and Burlington (D) sent Toys (P) a letter describing the terms of the agreement and giving them two weeks to accept. From this point on, the parties failed to come to an agreement and Toys (P) ultimately moved out of the mall and sued Burlington (D) for breach of contract. Burlington (D) claims, among other things, that the option agreement was not sufficiently definite to be enforceable. He claims that it was simply an agreement to agree. The trial court granted... ...summary...
- VERMONT SUPREME COURT FINDS AN OPTION AGREEMENT SUFFICIENTLY DEFINITE TO BIND THE CONTRACTING PARTIES
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Rocheux Int’l of N.J. v. U.S. Merchants Fin. Group 301 6 results (showing 5 best matches)
- Federal district court consideration of the parties’ cross-motions for summary judgment.
- With regard to the assurances purportedly provided, the defendant argues that its October 4, 2006 letter disputing the amount owed but indicating a willingness to purchase the quantities not yet delivered at the contract price constituted adequate assurance of its continued performance. Rocheux (P) responded by conditioning further deliveries on a letter of credit in favor of Rocheux (P) in the amount of the open invoices. The defendant did not provide the letter of credit. Given the defendant’s continued failure to pay the outstanding invoices, the court cannot say as a matter of law that the demand for a letter of credit was unreasonable. However, nor can this court determine as a matter of law that the defendant’s October 4 letter seeking to change the terms of delivery of the warehouse goods constituted repudiation or provided inadequate assurance. These issues present questions of fact to be determined according to commercial standards. The court finds that a reasonable jury...
- U.S. Merchants (D) failed to pay for raw plastic provided by Rocheux (P), claiming that it was defective, but Rocheux (P) argued that U.S. Merchants (D) had not complained about the defects in a timely manner and had admitted it owed the money; both parties moved for summary judgment in their favor.
- Case Vocabulary
- ...that if had known about the alleged defects, it would have inspected the goods and returned any defective goods to the manufacturer for credit. Not until September 6, 2006, did the company receive an email from U.S. Merchants (D) notifying Rocheux (P) of the problem, and by that time the vast majority of the goods had been discarded by U.S. Merchants (D) as scrap. Rocheux (P) sued for breach of contract and U.S. Merchants (D) counter-sued. Rocheux (P) argued that U.S. Merchants (D) was liable for the deficiency between the original purchase price and the subsequent resale value of the warehouse goods, as well as the costs Rocheux (P) incurred by storing and re-selling the same. U.S. Merchants (D) argued that the plaintiff could not recover these sums as a matter of law because Rocheux (P) improperly repudiated its contracts with the defendant without demanding adequate assurance, and despite having received such assurance from the defendant. The parties cross-moved for summary...
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- Appeal of summary judgment by the District Court for a breach of contract.
- The Best Barber Beauty & Supply Company was acquired by the Sally Beauty Company (P). Sally (P) succeeded to Best’s rights and interests, in all of Best’s contracts, including an agreement to exclusively distribute Nexxus Products (D) in Texas. Nexxus (D) renounced all of its obligations, upon the occurrence of the merger, because Sally Beauty (P) was a wholly-owned subsidiary of Alberto-Culver, a direct competitor of Nexxus (D). Nexxus (D) held “great reservations about a competitor acting as a distributor of Nexxus (D) products. Nexxus (D) claimed its agreement with Best was based upon “personal trust and confidence which precluded an assignment to Sally (P) absent Nexxus’ consent. Sally Beauty (P) argued that the contract was between corporations and the expected performance would not be altered by Sally Beauty (P). The trial court affirmed a motion for summary judgment, brought by Nexxus (D), “based upon a relationship of personal trust and confidence.
- ...direct competitor, Alberto-Culver, could carry out its “best efforts” In good faith. The “. . . duty of performance under an exclusive distributorship may not be delegated to a competitor. . . without the obligee’s consent.” It is reasonable that Nexxus (D) believed that the “best efforts” it had bargained for would be different under the control of a competitor, Alberto-Culver. Sally’s (P) contention, that it should be allowed to proceed to trial to prove that it could perform with “best efforts to Nexxus’ (D) satisfaction, is not consistent with a “best efforts contract, which is nondelegable, without Nexxus’ (D) consent. An obligee cannot be forced to accept a delegation of a performance in which the obligee cannot have full confidence in the best efforts of the assignee. Sally (P) has an obvious conflict of interest as a wholly-owned Alberto-Culver subsidiary. Therefore, the contract between Nexxus (D) and Best was not assignable to Sally (P), absent Nexxus’ consent. Summary...
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Kenford Co. v. County of Erie 343 4 results
- NEW YORK HIGH COURT LIMITS CONTRACT DAMAGES TO THOSE WHICH THE BREACHING PARTY ASSUMED
- ...contract as land owned by Cottrell or Kenford (P) located in Lancaster. If DSI (P) and the County (D) could not agree on the lease terms, DSI (P) and the County (D) were to enter into a 20-year management agreement. When the County (D) learned that the stadium would cost about $72 million to build [shouldn’t it have gotten an estimate before issuing the bonds?], it terminated the contract. Kenford (P) and DSI (P) sued. The jury awarded Kenford (P) $18 million for its lost appreciation in its property located near the proposed stadium site, and $6 million for out-of-pocket expenses. DSI (P) was awarded $25.6 million in lost profits under the 20-year management contract. On appeal, the Appellate Division reversed the award to DSI (P) for lost profits and a portion of the award to Kenford (P) for out-of-pocket expenses. The Appellate Division also held that Kenford (P) could recover for lost appreciation of its property, but remanded the case to obtain proper appraisal evidence. DSI...
- The court here went beyond
- [landmark English case holding that party injured by breach of contract may recover only those damages that were reasonably foreseeable at the time the contract was made] provides that damages are limited to those that were reasonably foreseen or contemplated at the time the parties executed the contract. This limits liability for unassumed risks, and diminishes the risks of entering into a business enterprise. Reversed.
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- Columber’s (D) employment with Lake Land (P) ended in 2001, and Columber (D) opened a business similar to Lake Land (P). Lake Land (P) brought suit against Columber (D), and Columber (D) pleaded lack of consideration. He testified that he remembered little about the noncompetition agreement, but admitted signing it. He could not remember if he was told that his continued employment depended upon his signing the agreement. The trial court granted Columber (D) summary judgment, finding that there was no consideration for the agreement. The trial court did not address the reasonableness of the time and geographic restrictions in the agreement. The Ohio Court of Appeals affirmed.
- Appeal from an order affirming a grant of summary judgment.
- Case Vocabulary
- Jurisdictions that have held that continued employment is not sufficient consideration have stressed that an employee has little bargaining power once employed and is subject to coercion. By signing a noncompetition agreement, an employee gets no more than he or she already has. The noncompetition agreement is not a protection of the employer’s investment, but a barrier to the employee’s mobility. Recently, however, some courts have found sufficient consideration when there has been a substantial period of employment after the noncompetition agreement is executed, particularly when continued employment is accompanied by raises, promotions, or other tangible benefits. These courts have found, in effect, that the employment relationship is changed from one purely at-will to employment for an indefinite, but substantial, term.
- Traditionally, courts have carefully scrutinized noncompetition agreements. Restraints of trade were long disfavored, and restrictions on competition could either destroy a person’s means of earning a livelihood or bind him to an employer for life. Modern economic realities do not justify a strict prohibition on noncompetition agreements. Noncompetition
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- In this case, there was no evidence that an ordinary user of the fire blanket reasonably expected a fire blanket to prevent the type of melting observed here. Black & Veatch (P) produced evidence only regarding the subjective views of one individual. In fact, there was other testimony that the blanket performed as expected. Summary judgment on the breach of warranty claim is affirmed.
- Black & Veatch (P) brought suit against Auburn (D) and Inpro (D), the distributor, alleging breach of the warranty of merchantability. A witness testified that he was “surprised” that the blanket melted. Other witnesses testified that the blanket performed as expected and that burn-through holes were common. There was no testimony regarding industry standards. The district court granted summary judgment for Auburn (D) and Inpro (D) on the breach of warranty claim.
- Appeal from an order granting summary judgment for Auburn (D).
- The excerpt discusses the warranty in terms of the reasonable expectations of consumers. In a portion of the court’s opinion not reproduced in the text, it is noted that marketing materials for the type of fire blanket probably involved (the actual blanket was destroyed) cautioned that it should not be used in the horizontal position, as it was in this situation. Auburn (D) manufactured another fire blanket recommended for such applications. While there are some products whose misuse is so common as to be part of the “normal
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Hopper v. All Pet Animal Clinic 239 6 results (showing 5 best matches)
- DE NOVO: Latin for “new,” or a “second time”; in a hearing of this kind, the reviewing court acts as though it were the court where the case originated, and the findings of the lower courts are used only if they are helpful to the reviewing court.
- (Cardine) Hopper (D) has essentially beaten the system with this ruling. The majority has decided that as a matter of law that a one-year non competition restriction is reasonable, and that a longer period is unreasonable. Hopper (D) should be enjoined from that part of the practice of veterinary medicine specified in the covenant starting from the date the trial court, on remand, enters its modified judgment, and for at least the one-year period set by this court.
- A COVENANT NOT TO COMPETE WILL BE VALID AND ENFORCEABLE IF IT IS REASONABLE GIVEN THE CIRCUMSTANCES OF THE PARTICULAR CASE
- Case Vocabulary
- ..., the provision also expressed Hopper’s (D’s) agreement that “the duration and geographic scope of that limitation is reasonable.” After this agreement was executed, All Pet’s (P) president, Dr. R.B. Johnson, heard a rumor that Hopper (D) was considering buying a competing practice. When Johnson suggested to Hopper (D) that she (D) buy her way out of the agreement, she (D) replied that she (D) could do whatever she (D) wanted. Hopper (D) was then discharged. In July 1991, having bought the other practice, she (D) began operating the Gem City Veterinary Clinic. In November, All Pet (P) sued Hopper (D) for an injunction and also for damages. Alpine Animal Clinic, Inc. (Alpine) (P), another practice in which Johnson and Hopper (D) had also been associated, joined All Pet (P) in this action. The case came to trial almost two years after Hopper (D) was actually discharged. All Pet and Alpine (P) did not seek a temporary injunction. The evidence showed that a little more than half of...
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By-Lo Oil Co. v. ParTech, Inc. 299 4 results
- By-Lo (P) brought suit against ParTech (D), claiming that its conduct amounted to an anticipatory breach of contract. ParTech (D) moved for summary judgment, claiming that it never made an overt communication of an intent to repudiate the contract. ParTech (D) also argued that By-Lo (P) did not have reasonable grounds for insecurity necessary to seek assurance, and that the assurance ParTech (D) gave was adequate. The district court granted ParTech’s (D) motion.
- Appeal from an order granting summary judgment in favor of ParTech (D).
- The question of whether adequate assurances were given is evaluated in terms of the reputation of the promisor, the grounds for the insecurity, and the kinds of assurance available. With those factors in mind, the district court was correct in concluding that ParTech’s (D) assurances were sufficient as a matter of law. The assurances were adequate even if they were less than what By-Lo (P) wanted. Affirmed.
- ...to perform the contract in two years, and if it did not, it would be costly to By-Lo (P). This is generally the case in any contract. The possibility that the software might not function, coupled with ParTech’s (D) alleged failure to communicate with By-Lo (P), might have given rise to reasonable insecurity at some point. The question remains whether January 7, 1998 was that point. That question is analyzed by looking to (1) whether time was running short for By-Lo (P) to make other arrangements, (2) whether it would take By-Lo (P) nearly that amount of time to install updates or modifications from ParTech (D), (3) whether ParTech (D) had proven unreliable in the past, and (4) whether By-Lo (P) had reason to believe that ParTech (D) would be unable to perform. Looking at these factors, it is clear that By-Lo (P) had no reason to feel insecure on January 7, 1998. By-Lo (P) had made no previous complaints about ParTech’s (D) previous service, nor was there any indication that By-Lo...
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Sheets v. Teddy’s Frosted Foods 241 7 results (showing 5 best matches)
- (Cotter) I dissent from the court’s opinion for the following reasons. First, the facts of the case are not sufficient to support an action for wrongful discharge. The alleged public policy concerns are limited to frozen food entrees which may not measure up to their purported quality. This is not the same as depriving an employee of his right to file a workman’s compensation claim or his right to engage in union activity. In those cases, the employer actually violated a statute in the termination itself. In this case, the statutory violation is only tangential to the firing. In addition, Sheets (P) need not have lost his job over the statutory violation. He could have informed the commissioner of consumer affairs anonymously and never faced the prospect of termination. The second problem with the court’s opinion is the danger it creates by relying on such meager facts to satisfy a claim for wrongful termination. Other jurisdictions have been far more careful in recognizing this...
- (Peters) Yes. An employee who is fired for reasons in contravention of public policy can sue in tort for wrongful termination. This is not unusual. Certain contract rights give rise to tort remedies, while certain tort principles have found their way into contract claims. Wrongful termination is a tort claim which stems from the improper violation of an employee’s contract rights. This claim has generally been recognized when the termination of an employee violates public policy. For instance, courts have found termination to be wrongful when employees were fired for refusing to commit perjury, for filing a workman’s comp claim, for engaging in union activity, or for serving on a jury. More importantly, courts have recognized claims for retaliatory discharge when an employee’s responsibilities were linked to the public interest and they were fired under circumstances which were similar to this
- Justice Peters alludes to a longstanding synergy between contract doctrine and tort doctrine. For instance, a tort action for misrepresentation may be available even if an action for breach of an implied warranty is not. In this case, Sheets (P) did not have a strong argument for breach of an employment contract because he was an at-will employee. However, he did have at least a colorable claim for wrongful termination since he was fired not long after he warned TFF (D) of its statutory violations. The most generally accepted claim for wrongful discharge results from termination for an employee’s refusal to engage in illegal activity. In strict at-will jurisdictions, however, an employee can be fired for virtually any reason, including his or her refusal to break the law. A plaintiff can, and should, pursue every relevant theory of recovery for a particular harm, including remedies in tort
- Case Vocabulary
- CONNECTICUT SUPREME COURT RECOGNIZES TORT REMEDY FOR VIOLATION OF EMPLOYMENT CONTRACT RIGHTS
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Kingston v. Preston 267 6 results (showing 5 best matches)
- KING’S BENCH: Until 1875, England’s trial court was called the King’s (or Queen’s) Bench. This court also handled certain appeals. From the court’s discussion in this case, it appears that this was a first adjudication of the parties dispute.
- Arguments before the King’s Bench, the trial court in this case.
- Consider Lord Mansfield’s three categories of covenants with regard to the cases from the first section of this chapter. All of these cases fit under the rubric of dependent conditions. In fact Lord Mansfield refers to the security agreement in this case as a condition precedent—a form of dependent condition. The first types of conditions, mutual and independent conditions, are now discussed with regard to material or immaterial breaches. If a party’s breach of a promise to perform is material, the other party is excused from performance. If the breach is immaterial, then the other party’s performance is not excused.
- (Mansfield) Potentially. There are three kinds of covenants: 1) mutual and independent, 2) conditional and dependent, and 3) mutual conditions. In the first instance, if a party breaches an independent covenant, the plaintiff can recover damages regardless of whether he has performed his end of the contract. In the second instance, if a party causes a condition to fall, the other party is excused from performance altogether. Finally, if parties agree to mutual conditions, they must both be prepared to perform at the same time. If one party is prepared to perform and the other party is not, the prepared party can sue for the other’s breach. In order to determine which of the above covenants applies to a particular case, the court must look at the language of the agreement. By looking at the agreement, the court can determine what the order and status of performance should be in order to best fulfill its language. In this case, the agreement between the parties was subject to a...
- Case Vocabulary
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Douglass v. Pflueger Hawaii, Inc. 137 5 results
- he Hawaii Supreme Court held in this case that an arbitration provision is not a valid and enforceable agreement if the provision fails the test of whether it indicates an unambiguous intent to submit a dispute to arbitration. Here, the Court found that the employment handbook’s language was “manifestly unambiguous in its expressed intent” to use arbitration, but the Court said the surrounding circumstances didn’t indicate mutual assent. Accordingly, the employment clause at issue failed the test, and the court therefore reversed a trial court order compelling arbitration and remanded the case for further proceedings.
- In the instant case, even if the statutory requirements were not followed, Douglass (P) should, nevertheless, be bound by the terms of his employment contract with Pflueger (D). First, there is nothing in the statutory scheme of the child labor law that renders Douglass’s (P) employment invalid or illegal. Second, it is undisputed that Douglass (P) was, at the time he was hired, a seventeen-year-old high school graduate, who was only four months away from majority. Third, there is nothing in the record to suggest that the nature or condition of Douglass’s (P) employment was such as to injuriously affect his health, safety, or well-being, or contribute towards his delinquency so as to trigger action by the Department. In other words, whether the legal requirements were followed is irrelevant. Hawaii’s child labor law provides for the protections of the infancy doctrine and renders inapplicable the general rule that contracts entered into by minors are voidable in the employment...
- Case Vocabulary
- RIGHT TO SUE LETTER: Permission to proceed with a court action without further involvement by the governmental agency responsible for enforcing civil rights laws.
- On or about November 29, 2001, Douglass (P) was injured on the job when a co-worker sprayed him on the buttocks area with an air hose. Douglass (P) filed a complaint with the Hawaii Civil Rights Commission, which issued a right-to-sue letter to Douglass (P). Thereafter, on December 17, 2002, Douglass (P) filed an action against Pflueger (D) in the circuit court. The complaint alleged five employment law claims: (1) Hostile, Intimidating and/or Offensive Working Environment; (2) Unsafe Working Environment; (3) Sexual Assault and Sexual Discrimination; (4) Negligent Training (of its Supervisor); and (5) Negligent Supervision. Pflueger (D) filed a motion to stay the action and compel arbitration. The circuit court granted the motion, stating that it was “inappropriate” for a person to accept the benefits of some of the contractual provisions and then try to disavow one other contractual provision.
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Sullivan v. O’Connor 9 6 results (showing 5 best matches)
- CASE AT BAR: Case before the court.
- Justice Kaplan appears to support an Inquiry Into the patient’s subjective interpretation of a doctor’s opinion in order to determine if a promise has been made. This approach is not necessarily at odds with the objective intent theory. Courts will frequently assume that parties to business contracts have a working knowledge of the terms and conditions that are
- (Kaplan) Yes. Courts have occasionally enforced agreements between doctors and patients. However they generally enforce these agreements reluctantly and with certain considerations in mind. Medical practice is inherently uncertain. The physical needs and reactions to treatment vary from patient to patient. Doctors cannot be liable for every optimistic opinion of a patient’s condition [not a problem for Dr. Kevorkian]. Unfortunately, patients are likely to interpret these opinions as promises, especially when things do not work out as planned. In addition, patients must be protected from unscrupulous doctors who fraudulently promise miraculous results. The difficulty lies in the grey area between optimistic opinions and unfounded promises. It is necessary to balance the protection which individual doctors require against the need to protect the integrity of the medical profession. As a result, courts have required clear proof before considering a breach of contract action in a doctor...
- NONSUITED: A case that has a judgment given against it because plaintiff is unable to prove his case (Involuntary nonsuit) or refuses or neglects to proceed to trial (voluntary nonsuit).
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United States Naval Institute v. Charter Communications, Inc. 11 7 results (showing 5 best matches)
- REMAND: To send back; the sending by the appellate court of the case back to the same court out of which it came, for the purpose of having some further action taken on it there.
- than October 1985. But, the retail sales of the paperback began September 15, 1985. Early sales were sufficiently substantial that the book was near the top of the paperback best seller lists before the end of September. Naval (P) learned of Berkeley’s (D) plans for early shipments, but could not get a preliminary injunction. After the trial, the District Court ruled that Berkeley (D) had not breached the contract because it was to ship prior to the agreed publication date, in accordance with industry custom. On appeal, the Circuit Court reversed the case holding that the contract was breached because of the retail sales prior to October 1985. The Circuit Court remanded the case back to the trial court for judgement and appropriate relief. On remand, the trial court concluded that Naval (P) was entitled to recover actual damages for copyright infringement and, in addition, profits wrongfully received by Berkeley (D) for that infringement. Both parties appealed the relief.
- One fundamental assumption made by courts in enforcing promises is that the law is concerned mainly with damages to redress the breach and not with the punishment of a promisor by compelling performance of a promise. Here the inclusion of profits in the calculation of damages was in addition to actual damages and thus equated to a punitive recovery. Courts normally attempt to put the plaintiff in the position he would have been in had the contract been performed, not a better one.
- Case Vocabulary
- COURTS WILL NOT ALLOW PUNITIVE DAMAGES ON A BREACH OF CONTRACT
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Tongish v. Thomas 335 4 results
- , the court faced a somewhat similar situation of a farmer being unable to deliver a crop to a buyer. There, the court noted that where a seller knows a buyer has a resale contract for goods, and the seller has not breached the contract in bad faith, then the buyer is limited to actual loss of damages under
- Case Vocabulary
- The courts have been split for over sixty years on the measure of damages when a supplier breaches delivery obligations. The majority of courts award damages in the amount of the difference between the market price and the contract price, even when it would be in excess of a plaintiff’s actual loss under the contract. A strong minority would limit market damages to actual loss, however, even if the defendant would have a relative windfall because of it. Most experts still favor the market damages rule, because it effectively penalizes parties for violating their own agreements for the sake of their own profits from the market. At least one scholar, Schneider, in a 1986 article mentioned in the opinion, criticized the
- ...sell the seeds to Coop (P) at $13 per hundredweight for large seeds and $8 per hundredweight for small seeds. The seeds were to be delivered in thirds by December 31, 1988, March 31, 1989, and May 31, 1989. Coop (P) also contracted to deliver these seeds to Bambino Bean & Seed for the same price it (P) paid to Tongish (D), minus a 55 cent per hundredweight handling fee as profit. In January 1989, the market price of sunflower seeds had risen to double the price named in the Tongish (D) contract. This was the result of a small seed crop, bad weather, and other factors. Tongish (D) notified Coop (P) that he (D) would end deliveries and sold his (D’s) remaining seed crop to Danny Thomas for about $20 per hundredweight. Thomas’ total purchase price amounted to $14,714, which was $5,153 more than the Coop (P) contract price. Coop (P) sued Tongish (D) and was awarded $455 in damages for its (P’s) loss of handling charges. Coop (P) appealed, and the Court of Appeals reversed so that...
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W.W.W. Associates, Inc. v. Giancontieri 177 6 results (showing 5 best matches)
- in the event the litigation interfered with its plans to build on the land, and that Giancontieri (D) breached in bad faith in the hope of obtaining a higher price. Giancontieri (D) moved for summary judgment, contending the contract as written allowed both parties to cancel, and that contrary parol evidence is inadmissible. At trial, the court dismissed the complaint, finding the right to cancel was mutual. On appeal, the appellate division reversed and ordered specific performance.
- Under the “plain meaning” approach, courts evaluating whether to admit extrinsic evidence in a completely integrated contract follow a two stage process. First, the court decides whether the contract’s language is “ambiguous.” Generally, judges will analyze only the “four corners” of the document (i.e., only the document itself, without regard to the circumstances or extrinsic claims). Legally, “ambiguous” means that the words may reasonably be interpreted in more than one way. Next, if the contract is ambiguous; the court will admit extrinsic evidence relevant to the question of what the words mean, or which of several meanings was the intended one. Needless to say, judges are widely divided on how much ambiguity is necessary before extrinsic evidence becomes admissible, and the outcome of any given case is often unpredictable.
- Case Vocabulary
- COURTS WILL NOT DISTURB COMPLETE AND UNAMBIGUOUS CONTRACTS FOR PAROL EVIDENCE
- LIS PENDENS: “Pending lawsuit.” A court-issued notice that some property (personal property or land) is subject to a lawsuit, and may be confiscated if the plaintiff wins. The notice is not itself a lien, but potential purchasers are put on notice, and will be unwilling to buy land which may later be turned over to a plaintiff.
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- ...have been in had the buyer performed; this is because the breach resulted in the loss of sales volume for the seller. Whether a person is a lost volume seller, however, should depend on two questions. The first is whether the seller could have produced the breached units in addition to its actual volume; the second is whether it would have been profitable for the seller to produce both units. This position reflects the economic law of diminishing returns: as a seller’s volume increases, at some point the cost of selling each additional item will be so high that it is unprofitable to make another sale. Thus, it is possible that granting a lost volume seller its presumed lost profit would overcompensate the seller. The measure of damages of 2–708(2) would not take effect because the damage formula in 2–708(1) would place the seller in as good a position as if the buyer had not breached. On remand, then, Diasonics (D) must prove not only that it (D) had the capacity to produce the...
- Appeal from order denying motion for summary judgment in action for restitution.
- On remand, the district judge ruled that Diasonics (D) had demonstrated lost profit damages equaling $453,050. Judgment was then entered for that sum, minus the $300,000 deposit that Diasonics (D) kept for the equipment. Davis (P), unsurprisingly, appealed this judgment as well. The court of appeals upheld this judgment, noting the evidence was undisputed that Diasonics (D) could produce one more piece of the diagnostic equipment. Also, Diasonics (D) had shown it was “beating the bushes for all possible sales.” In reality, a decision on lost volume in a given case will likely turn on who has the burden of proof on that issue. Most jurisdictions place that burden on the seller, as was done here. The Ninth Circuit, however, in
- . The district court held that lost volume sellers were limited to recovering only the difference between a resale price and a contract price, plus incidental damages, under
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Stoll v. Xiong 223 6 results (showing 5 best matches)
- Seller Stoll (P) contracted with buyers Xiong and Yang (D) for the purchase of sixty acres of land in Oklahoma next to a farm purchased from Stoll (P) by Xiong’s (D) sister and brother-in-law under similar terms. The buyers (D) were immigrants from Laos and Vietnam with only rudimentary ability to communicate in English. Stoll (P) inserted into the purchase contract a clause indicating that he had rights to the chicken litter produced by Xiong’s (D) chickens over a period of thirty years. Stoll (P) sued Xiong (D) after the Xiong (D) sold the litter. The trial court noted that the minimum estimated value of the chicken litter over thirty years would be $216,000, or roughly an additional $3,325.12 more per acre than the $2,000 per acre purchase price stated in the contract. Both parties moved for summary judgment. At the hearing on the motions for summary judgment, Stoll (P) argued that the contract was not unconscionable and it was simply a matter of buyer’s remorse. Xiong (D) argued...
- In analyzing this land contract case, the court looked to the law of unconscionability as applied to the sale of goods and to land deeds. For instance, although
- The basic test of unconscionability of a contract is whether under the circumstances existing at the time of making of the contract, and in light of the general commercial background and commercial need of a particular case, clauses are so one-sided as to oppress or unfairly surprise one of the parties.
- Appeal by Stoll (P) from a trial court ruling that a contract provision was unconscionable as a matter of law.
- Did the trial court err in ruling that the chicken litter clause of the contract was unconscionable as a matter of law?
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- (Hoffman, J.) Yes. A court may use evidence of standard industry practices and prior performance of parties to the contract to interpret the contract, if such evidence is not inconsistent with the terms of the contract. In this case, Nanakuli (P) argues that all material suppliers in the paving industry followed the trade usage of price protection, and that as such, under the U.C.C., it should be assumed that the parties intended to Incorporate price protection into their contract. Additionally, Nanakuli (P) argues that Shell (D) had price-protected it on two prior occasions; thus price protection was a commercially reasonable standard for fair dealing between the parties. Shell (D), on the other hand, argues that 1) “trade,” for the purposes of trade usage, should be limited to the buying and selling of asphalt, rather than to the whole asphaltic and paving industry, 2) the two prior occasions on which Shell (D) price-protected Nanakuli (P) constituted waivers of terms of the...
- A court may use evidence of standard industry practices and prior performance of parties to the contract to interpret the contract, if such evidence is not inconsistent with the terms of the contract.
- May a court use evidence of the routine use of price protection in a trade, and prior performance of parties to the contract, in order to interpret the price terms of a contract, if such evidence is not inconsistent with the terms of the contract?
- Usage of trade only applies to any practice or method of dealing that has a regularity of observance in a place, or trade, as to justify an expectation that it will be observed with respect to the contract and parties in question. Note that this court indicates that the “trade” need not be a party’s exact vocation. It is enough that the party deals with the trade in question constantly enough to be aware of its practices. Evidence of usage in trade can be admitted to supplement the terms of a contract even though the contract is fully integrated. Determination of trade usage and course of performance are questions of fact for the jury.
- Nanakuli Paving and Rock Co. (P), a large asphaltic paving company, had two contracts with Shell Oil Co. (D) under which it bought all its asphalt requirements from Shell (D). In 1974, Nanakuli (P) sued Shell (D) for breach of its 1969 contract on the ground that Shell (D) had failed to price-protect Nanakuli (P) against price increases for asphalt. Nanakuli (P) claimed that price protection was included in its 1969 agreement with Shell (D), and that this was demonstrated by the routine use of price protection by suppliers in the trade and by Shell’s (D) actual performance of the contract from 1969 until 1974. At the trial level, the jury returned a verdict in favor of Nanakuli (P). The trial court set aside the verdict and granted Shell’s motion for judgment n.o.v. Nanakuli (P) appeals.
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Delchi Carrier Spa v. Rotorex Corp. 341 4 results
- (Winter, J.) Yes, if the damages are foreseeable. This case is governed by the Convention for the International Sale of Goods (CISG), an international treaty between the United States and other countries, including Italy. The CISG has virtually no case law interpreting it, but it directs that its interpretation should be informed by the need to promote uniformity and good faith. Case law interpreting the UCC may inform the court where the language of the CISG tracks the UCC. Article 74 of the CISG provides that damages for breach of contract may not exceed the loss that was foreseeable at the time of the conclusion of the contract, in light of the facts and matter of which the breaching party knew or ought to have known as a possible consequence of the breach. Rotorex (D) argues that the district court improperly awarded Delchi (P) lost profits. We disagree. The CISG requires that damages be limited by foreseeability as established in
- Where a seller delivers goods to a manufacturer knowing they are to be used in the manufacturing process, the seller has reason to know that nonconforming goods may disrupt production and result in lost profits. Therefore, the foresee ability rule allowed Delchi (P) to recover its lost profits from lost sales due to Rotorex’s (D) breach and the costs Delchi (D) Incurred to return the shipments to Rotorex (D). This case demonstrates the universal acceptance of
- Case Vocabulary
- Appeal of district court judgment on breach of contract action for incidental and consequential damages.
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Hoffman v. Red Owl Stores 105 4 results
- Promissory estoppel is a purely equitable doctrine that entitles courts to ignore most of the rules of contract formation in order to do justice in a particular case. This approach seems antithetical to the notion of freedom of contract, which is thought to be the bedrock of contract theory. However, as in the above case, there ought to be a way of compensating parties like Hoffman (P) who are taken in by offers that skirt the requirements for contracts but are nonetheless enough like offers to induce reliance. This is the situation in which promissory estoppel functions most effectively and in which the courts are in the greatest need of the discretion it affords. Note, however, that along with that discretion comes the discretion to vary the damages as justice demands. Some commentators argue that courts are granting reliance damages in these cases, but doing so based on a measure of damages equal to the plaintiff’s expectation interest. Other commentators argue that courts are...
- places the responsibility on the court to determine whether injustice would result if the promise were not enforced. This is more discretion than a court
- WISCONSIN SUPREME COURT DISTINGUISHES PROMISSORY ESTOPPEL FROM BREACH OF CONTRACT
- ...store location. Red Owl (D) also asked him to work at their nearest franchise but the job never came through. Hoffman (P) and Red Owl (D) then began a complicated series of negotiations over the leasing of the franchise site and Hoffman’s (P) financial contribution. They could not agree on certain terms, however, including the status of a substantial loan which Hoffman (P) arranged with his father-in-law. Finally, the negotiations fell through and Hoffman (P) sued Red Owl (D) under a theory of promissory estoppel. Red Owl (D) argued that the parties never reached an agreement on many of the specifics necessary to establish a contract. Nonetheless, Hoffman (P) was awarded damages equal to the value of the grocery store he sold, the loss he incurred in selling his bakery, the costs of moving his family and renting a house near the new location, and the cost of securing a lot for the new store. The trial court confirmed the verdict, with the exception of the damages for selling...
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Hawkins v. McGee 5 2 results
- This case is popularly known as the “Hairy Hand” case, and has a firm place in the folklore of American legal education. The court emphasizes that it is merely upholding the findings of the jury that McGee’s (D) statements, in their context, created a binding promise. It can be
- McGee (D) argued that no reasonable man would understand his words as being used with the intention of entering into a contractual relationship. McGee (D) claimed that it was common knowledge that the results of all surgeries are uncertain, and that it was improbable that a surgeon would ever contract to make a damaged body part “one hundred per cent perfect.” The trial court held that there was a contract, and that McGee (D) breached that contract.
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Plante v. Jacobs 321 8 results (showing 5 best matches)
- (Hallows) Yes. The first question is whether substantial performance has been tendered. This cannot be answered according to precise formulae, especially with regard to construction contracts. In other cases, substantial performance was denied because performance was useless to the other party or a total failure with regard to the object of the contract. In construction cases, the rule is that something less than perfection will count as substantial performance unless the parties indicate otherwise in the contract. In this case, Plante (P) was not given any blueprints for the house. He built it based on standard floor plans, resolving problems by practical experience. Given the circumstances surrounding construction, and notwithstanding the Jacobs’ (D) unhappiness with the job, the trial court did not err in finding substantial performance. However, this is not the end of our inquiry. The house was still left uncompleted. The next question which must be answered is how to measure...
- Justice Hallows’s approach in this case is not wholly different from Justice Cardozo’s approach in
- Case Vocabulary
- WISCONSIN SUPREME COURT APPLIES DIMINISHED-VALUE RULE TO SUBSTANTIALLY PERFORMED CONSTRUCTION CONTRACT
- Appeal from a trial court judgement for the plaintiff in a suit to establish a lien on the defendant’s property.
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- Commission Express (P) brought suit against Thurman (D) and Re/Max (D). Thurman (D) did not plead, so judgment by default was entered against him. The trial court granted Re/Max’s (D) motion for summary judgment, holding that Thurman (D) was not entitled to receive a commission from the sale of the Keller Lake Drive property, and that it was impossible for Commission Express (P) to obtain a greater right in the commission than Thurman (D) had.
- Appeal from an order granting summary judgment for Re/Max (D).
- Case Vocabulary
- The court notes that Commission Express (P) could have, if it had chosen to do so, negotiated its contract so that its right to receive payment would not be subject to Re/Max’s (D) right to withhold commissions for unpaid overhead. An easier course of action may have been to make inquiries before advancing any money. It appears that there was no blanket agreement that automatically obligated Commission Express (P) to advance commissions, as the court refers to separate agreements made for each transaction. Commission Express (P) could have avoided the whole issue by verifying with Re/Max (D) whether Thurman (D) owed Re/Max (D) any money before agreeing to advance commissions.
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Speakers of Sports v. ProServ 157 3 results
- Rodriguez, a professional baseball player, signed a series of one-year, terminable-at-will contracts with Speakers of Sports (P). ProServ (D), another agency, attempted to lure Rodriguez from Speakers (P) by promising to get him between $2 and $4 million in endorsements if he switched to ProServ (D). Rodriguez signed with ProServ (D), but switched to another agency when ProServ (D) failed to get him any significant endorsements. Speakers (P) brought an action against ProServ (D), alleging that ProServ’s (D) promise of endorsements was fraudulent and induced Rodriguez to terminate his contract with Speakers (P). The trial court granted ProServ’s (D) motion for summary judgment.
- Appeal from an order granting summary judgment for ProServ (D).
- In general, there is nothing wrong with one sports agent trying to take a client from another, as long as it can be done without a breach of contract. That is known as competition. Speakers (P) argues that ProServ (D) may not compete by fraud, by making a promise they know they can’t fulfill. But the promise in this case was not a promise at all. Affirmed.
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Britton v. Turner 285 6 results (showing 5 best matches)
- (Parker) Yes. It goes without saying that a party who breaks a contract cannot recover on the contract itself. Similarly, courts have held that a party who breaches a contract for labor promised at a specific rate cannot recover for part performance of that labor. The effects of this rule can be harsh. For instance, a party may be liable for damages to their employer for breaching a contract before performance begins. By the same token, a party who performs nearly all of their contract, but falls short of complete performance, may be subject to the same damages in addition to the loss of their contribution to complete performance. This puts the performing breacher in a worse position than the non-performing breacher. In this case, Britton (P) worked for nearly ten months on a one-year contract. The jury valued this work at $95. If the rule of recovery is applied as above, he would forfeit that compensation, and the value of his performance, to Tumer (D). In addition, he might still...
- Case Vocabulary
- NEW HAMPSHIRE SUPREME COURT GRANTS RESTITUTION TO A PARTY IN BREACH
- Appeal from a trial court jury verdict for the plaintiff in an action for assumpsit and quantum meruit.
- Britton (P) had an employment contract with Turner (D) for a period of one year. Turner (D) promised to pay Britton (P) $120 for the year. However, Britton (P) quit, without reason, after ten months. He then sued Turner (D) in assumpsit, adding a count of quantum meruit for $100. The $100 was intended to compensate him for the time that he worked. The trial court instructed the jury that if they accepted all of the facts as alleged, Britton (P) was entitled to reasonable compensation for his ten months work. The jury subsequently awarded Britton (P) $95 [minimum wage must have been a fantasy back then]. Turner (D) appeals.
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- Cases in which multiple writings have been signed by the party to be charged present no difficulties. In cases such as the case at bar, when some writings have been signed and some have not, there has been disagreement about what constitutes a sufficient connection permitting the unsigned documents to be considered part of the writing. Courts in some jurisdiction require that the signed writing contain some reference to the unsigned. Without
- The Statute of Frauds is often looked at as a way of allowing a contracting party to escape responsibility on a technicality. The formal requirements of the Statute of Frauds are read flexibly in this case. A strict reading of the statute and the parol evidence rules would allow Arden (D) to escape liability for breach of a negotiated, bargained-for contract solely because the employees did not bother to merge the various documents.
- In the case at bar, the Statute of Frauds applies because the contract would take more than one year to perform. The unsigned office memo, the payroll change form initialed by Johns, and the paper signed by Carstens all refer to the same transaction, and all set out identical terms. The corroborative evidence as to Arden’s (D) assent is also convincing. There also can be no doubt that the documents contain all of the essential terms of the agreement. The only term in dispute is the length of the contract, and the language “2 years to make good” can have no purpose except to denote the length of the contract. Affirmed.
- ...Expense money . . . (2 years to make good).” A few days later, Crabtree (D) telephoned and telegraphed Arden (D) to accept the offer. When Crabtree (P) reported for work, a payroll change card was made up and initialed by Johns, the general manager of Arden (D). The payroll change card provided that Crabtree would receive a salary of annual salary of $20,000 for the first six months, $25,000 for the second six months, and $30,000 for the third year. Crabtree (P) received the scheduled salary increase after the first six-month period, but did not receive the increase scheduled for the second year. Carstens, the comptroller of the corporation, prepared and signed a payroll change card to effect the raise, but Arden (D) refused to approve it. Crabtree (P) sued Arden (D) for breach of contract. Arden (D) denied the existence of a contract and alleged that, even if a contract existed, enforcement was barred by the Statute of Frauds. The court found against Arden (D) and entered...
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Hill v. Gateway 2000, Inc. 103 6 results (showing 5 best matches)
- The court emphasizes that this case is about contract formation, and the question being addressed is, when was the contract formed? The court holds that the contract is not formed until thirty days after delivery of the computer, but does that agree with the expectations of most buyers? Critics of this case and the
- by stating that the software box in that case displayed a notice that there were additional terms inside, but the box from Gateway (D) did not. This is a functional distinction, not a legal one. Gateway’s (D) box is a shipping carton and has no information for the consumer. Hill (P) may have had a better argument if he first knew of the additional terms after opening the box but was dissuaded from returning it by the high cost of shipping. In any event, Gateway’s (D) advertisements state that their products come with limited warranties and lifetime support, but that does not describe the warranties or support fully. Buyers have several methods for learning about the terms, including inspecting the relevant documents after delivery of the product. This is the option Hill (P) chose, and by keeping the computer more than thirty days, Gateway’s (D) offer was accepted. Vacated and remanded, with directions to compel Hill (P) to submit to arbitration.
- should be limited to executory contracts, such as licenses, and therefore does not apply because performance of the contract in this case was complete when the computer arrived at his home. The question in this case relates to contract formation, not performance.
- (Easterbrook, J.) Yes. A seller may provide that acceptance of an offer will be by conduct, and the buyer accepts by performing the acts that the seller proposes to treat as acceptance. This case is governed by the rule in
- Case Vocabulary
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Bollinger v. Central Pennsylvania Quarry Stripping and Construction Co. 171 9 results (showing 5 best matches)
- It is important to recall the special role that courts of equity play in the legal system. They are specifically empowered to resolve disputes according to principles of fairness, as opposed to strict rules of law. Even though most equity courts have been merged with courts of law, a plaintiff may still request equitable relief if the circumstances call for it. In this case, the evidence was sufficient for the Chancellor to determine that it would be unfair to hold the Bollingers (P) to the written contract. This may have been an easy case, considering that Central (D) acted according to the terms of the topsoil provisions despite their absence in the contract. However, the same result would almost certainly have been unavailable in a breach of contract action, because the topsoil provisions were not the sort of terms that would be found anywhere but in the written agreement.
- (Musmanno) Yes. A court of equity has the power to amend a written contract in order to make it conform to the understanding of the parties. The need for reformation might arise from a mistake which led to an incomplete statement of the parties rights. This mistake must have been mutual in order for reformation to be proper. This does not mean that both parties must admit to the mistake. It simply means that the court must determine that a mutual mistake has been made. Normally, a party is bound by the terms of a completed, signed contract. In the case of mutual mistake, though, it is appropriate for an equity court to acknowledge the original intent of the parties. In this case, the Chancellor was satisfied that the parties had agreed to the topsoil provisions. Indeed, Central (D) began performance as if it were bound by those provisions. It removed and replaced the Bollingers’ (P) topsoil as they went along. They also provided a similar service to the Bollingers’ (P) neighbors....
- Case Vocabulary
- PENNSYLVANIA SUPREME COURT AFFIRMS THE EQUITABLE REFORMATION OF A CONTRACT TO CONFORM TO THE PARTIES’ INTENT
- A court of equity is permitted to reform a contract in response to a mutual mistake which rendered the contract’s terms incomplete.
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- (Friendly) Yes. The parties urge different interpretations of the word “chicken”. In order to resolve this dispute, the court will look at the contract itself, the actual and trade usage of the word, and the behavior of the parties. In this case, the contract provides some guidance. Frigaliment (P) claims that since 1½- to 2-pound chickens are necessarily young chickens, the 2½- to 3-pound chickens should have been young as well. This argument begs the question, since it has been established that the 2½- 3-pound chickens come in two types. B.N.S. (D), on the other hand, argues that the contract incorporated the Department of Agriculture’s regulations because Frigaliment (P) requested “US Fresh Frozen Chicken, Grade A, Government Inspected.” The USDA regulations refer to “chickens” as broilers, fryers, and stewing chickens (also known as fowl). As a result, the regulations favor B.N.S.’s (D) interpretation of the contract, permitting the shipment of any type of chicken. Indeed,...
- Judge Friendly’s opinion is well known for a variety of reasons, not the least of which is his comprehensive approach to contract interpretation. He uses every trick in the book to resolve a seemingly easy question of interpretation that becomes more complicated at every turn. Much of the opinion implicitly relies on objective intent. In other words, the court asks how a reasonable person would interpret the language and behavior of the parties. This approach should be familiar, since it also used in determining the existence of a contract. Judge Friendly also relies on trade usage to determine the definition of “chicken.” Even this approach is fraught with complications, however, since B.N.S. (D) was new to the poultry Industry. Finally, Judge Friendly interprets certain ambiguities in the parties’ communications against Frigaliment (P). This is a less common device that is used to allocate the burdens of poor contract drafting. In this case, Stovicek’s first cablegram referred...
- DISTRICT COURT APPLIES THE CANONS OF INTERPRETATION TO A CHICKEN CONTRACT
- District court judgement on a breach of warranty action.
- Can a court resolve a dispute based on differing interpretations of contract vocabulary?
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Seaver v. Ransom 393 4 results
- Writing for the lower court, Kellogg, P.J., wrote, “The doctrine of
- Case Vocabulary
- (Pound) Yes. The trial court found for Seaver (P), based on the theory that Mrs. Beman was fraudulently induced to execute the will by her husband. But Seaver’s (P) action is maintainable on grounds defined in
- Appeal from the affirming judgment of the appellate court for plaintiff for recovery of damages.
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Selland Pontiac-GMC, Inc. v. King 373 7 results (showing 5 best matches)
- As judicial adherence to the requirement of physical impossibility began to wane, courts developed the doctrine of impracticability, which has been adopted by the U.C.C. and the Restatement impracticability has changed the objective, albeit often harsh, rule of impossibility into a subjective analysis with few guiding principles. Under the impracticability standard, some courts choose to focus on how closely the facts come to the common law categories of excusable cases. Other courts, however, undertake an equitable weighing of the hardships to determine which party should bear the loss. This court adopts yet a third common approach, which focuses on the language of the contract to determine if the risk of impracticability was allocated in some fashion. Although most courts do not excuse performance on the basis of a loss of a supplier, the court here found that because. Superior was expressly mentioned in the contract, the risk of loss was allocated to Selland (P).
- IN DECIDING A CASE OF IMPRACTICABILITY, SOME COURTS WILL FOCUS ON THE LANGUAGE OF THE CONTRACT TO DETERMINE WHETHER THE RISK WAS SOMEHOW ALLOCATED TO EITHER PARTY
- Appeal to the Minnesota Court of Appeals to review the decision of the trial court denying the plaintiff’s motion of a new trial and/or amended findings of fact and conclusions of law.
- Case Vocabulary
- IMPRACTICABILITY: A doctrine courts use to excuse a party’s performance under a contract when an unexpected event makes such performance impossible or extremely difficult.
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Stees v. Leonard 361 3 results
- Is the court in
- Case Vocabulary
- (Young) No. If a person binds himself to a contract, nothing short of “absolute impossibility” will excuse that party from fulfilling his duties. In this case, Leonard (D) discovered a mistake of fact when he discovered after making the contract that the ground was composed of quicksand. However, because Leonard (D) promised Stees (P) that he (D) would fulfill his duties, Leonard must use all necessary means to overcome this problem. Leonard (D), for example, can use stronger footings or even drain the land. Either way, Leonard (D) must fulfill his contractual promise because there isn’t any “absolute impossibility” preventing him. Judgment affirmed.
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Dorton v. Collins & Aikman Corp. 89 8 results (showing 5 best matches)
- governs this case for two reasons. First the district court will have to determine whether C&A’s (D) acknowledgment forms were acceptances or confirmations. This will depend on whether TCM (P) and C&A (D) reached an oral agreement before the acknowledgment forms were sent. In either case, it is possible that an oral agreement between the parties included an implied arbitration provision. In that case, the arbitration terms in the acknowledgment forms would not be “additional” for the purposes of
- Case Vocabulary
- COURT OF APPEALS APPLIES
- Appeal from the district court’s denial of a defense motion for a stay of proceedings in a fraud action.
- ARBITRATION: A form of alternative dispute resolution which may be court-ordered or agreed to by the parties. Arbitration is done outside the courtroom and without a jury.
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Kanavos v. Hancock Bank & Trust Co. 295 6 results (showing 5 best matches)
- (Wilkins) No. The following propositions are settled law. The first party to an agreement containing concurrent obligations cannot place the second party in default unless he, the first party, is prepared to perform on the contract. He can also place the second party in default by showing that the second party substantially prevented his performance. In this case, the contract between Hancock (D) and Kanavos (P) was a bilateral contract with concurrent obligations. Hancock (D) promised to notify Kanavos (P) of an impending sale and to deliver the stock to Kanavos (P) if he so desired. Kanavos (P) agreed to pay for the stock if he exercised his option to purchase it. Kanavos (P) did not have to demonstrate his ability to pay for the stock at the time since Hancock (D) repudiated their agreement without his knowledge. However, Kanavos’ (P) inability to complete the transaction is material, as above, to his right to recover damages. Kanavos (P) relies on case law which states that a...
- In a sense, the court here implied a condition to the option contract that required Kanavos (P) to demonstrate his financial ability to perform. Otherwise, Hancock (D) is released from their obligation to pay damages. This seems reasonable, especially if you were to change the facts of the case slightly. Suppose Hancock (D) warned Kanavos (P) of the impending sale. In order to exercise his option he would have to fulfill his promise to meet the bank’s asking price. If he could not do so, his option would lapse and Hancock (D) would be released from any further obligations. Kanavos (P) could not claim damages on a contract for which the condition would have failed regardless of Hancock’s (D) behavior. The second part of the court’s opinion deals with the burden of proof on the issue presented. The party who has the best information on a particular fact frequently bears the burden of proof associated with that fact. This is particularly relevant in this case, where the determination...
- Case Vocabulary
- MASSACHUSETTS SUPREME COURT REJECTS REPUDIATION CLAIM BY NON-BREACHER WHO WAS, HIMSELF, INCAPABLE OF PERFORMANCE
- Appeal from a trial court jury verdict for the plaintiff in a breach of contract action.
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Lucy v. Zehmer 61 6 results (showing 5 best matches)
- W.O. Lucy (Lucy) (P) and A.H. Zehmer (Zehmer) (D) were drinking at a bar when Lucy (P) offered to buy Zehmer’s (D) farm for $50,000. Zehmer (D) thought it was a joke. In fact, he said that he was “high as a Georgia Pine” at the time. Nonetheless, he wrote up an agreement of sale on the back of a bar bill. Zehmer (D) and his wife signed the agreement and left it on the bar. When Lucy (P) picked it up, Zehmer (D) assured him that it was a joke. Lucy (P) insisted that he had purchased the farm and then left the bar. Lucy (P) brought a breach of contract suit against Zehmer (D), asking that the court enforce the sale of the farm by ordering specific performance of the agreement. The trial court denied Lucy’s (P) request and this appeal followed.
- The meeting of the minds doctrine, which required that each party to a contract have a subjective desire to be bound, is no longer the litmus test for a valid contract. In this case, a contract predicated on a joke remained enforceable even though Zehmer (D) was subjectively disinterested in selling his farm. Several mistakes can lead to the rescission of a contract, including transcription mistakes, jokes, ambiguities, and other problems. According to the Restatement (Second) of Contracts, when there is a mistake of fact that goes to a basic assumption of the contract, the party seeking to be excused from performance must show that they ought not to bear the risk of loss from the mistake. The analysis in mistake cases frequently hinges on which party was best situated to avoid the mistake. In this case, Zehmer (D) was best situated to avoid the confusion, because he had not made it clear that he was joking. However, a modem court would be unlikely to enforce the agreement under...
- Case Vocabulary
- SUPREME COURT OF VIRGINIA ENFORCES FARM SALE INTENDED AS A JOKE
- Appeal from a trial court judgement for the defendant in a breach of contract action.
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Lake River Corp. v. Carborundum Co. 349 5 results
- (Posner, J.) Yes. A clause in a contract that is designed to assure that the non-breaching party receives more than its actual damages is a penalty clause, not a liquidated damages clause, and will not be enforced under Illinois law. Illinois courts resolve doubtful cases in favor of classifying such clauses as impermissible penalties. While we question the judgment of refusing to enforce penalties against sophisticated commercial parties who entered into the
- Federal appellate court review of a federal district court decision finding in favor of both the plaintiff on its claim and the defendant on its counterclaim.
- Case Vocabulary
- The court provides several illustrative examples of how damages would be calculated under the formula set out in the contract. If the breach occurred the day after Lake River (P) bought its new bagging system but before Carborundum (D) shipped any Ferro Carbo, Carborundum (D) would owe Lake River (P) $533,000, resulting in a net gain to Lake River from the breach of $444,000. This amount is more than four times the profit of $107,000 that Lake River (P) expected to make from the contract if it had been performed, which would have been a huge—and unacceptable—windfall.
- shipped. Carborundum objected, (D) arguing that payment of that amount would impose a penalty. Lake River (P) refused to turn over the 500 tons of bagged Ferro Carbo it had in its warehouse until Carborundum (D) paid the $241,000. The parties were unable to resolve the dispute, and Lake River (P) sued for the $241,000, claiming that that amount was liquidated damages. Carborundum (D) counterclaimed for the value of the bagged Ferro Carbo in Lake River’s (P) warehouse and the additional costs it had incurred in serving the customers affected by Lake River’s (P) impounding of the product. The court granted judgment to both parties, but Carborundum (D) actually ended up about $42,000 to the good. Both parties appealed.
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- As the court notes, “I didn’t read it” is not a defense to contractual liability. There are a number of reasons for this, among them a general unwillingness to reward a lack of diligence. A different situation exists in cases in which there was no apparent reason to be diligent, as when the offeree does not know that he or she is being given the opportunity to accept or reject an offer. That was the case here.
- Case Vocabulary
- CLASS ACTION: A lawsuit in which the court authorizes a single person or a small group of persons to represent the interests of a larger group. In order to maintain a class action, (1) the class must be so large that individual suits would be impracticable, (2) there must be legal or factual questions common to the class, (3) the claims or defenses of the representative parties must be typical of those of the class, and (4) the representative parties must adequately protect the interests of the class.
- Netscape (D) argues that Specht (P) and the other plaintiffs must be held to a standard of reasonable prudence. Notice of the existence of the license terms was on the next scrollable screen, so Netscape (D) asserts that Specht (P) and the other plaintiffs were on “inquiry notice” of those terms. We disagree with the proposition that a reasonably prudent offeree would necessarily have known or learned of the existence of the license agreement prior to acting. It is true that a party cannot avoid the terms of a contract on the ground that he or she failed to read it before signing, but there is an exception to this general rule when the writing does not appear to be a contract and the terms are not called to the attention of the recipient. In that type of case, no contract is formed with respect to the undisclosed term.
- ...cases cited by Netscape (D) in support of its inquiry-notice argument are drawn from the world of paper contracting. Receipt of a physical document containing contract terms or notice thereof is frequently deemed, in the world of paper transactions, a sufficient circumstance to place the offeree on inquiry notice of those terms. These principles apply equally to the emergent world of online product delivery, pop-up screens, hyperlinked pages, shrink-wrap licensing, scrollable documents, and urgent admonitions to “Download Now!” What Specht (P) and the other plaintiffs saw when they were being invited by Netscape (D) to download the software was a screen containing praise for the product. At the very bottom of that screen there was a “Download” button. Netscape (D) argues that a “fair and prudent person using ordinary care” would have been on inquiry notice of the license terms. We are not persuaded that a reasonably prudent offeree in these circumstances would have known of...
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Internatio-Rotterdam, Inc. v. River Brand Rice Mills, Inc. 259 7 results (showing 5 best matches)
- This case introduces several concepts that may not be familiar to the reader. First, the term “recision” defines the moment when a party declares that it is no longer bound by the agreement. Announcing that you are rescinding an agreement can have a significant impact on your liability if it turns out that you wrongly judged the other party’s behavior as constituting a breach of contract. Ordinarily, it is a good idea to continue performance until it is clear that a breach has occurred. Otherwise, it may turn out that you breached the contract by announcing its recision. Another term that is introduced in this case is “of the essence.” The court strictly construes the requirement of notification in this case since delivery in December was “of the essence. Finally, the court examines a number of complicated aspects of commercial relationships. It is vitally important, particularly in contracts cases, to understand the business relationship between the parties. This includes an...
- Case Vocabulary
- RECISION (OR RESCISSION): Recision describes the process by which a contract is voided. This is generally due to the actions of one of the parties as in this case.
- COURT OF APPEALS VOIDS A CONTRACT AFTER A CONDITION FAILS WHICH WAS “OF THE ESSENCE”
- Appeal from the district court’s dismissal of the plaintiff’s complaint.
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Masterson v. Sine 167 7 results (showing 5 best matches)
- (Burke) I dispute the majority’s findings on virtually every issue in this case. First, the majority violates the spirit of the parol evidence rule by permitting evidence of a collateral agreement to obliterate an existing written agreement. This compromises the reliability of many transactions, including conveyances and debtor/creditor relationships. The central problem with the majority’s approach is its failure to acknowledge the strength of option agreements in general, and the nature of the option in this case, in particular. Options are, by nature, assignable property rights. The only way to limit an option is by specific language in the agreement. If this rule were otherwise, a party to a contract could always find a way out of an unfavorable option by fabricating an agreement which limited its effect. In this case, the Mastersons’ (P) creditor is deprived of a valid property right as a result of this approach. The majority invites this result by characterizing the parol...
- (Traynor) Yes. The trial court was justified in admitting extrinsic evidence in order to further the goals of the parties by clarifying the terms of their agreement. The trial court erred, however, in refusing to admit any evidence regarding the Mastersons’ (P) right to assign the option. The crucial question in this case is whether the agreement between the Mastersons (P) and the Sines (D) was an integration. By this, we mean a contract which the parties intended to be their final and exclusive agreement. There are two ways to determine whether
- ...piece of property as tenants in common [the actual plaintiffs in this case were Mrs. Masterson and her husband’s trustee in bankruptcy]. They transferred this property to Mr. Masterson’s (P) sister and her husband, Lu Sine (D). The Mastersons (P) retained an option in the grant deed to buy back the land within ten years. If they exercised the option, the Mastersons (P) were obligated to pay an amount equal to “the same consideration as paid heretofore,” plus the depreciation value of any improvements that the Sines (D) made to the property after two and a half years. These confusing payment terms were part of the subsequent litigation between the parties. The litigation was sparked by the Masterson’s (P) desire to repurchase the property. At the time, Mr. Masterson (P) was bankrupt. His trustee in bankruptcy and Mrs. Masterson (P) brought an action for declaratory relief. They sought an interpretation of the agreement which would secure their right to exercise the repurchase...court
- Justice Traynor is willing to look at all aspects of the parties’ transaction in order to determine whether the parol evidence rule applies here. Justice Burke is clearly uncomfortable with this approach. He is more likely to favor the “four comers” approach to contract interpretation. This approach limits the court’s attention to the language of the contract. However, Justice Burke loses sight of the fact that deeds and contracts are not equivalent documents. Indeed, he berates the majority for resting its interpretation on this distinction. However, parties do not usually put the details of a real estate transaction in the deed. In this case, the Mastersons (P) were obviously concerned with securing their right to repurchase the property. They might have put this provision in the deed in order to avoid fighting a future purchaser for the return of the property after it was already sold. Once they added the provision, however, they invited the difficulties that arose in this case—...
- CALIFORNIA SUPREME COURT DISTINGUISHES BETWEEN A GRANT DEED OPTION AND A SEPARATE CONTRACT LIMITING ITS ASSIGNABILITY
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- An inmate sued the government and the company that contracted with it to provide kosher meals to prisons, arguing that the food was inadequate; the trial court dismissed the case, concluding that the inmate was not a third-party beneficiary of the contract so he could not sue to enforce it.
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Sisney v. State 397 7 results (showing 5 best matches)
- An inmate sued the government and the company that contracted with it to provide kosher meals to prisons, arguing that the food was inadequate; the trial court dismissed the case, concluding that the inmate was not a third-party beneficiary of the contract so he could not sue to enforce it.
- Many government benefits are administered by private parties. Health care under Medicaid and Medicare is provided by hospitals, nursing homes, doctors, and managed care organizations, and federal housing benefits are often delivered by private landlords. In addition, as this case shows, private contractors frequently provide services to prisoners. When private parties that are not state actors fail to provide the benefits mandated by government contracts, contract law may or may not provide an avenue for relief. Unlike in this case, some courts have held that injured individuals may be able to sue the private party to enforce the contract as a third-party beneficiary. The core of such claims is that the government and the private party have entered into a contract for the benefit of the individuals for whom the government program was designed, and as a result those individuals may seek to enforce the contract if it is breached. Contract claims based on third-party beneficiary status...
- State supreme court review of the circuit court decision dismissing the plaintiff’s complaint.
- Sisney (P), a Jewish inmate in a state penitentiary, sued the state (D) and CBM Inc. (D) alleging that CBM (D) breached a contract with the state (D) in which CBM (D) agreed to provide kosher foods to Department of Correction (DOC) facilities. The contract required CBM (D) to provide services to the state in a manner that would meet the needs and concerns of the inmates and staff. Sisney (P) sought damages as a third-party beneficiary of that contract. Sisney (P) alleged that the kosher diet provided by CBM (D) consisted of too few calories and did not meet the dictates of his religious beliefs. The trial court concluded that even if the facts alleged by Sisney (P) were true, he was not a third-party beneficiary of the contract between CBM (D) and the state (D), so it dismissed Sisney’s (P) case for failure to state a claim. Sisney (P) appealed.
- Case Vocabulary
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Jacob & Youngs v. Kent 275 8 results (showing 5 best matches)
- SUBSTANTIAL PERFORMANCE: A doctrine which permits recovery for performance which, while not perfect, is substantial. The inquiry into substantiality is heavily dependent on the facts of the case and subject to the discretion of the court and the dictates of fairness.
- (Cardozo) Yes. However, the court must determine just how trivial the failure of performance was. If the failure was trivial, then it will not be allowed to void a condition upon which compensation for substantial performance rests. The difference between a trivial and a non-trivial failure of performance is similar to the difference between independent and dependent promises. Independent promises are not conditions of each other. In other words, the performance of one promise does not depend on the performance of a return promise. Dependent promises, however, can never exist without each other. They are, thus, conditions on each other. Finally, some promises are dependent on each other, but would not be substantially compromised if performance on one of the promises varied to an insignificant degree. Only a court can determine the degree to which performance has varied in order to decide whether to grant recovery. The court is guided by principles of fairness
- Appeal from an intermediate appeals court reversal and grant of a new trial after a trial court judgment for the defendant in a breach of contract action.
- (McLaughlin) This court applies a rule which has no application to this case: the rule of substantial performance. To put it simply, J&Y (P) did not perform their end of the contract. For whatever reason, they installed the wrong pipe in the house. In fact, two-fifths of the pipe was non-conforming. This amounts to 1000 to 1500 feet of pipe which was of a brand not specified in the contract. This is not a minor omission, and if this omission is to be excused by the doctrine of substantial performance, it can only be done so by showing good faith on the part of the contractor. Unfortunately, good faith is lacking here. It is not important why Kent (D) selected the pipe that he did. It is enough to know that wrong pipes were installed. Recovery for J&Y (P) should be denied and a verdict should be directed for Kent (D).
- Justice Cardozo is clearly worried about forfeiture—the result of a failed condition that denies payment to a party even though it has tendered substantial performance. In this case, denying the contractor recovery for work done because of a mix-up in the use of virtually identical pipes seems arbitrary and unfair. Justice McLaughlin is far more worried about the letter of the contract than about overarching fairness. He measures J&Y’s (P) mistake in pipe feet and brand names. Compare this case to the satisfaction clause cases. In those cases, there were times when satisfaction was measured according to a reasonable person standard. In the same way, Kent’s (D) desire for a specific brand of pipe is measured against a standard that has reasonableness written all over it. The difference between Justice Cardozo and Justice McLaughlin, thus, comes down to a fundamental conflict over the interpretation of contracts, Justice Cardozo is willing to bring fairness concerns to bear on the...
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Greenfield v. Philles Records, Inc. 175 5 results
- Philles (D) also argued that Greenfield’s (P) suit is barred by the divorce settlement agreement between her and Spector. The release was executed in California, so California law will be considered to determine the validity of the release. California courts consider all credible evidence of the parties’ intent, and do not limit the inquiry to the four corners of the agreement. The trial court in this case ruled that Greenfield’s (P) right to compensation under the 1963 agreement was not an intended subject of the release. There is no reason to reverse that determination. The case is affirmed as modified.
- The court may not consider extrinsic evidence to interpret a contract or add terms if the agreement on its face is reasonably susceptible of only one meaning.
- Some years after the Ronettes disbanded, Philles (D) began to license recordings of the Ronettes’ performances for use in movie and television productions (a process called “synchronization”). Philles (D) also licensed master recordings to third-parties for production and distribution in the United States, and sold compilation albums containing performances by the Ronettes. Philles (D) paid no royalties to Greenfield (P) or any of the other members of the group. Greenfield (P) brought a breach of contract action against Philles (D), alleging that the 1963 agreement did not grant the right to license recordings for synchronization or domestic redistribution. The trial court entered judgment for Greenfield (P). The appellate court affirmed, holding that the 1963 agreement did not specifically transfer the right to issue synchronization or third-party distribution licenses.
- The court’s opinion validates the “catch-all” clause (“any method now or hereafter known”) used in many licensing agreements. A catch-all clause is a way of expressing the parties’ intentions regarding uses of a property that are not envisioned at the time the licensing agreement is made. The absence of such a clause has often cost performers or writers a substantial amount of royalties when entirely new uses are made of their work. For example, the lack of a “catch-all” clause has been held to deprive performers of royalties when a theatrical film is reissued on home video, even when the home video version proves more profitable than the original release.
- (Graffeo, J.) No. The court may not consider extrinsic evidence to interpret a contract or add terms if the agreement on its face is reasonably susceptible of only one meaning. Contracts are to be construed according to the intent of the parties, and the best way of determining that intent is to consider what is said in writing. Extrinsic evidence of the parties’ intent may be considered only when a contract is ambiguous, and the existence of an ambiguity is a question of law. Here, the contract’s silence on synchronization and domestic licensing does not create an ambiguity. Because there is no ambiguity, Philles (D) is entitled to exercise complete ownership rights, subject to the payment of royalties to Greenfield (P).
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- Under the UCC, evidence of custom and usage and course of dealings between the parties can be used to supplement and explain the terms of a contract where it is reasonable. In this case, the contract expressly includes price and quantity requirements. However, the court indicated that this still does not allow per se exclusion of such evidence. It appears from this court’s broad interpretation of
- (Butzner, J.) Yes. Evidence of custom and usage or course of dealings is not admissible where it contradicts the express, plain, and unambiguous terms of a validly written and fully integrated contract. In this case, Royster (D) contends that the evidence offered by Columbia (P) should be excluded as inconsistent with the terms of the contract because the contract itself has detailed provisions regarding price, its escalation, and quantity of the phosphate to be bought by Columbia (P). This court believes that such a broad exclusionary rule is not within the language of the UCC rule. The test of admissibility is not whether the contract appears on its face to be complete in every detail, but whether the proffered evidence of course of dealing and trade usage reasonably can be construed consistent with the express terms of the agreement. In this case, it is reasonable to construe the terms of the contract with evidence of usage and course of dealings. In the first place, the contract...
- ...ton was stated in the contract and was subject to an escalation clause dependent on the cost of producing the phosphate. The contract also contained a merger clause. Due to a plunge in phosphate prices, Columbia (P) was unable to resell phosphate competitively and ordered less than one tenth of the tonnage required under its contract with Royster (D). Royster (D), having sold the phosphate below contract price, sued Columbia (P) for damages. At trial, Columbia (P) sought to show that due to the uncertainty in crop and weather conditions, and other factors, price and quantity terms in contracts in the industry were mere speculations, subject to change based on market conditions. Additionally, Columbia offered evidence to show that in its prior dealings with Royster (D), where Columbia (P) sold nitrogen to Royster (D), there was always substantial deviation from price terms stated in contracts. The trial court excluded this evidence on the ground that it was in contradiction to...
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- At the time of this dispute, the importation of foreign wool products into the United States was met with high tariff barriers. These high tariffs would be avoided under statute if such wool products were imported into the Virgin Islands and processed in some way that their finished value exceeded their importation value by 50%. The Virgin Islands Legislature imposed quotas to limit the output of businesses engaged in such wool processing. Vitex Manufacturing Company, Ltd. (Vitex) (P) chemically shower-proofed imported doth so that it could be imported duty-free into the United States. To this end, Vitex (P) operated a processing plant in the Virgin islands, but had closed it when there was a lack of customers. Caribtex Corporation (D) imported cloth into the islands, secured its processing, and exported it to the United States. In the fall of 1963, the two companies (P and D) entered into a contract in which Vitex (P) agreed to process 125,000 yards of Caribtex’s (D’s) material at...
- ...constant, regardless of whether Vitex (P) contracted with Caribtex (D) or Vitex (P) actually processed Caribtex’s (D’s) wool. Because overhead remained constant and was totally unaffected by the Caribtex (D) contract, it would be improper to consider it as a cost of Vitex’s (P’s) performance and deduct it from the gross proceeds of the Caribtex (D) contract. Caribtex (D) may argue that this position is incorrect, as overhead is as much a cost of production as other expenses. Granted, successful businessmen do set prices at a level high enough to recoup all expenses, including overhead, and reap profits. Still, this does not automatically mean that fixed overhead costs, even when allocated in part to each transaction, should be considered a cost factor when computing lost profits on individual transactions. While overhead is paid for by the proceeds of the business, such costs generally do not bear a direct relationship to individual transactions to be considered a cost in...
- Case Vocabulary
- which the seller would have made from full performance by the buyer.” In the case of
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Keith v. Buchanan 203 5 results
- Appeal from lower court judgment for sellers (D) at close of buyer’s case.
- In this case, the specific and unequivocal statements in the sales brochures, together with the Buchanan (D) salesperson’s awareness that Keith (P) was looking for a seaworthy boat, amounted to affirmations of fact, satisfying the first element of the express warranty test. As for the second element, whether the statement was part of the basis of the bargain, a buyer need not show that he would not have entered into the agreement absent the warranty or even that it was a dominant factor inducing the agreement. Rather, a warranty statement is deemed to be part of the basis of the bargain and to have been relied upon as one of the inducements for the purchase of the product. In this case, Keith (P) was aware of the representations regarding seaworthiness by Buchanan (D) prior to contracting. He also had expressed to the seller’s representative his desire for a long distance ocean-going vessel. Although Keith (P) had other experts inspect the vessel, the inspection was limited and...court
- Keith (P) bought a sailboat from Buchanan (D) for $75,610. Buchanan’s (D) sales brochures described the sailboat as “a picture of sure-footed seaworthiness” and “a carefully well-equipped and very seaworthy vessel.” Keith (P) stated that he relied on these brochures in deciding to buy the boat. Keith (P) and a Buchanan (D) salesperson discussed Keith’s desire for an ocean-going boat capable of long-distance cruises. A boat-building friend of Keith’s and the friend’s colleague inspected the boat before the purchase and advised Keith (P) that it would suit his stated needs. After execution of the sales contract and delivery of the boat to Keith (P), a dispute arose regarding its seaworthiness. Keith (P) sued Buchanan (D) for breach of express and implied warranties. On Buchanan’s (D) motion at the close of Keith’s (P) case at trial, the court found that no express warranty was established by the evidence because none of the defendants had undertaken in writing to preserve or maintain...
- Case Vocabulary
- Courts have narrowed the interpretation of sales representations such as “puffing” and “sales talk” which were previously considered to be unenforceable opinion. This narrowing of interpretation serves to expand the liability of sellers in favor of injured customers.
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- In this case, the parties were “in part delicto” (of equal fault), since Rivergate (D) was fully aware of X.L.O.’s (P) illegal involvement with the Club’s extortion and bid-rigging racket. In cases of equal fault, courts often automatically hold for defendants, under the maxim “in pari delicto potior est condition defendantis” (in [case of] equal fault, the stronger position is that of the defendant). Of course, this motto is arbitrary, and if literally enforced would often have the dubious effect of unjustly enriching one crook at the expense of another who is no more reprehensible. The rule seems to be a reflection of courts’ unwillingness to lend official auspices to mediating disputes between crooks, and their preference for leaving the parties as they found them (with the defendant presumably in possession of the money). The courts’ “hands-off” policy in shady contracts is debatable, since the upshot is that Mafiosos and semi-legitimate businesses are left to “self-help,” often...
- Case Vocabulary
- ..., the use of antitrust defenses in contract actions is not encouraged, out of fear that one who successfully uses such a defense will reap the benefits of a contract while escaping the corresponding burdens of it. Still, antitrust defenses will be upheld in cases where judicial enforcement of a contract would result in enforcement of the exact kind of conduct an antitrust act forbids. Likewise, a contract which is legal on its face and does not call for unlawful conduct in its performance is not voidable simply because it resulted from an antitrust conspiracy. The key issue is whether the given contract is so integrally related to the agreement in restraint of competition that its enforcement would result in compelling performance of the precise conduct made unlawful by the antitrust laws. Here, that question cannot be answered without further development at trial. The extent to which the contract price is excessive and fails to reflect fair market value at the time the contract...
- .... The Commission gave this project to XLO (P) on the assumption that it would not exceed $15 million. XLO (P) and Rivergate (D) agreed on a figure of $16,300,000. This price exceeded the amount approved by the Commission, prompting the Commission to request that XLO (P) abandon the project. XLO (P) refused, claiming that the Commission had not designated XLO (P) for any work for over 18 months. The Commission decided to allow XLO (P) to work on the project, which led XLO (P) to give a $50,000 gift to a Commission representative for speaking on XLO’s (P) behalf. Rivergate (D) negotiated the contract with full knowledge of the Club and its rules. XLO (P) completed its performance of the contract, but Rivergate (D) refused to pay the full balance, claiming that the contract was an integral feature of the Club’s bribery and extortion operations, and thus violated antitrust laws. XLO (P) sued for breach of contract and unjust enrichment. The Supreme Court dismissed the complaint and...
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- The offeror can dictate the terms of the offer, the method and means of acceptance, and the method and means of notification. Most cases deal with the method of acceptance. There is no legal requirement that the offeror follow up with notification that this acceptance has been approved. However, as the case indicates, this requirement could have been written into the offer at IFC’s (P) discretion. At times, it is possible for courts to resolve a contract dispute by relying solely on the language of the contract. This is generally referred to as staying within the “four corners” of the contract. However, it is not unusual for courts to arrive at different legal conclusions while analyzing and re-analyzing the same contract language.
- TEXAS APPEALS COURT AFFIRMS OFFEROR’S RIGHT TO CONTROL THE METHOD OF ACCEPTANCE
- Appeal from an affirmance of a trial court judgement for the defendant in a breach of contract action.
- ..., the International Filter Co. (IFC) (P) made a written offer to sell a water filter to the Conroe Gin, Ice & Light Co. (Conroe) (D). The offer was subject to certain conditions including a set price. The offer also stated that it would become a contract upon acceptance by Conroe (D) and approval by IFC’s (P) executive officer in Chicago. Finally, the offer stated that It was “submitted for prompt acceptance.” Conroe (D) accepted the offer the same day, in writing, including a request for delivery by March 10th. This acceptance was approved by IFC’s (P) president and vice-president [the same person] in Chicago. He wrote, “O.K.” on Conroe’s (D) order and dated it. IFC (P) then sent an acknowledgment of the order to Conroe (D) by mail, on February 14th. Conroe (D) subsequently sent two letters to IFC (P) in an attempt to cancel the order. IFC (P) responded to the first letter, refusing to do so. They then sued Conroe (D) for breach of contract. The trial court found for Conroe...Court
- ...by the terms of the offer and by a verbal agreement made between their respective agents when the written order was placed. However, the offer explicitly states that a contract will be formed when Conroe (D) accepts the offer and when IFC’s (P) executive officer approves the acceptance. The offer would contradict itself if the phrase “[t]his proposal is submitted for prompt acceptance” was interpreted as a requirement for notification to Conroe (D) after IFC’s (P) acceptance. This phrase simply puts the offeree on notice that IFC’s (P) approval will follow promptly after Conroe’s (D) acceptance. It is not a further requirement to the formation of a valid contract. As a result, a valid contract was formed when Conroe (D) accepted the offer and IFC (P) approved. However, even if notice were required, then IFC’s (P) acknowledgment letter was sufficient. There are no requirements governing notification unless the parties agree to them. In this case, that was not done. The...
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Ricketts v. Scothorn 41 4 results
- expect to induce action or forbearance, (2) and that does induce such action or forbearance, (3) is binding if injustice can be avoided only by enforcement of the promise. In the case at hand, the first two elements are clearly satisfied. Ricketts (D) made a promise and executed a promissory note to induce Scothorn (P) to quit work, and Scothorn (P) did indeed quit because of this promise. Further, the court concludes that it would be unjust to permit Ricketts (D) to escape his promise. Alternatively, in the instant case, the court could have concluded that Ricketts (D) and Scothorn (P) made a bargained-for exchange, with Ricketts (D) bargaining for the psychological comfort he would feel if Scothorn (P) quit work, and with Scothorn (P) bargaining for the money. In the end, no matter which theory is used, the courts seem to be placing a premium on doing the right thing. It a result is equitable, the court usually finds some legal basis for reaching that result.
- Case Vocabulary
- COURT ADOPTS PROMISSORY ESTOPPEL AS ALTERNATIVE TO BARGAINED-FOR EXCHANGE
- ...Ricketts (D) executed a promissory note by which he promised to pay his granddaughter, Katie Scothorn (P), $2000 per year at 6% interest on demand. After Ricketts (D) died, Scothorn (P) sued his estate in order to recover payment on the note. Scothorn (P) alleged that the consideration for this note was that Scothorn (P) should surrender her employment and cease to work for a living, just like the rest of Ricketts’ (D) grandchildren. Scothorn (P) also argued that Ricketts (D) was equitably estopped from denying to pay the note, since the note was given to induce her to abandon her occupation, and since she did give up her employment in reliance on the note. Scothorn (P) remained unemployed for more than a year after receiving the note, but she eventually went back to work with the consent of Ricketts (D). Ricketts (D) died approximately two years later, having paid only one year’s interest on the note. The trial court granted judgment for Scothorn (P), and Ricketts’ (D)...
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McKinnon v. Benedict 209 7 results (showing 5 best matches)
- A court is generally given discretion to deny specific performance. In withholding this remedy, the courts find justification in the fact that such a decision does not leave a claimant without any remedy at all if the claimant can still make a claim for damages. With a case like
- Case Vocabulary
- A COURT CAN DECIDE WHETHER TO ENFORCE A CONTRACT THAT APPEARS TO BE HARSH AND OPPRESSIVE AGAINST ONE OF THE PARTIES TO IT
- A contract which is harsh, oppressive, and unconscionable may still be enforceable at law, but it is within a court’s discretion to not enforce equitable remedies against a party who suffers from such harshness and oppression under the contract.
- Can a court choose not to enforce a contract when it appears that the contract is unfairly harsh or oppressive for one party?
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Doe v. Great Expectations 219 5 results
- Did the court award Doe (P) and Roe (P) damages, or did it impose a penalty on their behalf? If the case is looked at strictly as a breach of contract matter, without reference to the Dating Services Law, there is no proof that Great Expectations (D) breached the contract. From a strictly contractual point of view, there are no damages. The court, however, presumes damage from the statutory violations. Doe (P) and Roe (P) would not, in the court’s reasoning, have signed the contract in the first place if they knew the contract was illegal, and the full contract price is, therefore, the amount by which they were damaged.
- The Dating Service Law provides that a person injured by a violation of the law may bring an action to recover his or her actual damages or fifty dollars, whichever is greater. In this case, the actual damages include the difference between each contract price and the maximum twenty-five dollar fee permitted. Doe (P) and Roe (P) seek restitution of the full balance paid, including the twenty-five dollars. The court finds that they would not have signed contracts violating the applicable laws if they had known of their rights, so they are also entitled to a refund including the twenty-five dollar balance. The statutory language regarding actual damages was added along with a provision authorizing the Attorney General to bring enforcement actions and seek civil penalties. Consumers were offered a single remedy of restitution, available through a private lawsuit or through an enforcement action by the Attorney General. The addition of “actual damages” to the law does not erode the...
- The contracts of Doe (P) and Roe (P) are terminated, Doe’s (P) by expiration and Roe’s (P) by reason of this action. Great Expectations (D) may wish to return personal material to them, or face adverse consequences outside the scope of this litigation. The court has the discretion to report unlawful conduct to the appropriate authorities. This matter impacts the public interest in that it violates the rules of a regulated industry, and a similar course of conduct by Great Expectations (D) has previously been litigated. In addition, the court’s truth-determining function will not be impacted by a report. Accordingly, the court will report this matter to the appropriate officials. Judgment ordered in favor of Doe (P) and Roe (P).
- Decision after a small claims court hearing.
- ...of the law in this case. First, the charges are excessive. When no assurances are provided that a service will furnish a client with a specified number of referrals per month, the maximum charge is twenty-five dollars. Roe (P) was told that she would get twelve introductions over the course of thirty-six months, but that is not an assurance of a specified number each month. The second departure is that the form contract violates every provision of the Dating Services Law, with the exception of the mandatory three-day cooling-off period. The provisions omitted include stating a “specified number of social referrals per month,” disclosure of the option to cancel and obtain a refund, a statement that personal information will not be revealed without consent, the client’s right to place a membership on hold for a year, the return of personal information at the end of the contract, the maximum distance for a face-to-face meeting, and the policy to be applied if the customer moves...
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- Although the trial court held the contract to be “illegal and unenforceable,” the appeals court restricted its holding to whether the contract was unenforceable. The appeals court noted that its position was in keeping with the Restatement at
- Cheese additive manufacturer Blossom (P) sued cheese manufacturer Kasson (D) on an open-account contract for $138,306 for Kasson’s (D) last purchase of the cheese additive Isokappacase. Kasson (D) used the additive as a cheese yield enhancer rather than as a starter medium. Kasson’s (D) use of the additive as an enhancer triggered labeling rules, but Kasson (D) did not label its final product as imitation cheese as required. Kasson (D) was ordering about one hundred times more Isokappacase than would be needed if it were using the product as a starter medium. Both parties benefited economically from this volume purchase and use. When Kasson (D) stopped using Isokappacase as a yield enhancer, Blossom (P) stopped making the product. The trial court found that Blossom (P) was aware of the fact that Kasson’s (D) extremely large volume purchases of the additive could only be accounted for by Kasson’s (D) use of the additive as a yield enhancer. The trial court also found that the...
- at cmt. b. A court engages in a balancing process to determine factually if the improper use or conduct at issue is unenforceable on grounds of public policy.
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Kirkland v. Archbold 287 8 results (showing 5 best matches)
- [permitting a party to recover in quantum meruit despite being in breach of their contract], courts began allowing contractors to recover in quantum meruit for work which bestowed a benefit on the other party. Recovery was based on the concept of unjust enrichment, and represented a quasi-contract in which one party promised to pay for a benefit received from the other. Generally, the plaintiff’s recovery was reduced by the amount of damages which resulted from the breach of contract. This doctrine is not the same as substantial performance even though courts use substantial performance to protect builders against the same result—the forfeiture of work without compensation after a breach. However, even if a builder has not substantially performed, there is no justice in forcing him to forfeit compensation for work which benefited his client. In this case, Kirkland (P) never claimed that he had substantially performed. He only sought compensation for the work that he completed....court
- Kirkland (P), a contractor, agreed to make some repairs on a home owned by Archbold (D). Their contract stated, among other things, that Archbold (D) would pay Kirkland (P) $1000 after ten days of satisfactory work, $1000 after twenty days of work, $1000 after thirty days of work, $1000 upon completion of the job, and $2000 within thirty days of completion. Kirkland (P) worked for two months before Archbold (D) asked him to stop. During this time, Kirkland (P) had only been paid $800. His expenses, up to this point, were $2985. He sued Archbold (D) for the difference in a breach of contract action. The trial court found that Kirkland (P) himself was in breach of contract by ignoring certain contract specifications for work that he completed. As a result, the court found that Archbold (D) fired him justifiably. However, since Archbold (D) had already paid Kirkland (P) $800, she was deemed to have accepted his first ten days work as satisfactory. The trial court granted Kirkland (P)...
- Case Vocabulary
- OHIO COURT OF APPEALS GRANTS RECOVERY TO A BUILDER DESPITE HIS BREACH OF CONTRACT
- A court may grant recovery in quantum meruit to a party, despite their being in breach of contract and without interpreting the contract as severable.
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Laclede Gas Co. v. Amoco Oil Co. 311 5 results
- Generally, the determination of whether to order specific performance of a contract lies within the sound discretion of the trial court. The Eighth Circuit in this case held that the remedy at law was not adequate in part because it believed money could not purchase a substitute performance (i.e., future propane gas) for the subdivisions of the development.
- (Ross) No. Specific performance generally will not be ordered when the party claiming breach of contract has an adequate remedy at law. The remedy at law must be certain, prompt, complete and efficient to attain the ends of justice as in a decree of specific performance. The contract between Laclede (P) and Amoco (D) is for a long-term supply of propane to the subdivisions of the development and there was uncontradicted expert testimony that Laclede (P) probably could not find another supplier of propane willing to enter into such a long-term contract. Even if Laclede (P) could obtain supplies of propane for the affected developments, there is no guarantee that Laclede (P) would be able to find propane in the future years, in which case the damages could not be estimated in advance. Specific performance is the proper remedy in this situation and it should be granted by the district court. Reversed and remanded.
- Laciede (P) and Amoco (D) entered into a long term agreement whereby Amoco would supply propane gas distribution systems to various residential developments until such time as natural gas mains were extended into those areas. The contract gave Laclede (P) broad cancellation rights. However, Amoco (D) could not cancel the contract unless the subdivisions subsequently converted to natural gas. After performing under the contract for some time, Amoco (D) notified Laclede (P) that the price of propane had increased by three cents per gallon and subsequently terminated the agreement, telling Laclede (P) that the agreement lacked mutuality. The district court ruled in favor of Amoco (D), agreeing that the contract was invalid because of a lack of mutuality. The district court denied injunctive relief. On appeal, the Circuit Court ruled that there was a contract and that the contract had been breached by Amoco (D).
- Case Vocabulary
- COURT WILL UPHOLD SPECIFIC PERFORMANCE IF PUBLIC INTEREST IS DIRECTLY INVOLVED
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- Appeal from an order granting summary judgment in favor of Wilson (P).
- The application for reinstatement provided that payment should be mailed to U.S. Life’s (D) administrator. In portions of the opinion not reproduced in the casebook, the court discusses whether delivery of payment by a private delivery service would suffice. The court quoted Professor Williston’s treatise on contracts to say that a dispatch to a private delivery service would qualify for the “mailbox rule” if it were “independent of the offeree, reliable both in terms of its delivery obligations and record keeping, and of a type that would customarily be used to communicate messages of this sort.” See
- Application of the mailbox rule to the undisputed material facts in this case produces the legal conclusion that the date of payment of the overdue premium was July 25, 2007. At that point, the permissible means for acceptance was in motion and, so far as is established by the common law mailbox rule, was beyond Griffith’s power to stop. Affirmed.
- ...“mailbox rule,” the “dispatch rule,” or sometimes the “postal acceptance rule,” provides that an offer for a unilateral contract that calls for performance by sending money through the mail is effective when the check was dispatched. The transaction at issue in the case at bar is not a wholly traditional one that involves a paper document mailed by the offeree to the offeror. This transaction began electronically, as an on-line banking directive. Bank documents in the record show, however, that the directive was acted upon by preparation of a paper check drawn on an account under Griffith’s name, and bearing his “Authorized Signature.” The paper check then was “sent” to the administrator on July 25, 2007, coming into the administrator’s physical possession on July 30, 2007. The transaction thus resembles a traditional acceptance by writing, in that a writing was “sent,” even though its creation was directed electronically and it was created not by the offeree but by his bank...
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Swift Canadian Co. v. Banet 381 3 results
- Appeal from granting of summary judgment for Banet (D) on an action for breach of contract.
- Case Vocabulary
- What would happen if the contract provided “F.O.B. Philadelphia,” which is Banet’s (D) home? For the obligations of the seller, see Uniform Commercial Code § 2319(1)(b). Here, the judge discussed the F.O.B. clause basically to determine the intent of the parties. The bigger picture illustrated by this case is that parties are free to allocate the risk of frustration of purpose.
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- Appeal from order granting summary judgment dismissing action for damages based on promissory estoppel.
- ...under the name General Liquors, Inc. (“General”) was distributing liquor in Indiana in 1987. During this time period, the liquor suppliers in Indiana undertook an effort to consolidate their distribution. As a result, two of General’s (P) suppliers canceled their contracts in early 1987. General (P) began negotiating with another distributor, National Wine & Spirits, for a potential sale of General (P). However, Bacardi Imports, Inc. (D), one of General’s remaining suppliers, assured General (P) that it would continue to act as its supplier for Indiana. Based on this promise, General (P) turned down National’s offer to purchase General (P). One week later, Bacardi (D) withdrew its account. General (P), after losing another major supplier and several employees, then returned to its earlier negotiations, eventually selling the company to National for $550,000 less than the original offer. General (P) sued Bacardi (D) in order to recover this $550,000 difference. The district court...
- Promissory estoppel applies, of course, only to allow recovery of reliance damages. Thus, where a party changes position based on the mere expectancy of a continuing relationship, that party may not recover. In the case at hand, it is possible to argue that General (P) did just that. It expected Bacardi (D) to continue as a supplier, and therefore it rejected National’s offer. However, the conclusion reached by the Court is more reasonable. General’s (P) rejection of National’s offer was not based on any future income from Bacardi (D), but on the fact that it could stay in business by having Bacardi (D) as a supplier. It was General’s (P) reliance on the assurances, and not any future income, that induced General (P) to reject the original bid. It is interesting to note that, on remand, the district court found that Bacardi’s (D) commitment was conditional on future events, but nevertheless that General’s (P) reliance was not unreasonable. Accordingly, General (P) was awarded nearly...
- Case Vocabulary
- All parties Involved, including Bacardi (D), realized that General (P) could continue in business only if Bacardi (D) remained one of General’s (P) suppliers. Thus, Bacardi (D), because of its promise and its continuing reassurances to General (P) of its commitment, could have reasonably expected General (P) to rely thereon. While we do not reach the issue of whether General’s (P) reliance was reasonable—as this is an issue for the trial court on remand—we hold that promissory estoppel may apply. Reversed and remanded.
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Balla v. Gambro, Inc. 243 3 results
- In wrongful discharge suit seeking damages, appeal from appellate reversal of summary judgement for defendant.
- Attorney Balla (P) was in-house counsel and “manager of regulatory affairs” at Gambro, Inc. (“Gambro”) (D), a distributor of kidney dialysis equipment. When Gambro (D) agreed to Import German equipment which failed to comply with FDA regulations, Balla (P) protested its resale plan was illegal, in vain. When Balla (P) insisted the purchase be stopped, Gambro (D) fired him. Balla (P) complained to the FDA, which seized the shipment and found it adulterated. Balla (P) then sued Gambro (D) for retaliatory discharge. Gambro (D) moved for summary judgement, contending it had an absolute right to fire Balla (P). At trial, the judge granted Gambro’s (D) motion. On appeal, the Court of Appeals reversed and remanded, holding Balla (P) may sue for retaliatory discharge. Gambro (D) appeals.
- Apparently, the law in Illinois was that ordinary “employees” could sue for wrongful discharge, but whistle-blowing “lawyers” could not. Thus, Balla (P) attempted to portray himself as Gambro’s (D) compliance officer employee rather than its lawyer, but the court rejected this concocted duality. For no apparent reason, Justice Clark decides that, when clients violate the law, their lawyers should lose their jobs without compensation for doing the right thing; he forgets that it is Gambro (D), not Balla (P), who committed the violation. Needless to say, this discourages attorneys from reporting misconduct by effectively allowing criminals to punish whistle blowers. Fortunately,
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- Motion for summary judgment in breach of contract action seeking specific performance.
- , a seller accepts the offer by shipping goods, whether they are conforming or not, but if the seller ships non-conforming goods and seasonably notifies the buyer that the shipment is a mere accommodation, then the seller has not accepted the buyer’s offer. Lederle’s (D) shipment to Corinthian (P) was non-conforming because it was only 1/20 of the quantity Corinthian (P) requested. An accommodation is an arrangement or engagement made as a favor to another. Consideration is not required. Lederle’s (D) shipment of 50 vials was an accommodation because Lederle (D) had no obligation to make the partial shipment and did so only as a favor to Corinthian (P). Lederle (D) clearly informed Corinthian (P) that the 50 vials were being sent as an exception to Lederle’s (D) general policy, that the balance of the offer would be at the higher price, and that Corinthian (P) could cancel the rest of the order. Therefore
- Case Vocabulary
- ...sent an invoice to Corinthian (P) for 50 vials of DTP vaccine at $64.32 per vial. Lederle (D) sent the 50 vials to Corinthian (P) and Corinthian (P) accepted them. At the same time, Lederle (D) sent a letter to Corinthian (P) stating that the enclosed is a partial shipment of DTP and that Lederle’s (D) normal policy would be to invoice the order at the price in effect when the shipment was made. However, because of the magnitude of the price increase, Lederle (D) decided to ship a portion at the lower price. The letter stated that the balance of the order would be priced at $171 per vial. The letter concluded that if Corinthian (P) wished to cancel the balance of the order it should contact Lederle (D) on or before June 13. Corinthian (P) sued Lederle (D) for specific performance for the 950 vials of DTP that Lederle (D) did not deliver. Lederle (D) moved for summary judgment arguing that no contract for the sale of 1000 vials was formed. In the alternative, Lederle (D) argued...
- ...offer to buy goods for prompt or current shipment shall be construed as inviting acceptance either by a prompt promise to ship or by the prompt or current shipment of conforming or non-conforming goods, but such a shipment of non-conforming goods does not constitute an acceptance if the seller seasonably notifies the buyer that the shipment is offered only as an accommodation to the buyer.” Thus, under the UCC, even if the seller sends non-conforming goods, there is a contract. The non-conforming shipment is an acceptance of the offer and a breach. However, if the seller “seasonably notifies the buyer that the shipment is offered only as an accommodation to the buyer,” there is no contract and the shipment is treated as a counter-offer. Here, Lederle (D) sent non-conforming goods and notified Corinthian (P) that the shipment was an accommodation in light of the magnitude of the price increase. Had Lederle (D) not sent that notice, Corinthian (P) likely would have won the case...
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Vokes v. Arthur Murray, Inc. 159 5 results
- In contract action seeking rescission, appeal from summary judgement for defendant.
- Case Vocabulary
- Dance school Arthur Murray, Inc.’s (D) owner Davenport (D) encouraged lonely widow Vokes (P) to take dance classes. Davenport (D) constantly told Vokes (P) she was an excellent dancer, with great potential for learning through additional instruction, and flattered and cajoled her. Over 16 months, Vokes (P) bought 14 dance lesson packages, entitling her to 2302 hours of instruction, for $31K. Later, when Vokes (P) realized she had no talent and could not even hear the rhythm, she sued Arthur Murray (D) for misrepresentation. Davenport (D) and Arthur Murray (D) defended, contending such talk was permissible sales puffery or non-actionable opinion. At trial, the court dismissed for failure to state a claim. Vokes (P) appeals.
- provides a rare example of sales “puffery” being actionable as “misrepresentation.” Puffery is a salesperson’s exaggerated opinion of his or her products’ worth or potential, e.g., “This is the hottest stock I’ve ever seen! It’s poised to really take off!” Usually, courts tolerate it on the basis that it involves no false
- inequities or inherently unfair practices, courts generally will leave the parties where they find themselves. But we cannot say as a matter of law that these elements were present here. Reversed.
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Dyer v. National By-Products, Inc. 19 6 results (showing 5 best matches)
- Appeal from an order granting summary judgment for National By-Products (D).
- For purposes of this discussion, it is assumed that Dyer’s (P) claim is unfounded. While forbearance to bring a claim is consideration for settlement of that claim, difficulties arise when the claim is invalid. The view of Professor Corbin is that forbearance to pursue an unfounded claim may be consideration if there is any reasonable ground to assert the claim, or if the claim is asserted in good faith. In this context, a claim is asserted in “good faith” if the claim is not made for purposes of vexation, or in order to recover the claim’s “nuisance value.” The Corbin view is supported by our case law and the Restatement. The Comment to
- Dyer (P) was an employee of National By-Products (D). In 1981 he lost his foot in an employment-related accident. Dyer (P) was on a leave of absence with pay for several months before he returned to his old position with National (D). He worked for National (D) for approximately seven months, and then was laid off indefinitely. Dyer (P) brought an action against National (D) for breach of an oral contract. Dyer (P) claimed that he believed in good faith that he had a valid claim against National (D) for his injury. He also claimed that his forbearance from litigating his claim was made in exchange for a promise from National (D) of lifetime employment. The district court sustained National’s (D) motion to dismiss. The court held that there was no reciprocal promise from Dyer (P) to work for National (D) for life. The court also held that there was no value to Dyer’s (P) promised forbearance, because workers’ compensation was Dyer’s (P) sole remedy.
- Case Vocabulary
- NUISANCE VALUE: A quick settlement offered to dispose of a meritless or frivolous case.
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- Appeal from summary judgment in action for breach of contract for damages.
- (Pollock) No. Provisions for liquidated damages are enforceable only if the amount fixed for damages is a reasonable forecast of just compensation for the harm that is caused by the breach and that harm is incapable or very difficult of accurate estimate. Historically, courts have been reluctant to enforce penalty clauses of contracts. This stems from the use of early penalty clauses as a means of oppression or extortion, as debtors would be bound for twice the amount of their actual debts. Over the years, courts have distinguished nonenforceable
- There are policy considerations on both sides of the question of stipulated damages clauses. Proponents of stipulated damages claim the clauses allow parties to control their exposure to risk by setting payments for a potential breach well in advance. In addition, the judicial process is avoided in setting damages, saving the parties a great deal of time and expense. Moreover, stipulated damages clauses allow the parties to set a damage formula that can include elements not otherwise considered by most courts in their rules of damages. Such clauses are not universally praised, however. Stipulated damages go against the ordinary practice of allowing public law, not private law, to define contract remedies. Courts must thus be involved in order to prevent private parties from exceeding the principle of allowing compensatory damages. A minority of courts treat these provisions as unconscionable if the amount of liquidated damages is clearly disproportionate to actual damages. The...
- Case Vocabulary
- ...the total value of the improvements, and the proportion of time remaining in the lease. In addition, the Township (D) would have to pay damages equal to twenty-five percent of Wasserman’s (P) average gross receipts for one year. Wasserman’s (P) eventually spent $142,336.01 in renovating and expanding the store. In August 1973, Wasserman’s (P) apparently sold its (P) corporate assets and sublet the premises to Jo-Ro, Inc. (Jo-Ro) (P). The sublease provided that Jo-Ro (P) would pay Wasserman’s (P) a monthly rent, and that any payments made by the Township (D) if the lease were canceled would be split between the two (P). By a December 7, 1987 letter, the Township (D) canceled the lease effective December 31, 1988. In June 1989, the Township (D) sold the property at auction for $610,000, but refused to pay damages for canceling the lease. Wasserman’s and Jo-Ro (Ps) filed for summary judgment, as did the Township (D). The Law Division held that the lease and cancellation clause were...
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- Appeal from an order granting summary judgment for Bayway (P).
- We do not need to decide if hardship is an independent ground of material alteration. Oxygenated (D) has shown no evidence of hardship other than that payment of the taxes would cause it to suffer a loss it cannot afford. This does not amount to hardship. Courts that have found hardship in this context have typically done so when the additional terms create or allocate a prolonged or open-ended liability. Any loss that the Tax Clause imposes on Oxygenated (D) is limited, routine, and self-inflicted. Affirmed.
- Oxygenated (D) offered to buy 60,000 barrels of MTBE from Bayway (P). Bayway’s (P) response, which acted as the acceptance, contained a term known as a “Tax Clause.” This clause provided that Oxygenated (D) would pay Bayway (P) the amount of any taxes incurred by Bayway (P) with respect to the MTBE sold. Oxygenated (D) did not object to the additional term. Oxygenated (D) accepted delivery of the MTBE, and Bayway (P) incurred a tax liability of $464,035.12. Bayway (P) paid the taxes, and then demanded payment from Oxygenated (D). Oxygenated (D) denied that it agreed to the Tax Clause and refused to pay. The district court held that the Tax Clause was properly incorporated into the contract.
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- Decision on the Detroit Institute of Arts’ (P) motion for summary judgment.
- (Droney, J.) Yes. A contract may create an obligation to a third-party without containing express language creating that obligation. It is not enough that the contract confer some incidental benefit on the third-party. It must be shown that both parties to the contract intended to create a direct obligation from the promisor to the third-party. The intent of the parties is to be determined from the terms of the contract read in light of the circumstances surrounding the making of the contract. The motives and purposes of the parties are part of the circumstances to be considered. Partial summary judgment granted.
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- Appeal from summary judgment in breach of contract action for damages.
- The question of what is an appropriate substitute offer of employment will depend greatly on the facts and circumstances of each case. Factors may include the work the injured party is to perform, the time and place at which the performance is to be rendered, and the compensation to be given for the work. The cases where latter offers of employment have not been found to be appropriate have tended to involve very vivid situations. The Eighth Circuit in
- ...in California is there a rule that an employee is only required to accept employment that is “substantially similar.” There is no historical or theoretical justification for adopting a standard regarding employment of a “different or inferior kind.” It has never been the law that the mere existence of differences between two jobs in the same field is sufficient to excuse an employee from accepting an alternative offer of employment in order to mitigate his or her own damages. All the majority has done is attempt to prove their proposition that the two roles offered by Fox (D) were different by repeating the idea that they were different. The relevant question is not whether one offer of employment is different from the other, but whether there are enough differences in the kind of employment, or whether one offer is truly inferior to the other. These questions are part of the ultimate issue, which is whether or not the employee in question has acted reasonably. Summary judgment...
- ..., “Big Country” was to be filmed in Australia, while “Bloomer Girl” had been set for production in California. Moreover, Parker (P) was not given director and screenplay approval by the “Big Country” contract. Parker (P) was given a week to accept this second contract. She (P) did not accept Fox’s (D’s) offer, and then filed suit seeking recovery of the agreed guaranteed compensation. She (P) set forth a cause of action under the contract itself, and another for damages from the breach of the contract. Fox (D) admitted the existence and validity of the contract, and that it (D) had breached and repudiated the contract. Fox (D) denied, however, that Parker (P) was entitled to any money under the contract or as a result of the breach. Fox (D) claimed, as an affirmative defense, that Parker (P) deliberately failed to mitigate her (P’s) damages by unreasonably refusing to accept the role in “Big Country.” Parker (P) moved for and was granted summary judgment, with an award of $750...
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ProCD, Inc. v. Zeidenberg 101 5 results
- ...) (P) sells a CD-ROM disk set called SelectPhone that contains a database of information from more than 3000 telephone directories. The database cost ProCD (P) more than $10 million to compile and is expensive to keep current. ProCD (P) sold the database to the general public for about $150, and it sold a slightly different product to commercial buyers for a higher price. Every box containing its consumer product states that the software comes with restrictions in an enclosed license. The license is encoded on the CD-ROM disks, printed in the manual, and appears on the user’s screen every time the software runs. The license limits the use of the program to non-commercial purposes. Zeidenberg (D) bought several consumer packages of SelectPhone from a retail outlet. He resold the SelectPhone database on the Internet for less than ProCD (P) charges its commercial customers. ProCD (P) sued Zeidenberg (D) seeking an injunction against further dissemination of the database in violation...
- The court here distinguished
- Case Vocabulary
- Appeal of district court decision for defendant in breach of contract action seeking an injunction.
- ...has the opportunity to return the software for a refund if the buyer does not agree to the license’s terms. For purposes of this case, licenses are ordinary contracts governed by the UCC and the common law. Zeidenberg (D) argues that making the software package available for sale is an “offer,” which the customer “accepts” by paying for the package. He argues that hidden terms inside the box cannot be part of the contract. However, the outside of the software box stated that the transaction was subject to a license. As a practical matter, ProCD (P) could not have included all the terms of the license on the outside of the box. However, providing notice of the license on the outside of the box, the terms of the license inside the box, and the right to return the software for a refund if the terms are unacceptable is an acceptable way to do business. Standardized agreements save time and are essential to a system of mass production and distribution. Transactions in which the...
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Webb v. McGowin 25 5 results
- The court here discussed the value of a life and the severity of the injuries suffered by Webb (P). Although the case is arguably a case where a “moral obligation” was held to be sufficient consideration, the distinction in this case is the degree of the injuries to Webb (P) and the act of saving a life. One of the concurring opinions quoted Chief Justice Marshall as stating, “This case is about achieving justice.” This type of rationale has been condemned by legal scholars, who claim that it is a wanton departure from legal principles and replaces sound legal logic with sentiment. New York is one jurisdiction that has given legal effect to promises based on consideration consisting of a past performance, when the promise is in writing and it meets other requirements.
- ...the service, necessarily rests on the assumption that saving life and preservation of the body from harm have only sentimental value. Had McGowin been accidentally poisoned and a physician, without his knowledge or request, had administered an antidote, a subsequent promise by McGowin (D) to pay the physician would have been valid. Likewise, McGowin’s (D) agreement to compensate Webb (P) for saving him from death or grievous bodily injury is valid and enforceable. In the business of life insurance, the value of a man’s life is measured in dollars and cents according to his expectancy, soundness of his body, and his ability to pay premiums. In the act of saving McGowin (D) from death or grievous bodily harm, Webb (P) was crippled for life. This was part of the consideration of the contract McGowin (D) made with Webb (P). Benefit to the promisor or injury to the promisee is a sufficient legal consideration for the promisor’s agreement to pay. The court below erred in sustaining...case
- Case Vocabulary
- An appeal by Webb (P) from a judgment of nonsuit at trial court.
- DEMURRER: In court pleadings this is a claim that even if all of the allegations are accepted as true, the party claiming the allegations still has not shown a legal basis for recovery.
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Van Wagner Advertising Corp. v. S & M Enterprises 309 7 results (showing 5 best matches)
- (Kaye, J.) No. Specific performance of a contract to lease unique commercial property is properly denied when damages are an adequate remedy to compensate the tenant and equitable relief would impose a disproportionate burden on the defaulting landlord. While specific performance is available in appropriate circumstances for breach of a commercial or residential lease, specific performance of real property leases is not awarded as a matter of course in New York. Van Wagner (P) argues that specific performance must be granted in light of the trial court’s finding that the demised space is unique as to location for the particular advertising purpose intended. The word “uniqueness” is not, however, a magic door to specific performance. The point at which breach of a contract will be redressable by specific performance lies not in any inherent physical uniqueness of the property but instead in the uncertainty of valuing it. Here, the trial court correctly concluded that the value of the...
- The court noted
- SPECIFIC PERFORMANCE: 1. Equitable remedy granted by a court where there has been a breach of contract and where damages would be inadequate to compensate the injured party so that the court requires the breaching party to fulfill his obligations under the contract. 2. The fulfillment or achievement of one’s obligations under a contract.
- Case Vocabulary
- Appeal from lower court denial of specific performance for breach of lease.
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- In this case, the contract specifically provided that performance by Ever-Tite would bind both parties. As a result, the Greens (D) were on notice that Ever-Tite’s (P) acceptance might be unknown to them until the workers actually arrived. As in
- (Ayres) Yes. An offeree has a reasonable amount of time to accept if the offer does not specify a time by which it must be accepted. A reasonable amount of time can be inferred from the circumstances surrounding the offer and the intent of the parties. In this case, the trial court found that the Greens (D) had given Ever-Tite (P) sufficient notice that they no longer wanted them to work on the house. However, this notice did not come until Ever-Tite (P) was actually at the house. This is not a reasonable amount of time based on the language of the contract and the knowledge of the parties. The contract stated that it would become binding upon acceptance by Ever-Tite’s (P) authorized agent or by commencement of the work requested. In this case, the work began when Ever-Tite (P) loaded its trucks before driving to the job site. In addition, the Greens (D) knew that it might take some time for financing to come through. Given that this did not take an unreasonably long time, the...
- LOUISIANA COURT OF APPEALS ENFORCES A REASONABLE RESPONSE TIME FOR AN OTHERWISE UNSPECIFIED OFFER
- Appeal from a trial court judgement for the defendant in a breach of contract action.
- The Greens (D) wanted the Ever-Tite Roofing Corporation (Ever-Tite) (P) to do some work on their house. They signed a document which detailed the work desired and the price to be paid. An agent from Ever-Tite (P) also signed the document, even though he had no authority to bind them to a contract. In fact, the document contained a provision which stated that it became binding only upon acceptance by an authorized agent of Ever-Tite (P) or upon commencement of the work requested. The Greens (D) knew that the work could not start until a lender approved their credit. This approval came nine days later. When Ever-Tite (P) arrived to start the job, however, there was another company there which had already been working for two days. Ever-Tite (D) was not permitted to do any work, and, as a result, they sued the Greens (D) for breach of contract. The trial court found for the Greens (D). Ever-Tite (P) appeals.
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Fera v. Village Plaza, Inc. 345 5 results
- (Kavanagh) Yes. Future lost profits are allowed as an element of damage in any case where, by reason of the nature of the situation, the profits may be established with reasonable certainty. Some cases have held that prospective profits are so uncertain that they cannot be included when measuring damages. This rule is simply an application of the general doctrine that a plaintiff must be able to provide a sufficient basis for a reasonable estimate of the degree of harm he or she has suffered in order to be entitled to a verdict or judgment for damages for breach of contract. Future profits should not be excluded from the measure of damages simply because they are profits. If the profits can be established with reasonable certainty, they should be allowed in setting damages. When an already established business is interrupted, a reasonable prediction can often be made as to its future profits based on its past profits. Granted, a new business will not have the kind of financial...
- The element of certainty as a limit on damages was introduced by American Judges at around the same time that English judges introduced foreseeability. As outlined in a leading New York case,
- Future lost profits are allowed as an element of damage in any case where, by reason of the nature of the situation, the profits may be established with reasonable certainty.
- Case Vocabulary
- % of annual receipts in excess of $240,000 to be paid to VPI (D). After the lease was executed, Fera (P) agreed to give up 600 square feet of its leased space to another tenant. In exchange, VPI (D) agreed to exclude Fera’s (P) liquor sales from the 5% rent provision of the lease. Numerous work stoppages occurred afterwards, and VPI (D) ended up transferring the deed to Bank of the Commonwealth in lieu of foreclosure after defaulting. When the space was finally ready for occupancy, Fera (P) was told that the lease had been misplaced and that the space had been rented to other tenants. Fera (P) refused an offer of alternative space, saying the alternative space was unsuitable for the intended business. Fera (P) filed suit in Wayne Circuit Court, alleging, among other things, a claim for anticipated lost profits. The jury returned a verdict for Fera (P) against VPI (D) and those managing the property for the Bank (D) for $200,000. The Court of Appeals reversed and remanded for new...
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Step-Saver Data Systems, Inc. v. Wyse Technology 97 6 results (showing 5 best matches)
- (Wisdom) Maybe. This case involves the sale of goods. As a result,
- Case Vocabulary
- COURT OF APPEALS APPLIES THE UCC TO MULTIPLE SALES AGREEMENTS WITH DIFFERENT TERMS
- Appeal from a trial court directed verdict for the defendant in a breach of warranty [breach of contract] action.
- , a motion for directed verdict, now referred to as a motion for judgement as a matter of law, can be made at the end of a party’s presentation of their evidence. The moving party asks the court to rule that their opponent has not met their burden of production. In other words, the judge is asked
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Williams v. Walker-Thomas Furniture Co. 221 6 results (showing 5 best matches)
- (Wright) No. A contract is unenforceable if its terms, when considered in light of the circumstances existing when the contract was made, are so extreme as to appear unconscionable according to prevailing mores and business practices. Congress should consider enacting corrective legislation to protect the public from such exploitative contracts as were used by Walker-Thomas (D) in this case. In fact, Congress has recently enacted the Uniform Commercial Code, which specifically provides that the court may refuse to enforce a contract which it finds to be unconscionable at the time it was made. This court now holds in accordance with this position. Unconscionability has generally been considered as including the absence of meaningful choice for one party combined with contract terms
- LOAN SHARK: One who lends money to others at extremely high rates of interest, often threatening violence against the borrower if he or she defaults.
- Case Vocabulary
- (Danaher) There must be thousands upon thousands of this kind of transaction occurring every day. Because the law has long allowed parties such latitude in making contracts, any approach to this problem should be a cautious one. Here, Williams (P) apparently knew precisely where she (P) stood in this contract. The District of Columbia Court of Appeals was correct in its disposition of the issues.
- ...payments made would be credited pro rata on all outstanding balances. In other words, if a customer had bought more than one item on installments, his or her payments would be credited to all the debts for all the different items. This overall balance would then exist until all balances due were paid in full. On April 17, 1962, Williams (P) bought a stereo set for $514.95. By that point, Williams had an outstanding balance of about $164 for previously purchased goods. Her (P) new balance thus increased to $679. Williams (P) was receiving a $218 stipend from the government every month. Walker-Thomas (D) was aware of Williams’ (P) financial status when selling the stereo to her (P), and Williams’ (P) social worker’s name was even written on the back of the contract. Williams (P) eventually defaulted on her (P) payments shortly thereafter, and Walker-Thomas (D) sought to replevy all the items she (P) purchased after December 1957. The Court of General Sessions granted judgment for...
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Renner v. Kehl 363 7 results (showing 5 best matches)
- Traditionally, the analysis employed by courts confronted with a case of mutual mistake involved an abstract inquiry into whether the mistake involved the substance of the contract or a only a quality or value thereof. The court here holds that rescission is proper where the parties’ mistake concerns “a basic assumption” upon which the contract was formed. The “basic assumption” formulation used in the Second Restatement is the more modern approach. After a court determines that the parties have made a mistake as to a basic assumption of fact, the court should go on to ask which party is in the best position to bear the risk. However, the court here appears to assume that the sellers bore the risk. This assumption may be questioned in light of two facts. First, because Renner (P) was the person proposing the farming, he was in the best position to determine which land was most suitable for his needs. The second, and most important, fact that leads to a conclusion that Renner (P)...
- Appeal to the Supreme Court of Arizona to review the decision of the appellate court affirming the judgment of the trial court, which rescinded a real estate contract on the ground of mutual mistake.
- (Gordon, V.C.J.) No. A party who rescinds a contract based on mutual mistake is not entitled to recover consequential damages. Since both parties were mistaken as to a basic assumption upon which the contract was based—i.e. that the land contained a suitable quantity of water—the contract was voidable and Renner (P) was entitled to a rescission. However, mutual mistake implies freedom of fault on the part of both parties. Thus, the trial court improperly awarded Renner (P) the full cost of his expenses. When a party rescinds a contract in the absence of fraud or misrepresentation, he is entitled only to restitution for any benefit conferred on the other party by way of part performance or reliance. In this case, Renner (P) was entitled to the down payment and the value of any improvements made to the land. However, the Kehls (D) and Moyles (D) were entitled to the fair rental value of their land during the time it was occupied by Renner (P). Additionally, Renner (P) is not entitled...
- The Kehls (D) and Moyles (D) sold to Roy Renner (P) certain leases of unimproved land for about $100 per acre for over two thousand acres. Renner (P) had made dear to the Kehls (D) and Moyles (D) that he was interested in the land only for the cultivation of jojoba and that he required adequate supply of water for that purpose. After making a down payment, taking the conveyance and undertaking some test drills, Renner (P) abandoned the project due to an insufficient supply of water. Renner (P) brought an action to rescind the sales contract on the ground of mutual mistake of the parties. After finding that the sale would not have taken place if the parties involved did not believe the land was suitable for commercial cultivation of jojoba, the trial court concluded that Renner (P) was entitled to a rescission of the contract. The trial court ordered the Kehls (D) and Moyles (D) to reimburse Renner (P) the amount of the down payment and the expenses incurred in developing the land...
- Case Vocabulary
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Mineral Park Land Co. v. Howard 367 6 results (showing 5 best matches)
- , the court stressed the differences in costs in deciding to excuse the buyer, Howard (D). In fact, it seems to be the only justification for excusing performance on the basis of impracticality. But for impracticality cases in general, courts very rarely rely on price differentials to excuse performance. Another thing to consider with regard to
- PROHIBITIVE COST: An unreasonably high cost.
- (Sloss) Yes. Even though there is an existing impracticality, as opposed to a supervening one, at the time of entering the contract, the court can excuse a buyer from his duties if he can’t perform them in an ordinary manner and without paying prohibitive cost. Here, the impracticality existed at the time Mineral Park (P) and Howard (D) entered the contract: Some of the gravel was already underwater. Howard (D) couldn’t remove the underwater gravel by resorting to ordinary means and without paying prohibitive costs. The difference in cost between using Mineral Park’s (P) underwater gravel and someone else’s gravel is so high that forcing Howard (D) to do so would be impractical. Judgment reversed.
- Case Vocabulary
- Even though there is an existing impracticality, as opposed to a supervening one, at the time of entering the contract, the court can excuse a buyer from his duties if he can’t perform them in an ordinary manner and without paying prohibitive cost.
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Prasad v. Pinnacle Property Management Services, LLC 225 10 results (showing 5 best matches)
- Rather than invalidating the entire IRA, the court determined that the unconscionable provisions could be severed from it. Courts properly may refuse to enforce an agreement where unconscionable provisions are too numerous and too important to be severed from the whole; however, if the unconscionable terms are collateral to the main purpose of the contract and can be extirpated by severance or restriction, then those measures are appropriate. In this case, the court noted that there was no issue as to any unconscionable limitation on the relief available to employees, or any other defect that would indicate a systematic effort to impose arbitration on an employee not simply as an alternative to litigation, but as an inferior forum that works to the employer’s advantage. Rather, the defects were collateral to the IRA’s central purpose, which was to provide an alternate forum for dispute resolution. The court severed portions of the IRA found to be unconscionable and granted Pinnacle’...
- IN FORMA PAUPERIS: (Latin) In the manner of a pauper. A court may allow an indigent party to proceed in forma pauperis and bear no liability for court fees or costs.
- The procedural unconscionability analysis begins with an inquiry into whether the contract is one of adhesion. Ordinary contracts of adhesion, although they are indispensable facts of modern life that are generally enforced, contain a degree of procedural unconscionability even without any notable surprises, and bear within them the clear danger of oppression and overreaching. Courts must be particularly attuned to this danger in the employment setting, where economic pressure exerted by employers on all but the most sought-after employees may be particularly acute. Prasad (P) established some procedural unconscionability, given that the IRA was a contract of adhesion, with no meaningful opt-out, and that Prasad’s (P) agreement to the IRA was not an informed decision to the extent
- he court stayed arbitration pending the U.S. Supreme Court’s decision in
- Case Vocabulary
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Grigerik v. Sharpe 403 3 results
- The existence of an intent to confer a benefit is often the critical inquiry in the area of third-party beneficiaries. The test of intent differs significantly among jurisdictions. Some courts hold that only the intent of the promisee (the seller Lang in this case) is dispositive. However, other courts recognize that the intent of the promisee should carry more weight, but make the promisor’s intent a factor in the total inquiry. The court here adopts a test that requires consideration of the intent of both contracting parties to determine whether a third person is entitled to third-party beneficiary rights. The court here also rejects the concept of the foreseeable third party beneficiary, reasoning that giving merely foreseeable parties enforceable rights may take the contract out of the contracting parties’ hands. In a jurisdiction that recognizes foreseeable beneficiaries, the parties are forced to include a provision in their contract denying such party any enforceable rights....
- Appeal to the Connecticut Supreme Court to review the decision of the Appellate Court, which, partly on the ground that jury was incorrectly charged as to third party beneficiaries, reversed the trial court’s judgment entered after the jury returned a verdict for the plaintiff.
- Case Vocabulary
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- (Traynor) Yes. It is not appropriate for a judge to presume that his interpretation of particular contract language is so secure that it could not be swayed by relevant evidence to the contrary. The judge’s own linguistic ability is not infallible, nor is the language in the contract likely to be free from any ambiguities. We understand that many judges rely on particular language to give rise to certain contractual obligations. However, California courts should not rely on the magical incantation of special phrases in order to create and destroy contract rights. Contractual obligations are created by the intent of the parties. If a court can determine this intent from the language of the contract, then it need not admit any further evidence. However, language is seldom so clear as to warrant this approach. Ordinarily, the court must admit any evidence which is “relevant to prove a meaning to which the language of the instrument is reasonably susceptible.” This rule does not...
- CALIFORNIA SUPREME COURT ADMITS EXTRINSIC EVIDENCE TO SETTLE A DISPUTE OVER A CONTRACT TERM
- Is a court required to admit extrinsic evidence which may assist in the interpretation of a disputed contract term?
- ...the cover on Pacific Gas & Electric Co.’s (PG&E) (P) steam turbine. The agreement required Thomas (D) to indemnify PG&E (P) against any property damage resulting from Thomas’s (D) work. To that end, Thomas (D) was obligated to purchase an insurance policy with more than $50,000 liability coverage for property damage. PG&E (P) was to be listed as an additional insured. In addition, PG&E (P) was supposed to be specifically covered for damage to its property. Thomas (D) subsequently damaged PG&E’s (P) engine in the course of its work. PG&E (P) then sued Thomas (D), requesting the cost of repairs under the indemnification clause. Thomas (D) argued that the indemnification clause only covered damage to property owned by third parties. The trial court rejected its proof on this issue, however. The judge acknowledged that the indemnification clause was of a sort which normally covered only the property of third parties. Nonetheless, he decided that the plain language of the... ...court...
- Chief Justice Traynor’s views are controversial. Some commentators feel that his approach subverts the parol evidence rule to the point where there is little left to enforce. He does walk a fine line between admitting evidence of subjective intent and permitting that intent to govern and change the contract in a way that violates the parol evidence rule. He defends this approach as a means of protecting the intent of the parties. There is validity in this defense. Contracts are supposed to reflect the common intent of the parties. When the language of the contract itself fails to make this intent clear, a court must resort to other evidence of the parties’ intent in order to preserve the enforceability of the contract. As shown in
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Iron Trade Products Co. v. Wilkoff Co. 291 6 results (showing 5 best matches)
- It can be difficult to determine whether one party has sufficiently interfered with the other party’s ability to perform such that performance should be excused. The inquiry is heavily dependent on the facts of the case, and subject to the court’s interpretation of those facts. One way of looking at a party’s interference is to consider whether the other party would have agreed to that sort of behavior in the contract. For instance, would Wilkoff (D) have agreed to allow Iron Trade (P) to continue looking for rails while Wilkoff (D) was trying to satisfy its order? Again, the answer to this question depends upon the facts of the case, the circumstances surrounding the transaction, and the relationship of the parties. It is important to this case that Iron Trade (P) did not intend to interfere with Wilkoff’s (D) ability to fulfill his obligations. If Wilkoff (D) could have demonstrated malice on Iron Trade’s (P) part, he might have been more successful in being excused from performance.
- ...difficult. Performance must actually be made impossible before its failure can be excused. The true facts of this case reveal that Wilkoff (D) was capable of buying the necessary rails at all times. If nothing else, Iron Trade’s (P) ability to buy up large amounts of rails, including the rails that Wilkoff (D) failed to provide, indicates that rails were readily available. In addition, Iron Trade (P) did not know that they were interfering with Wilkoff’s (D) ability to buy rails. More importantly, they never intended to make it difficult for him to do so. As a matter of fact, the negotiator with whom both parties were dealing offered Wilkoff (D) a better price than he gave Iron Trade (P). Wilkoff (D) cannot claim, under these circumstances, that it was truly impossible for him to buy enough rails to meet his obligations. However, Wilkoff (D) also claims that he should not be held liable because Iron Trade (P) made a deal to sell Wilkoff’s (D) rails even before the parties...
- Case Vocabulary
- PENNSYLVANIA SUPREME COURT REJECTS A BREACHER’S CLAIM THAT THE NON-BREACHER INTERFERED WITH HIS PERFORMANCE
- Appeal from a trial court judgement for the plaintiff in a breach of contract action.
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Walker & Co. v. Harrison 277 7 results (showing 5 best matches)
- Many people think that any deviation from the terms of an agreement gives them the right to stop paying the landlord, the plumber, or any other party with whom they have a disagreement. Since this is not the case, it is one of the most dangerous misconceptions. While this case makes it clear that a material breach is difficult to quantify, it is always necessary to analyze a breach according to the criteria that the court outlines. At the very least, this analysis will provide some indication of the breach’s magnitude and suggest an outcome in one party’s favor.
- Case Vocabulary
- MICHIGAN SUPREME COURT HOLDS REPUDIATING PARTY LIABLE FOR CONTRACT WHICH WAS NOT MATERIALLY BREACHED BY THE OTHER PARTY
- Appeal from a trial court judgement for the plaintiff in an action for assumpsit.
- MATERIAL BREACH: If one party to a contract materially (or substantially, or totally) breaches the contract, the other party may be excused from performance. In this event, the non-breaching party may still sue on the contract to recover damages due to lack of performance. In order to determine whether a breach is material, a court is likely to consider the elements outlined by Justice Smith, above.
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Channel Home Centers, Division of Grace Retail Corp. v. Grossman 111 6 results (showing 5 best matches)
- ...evidence of preliminary negotiations between the parties. In addition, Grossman (D) argues that the letter would be unenforceable even if it was considered a contract because it was not supported by consideration. Grossman’s (D) first argument misconstrues Channel’s (P) claim, however. Channel (P) does not claim that Grossman (D) breached an agreement to lease the mall site. They claim that Grossman (D) breached an agreement to negotiate in good faith toward the desired goal of a binding lease. Pennsylvania law sets the following requirements for an enforceable contract: 1) both parties must manifest an intention to be bound by the terms of the contract [offer and acceptance], 2) the terms of the contract must be sufficiently definite, and 3) the contract must be supported by consideration. Consideration may be a benefit granted to the promisor or a detriment suffered by the promisee. In either case, consideration must be bargained for and granted in exchange for... ...court has...
- ...draft lease about a month after signing the letter of intent. After some further communications between the parties, Grossman (D) and Channel’s (P) lawyer planned a conference call to discuss some of the issues concerning the lease. Both parties thought that the other party was responsible for reinitiating contact between them. [Here’s where it gets interesting] During this time, another retail chain, Mr. Good Buys, contacted Grossman (D) about leasing a space at the mall. In fact, Grossman (D) gave them a tour of the proposed Channel (P) site and discussed the terms of a prospective lease with them. Soon after, Grossman (D) terminated their negotiations with Channel (P), claiming that Channel (P) had failed to submit a signed and mutually acceptable lease within the thirty day limit. The next day, Grossman (D) executed a lease with Mr. Good Buys at a much higher rate than that to which Channel (P) had agreed. Channel (P) subsequently sued Grossman (D) for breach of contract....
- This opinion is another excellent review of many of the principles of contract formation. The court notes early on that negotiations between parties or an agreement to enter into a contract in the future are not contracts in themselves. However, in this case, we see that while agreements to agree will generally not be enforced, if they can be characterized as agreements to negotiate in good faith, and the three requirements for a valid contract are present, the agreement will be enforced. An agreement to negotiate in good faith is an important tool in business, where most contracts are skeletal in nature because of the fast-paced world within which transactions are completed. Even though a formal agreement on all essential terms is not reached, the parties are able to go forward with the overall transaction confident in the knowledge that they have agreed to negotiate in good faith a full-fledged agreement.
- Case Vocabulary
- COURT OF APPEALS APPROVES A CONTRACT TO NEGOTIATE TOWARDS AN AGREEMENT
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- Many courts have made similar rulings on questions of this nature. In addition to the Fourth Circuit here, the Second Circuit in
- ...of a naval hospital. Blair (D) then contracted with Coastal Steel Erectors, Inc. (Coastal) (P) to conduct steel erection operations and supply equipment as part of Blair’s (D’s) contract with the U.S. (P). Coastal (P) began performing its obligations and supplied its own cranes for handling and placing the required steel. Blair (D) claimed that the cost of crane rental was not its (D’s) responsibility under its (D’s) subcontract with Coastal (P), and refused to pay those costs. Because of this refusal to pay, Coastal (P) terminated its performance. This occurred after Coastal (P) had completed roughly 28 percent of its subcontract. Blair (D) went ahead and completed its contract with the U.S. (P) with a new subcontractor. Coastal (P) sued in the name of the United States (P) under the Miller Act to recover damages for labor and equipment already furnished. The district court found that Blair (D) was required under the subcontract to pay for crane use. Also, the refusal... ...court...
- Case Vocabulary
- , the Second Circuit faced a similar situation involving a prime contractor who had unjustifiably breached a subcontract after partial performance by a subcontractor. There, the court stated that the subcontractor could choose not to file suit based on the contract, and instead could make a claim for the reasonable value of his or her performance. Here, Coastal (P) paid for the costs of labor and equipment that Blair (D) has used. Blair (D) then breached the subcontract and retained the benefits of this labor and
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Hamer v. Sidway 17 4 results
- The waiver of the legal right in this case was clearly induced by the promise of the uncle. The court pointed out that the consideration given may in fact have benefitted the nephew even more than the uncle. However, the degree of benefit is not measured by the court to determine the validity of a contract. The determining factor is that William Sr. (D) “bargained” for the surrender of William Jr.’s (P) legal right to drink alcohol, use tobacco, and gamble. The abandonment of these rights may have saved William Jr. (P) money or contributed to his health, nevertheless this same abandonment, when bargained for, is sufficient consideration to uphold the promise.
- An appeal from the Supreme Court reversing the trial court judgment that awarded judgment for Hamer (P), the assignee, against Sidway (D), the executor.
- Case Vocabulary
- (Parker) Yes. A valuable consideration in the sense of the law may consist either in some right interest, profit, or benefit accruing to the one party, or some forbearance, detriment, loss, or responsibility given, suffered, or undertaken by the other. The forbearance does not have to benefit the promises or a third party, or have any substantial value to any one. It is enough that something is promised, done, forborne, or suffered by the party to whom the promise is made as consideration for the promise made to him. William Jr. (P) used tobacco, occasionally drank liquor, and he had a legal right to do so. He abandoned these rights for a period of years upon the strength of William Sr.’s (D) promise that for such forbearance William Sr. would give him $5,000. It is not of any legal importance whether or not the forbearance benefitted William Sr. (D). The judgment of the Supreme Court is reversed and the special term judgment for plaintiff, Hamer, is affirmed.
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Pyeatte v. Pyeatte 55 2 results
- Usually, inter-spousal restitution claims are dismissed on the premise that spousal services are presumed gratuitous. This premise is still applied in the vast majority of cases, since even under
- Charles (D) and Margrethe (P) Pyeatte married. They agreed Margrethe (P) would put Charles (D) through law school without his working, and that Charles (D) would later pay for Margrethe’s (P) graduate school. Margrethe (P) paid Charles’s (D) bills, enabling him to graduate, obtain work at a law firm, and divorce her soon after. [Apparently, he learned the law too well.] Margrethe (P), who had not yet started graduate school, sued Charles (D) for breach of contract. Charles (D) defended, contending the agreement was too indefinite to be enforceable. At trial, the court found the agreement was enforceable, and awarded Margrethe (P) $23,000. On appeal, the Court of Appeal apparently found the contract was invalid, but granted Margrethe (P) the same amount as restitutionary damages. Charles (D) appeals.
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Lamps Plus, Inc. v. Varela 181 6 results (showing 5 best matches)
- (Ginsburg, J.) The Court has strayed treacherously from the principle that arbitration is a matter of consent, not coercion. The FAA is intended to apply to parties with roughly equal bargaining power, and not to the employer/employee agreement in this case, in which one
- U.S. Supreme Court review of Ninth Circuit affirmation of U.S. District Court order to compel class arbitration.
- In 2016, a hacker tricked an employee of Lamps Plus, Inc. (P), into disclosing tax information of about 1,300 company employees. After a fraudulent federal income tax return was filed in the name of Lamps Plus’ employee Frank Varela (D), he filed a putative class action against Lamps Plus (P) in federal District Court on behalf of employees whose information had been compromised. Relying on the arbitration agreement in the employment contract, Lamps Plus (P) sought to compel arbitration—on an individual rather than a classwide basis—and to dismiss the suit. The District Court rejected the individual arbitration request, but authorized class arbitration and dismissed Varela’s (D) claims. Lamps Plus (P) appealed, arguing that the District Court erred by compelling class arbitration, but the Ninth Circuit affirmed, and Lamps Plus (P) sought U.S. Supreme Court review.
- Case Vocabulary
- (Roberts, C.J.) No. Arbitration is a matter of consent, not coercion, under the FAA. We refuse to infer consent when it comes to fundamental arbitration questions. Neither silence nor ambiguity provides a sufficient bases for concluding that parties to an arbitration agreement agreed to undermine the central benefits of arbitration itself. Individual arbitration and class arbitration are fundamentally different. In individual arbitration, parties forgo the procedural rigor and appellate review of the courts in order to realize the benefits of private dispute resolution: lower costs, greater efficiency and speed, and the ability to choose expert adjudicators to resolve specialized disputes. Class arbitration lacks those benefits. It sacrifices the principal advantage of arbitration—its informality—and makes the process slower, more costly, and more likely to generate procedural morass than final judgment. For this reason, we held in
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Taylor v. Caldwell 369 3 results
Drennan v. Star Paving Co. 85 5 results
- Star Paving (D) contends that its bid was the result of mistake and that it was therefore entitled to revoke it. The cases relied upon by Star Paving (D) are distinguishable, in that the bidder’s mistake was known or should have been to the offeree, and the offeree could be placed in status quo. Drennan (P) had no reason to know that Star Paving (D) had made a mistake in submitting its bid, since there was usually a variance of 160% between the highest and lowest bids for paving in the desert around Lancaster. Drennan (P) committed himself to performing the main contract in reliance on Star Paving’s (D) figures. Even had it been clearly understood that Star Paving’s (D) offer was revocable until accepted, it would not necessarily follow that Star Paving (D) had no duty to exercise reasonable care in preparing its bid. It presented its bid with knowledge of the substantial possibility that it would be used by Drennan (P), and it could foresee the harm that would ensue from an...
- State supreme court review of a trial court judgment in the plaintiff’s favor.
- Star Paving (D) claimed that there was no enforceable contract because they made a revocable offer and revoked it before Drennan (P) communicated his acceptance. The trial court found on substantial evidence that Star Paving (D) made a definite offer to do the work for $7,131.60. The trial court also found that Drennan (P) relied on Star Paving’s (D) bid in computing his own bid and naming Star Paving (D) as the subcontractor for the paving work. Accordingly, the court entered judgment for Drennan (P) in the amount of $3,817 plus costs.
- Local custom and practice play important roles in the court’s decision. Drennan (P) received bids in the customary manner, and prepared his bid using the subcontracting bids, per local custom. Star Paving’s (D) bid was low, but not out of the usual range for subcontracting bids in the area. It made reasonable and practical sense to hold Star Paving (D) accountable.
- Star Paving’s (D) bid was silent on revocation. The court must therefore determine whether there are conditions to the right of revocation imposed by law or reasonably inferable in fact. In the analogous problem of an offer for a unilateral contract, the theory is now obsolete that the offer is revocable at any time before complete performance. The main offer includes as a subsidiary promise, necessarily implied, that if part of the requested performance is given, the offer will not be revoked. Reasonable reliance resulting in a foreseeable prejudicial change in position also affords a compelling basis for implying a subsidiary promise not to revoke an offer for a bilateral contract. The absence of consideration is not fatal to the enforcement of such a promise. Reasonable reliance serves to bind the offeror.
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Cohen v. Cowles Media Company 47 5 results
- in order to prevent an injustice. In the case at hand, both parties have good moral arguments as to why Cowles’ (D) promise should or should not be enforced. Neither side clearly holds the higher moral ground. However, the record reveals that the harm to Cohen (P) requires a remedy in order to avoid injustice. At trial, the newspapers themselves conceded that they generally keep the confidentiality of any source. Cowles’ (D) editors conceded that they have never since reneged on a promise of confidentiality. Other experts stressed the ethical importance of keeping promises of confidentiality. Based on these representations, we conclude that promissory estoppel should apply to prevent Cowles’ (D) from reneging on their promise of confidentiality. Affirmed.
- in order to prevent injustice. Here, however, the facts do not clearly state that Cohen (P) revealed the information only after being assured that his name would remain confidential. If the promise was given by the newspapers only after Cohen (P) supplied the information, promissory estoppel would not apply. The court itself notes that both parties are on equal moral ground. How, then, can the court be so sure that enforcement of the
- Dan Cohen (P), an associate of a gubernatorial candidate, informed reporters of newspapers owned by Cowles Media Company (D) of the arrests and conviction of the opposing candidate for lieutenant governor. The reporters had promised to keep Cohen’s (P) identity confidential. However, the editors overruled these promises and printed Cohen’s (P) name. Cohen was fired by his firm, and he sued Cowles (D) for breach of contract. The trial court awarded $200,000 in compensatory damages. However, on Cowles’ (D) appeal, the Minnesota Supreme Court held that the parties were not thinking in terms of a legally binding contract, and that recovery based on promissory estoppel would violate the newspapers’ First Amendment rights. The United States Supreme Court disagreed on the First Amendment holding, and it remanded to the Supreme Court of Minnesota.
- Case Vocabulary
- Appeal from judgment for $200,000, on remand from U.S. Supreme Court to apply doctrine of promissory estoppel.
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Cotnam v. Wisdom 51 5 results
- As the court pointed out, implied contracts (or quasi or constructive contracts) exist only as a legal fiction. The courts apply the legal fiction only when one party has substantially benefited another and justice requires that the benefited party compensate the other party. In this case, the physician, Wisdom (P), was adhering to his oath taken as a doctor by responding to the medical emergency of Harrison (D). The general welfare of the public interest is furthered when physicians respond to the emergency medical needs of the public. The court compares these occurrences to physicians treating insane persons. The insane person needs medical assistance, but is unable to contract for the treatment. The legal fiction creates the contract in the interest of public welfare.
- Case Vocabulary
- An appeal from Circuit Court that awarded judgment for Wisdom (P).
- evidence in error. This was relevant to no issue in the case, and its effect might well have been prejudicial. Judgment is reversed, and the action is remanded.
- ...which rendered him unconscious. While Harrison (D) was still unconscious, Wisdom (P), a physician, was summoned to his assistance by some spectator. Wisdom (P) performed a difficult operation in an effort to save Harrison’s (D) life, but the operation was unsuccessful, and Harrison (D) died without regaining consciousness. Wisdom (P) brought an action against Cotnam, administrator of Harrison’s (D) estate, to recover for the services rendered to Harrison (D). The trial court gave instructions to the jury that “(1) If you find from the evidence that plaintiffs rendered professional services as physicians . . . in a sudden emergency . . . then you are instructed that plaintiffs are entitled to recover . . . reasonable compensation for the services rendered. (2) The character and importance of the operation, the responsibility resting upon the surgeon . . . his experience and professional training, and the ability to pay of the person operated upon, are elements to be considered ....
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Lamps Plus, Inc. v. Varela 67 6 results (showing 5 best matches)
- (Ginsburg, J.) The Court has strayed treacherously from the principle that arbitration is a matter of consent, not coercion. The FAA is intended to apply to parties with roughly equal bargaining power, and not to the employer/employee agreement in this case, in which one
- U.S. Supreme Court review of Ninth Circuit affirmation of U.S. District Court order to compel class arbitration.
- In 2016, a hacker tricked an employee of Lamps Plus, Inc. (P), into disclosing tax information of about 1,300 company employees. After a fraudulent federal income tax return was filed in the name of Lamps Plus’ employee Frank Varela (D), he filed a putative class action against Lamps Plus (P) in federal District Court on behalf of employees whose information had been compromised. Relying on the arbitration agreement in the employment contract, Lamps Plus (P) sought to compel arbitration—on an individual rather than a classwide basis—and to dismiss the suit. The District Court rejected the individual arbitration request, but authorized class arbitration and dismissed Varela’s (D) claims. Lamps Plus (P) appealed, arguing that the District Court erred by compelling class arbitration, but the Ninth Circuit affirmed, and Lamps Plus (P) sought U.S. Supreme Court review.
- Case Vocabulary
- (Roberts, C.J.) No. Arbitration is a matter of consent, not coercion, under the FAA. We refuse to infer consent when it comes to fundamental arbitration questions. Neither silence nor ambiguity provides a sufficient bases for concluding that parties to an arbitration agreement agreed to undermine the central benefits of arbitration itself. Individual arbitration and class arbitration are fundamentally different. In individual arbitration, parties forgo the procedural rigor and appellate review of the courts in order to realize the benefits of private dispute resolution: lower costs, greater efficiency and speed, and the ability to choose expert adjudicators to resolve specialized disputes. Class arbitration lacks those benefits. It sacrifices the principal advantage of arbitration—its informality—and makes the process slower, more costly, and more likely to generate procedural morass than final judgment. For this reason, we held in
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- After a cannery hired sailors for seasonal work, they refused to work unless paid higher wages, knowing replacements are unavailable. When the cannery promised a raise but never delivered, the workers sued.
- Four factors are usually present in a case of undue influence: an (1) unnatural disposition is made (2) by a person susceptible to undue influence to the advantage of someone (3) with an opportunity to exercise undue influence, and (4) who in fact has used that opportunity to procure the contested disposition through improper means.
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Northwest, Inc. v. Ginsberg 229 6 results (showing 5 best matches)
- PREEMPTION: Refers to the idea that a higher authority of law will displace the law of a lower authority of law when the two authorities come into conflict.
- U.S. Supreme Court review of Ninth Circuit decision reversing District Court dismissal of claim.
- Case Vocabulary
- Northwest (P) terminated customer Ginsberg’s (D) membership in its frequent flyer program, apparently based on a provision in the frequent flyer agreement that gave Northwest (P) sole discretion to determine whether a participant had abused the program. Ginsberg (D) filed suit, asserting among other claims that Northwest (P) had violated the duty of good faith and fair dealing because it terminated his membership in a way that contravened his reasonable expectations. The U.S. District Court found that the ADA,
- The Court noted that the ADA is based on the view that the best interests of airline passengers are most effectively promoted by allowing the free market to operate. Thus, in the Court’s view, pre-empting the covenant of good faith and fair dealing does not leave customers unprotected. If an airline acquires a reputation for mistreating the participants in its frequent flyer program, customers can avoid that program and may be able to enroll in a more favorable rival program.
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Alaska Packers’ Ass’n v. Domenico 145 3 results
- After a cannery hired sailors for seasonal work, they refused to work unless paid higher wages, knowing replacements are unavailable. When the cannery promised a raise but never delivered, the workers sued.
- Case Vocabulary
- Alaska Packers’ Association (D) recruited workers (P), including Domenico (P), to sail from San Francisco to Alaska to work as fishermen/canners for $50. Once the workers (P) arrived in Alaska, they stopped work and threatened to return to San Francisco unless paid $100. Since it was impossible to get replacement workers without notice, Alaska Packers’ (D) plant superintendent signed a promise to pay them $100. However, Alaska Packers (D) paid them only $50. The workers (P) sued in admiralty for the difference. At trail, the court found for the workers (P). Alaska Packers (D) appeals.
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- U.S. Merchants (D) failed to pay for raw plastic provided by Rocheux (P), claiming that it was defective, but Rocheux (P) argued that U.S. Merchants (D) had not complained about the defects in a timely manner and had admitted it owed the money; both parties moved for summary judgment in their favor.
- Nonconformities are sufficiently serious to justify revocation of acceptance if, under the specific facts and circumstances of the case, the nonconformities substantially impaired the value of the goods to the buyer.
- In the absence of agreement to the contrary, a court cannot imply a condition to make payments at reasonable intervals rather than upon completion of the contract.
- A general contractor fires his roofing subcontractor on narrower grounds than he alleges in court.
- A court may grant recovery in quantum meruit to a party, despite their being in breach of contract and without interpreting the contract as severable.
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Groves v. John Wunder Co. 323 4 results
- The court’s focus on the willfulness of the breach in justifying a higher award of damages should be noted. Remember that the cost of performance, namely the cost of leaving the land at the required grade, would be roughly $60,000. Also, the potential increase in the market value of the land would be only $12,160, barely one-fifth of the cost. From these facts alone, it seems that Wunder’s (D) decision not to leave the property at a uniform grade was the only economically sensible decision that that company (D) could make. Had Groves (P) attempted to show there was some special value to the land that was not necessarily reflected in its market value, then perhaps the award would not seem too excessive. For instance, if Groves (P) owned adjacent land that could only be used productively if the land in question were restored, then the award would possibly make better sense. Without such an indication of special value, however, one may find difficulty justifying a large award of...
- (Stone) Yes. When a party willfully falls to perform under a contract, the other party will be entitled to damages equal to the reasonable cost of having performance carried out, and not the difference in value resulting from non-performance. Wunder’s (D) breach of contract was certainly willful in this case, with nothing of good faith about it. The lower court’s decision to award damages for only $15,000 effectively rewards bad faith and the deliberate breach of a contract. That outcome is unacceptable. A contractor who willfully and fraudulently varies from a contract cannot sue based on the contract and expect to have the
- Case Vocabulary
- ...owned and operated a similar plant nearby. In August 1927, Groves (P) and Wunder (D) entered a contract by which Groves (P) would lease its (P) land to Wunder (D) for seven years. Wunder (D) agreed to remove the sand and gravel, and also to leave the property “at a uniform grade, substantially the same as the grade now existing at the roadway . . . on said premises. . .” The lease also provided that Wunder (D), in clearing away any of the materials covering the sand and gravel, would use such materials “for the purpose of maintaining and establishing said grade.” Further, Wunder (D) would acquire the Groves (P) screening plant on the property and eliminate Groves (P) as a competitor. Groves (P) was paid $105,000 under the lease. Wunder (D) breached this contract deliberately, removing only “the richest and best of the gravel” from the land and leaving the property “broken, rugged, and uneven.” Groves (P) sued Wunder (D) for breach of contract. The lower court found that, to leave...
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Mitchill v. Lath 165 5 results
- COURT OF EQUITY: Courts that handle lawsuits requesting remedies other than monetary damages, such as writs, injunctions, and specific performance. Such courts existed, separate from courts of law, under English common law and in several states. Federal bankruptcy courts are an example of courts that continue to operate as courts of equity.
- Appeal to state Supreme Court after appellate court affirmation of order directing specific performance of agreement to remove icehouse.
- SPECIFIC PERFORMANCE: 1. Equitable remedy granted by a court where there has been a breach of contract and where damages would be inadequate to compensate the injured party so that the court requires the breaching party to fulfill his obligations under the contract. 2. The fulfillment or achievement of one’s obligations under a contract.
- Case Vocabulary
- PAROL EVIDENCE RULE: 1. Oral or verbal evidence. 2. The kind of evidence given by a witness in a court. 3. Evidence relating to the interpretation of an agreement that does not appear in the writing evidencing the agreement.
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Graham v. Scissor-Tail, Inc. 217 4 results
- Form contracts offer some efficiency gains by reducing the need to hire lawyers to draft individualized contracts. Adhesion contracts are unenforceable, however, when they undermine adherents’ “reasonable expectations,” which often happens when a contract that ostensibly confers some boon whittles away most of the expected benefit. Further, clauses that are “unconscionable” are unenforceable. Courts evaluating unconscionability use a
- After a music promoter signed a mandatory form contract requiring arbitration before a biased panel and then loses his case, he sues to void the contract as unconscionable.
- Case Vocabulary
- ...), an experienced music promoter and producer, contracted with singer Leon Russell’s corporation Scissor-Tail, Inc. (D) to promote Russell’s multi-city concert tour. The contract was an industry-standard form promulgated by the American Federation of Musicians (“A.F. of M.”) and provided any disputes would be arbitrated by the A.F. of M’s executive board. A.F. of M. required its producer-members to use only its form contract, and membership was virtually required to work in the industry. Some of Russell’s concerts proved unprofitable, and disputes arose about whether losses could be applied to offset lucrative concerts’ profits. Graham (P) sued for contract breach, but Scissor-Tail, Inc. (D) moved to compel arbitration, and won. At arbitration, the board found for Scissor-Tail (D). Graham (P) appealed, contending the agreement was unenforceable as an adhesion contract, and the arbitration clause was unconscionable. The appellate court affirmed the arbitrators’ award. Graham (P)...
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- [when a party willfully fails to perform under a contract, the other party will be entitled to damages equal to the reasonable cost of having performance carried out, and not the difference in value resulting from non-performance] to justify their (P) claim. It should be noted that that particular case is the only one in which the cost of performance rule was followed where the cost of performance greatly exceeded the decrease in value caused by the breach of contract. Moreover, that case was decided by a mere plurality of the court. Here, unlike previous cases, a “building and construction” or “grading and excavation” contract is not at issue. The
- times the potential effect on the Peevyhouses’ (P) land. Such an award would be quite unfair to some and economically ridiculous to others. Looking back at an earlier case, a $29,000 award here would lead to the same kind of economic waste that would have resulted had Jacob & Youngs been forced to demolish the walls in Kent’s home in order to replace the pipes. Admittedly, this is a case that pits a farm couple (P) against a larger coal mining company (D), and strip mining is particularly damaging to surface land, with large expanses of earth being excavated a layer at a time. Still, the cost of restoring the land could have been mitigated, perhaps if Garland (D) agreed, as a term of its (D) lease, to allot a small percentage of profits over the five years to the Peevyhouses (P) for the purpose of funding the remedial work at the end of the lease.
- In 1954, Willie and Lucille Peevyhouse (P) leased their farm to Garland Coal & Mining Co. (Garland) (D). The lease was for a five-year term, and would allow Garland (D) to strip mine for coal. As part of this lease, Garland (D) agreed to perform specific kinds of restorative and remedial work on the land at the end of the lease. Garland (D) failed to do this work, which would have involved moving many thousands of cubic yards of dirt. This operation would have cost Garland (D) roughly $29,000, but would have only increased the market price of the farm by about $300. The Peevyhouses (P) sued for $25,000 in damages, The trial court awarded $5,000 in damages. Both the Peevyhouses (P) and Garland (D) appealed.
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Kirksey v. Kirksey 29 4 results
- This case is one of the prime examples of the difficulty of interpreting contractual language and behavior. The central issue in this case is the intent of Mr. Kirksey (D), the promisor. Was Mr. Kirksey (D) making a bargained-for exchange, in which he promised to provide a house and land in exchange for Antillico’s (P) action of moving to his estate? Or was Mr. Kirksey (D) simply offering a gift to which no contractual duties attach? Sound arguments can be made for each position. On one hand, it appears that Mr. Kirksey (D) was bargaining for Antillico’s
- Case Vocabulary
- (Ormond, J.) No. A change of residence in reliance on a promise to provide a new residence is not necessarily sufficient consideration to impose contractual duties upon the promisor. In this situation, the promise of Mr. Kirksey (D) has been interpreted by the majority of the court as a mere gratuity. As such, Mr. Kirksey (D) did not enter into a binding contract with Antillico (P). I tend to disagree. In my mind, the loss and inconvenience that Antillico (P) suffered in moving to Mr. Kirksey’s (D) land is sufficient consideration to support Mr. Kirksey’s (D) promise to furnish her with a house and land to cultivate. However, my brothers on this court disagree. Reversed.
- ...from her brother-in-law, Mr. Kirksey (D). After Antillico’s (P) husband died, Mr. Kirksey (D) wrote to Antillico (P) and expressed concern with her living situation. He stated that if Antillico (P) would come down and see him, he would give Antillico (P) a place to raise her family and some land to tend. He stated that, considering her plight, he wanted Antillico (P) and her children to do well and have a nice place to live. Within a month or two of receiving the letter, Antillico (P) abandoned her home and moved to the residence of Mr. Kirksey (D). He gave Antillico (P) a comfortable house and land to cultivate for two years, but then he forced Antillico (P) to move into an uncomfortable house in the woods. Later, he even required Antillico (P) to abandon this house. Antillico (P) sued, alleging that Mr. Kirksey (D) had made a promise and that she had fulfilled her obligations under the contract, but that he had breached. The trial court granted a $200 judgment for Antillico...
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Mattei v. Hopper 35 3 results
- Contracts containing satisfaction clauses, making one party’s performance dependent on his good-faith satisfaction with a related matter, are neither illusory not lacking in mutuality of obligation, Mattei (P) was legally bound to make a good-faith determination. Suppose that Hopper (D) wanted to go forward with the sale, but that Mattei (P) refused on the ground that the leases were not satisfactory. In this case, Hopper (D) could call experts to testify to the satisfactory nature of the leases, and he would have to prove that Mattei’s (P) dissatisfaction was not in good faith. The court held that the satisfaction clause was an issue of judgment, not of commercial value or quality, and therefore that Mattei’s (P) subjective good-faith judgment controlled. Would it make more sense to require satisfaction based on commercial value or quality? In such a case, a reasonable person standard is used. The good-faith standard usually applies to something like a portrait painting, which is...
- Case Vocabulary
- Mattei (P), a real estate developer, and Hopper (D), a landowner, entered into a written agreement for the sale of Hopper’s (D) property. The written agreement was evidenced by a deposit receipt, under which Mattei (P) paid $1000 of the total purchase price of $57,500. Mattei (P) was given 120 days to examine the title and consummate the purchase, subject to Mattei’s (P) bank obtaining leases satisfactory to Mattei (P). While Mattei (P) was in the process of securing the leases for this commercial property, Hopper (D) notified Mattei (P) that he would not sell the property. Thereafter, Mattei (P) offered to pay the balance of the purchase price, but Hopper (D) failed to tender the deed as provided in the deposit receipt. Mattei (P) sued for breach of contract. The trial court concluded that the agreement was illusory and lacking in mutuality. Mattei (P) appeals.
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Luttinger v. Rosen 257 6 results (showing 5 best matches)
- The mortgage condition in the Luttingers’ (P) contract is referred to as a “condition precedent.” The court defines a condition precedent as a fact or event that must exist or take place before there is a right to performance. In other words, the parties agree to a set of circumstances that must exist before they will be bound by their contract. This case deals
- Case Vocabulary
- CONNECTICUT SUPREME COURT EXPLAINS THE CONSEQUENCES OF A FAILED CONTRACT CONDITION
- Appeal from a trial court judgement for the plaintiffs in a breach of contract action.
- (Loiselle) No. Rosen (D) claims that the Luttingers did not try hard enough to get a qualifying mortgage. However, it is not necessary to perform futile acts in order to satisfy a condition requiring due diligence. In this case, the Luttingers’ (P) lawyer knew that no other lending institution would make the loan that they needed. It would have been pointless to apply to those banks under the circumstances. Rosen (D) also claims that the mortgage condition was satisfied, obviating the need to return the Luttingers’ (P) deposit, because he offered to make the additional loan necessary to bring the mortgage down to 8½ percent. However, the condition states that the loan must come from a bank or another lending institution. The Luttingers (P) were under no obligation to accept Rosen’s (D) offer. As a result, the condition failed and the Luttingers were entitled to the return of their deposit. Affirmed.
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K & G Construction Co. v. Harris 279 4 results
- (Prescott) Yes. Ordinarily, contracts give rise to two types of promises: Independent and mutually dependent. Independent promises are exchanged for nothing more than a return promise. They are not exchanged for immediate performance. Mutually dependent promises, on the other hand, are exchanged only on the condition of performance by the other party. These promises may be precedent, subsequent, or concurrent. In other words, either a party must perform before the other party will be bound, after the other party becomes bound, or the parties must perform simultaneously. Courts used to presume that contract promises were independent. However, this trend was reversed when Lord Mansfield developed the concept of constructive conditions in
- MARYLAND COURT OF APPEALS SORTS OUT COMPLICATED BREACH AND REPUDIATION CONSTRUCTION DISPUTE
- Appeal from a trial court judgement on a counterclaim, in favor of the defendant in a breach of contract action.
- Judge Prescott appears to see the doctrines of mutually dependent promises and material breach at odds with each other. This need not be the case. Using the doctrine of mutually dependent promises could have led Judge Prescott to the same conclusion—i.e., that Harris’s (D) lack of workmanship relieved K&G’s (P) obligation to pay him. The lack of workmanship could either be phrased as the failure of a constructive condition on payment or a material breach of the contract. Either way, these doctrines need not be seen as competing, but rather complementary solutions to a difficult problem of mutual performance.
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- Ella O’Callaghan (P) was a tenant in a large apartment building maintained and operated by Waller & Beckwith Realty Co. (Waller & Beckwith) (D). O’Callaghan (P) was injured when she (P) fell while crossing the paved courtyard between the garage and her apartment. O’Callaghan (P) sued Waller & Beckwith (D) for negligence, claiming that her (P’s) injuries were caused by defective pavement in the courtyard. Before the case was tried, O’Callaghan (P) died. Her (P) administrator was substituted as plaintiff in this action. The jury returned a verdict for $14,000 for O’Callaghan (P) and judgment was entered on the verdict. Waller & Beckwith (D) appealed. The Appellate Court held that the action was barred by an exculpatory clause in O’Callaghan’s (P) lease, and that a verdict should have been directed for Waller & Beckwith (D). The trial court judgment was then reversed and the cause was remanded with directions to enter a judgment accordingly. Leave to appeal was granted.
- Case Vocabulary
- ...policy of the State to do so, or there is something in the social relationship of the parties militating against upholding the agreement. O’Callaghan (P) argues that the exculpatory clause at issue here is contrary to public policy when included in a lease of residential property and invalid. Freedom of contract is basic to our law. If that freedom, however, is used to absolve one party from the consequences of his or her own negligence, then the standards of conduct which have developed for the protection of others may be diluted. The courts have refused to enforce exculpatory contracts between common carriers and freight companies or passengers, and between telegraph companies and those sending. There is an obvious public interest involved in those transactions. Here, however, an essentially private transaction involving a lessor and lessee is involved. Clauses that exculpate the landlord from the consequences of his or her negligence have been sustained in residential as well...
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- There are two main, recurring situations in which courts have held that no suretyship relationship exists. In both cases, the courts make their decisions on the basis of a lack of a duty owed by a principal debtor. One situation involves the circumstances found here, where the primary debtor (Langman (P)) renders performance while relying on the promisor’s (Association’s (D)) credit. The other situation involves a novation, or the adding of a new party to an earlier contract. In both situations, the promisor is not a surety, so the promise in question falls outside the Statute. There are, however, several more exceptions by which a promise falls outside the suretyship provision, even though the promisor is a surety. One example is where the debtor had no actual or constructive notice that the promisor was a surety. Other examples include when the surety makes the promise to the principal and not to the debtor, and when the promisor agrees to render performance that has nothing to do...
- Case Vocabulary
- ...$775,000. The deed to the Association (D) stated that the property was subject to a lien. This lien resulted from a $600,000 debt that Langman (P) and Stowe incurred in purchasing the property. The deed also stated that “[t]he Grantee [namely, the Association (D)] does hereby assume payment of such obligation and agrees to hold the Grantors [Langman (P) and Stowe] harmless from further liability on such obligation.” While the Association (D) did not sign this deed, it (D) did acknowledge the gift and have the deed recorded. In a short time, the cost of operating the property exceeded the income it generated. Stowe continued to manage the property, but only continued payments on the outstanding loan until the summer of 1989. The lender then demanded payments from Langman (P). She (P) cured this default and then sued the Association (D), claiming that it was its (D) responsibility to reimburse her (P) under the deed. The trial court held that the Association (D) “did not... ...court...
- (Keenan) No. A grantee of a deed who assumes an existing mortgage is not a surety because he or she does not make a promise to the mortgagee to pay the debt of another, but rather promises the grantor to pay to the mortgagee the debt the grantee owes to the grantor. The trial court erred in holding that the Statute of Frauds does not bar enforcement of an unsigned mortgage assumption clause. The Association (D) claims that the “suretyship” provision of the Statute requires that it (D) sign the agreement before assuming any debts. Further, the Association (D) claims that Langman (P) would still remain secondarily liable to the lender for the mortgage debt, even if there were an effective assumption by someone else. Because of this, the Association (D) claims that its (D) agreement to assume the mortgage was a “collateral” agreement falling within the Statute of Frauds. Specifically, the state code equivalent of the Statute provides that “unless a promise, contract, [or] agreement
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- At first glance, it seems the court below exceeded its mandated remedy (specific performance) by ordering ETS (D) not just to re-evaluate its decision in light of his explanations, but to bypass its evaluation and release Dalton’s (P) score to colleges as valid. The court probably granted this drastic remedy because it believed that ETS (D), if ordered to reconsider, would just reaffirm its decision automatically. Indeed, this is exactly what happened. ETS (D) refused to release Dalton’s (P) score, and he was apparently forced to apply to colleges using his old, lower score. Dalton (P) was accepted to a college. Technically, Dalton (P) was allowed to sue ETS (D) for damages. However, note that his case is still in the
- test takers cheated. Nor did the invitation to furnish relevant information translate into an obligation by ETS (D) to conduct a field investigation or gather evidence to prove/disprove test-takers’ documentation. Indeed, the contract specified that test-takers bore the burden of overcoming ETS’ (D) findings. The contract did require ETS (D) to consider evidence supplied by Dalton (P), which is germane to whether an impostor completed the exam. When ETS (D) fulfills its contractual obligation to consider relevant evidence provided by test-takers and otherwise acts in good faith, ETS (D) and not the courts must be the final arbiter of test scores’ validity. This court will not interfere with that determination, unless it is formed arbitrarily or Irrationally. We agree Dalton (P) is entitled to specific performance, but the “performance” specified by the contract is merely that ETS (D) must reconsider Dalton’s (P) proffered evidence in good faith. We conclude this affords Dalton (P)...
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Monarco v. Lo Greco 131 3 results
- This case signaled a new interrelationship between the Statute of Frauds and promissory estoppel. Nearly all states have used promissory estoppel at one time or another to thwart a Statute of Frauds defense against an otherwise fair and proper claim. A few other jurisdictions, however, including New York and Wisconsin, have shown the same tendency as the California court here to leave the more narrow confines of the part performance doctrine. These courts have gone on to use estoppel whenever a ruling against a plaintiff would be utterly unconscionable. This tendency has resulted in the near-elimination of the doctrine of part performance as a means of thwarting the Statute. Instead, part performance has been incorporated into estoppel in those jurisdictions.
- Case Vocabulary
- ...money. By doing this, Christie (D) gave up any opportunity for further education or any chance of accumulating property of his (D) own. After Christie (D) got married, Natale told him (D) that he (D) would receive all the property when Mr. and Mrs. Castiglia died. Mr. and Mrs. Castiglia placed all of their property in joint tenancy, and in 1941 they both executed wills according to their earlier agreement, with an additional $500 to Monarco (P). While these wills did not refer to the earlier agreement, Mr. and Mrs. Castiglia and Christie (D) all agreed to the terms. Natale Castiglia eventually decided, however, to leave his half of the joint property to his grandson, Monarco (P). Shortly before his death, Natale terminated the joint tenancies and executed a will leaving all of his property to Monarco (P). Natale died soon thereafter, with his and Carmela’s interest worth roughly $100,000. The will was probated and the court distributed the property to Monarco (P). Monarco (P)...
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Gill v. Johnstown Lumber Co. 283 7 results (showing 5 best matches)
- A court’s interpretation of a contract as divisible is much like the determination of substantial performance in that there is no set rule determining the outcome. According to the Restatement, courts should determine whether the elements of performance can be paired
- (Heydrick) No. However, the contract in this case is not entire. A contract is entire if only one payment is made for the completion of performance. It does not matter whether a single act is promised, or If several distinct acts make up the completed performance. On the other hand, a contract is severable if it divides payment up among several distinct acts which constitute performance. The contract is also severable if it does not specify how payment is to be made for these distinct acts. In this case, Gill (P) had a variety of responsibilities. He had to deliver logs made of different woods to different locations. He also had to deliver cross-ties to varying locations. The contract specifically apportioned payment among the types of wood, cross-ties, and shipping locations. As a result, the agreement is severable, not entire. Accordingly, Gill (P) is entitled to payment for the work completed. He is not, however, entitled to payment for the logs which were lost. Johnstown (D)...
- Case Vocabulary
- PENNSYLVANIA SUPREME COURT PERMITS RECOVERY ON A SEVERABLE DELIVERY CONTRACT
- Appeal from a trial court directed verdict for the defendant in a breach of contract action.
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Beaver v. Brumlow 127 6 results (showing 5 best matches)
- (Vigil, J.) Yes. When an oral contract that is not enforceable under the Statute of Frauds has been performed to such an extent that it would be inequitable to deny enforcement of the contract, the court may consider the contract removed from the operation of the Statute of Frauds. The main questions for a court faced with a case such as this one are, was there actually an oral agreement such as that alleged by the plaintiff, and if so would it be inequitable to deny enforcement to the agreement? Beaver (P) concedes that proof of the oral contract is sufficient, and Beaver (P) does not argue that the partial performance was insufficient to overcome the Statute of Frauds. Beaver’s (P) sole argument is that the character of Brumlow’s (D) performance was not sufficiently indicative of an oral agreement to sell land to qualify as partial performance.
- The trial court found for Brumlow (D) on the prima facie tort claim. The court also found that Beaver (P) had breached an agreement to sell the property, and held that the Statute of Frauds did not apply. Brumlow (D) was given the choice between money damages for the tort, or specific performance of the agreement to sell the property. Brumlow (D) opted for specific performance.
- Beaver (D) asserts that by ruling that the purchase price would be established by an appraisal and that the terms of the payment would be in cash payable within thirty days, the trial court formulated an agreement between the parties that never existed. A claim for specific performance of a contract involving land will not fail for failure to specify a price where the contract is otherwise complete and there has been part performance of the contract by a transfer of possession. Price is a material term in all contracts of sale, assignment, and the like. It must either be fixed by the agreement itself, or means must be therein provided for ascertaining it with certainty. Brumlow (D) proved to the satisfaction of the trial court by clear, cogent, and convincing evidence that Beaver (P) entered into a contract to sell specific land to Brumlow (D). In addition, there was significant specific part performance by both Brumlow (D) and Beaver (P) in reliance on the contract they made....
- Part performance must be “unequivocally referable” to a contract in order to defeat application of the Statute of Frauds. The part performance relied on to take a case out of the Statute of Frauds should be of a character not only consistent with a reasonable presumption that what was done was done on the faith of such a contract, but also that it would be unreasonable to presume that it was done on any other theory. The “unequivocally referable” concept does not mean that outside of the contract there can be no other plausible explanation for the part performance. The concept means that an outsider, knowing all of the circumstances of a case except for the claimed oral agreement, would naturally and reasonably conclude that a contract existed regarding the land, of the same general nature as that alleged by the claimant. Two key specific factors in coming to such a conclusion are taking possession of the property and making valuable, permanent, and substantial improvements to it....
- Case Vocabulary
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Northern Delaware Industrial Development Corp. v. E. W. Bliss Co. 313 9 results (showing 5 best matches)
- (Marvel) No. The court of equity should not order specific performance of any building contract in a situation in which it would be impractical to carry out such an order unless there are special circumstances or public interest is directly involved. To grant specific performance in this case would be inappropriate in view of the imprecision of the contract provision relied upon and the impracticability if not impossibility of effective enforcement by the Court of a mandatory order designed to keep a specific number of men on the job at the site of a steel mill which is undergoing extensive modernization and expansion. If Northern (P) has suffered loss as a result of actionable building delays, they may, at an appropriate time, resort to law for fixing of their claimed damages. Affirmed.
- A COURT GENERALLY WILL NOT GRANT EQUITABLE RELIEF IN CONSTRUCTION CONTRACTS WHERE ENFORCEMENT AND SUPERVISION BY THE COURT IS IMPRACTICAL
- COURT OF EQUITY: Court which administers justice according to the system of equity, using well-settled and well-understood rules, principles and precedents.
- Case Vocabulary
- The court denied Northern (P) an order of specific performance of a contract to compel E.W. Bliss (D) to add workers, for the period that one of Phoenix Steel’s (P) mills had to be shut down, because of a delay of the work.
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Cyberchron Corp. v. Calldata Systems Development, Inc. 109 6 results (showing 5 best matches)
- ...penalties to be assessed against Cyberchron (P) for delivering Equipment that exceeded the agreed weight. After preliminary negotiations, Grumman (D) delivered a purchase order dated May 15, 1990 to Cyberchron (P) that set forth a total weight per unit of 145 pounds and provided for severe penalties for exceeding that weight. Cyberchron (P) did not agree to those terms. Cyberchron (P) had begun producing the Equipment, despite the absence of an agreement. In a June 26, 1990 letter, Grumman (D) and Calldata (D) encouraged Cyberchron (P) to continue to perform its “contractually binding obligations” under the purchase order. Beginning in mid-July 1990, Grumman (D) directed Cyberchron (P) to continue producing the Equipment, assuring Cyberchron (P) that the details of the agreement would be resolved later. On July 30, Cyberchron (P) submitted a payment request to Grumman (D). Grumman’s (D) business manager testified that Grumman (D) would have paid the request but for a court...
- ...doctrine, promissory estoppel can be used by courts to award what seems like contract damages, even if no contract exists. Ordinarily, negotiations do not constitute an offer. Here, however, Calldata (D) went beyond mere negotiations. It made express promises to Cyberchron (P) that the parties would enter into an agreement, presumably with terms acceptable to Cyberchron (P), if Cyberchron (P) produced the Equipment. The key promise at issue here is Calldata’s (D) promise to Cyberchron (P) that if Cyberchron (P) continued to produce the Equipment, the parties could resolve the weight issue and enter into an enforceable contract. Cyberchron (P) relied on this promise and expended considerable funds to build the Equipment, only to have the rug pulled out from under it when Calldata (D) contracted with someone else. While, as a legal matter, Cyberchron (P) did not have to prove that Calldata (D) was negotiating in bad faith, Calldata’s (D) bad faith certainly helped Cyberchron’s...
- Case Vocabulary
- Appeal of district court judgment on a claim for damages based on promissory estoppel.
- QUANTUM MERUIT: A cause of action available when no express contract exists between the parties, but one party confers a benefit on the other party; the courts may imply a contract and impose a duty on the recipient of the benefit to pay for it to prevent unjust enrichment.
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Stewart v. Newbury 269 6 results (showing 5 best matches)
- (Crane) No. The default rule states that a contract must be substantially performed before payment can be requested. The parties to a contract can circumvent this rule by agreeing to whatever payment terms they choose. As a result, the trial court wrongly instructed the jury on this issue. However, this was not the only question in this case. The jury was also required to determine whether Newbury (D) breached his contract by refusing to allow Stewart (P) to continue working on the job. Newbury (D) alleges that the builder’s work was not up to specifications and there is evidence to support this claim. However, the jury’s findings on this issue are not clear. They obviously thought Stewart (P) was entitled to damages for the unpaid bill. On the other hand, they did not grant him damages for breach of contract. It appears that the jury found that Stewart (P) left the job justifiably after he was not paid. If this is the case, then the jury reached this conclusion in reliance on the...
- Appeal to the state supreme court from an intermediate appellate affirmance of the trial court’s judgment for the plaintiff in a breach of contract action.
- Consider in each case whether a party has substantially or materially breached its contractual obligations. If not, the party walking away may turn out to be the breacher. In this case, it is not clear whether the jury found that Stewart (P) and Newbury (D) had agreed to payment terms. They might have found that there were no agreed terms and then applied the default terms. While Stewart (P) did not make out badly on these terms, the new default terms will not be as attractive on remand. As a result, he should have been more careful when dealing with Newbury (D). For instance, he could have stayed on the job until the dispute was resolved in order to protect himself. It should be noted that most contractors now explicitly agree to terms that include progress payments for large jobs. These agreements should help circumvent the effects of the rule announced in this case.
- NEW YORK COURT OF APPEALS REJECTS AN IMPLIED CONDITION OF REASONABLE PROGRESS PAYMENTS FOR LARGE CONSTRUCTION JOBS
- In the absence of agreement to the contrary, a court cannot imply a condition to make payments at reasonable intervals rather than upon completion of the contract.
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New England Structures, Inc. v. Loranger 281 6 results (showing 5 best matches)
- (Cutter) Yes. The trial court relied on precedent which states that a party cannot advance arguments during litigation which were not made at the time of the dispute. However, the greater weight of precedent requires this result only when the other party has relied on the earlier representations. This is especially true if the terminating party explicitly reserves their right to raise other grounds for termination at a later date. As long as the terminating party does not act dishonestly and the other party is not misled, then there is no estoppel on future arguments. In this case, the judge should not have precluded Loranger (P) from raising other grounds for New England’s (R) termination. New England (R) was similarly entitled to defeat this approach by presenting evidence that they relied on the original notice to their detriment. The jury should have determined both of these issues. Since this case will be remanded for a new trial, we should address one other point. The...
- Generally, a party is not estopped from raising a claim or defense unless a prior act on its part induces reliance in another party. This is where estoppel gains its moral force. A party should not be allowed to continually change position when its behavior directly affects that of another party. However, without reliance, there is no reason to enforce this rule. In this case, New England (R) did not place any weight on the allegations in the notice of termination. Consider how the parties might have drafted their agreement to avoid the difficulties that landed them in court.
- ...workmen to complete the job according to the pace set by Loranger (P). Loranger (P) was entitled to fire New England (R) with five days written notice if they failed to live up the agreement. In fact, Loranger (P) sent New England (R) a notice of termination after they had been on the job for barely a month. Loranger (P) stated in the notice that New England (R) consistently refused or failed to provide enough skilled workman to maintain satisfactory progress. New England (R) sent back a telegram, claiming that Loranger (P) had been slow in providing approved drawings from which New England (R) could do their work. Despite this, Loranger (P) hired another subcontractor to complete the job. They then sued New England (R) for breach of contract, claiming damages for the payments made to the new subcontractor. New England (R) in turn, sued Loranger (P) for breach of contract resulting from their termination. This case arose from two distinct actions. In one action, Loranger sued New...
- MASSACHUSETTS SUPREME COURT PERMITS A PARTY TO MAKE ARGUMENTS AT TRIAL WHICH DIFFER FROM THOSE ADVANCED DURING THE ORIGINAL DISPUTE
- A general contractor fires his roofing subcontractor on narrower grounds than he alleges in court.
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Hurst v. W.J. Lake & Co. 185 6 results (showing 5 best matches)
- Justice Rosman makes a case against the plain meaning rule with regard to the interpretation of contracts between tradespeople. In fact, this approach is ratified in
- (Rosman) Yes. A court cannot limit its consideration to the plain language of a contract when the trade usage of the parties is relevant to a determination of their Intent. Lake (D) argues that courts will not admit extrinsic evidence of party intent when the language of a contract is unambiguous. He claims that courts will rely. Instead, on the common meaning of the words in order to determine the parties’ intent. This approach has simplicity as its advantage. It protects every contract against the occasional perjurer who would testify to bogus industry custom in order to subvert an unfavorable contract. This rule goes too far, however. Many trades make specific allowances for measurements which would not be understood by outsiders. Bricklayers, lumbermen, and rabbit traders are just a few of the tradespeople who subject commonly understood measurements to an arcane understanding observed only within their industries. In addition, familiar terms may be transformed by statute, local...
- OREGON SUPREME COURT INTERPRETS A SEEMINGLY UNAMBIGUOUS CONTRACT TERM ACCORDING TO THE TRADE USAGE OF THE PARTIES
- If appropriate, a court may rely on trade usage to inform its interpretation of a seemingly unambiguous contract term.
- Appeal from a trial court judgement on the pleadings in favor of the defendant in an action to recover payments withheld under a contract.
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Callano v. Oakwood Park Homes Corp. 53 4 results
- (Collester, J.) No. A party may not recover based on quasi-contract when an alternative remedy based on an actual contract exists. The law does recognize contracts implied by law, also known as quasi-contracts, as a means to prevent unjust enrichment in some situations. Pursuant to this theory, the Intention of the parties is entirely disregarded, and the law imparts an implied promise to pay where one party is enriched by benefits and the retention of the benefits without payment would be unjust. A common thread runs through all such cases, namely, that the plaintiff expected payment from the defendant at the time the benefit was conferred. In other words, there must be some direct relationship or mistake on the part of the person conferring the benefit. In the case at hand, there was no direct relationship between the Callanos (P) and Oakwood (D). The Callanos (P) did not expect remuneration from Oakwood (D) at the time they planted the shrubbery. In this situation, we hold that...
- Case Vocabulary
- ...home which Oakwood was building. Prior to the completion of the house, Julia and Frank Callano (P), the operators of a plant nursery, delivered and planted shrubbery pursuant to a contract with Pendergast. An Oakwood representative had knowledge of the planting. Pendergast failed to pay the Callanos (P) and Pendergast died shortly after the shrubbery was planted. After the death, Oakwood (D) and Pendergast canceled the house sale contract. Shortly thereafter, Oakwood (D) sold the property (including the shrubbery) to a new buyer. The Callanos (P) sued Oakwood (D) in order to recover payment for the shrubbery. Although no contract existed between the Callanos (P) and Oakwood (D), the Callanos (P) argued that Oakwood (D) would be unjustly enriched if it did not have to pay for the shrubbery. The parties agreed that the shrubbery increased the value of the property by $475. The trial court implied a quasi-contract and granted restitution, entering a judgment in favor of the Callanos...
- Restitution is recovery based on preventing unjust enrichment, not any actual promise between parties. Thus, the law implies a promise (a quasi-contract) when it would be unfair for one person to obtain certain benefits without having to pay for them. Based on this framework, it would appear that the Callanos (P) could recover from Oakwood (D), since Oakwood (D) was certainly enriched by the increased value conferred on the land by the shrubbery. However, there are two important twists. First, there must be some relationship or dealings between the party seeking the quasi-contract and the party who was unjustly enriched. Second, where the party seeking the quasi-contract has an alternative remedy available—such as suing the original promisor for breach of contract—he cannot recover based on unjust enrichment. Courts are cautious in employing unjust enrichment theories, especially when alternative recovery based on actual contracts is possible.
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McCloskey & Co. v. Minweld Steel Co. 297 5 results
- (McLaughlin) No. This case is in federal court by way of diversity jurisdiction. Pennsylvania state law applies since the contract was executed there. In that regard, in order for a repudiation to rise to the level of breach of contract, there must be an “absolute and unequivocal refusal to perform or a distinct and positive statement of an inability to do so.” Even if a party does nothing in preparation for performance which is due at a later date, it is not tantamount to a repudiation of the contract. In this case, Minweld (D) simply explained the difficulties that they were having. At no time did they refuse to perform the contract or suggest that performance would be impossible for them. They justifiably looked to McCloskey for help and were denied. In fact, McCloskey (P) was able to procure the necessary steel from two different manufacturers in order to have the work completed. One of their
- Case Vocabulary
- COURT OF APPEALS DISTINGUISHES BETWEEN ANTICIPATORY REPUDIATION AND STATEMENTS EXPRESSING DOUBT ABOUT PERFORMANCE
- Appeal from a district court judgement for the defendant in a breach of contract action.
- ...when McCloskey (P) sent the contract drawings to Minweld (D) In May of 1950. McCloskey (P) wanted to know how long it would take them to supply and erect the steel. Minweld (D) sent him a letter stating that the work would take until November 15th. As early as July, however, McCloskey (P) threatened to fire Minweld (D) if they did not assure him that they would have the necessary materials within thirty days. Minweld (D), unfortunately, was having problems buying steel. None of the major steel companies could fill their orders. In addition, the President of the United States further constricted the domestic steel market due to the outbreak of the Korean War in June. Minweld (D) informed McCloskey (P) of these problems and requested their help in lobbying the General State Authority for the necessary steel. McCloskey (P) took this as a repudiation of Minweld’s (D) ability to perform their obligations and sued them for breach of contract. The district court found for Minweld (D...
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White v. Benkowski 15 8 results (showing 5 best matches)
- The court can give no stronger rationale for its refusal to allow punitive damages than to say that it just isn’t done. The usual reasoning is that contract law does not seek to punish, but to compensate. In this case, in which Benkowski (D) acted out of malice (at least some of the time), the lines between tort and contract seem to blur. Shutting off the water doesn’t fit into one of the traditional tort causes of action, and the only legally recognized “wrong” done was to go against the terms of the contract. This makes the action a contract action, even if it may seem tortious.
- (Wilkie, J.) No. Punitive damages may not be recovered for breach of contract. Punitive damages are permitted in some tort actions to punish, but, with the limited exception of claims for breach of contract to marry, have never been allowed in contract cases. Cases from other jurisdictions hold that punitive damages are unavailable in breach of contract cases without exception. This is true even though the breach, as it was here, is willful.
- White (P) brought suit for breach of contract, asking for compensatory and punitive damages. The trial court instructed the jury on nominal damages, telling the jury that a nominal award was appropriate when the no pecuniary damages had been proven. The court based this instruction on the calculation that the Whites’ (P) loss in proportion to the contract price for their water was approximately twenty-five cents. The jury awarded the Whites (P) compensatory damages of $10 and punitive damages of $2,000. The trial court reduced the award to $1 in compensatory damages and no punitive damages.
- Are punitive damages available in breach of contract cases?
- Case Vocabulary
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- The court refers to the “leading object” rule as an “exception” to the Statute of Frauds. It is probably more accurate to say that a promise that falls within the leading object rule is not a “promise to answer for the debt of another,” and so not subject to the Statute at all. In this case, Old Colony was essentially little more than an intermediary between Central (P) and National (D). Central (P) did the work that National (D) wanted, and National’s (D) payments to Old Colony were meant, at least in part, to pay Central (P).
- Case Vocabulary
- There was evidence in this case that National (D) wanted to complete the theater complex in time for it to be open on Labor Day; that the project was on a tight schedule; and that Central (P) was one of the main subcontractors on the project and had already started the work, and was one of the few, if not the only, subcontractors capable of finishing the work
- .... A promise to pay a debt owed by another is not within the Statute of Frauds if the leading object of the promise is to confer some benefit on the promisor. In such a case, the debt could be considered to be the debt of the promisor. National (D) argues that the agreement is outside the Statute of Frauds only if there was a novation; that is, if the agreement had released Old Colony from its debt and substituted National (D). A novation is not required, however. The “leading object” exception to the Statute of Frauds applies when there is a debt of a third party, there is no novation, and the debt will be terminated by the performance of the promise. An agreement made under those circumstances may be enforceable if the facts and circumstances of the transaction show that the promise was given primarily or solely to serve the promisor’s own interests. It has been recognized that a property owner’s promise to pay subcontractors may, in the appropriate circumstances, fall within...
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Young v. City of Chicopee 387 2 results
- Young (P), as the repairman, seems to have really “burned his bridges” in this case. Would he have been better off if he had the job of erecting the bridge, instead of merely repairing it? Probably not. If a contractor agrees to build something (like a bridge), and a supervening event destroys it prior to completion, then the contractor is bound to rebuild it! The court will not let him use the defense of impracticability because the contractor is still able to rebuild it. Yes, rebuilding will cost money, and yes, the obligation seems unfair. But that’s what insurance is for. The policy reason for such law is that predictability is essential.
- Case Vocabulary
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Shadis v. Beal 251 5 results
- ...fee restraints of the contracts between PLSC and CLS were unenforceable because they counteracted the federal public policy underlying the Fees Awards Act. Congress enacted the Fees Awards Act to encourage private citizens to enforce fundamental rights under the civil rights laws. The Act must be liberally construed to achieve these ends. To a great extent, legal services organizations must allocate limited resources among various possible clients. Of necessity, the potential for fee recovery will be one of the factors considered in the allocation and use of resources for the maximum benefit of the poor. We are not persuaded by the Commonwealth’s contention that the contractual extraction of the financial incentives created by the Fees Awards Act will have no effect on CLS because it is not free to pick its suits on the basis of pecuniary concerns. By enacting the Fees Awards Act, Congress reinvested the judiciary with the discretion to grant attorneys’ fees in civil rights cases...
- Neither private parties nor states can avoid the equitable powers of federal courts.
- Appeal from U.S. District Court ruling voiding contract provisions prohibiting award of attorney fees.
- (the Fees Awards Act). However, contracts between the Pennsylvania Department of Public Welfare (PDPW) and the Pennsylvania Legal Services Center (PLSC) and between PLSC and CLS prohibit CLS from requesting or accepting attorneys’ fees in suits against the state or its employees. The federal district court held that the relevant contractual provisions between CLS and the state were void because they conflicted with the public policy underlying the Fees Awards Act. The state appealed.
- , the Supreme Court of Pennsylvania held that a contract is against public policy if it has “a tendency to injure the public or to be against the public good, or [is] inconsistent with good morals as to the consideration or the thing to be done.”
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Jorgensen v. Pressnall 273 3 results
- Pressnall (D) also contended that any failure to cure the nonconformities was excused because the Jorgensens (P) unreasonably refused to allow further attempts to repair the unit. However, the court noted that a seller does not have an unlimited amount of time to cure the nonconformity. In this case, Pressnall (D) had ample opportunity to cure the defects before the revocation of acceptance occurred, but he did not act seasonably.
- nonconformity must substantially impair the value of the goods to the plaintiff buyer. The existence of substantial impairment depends upon the facts and circumstances in each case. Revocation of acceptance is permissible not only where there is complete impairment, but also where the impairment is substantial but not complete. The relatively small amount of money needed to repair the defect is not necessarily relevant because the impairment of the value to the purchaser may be substantial even though the cost of curing the defect may be relatively small. Thus, in the present case, although the defects in the mobile home probably could have been repaired at a relatively small cost, the Jorgensens (P) were deprived of the benefits of a comfortable home for a substantial period of time as a result of Pressnall’s (D) failure to make timely repairs. The Jorgensens (P) retained a security interest in the mobile home after the revocation of acceptance. This entitled them to continue in...
- Nonconformities are sufficiently serious to justify revocation of acceptance if, under the specific facts and circumstances of the case, the nonconformities substantially impaired the value of the goods to the buyer.
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- While the court’s analysis, upholding the validity of the waiver, appears to be consistent with the relevant statutes, it certainly leaves Rinden (D) in an unenviable position. Rinden (D) was unfortunate enough to foolishly assent to a waiver of defenses (gaining nothing in return),
- Case Vocabulary
- MASTER: A judicial officer appointed to assist courts with specific duties, including making preliminary findings of fact and conclusions of law.
- ...is assigned, the purchaser may validly waive the sales warranties. In order for the waiver to be valid, pursuant to the UCC and Massachusetts law, there must be an agreement by the buyer, who is not a consumer, to waive defenses against an assignee. Furthermore, the assignment must have been made for value, in good faith, and without notice of a claim or defense. In the case at hand, Rinden (D) agreed to the waiver-of-defenses clause, and Rinden (D) did not claim to be a consumer. In addition, the assignment to Chemical Bank (P) was made for value, as the bank paid Intertel over $8,800. There is no basis for concluding that Chemical Bank (P) was not acting in good faith, or that it took the assignment with notice of Rinden’s (D) claim or defense. Moreover, there is no validity to Rinden’s (D) argument that consideration was required to make Rinden’s (D) waiver valid, as modifications under the UCC need no consideration. Finally, this decision is in accord with the general policy...
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Dixon v. Wells Fargo, N.A. 107 6 results (showing 5 best matches)
- Admittedly, the courts of Massachusetts have yet to formally embrace promissory estoppel as more than a consideration substitute. Nonetheless, they have adopted section 90 of the Restatement (Second) of Contracts, which reads, “A promise which the promisor should reasonably expect to induce action or forbearance on the part of the promisee or a third person and which does induce such action or forbearance is binding if injustice can be avoided only by enforcement of the promise.” There is no explicit requirement that the promise giving rise to the cause of action must be so comprehensive to meet the requirements of an offer. Massachusetts’s requirement that a promise be definite can be reconciled with the Restatement’s more relaxed standard. Case law reveals a willingness to enforce even an indefinite promise made during preliminary negotiations where the facts suggest that the promisor’s words or conduct were designed to take advantage of the promisee. Typically, where the...
- Massachusetts courts treat agreements to negotiate as variants of open-ended agreements to agree. The view that such an agreement does not create a binding contract reflects a concern that a promise of further negotiations is too indefinite and too undefined in scope to be enforceable. This is particularly true where the parties have not specified the terms on which they will negotiate. As with open-ended agreements to agree, enforcement of vague agreements to negotiate would risk imposing on parties obligations they had not taken on themselves. In this case, Wells Fargo (D) and the Dixons (P) had not yet contemplated the terms of a loan modification, but they had contemplated negotiations. Yet, Wells Fargo (D) made a specific promise to consider the Dixons’ (P) eligibility for a loan modification if they defaulted on their payments and submitted certain financial information. Importantly, it was not a promise made in exchange for a bargained-for legal detriment. The legal detriment...
- In the present case, Wells Fargo (D) convinced the Dixons (P) that to be eligible for a loan modification they had to default on their payments. It was only because they relied on this representation and stopped making their payments that Wells Fargo (D) was able to initiate foreclosure proceedings. There is no allegation that its promise was dishonest, but Wells Fargo (D) distinctly gained the upper hand by inducing the Dixons (P) to open themselves up to a foreclosure action. Wells Fargo (D) not only should have known that the Dixons (P) would take these steps, but also must have intended that the Dixons (P) do so. Wells Fargo’s (D) decision to foreclose without warning was unseemly conduct at best. In the opinion of this court, such conduct presents an identifiable occasion for applying the principle of promissory estoppel.
- There remains the concern that, by imposing precontractual liability for specific promises made during preliminary negotiations, courts will restrict parties’ freedom to negotiate by reading in a duty to bargain in good faith not recognized at common law. This concern can be effectively minimized by limiting the promisee’s recovery to his or her reliance expenditures. Motion to dismiss denied.
- Wells Fargo (D) was the holder of a mortgage on the Dixons’ (P) home. In June 2009, the Dixons (P) orally agreed with Wells Fargo (D) to take the steps necessary to enter into a mortgage loan modification. As part of this agreement, Wells Fargo instructed (D) the Dixons (P) to stop making payments on their loan. It was contemplated that the unpaid payments would be added to the note as modified. Wells Fargo (D) also requested certain financial information, which the Dixons (P) promptly supplied. Wells Fargo (D) effectively refused to abide by the oral agreement to modify the loan. On or about December 8, 2010, the Dixons (P) received notice from the court that Wells Fargo (D) was proceeding with a foreclosure on their home. The Dixons (P) brought an action for a restraining order to prevent the foreclosure. The Dixons (P) alleged that Wells Fargo’s (D) conduct constituted promissory estoppel.
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Morris v. Sparrow 13 4 results
- CHANCERY: A court of equity, or, collectively, the courts of equity; the system of jurisprudence administered in courts of equity.
- Case Vocabulary
- Appeal from a decree of the chancery court.
- Morris (D) contends that Sparrow’s (P) right to receive Keno was conditioned upon doing a satisfactory job at Morris’s (D) ranch. Both parties were in the chancery court, and the chancellor had a better opportunity to evaluate the testimony regarding the quality of Sparrow’s (P) work. Affirmed.
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Tuckwiller v. Tuckwiller 211 7 results (showing 5 best matches)
- The court should look at a transaction prospectively, from the viewpoint of the parties at the time at the time of the agreement, to determine the fairness of the transaction and the sufficiency of its consideration; once the essential fairness of a contract for real property and the adequacy of its consideration are found, a court of equity can decree specific performance of it.
- The courts are split over the question of awarding specific performance in the event of a change of circumstances after the contract is made. In
- Case Vocabulary
- A COURT SHOULD LOOK AT A TRANSACTION PROSPECTIVELY, NOT RETROACTIVELY, TO DETERMINE ITS FAIRNESS AND THE ADEQUACY OF ITS CONSIDERATION
- Can a court decree specific performance of a contract if it is unfair or has inadequate consideration?
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Campbell Soup Co. v. Wentz 307 5 results
- The trial court denied relief, noting that Campbell’s (P) had not proved what proportion of its carrots was used to make stock, and what proportion was used as identifiable ingredients in soups. The court concluded that Campbell failed to establish that the carrots, “judged by objective standards,” were unique goods.
- There is no reason why a court should be reluctant to grant specific relief when it can be given without supervision of the court or other time-consuming processes. There is considerable authority showing liberality in the granting of an equitable remedy. Affirmed.
- Case Vocabulary
- Although the court agreed with Campbell’s (P) contention that equitable relief was appropriate, enforcement of the contracts was denied as unconscionable. The unconscionable provision was one that prevented Wentz (D) from selling the carrots to anyone else if, due to circumstances beyond the control of either party, Campbell’s (P) could not take possession of them. The court did not analyze this provision in detail, but said it was “carrying a good joke too far.” Although Wentz’s (D) conduct was a breach of the contract, equity would not enforce an unconscionable bargain.
- SPECIFIC PERFORMANCE: The rendering, as nearly as practicable, of a promised performance through a judgment or decree; specifically, a court-ordered remedy that requires precise fulfillment of a legal or contractual obligation when monetary damages are inappropriate or inadequate, as when the sale of real estate or a rare article is involved. Specific performance is an equitable remedy that lies within the court’s discretion to award whenever the common-law remedy is insufficient, either because damages would be inadequate or because the damages could not possibly be established.
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- ADDITUR: (Latin, “it is added to.”) A trial court’s order, issued usually with the defendant’s consent, that increases the damages awarded by the jury to avoid a new trial on grounds of inadequate damages. The term may also refer to the increase itself, the procedure, or the court’s power to make the order.
- Case Vocabulary
- Appeal from an order of the Western District Court of Appeals reversing an order granting Cleveland Chiropractic College’s (D) motion for judgment notwithstanding the verdict, and denying Verni’s (P) motion for additur or a new trial.
- ...required him to be on campus for a certain amount of time every week and that outlined his teaching duties. The contract also set out Makarov’s (D) salary and benefits. There was no clear expression of intent that Makarov (D) was undertaking any duty to benefit Verni (P) or a class of students. The contract also required Makarov (D) to comply with the policies and procedures in the College’s (D) faculty handbook. The handbook required faculty members to treat students with courtesy, respect, fairness, and professionalism. The handbook also stated that students were entitled to expect such treatment. Assuming that the faculty handbook is a part of Makarov’s (D) employment contract, there is still nothing that overcomes the strong presumption that the contract was executed solely for the benefit of Makarov (D) and the College (D). Because Verni (P) was not a third-party beneficiary, he had no standing to raise the breach of contract issue. Standing issues are reviewed by the court...
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- Appeal to the Third Circuit Court of Appeals to review an order of the district court, which compelled a foreign party to submit to arbitration.
- Case Vocabulary
- CONTRACTS ARE FREELY ASSIGNABLE AND COURTS WILL INTERPRET PROVISIONS RESTRICTING ASSIGNMENT NARROWLY SO AS TO FURTHER THE POLICY FAVORING FREE ASSIGNABILITY
- This case illustrates the majority rule regarding the contractual provisions that purport to restrict the assignment of rights accruing under the contract. Although early cases suggested that such terms effected an unlawful restraint on alienation, the rule that prevails today is that restrictions on the assignment of rights are to be construed only as promises. Unless the contracting parties clearly state otherwise, an assignment of rights made contrary to the terms of the contract will give rise only to a claim for damages, and will not act to negate the assignment. Since the damages that would usually flow from an extra-contractual assignment are likely to be minimal, anti-assignment clauses are practically ineffective if they are phrased improperly.
- ...(“Agreements”) with Chemrite Ltd. (D), a South African corporation, giving Chemrite (D) the right to blend and distribute certain lubricants. When Lubritene Ltd. (D) acquired Chemrite (D), Lubritene (D) had assigned to it all of the rights under the Agreements. Bel-Ray (P) was informed of the transfer and it continued to do business with Lubritene (D). Bel-Ray (P) then filed an action against Lubritene (D) in federal District Court in New Jersey, alleging fraud and violations of the Agreements. Bel-Ray (P) sought and was granted an order compelling Lubritene (D) to submit to arbitration on the ground that the Agreements contained valid and enforceable arbitration clauses. Lubritene (D) appealed the order. Lubritene (D) argued that it was not required to submit to arbitration because the rights under Agreements were assigned to Lubritene (D) without Bel-Ray’s (P) consent, which was expressly required by the language of the Agreements. Hence, Lubritene (D) argued, there was no...
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Lawrence v. Fox 391 4 results
- Appeal from the Superior Court affirming trial court judgment for the plaintiff for legal damages.
- Few contract cases are as significant as
- Case Vocabulary
- Holly lent $300 to Fox (D); Holly already owed $300 to Lawrence. So in order to pay back Holly, Fox promised Holly to repay the $300 debt that Holly owed Lawrence (P), directly to Lawrence (P). Fox (D) failed to pay Lawrence (P) the $300, as Fox (D) had promised Holly. Lawrence (P) brought this action against Fox (D). Fox (D) claimed that his agreement with Holly lacked consideration. Fox (D) further claimed that since there was no privity between Fox (D) and Lawrence (P), there was no basis for a suit. The trial court overruled the motion and the jury found in favor of Lawrence (P).
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Sisney v. Reisch 399 6 results (showing 5 best matches)
- State supreme court review of a circuit court decision dismissing the plaintiff’s complaint.
- decision, discussed just prior to this case, conflicts with the conclusion reached here. In fact, the decisions are compatible, and turn on the language used in each of the subject contracts to describe the party or parties to whom the contractual benefits inure. In the first
- Case Vocabulary
- THE COURT REACHED A DIFFERENT CONCLUSION WITH REGARD TO SISNEY’S THIRD-PARTY BENEFICIARY STATUS IN THIS DECISION
- ...a pro se complaint alleging that he was a third-party beneficiary of a settlement agreement between the Department of Corrections (DOC) and a former inmate. The agreement with the other inmate, Heftel, provided that the DOC (D) would provide a kosher diet to all Jewish inmates who requested it, to include prepackaged noon and evening meals that were certified kosher. Sisney (P) alleged that the DOC (D) breached the settlement agreement when they did not provide him with such prepackaged, certified kosher meals. CBM Inc., the new food service provider, served a new kosher diet that was cooked on-site in the prison kitchen. Sisney (P) claimed that the new diet violated the Heftel Agreement and his religious beliefs. The trial court dismissed the suit, concluding that Sisney’s (P) claim was barred by statutory immunity, and that the complaint did not contain sufficient factual assertions supporting an inference that either Secretary Reisch (D) or the Director of Prison... ...court...
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Fairmount Glass Works v. Crunden-Martin Woodenware Co. 71 6 results (showing 5 best matches)
- Justice Hobson follows the trail of correspondence chronologically and with close attention to the language of each letter. Note that this case comes out differently than the earlier
- Case Vocabulary
- KENTUCKY COURT OF APPEALS ENFORCES A CONTRACT BASED ON A DETAILED PRICE QUOTE
- Appeal from a trial court judgment in favor of the plaintiff in a breach of contract action.
- (Hobson) Yes. Ordinarily, a contract does not close until the seller responds affirmatively to an order from a buyer. This order must conform to the terms which the seller has set for the buyer. However, the cases which support this view rely on the language used by the parties in order to determine their intent. In this case, the letters between Crunden (P) and Fairmount (D) gave rise to an enforceable contract as soon as Crunden (P) accepted the terms set forth in Fairmount’s initial reply (D). This is because Crunden’s (P) first letter made it clear that they were interested in an actual price at which they could place their order. Fairmount (D) not only gave them the price quotes, but told them that the prices were available for immediate acceptance. As a result, they opened themselves up to a contract which could be sealed by Crunden’s (P) acceptance. Fairmount (D) claims that Crunden’s (P) letters fail to conform to their stated terms because the language “strictly first-...
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Cosden Oil & Chemical Company v. Karl O. Helm Aktiengesellschaft 333 7 results (showing 5 best matches)
- Cosden Oil & Chemical Company (Cosden) (P) had a contract to supply Karl O. Helm Aktiengesellschaft [gesundheit] (Helm) (D) with two different grades of polystyrene. Helm (D) ordered a large amount of the product in response to an impending shortage due to political problems in Iran, a major petroleum producer. The bulk of Helm’s (D) order was high impact polystyrene. They also ordered a small amount of less expensive general purpose polystyrene. In addition, Helm (D) had four options on future purchases, represented by four confirmation numbers from 04 through 07. Numbers 04 and 06 designated the high impact polystyrene. Cosden (P) began delivery on contract 04 in January of 1979. Shortly thereafter, they began experiencing difficulties which forced them to cancel delivery on contracts 05, 06, and 07. One of Cosden’s (P) plants had to shut down after the Illinois River froze, suspending barge traffic to the plant. Another plant was shut down after a defect was discovered in its...
- . The Texas code does not differ markedly from the UCC. You can tell from looking at the Texas code that the rights of the buyer with regard to recovery and cover closely resemble the expectation measure of damages. Under the expectation measure, buyers are entitled to damages that place them in the position they would have occupied if the contract had been performed as promised. Similarly, a buyer is entitled to damages that reflect the expected price of the goods that he sought to purchase. This purchase price fluctuates, however, with the market. In addition, this measure of damages is subject to the buyer’s mitigation by way of cover. As is the case with the expectation measure, if the buyer does not cover, he suffers the consequences of his failure to mitigate. According to
- measure is easily applied when the breach takes place at or after the time for performance. However, courts have disagreed over when to measure the damages after anticipatory repudiation. In that event, courts have interpreted “the time the buyer learned of the breach” to mean 1) when the buyer learns of the repudiation, 2) when the buyer learns of the repudiation plus a reasonable commercial time, or 3) when performance is due under the contract. Code section 2.610 on anticipatory repudiation, on the other hand, permits buyers to wait a commercially reasonable time before suing for breach. They cannot recover additional damages incurred after that point. Consequently, this Code section marks the outer boundaries of a buyer’s recovery at a commercially reasonable time after learning of the repudiation. Any interpretation of section 2.713 which limited this range of recovery would be at odds with the buyer’s rights under 2.610. Both parties rely on these rights to guide their...
- Case Vocabulary
- COURT OF APPEALS ANNOUNCES THE APPROPRIATE MEASURE OF A BUYER’S DAMAGES RESULTING FROM A SELLER’S ANTICIPATORY REPUDIATION
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Kannavos v. Annino 155 3 results
- (Cutter) Yes. Although a party may be under no duty to disclose information to another, if that party does speak with reference to a specific point of information, then he or she is bound to speak honestly and to divulge all the material facts bearing upon that point within his or her knowledge. The court in
- In this case, partial disclosure results in misrepresentation, and the court finds an exception to the general rule of no liability for nondisclosure where no duty exists. There are several other exceptions to this rule as well. For example, disclosure may be required by statute or regulation. Also, positive action intended to hamper another party’s investigation into the facts of a transaction can result in liability for misrepresentation. Another exception involves a party making a statement in good faith, but then later learning facts that prove the earlier statement was not true, or having that earlier statement rendered false by subsequent events. Such party would have to disclose the new information if he or she knew that the other party was acting in reliance upon that original statement.
- ...gross $9,600 yr. In lg. single house, converted to 8 lovely, completely furn. (includ. TV and china) apts. 8 baths, ideal for couple to live free with excellent income. By apt. only. Foote Realty.” Apostolos Kannavos (P) contacted Foote, who gave him (P) income and expense figures supplied by Annino (D). Kannavos (P) contracted to buy the property. Annino (P) and Foote knew that Kannavos’s (P) reason for buying the property was to rent the apartments later. Kannavos (P) was unaware of any zoning or building permit violations, and would not have bought the property if he (P) had known of any such violation. The property was worth substantially more if operated as an apartment building than if kept as a single-family dwelling. Shortly after the sale, the city started legal proceedings to stop the non-conforming use of property. Kannavos (P) brought a bill in equity against Annino (D) to rescind the purchase. The trial court overruled a demurrer, and granted a rescission...
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Feinberg v. Pfeiffer Co. 43 2 results
- This case provides interesting insight into the doctrine of promissory estoppel. Feinberg’s (P) previous work, plus her continuation of employment after Pfeiffer (D) made the promise, was not sufficient consideration to form a binding contract. However, Pfeiffer’s (D) promise clearly was made with the intent to induce reliance, and Feinberg (P) did retire in detrimental reliance on the promise. The third prong of the promissory estoppel analysis—that the promise is binding if injustice can be avoided only by enforcement of the promise—seems to be an afterthought. The court essentially holds that, where a promisor intends to induce
- Anna Sacks Feinberg (P) was employed by Pfeiffer Co. (D) for 37 years. In view of Feinberg’s (P) long service, Pfeiffer (D) promised to pay Feinberg (P) $200 per month for life whenever Feinberg (P) decided to retire. Feinberg (P) continued to work for Pfeiffer (D) for one-and-one-half years, at which point she decided to retire. Pfeiffer (D) paid Feinberg (P) $200 per month for several years. However, when new management took the helm at Pfeiffer (D), they decided not to pay Feinberg (P) any more. Feinberg sued under two alternative theories: (1) that her continued employment and eventual retirement was a bargained-for exchange for the future retirement benefits; and (2) that Pfeiffer’s (D) promise was enforceable because it induced Feinberg (P) to rely thereon. The trial court entered a judgment for Feinberg (P), and Pfeiffer (D) appealed. On appeal, the Appellate Court held first that there was no consideration sufficient to create a binding contract. The Appellate Court then...
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Hicks v. Bush 265 7 results (showing 5 best matches)
- (Fuld) Yes. Parol testimony is admissible to prove a condition precedent to the existence of a contract if the condition does not contradict the express terms of the contract. The question in this case is whether the condition contradicts the contract. It does not. In fact, there is no mention in the contract of the need to raise funds to support the merger. Hicks (P) claims that the condition contradicts a term which would annul the merger if the new corporation does not accept any of their stock within 25 days. However, these conditions can coexist without negating each other. They are simply complementary conditions which bear on the viability of the merger. The oral condition, in particular, is not the sort of condition which would be included in a written agreement to which the public has access. Consequently, the trial court did not err in admitting evidence of the extra condition. Bush (D) was perfectly justified in not transferring their stock until it was satisfied....
- Case Vocabulary
- HOLDING COMPANY: As it sounds, a holding company can be used to hold the stock of other companies. In this case, the holding company was probably a form of security for the two merging companies—a neutral entity to hold their stock during the merger process.
- NEW YORK COURT OF APPEALS APPLIES THE PAROL EVIDENCE RULE TO A CONDITION PRECEDENT
- Appeal from a trial court judgement for the defendant in a breach of contract action.
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- In 2002, Sumerel (P), Berzin (P), Dicke (P), and Kaufman (P) obtained a verdict of approximately $1.3 million in a products liability action against Goodyear (D). The verdict included “other costs and losses” incident to having to repair and replace heating systems. The jury found that Goodyear (D) was responsible for 36% of such “other costs and losses” suffered by Berzin (P) and Dicke (P), and 48% of those incurred by Sumerel (P) and Kaufman (P). Sumerel (P) and the others appealed the court’s decision not to award prejudgment interest with respect to the “other costs and losses,” and Goodyear (D) appealed, among other things, the award of the “other costs and losses.” The award was upheld on appeal, and the case was remanded to calculate the correct amount of prejudgment interest. After the remand, counsel for Goodyear (D) and counsel for Sumerel (P) and the others discussed a compromise on the dates on which the interest began to accrue. Goodyear’s (D) counsel proposed accrual...
- ...of the mistake or his fault caused the mistake. A party bears the risk of a mistake when the risk is allocated to that party by agreement of the parties, or if that party is aware, at the time the contract is made, that he has only limited knowledge regarding the facts to which the mistake relates but treats that limited knowledge as sufficient, or the risk is allocated to him by the court. There was no enforceable agreement here, because the e-mail and charts sent by Brooks did not constitute an offer. The charts were sent in a context in which the parties were attempting to reconcile their mathematical calculations, and they included qualifying language. Furthermore, they were accompanied by language that asked for further discussion, not an acceptance. An offeree cannot snap up an offer that is, on its face, manifestly “too good to be true.” The jury had allocated fault, and the parties had agreed on the accrual dates. All that was left was a simple calculation. When Sumerel’s...
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- The court here went into a lot of detail regarding weighing the cost and benefits of damages versus an injunction. The appellate court was comfortable that the district court at least had this analysis in mind when granting the injunction and did not question it further. However, the Seventh Circuit found that the calculations of damages were at best “fraught with uncertainty.” The result may have been different if the contract was for a shorter term, or involved a different industry. Nevertheless, judges do engage in such balancing and use their discretion. The goal is to determine if the plaintiff’s damages remedy is inadequate.
- Case Vocabulary
- Walgreen (P) is a discount chain store that has a pharmacy. As part of its lease with Sara Creek (D), Sara Creek (D) agreed not to lease a space in the mall to another store operating a pharmacy. In 1990, fearful that its largest tenant was about to close its store, Sara Creek (D) Informed Walgreen (P) that it intended to buy out that tenant and install in its place a “deep discount” store that would contain a pharmacy. Walgreen (P) sought an injunction against Sara Creek (D) until its contract expired in ten years. The Court entered a permanent injunction against Sara Creek (D).
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Wood v. Lucy, Lady Duff-Gordon 39 5 results
- One of the fundamental bases of contract law is that the parties should be free to establish the terms of the contract. Ordinarily a court will not interfere and create implied promises or duties. For this reason, the holding of the Court of Appeals of New York in this opinion is open to some criticism. Obligations should be created voluntarily by contracting parties, not imposed by courts. Although this opinion deviates from the typical “freedom of contract” analysis, it is nevertheless supported by the U.C.C. According to § 2–306, exclusive dealing contracts are valid and, unless otherwise agreed, impose an obligation on the seller to use
- Case Vocabulary
- COURT IMPLIES DUTY TO MAKE REASONABLE EFFORTS IN AN EXCLUSIVE DEALING ARRANGEMENT
- May a court imply a promise to make reasonable efforts in an exclusive-dealing arrangement?
- (Cardozo, J.) Yes. A court may imply a promise to make reasonable efforts in an exclusive-dealing arrangement. Indeed, Wood (P) never expressly promised to use reasonable efforts to endorse Lucy’s (D) products or to market her designs. However, such a promise may be fairly implied by the court. Lucy (D) gave an exclusive privilege to Wood (P), and his acceptance of the exclusive agency was an assumption of its duties. To hold otherwise would be to undermine the purpose of the agreement. Lucy’s (D) sole compensation for the grant of exclusive agency was to receive one-half of all profits. He agreed to account monthly for all moneys received, and to take out the necessary patents, copyrights, and trademarks. Unless Wood (P) gave some reasonable effort, Lucy (D) could never get anything. In line with the intention of the parties, we determine that Wood (P) made an implied promise, and thus that the contract was not lacking in mutuality of obligation. Reversed.
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Oglebay Norton Co. v. Armco, Inc. 115 7 results (showing 5 best matches)
- .... The primary price mechanism was for Armco (D) to pay the regular net contract rates as recognized by the leading iron ore shippers in that season. If there were no regular net contract, under the secondary price mechanism, the parties were required to mutually agree upon a rate, taking into consideration the rate being charged by the leading independent vessel operators. During the next 23 years, the parties modified the contract four times, requiring substantial capital investment by Oglebay (P) to meet Armco’s (D) requirements. Until 1983, the parties established the shipping rate by referring to a rate published in Skillings Mining Review. In 1984, after a downturn in the iron ore industry, the parties negotiated a mutually satisfactory rate. However, after that the parties could not agree on a rate. Oglebay (P) filed an action for declaratory relief asking the court to declare the contract rate to be the correct rate or, in the absence of a contract rate, to declare a...
- The court notes here that equity is available when legal damages are too speculative, recovery of monetary damages is inadequate to compensate the aggrieved party, and the parties intend to be bound by the contract. While ordinarily price is a material term that would make a contract void if it is missing, here the parties had been doing business pursuant to their contract for about twenty-five years. If the two pricing mechanisms had failed back in 1957, the court likely would not have ordered specific performance, but would have awarded damages for breach of contract and declared that the contract was no longer enforceable. The parties knew they left the price out of the contract, but formulated two ways in which they would determine the price. Thus, they agreed to agree later about the price. The common law rule is that an agreement to agree does not result in a binding contract. Generally, because the parties intend to fill the gap themselves, the court may not use a gap-filler....
- Case Vocabulary
- COURT CAN DETERMINE CONTRACT PRICE WHEN PARTIES CAN’T AGREE
- If parties to a contract have not agreed on the price, the court can set a price so long as the parties intend to be bound by the contract.
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- The district court properly amended the judgment entered in Structural’s (P) favor. The jury’s award gave Structural (P) profits corresponding to 6,960,276 pounds of large-tow carbon fiber when at most Structural (P) was entitled to buy 3,960,276 pounds. Therefore, the district court acted within its discretion when it determined that the jury’s award under both counts was duplicative and altered the judgment accordingly. Affirmed.
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Wright v. Newman 45 1 result
- Newman (P) brought an action against Wright (D) to recover child support for her daughter and son. Wright (D) admitted his paternity only as to Newman’s (P) daughter. DNA testing showed that he was not the father of Newman’s (P) son. The trial court ordered Wright (D) to pay child support for both children. The court ordered support for Newman’s (P) son based on Wright’s (D) actions in listing himself on the child’s birth certificate, giving the child his surname, and establishing a parent-child relationship. The trial court held that Wright (D) had thereby allowed the child to consider Wright (D) as his father and in so doing deterred Newman (P) from establishing the paternity of the child’s biological father. The child was thus denied an opportunity to establish a parent-child relationship with his biological father.
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Chapter Six. Limits on the Bargain and Its Performance 205 7 results (showing 5 best matches)
- The court should look at a transaction prospectively, from the viewpoint of the parties at the time at the time of the agreement, to determine the fairness of the transaction and the sufficiency of its consideration; once the essential fairness of a contract for real property and the adequacy of its consideration are found, a court of equity can decree specific performance of it.
- After a music promoter signed a mandatory form contract requiring arbitration before a biased panel and then loses his case, he sues to void the contract as unconscionable.
- The basic test of unconscionability of a contract is whether under the circumstances existing at the time of making of the contract, and in light of the general commercial background and commercial need of a particular case, clauses are so one-sided as to oppress or unfairly surprise one of the parties.
- A contract which is harsh, oppressive, and unconscionable may still be enforceable at law, but it is within a court’s discretion to not enforce equitable remedies against a party who suffers from such harshness and oppression under the contract.
- It is not the function of the court to interfere in the contractual relationship of two ordinary businessmen dealing at arm’s length by trying to determine the validity of the contract on the basis of the adequacy of the consideration.
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Ortelere v. Teachers’ Retirement Bd. 139 4 results
- (Jasen) The kind of detailed, explicit, and extremely pertinent questions posed by Mrs. Ortelere in her letter to the Board (D) reveal a mind fully in command of the more prominent features of the Retirement System. Certainly it could not be said that she possessed sufficient capacity to write this letter, yet lacked the capacity to understand the answers to her questions. The evidence shows that Mrs. Ortelere made this decision to increase her monthly benefit payments was based on a need for a higher income to support two people, namely her husband (P) and herself. Her decision was both a rational and necessary one. Further, there is no evidence to indicate that Mrs. Ortelere had any indication or warning that her life expectancy would be reduced by her condition.
- The court here describes the two main tests for mental capacity. The first, known as the cognitive test, is the traditional one. This test focuses on the question of whether the party in question lacked the capacity to understand the nature and consequences of the particular contract. This test, though criticized as unscientific and too ambiguous to be accurately defined, is nonetheless almost universally accepted by the courts. The second test, known as the volitional test, weighs the question of whether a mentally III person has effective control of his or her actions. The
- Case Vocabulary
- ...and select option four-a on both the pension and annuity. . .” Soon afterwards, she borrowed the maximum amount possible from the fund, $8,760. She also made an irrevocable election to receive the maximum benefits of $450 per month during her lifetime. She made these changes without informing her husband (P). As a result, an earlier plan by which Mrs. Ortelere would have received $375 per month, and her husband (P) would have taken the remaining fund when she died, was revoked. This new plan left Mr. Ortelere (P) and their two grown children with no benefits upon her death. Mrs. Ortelere died of cerebral arteriosclerosis two months later. Mr. Ortelere (P) sued to set aside his (P) wife’s modification of the retirement plan, claiming she was mentally incompetent. Her psychiatrist testified that victims of involutional melancholia “can’t think rationally. . .” and that “[e]verything is impossible [for them] to decide.” The trial court judged for Mr. Ortelere (P), and the Board (D)...
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Watkins & Son v. Carrig 147 4 results
- ...) agreed through a written contract to excavate a cellar for Carrig (P) for a particular price. The contract provided that “all material” was to be removed from the site, and there was no qualification as to the term “to excavate.” After work began, the workers discovered solid rock at the digging site. The manager for Watkins & Son (P) informed Carrig (D) of this. A meeting between the manager and Carrig (D) followed, and, at Watkins & Son’s (P’s) Insistence, it was orally agreed that Watkins & Son (P) would remove the rock at a higher unit price. This new price would be about nine times greater than the unit price which served as the basis for the gross amount to be paid under the original written contract. The rock eventually amounted to two-thirds of the material that had to be excavated. A referee found that the oral agreement “superseded” the written contract, and thus reported a verdict for Watkins & Son (P). Carrig (D) took exception to the acceptance of this report and a...
- Case Vocabulary
- ...the written contract as though it never existed, and the oral contract was the only one made. Carrig (D) agreed to the new price for excavating the rock, and Watkins & Son (P) proceeded on the strength of that promise. Carrig (D) granted relief for Watkins & Son (P) from an unforeseen burden tied to the contract, and received reasonable value for the higher price he (D) paid. The problem is whether this grant of relief constituted a valid contract. The basic rule is that a promise without consideration is invalid. From that rule comes the idea that a promise to pay for what the promisor already has a right to receive is invalid. Watkins & Son (P) claims that the original contract was rescinded by mutual consent, and that the idea that Carrig (P) promised to pay for performance of a pre-existing duty is unfounded. Granted, an agreement for rescission is still an agreement, and as such requires consideration. There is, however, an important distinction between a regular promise...
- This case demonstrates an exception to the pre-existing duty rule. The Restatement Second has taken on the spirit of this exception, having been influenced by the terms of
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Dave Gustafson & Co. v. State 347 2 results
- The liquidated damages for government contracts described here have widespread practical effects. As at least one scholar has noted, high levels of liquidated damages can make contractors and others who perform construction work for the government rather “jittery.” For instance, the potential threat of significant penalties for delays in performance can leave companies open to pressure from labor groups. Unions and other workers’ organizations can employ considerable leverage in persuading employers to comply with their demands, whether such demands are reasonable or not. Such negotiations for benefits or other working conditions between labor and individual government contractors can, in turn, affect other contractors. Businesses outside these isolated transactions may feel pressured to give the same benefits to their employees or face the same type of labor pressure, and thus may not have the security to take on lucrative public projects.
- Dave Gustafson & Co. (Gustafson) (P) contracted with the State (D) to surface a new state highway which ran parallel to an older road. Gustafson (P) was to receive $530,724.14 for the work. The State (D), however, withheld $14,070 as liquidated damages after completion was delayed by 67 days. The contract included a graduated scale of liquidated damages per day. Under this scale, a contract in an amount from $500,001 to $1,000,000 would be accompanied by damages of $210 per day. This rate over 67 days amounted to $14,070. When Gustafson (P) sued for this remaining amount, the trial court upheld the State’s (D) claim. Gustafson (P) appealed.
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- A court won’t grant a party additional costs other than that agreed in the contract if the party relies on a theory of quantum meruit (under this equitable doctrine, the court will imply a promise to pay for labor and goods if a party stands to unjustly enrich himself on the labor and gods of another) and the party cannot show that its contract performance was impractical.
- Even though there is an existing impracticality, as opposed to a supervening one, at the time of entering the contract, the court can excuse a buyer from his duties if he can’t perform them in an ordinary manner and without paying prohibitive cost.
- If a seller fails to take all due precautions to ensure a steady supply of raw materials to complete his goods, then the court will not excuse his performance when such raw materials run out.
- Even though performance isn’t Impractical, a court can still excuse performance on the basis of frustration of purpose as long as there is a non-existence of events which both parties considered as the foundation of the contract.
- A court can excuse performance on the basis of frustration of purpose only if the contract didn’t allocate to one of the parties the risk of a supervening event.
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Transatlantic Financing Corporation v. United States 371 7 results (showing 5 best matches)
- A court won’t grant a party additional costs other than that agreed in the contract if the party relies on a theory of quantum meruit (under this equitable doctrine, the court will imply a promise to pay for labor and goods if a party stands to unjustly enrich himself on the labor and gods of another) and the party cannot show that its contract performance was impractical.
- Case Vocabulary
- UNDER A THEORY OF QUANTUM MERUIT A COURT WILL NOT GRANT ADDITIONAL EXPENSES OVER AND ABOVE WHAT WAS AGREED TO IN A CONTRACT
- Will a court grant a party additional costs other than that agreed in the contract if the party relies on a theory of quantum meruit and the party cannot show that its contract performance was Impractical?
- , the court stated that foreseeability alone doesn’t necessarily mean that a party has assumed the risks. However, it is one factor that the court will consider in deciding whether there was legal impossibility. Consider the Restatement (Second), Introductory Note to Chapter 11: “The fact that the event was unforeseeable is significant as suggesting that its nonoccurrence was a basic assumption. However, the fact that it was foreseeable, or even foreseen, does not, of itself, argue for a contrary conclusion, since the parties may not have thought it sufficiently important a risk to have made it a subject of their bargaining.”
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Hochster v. De La Tour 293 3 results
- Case Vocabulary
- ...question in this case is whether Hochster (P) can maintain an action for damages due to the breach of a contract for which performance was not yet due. De La Tour (D) argues that Hochster (P) cannot sue until the date for performance passes. Until then, Hochster (P) must remain ready and willing to perform on the contract. However, this is not the law. Actions can be brought in many other circumstances where contracts are breached, although performance was due at a future date. A party can face liability for breaching a marriage contract before the wedding takes place, a party can be sued for breaking a prospective lease agreement, and a party can be sued for selling goods which he promised to deliver to another buyer at a later date. There is a reasonable explanation that binds these examples. When two parties agree to a contract that will not be performed until some future date, they impliedly promise to avoid actions which would be inconsistent with their agreement....
- Appeal from a trial court jury verdict for the plaintiff in an action for assumpsit.
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McKenna v. Vernon 289 6 results (showing 5 best matches)
- Case Vocabulary
- PENNSYLVANIA SUPREME COURT IMPLIES WAIVER OF A CONDITION FROM THE CONDUCT OF THE PARTIES
- Appeal from a trial court judgment for the plaintiff in a breach of contract action.
- WAIVER: A party may waive the enforcement of a condition. As above, conduct alone may be sufficient to constitute waiver. When in doubt, courts will lean towards enforcing the overall contract at the expense of a condition whose waiver may be implied.
- A party who, by its behavior, waives the obligation that a condition places on the other party, cannot later complain that the contract is void for failure of that condition. This concept is referred to as estoppel. Estoppel precludes a party from making a particular claim due to its own conduct. For instance, once a condition has been waived, it can only be reinstated if the other party has not relied to its detriment on the waiver. In this case, the builder presumably continued on with his work under the assumption that the architect’s certificate was no longer required for payment. It would be unfair to let Vernon (D) out of the contract, since he induced McKenna’s (P) reliance by ignoring the conditions for payment.
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Strong v. Sheffield 33 4 results
- Case Vocabulary
- Benjamin Strong (P) sold his business on credit to Louisa Sheffield’s (D) husband, Gerardus. Strong (P) sought a promissory note from Gerardus for this antecedent debt, and Strong (P) wanted Louisa (D), his niece, to endorse the note as security for the debt. Strong (P) promised that he would not put the note away, but rather that he would keep it until such time as he would demand payment. Strong (P) did not promise to forbear on collection for any specific period of time. Based on this promise from Strong (P), Louisa (D) endorsed the note. After the note was executed, Strong (P) waited for two years before demanding payment. Louisa (D) refused to satisfy her undertaking, and Strong (P) sued for payment on the note. The trial court granted a judgment for Strong (P), and the New York Supreme Court reversed. Strong (P) appeals.
- ...to take some action for an unspecified period of time does not constitute sufficient consideration to create a contract. Gerardus’ debt, secured by the promissory note, was already past due. The only possible consideration for Louisa’s (D) endorsement was that Strong (P) promised to forbear the collection of the debt, and that this promise was followed by a forbearance of two years. However, at the time of making the promise, Strong (P) did not promise to forbear for any specific period of time. The note did not extend the period for paying the debt, as the note was payable on demand at any time. Gerardus and Louisa (D) may have hoped that Strong (P) would forbear, and indeed he did forbear for two years. However, there was no agreement to forbear. Consideration must be tested by the agreement itself, not by what actually occurred under the agreement. This was a case of mutual promises, with no consideration exchanged for Louisa’s (D) endorsement. Accordingly, the endorsement on...
- Although a contract can be formed with a promise exchanged for a promise, both promises must be valid. This case provides an example of an illusory promise. Strong (P) made no promise of any substance to the Sheffields (P), because he could demand payment on the note at any time. Likewise, Strong’s (P) “promise” to forbear was not sufficient consideration
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- Case Vocabulary
- Judgment of district court in breach of contract action, following entry of a preliminary injunction against defendant.
- because of the increase of the market price of foreign crude oil, the court finds that the tendered defense has not been proved. On this record the court cannot determine how much it costs Gulf (D) to produce a gallon of jet fuel for sale to Eastern, whether Gulf (D) loses money or makes a profit on its sale of jet fuel to Eastern, either now or at the inception of the contract, or at any time in between. The party undertaking the burden of establishing “commercial impracticability” by reason of allegedly increased raw material costs undertakes the obligation of showing the extent to which he has suffered, or will suffer, losses in performing his contract. The record here does not substantiate Gulf’s contention on this fundamental issue. Gulf (D) transfers oil from one subsidiary to another. Each of the various subsidiaries charges the buyer subsidiary different prices. As a result, Gulf (D) is able to shift the tax consequences of the profits it earns from one subsidiary to...
- ” It goes on to say that “a severe shortage of raw materials or of supplies due to a contingency such as war, embargo, local crop failure, unforeseen shutdown of major sources of supply or the like, which causes a marked increase in cost is within the contemplation of this section.” On the surface, it seems that Gulf’s (D) position fell squarely within the contemplation of the UCC and it was entitled to the defense. Ultimately, however, Gulf (D) lost because of a failure of proof; it could not prove its increased cost to supply Eastern (P). Moreover, due to its own efforts to alter price controls, the court decided that the risk of a change in such controls was foreseeable by Gulf (D) and, accordingly, should have been addressed in the contract. The law was on Gulf’s (D) side; the facts were not.
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- Case Vocabulary
- Appeal from judgment on an action for court declaration excusing performance.
- ...party to raise the contract price from time to time according to provisions of the contract) such that Carbon (D) could raise the price. Finally, the contract contained a force majeure clause which excused NIPSCO from accepting and paying for Carbon’s (D) coal for “any cause beyond [its] reasonable control. . . .which wholly or partly prevented. . .the utilizing. . .of the coal.” About five years after NIPSCO (P) and Carbon (D) entered the contract, a state commission regulating NIPSCO (P) issued an order preventing NIPSCO (P) from shifting its (P) costs to its (P) customers. So when NIPSCO (P) entered a long-term, nonnegotiable, restrictive contract with Carbon (D), it (P) bore the risk of being unable to purchase at lower prices elsewhere and not being able to shift the costs to its (P) customers. NIPSCO (P) discovered that Carbon’s (D) competitors were offering lower prices. NIPSCO (P) wanted to exercise its force majeure clause and sought excuse of performance from the court...
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- Case Vocabulary
- ...(P and D) executed a contract by which Laredo (P) agreed to buy all of H & H’s (D’s) cattle hide production from March through December, 1972. On March 3, 1972, Laredo (P) contracted to sell all the hides it would purchase from H & H (D) to a Mexican tannery. A disagreement over payment for the second shipment resulted in H & H (D) stating it (D) would deliver no more hides. [The appellate court held that H & H’s (D’s) refusal to deliver more hides was unjustified as it amounted to a breach by repudiation of the contract. Thus, Laredo (P) was not obligated to fulfill the remaining months of the contract.] To fulfill its (P’s) contract with the tannery, Laredo (P) was forced to purchase hides on the open market in substitution for the H & H (D) hides. Unfortunately for Laredo (P), the market price for cattle hides had steadily increased after Laredo (P) contracted with H & H (D). Laredo’s (P’s) total additional cost of purchasing substitute hides from other suppliers was...
- ...is presumed to be proper. The seller bears the burden of proof to show that “cover” was not properly obtained. Here, H & H (D) offered no evidence to counter this presumption. The difference between the contract price and the cover price for the steer hides has thus been shown to be $134,252.82; the difference for the bull hides has been shown to be $8,001.66. The total contract/cover difference, then, is $142,254.48. Further, Laredo (P) offered evidence of $1,435,77 in increased transportation costs, and $2,013.18 in increased handling charges. These costs are certainly recoverable as incidental damages where a buyer elects to “cover.” There is no evidence that Laredo (P) tried to increase its damages after H & H (D) refused to deliver the contracted hides. By purchasing the other hides, Laredo (P) acted promptly and in a reasonable manner. The record does not support the trial court’s decisions of fact and of law. Laredo (P) is entitled to $152,960.04 in damages plus interest...
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Owen v. Tunison 69 5 results
- Case Vocabulary
- SUPREME COURT OF MAINE DISTINGUISHES BETWEEN AN OFFER TO CONTRACT AND AN OFFER TO NEGOTIATE
- [SPOCK: A half-Vulcan, half-human member of the crew of the Starship Enterprise capable of performing the creepy Vulcan mind meld. This would be a very useful device for determining the subjective intent of the parties to a contract if courts took this into account—which they don’t.]
- (Barnes) No. In order for this contract to be valid, there must be an actual offer to sell the property. In this case, Tunison (D) did not offer to sell his real estate. At best, his letter indicated a willingness to negotiate towards a potential sale. Judgement for Tunison (D). [You’re a man of few words, Justice Barnes.]
- It can be difficult to determine whether a party’s communication is a potentially binding offer to enter into a contract. The general rule is that a communication is an offer if the person receiving the communication would be justified in thinking that he or she had the power to bind the other party to a legally enforceable agreement. In this case, the letter is phrased negatively—it would not be possible. . .unless.” This language implies that Tunison (D) is not completely committed to the idea of selling the property. In addition, Owen (P) initiated the communication between the parties. As a result, a more affirmative response from Tunison (D) should be required before binding him to a contract.
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Howe v. Palmer 151 3 results
- Four factors are usually present in a case of undue influence: an (1) unnatural disposition is made (2) by a person susceptible to undue influence to the advantage of someone (3) with an opportunity to exercise undue influence, and (4) who in fact has used that opportunity to procure the contested disposition through improper means.
- In these highly case-specific inquiries, the party challenging the validity of the document on the ground that it was procured and executed as a result of undue influence bears the burden of proving the allegation by a preponderance of the evidence. This burden shifts when a person in a fiduciary relationship with the grantor or principal benefits from the transaction.
- ...documents such as deeds, wills, and contracts can be avoided by showing that they were procured by means of undue influence. Undue influence creates a situation where the victim’s own free will is destroyed or overcome such that what he does, his action, is contrary to his true desire and free will. Any species of coercion, whether physical, mental or moral, which subverts the sound judgment and genuine desire of the individual, is enough to constitute undue influence. Ultimately the nature, extent, or degree of the means employed is inconsequential so long as it is sufficient to substitute the dominating purpose of another for the free expression of the wishes of the person signing the instrument. Any influence to be unlawful must overcome the free will and eliminate unconstrained action. Four factors are usually present in a case of undue influence: an (1) unnatural disposition is made (2) by a person susceptible to undue influence to the advantage of someone (3) with an...
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Hadley v. Baxendale 339 4 results
- Case Vocabulary
- NOLLE PROSEQUI: A formal declaration that a prosecutor or plaintiff will “no longer prosecute” a particular case.
- Consequential damages are affected by the circumstances under which the contract was made, such as the amount of information provided by one party to another. The court here said the loss of profits for the mill could not have been in Baxendale’s (D) “contemplation” because he (D) did not know if Hadley (P) had an extra mill shaft, if the mill engine was otherwise faulty, etc. This “contemplation” requirement imposed on the recovery of breach of contract damages was more severe than the test for substantial or proximate cause used in actions for tort or breach of warranty. Shortly after the
- ...away from such parties by presuming otherwise. Here, the Hadleys’ (P) servant only told Baxendale’s (D) clerk at the time the contract was made that the mill shaft was broken, and that the Hadleys (P) operated that mill. It is unclear how these circumstances could reasonably show that the mill’s profits would be stopped if the delivery of the shaft to the manufacturer were unreasonably delayed. Baxendale (D) had no idea of whether the Hadleys (P) had an extra shaft at the mill, or whether the steam engine was otherwise defective, etc. Ordinarily, a miller sending an engine shaft to a third person by a common carrier would not result in a loss of profits and a stopped mill. The special circumstances here that would lead to such a situation were never communicated to Baxendale (D). Therefore, the loss of profits in this case cannot reasonably be considered such a consequence of the breach of the contract as could have been fairly and reasonably contemplated by both parties...
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Lefkowitz v. Great Minneapolis Surplus Store 73 6 results (showing 5 best matches)
- Case Vocabulary
- MINNESOTA SUPREME COURT BINDS STORE TO AN ADVERTISED, FIRST-COME FIRST-SERVED PRICE
- Appeal from a trial court judgement for the plaintiff in a breach of contract action.
- (Murphy) Yes. The Store (D) correctly states the general rule that advertisements are merely offers to negotiate for the sale of an item at the advertised price. However, when an offer is clear, definite and explicit, and leaves nothing open to negotiation, then the advertiser can be bound by the acceptance of a prospective purchaser. In this case, the Store’s (D) advertisement fits this description. Nor can they use their house rule to escape liability. They cannot modify the advertised offer after it has already been accepted. Judgement affirmed.
- Justice Murphy believed that the “First Come-First Served” language was definite and explicit enough to create a valid, binding offer. Recall that an offer is valid only if the offeree is justified in thinking that he has the power to bind the offeror to a legally enforceable agreement. An open-ended offer, like those in most advertisements, does not justify this belief because the store might sell out of the advertised product before the buyer gets there. However, in this case, the Store (D) identified the first person there as the person who could accept. Lefkowitz (P) was justified in thinking that the Store (D) must sell him the fur coat if he was the first in line The Store’s (D) secret condition that it would sell only to women is indeed invalid.
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Gibson v. Cranage 263 5 results
- Case Vocabulary
- MICHIGAN SUPREME COURT GRANTS COMPLETE DISCRETION TO A PARTY WITH APPROVAL UNDER A SATISFACTION CLAUSE
- Appeal from a trial court judgement for the defendant in an action in assumpsit.
- Gibson (P) offered to have an enlarged photograph made of Cranage’s (D) deceased daughter. He told Cranage (D) that he would not have to pay for the enlargement if it was not “perfectly satisfactory to [him] in every particular.” As it turns out, Cranage (D) was not happy with the finished photograph and refused to accept it. Gibson (P) sent it back for refinishing and presented it to Cranage (D) a second time after it returned. Cranage (D) refused to look at the photograph and, again, refused to accept it. Gibson (P) subsequently brought an action in assumpsit for payment on the contract. The trial court ruled for Cranage (D). Gibson (P) appeals.
- This is a rare contract case in which the reasonable man standard does not apply because of the personal nature of the contract. There is nothing by which to judge Cranage’s (D) satisfaction with a deeply personal item like a portrait of his deceased daughter. On the other hand, a satisfaction-guaranteed contract that takes place in a commercial setting might be subject to an implied range of reasonableness, since there will be objective standards by which to measure the quality of the goods. Ordinarily, this type of guarantee is referred to as a satisfaction clause. This kind of agreement can have an enormous impact on the allocation of risk between the parties by requiring one of them to run the risk of forfeiture.
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White v. Corlies & Tift 77 5 results
- Case Vocabulary
- ..., given the usual course of events, and be communicated to the offeror within a reasonable amount of time. For instance, an offer which is made by mail becomes binding when an acceptance is mailed, even though the offeror will not learn of the acceptance until it is received [the mailbox rule]. The importance lies in an affirmative act which is recognizable as an acceptance of the offer. As a result, an offeree’s subjective desire to accept an offer will not be binding. In this case, White (P) received a communication from Corlies (D) which was an offer. This offer took the form of an acceptance of his bid and a request that the work start immediately and be completed within two weeks. White (P) had to accept this offer in order to create a binding contract. Indeed, he did accept the offer in his mind [perhaps the voices in his head weren’t speaking loud enough for anyone else to hear]. He also began working on the job. However, Corlies (D) could not distinguish White’s (P)...
- NEW YORK COURT OF APPEALS REQUIRES ONLY A REASONABLE MEANS OF ACCEPTANCE OF AN OFFER ABSENT SPECIFICATION OF MANNER OF ACCEPTANCE BY THE OFFEROR
- Appeal from an affirmance of the trial court’s judgement for the plaintiff in a breach of contract action.
- ...) asked White (P), a builder, for an estimate on renovating a suite of offices for them. White (P) gave them an estimate, which he later signed and returned to Corlies (D) after approving some changes in their specifications. Corlies (D) sent White (P) a note telling him to start the job and giving him two weeks to finish it. White (P) never responded to this note. The next day, it was countermanded by a second note from Corlies (D) canceling White’s (P) participation in the job. White (P) had already begun work, however, buying lumber for the job. When White (P) received the cancellation letter he sued Corlies (D) for breach of contract. The trial court instructed the jury that, in the judge’s opinion, White (P) was not obligated to make a formal acceptance of Corlies’ (D) first note in order for there to be an enforceable contract between them. According to the trial judge, the contract became binding as soon as White (P) began working on the job. The jury found for... ...court...
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Bartus v. Riccardi 271 5 results
- Case Vocabulary
- Goods that fail to meet contractual specifications, in which case the buyer may reject the tender of the goods or revoke their acceptance.
- 284 N.Y.S.2d 222 (New York City Court 1967)
- Trial court consideration of the plaintiff’s claim.
- permits a seller to cure a nonconforming delivery before the expiration of the contract time by notifying the buyer of the intention to cure and making a delivery within the contract period. Subparagraph (2) of that section—the rule applied in this case—in effect extends the contract period beyond the date set forth in the agreement unless the buyer requires strict performance, and a specific clause to that effect is the contract. Here, the plaintiff had reasonable grounds to believe that a newer model would be acceptable to the defendant buyer, and he acted within a reasonable time to notify the defendant that a conforming model was available. Judgment is granted to the plaintiff.
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Mills v. Wyman 23 2 results
- CASE VOCABULARY
- This case stands for the principle that a “moral obligation” that motivates a promise for some benefit previously received is not sufficient consideration to create a binding contract. Exceptions to this rule are (1) a promise to pay a debt that is no longer enforceable because the statute of limitations has run; and (2) a promise made as an adult, subsequent to the same promise made as a minor, that was avoided on the basis of the age of the party.
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Bayliner Marine Corp. v. Crow 7 4 results
- Case Vocabulary
- (Keenan, J.) No. Statements that do not relate to the particular item purchased, or that merely commend the quality of goods, do not create express warranties. Express warranties are created by affirmations of fact, and the question of whether a particular statement creates a warranty is a factual question for the jury. A statement relating to the quality of particular goods may create a warranty. In this case, however, the statements in the prop matrix did not relate to the boat purchased by Crow (P), or even to a similar boat. Crow’s (P) boat had a different propeller from the one referred to in the matrix and was loaded with substantially heavier equipment. The statements in the prop matrix could not constitute an express warranty with regard to Crow’s (P) boat.
- Why did Crow (P) think that the prop matrix contained anything about the performance of his boat when, at the very least, the propellers were different? Advertisements and marketing documents routinely carry disclaimers, so it should have come as no surprise to him that there would be some limitations or qualifications on the statistics set out. The case here concerns only Crow’s (P) claim against Bayliner (D), but he also brought a claim against the dealer who sold him the boat. The opinion—addressing as it does only the claims against Bayliner (D)—does not say what, if anything, the dealer might have told Crow (P) when he selected the propeller and ordered the additional equipment.
- Crow (P) brought suit against Bayliner (D), alleging breach of express and implied warranties of merchantability and fitness for a particular purpose. Crow (P) testified that the boat’s low speed made it worthless to him, and that he would not have purchased it if he had known that the maximum speed was only twenty-three to twenty-five miles per hour. He testified that he could not use the boat for offshore fishing. Other witnesses testified that a typical offshore fishing site in the area was approximately ninety miles offshore, and the speed at which a boat could reach those fishing grounds had an impact on the amount of time left for fishing. The trial court ruled in Crow’s (P) favor, and held that Bayliner (D) breached express and implied warranties of merchantability and fitness for a particular purpose.
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Krell v. Henry 379 6 results (showing 5 best matches)
- Case Vocabulary
- A COURT CAN EXCUSE PERFORMANCE EVEN THOUGH IT’S NOT IMPRACTICAL BUT MERELY DUE TO FRUSTRATION OF PURPOSE
- Even though performance isn’t Impractical, a court can still excuse performance on the basis of frustration of purpose as long as there is a non-existence of events which both parties considered as the foundation of the contract.
- Even though performance isn’t impractical, can a court still excuse performance on the basis of frustration of purpose as long as there is a non-existence of events which both parties considered as the foundation of the contract?
- The Uniform Commercial Code hasn’t explicitly recognized the doctrine of frustration. However, most American courts, like the English court in
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Canadian Industrial Alcohol Co. v. Dunbar Molasses Co. 375 6 results (showing 5 best matches)
- Case Vocabulary
- A COURT WON’T EXCUSE CONTRACT PERFORMANCE IF THE SELLER FAILS TO TAKE REASONABLE MEASURES TO ASSURE PERFORMANCE
- If a seller fails to take all due precautions to ensure a steady supply of raw materials to complete his goods, then the court will not excuse his performance when such raw materials run out.
- If a seller falls to take all due precautions to ensure a steady supply of raw materials, will the court excuse his performance when such raw materials run out?
- (Cardozo) No. If a seller fails to take all due precautions to ensure a steady supply of raw materials to complete his goods, then the court will not excuse his performance when such raw materials run out. Here, Dunbar (D) never made a contract with the sugar company to ensure a steady stream of raw materials that were necessary to make the molasses. Furthermore, Dunbar (D) never even tried to make such a contract. Such a contract would’ve helped to avoid the damages suffered by Canadian (P). Judgment affirmed.
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- Case Vocabulary
- A court can excuse performance on the basis of frustration of purpose only if the contract didn’t allocate to one of the parties the risk of a supervening event.
- Can a court excuse performance on the basis of frustration of purpose if the contract didn’t allocate to one of the parties the risk of a supervening event?
- The court states here that frustration of purpose and impossibility both involve a supervening event, and they differ only in the effect of the supervening event. Assuming neither party caused the supervening event and neither party assumed the risks, under impossibility, both parties are excused from performance if a supervening event occurs that
- (Lynch) Yes. A court can excuse performance on the basis of frustration of purpose even if the contract didn’t allocate to one of the parties the risk of a supervening event. Chase (P) argues that Paonessa (D) had assumed the risk of the supervening event, and therefore, it (D) has no excuse for nonperformance. Chase (P) points to Paonessa’s (D) contract with Massachusetts as the main evidence. In that contract, Massachusetts reserved the right to delete any work which was unnecessary. Chase (P) argues that Paonessa (D) was fully aware of this provision and nonetheless still assumed the risk of a reduction in work orders. But Chase (P) was also aware of such risks. Chase (P) had contracted with Massachusetts in the past and signed contracts which contained the same standard provision as in Paonessa’s (D) contract.
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Chapter Eight. Remedies for Breach 303 5 results
- Future lost profits are allowed as an element of damage in any case where, by reason of the nature of the situation, the profits may be established with reasonable certainty.
- Guideposts in reviewing excessiveness of punitive damages are: (1) the degree of reprehensibility, (2) the disparity between the harm suffered and the punitive damages award, and (3) the difference between the remedy and the civil penalties authorized or imposed in comparable cases.
- The court denied Northern (P) an order of specific performance of a contract to compel E.W. Bliss (D) to add workers, for the period that one of Phoenix Steel’s (P) mills had to be shut down, because of a delay of the work.
- With regard to a construction contract, a court should not order specific performance which would be impractical to enforce and supervise.
- A polystyrene supplier is taken to court when they fall to meet their obligations to their buyer.
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Herzog v. Irace 407 4 results
- Case Vocabulary
- Gary Jones needed surgery to fix a shoulder injury, but he could not afford to pay. However, Jones was expecting to receive a substantial amount of money in settlement of a personal injury action he had instituted earlier. Thus, in lieu of payment, Jones attempted to assign his right to the settlement monies to the surgeon, Dr. Herzog (P). Dr. Herzog (P) notified Jones’s attorneys, Anthony Irace (D) and Donald Lowry (D), regarding the assignment. Nevertheless, after Jones received a $20,000 settlement award, Jones instructed Irace (D) and Lowry (D) not to pay Dr. Herzog (P). Thereafter, Dr. Herzog (P) filed a complaint in an attempt to enforce the assignment. The trial court rendered a judgment in favor of Dr. Herzog (P), the Superior Court affirmed, and Irace (D) and Lowry (D) appealed again.
- (Brody, J.) No. An assignor retains no power of revocation over an assignment. In an assignment, the assignor transfers some right to the assignee. For an assignment to be valid and enforceable, the assignor must make clear his intent to relinquish the right to the assignee and must not retain any control over the right assigned or any power of revocation. In the case at hand, Jones validly assigned his right to a portion of the pending settlement to Dr. Herzog (P), demonstrating an intent to permanently relinquish all control over the assigned funds. He therefore had no right to revoke the assignment by instructing Irace (D) and Lowry (D) not to pay Dr. Herzog (P). Furthermore, Irace (D) and Lowry (D) were under no ethical obligation to honor Jones’s instruction in disbursing the funds. Maine’s Bar Rules say nothing about a client’s power to assign his rights to proceeds from a pending lawsuit to third parties. Affirmed.
- An assignments essentially a transfer of some right from one party (the assignor) to some third party (the assignee). All that is required is a clear intent for the assignor to relinquish his right. And while the party who must perform to the assignee (the obligor) need not consent to the assignment to render it valid, the assignment must not significantly alter the burden imposed on the obligor. While each of these rules is important, the only one essential to this case is the notion that an assignor may not revoke the assignment after it has been made. Perhaps this rule is overly general. Suppose Jones executed a written assignment to
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Simeone v. Simeone 245 5 results
- Case Vocabulary
- MASTER: In litigation, a court-appointed fact-finder, usually an expert on calculating damages.
- inappropriately allowed courts to consider parties’ knowledge and the sufficiency of consideration in deciding whether to enforce contracts. Prenuptial agreements are just contracts, and should be evaluated similarly. Normally, contracting parties are bound by their agreements, regardless of whether they read or understood them, or whether the bargain was good or reasonable. To impose a requirement that parties entering a prenuptial agreement consult independent counsel would interfere with freedom of contract. Furthermore, permitting courts to investigate prenuptial agreements’ reasonableness would undermine such contracts’ reliability. But we do not retreat from the principle that parties must make full and fair disclosure of their financial positions, and that material misrepresentations may void the agreement, because at that moment the parties are in a relationship calling for mutual trust and disclosure. Catherine (P) claims duress, contending Frederick (D) presented the...
- is a case decided on policy grounds, where the correct policy is not at all clear. There is no law criminalizing prenuptial agreements, and no indication the legislature either approves or disapproves of them. Thus, judges wishing to decide whether to enforce them are forced to make their own policy choice, often selecting between several competing policies. Here, majority judge Flaherty believes the most important policy is to protect freedom of contract, preserve parties’ contractual expectations, and affirm gender equality. Concurrer Papadakos predicates his opinion on the assumption that rich men force such contracts on poor women; in his view, the prevalent policy should be to protect weaker parties from overreaching. For dissenter McDermott, the important policy is to ensure divorcees are paid enough to support them, in order to protect the state from having to support them.
- Frederick (D) defended, contending he had already paid support payments of $25K after they separated. At trial, the master upheld the prenuptial agreement. On appeal, the appellate court affirmed. Catherine (P) appeals again, contending the payment cap was unreasonable, and that she was not properly informed of her rights before signing.
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Cundick v. Broadbent 141 4 results
- Case Vocabulary
- so. The modem rule, however, has been different. In cases where someone claiming to be mentally deficient is not under the guardianship of another, and there is no evidence of fraud by the other party, or that the other party knew of the mental deficiency, then the contract can only be voided in accordance with certain equitable principles. The majority of courts find that mental capacity to contract depends upon whether the allegedly disabled person had sufficient reason to understand the contract. Average intelligence is not essential to a valid contract. Weakmindedness may certainly be relevant in determining whether a party was overreached and defrauded, but it does not constitute mental incompetency under the law. Here, there is no record of any discussion of Mr. Cundick’s mental condition among his friends and family. It seems incredible that Mr. Cundick could have been mentally incapable of conducting his business affairs without Mrs. Cundick (P) or anyone else realizing such...
- ...document. In October 1963, this agreement was amended so that the over 2,000 acres of range land would be sold for about $40,000. This land was later valued by an expert at about $89,000. Also, Cundick’s interest in a development company which employed Broadbent (D) as director was to be sold for $46,750. This interest was valued by others to be between $73,000 and $184,000. As of February 1964, Mr. Cundick was executing documents to carry out the sale. By March, however, after the price had already been paid by Broadbent (D), Mr. Cundick tried to rescind the sale. Mrs. Cundick (P) filed suit against Broadbent (D) claiming that Mr. Cundick had been mentally incompetent to contract, and that in any event he was mentally infirm and Broadbent (D) knowingly took advantage of him. Nothing was ever said about Mr. Cundick’s mental condition until this action was raised. In court-ordered examinations, two neurosurgeons and a psychologist found that Mr. Cundick had been a “confused and...
- The party who tries to assert incompetency as a basis for relief has the burden of persuasion and can introduce a variety of circumstances surrounding the transaction. These can include the party’s “normal” behavior in similar transactions, the opinions of friends and family and psychiatric experts, and records of anyone who has observed or treated the party in question. Still, more and more experts are noting that the dominant factor is whether the court sees the given transaction as one that a reasonably competent individual may take part in. This inquiry can be very subjective, as it depends on an unscientific opinion of what a reasonably
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- Case Vocabulary
- The test for whether a threat is serious enough to justify a party’s acceptance of another party’s terms has changed over the years. The early common law imposed a strict objective requirement that the threat be enough to “overcome mind and will of a person of ordinary firmness.” After this period of strict objectivity, the courts went to a more subjective standard, which required only that the alleged threat had deprived the victim of his or her free will. As the Eighth Circuit described it in
- ...a schedule of deliveries in the second half of 1966, a liquidated damages clause applicable to late deliveries, and a cancellation clause in case Loral (D) defaulted. Loral (D) then solicited bids for the roughly 40 precision gear components it (D) needed to produce the radar sets. Austin Instrument, Inc. (Austin) (P) was awarded a subcontract by Loral (D) to supply 23 of those parts. Austin (P) began delivery in early 1966. In May 1966, Loral (D) was awarded a second Navy contract for the production of more radar sets. Again, Loral (D) solicited bids for the needed components. Austin (P) bid to produce all 40 components, but, on July 15, a Loral (D) representative informed Austin’s (P) president that Austin (P) would only receive the subcontract for parts that it (P) was the lowest bidder for. Austin (P) refused to accept an order for less than the 40 parts. The next day, Austin (P) Informed Loral (D) that it (P) would cease delivery of the parts from the first subcontract...
- ...the agreement by withholding needed goods unless the other party agrees to some further demand, that the threatened party could not obtain the goods from another source, and that the ordinary remedy for breach of contract would be inadequate. The evidence here makes out a classic case of duress. In July 1966, Loral (D) was concerned with meeting deadlines for radar sets due later that year. For Loral (D), the threat of paying the liquidated damages, as well as defaulting, were very real possibilities. In addition, Loral (D) could not risk losing future contracts as a result of failure to deliver for this first radar set contract. These factors made it perfectly reasonable for Loral (D) to consider itself in an emergency, duress situation. While Austin (P) argues that Loral (D) should have asked the Government for an extension, Loral (D) had no way of knowing when substitute suppliers could have supplied it (D) with the parts needed to complete its (D) orders. Loral (D)...
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Dickinson v. Dodds 83 2 results
- Case Vocabulary
- ...his intent not to enter into a contract with Dickinson (P) by entering into an agreement with Allan (D). Dodds (D) revoked the offer indirectly. He did not communicate the revocation directly to Dickinson (P), but the offer was deemed revoked when Dickinson (P) received reliable information that Dodds (D) had sold the property to Allan (D). This rule is set forth in Restatement (Second) § 43. Case law holds that to be reliable, information must be true and come from a reliable source. The offeree may ignore the information. If the source is reliable, the offeree has a duty to reasonably inquire about the accuracy of the information. Here, Dickinson (P) heard that Allan (D) had accepted Dodds’ (D) offer. Dickinson (P) should have thus concluded that Dodds (D) revoked the offer to Dickinson (P). If Dickinson (P) had heard only that Dodds (D) made an offer to Allan (D). Dickinson (P) could reasonably have reached two different conclusions. He could have concluded that Dodds (D...
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- A court, when considering a disputed contract, may consider evidence of a collateral agreement if it is of a sort that would naturally be made separately from the disputed contract.
- A court of equity is permitted to reform a contract in response to a mutual mistake which rendered the contract’s terms incomplete.
- The court may not consider extrinsic evidence to interpret a contract or add terms if the agreement on its face is reasonably susceptible of only one meaning.
- If appropriate, a court may rely on trade usage to inform its interpretation of a seemingly unambiguous contract term.
- A court may use evidence of standard industry practices and prior performance of parties to the contract to interpret the contract, if such evidence is not inconsistent with the terms of the contract.
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Feinberg v. Pfeiffer Co. 21 3 results
- An appeal from Circuit Court that rendered a judgment for Feinberg (P).
- (Doerner) No. A valid contract requires mutuality of obligation bargained for and given in exchange for the promise. The consideration sufficient to support a contract may be either a benefit to the promisor or a loss or detriment to the promisee. There is nothing in the resolution adopted by Pfeiffer Co. (D) that made its effectiveness conditional upon Feinberg’s (P) continued employment. Feinberg (P) was not under contract to work for any length of time but was free to quit whenever she wished. Feinberg (P) had no contractual right to her position and could have been discharged at any time. Feinberg (P) made no promise or agreement to continue in the employ of the Pfeiffer Co. (D) in return for its promise to pay her a pension. The judgment of the Circuit Court is reversed.
- employment, and she was notified of this plan prior to accepting employment, then there is a strong argument that her long faithful service with the company would have been bargained for. When the issue is whether the performance was bargained for, the court does not have to consider the issue of the degree of benefit given.
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Lewis v. Mobil Oil Corporation 199 2 results
- (Gibson, J.) Yes. An implied warranty of fitness arises when the seller has reason to know of the use for which goods are purchased and the buyer relies on the seller’s expertise in supplying the proper product. Both of these requirements are met in this case. The existence
- The warranty of fitness comes from the idea that a merchant has some expertise with regard to the goods being sold. Buyers are entitled to rely on this expertise when receiving a recommendation for a particular item. In situations such as the one presented by this case, the assumption of expertise is not an unreasonable one—Rowe had dealt with Lewis (P) for some time, and knew about his business and why he wanted to buy the oil. Most consumer purchases of goods, while governed by the same rule, might cast doubt on that assumption. Is the expertise the same when the sale is of one of thousands of products carried by a “big box” retail chain?
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- Itoh’s (P) failure to object to the additional terms could be regarded as assent. The court is placing the burden on Jordan (D)—the party who proposed the additional clause—to establish that there was in fact assent. This keeps the burden of proof on the party who is proposing a substantial change in the agreement between the parties to show that there was mutual assent to the alteration.
- (Sprecher, J.) No. The terms of a contract formed by the conduct of the parties are those on which the writings of the parties agree, along with supplementary terms incorporated by operation of law. There is no definition of “supplementary terms” in the U.C.C. or in relevant case law. We are persuaded that the term does not encompass those which are necessarily excluded from the contract by the language, “terms on which the writings of the parties agree.” Accordingly, the “supplementary terms” are limited to those supplied by the standard “gap-filler” provisions of Article Two of the U.C.C. Arbitration is not a missing or necessary term that would be supplied by Article Two, so the arbitration clause is not a part of the contract created by the conduct of Itoh (P) and Jordan (D).
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Northrop Corp. v. Litronic Industries 95 2 results
- The majority rule adopted by the court has the advantage of being simple to apply. The California rule advanced by Judge Posner would involve making a detailed inquiry into the substance of the two different documents. Given that many commercial transactions involve preprinted boilerplate forms, such an inquiry would move away from an inquiry into the intention of the parties to a review of who used which form.
- ...U.C.C. cases, Illinois has tended to adopt majority rules, so we start with a presumption that Illinois, whose position we are trying to predict, would adopt the majority view. We do not find the presumption rebutted. The majority rule is that the discrepant terms drop out and are replaced with neutral terms from the U.C.C. The idea behind this rule is that the presence of different terms in the acceptance suggests that the offeree didn’t really accede to the offeror’s terms, yet both parties wanted to contract, so why not find a neutral term to govern the dispute that has arisen between them? The offeree may not have had any serious objection to the terms in the offer, but may have mailed a boilerplate form. It is just as likely that the discrepant terms in the offer itself were the product of a thoughtless use of a boilerplate form rather than a considered condition of contracting. If the offeror doesn’t want to do business other than on the terms in the offer, he can protect...
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- The Board of County Commissioners of Rockingham County, North Carolina (D) entered a contract with Luten Bridge Company (Luten) (P) on January 7, 1924 to build a bridge within the county limits. A significant amount of the public opposed the building of the bridge. On February 21, 1924, the Board (D) notified Luten (P) that the County (D) was refusing to recognize the contract as valid and that Luten (P) should not proceed with further work. [The appellate court eventually held that this refusal to recognize the contract was unjustifiable.] By this point, Luten (P) had already spent about $1900 for labor and materials for the bridge. After receiving notice from the Board (D), Luten (P) continued to build the bridge according to the terms of the contract. Luten (P) filed suit to recover $18,301.07, which Luten (P) claimed it (P) was owed for work done before November 3, 1924. The trial court directed a verdict for Luten (P) for this amount. The County (D) appealed.
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- Publication Date: October 16th, 2019
- ISBN: 9781684673834
- Subject: Contracts
- Series: High Court Case Summaries
- Type: Case Briefs
- Description: This title contains briefs for each major case in Farnsworth, Sanger, Cohen, Brooks, and Garvin's casebook on Contracts. These briefs will help you identify, understand, and absorb the core knowledge points from each case. They are followed by legal analysis, providing contextual background about each case, and connecting the case to the broader concepts developed throughout the casebook. This title also supplies case vocabulary, with definitions of new or unusual legal words found throughout the cases.
