High Court Case Summaries on Contracts, (Keyed to Knapp, Crystal, and Prince, 10th)
Author:
Publisher's Editorial Staff
Edition:
10th
Copyright Date:
2025
115 chapters
have results for High Court Case summaries on contracts keyed to knapp
Title Page 3 results
Beaver v. Brumlow 12 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.
- 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....
- Although there are minor variations from state to state, the Statute of Frauds generally requires that four types of contracts be in writing and signed by the parties to be bound: contracts involving the transfer of real property, contracts that cannot be completed within one year, contracts for the sale of goods worth $500 or more, and contracts whereby one person agrees to pay the debts of another. The purpose of the statute is to avoid fraud and perjury. Here, the court found an exception to the statute based on substantial performance. When the facts demonstrate that the parties acted as though a contract existed, the concerns that gave rise to the Statute become less of an issue.
- 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.
- Four years after moving onto the property, Brumlow (D) quit working for Beaver (P) and went to work for a competitor. Beaver (P) changed his mind about selling the property to Brumlow (D), attempted to restructure the agreement as a “lease,” and then attempted to terminate the lease and evict Brumlow (D). Beaver (P) prepared a document that called for Brumlow (D) to pay $400 per month. The agreement did not contain the words “rent,” “rental,” “lease,” or “leasehold.” Brumlow (D) paid, believing the money was payment for purchase of the property. Beaver (P) refused to cash Brumlow’s (D) checks when he began writing “Land Payment” on them. Brumlow (D) offered to pay the fair market value for the property, but Beaver (P) refused and brought an action for ejectment against Brumlow (D). Brumlow (D) counterclaimed for breach of contract and prima facie tort. The trial court found for Brumlow (D) on the prima facie tort claim. The court also found that Beaver (P) had breached an agreement
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Walker v. Keith 11 results (showing 5 best matches)
- (Clay, Comm’r) No. An agreement, in order to be binding, must be sufficiently definite to enable a court to give it an exact meaning. This is no less true of an agreement for a lease. Indefiniteness and uncertainty in the terms of a renewal provision will render it void unless the parties, by their subsequent conduct or acts, supplement the covenant and thus remove an alleged uncertainty. The terms of an extension or renewal, under an option in a lease, may be left for future determination by a prescribed method, but merely leaving the terms for future ascertainment, without providing a method for their determination renders the agreement unenforceable. Renewal covenants in a lease that leave the renewal rental to be fixed by future agreement between the parties have generally been held unenforceable and void for uncertainty and indefiniteness. Also, as a general rule, provisions for renewal dependent up future valuation of the premises, without indicating when or how such valuation...
- Courts should be hesitant to complete an incomplete agreement made between persons who enjoy the freedom of contract just because otherwise they would be invalid instruments. The basic principle of contract law that requires substantial certainty as to the material terms upon which the minds of the parties have met is a sound one and should be adhered to. Rent is a material term of a lease. If the parties do not fix it with reasonable certainty, it is not the business of courts to do so. The renewal provision before the court in this case was fatally defective in failing to specify either an agreed rental or an agreed method by which it could be fixed with certainty.
- The lessor and lessee entered into a ten-year lease that included an option to renew for another ten-year period according to the same terms, except that the amount of rent would be recalculated based on then-current business conditions; the parties could not agree on the amount of rent to be paid and looked to the courts to solve their dilemma.
- : A statement of the court declaring the rights and duties of the parties in a case or stating an opinion on a question of law without awarding relief. This judgment is binding whereas an advisory opinion is not.
- In 1951, the lessors leased a small lot to the lessee for a term of ten years at a rent of $100 per month. The lessee was given an option to extend the lease for another ten-year period under the same terms and conditions, except that the renewal option stated that “rental will be fixed in such amount as shall actually be agreed upon by the lessors and the lessee with the monthly rental fixed on the comparative basis of rental values as of the date of the renewal with rental values at this time reflected by the comparative business conditions of the two periods.” The lessee gave the proper notice to renew, but the parties were unable to agree on rent. Preliminary court proceedings culminated in this lawsuit. Based on the verdict of an advisory jury, the Chancellor fixed the new rent at $125 per month.
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Prochazka v. Bee-Three Development, LLC 13 results (showing 5 best matches)
- (Harrison, J.) Yes. A contract term is patently ambiguous if, when read in the context of the entire contract, the term is subject to at least two reasonable interpretations. Typically, a contract’s meaning is determined by assigning each contract term its plain and ordinary meaning unless the contract provides an alternate meaning. A term’s meaning is not determined in isolation but is evaluated by reading the term in the context of the entire contract. If a contract term’s meaning is clear and unambiguous, a court may apply that term to resolve the matter. In contrast, if a contract term is patently ambiguous, meaning ambiguous on its face, the court may look to extrinsic evidence to resolve the ambiguity. If the extrinsic evidence is either disputed or does not resolve the ambiguity, a jury must resolve the factual issue of what the parties really meant by their use of the ambiguous term. Here, the termination right in section 4.3 is subject to two possible reasonable... ...to...
- Whether a contract is ambiguous is considered a legal question that a court must resolve. If a court determines that the contract is not ambiguous, the litigation moves on to applying the unambiguous meaning to the case facts, whatever that may mean in a particular case. However, if a court determines that a contract is ambiguous, then a jury (or other fact-finder) must determine what the parties actually meant by the ambiguous term. At this point, the parties may submit extrinsic or parol evidence to argue for a particular meaning. For example, emails or contract drafts exchanged by the parties during the contract negotiations can be persuasive evidence of what the parties intended the contract’s language to mean. In , the only extrinsic evidence submitted by the parties prior to the appeal was a set of conflicting affidavits, with each party swearing that its proposed meaning was what it intended the contract to mean. On remand, the parties might have been able to produce... ...to...
- Bee-Three Development (Bee-Three) (P) contracted to purchase a commercial lot from Robert and Donna Prochazka (D). Bee-Three (P) intended to develop the lot and lease it to a specific commercial tenant that wanted a new space. Article 4 of the purchase contract addressed Bee-Three’s (P) right to inspect the lot before the sale was finalized. Section 4.1 authorized Bee-Three (P) to check the property for environmental, legal, and other issues during a defined inspection period to “determine generally” whether the property was suitable for its intended use. Section 4.3 gave Bee-Three (P) the right to terminate the agreement during the inspection period if Bee-Three (P) “determines, in its sole and absolute discretion, that the Property is not suitable for [Bee-Three’s (P)] intended use.” If Bee-Three (P) exercised this termination right, it was entitled to have the Prochazkas (D) return its $7,000 deposit. The contract did not define the term “intended use.” The contract had two other...
- Appeal from a trial court order adopting the buyer’s contract interpretation and granting summary judgment for the buyer.
- (Gruber, J.) The plain and ordinary meaning of the words used in section 4.3 is clear, so they are not ambiguous. This section gave Bee-Three (P) the “sole and absolute discretion” to decide whether the lot was unsuitable for its intended use during the inspection period and, if so, to terminate the contract. There is no language stating that Bee-Three (P) could exercise this termination power only if the property failed an inspection. The only limitation in the text is that Bee-Three (P) had to decide that the property was unsuitable for its needs. Accordingly, Bee-Three (P) was free to terminate the contract if it believed the property was unsuitable for any reason, including because its intended tenant backed out. The trial court’s ruling should have been affirmed.
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Brookside Farms v. Mama Rizzo’s, Inc. 11 results (showing 5 best matches)
- In October 1993, Brookside Farms (P) and Mama Rizzo’s, Inc. (MRI) (D) entered into a requirements contract for the sale of fresh basil leaves. Under the contract, MRI agreed to buy a minimum of 91,000 pounds of basil for one year, with daily deliveries five days per week. The price for the basil depended on whether it was the growing season or the non-growing season, when Brookside (P) would have to look to Mexican growers to supply the basil. The Vice President of MRI (D) requested that Brookside (P) remove additional parts of the stems of the basil leaves, which was not specifically required under the original contract, and Brookside (P) agreed to do so for an additional 50 cents per pound. Because the original contract prohibited oral modifications, MRI’s (D) VP promised to make a notation of the price change on its copy of the original contract. The new price terms were also on MRI’s (D) internally generated purchase orders, Brookside’s (P) invoices, and MRI’s (D) payment checks...
- (Kent, J.) No. Ordinarily, oral agreements that materially modify a written agreement within the Statute of Frauds are not enforceable unless one party reasonably relies on the oral promise of another to reduce an oral agreement to writing, in which case the failure to create such a writing will not prevent the relying party from taking the modification out of the Statute of Frauds. In addition, Texas has adopted an exception to the Statute of Frauds contained in the UCC that provides that a contract that does not satisfy the Statute but that is valid in other respects is enforceable with respect to goods that have been received and accepted. Thus, an oral modification that would itself form a binding contract in the absence of the Statute of Frauds can be binding on the parties to a sale of goods over $500 insofar as specific goods have been received and accepted by the buyer. Here, we find that a valid oral modification occurred on both estoppel and statutory grounds. The parties...
- As this case demonstrates, 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.
- : The law that holds that certain contracts may not be enforced unless there is some writing signed by the defendant to the dispute indicating that there was an agreement. Although there are minor variations from state to state, the Statute of Frauds generally requires that four types of contracts be in writing and signed by the parties to be bound: contracts involving the transfer of real property, contracts that cannot be completed within one year, contracts for the sale of goods worth $500 or more, and contracts whereby one person agrees to pay the debts of another. The purpose of the statute is to avoid fraud and perjury. An exception to the statute exists based on substantial performance. When the facts demonstrate that the parties acted as though a contract existed, the concerns that gave rise to the Statute become less of an issue.
- Federal district court consideration of the plaintiff’s motion for partial summary judgment and the defendant’s motion for summary judgment.
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De La Torre v. CashCall, Inc. 11 results (showing 5 best matches)
- The court in noted that although contractual interest rate terms may be deemed unconscionable, such determinations are rare. This is true for several reasons. First, generally, the legislature is the appropriate party to set economic policy, and courts will act only if a situation is extreme. Next, if lenders could not charge high interest rates or rely on courts to enforce those high rates, law-abiding lenders would stop lending money to high-risk borrowers. If that happened, financially vulnerable individuals might be denied all access to legal loans, leaving them either with no options or subject to even worse conditions from illegal lenders. Finally, if courts routinely undermined the parties’ agreed interest rates, the courts’ actions would hinder the freedom to contract. Indeed, this hesitation to interfere with the parties’ agreed deal, even if it is a bad deal, is why courts are often reluctant to apply the contractual defense of unconscionability to any contract term.
- California company CashCall, Inc. (D) made consumer loans to high-risk borrowers, commonly called payday loans. California’s financial code placed a cap on interest rates for loans under $2,500 but not on loans above that amount. CashCall (D) offered an unsecured loan for $2,600 at an interest rate between 96 and 135 percent. Typical borrowers had low credit scores and were in financial difficulty. Eduardo De La Torre (P) and others who had taken out these loans (collectively, the borrowers) (P) filed a class action lawsuit against CashCall (D) in federal district court. The borrowers (P) argued that CashCall (D) had violated California’s unfair-competition law by charging interest rates so high they were unconscionable and therefore unlawful. CashCall (D) moved for summary judgment. CashCall (D) argued that because the legislature had not capped interest rates on loans over $2,500, the legislature had determined that all rates were allowed, and no interest rate could be considered...
- (Cuéllar, J.) Yes. The interest rate on a loan is a contract term that may be invalidated if it is unconscionable. Under California law, a contract’s price terms, like other contract terms, may be unconscionable and therefore unenforceable. An interest rate is essentially a price term, so it may also be unconscionable. In assessing unconscionability, courts engage in a flexible, fact-focused, context-driven analysis. A term will be deemed unconscionable only if it is both procedurally and substantively unconscionable. A term is procedurally unconscionable if the contract was formed unfairly, such as if one side used tactics that eliminated the other side’s ability to voluntarily agree to the proposed terms or if there were surprise terms hidden in the contractual document. A term is substantively unconscionable if its contents are so unduly and unfairly one-sided that it shocks the conscience. These two elements are evaluated on a sliding scale. A weak showing of procedural...
- A CONTRACT’S INTEREST RATE TERM MAY BE SO HIGH THAT IT IS UNCONSCIONABLE AND LEGALLY UNENFORCEABLE
- The interest rate on a loan is a contract term that may be invalidated if it is unconscionable.
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Quake Construction, Inc. v. American Airlines, Inc. 11 results (showing 5 best matches)
- (Calvo, J.) Yes. The fact that contracting parties contemplate that a formal agreement will eventually be executed does not necessarily render prior agreements mere negotiations where it is clear that the ultimate contract will be substantially based on the same terms as the previous document. If the parties intended that the document be contractually binding, that intention cannot be defeated by the mere recitation in writing that a more formal agreement is yet to be drawn. However, parties may specifically provide that negotiations are not binding until a formal agreement is in fact executed. If the parties construe the execution of a formal agreement as a condition precedent, then no contract arises unless and until that formal agreement is executed. The circuit court in this case dismissed Quake’s (P) complaint, relying on this sentence in the letter of intent from Jones: “Jones Brothers Construction Corporation reserves the right to cancel this letter of intent if the parties...on
- In February 1985, American Airlines (D) hired Jones Brothers Construction to oversee an expansion project at O’Hare Airport. Quake Construction (P) received an invitation to bid on the project and submitted its bid to Jones. Jones orally notified Quake (P) that Quake (P) had been awarded the contract. Jones then asked Quake (P) to provide license numbers for the subcontractors Quake (P) intended to use. Quake (P) notified Jones that the subcontractors would not allow Quake (P) to use their license numbers until Quake (P) submitted a signed subcontract agreement to them. In response, Jones sent Quake (P) a letter of intent stating that Quake (P) was awarded the contract and that the formal agreement would soon follow. Jones reserved the right to cancel the letter of intent if the parties could not agree on a fully executed subcontract agreement. The parties made certain agreed-upon handwritten changes to a written form contract, and Jones advised Quake (P) that it would provide the...
- (Stamos, J.) Because dismissal is unwarranted unless no set of facts could be proved under the pleadings that would entitle the plaintiff to recover, I agree with the majority that the circuit court should not have dismissed Quake’s (P) complaint. However, I believe that any interpretation of the letter’s language as potentially establishing an underlying construction contract is less plausible than the majority implies. The cancellation clause refers to cancelling the letter, not cancelling the contract anticipated by the letter. The letter may be considered a contract in its own right: a contract to engage in negotiations. If letters of intent are used, their drafters would be well advised to avoid ambiguity on the point of whether the issuers are bound.
- In determining whether the parties intended to reduce their agreement to writing, the following factors may be considered: whether the type of agreement involved is one usually put into writing, whether the agreement contains many or few details, whether the agreement involves a large or small amount of money, whether the agreement requires a formal writing for the full expression of the covenants, and whether the negotiations indicated that a formal written document was contemplated at the completion of the negotiations. Other factors that may be considered are where in the negotiating process that process is abandoned, the reasons it is abandoned, the extent of the assurances previously given by the party that now disclaims any contract, and the other party’s reliance on the anticipated completed transaction. One factor that could have been evidence of the potential existence of a contract in this case was the fact that the letter of intent was provided in response to the need for...
- The fact that contracting parties contemplate that a formal agreement will eventually be executed does not necessarily render prior agreements mere negotiations where it is clear that the ultimate contract will be substantially based on the same terms as the previous document.
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Handicapped Children’s Education Board v. Lukaszewski 12 results (showing 5 best matches)
- (Callow, J.) No. We hold that ill health will excuse nonperformance under an employment contract, but not if the ill health is brought on by the employee herself. Lukaszewski (D) contends that her employment contract with the Board (P) was excused because of her health condition. The law provides that under certain conditions illness or health danger may excuse nonperformance of a
- This case examines on what basis, and under what circumstances, a party to an express contract may be excused from performing thereunder. Note that if Lukaszewski (D) had not entered into an express contract with the Board (P) and had been an at-will employee, she would have been free to resign. The Board (P) would have been without a remedy, no matter how much more it was required to pay a replacement, and even if it had to incur costs of training, etc. However, she was employed under a contract for term, meaning the 1978–1979 school year. The defense Lukaszewski (D) asserted to the Board’s (P) breach of contract claim was excuse based on a health danger. However, the court relied on the self-induced illness exception to hold Lukaszewski (D) liable for breach of contract. The case also considered the issue of damages and mitigation of damages. The Board (D) was entitled to 313 recover its loss of the bargain, which means the cost it incurred in replacing Lukaszewski (D). The court...
- Handicapped Children’s Education Board (the Board) (P) hired Elaine Lukaszewski (D) as a speech and language therapist for the spring term, and during the spring she entered into a contract with the Board (P) to continue the following school year. The school was 45 minutes from her home, and she commuted each workday. Before the beginning of the following school year, Lukaszewski (D) decided to accept another position at a day care center close to her home, which paid more money. She notified the Board’s (P) director that she intended to resign, and he told her to submit a letter of resignation for consideration by the Board (P). The Board (P) refused to release Lukaszewski (D) from her contract. Lukaszewski (D) left the day care center and returned to the school for the fall term. She resented the actions of the Board (P) and told the director of her feelings. [In other words, she was not a happy camper.] After the meeting with the director, Lukaszewski (D) felt quite upset and...
- Employment contract was breached by therapist with high blood pressure, caused by the stress of having to continue working at a faraway school, instead of one close to home.
- Appeal to State Supreme Court from decision of court of appeals that affirmed and reversed portions of judgment for damages for breach of employment contract.
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Locke v. Warner Bros., Inc. 11 results (showing 5 best matches)
- (Klein, J.) Yes. When a contract confers on one party a discretionary power affecting the rights of the other, a duty is imposed to exercise that discretion in good faith and in accordance with fair dealing. When, as here, it is a condition of an obligor’s duty that he or she be subjectively satisfied with respect to the obligee’s performance, the subjective standard of is applicable. That is, when the contract involves matters of taste or judgment, the promisor is the sole judge of his satisfaction. If he asserts, , that he is not satisfied, there can be no inquiry into the reasonableness of his attitude. In such cases, the promisor’s determination that he is not satisfied, when made in good faith, has been held to be a defense to an action on the contract. In this case, however, the trial court erred in deferring entirely to what it characterized as Warner’s (D) creative decision-making in handling the development deal. If Warner (D) acted in bad faith by categorically rejecting...
- Appeal by the plaintiff from the trial court’s entry of summary judgment in favor of the defendant.
- When a contract confers on one party a discretionary power affecting the rights of the other, a duty is imposed to exercise that discretion in good faith and in accordance with fair dealing.
- : Deception, deceit; trickery. An act using deceit such as intentional distortion of the truth or misrepresentation or concealment of a material fact to gain an unfair advantage over another in order to secure something of value or deprive another of a right. Fraud is grounds for setting aside a transaction at the option of the party prejudiced by it or for recovery of damages. “Actual fraud” involves a deliberate misrepresentation or concealment. A court may infer “constructive” or “legal fraud” either from the nature of a contract or from the relationship of the parties.
- In 1975, Locke (P) appeared in a movie with Clint Eastwood. A romantic relationship developed between them that lasted for 13 years. When the couple broke up, Locke (P) sued Eastwood. As part of the settlement agreement, Eastwood secured a development deal for Locke (P) with Warner Bros. (D). Unbeknownst to Locke (P), Eastwood agreed to reimburse Warner (D) for any money paid to Locke (P) pursuant to the deal, which included terms by which Locke (P) would be paid even if none of her projects were developed and Warner (D) offered her no directing jobs. Although Warner (D) paid Locke (P) all that was promised under the agreement, the studio did not develop any of her projects or hire her to direct any films. Locke (P) brought suit against Warner Bros. (D), contending that the deal was a sham. She claimed, among other things, a violation of the covenant of good faith and fair dealing and fraud. Warner (D) moved for summary judgment, and the court granted the motion. Locke (P) appealed.
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Commerce Partnership 8098 Limited Partnership v. Equity Contracting Co. 11 results (showing 5 best matches)
- There was some confusion in this case as to how to couch the claim. Causes of action based on contracts implied in law have been deemed claims for quasi contract, unjust enrichment, restitution, constructive contract, and quantum meruit. At trial in this case, Commerce (D) understood quantum meruit to mean a contract implied in fact, but Equity (P) was actually asserting a quasi-contract claim against it, not a contract implied in fact. A contract implied in fact is based on a tacit promise, one that is inferred from the parties’ conduct, not solely from their words. A contract implied in fact is not put into promissory words with sufficient clarity, so a factfinder must examine and interpret the parties’ conduct to give definition to their unspoken agreement. A contract implied in law, or quasi contract, is not based on the finding of an agreement through a process of implication from the facts. It is a legal fiction, an obligation created by the law without regard to the parties’...
- (Gross, J.) No. A subcontractor’s quasi-contract action against an owner requires that the owner received the benefit conferred without paying consideration to anyone, and that the subcontractor exhausted its remedies against the general contractor. The contractor with whom the subcontractor is in privity is always the pocket of first resort. The owner can only be liable if it received a windfall benefit, something for nothing. In this case, Equity (P) did not prove at trial that Commerce (D) had not made payment to any party for the benefits conferred on the property. That is an essential element of a quasi-contract claim by a subcontractor against an owner. Moreover, the owner can only be liable when it has received a windfall. When the owner has given consideration for the subcontractor’s work by paying out the contract price for the work, an unpaid subcontractor’s claim that the owner has been unjustly enriched must fail.
- The appellate court held that the trial court was wrong in ruling that the evidence of what Commerce (D) paid to other subcontractors was irrelevant, because what Commerce (D) expended on the project was central to Equity’s (P) cause of action. The court instructed the trial court that, on remand, if the trial court determined that Commerce (D) had not paid anyone for the benefits conferred by Equity (P), then it must enter judgment for Equity (P). If the court determined that Equity (P) failed to prove that Commerce (D) did not make such payment, the court must enter judgment for Commerce (D).
- : (Latin) “As much as he deserves.” An equitable doctrine that allows a party to recover for the value of his labor and materials furnished to another even though there was no actual contract so that the other party will not be unjustly enriched. The suit is based on an implied promise to pay.
- A subcontractor claimed that it did not get paid for its stucco work on a project, and after the general contractor declared bankruptcy the subcontractor sued the property owner, which claimed it had already paid the general contractor; the court awarded damages to the subcontractor, and the owner appealed.
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Sherrodd, Inc. v. Morrison-Knudsen Co. 11 results (showing 5 best matches)
- (Turnage, J.) No. The execution of a contract in writing, whether the law requires it to be written or not, supersedes all oral negotiations or stipulations concerning its matter that preceded or accompanied the execution of the instrument. When an agreement has been reduced to writing, there can be no evidence of the terms of the agreement other than the contents of the writing, except when a mistake or imperfection of the writing is claimed, or when the validity of the agreement is the fact in dispute. A further exception is made when fraud is alleged, but that exception only applies when the alleged fraud does not relate directly to the subject of the contract. When an alleged oral promise directly contradicts the terms of an express written agreement, the parol evidence rule applies. Here, any reliance on the alleged fraudulent statement of the Morrison-Knudsen (D) representative is contradicted by the terms of the written contract stating ...satisfied itself as to the... ...to...to
- If the facts are as alleged by the plaintiff (and for purposes of summary judgment we must assume that they are), the result of this case is that no party can be held accountable for its fraudulent conduct as long as it is in a sufficiently superior bargaining position to compel its victim to sign a document relieving it of liability. Although the parol evidence rule provides that a written agreement supersedes all oral negotiations that preceded or accompanied the execution of the written instrument, the rule does not exclude evidence of the circumstances under which the agreement was made or to which it relates, or other evidence to explain fraud. When, through fraud or the mistake of one party that the other party knew about or suspected, a written contract does not truly express the intention of the parties, the contract may be revised to express that intention as long as it can be done without prejudice to rights acquired by third parties in good faith and for value. I would...
- Sherrodd (P) was an excavation subcontractor on a construction project on which Morrison-Knudsen (D) was the general contractor. Sherrodd (P) actually subcontracted with another subcontractor, COP Construction (D). Sherrodd (P) contended that while its officer was examining the building site in preparation for submitting a bid, a Morrison-Knudsen (D) representative told him that there were 25,000 cubic yards of excavation to be performed. Sherrodd (P) based its bid of $97,500 on that alleged representation, Sherodd’s (P) bid was accepted. While performing the work, Sherrodd (P) discovered that the quantity of work far exceeded 25,000 cubic yards. Sherrodd (P) was paid the $97,500 contract price. Sherrodd (D) also contended that a COP (D) officer verbally represented that Sherrodd (P) would be paid more than the contract sum, but he was not. The contract between COP (D) and Sherrodd (P) provided that Sherrodd (P) had, by examination, satisfied itself as to the character and quantity...
- Did the trial court err in granting summary judgment to the defendants based on the parol evidence rule?
- Sherrod (D) bid on an excavation contract allegedly based on the general contractor’s representation of the amount of work required; there was actually much more work to be done but Sherrod (D) was only paid the contract price.
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Vogan v. Hayes Appraisal Associates, Inc. 10 results (showing 5 best matches)
- The Vogans (P) contracted with a builder to construct a home in Des Moines, Iowa. They obtained a mortgage through MidAmerica Savings Bank. MidAmerica contracted with Hayes Appraisal (D) to make periodic appraisals of the progress on the construction, at which times MidAmerica would make disbursals to the contractor based on the reported progress. At one point, it was determined that more money would be required, so the Vogans (P) obtained a second mortgage from MidAmerica and added some of their own funds for disbursements to the builder. When Hayes (D) reported that the house was 90% complete, all of the original loan amount and much of the second mortgage plus personal funds had been disbursed. In reality, there was much more work to be done. At that point, the builder defaulted on the job. The Vogans (P) stopped making mortgage payments and the bank brought an action to foreclose on the mortgage. The Vogans (P) counterclaimed that the bank had improperly authorized payments of...to
- One of the other issues raised by the defendant in this case is whether the trial court’s decision violated the rule of . In that case, the British court held that, where two parties have made a contract that one breaks, the damages the other party ought to receive should be those fairly and reasonably considered as arising naturally out of the breach or those that were reasonably within the contemplation of both parties at the time they made the contract. The state supreme court was convinced that, to the extent the Vogans’ (P) recovery included sums advanced to the builder by the bank based on inaccurate progress reports, that element of recovery was not beyond the inspector’s contemplation at the time it contracted with the bank.
- (Carter, J.) Yes. A third party who is not a promisee and who gave no consideration has an enforceable right by reason of a contract made by two others if the promised performance will be of pecuniary benefit to the third party and the contract is so expressed as to give the promisor reason to know that such benefit is contemplated by the promisee as one of the motivating causes of his making the contract. Unless otherwise agreed between promisor and promisee, a beneficiary of a promise is an intended beneficiary if recognition of a right to performance in the beneficiary is appropriate to effectuate the intention of the parties and the circumstances indicate that the promisee intends to give the beneficiary the benefit of the promised performance. When a contract is made, the two or more contracting parties have separate purposes. Here, MidAmerica is the promisee, who stands to benefit from Hanes Appraisal’s (D) performance, and Hayes (D) is the promisor, who agreed to provide...
- : One who may receive a benefit under a contract without being a party to the contract ( the beneficiary under a life insurance policy stands to receive the proceeds of the policy, but never signs or agrees to the policy). Two parties may validly contract to confer benefits on a third party, even though the third party provides no consideration.
- Hayes Appraisal (D) contracted with the Vogans’ (P) mortgage company to make periodic inspections of the construction of the Vogans’ (P) home and notify the bank when to make disbursements based on progress, but the appraisal company provided erroneous project reports, resulting in disbursing too much money too soon and leaving the Vogans’ (P) without a completed house.
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Walser v. Toyota Motor Sales, U.S.A., Inc. 10 results (showing 5 best matches)
- The proper measure of damages in promissory estoppel cases was traditionally a subject of controversy. When § 90 of the Restatement of Contracts was drafted, Professor Williston maintained that if a promisee had reasonably relied on a promise, expectation damages should be awarded, as in other contract actions. Other commentators disagreed, arguing that liability should be limited to the promisee’s reliance loss. In a few remaining cases, courts seemed to use promissory estoppel to afford a tort remedy for misrepresentation. In these cases, courts awarded expectation damages when expectation damages could be calculated. When, as here, the misrepresentation occurs during negotiations, the remedy is reliance damages, under either tort or contract damages rules. The Second Restatement focuses on reliance damages in most promissory estoppel cases.
- In 1987, Toyota Motor Sales (D) was scouting Midwest locations for new Lexus dealerships. The Lexus regional manager approached Walser and McLaughlin (P), who owned BMW and Lincoln Mercury dealerships in Bloomington, Minnesota. They were interested in obtaining the Lexus dealership, and after taking the preliminary steps they received oral approval from Toyota. A few days later, however, Walser (P) was informed that a mistake had been made, and that they did not have final approval. In the meantime, Walser’s (P) father had agreed to purchase property for the Lexus dealership. In February 1990, Toyota (D) informed Walser and McLaughlin (P) that they were not approved for the dealership after all. In March, Walser and McLaughlin (P) sued Toyota (D) for breach of the Minnesota motor vehicle franchise statute, breach of contract, promissory estoppel, joint venture, fraud, intentional interference with contractual relations, and interference with a prospective business advantage. The
- (Hansen, J.) No. In a claim for promissory estoppel, the remedy granted for breach may be limited as justice requires; in particular, relief may sometimes be limited to restitution, damages, or specific relief measured by the extent of the promisee’s reliance rather than by the terms of the promise.
- 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. In contracts, restitution occurs when a party recovers monetary payments already made or when a party is ordered to pay the value of performance already rendered.
- Did the district court err in instructing the jury that damages on the promissory estoppel claim were limited to the out of pocket expenditures the plaintiffs made in reliance on Toyota’s (D) promise?
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Shaffer v. George Washington University 15 results (showing 5 best matches)
- Mark Shaffer (P) paid full tuition for his child to attend the spring 2020 semester of the on-campus undergraduate program at George Washington University (GWU) (D). GWU (D) charged higher tuition for on-campus programs than for online-only programs. The on-campus program’s catalog advertised in-person instruction and hands-on educational opportunities, which were standard for GWU’s (D) on-campus offerings. American University (AU) (D) made similar representations. Due to the COVID-19 pandemic, in March 2020, GWU (D) and AU (D) (collectively, the universities) closed their campuses and moved to online-only instruction. The universities (D) did not refund any tuition or fees. Shaffer (P) and other similarly situated payers (P) (collectively, the payers) (P) filed class actions in federal district court against the universities (D), alleging three alternative claims: (1) breach of an express contract for in-person instruction and campus activities, (2) breach of an implied contract...
- (Edwards, J.) Yes. A contract’s existence prevents an unjust enrichment claim only if (1) the contract is enforceable and (2) the issue is covered by the contract. An unjust enrichment claim is an equitable claim for restitution ( the return of) a benefit that the plaintiff conferred on the defendant because, under the circumstances, the defendant’s retention of the benefit is unjust. If a contract exists on a matter, its rights and remedies generally govern the parties’ dealings. A party may not circumvent any contractual limitations by bringing an unjust enrichment claim instead of a breach of contract claim. Thus, for matters covered by an enforceable contract, the contract’s legal remedies displace unjust enrichment claims as an avenue of recovery. However, the contractual parties may still pursue an unjust enrichment claim and equitable remedies for all other matters. Here, the district court correctly found there is no express contractual agreement between the parties for in-...
- , the payers (P) raised three alternative claims for the same overpayment complaint. Whether this claim was ultimately treated as a breach of contract claim or an unjust enrichment claim would significantly impact the damage calculations. Under a breach of contract claim, a successful plaintiff typically gets expectation damages. In , if the students were successful, they would get the value of what they were promised, in-person instruction, less what they actually received, the online instruction. Tuition differences for the two programs were one possible way to calculate the values of those two options but not necessarily the only method. Regardless, the focus is on the plaintiff’s loss. An unjust enrichment claim has a different focus, looking at what amount of property, if any, would be unjust for the defendant to retain. This can be a very fact-intensive analysis. In ...tuition, if any, that was unjust for the universities (D) to retain in light of all the circumstances....
- MOTION TO DISMISS
- A contract’s existence prevents an unjust enrichment claim only if the contract is enforceable and the issue is covered by the contract.
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Nanakuli Paving & Rock Co. v. Shell Oil Co. 16 results (showing 5 best matches)
- Additionally, Shell’s (D) price protection on prior occasions could reasonably be construed by a jury as a course of performance and not a waiver of the express terms of the contract between the parties. Under the UCC, the preference for waiver only applies where the terms of the contract are ambiguous. Whether terms of a contract are ambiguous or not is a question for the jury, and it was not unreasonable for the jury in this case to find that Shell’s (D) price protection on the two prior occasions constituted a course of performance and not a waiver. This is true especially in light of the fact that Shell (D) also price-protected Nanakuli (P) on two other occasions after 1974. Further, although at first glance the express price terms of the contact seem inconsistent with the trade usage of price protection, a jury could have reasonably construed price protection as consistent with the terms of the contract. A commercial agreement is broader than the express terms of the agreement...
- (Hoffman, J.) Yes. A court may use evidence of standard industry practices and the prior performance of the parties 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 practice of price protection, and that, as such, under the UCC 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 asphalt and paving industry; (2) the two prior occasions on which Shell (D) price protected Nanakuli (P) constituted waivers of terms of the contract rather...
- In this case, evidence of custom and usage regarding price protection in the asphalt paving trade was not contradicted in major respects, so the jury could find that the parties knew or should have known of the practice at the time of making the contract. This is a necessary predicate for interpretation of the contract based on the course of its performance or a finding that good faith required the seller to hold the price.
- Nanakuli Paving and Rock Co. (P), a large asphalt paving company, had two contracts with Shell Oil Co. (D) under which it bought all its asphalt 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. The jury returned a verdict in favor of Nanakuli (P). The trial court set aside the verdict and granted Shell’s motion for judgment notwithstanding the verdict. Nanakuli (P) appealed.
- A court may use evidence of standard industry practices and the prior performance of the parties to interpret the contract, if such evidence is not inconsistent with the terms of the contract.
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Higgins v. Superior Court of Los Angeles County 10 results (showing 5 best matches)
- (Rubin, J.) Yes. Although there is a strong public policy in California in favor of resolving disputes by arbitration, an arbitration agreement is to be rescinded on the same grounds as other contracts or contract terms. In this case, the arbitration agreement is an unconscionable contract of adhesion, and may be rescinded on those grounds. A contract of adhesion is a standardized contract that is imposed and drafted by the party of superior bargaining strength and relegates to the other party only the opportunity to adhere to the contract or reject it. A contract of adhesion may be unenforceable if it is also found to be unconscionable. Unconscionability has both a procedural and a substantive element, the former focusing on oppression or surprise due to unequal bargaining power, the latter on overly harsh or one-sided results. The entire agreement was clearly a contract of adhesion. The standardized 24-page, single-spaced contract was presented to the Higgins (P) on a take-it-or-...
- The prevailing view is that procedural and substantive unconscionability must both be present in order for a court to exercise its discretion to refuse to enforce a contract or clause under the doctrine of unconscionability. But they need not be present in the same degree. The more substantively oppressive the contract term, the less evidence of procedural unconscionability is required to come to the conclusion that the term is unenforceable, and vice versa.
- CONTRACT OF ADHESION
- The court may rescind provisions in a contract of adhesion which also contains elements of procedural and substantive unconscionability.
- May the court rescind an arbitration clause in a contract of adhesion, which also contains elements of procedural and substantive unconscionability?
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E.C. Styberg Engineering Co. v. Eaton Corp. 8 results (showing 5 best matches)
- (Flaum, J.) Yes. For a contract to be enforceable, it must be specific as to its essential terms, such as the identity of the parties to be bound, the subject matter of the contract, consideration, a quantity term, and a price term. Styberg (P) argues that the parties agreed Eaton would purchase 13,000 I-brakes at an average unit price of $544.88. We disagree. Typically, a price quotation is considered an invitation for an offer, rather than an offer to form a binding contract. Moreover, it is most often the buyer’s purchase order, submitted in response to a quote, that constitutes the offer. Here, there was no purchase order. Even assuming the price was agreed upon, the district court found that Styberg (P) continued to push for a higher minimum-unit commitment, so there was no agreement on quantity. Nor did the parties’ conduct demonstrate the existence of a contract. Eaton’s (D) request for two 240-unit orders was insufficient to prove an agreement for the sale of 13,000 units.
- The court contrasted other cases in which the parties’ conduct was deemed sufficient to find that a contract existed. In one case, the buyer submitted a purchase order, the seller shipped coal to the buyer on numerous occasions, the buyer paid for each shipment, and the parties continued to do business even after a dispute arose between them. In another, the parties simply followed their usual procedures for placing and accepting orders. Here, if the parties intended to contract, they deviated from their usual procedure, because historically Eaton (D) would submit a specific purchase order to Styberg (P) and Styberg (P) would send Eaton (D) a purchase order acknowledgement form. This difference in procedure supports a finding that no contract existed relative to this dispute.
- Styberg (P) manufactured component parts for other manufacturers. Beginning in 1998, Styberg (P) sold limited quantities of I-brakes to Eaton Corp. (D) while Eaton (D) tested full production of the product. In 1999, the parties began negotiating an agreement under which Styberg (P) would produce larger quantities of I-brakes for Eaton (D), which would require a significant capital investment on Styberg’s (P) part. Baker, a Styberg (P) manager, kept in contact with Davis and Fletcher at Eaton (D). They conveyed to Baker that Eaton (D) was willing to make a minimum purchase commitment to Styberg (P). Baker then sent Fletcher a proposal for the production of 60,000 units and requested $343,000 in tooling money to get started. In response, Eaton (D) offered to invest $293,000 and stated that Eaton (D) was willing to purchase a minimum of 13,000 units at an average unit price of $544.88. Styberg (P) countered with a quote of $595 per initial unit plus an additional $31 per unit until a...to
- The plaintiff sold component parts to the defendant and contended that the sales were pursuant to a contract between them; when the defendant ceased buying the parts, the plaintiff sued, arguing that the contract was breached, but the defendant argued that no contract existed.
- THERE WAS NO ESTABLISHED COURSE OF DEALING HERE TO SUPPORT FINDING A CONTRACT BASED ON THE PARTIES’ CONDUCT
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Truman L. Flatt & Sons Co. v. Schupf 11 results (showing 5 best matches)
- Moreover, even if the letter did constitute repudiation, the plaintiff timely retracted that repudiation. According to both the Restatement and the UCC, until a repudiating party’s next performance is due, she can retract her repudiation unless the aggrieved party has, since the repudiation, cancelled or materially changed his position or otherwise indicated that he considers the repudiation final. Although Illinois law is silent on the issue, the seller points out that the UCC also states the proposition that, after an anticipatory repudiation, the aggrieved party is entitled to choose to treat the contract as rescinded or terminated, to treat the anticipatory repudiation as a breach by bringing suit or otherwise changing his position, or to await the time for performance. The plaintiff acknowledges this principle, but points out that the seller is ignoring the fact that until the aggrieved party exercises one of these options, the repudiating party has the opportunity to retract....
- Schupf (D) agreed to sell to Truman L. Flatt & Sons Co. (Flatt) (P) a parcel of land for $160,000, subject to the contingency that, within 120 days of signing the contract, the city zoning board authorized the construction and operation of an asphalt plant on the property. If the zoning request was denied, the contract was voidable at the buyer’s option. When, after the public hearing on the matter, the buyer realized that the likelihood of rezoning was slim to none, it offered to purchase the property anyhow, but at a slightly lower price. The seller rejected the offer. The zoning reclassification was ultimately denied but, sometime later (still within the allowable time period), the buyer elected to proceed with the purchase at the full price. The seller’s attorney notified the buyer’s attorney that the buyer’s failure to waive the rezoning requirement and elect to proceed at the time rezoning was denied, coupled with the buyer’s offer to buy the property at a lower price,...contract
- The Restatement provides two illustrations that are helpful in understanding this case. In the first one, on February 1, A contracts to supply B with natural gas for one year beginning on May 1, with payments to be made each month. On March 1, A repudiates. On April 1, before B has taken any action in response to the repudiation, A notifies B that he retracts his repudiation. B’s duties under the contract are not discharged, and B has no claim against A. In the second illustration, with the facts being otherwise the same as stated above, on March 15 B notifies A that he cancels the contract. B’s duties under the contract are discharged and B has a claim against A for damages for total breach.
- (Knecht, J.) Yes. The doctrine of anticipatory repudiation requires a clear manifestation of an intent not to perform the contract on the date of performance. That intention must be a definite and unequivocal manifestation that he will not render the promised performance when the time fixed for it in the contract arrives. Doubtful and indefinite statements that performance may or may not take place are not enough to constitute anticipatory repudiation. Here, the defendant relied on a May 21 letter as constituting the anticipatory repudiation. That letter stated that it appeared very unlikely that the property would be zoned to permit an asphalt plant, but that the buyers would consider buying the property for $142,500. This language did not constitute a clearly implied threat of nonperformance. Even if such an inference were possible, Illinois law requires a repudiation to be manifested clearly and unequivocally. The May 21 letter was at most ambiguous on whether repudiation had...
- Appeal by the plaintiff from the trial court decision granting the defendant’s motion for summary judgment.
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Berryman v. Kmoch 9 results (showing 5 best matches)
- Kmoch (D) also argued that the option contract should have been enforced under the doctrine of promissory estoppel. The court stated that, in order for the doctrine of promissory estoppel to be invoked as a substitute for consideration, the evidence must show that (1) the promise was made under such circumstances that the promisor reasonably expected the promisee to act in reliance on the promise, (2) the promisee acted as could reasonably be expected in relying on the promise, and (3) a refusal by the court to enforce the promise must be virtually to sanction the perpetration of fraud or must result in other injustice. Given the facts of this case, those elements were not satisfied here, so the case turned on whether there was consideration for the option agreement and, if not, whether the offer to sell had been revoked. The court held that it had been revoked, and thus could no longer be exercised.
- Berryman (P) sent Kmoch (D) an option agreement in 1973 whereby, for “$10,000 and other valuable consideration,” Berryman (P) would grant Kmoch (D) an option to purchase 960 acres of land in the next 120 days. The next month, Berryman (P) called Kmoch (D) and asked to be released from the option agreement. Nothing definite was worked out between them, but Kmoch (D) never paid the $10,000 and Berryman (P) sold the land to another person. The following month, Kmoch (P) made arrangements to purchase the land. When he learned of the sale to another buyer, he quickly recorded the option in the office of the county recorder. Kmoch (D) then called Berryman (P) and sent him a letter, attempting to exercise his option. Berryman (P) responded by filing a declaratory judgment action to have the option contract declared null and void. Both parties moved for summary judgment. The trial court reached a decision in the plaintiff’s favor, finding that the option was granted without consideration...
- State appellate court review of a trial court decision granting summary judgment to the plaintiff.
- (Fromme, J.) No. An option agreement, to be binding, must be supported by consideration the same as any other contract. An option contract that is not supported by consideration is an offer to sell that may be withdrawn at any time prior to acceptance. Although Kmoch (D) spent time and effort looking for others who may have been interested in buying the land, this was not a contract listing the real estate with Kmoch (D) for sale to others. The acts that Kmoch (D) urges as consideration conferred no special benefit on the promisor or his land. Time and money spent by a party in trying to sell property for which he holds an option cannot be construed as a consideration to the party from whom he secured the option. When an offer is for the sale of an interest in land, if the offeror, after making the offer, sells or contracts to sell the land to another and the offeree acquires reliable information of that fact before he has exercised his power of creating a contract by accepting the...
- An option agreement, to be binding, must be supported by consideration the same as any other contract.
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Hemlock Semiconductor Operations, LLC v. SolarWorld Industries Sachsen GmbH 10 results (showing 5 best matches)
- Sachsen (D) makes the related argument that the Chinese government’s illegal actions frustrated Sachsen’s (D) purpose in entering into the LTAs. Frustration of purpose and impracticability are “overlapping defenses.” Both defenses require proof that an unforeseen event altered “a basic assumption on which the contract was made.” The frustration-of-purpose defense also requires that the unforeseen event thwart the parties’ purpose in making the contract to such a degree that “one party’s performance [becomes] virtually worthless to the other.” Like the impracticability defense, the frustration-of-purpose defense generally cannot be based on an argument that the continuation of existing market conditions was a “basic assumption” on which the contract was made. And courts usually will not assume that “mutual profitability” was the primary purpose of a contract. The frustration-of-purpose defense is inapplicable to the present case for the same reasons that the impracticability defense...
- The impracticability defense applies only when an unanticipated circumstance has made performance of the promise vitally different from what should reasonably have been within the contemplation of both parties when they entered into the contract. In other words, the defense is viable only if an unforeseen event occurs and the non-occurrence of that event was a basic assumption on which both parties made the contract. The expectation that current market conditions will continue for the life of the contract is not such a basic assumption, so shifts in market prices ordinarily do not constitute impracticability. Likewise, the simple fact that a contract has become unprofitable for one of the parties is generally insufficient to establish impracticability. Even relatively drastic changes in the market have been held insufficient to trigger the impracticability defense. Sachsen (D) argues that the impracticability defense should apply here because the illegal actions of the Chinese...
- Hemlock (P) sued, seeking the full amount due under the liquidated-damages provision. In its answer, Sachsen asserted 17 affirmative defenses, including illegality, commercial impracticability, and frustration of purpose. The argument that the LTAs were illegal was based on Sachsen’s claim that the LTAs violated European Union (E.U.) and German antitrust laws. The District Court granted Hemlock’s (P) motions to strike Sachsen’s (D) defenses, and ordered summary judgment in favor of Hemlock (P).
- Sachsen (D) also argues that the district court improperly struck its defense the LTAs were illegal under E.U. and German antitrust law. According to Sachsen (D), the LTAs were illegal for two reasons. It first argues that the take-or-pay provision and a separate prohibition on resale are inextricably linked, and that the combination of the two is facially illegal under E.U. and German antitrust law. Second, Sachsen argues that the LTAs violated E.U. antitrust law by tying Sachsen’s (D) predominant demand for polysilicon to a single seller—Hemlock (P). Hemlock (P), however, does not seek to enforce the prohibition on resale. Similarly, Sachsen (D) failed to prove that the LTAs violated the E.U. regulations that prohibit tying provisions.
- Contracts that call for a continuing obligation to supply a buyer at a certain price are risky for both parties. The supplier runs the risk that the price of whatever is being supplied will increase, meaning that the supplier could obtain a better price elsewhere. The buyer runs the risk that prices will fall, meaning that the buyer’s requirements could be supplied more cheaply by another. The longer the term of the contract, the greater the risk is to either party.
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Williams v. Walker-Thomas Furniture Co. 10 results (showing 5 best matches)
- (Wright, J.) Yes. Unconscionable contracts are unenforceable. Unconscionability includes an absence of meaningful choice on the part of one party together with contract terms that are unreasonably favorable to the other party. Whether a meaningful choice is present can be determined only by considering all circumstances surrounding the transaction. In such a case, the court should then consider whether the contract terms are so unfair that they should not be enforced. A test for fairness is whether the terms are so extreme as to appear unconscionable according to the mores and business practices of the time. Remanded.
- (Danaher, J.) What may appear to be an unconscionable contract may simply be a means for a business establishment to balance its risk when extending credit to a customer on relief. As such, courts must take a cautious approach in determining what is unconscionable in light of the fact that law has traditionally allowed parties great latitude in making their own contracts.
- The Uniform Commercial Code specifically provides that a court may refuse to enforce a contract it finds to be unconscionable at the time it was made. Those Code sections were enacted after the installment contracts here were made. However, that timing does not mean that the common law in the District of Columbia was otherwise or that a similar rule could not be adopted by the court. Rather, the court in Williams found that the congressional adoption of this section was persuasive authority for the court’s position that if the element of unconscionability was present at the time a contract was made, the contract should not be enforced.
- Williams (P) was a single mother who relied on public assistance to support herself and her seven children. Over the course of a five-year period, she signed fourteen installment contracts with Walker-Thomas (D) for the purchase of several household items. The installment contracts each contained a long paragraph in fine print that provided, among other things, that any payments after the first purchase were prorated on all purchases. The effect of the provision was to keep a balance due on all items until the entire balance was paid in full. Williams (P) defaulted on her last purchase, and Walker-Thomas (D) filed a complaint in replevin for possession of all items Williams (P) had purchased.
- After Williams (P) defaulted on an installment contract for a stereo set she had purchased from Walker-Thomas (D), Walker-Thomas (D) filed a complaint in replevin for possession of all items Williams (P) had purchased on installment contracts with Walker-Thomas (D).
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BMW Financial Services, NA, LLC v. Deloach 6 results (showing 5 best matches)
- Rescission of a contract may be granted for a mistake of fact, but the party seeking rescission may not bear the risk of that mistake. Adopting the test set forth in the Restatement Second of Contracts, the court held that the following facts must be established to qualify for a rescission based on mistake of fact: “(1) the defendant made a mistake regarding a basic assumption upon which the defendant made the contract; (2) the mistake has a material effect upon the agreed exchange of performances that is adverse to the defendant; (3) the defendant does not bear the risk of the mistake; and (4) the effect of the mistake is such that enforcement of the contract would be unconscionable.” Here, the first two parts of the case are undisputed. BMW (P) made a material mistake that led to the Deloach (D) settlement agreement for significantly less money than the default judgment. BMW (P), however, bears the risk of the mistake. party bears the risk of a mistake when “(a) the risk is...
- court relied on a test for unilateral mistake based on the Restatement (Second) § 153. The Restatement and various courts have recognized a few different bases for unilateral mistake. Early cases required that the unilateral mistake be “palpable”—so obvious that the other party either knew or should have known that a mistake had been made.
- Deloach (D) leased a BMW from BMW Financial Services (BMW) (P). Deloach (D) did not make his lease payments, and BMW (P) repossessed the car. At that point, BMW (P) determined that the odometer had been tampered with. BMW (P) sued Deloach (D) for breach of the lease and for tampering with the odometer. BMW (P) sold the car at auction for $25,000. Because BMW (P) did not properly flag Deloach’s (D) account as being part of ongoing litigation, the account was sent to a collection agency with an outstanding balance of approximately $24,000. Deloach’s (D) father negotiated a settlement with the collection agency for $14,000 in exchange for a complete release of claims. The settlement was signed on August 17, 2015. On August 13, 2015, BMW (D) won a default judgment against Deloach in the amount of $114,677. Most of this amount was treble damages for the odometer tampering. BMW (P) did not learn of the settlement until after the default judgment was entered. BMW (P) sought to rescind the...
- Rescission of a contract may be granted for a mistake of fact, but the party seeking rescission may not bear the risk of that mistake.
- RESCISSION IS NOT AVAILABLE TO THE PARTY THAT BEARS THE RISK OF A MISTAKE
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Princess Cruises, Inc. v. General Electric Co. 13 results (showing 5 best matches)
- (Goodwin, J.) Yes. When the predominant purpose of a contract is the rendering of services rather than the furnishing of goods, the UCC is inapplicable and courts must draw on common law doctrines when interpreting the contract. Although this is a maritime case involving a maritime contract, given admiralty law’s goals of uniformity and predictability, mixed maritime contracts for goods and services are subject to the same inquiry as land-based mixed contracts. Accordingly, when considering whether the UCC applies, a court must first determine whether the predominant purpose of the transaction is the sale of goods. In making this determination, we are guided by the seminal case of . In holding the UCC applicable in that case, the court explained that the test is not whether the contract is one for mixed goods and services, but granting that goods and services are mixed, whether the contract’s thrust, its purpose, is the rendition of services with goods incidentally involved (
- Common law principles are important in this case to determine which agreement controls, and therefore what damages may be awarded. Princess (P) argues that the terms of its purchase order apply, but GE (D) argues that the terms of its final price quotation apply. Applying common law principles, we find that GE’s (D) final price quote was a counteroffer to Princess’s (P) purchase order, which was accepted by Princess (P). Princess (P) accepted the final price quotation by not objecting to the confirmatory letter sent by GE (D) and by paying the amount set forth in the final price quote. At common law, an offeror who proceeds under a contract after receiving a counteroffer can accept the terms of the counteroffer by performance. Accordingly, the terms and conditions of GE’s (D) final price quotation control liability and damages in the transaction at issue here. That agreement limited damages to the contract price and eliminated liability for incidental or consequential damages and...
- When the predominant purpose of a contract is the rendering of services rather than the furnishing of goods, the UCC is inapplicable and courts must draw on common law doctrines when interpreting the contract.
- Princess Cruises (P) scheduled one of its cruise ships for routine inspection services and repairs and requested that GE (D), the original manufacturer of the ship’s main turbines, perform services and provide parts incidental to the ship’s inspection and repair. GE (D) noticed rust on the surface of the rotor and recommended that the ship be taken ashore for cleaning. Good metal was removed from the rotor during the cleaning process, rendering the rotor unbalanced. Princess (P) was forced to cancel a ten-day Christmas cruise and a ten-day Easter cruise as a result of delays caused by the repairs. Princess (P) sued GE (D) for breach of contract. A jury found GE (D) liable and awarded Princess (P) over $4.5 million in damages. GE (D) appealed, arguing that the court erred in denying its renewed motion for judgment as a matter of law, which requested that the court vacate the jury’s award of incidental and consequential damages because the court erroneously applied UCC principles...
- A counteroffer is an offer made in response to an earlier offer made by the other party during negotiations for a final contract. It is a new offer made in response to an offer received. A counteroffer has the effect of rejecting the original offer, which can no longer be accepted unless revived by the offeror. Once a counteroffer is made, there must be acceptance of the terms of the counter offer or there is no contract. In this case, acceptance was made by the offeree’s performance under the terms of the counteroffer.
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Credit Bureau Enterprises, Inc. v. Pelo 11 results (showing 5 best matches)
- The court did not address the issue of whether Pelo’s (D) signing the consent form constituted an express contract, because the case was decided under a quasi-contract theory. The existence of a contract generally precludes application of the doctrine of unjust enrichment. An express and an implied contract cannot be found to exist on the same subject matter.
- (McGiverin, C.J.) Yes. An implied contract is an obligation imposed by law without regard to either party’s expression of assent either by words or acts. Implied contracts do not arise from the traditional bargaining process, but rather rest on a legal fiction arising from considerations of justice and the equitable principles of unjust enrichment. The general rules of contracts do not apply. Restitution and unjust enrichment are modern designations for the older doctrine of quasi or constructive contracts. Unjust enrichment is an equitable principle mandating that one may not be permitted to unjustly enrich oneself at the expense of another or to receive property or benefits without making compensation for them. When a person performs services for another that are known to and accepted by the latter, the law implies a promise to pay for those services. Pelo’s (D) hospitalization was a medical benefit to him. The services were provided in good faith and not gratuitously, and were...
- After arguing with his wife, Pelo (D) left his home and checked into a motel. He called his wife and threatened to hurt himself. The police were notified and they located Pelo (D) and took him to the hospital. A magistrate found probable cause that Pelo (D) was seriously mentally impaired and likely to harm himself, so the magistrate entered an emergency hospitalization order requiring Pelo (D) to be detained for 48 hours. Pelo (D) refused to sign a release form providing that he was liable for any charges not covered by insurance, but later relented to protect his personal items. After Pelo (D) was released, the hospital sought payment of a bill for $2,775. Pelo (D) refused to pay the bill or authorize his insurance carrier to pay it. The hospital assigned its claim to Credit Bureau Enterprises, Inc. (P). The credit bureau sued in small claims court. At a hearing on the claim, Pelo (D) admitted that he had been hospitalized, but denied making any agreement to pay for the services....
- QUASI-CONTRACT
- : 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. In contracts, restitution occurs when a party recovers monetary payments already made or when a party is ordered to pay the value of performance already rendered.
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Cook v. Coldwell Banker/Frank Laiben Realty Co. 15 results (showing 5 best matches)
- (Crane, J.) Yes. An offer to make a unilateral contract is accepted when the requested performance is rendered. In the absence of any contract to the contrary, the plaintiff could terminate her relationship with the defendant at any time and was not obligated to earn a certain level of commissions. Here, there was sufficient evidence that the bonus offer induced the plaintiff to remain with the defendant through the end of 1991 and to earn a high level of commissions for the court to submit the issue of acceptance by performance to the jury. The defendant argues that it withdrew the first offer and made a new offer that required the plaintiff to stay with the company until March 1992. An offeror may not revoke an offer when the offeree has made substantial performance. When a party makes a promissory offer that can be accepted by the rendition of the performance that is requested in exchange, without any express return promise or notice of acceptance in words, the offeror is bound...
- A unilateral contract is a contract in which performance is based on the wish, will, or pleasure of one of the parties; the promisor does not receive a promise as consideration for his promise. Although a unilateral contract lacks consideration for want of mutuality, when the promisee performs, consideration is supplied, and the contract is enforceable to the extent performed. In other words, the main offer includes a subsidiary promise, necessarily implied, that if part of the requested performance is given the offeror will not revoke his offer. Part performance thus furnishes the consideration for the subsidiary promises. Merely acting in justifiable reliance on an offer may in some cases serve as sufficient reason for making a promise binding.
- Did the plaintiff present sufficient evidence to make a submissible case for breach of contract?
- : The complete fulfillment of one’s obligations according to the contract. “Part performance” is the fulfilling of only some of the contract obligations. “Substantial performance” is performance of the essential purpose of the contract, although insignificant deviations from the strict obligations of the contract may remain.
- : The fulfillment of the material obligations that a person has under a contract so as to excuse complete performance of the condition. The contract remains enforceable as long as the omission is minor although damages may be available to the other party.
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Jacob & Youngs, Inc. v. Kent 8 results (showing 5 best matches)
- Jacob & Youngs (P) contracted to build a country house for Kent (D). The specifications for the plumbing stated that all iron pipe would be “of Reading manufacture.” After construction was completed, Kent (D) learned that some of the pipe was made by other manufacturers. The different brands were not substituted intentionally, but were used due to an oversight. The architect of the house asked Jacob & Youngs (P) to replace the pipe, but replacing it would have involved demolishing substantial parts of the house. Jacob & Youngs (P) did not change the pipe and asked for a certificate that the final payment was due. The certificate was refused, and Jacob & Youngs (P) brought suit. The trial court refused to admit evidence that there was no difference in the quality or appearance of the pipe made by other manufacturers and that the only distinction between the different brands of pipe was the manufacturer’s name stamped on the pipes. The court directed a verdict for the defendant and...
- (Cardozo, J.) No. A trivial, innocent omission will not always be a failure of a condition that causes forfeiture of the contract. In deciding if an omission is trivial, the finder of fact must look at the purpose to be served by the condition, the “desire to be gratified” by the condition, the excuse for the failure to meet the condition, and the harshness of forcing the party to comply with the condition. When the significance of the failure to meet the condition is, as it is here, grossly out of proportion to the harshness of forcing a party to forfeit the contract, the courts will not assume that full performance is dependent on meeting that trivial condition. Nonetheless, the defendant may be entitled to an offset consisting of the difference in value of the pipes he expected would be used and those that were actually used, which may actually be trivial or even nothing. Although in most cases the cost of replacement is the proper measure of damages, in this case such a cost...
- (McLaughlin, J.) The plaintiff did not perform its contract, so the trial court was right in directing a verdict for the defendant. The plaintiff agreed that all the pipe used should be from the Reading Manufacturing Company, but only about two-fifths of it was. The defendant had a right to contract for what he wanted. It does not matter whether the pipe used was just as good, or that the difference in value was nominal. The defendant was entitled to get what he asked for, even if it was a mere whim. He agreed to pay only upon the condition that the pipes installed were made by one company. A builder can demand payment only upon and according to the terms of the contract, and if the conditions on which payment is due have not been performed, the right to demand it does not exist. To apply a different doctrine would be to make another contract, and would be giving to parties the encouragement to violate their engagements, which the just policy of the law does not permit. I would...court
- The main objection raised by the dissent is that Kent (D) was deprived of something he bargained for and that he thought important enough to merit tearing out the already-installed plumbing. The court does not recognize that there may have been reasons other than the properties or specifications of the pipe for preferring one brand over the other ( Kent (D) may have had a substantial investment in the Reading Pipe Company). Kent (D), who was a prominent and wealthy attorney in New York (the $77,000 price of his country house is equivalent to well over $1 million in the 2000s), may have been ahead of his time. When this case was litigated, brand names had not become the form of social validation they are today.
- BREACH OF A TRIVIAL CONDITION WILL NOT DEFEAT THE RIGHT TO RECOVER UNDER A CONTRACT
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Leibel v. Raynor Manufacturing Co. 8 results (showing 5 best matches)
- (Howerton, J.) Yes. Reasonable notification is required in order to terminate an ongoing oral agreement for the sale of goods in a relationship of manufacturer-supplier and dealer-distributor or franchisee. Although distributorship agreements are often not in writing and can be terminated at will, without a requirement of good faith and fair play either party may be severely damaged. Reasonable notification should be the minimum amount of protection afforded to either party. When a manufacturer sells its products to the public through a local dealer, the transaction is a sale, and the provisions of the Uniform Commercial Code apply. Although the UCC provides that when an agreement is indefinite in duration it may be terminated at any time by either party, it also provides that termination by one party requires that reasonable notification be received by the other party. The requirement of reasonable notification does not relate to the method of giving notice, but to the...
- Comment 8 to provides that subsection (3) recognizes that the application of principles of good faith and sound commercial practice normally call for such notification of the termination of an ongoing contractual relationship as will give the other party reasonable time to seek a substitute arrangement. An agreement dispensing with notification, or limiting the time for seeking a substitute arrangement, is valid unless the results of putting it into operation would be the creation of an unconscionable state of affairs. Here, whether the notification was reasonable was a question of fact, which is not suitable for resolution on a motion for summary judgment, so the case was remanded to the trial court for further proceedings.
- Appeal by the plaintiff from the trial court’s summary judgment for the defendant.
- The parties entered into an oral agreement whereby Leibel (P) had an exclusive dealer-distributorship for Raynor’s (D) garage doors in a territory extending for a 50-mile radius around Lexington, Kentucky. As a result of the agreement, Leibel (P) borrowed substantial sums of money in order to purchase inventory and equipment and provide working capital for starting the business. After two years of allegedly declining sales, Raynor (D) notified Leibel (P) that it was terminating the relationship. Raynor (D) also notified Leibel (P) that Helton Overhead Door Sales was the new dealer-distributor for the area, and that Leibel (P) would have to place all future orders with Helton. Leibel (P) brought suit for breach of contract. Raynor (D) moved for summary judgment, contending that the agreement between the parties was for an indefinite duration and could be terminated at will by either party. Leibel (P) countered that he was entitled to reasonable notice of the intent to terminate. The...
- Was Leibel (P) entitled to reasonable notice of Raynor’s (D) intent to terminate the exclusive dealer relationship?
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Mel Frank Tool & Supply, Inc. v. Di-Chem Co. 9 results (showing 5 best matches)
- (Lavorato, J.) No. The Restatement recognizes three distinct grounds for the discharge of an obligor’s contractual duty: the obligor may claim that (1) some circumstance has made his own performance impracticable, (2) some circumstance has so destroyed the value to him of the other party’s performance as to frustrate his own purpose in making the contract, or (3) he will not receive the agreed exchange for the obligee’s duty to render that agreed exchange on the ground of either impracticability or frustration. Restatement (Second) of Contracts ch. 11. The key question underlying the doctrines of impracticability and frustration is whether the nonoccurrence of the circumstance was a basic assumption on which the contract was made. When, after a contract is made, a party’s principal purpose is substantially frustrated without his fault by the occurrence of an event the nonoccurrence of which was a basic assumption on which the contract was made, his remaining duties to render...contract
- Di-Chem (D) also relied on language in the lease that it claimed released it from further obligation to pay rent. The lease provided that, should a zoning ordinance of the city make it impossible for the landlord, using diligent and timely efforts to obtain necessary permits and to repair and/or rebuild such that the tenant is not able to conduct its business on the premises, then the partial destruction will be treated as a total destruction of business use, which releases both parties from future obligations under the lease. But the court held that this clause had no bearing on the facts of this case. The clause does not cover the situation where a subsequent governmental regulation prohibits the use of the premises for one of several purposes specified in the lease, so the district court was correct in disregarding that argument.
- The Restatement recognizes three distinct grounds for the discharge of an obligor’s contractual duty: the obligor may claim that (1) some circumstance has made his own performance impracticable, (2) some circumstance has so destroyed the value to him of the other party’s performance as to frustrate his own purpose in making the contract, or (3) he will not receive the agreed exchange for the obligee’s duty to render that agreed exchange on the ground of either impracticability or frustration.
- Di-Chem (D), a chemical distributor, leased a storage and distribution facility from Mel Frank (P). Before the lease was signed, Mel Frank’s (P) owner asked Di-Chem (D) representatives what they were going to be selling, and he was told “chemicals.” Some of these chemicals were considered hazardous. After Di-Chem (D) began occupying the property, it received a letter from the city regarding various code violations that were revealed upon inspection of the premises. Pursuant to a new city ordinance, Di-Chem (DP) was ordered to remove all hazardous materials within seven days. The city also notified Di-Chem (D) of changes it could make in order to continue storing hazardous materials on the property. Although Di-Chem (D) and Mel Frank (P) briefly considered splitting the cost of bringing the building up to code, Mel Frank (P) thought the cost was prohibitive. Di-Chem (D) then notified Mel Frank of its intention to relocate as soon as possible to avoid civil and criminal proceedings...
- EVEN IF A SIGNIFICANT PURPOSE OF THE CONTRACT IS FRUSTRATED, IF OTHER PURPOSES REMAIN, THE PARTIES ARE NOT RELIEVED OF THEIR DUTY TO PERFORM
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Lenawee County Board of Health v. Messerly 10 results (showing 5 best matches)
- (Ryan, J.) No. A contract based on a mutual mistake is voidable unless the adversely affected party agrees to bear the risk of the mistake. A mistake is a belief that is not in accord with the facts. The belief must be about a fact in existence at the time the contract is executed. It may not be a prediction about a future occurrence. Here, the parties were mistaken about the property’s income-producing capacity. The Messerlys (P) claim the defect in the sewage system arose after the contract was executed, whereas the Pickleses (D) claim the defect existed previously, but was only discovered after. We conclude that the septic system was defective before the parties executed the contract. We now determine the legal significance of the mistake. The Messerlys (P) claim the mistake relates only to the quality or value of the property, and that such a mistake is collateral to the contract and does not justify rescission. The Pickleses (D) argue that the parties were mistaken about the...
- The Pickles (D) purchased from the Messerlys (P) land containing an apartment building, as an income-producing investment property. At the time of the purchase, neither party knew that a septic tank had been installed on the property several years earlier in violation of the then-applicable health code. A few days after the Pickleses (D) purchased the property, they discovered raw sewage seeping from the ground. The county board of health condemned the property and issued an injunction proscribing human habitation on the property until it was brought up to code. The Pickleses (D) stopped making payments on the land contract. After the Messerlys (P) filed an action for foreclosure, the Pickleses (D) filed a counterclaim to rescind the contract. The trial court dismissed the Pickleses’ (D) complaint and issued a foreclosure action against them. On appeal, the court of appeals concluded that that the mutual mistake between the parties regarding the septic tank went to a basic, rather...
- The court adopts the approach to mutual mistake found in
- : Any of several means of ending a contract, such as by mutual agreement, by exercising an option in the contract allowing the party to do so, or as an equitable remedy when the contract was based on fraud, mistake, or similar problems.
- Review of the court of appeals’ judgment in favor of the Pickleses (D), finding that they were entitled to rescind the contract.
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Zapata Hermanos Sucesores, S.A. v. Hearthside Baking Company, Inc. 11 results (showing 5 best matches)
- The court held that a loss recoverable as remedy for breach of contract under the (CISG), does not include attorney’s fees. The court first noted that the CISG provides remedies for breach of international contracts for the sale of goods. Article 74 of the CISG provides that damages for breach of contract by one party consist of a sum equal to the loss, including loss of profit, suffered by the other party as a consequence of the breach, provided that the consequence was foreseeable at the time the contract was made. The court next noted that there is no mention of attorney’s fees in the CISG, and no suggestion in the background of the Convention or the cases under it that “loss” was intended to include attorney’s fees, but no suggestion to the contrary, either. Nevertheless, the court noted that it seems apparent that “loss” does not include attorney’s fees incurred in the litigation of a suit for breach of contract, though certain prelitigation legal expenditures—for example,...
- : The charge for services rendered by an attorney. Determination of fee may vary depending on whether the attorney’s contract stipulates a contingency fee. Hourly fee, or retainer, or whether the fee is subject to other regulations (
- As a general rule, attorneys’ fees are not recoverable in an action for breach of contract. The caveat to the rule is that attorneys’ fees may be recoverable in an international contract, when dealing with a party whose laws would allow it to recover
- Zapata (P), a Mexican corporation that supplied Hearthside (D), a U.S. wholesale baker of cookies, with cookie tins. Hearthside (D) became delinquent, leading Zapata (P) to bring suit under the CISG for money due under 110 invoices, amounting to some $900,000. Zapata (P) also sought prejudgment interest and attorneys’ fees, which it contended are “losses” within the meaning of the Convention on Contracts for the International Sale of Goods (CISG) and are therefore an automatic entitlement of a plaintiff who prevails in a suit under the CISG. The judge granted judgment as a matter of law for Zapata (P) on 93 of the 110 invoices, totaling $850,000. Zapata’s (P) claim for money due under the remaining invoices was submitted to the jury, which found in favor of Hearthside (D). The jury also awarded Zapata (P) $350,000 in prejudgment interest with respect to the 93 invoices, and the judge added on attorney’s fees.
- The CISG is about contracts, not about procedure. The principles for determining when a losing party must reimburse the winner for the latter’s expense of litigation are usually not a part of a substantive body of law, such as contract law, but a part of procedural law. For example, the “American rule,” that the winner must bear his own litigation expenses, and the “English rule” (followed in most other countries as well), that he is entitled to reimbursement, are rules of general applicability. They are not field-specific. There are, it is true, numerous exceptions to the principle that provisions regarding attorneys’ fees are part of general procedure law. For example, federal antidiscrimination, antitrust, copyright, pension, and securities laws all contain field-specific provisions modifying the American rule (as do many other field-specific statutes). An international convention on contract law could do the same. But not only is the question of attorneys’ fees not “expressly...
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Alaska Democratic Party v. Rice 11 results (showing 5 best matches)
- Rice (P) worked for the Alaska Democratic Party (D) for four years before the executive director fired her. Rice (P) took a similar job in Maryland. While in Maryland, Wakefield contacted Rice to discuss his candidacy for Party (D) chair and the possibility of her serving as his executive director. According to Rice (P), after Wakefield was elected as chair, he confirmed his decision to hire her as executive director and offered specific terms. A short time later, the Maryland chair resigned and asked Rice (P) to come work for him on the Gore campaign. She accepted that offer. Within months, she accepted the Alaska offer. She resigned from the campaign and moved to Alaska, despite there being no written contract for the Alaska job. A few months later, the executive committee of the Party (D) told Wakefield that he could not hire Rice (P). Rice (P) stated, however, that even after this meeting Wakefield continued to assure her that she had the job. About a week later, he told her he...
- Did the superior court err in denying the defendant’s motion for summary judgment?
- : A jury verdict ordered by the court. In civil cases, a party may receive a directed verdict if the opposite side does not present a prima facie case or a necessary defense.
- In upholding the jury’s verdict, the appellate court also rejected the argument that Wakefield, as chair-elect, could not bind the Party (D). The superior court had concluded that it would have been reasonable for the jury to find that Wakefield had implied authority, apparent authority, or both. The Party (D) elected Wakefield as its new chair, which arguably cloaked him with apparent authority to conduct business on behalf of his incoming administration. In addition, the evidence provided a sufficient basis for a finding of the chair’s implied general authority to make hiring decisions regarding executive personnel. Accordingly, his actions bound the Party (D) as well. It made no difference that the first time Wakefield made the representations he was not yet Party (D) chair, since the misrepresentations were made in the course of running a political party.
- (Rabinowitz, J.) No. A promise that the promisor should reasonably expect to induce action or forbearance on the part of the promisee or a third person and that does induce the action or forbearance is enforceable, notwithstanding the Statute of Frauds, if injustice can be avoided only by enforcement of the promise. The plaintiff’s burden in overriding the Statute of Frauds is to establish the promise’s existence by clear and convincing evidence. The Party (D) and Wakefield could reasonably have expected to induce Rice’s (P) action by their promise. She did in fact resign from her job, move from Maryland, and lose money as a result of her reliance on the Party (D) and Wakefield. In addition, her reliance on the promise was reasonable. Even so, the promise
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Paul Gottlieb & Co., Inc. v. Alps South Corp. 7 results (showing 5 best matches)
- Gottlieb (P), a supplier of knitted fabrics, provided fabric to Alps (D) for use in prosthetic devices. The commercial relationship went well for about six months, until Gottlieb (P) provided fabric samples of inconsistent color and texture. Things got worse when Gottlieb (P) exhausted its supply of the yarn that was required to produce the specialized high-tech fabric required by Alps (P) and substituted a similar, but not identical, yarn without notifying Alps (D) of the substitution. The new fabric did not stretch as well and Alps (D) began receiving complaints from customers that the fabric was less comfortable. Alps (D) was forced to recall the devices in which the substitute fabric was used and destroy the devices in its inventory. Alps (D) then refused to pay a bill submitted by Gottlieb (P). Gottlieb (P) brought an action to collect damages due to the nonpayment. Alps (D) counterclaimed for breach of warranty. The back of Gottlieb’s (P) contract included language purporting
- (Casanueva, J.) Yes. Between merchants, where a definite and seasonable expression of acceptance or a written confirmation is sent within a reasonable time, it operates as an acceptance even though it states terms additional to or different from those offered or agreed upon, unless acceptance is expressly made conditional on assent to the additional or different terms. Such terms become part of the contract unless they materially alter it (or in other circumstances not relevant here). The party seeking the exclusion of a contractual term pursuant to this provision, as constituting a material alteration, has the burden of proof. A term may be a material alteration if it is surprising. What is expectable, and hence unsurprising, is okay; what is unexpected, hence surprising, is not. Here, Alps (D) must prove that, under the circumstances, it cannot be presumed that a reasonable merchant would have consented to the additional term. The contract at issue was the sixth in a series...
- State appellate court review of a circuit court decision refusing to enforce the plaintiff’s limitation of liability clause.
- Between merchants, where a definite and seasonable expression of acceptance or a written confirmation is sent within a reasonable time, it operates as an acceptance even though it states terms additional to or different from those offered or agreed upon, unless acceptance is expressly made conditional on assent to the additional or different terms.
- Did the court err in refusing to enforce the limitation of liability clause?
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Morin Building Products Co. v. Baystone Construction, Inc. 9 results (showing 5 best matches)
- It would seem that this case falls in the second category, because the aluminum siding was for a factory, where aesthetic considerations are often secondary to considerations of function and cost. This view is supported by the fact that the contract specified unpainted aluminum, which is usually not uniform. Moreover, the reasonable uniformity of Morin’s (P) work was susceptible to objective judgment as to its commercial quality. But the preference courts manifest for applying the objective standard is only proper where the parties employ a standard satisfaction clause. Here, the contract explicitly refers to “artistic effect,” which would seem to place the contract in the “personal aesthetics” category. However, the contract qualifies “artistic effect” with the phrase, “if within the terms of the Contract Documents,” suggesting that the artistic effect clause is limited to those contracts where artistic effect is an aim of the buyer. Baystone (D) also relies on the clause relating
- Although the Seventh Circuit seems to defer to the judgment of the trial court on a “difficult issue of state law,” the opinion does provide an example of the Initial inquiry a court must undertake before it can determine whether a buyer justifiably rejected performance pursuant to a satisfaction clause. Depending on the type of satisfaction clause at issue, a court’s analysis will differ. Most jurisdictions hold that performance need only be reasonably satisfactory in those cases that involve commercial fitness, utility, or value, thus establishing an objective standard. On the other hand, a subjective test is employed in those cases that involve taste, fancy, or personal judgment. Courts ask only whether the rejection was in good faith in those cases involving what Judge Posner terms “personal aesthetics.” This latter category permits an unreasonable but honest rejection. As a result of this difference in standards, the cases often turn on a determination of which category a...
- (Posner, Cir. J.) No. The fact that the owner of a commercial construction project has the final authority to determine the artistic quality of the work does not necessarily mean that he may unreasonably reject the work. Courts categorize into two groups those contracts that provide that the seller’s performance must be to the satisfaction of the buyer before the buyer’s duty to perform arises. The first category of contracts involves commercial quality, operative fitness, or mechanical utility. Applying this standard, courts will judge the buyer’s rejection against the reasonable person standard. In contrast, courts will employ the subjective good faith standard to judge a rejection under those contracts that involve personal aesthetics or fancy. Our task is to decide which category the contract between Baystone (D) and Morin (P) belongs in.
- General Motors hired Baystone Construction, Inc. (D) to build an addition to one of its Chevy plants. Baystone (D) hired Morin Building Products Company (P) to supply and erect the aluminum walls for the addition. The contract, which required the use of a particular type of aluminum with “mill finish and stucco embossed surface,” provided that “all work shall be subject to the final approval of . . . [GM], and [its] decision in matters relating to artistic effect shall be final, if within the terms of the Contract Documents.” In addition, “should any dispute arise as to the quality or fitness of materials or workmanship, the decision as to acceptability shall rest strictly with [GM], based on the requirement that all work done or materials furnished shall be first class in every respect. What is usual or customary in erecting other buildings shall in no wise enter into any consideration or decision.” When GM reviewed the walls erected by Morin (P), it found that the exterior siding...
- A subcontractor who was hired to erect aluminum walls during the construction of an auto factory filed suit to recover the balance of the contract price, claiming that the owner of the project unreasonably rejected the subcontractor’s work.
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Reier Broadcasting Company, Inc. v. Kramer 11 results (showing 5 best matches)
- (Leaphart, J.) Yes. An injunction cannot be granted to prevent the breach of a contract the performance of which would not be specifically enforced. . Personal services contracts are not generally subject to specific enforcement. In fact, injunctions are rarely used to enforce contract rights or prevent breaches. Cases in California and Arizona have enforced this principle. We agree with those cases, concluding that Montana law, too, prohibits the use of injunctive relief to prevent a party to a personal services contract from performing services elsewhere during the life of the contract. The exclusivity clause in the Reier-Kramer agreement, if enforced through an injunction, would prevent Kramer (D) from performing for any competitors. In that sense, an injunction would amount to the indirect enforcement of the affirmative part of the contract. It is this sort of indirect enforcement that the California court sought to avoid, stating that to enjoin one from doing something in...
- Reier Broadcasting (P) owned several radio stations and had the exclusive right to broadcast Montana State University (MSU) athletic events. Kramer (D) was the head football coach at MSU. In 2001, Kramer (D) and Reier (P) entered into an employment contract whereby Reier (P) agreed to pay Kramer (D) $10,020 per year in exchange for exclusive broadcast rights with Kramer (D) as the announcer and talent on a weekly radio program. Kramer (D) also agreed to record commercials for several of Reier’s (P) advertisers. As the expiration of the MSU exclusive broadcast agreement approached in 2002, MSU started seeking competitive bids. Reier (P) informed MSU of the potential conflict of interest arising out of its agreement with Kramer (D). The request for proposals required the successful offeror to broadcast interviews and conduct a commentary program with Kramer (D), which would violate the Reier-Kramer employment agreement. MSU declined to amend its request for proposals and disqualified...
- (Cotter, J.) Reier Broadcasting (P) is not seeking to compel Kramer to perform under the contract. It is simply seeking to prevent him from violating the non-competition provisions of the contract—provisions that were specifically bargained for by Kramer (D) at the encouragement and behest of MSU. Reier (P) has fully and in good faith performed its obligations under the contract and MSU and Kramer (D) accepted the benefits. Now they want this court to assist them in their breach. A party who has enjoyed the benefits of a contract and has accepted and used these benefits has estopped himself from denying the validity or binding force of the agreement, or from setting up or asserting the contrary. I would conclude that MSU and Kramer (D) were estopped from challenging the contract’s enforceability.
- An injunction is an equitable remedy in which the court orders a party to perform or to desist from a particular act. There are many different types of injunctions. A commands the defendant to take a positive action to accomplish a specific purpose ( the court may order a school to admit a particular student). A forbids the defendant or his agents from attempting or continuing some activity that is injurious to the plaintiff ( the court may prohibit a school from suspending or expelling a student). An is any injunction issued prior to trial to prevent irreparable injury to the plaintiff while the court considers whether to grant permanent relief. It is granted for a limited time only. There are two types of interlocutory injunctions: a “preliminary injunction,” which is granted after the defendant has received notice and has had an opportunity to participate in a hearing on the issue; and a “temporary restraining order,” which is granted without notice to the defendant in...
- A radio station owned by Reier (P) had an exclusive contract with the Montana State University football coach that would be violated if the university contracted with a different station and required the coach to work with that station; Reier (P) sought an injunction to prevent the contract violation.
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Brown Machine, Inc. v. Hercules, Inc. 12 results (showing 5 best matches)
- This case is a good illustration of the “battle of the forms” under the UCC. Under the common law, the terms of the last form provided by one of the contracting parties may be deemed controlling, but the UCC provides for different outcomes. Under , a definite and timely expression of acceptance, or a written confirmation that is sent within a reasonable time, operates as an acceptance even if it includes terms additional to or different from those offered or agreed upon, unless acceptance of the new terms is expressly made conditional on assent to the additional or different terms. The additional terms are to be construed as proposals for additions to the contract. Between merchants, the terms become part of the contract unless (a) the offer expressly limits acceptance to the terms of the offer; (b) they materially alter it; or (c) notification of objection to them has already been given or is given within a reasonable time after notice of them is received. ...of a contract... ...to...
- We believe Hercules’ (D) purchase order constitutes the offer in this case. The question then is whether Brown’s (P) acknowledgment containing the indemnity provision constitutes a counteroffer or an acceptance with additional or different terms. According to the UCC, an offeree’s response to an offer operates as a valid acceptance even if it contains terms additional to, or different from, the terms of the offer, unless the acceptance is expressly made conditional on the offeror’s assent to the additional or different terms. When the acceptance is made expressly conditional on the offeror’s assent, the response operates not as an acceptance, but as a counteroffer that must be accepted by the original offeror. The conditional nature of the acceptance must be clearly expressed in a manner sufficient to notify the original offeror that the offeree is unwilling to proceed with the transaction unless the additional or different terms are included in the contract. We find nothing in...
- (Stephan, J.) No. A price quotation is generally not an offer, but rather an invitation to enter into negotiations or a suggestion to induce offers by others; however, if detailed enough, a price quote can amount to an offer creating the power of acceptance if it reasonably appears from the quote that assent to the quote is all that is needed to ripen the offer into a contract. Here, Hercules (D) could not have reasonably believed that the Brown (P) quote was an offer. The cover letter stated that a sales rep would contact Hercules (D) to discuss the quote, and that the quotation was submitted for Hercules’ (D) approval. It further stated that no agreement for sale would be binding on Brown (P) unless accepted by Brown (P) on Brown’s (P) standard order acknowledgment form. Even if we were to accept Brown’s (P) characterization of its proposal as an offer, the quotation by its own terms and conditions expired after thirty days, and Hercules (D) sent its purchase order well beyond the...
- A price quotation is generally not an offer, but rather an invitation to enter into negotiations or a suggestion to induce offers by others; however, if detailed enough, a price quote can amount to an offer creating the power of acceptance if it reasonably appears from the quote that assent to the quote is all that is needed to ripen the offer into a contract.
- Brown Machine (P) sold Hercules (D) a trim press, which was a piece of equipment used to make Cool Whip bowls. The original quote provided by Brown (P) included a term stating that the buyer agreed to pay, on behalf of Brown (P), all sums that Brown (P) became legally obligated to pay because of bodily injury or property damage caused by or resulting from the use or misuse of the trim press, including attorneys’ fees and legal expenses. The quote further stated that the buyer agreed to indemnify and hold Brown (P) harmless from all actions, claims, or demands arising out of or in any way connected with the trim press, including actions, claims, or demands based on Brown’s (P) negligence. After further negotiations, Hercules (D) sent Brown (P) a written purchase order, which stated that the purchase order included all of the terms applicable to the sale, and that any different terms proposed by the seller were rejected. The purchase order did not contain an indemnity provision. In...
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Sateriale v. R.J. Reynolds Tobacco Co. 12 results (showing 5 best matches)
- (Fisher, J.) Yes. A unilateral contract involves the exchange of a promise for a performance. The offer is accepted by rendering the performance rather than providing a return promise. R.J. Reynolds’ (D) argument to the contrary notwithstanding, we see no reason to presume that the communications with the plaintiffs in this case did not constitute an offer merely because they were addressed to the general public in the form of advertisements. The operative question is whether the advertiser, in clear and positive terms, promised to render performance in exchange for something requested by the advertiser, and whether the recipient of the advertisement reasonably might have concluded that by acting in accordance with the request a contract would be formed. We conclude that the plaintiffs adequately alleged the existence of an offer to enter into a unilateral contract whereby R.J. Reynolds (D) promised to provide rewards to customers who purchased Camel cigarettes, saved Camel Cash...
- The court found that there was a unilateral, but no bilateral, contract in this case. A bilateral contract consists of mutual promises made in exchange for each other by the two contracting parties. Here, the plaintiffs identified a promise made by the tobacco company, but they did not point to any promise they made in return. Nor did they argue that R.J. Reynolds (D) sought a return promise in exchange for its own promise to allow consumers to exchange certificates for merchandise. The plaintiffs were not bound to do anything, and they therefore could not establish an offer to enter into a bilateral contract.
- THE PLAINTIFFS’ PERFORMANCE IN RELIANCE ON THE DEFENDANT’S PROMISE CAN SUPPORT A CLAIM FOR BREACH OF A UNILATERAL CONTRACT
- R.J. Reynolds (D) operated a customer rewards program called Camel Cash. The tobacco company urged consumers to buy Camel cigarettes, register with the program, and save the certificates in the packages, which they could then redeem for merchandise featured in Camel Cash program catalogs. During the period of time that the program was operational, Camel’s market share nearly doubled. In October 2006, R.J. Reynolds notified program participants that it was terminating the Camel Cash program, but that they had until March 2007 to redeem the certificates they currently held. However, beginning in October 2006, R.J. Reynolds (D) ceased accepting certificates for redemption. The plaintiffs, who had taken part in the Camel Cash program and saved up their certificates, sued for breach of contract and promissory estoppel. The trial court dismissed the action for failure to state a claim and the plaintiffs appealed.
- Doctrine in equity that states that a promise is binding if the person who made it (promisor) could reasonably expect another (promisee) to rely upon it in a substantial way, and that the promisee did indeed rely upon it. The promisor is “estopped,” or barred, from denying his promise created a contract, even though one has not been made in the normal way.
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Wood v. Lucy, Lady Duff-Gordon 13 results (showing 5 best matches)
- Wood (P) and Lucy, Lady Duff-Gordon (Lucy) (D), a famous fashion designer, entered into a contract whereby Wood (P) was to have the exclusive right to market Lucy’s (D) designs and to place her endorsement on others’ designs. In exchange, Lucy (D) was to pay Wood (P) one-half of the profits. Wood (P) sued Lucy (D), arguing that she breached the contract by placing her endorsement on certain goods without his knowledge and without paying him one-half of the profits. Lucy (D) argued that the contract lacked a mutuality of obligation and demurred on the ground that a valid contract never existed between the parties. The trial court denied the motion, but the appellate division granted the demurrer and dismissed the complaint, finding that the contract lacked mutuality because Wood (P) never promised to do anything. Wood (P) appealed from the appellate division’s judgment.
- An illusory promise is an expression cloaked in promissory terms, but that, on closer examination, reveals that the promisor is not committed to any act or forbearance. One method of circumventing the illusory promise problem is interpolating into an agreement that otherwise seems illusory the requirement of good faith or reasonableness. The method employed in this case is to find a promise by inferences drawn from the facts. Under some circumstances, the promise inferred is called an implied promise, and in others it is referred to as a constructive promise. The road has been much traveled. It is now common for courts to find a means of implying promises to give effect to the intent of the parties.
- (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. Wood (P) 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 from the arrangement. 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.
- : An agreement whereby a distributor expressly or implicitly contracts to supply all of a seller’s goods, using the distributor’s best efforts.
- Appeal from a judgment of the appellate division reversing an order of the trial court that denied the defendant’s motion for judgment on the pleadings and granted that motion.
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Sackett v. Spindler 10 results (showing 5 best matches)
- (Molinari, P.J.) No. Termination of a contract by one party due to a breach by the other, and substitution of the injured party’s legal remedies for his contractual rights, is justifiable when the breaching party’s breach is properly classified as a total, rather than partial, breach of the contract. If, on the other hand, the breach was not total, so that the injured party is not entitled to consider himself discharged under the contract, that party’s action would be considered an unlawful repudiation, which would in turn be a total breach of the contract sufficient to discharge the first breaching party from any further duty to perform. Whether a breach is total or partial depends on its materiality. In determining the materiality of a failure to fully perform a promise, the following factors are considered: (1) the extent to which the injured party will obtain the benefit he reasonably anticipated; (2) the extent to which the injured party may be compensated in damages for lack...to
- Repudiation of a contract occurs when one party refuses or becomes unable to honor the terms of the agreement. Another name for repudiation is anticipatory breach, Courts generally recognize three types of repudiation. First, one party might tell the other that it does not intend to follow through with its side of the deal. This type of repudiation, called “express repudiation,” must be clear and unconditional, as opposed to a vague expression of doubt about whether the party can follow through. Second, a party might take actions that make it impossible to honor the contract. For instance, a restaurant owner may promise to repay a small business loan, but then take on extensive remodeling projects that make it impossible to do so. These facts could constitute an anticipatory breach. Third, the property that is the subject of the contract might be transferred to a third party, rendering the former owner of the property unable to fulfill the deal. Most courts require the non-... ...to...
- Appeal by the plaintiff from a trial court judgment in favor of the defendant on the plaintiff’s claim for breach of contract.
- Termination of a contract by one party due to a breach by the other, and substitution of the injured party’s legal remedies for his contractual rights, is justifiable when the breaching party’s breach is properly classified as a total, rather than partial, breach of the contract.
- : To reject or deny a claim, right, or privilege; the rejection or denial. In contract law, “repudiation of a contract” is the unequivocal declaration before performance is due that performance will not be made.
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Thompson v. Libby 13 results (showing 5 best matches)
- (Mitchell, J.) No. When the parties have deliberately put their engagement into writing in such terms as to import a legal obligation, without any uncertainty as to the object or extent of such engagement, it is conclusively presumed that the whole engagement of the parties, and the manner and extent of their undertaking, was reduced to writing. This rule does not apply when the writing is incomplete on its face and does not purport to contain the whole agreement. The only criterion of the completeness of the written contract as a full expression of the agreement is the writing itself. If it imports on its face to be a complete expression of the whole agreement, it is presumed that the parties have introduced into it every material item and term, and parol evidence cannot be admitted to add another term to the agreement. The written agreement in this case purports to be a complete expression of the whole agreement. There is nothing on its face to indicate that it is an informal and...
- Thompson (P) owned logs marked “H.C.A.” that were lying in the waters of or on the banks of the Mississippi above Minneapolis. He entered into a simple agreement to sell the logs to Libby (D). Libby (D) did not pay and Thompson (P) brought suit to recover the money owed on the contract. Libby (D) counter-claimed for breach of warranty. No warranty was set out in the sale agreement. The trial court admitted parol evidence to establish the existence of a warranty and held in favor of the defendant. The plaintiff’s motion for a new trial was denied and the plaintiff appealed.
- : Uniform Commercial Code; the statute drafted, formulated, and approved by the Commissioners on Uniform State Laws that sets forth the rules that control commercial transactions and contracts.
- The agreement in this case is admittedly very simple, stating only that Thompson (P) sold to Libby (D) all of his logs marked “H.C.A.” for ten dollars per thousand feet, boom scale at Minneapolis, with payments in cash as fast as the scale bills were produced. Apparently the logs did not meet the defendant’s expectations with regard to quality, but because the agreement included no terms relating to quality, parol evidence regarding any such representations was not allowed. In more recent times, the court may have applied one of the implied warranties under the Uniform Commercial Code, such as the implied warranty of merchantability or of fitness for a particular purpose.
- WHEN IT IS CLEAR FROM THE CONTRACT THAT IT ENCOMPASSES THE PARTIES’ ENTIRE AGREEMENT, PAROL EVIDENCE WILL NOT BE ADMITTED TO ADD AN ADDITIONAL TERM
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Sparrow v. Demonico 10 results (showing 5 best matches)
- (Duffly, J.) No. A contract is voidable by a person who, due to mental illness or defect, lacked the capacity to contract at the time of entering into the agreement. Incapacity is a question of fact. Contractual incapacity does not in all cases require proof that mental illness or defect was of some significant duration or that it is permanent, progressive, or degenerative; but, without medical evidence or expert testimony that the mental condition interfered with the party’s understanding of the transaction, or her ability to act reasonably in relation to it, the evidence will not be sufficient to support a conclusion of incapacity. In this case, Demonico (D) failed to present medical evidence or expert testimony as to the nature of her impairment or its effect on her decision-making ability. Such corroboration helps to guard against fraudulent claims and discourages honest plaintiffs from convincing themselves that they suffer from emotional distress. Demonico (D) was aware of the...
- In a dispute over ownership of their former family home, Sparrow (P) filed a complaint against her sister Demonico (D) and Demonico’s husband. Before trial, the parties, both represented by attorneys, reached a settlement through voluntary mediation, according to which Demonico (D) agreed to sell the property and to pay Sparrow (P) $100,000 from the proceeds. Sparrow (P) sought an order to enforce the agreement. The trial court judge denied Sparrow’s (P) motion, concluding in essence that, due to mental impairment, Demonico (D) lacked the capacity to contract at the time of agreement, although Demonico (D) and her husband were the only witnesses at the evidentiary hearing on Sparrow’s (P) motion to enforce, and presented no other evidence of Demonico’s (D) incapacity.
- A contract is voidable by a person who, due to mental illness or defect, lacked the capacity to contract at the time of entering into the agreement.
- Over time the traditional “cognitive test” for incapacity, according to which the movant must prove lack of capacity to understand a contract’s meaning, effect and consequences, has evolved to incorporate an increased understanding of forms of mental illness. The modern test, known as and “affective” or “volitional” test, recognizes that competence can be lost, not only through cognitive disorders, but through affective disorders that encompass motivation or exercise of will. Under this test, a person although aware of nature and consequences of conduct, may still be considered incompetent because mental illness impels the person to act irrationally. Under either the traditional or the modern theory of incapacity, a finding of incapacity need not rest on evidence of a mental defect that is permanent, degenerative, progressive, or of significant duration. The inquiry focuses on a party’s understanding or conduct only at the time of the disputed transaction.
- Can a party establish that she lacked capacity to contract absent medical evidence or expert testimony that the mental condition interfered with the party’s understanding of the transaction or her ability to act reasonably in relation to it?
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Crabtree v. Elizabeth Arden Sales Corp. 10 results (showing 5 best matches)
- (Fuld, J.) Yes. The Statute of Frauds does not require that the memorandum of an agreement be in only one writing, provided that the multiple writings are linked by a reference within them to the same subject matter or transaction. Signed and unsigned writings may be read together, provided that they clearly refer to the same subject matter or transaction. Cases in which multiple writings have been signed by the party to be charged present no difficulties. However, in cases such as this, 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 jurisdictions require that the signed writing contain some reference to the unsigned. Without such a reference, the unsigned writing is not considered. This requirement is based on the construction of the Statute of Frauds that requires that the connection between the signed and... ...to...
- The formal requirements of the Statute of Frauds are liberally interpreted 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. The court noted that the danger of fraud and perjury usually attendant upon the admission of parol evidence is at a minimum in this type of case. Parol evidence will serve only to connect the documents. If that evidence does not connect the documents, or suffice to show assent, the court may conclude that the Statute has not been satisfied.
- Crabtree (P) began negotiations with Elizabeth Arden (D) for possible employment. He told Elizabeth Arden (D) that he would require a three-year employment agreement, with an annual salary of $25,000. Arden (D) countered with an offer of a two-year contract, with an annual salary of $20,000 for the first six months, $25,000 for the second six months, and $30,000 for the second year. Under this proposal, Crabtree (P) would also receive $5000 per year for expenses. Crabtree (P) replied that the offer was “interesting,” and Arden’s (D) secretary prepared a memorandum. The memorandum was headed “EMPLOYMENT AGREEMENT” with Crabtree (P), but was not signed. The memorandum read as follows: “Begin 20000. . . . 6 months 25000. . . . 6 months 30000. . . . 5000 per year.—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...
- : Law that holds that certain contracts may not be enforced unless there is some writing signed by the defendant to the dispute indicating that there was an agreement.
- Crabtree (P) sued Elizabeth Arden (D) for breach of contract and Arden (D) claimed that the Statute of Frauds barred enforcement of the contract.
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Harris v. Time, Inc. 11 results (showing 5 best matches)
- All contracts require the existence of three core elements: offer, acceptance, and consideration. In determining whether the consideration element exists, the general rule is that a court may not weigh the value of either side’s consideration or otherwise concern itself with whether the parties’ bargain was fair. If any consideration exists, even a peppercorn, the consideration requirement has been satisfied. However, this rule is limited only to whether the consideration requirement has been satisfied, and it does not mean that all shockingly one-sided bargains are enforceable. Rather, even if the three core contractual elements exist, an unfair bargain may be evidence of flaws in the contracting process that will invalidate that contract, such as duress or unconscionability. For example, in a contract agreeing to sell a mansion for $1, the low amount of consideration provided might be evidence supporting the seller’s claim that the buyer held a gun to her head to obtain the...
- (King, J.) Yes. A court may dismiss a breach of contract claim if the plaintiff’s allegedly lost consideration is so de minimis that providing a remedy does not justify the judicial resources needed to provide relief. The formation of a contract requires an offer, acceptance, and consideration. Typically, advertisements are treated as invitations to bargain, not as offers to form contracts. However, an advertisement that calls for a specific performance with no opportunity for further negotiation can be an offer. Further, in this situation, any bargained-for act can be consideration. A court will not evaluate the adequacy of the consideration. In other words, a court will not evaluate the value of either side’s consideration or whether the two sides have made a fair bargain. Finally, if a contractual offer allows acceptance through a performance, acceptance does not occur until the offeror has notice of the performance. Separately, there’s a long-standing maxim “de minimis non curat...
- Joshua Gnaizda (P), a three-year-old boy, received an envelope in the mail from Time, Inc. (D). The envelope’s front offered a free calculator watch “just for opening this envelope” before a certain date. Gnaizda’s (P) mother opened the envelope and discovered the rest of the statement: “and mailing this certificate today!” The certificate was a subscription to magazine. Gnaizda’s (P) father, a public interest attorney, gave Time (D) notice that Gnaizda (P) had opened the envelope before the requested date and asked for the watch. Time (D) did not provide the watch. Gnaizda’s (P) father filed a putative class-action lawsuit against Time (D) on behalf of Gnaizda (P) and two other envelope recipients, Mark Harris (P) and Richard Baker (P). The complaint alleged several claims, including a breach of contract claim, and sought declaratory relief, injunctive relief, and $15 million in punitive damages. The trial court dismissed the breach of contract claim at the pleading stage. After a...
- A court may dismiss a breach of contract claim if the plaintiff’s allegedly lost consideration is so de minimis that providing a remedy does not justify the judicial resources needed to provide relief.
- May a court dismiss a breach of contract claim if the plaintiff’s allegedly lost consideration is so de minimis that providing a remedy does not justify the judicial resources needed to provide relief?
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Taylor v. State Farm Mutual Automobile Insurance Co. 12 results (showing 5 best matches)
- (Feldman, C.J.) Yes. The parol evidence rule prohibits extrinsic evidence to vary or contradict an agreement, but not to interpret the agreement. Thus, antecedent understandings and negotiations may be admissible to aid in the interpretation of a contract. The primary and ultimate purpose of interpretation is to discover the parties’ intent and to make it effective. Under a restrictive reading of the parol evidence rule, evidence of prior negotiations may be used for interpretation only upon a finding that some language in the contract is unclear, ambiguous, or vague. If the judge finds from the face of a document that it conveys only one meaning, parol evidence is not admitted for any purpose. Under the Restatement view and that of Professor Corbin, an expert on contracts, there is no need to make a preliminary finding of ambiguity before the judge considers extrinsic evidence. The court may consider all proffered evidence to determine its relevance to the parties’ ...to... ...to...
- Taylor (P) was in a car accident involving three vehicles. The occupants of the other two vehicles sued Taylor (P). He was represented at trial by both a personal attorney and an attorney for State Farm (D). The plaintiffs in that case obtained combined verdicts against Taylor (P) for approximately $2.5 million over his policy limits. One of those plaintiffs eventually settled with State Farm (D). Taylor (P) sued State Farm (D) for bad faith, seeking damages for the excess judgment obtained by the other plaintiff, and claiming that State Farm (D) improperly failed to settle that matter within policy limits. State Farm (D) moved for summary judgment, arguing that Taylor (P) relinquished his bad faith claim when he signed a release drafted by Taylor’s (P) personal attorney in exchange for State Farm’s (D) payment of uninsured motorist benefits. Taylor (P) also moved for partial summary judgment, seeking a ruling that the release did not preclude his bad faith claim. Both motions were...
- Turning to the release in this case, Taylor (P) released all claims in connection with the collision. Taylor (P) argued that a bad faith action sounds in tort and was thus not waived. The court of appeals, in reversing the trial court, held that the bad faith action was purely contractual, and therefore found no ambiguity in the release language. The legal character of bad faith claims is not universally established, however, so the release could reasonably be interpreted as Taylor (P) asserts. The trial court, therefore, did not err in concluding that the text of the release did not necessarily cover claims for bad faith. Taylor (P) was aware of a potential, sizable bad faith claim against State Farm (D) at the time he signed the release, as undoubtedly was State Farm. A recent state supreme court decision characterized the claim as a tort. It is reasonable to believe that, if the parties agreed to release the bad faith claim, they would not have confined the release to... ...to...
- (Corcoran, J.) I fear that this opinion makes this court the supreme court of arguments “that white is black and that a dollar is fifty cents,” to use the colorful words of Professor Corbin.
- State Farm (D) argued that any uncertainty in the interpretation of the language of the release should be construed against the drafter, which in this case was Taylor’s (P) personal attorney (and thus Taylor (P) himself). The rule that requires ambiguities to be construed against the drafter is subordinate, however, to the rule that the intent of the parties should govern. In any event, it was the language of “bad faith” that made the release in this case unclear. Although Attorney Randall drafted the agreement, he argued that State Farm was responsible for that omission. Therefore, it was unclear who, if anyone, the rule should be applied against.
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Frigaliment Importing Co. v. B.N.S. International Sales Corp. 6 results (showing 5 best matches)
- This is a well-known case, probably more from its nearly universal presence in contracts casebooks than from its jurisprudential value. The ultimate effect of the court’s ruling is somewhat unclear: is the court holding that there was no contract because of the ambiguity, or is it holding that the contract was not breached? As far as this particular case is concerned, it may not matter much, but it could be important if, for example, B.N.S. International (D) turned the tables and sued Frigaliment Importing (P) for non-payment for the chickens delivered. If there is no contract, B.N.S. (D) would be limited to seeking restitution for the chickens delivered, which could be considerably less than the price set out in the contract.
- Frigaliment Importing (P) agreed to purchase a several thousand pounds of “US Fresh Frozen Chicken, Grade A, Government Inspected, Eviscerated,” from B.N.S. International Sales (D). The contract called for some of the chickens to be between two and one-half and three pounds. The chickens of that size that were shipped by B.N.S. International (D) were older, stewing chickens, and Frigaliment Importing (P) claimed that it wanted all of the chickens to be younger, frying or broiling chickens. At trial, Frigaliment Importing (P) attempted, but was unable, to prove that the pre-contract negotiations between the parties established that both parties understood that “chicken” meant “broilers or fryers.” Frigaliment Importing (P) also provided testimony that the term “chicken,” as used in the poultry trade, is commonly understood to mean broilers or fryers. Some of this testimony was inconsistent. B.N.S. International (D) introduced other testimony that the term “chicken” could mean either...
- Trial court disposition of the plaintiff’s breach of warranty case.
- (Friendly, J.) No. The party that advocates a special meaning for a contractual term has the burden of proving that the special meaning was the one intended by both parties. Frigaliment Importing (P) was unable to prove conclusively that both parties understood “chicken” to mean “broiler.” Frigaliment Importing (P) was also unable to prove that the term had a common meaning in the poultry industry, and B.N.S. International (D) had reason to believe that it could comply with the contract by shipping stewing chickens. Complaint dismissed.
- WHEN THE PLAINTIFF URGES A SPECIAL MEANING OF A CONTRACT TERM, THE PLAINTIFF HAS THE BURDEN OF PROVING THAT THE MEANING APPLIES
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Oppenheimer & Co., Inc. v. Oppenheim, Appel, Dixon & Co. 12 results (showing 5 best matches)
- Oppenheimer & Co. (P) had three years left on its lease of office space in Manhattan’s financial district. To induce Oppenheimer to move to a different building, the new building’s owner offered to pay the rest of Oppenheimer’s (P) lease if it moved and could not find a sublessor. Oppenheimer (P) moved to the new building and negotiated to have Oppenheim, Appel, Dixon & Co. (OAD) (D) sublease Oppenheimer’s (P) old space. The parties signed a conditional letter agreement. Among other things, the agreement stated there would be no sublease “unless and until” Oppenheimer (P) provided written notice to OAD (D) that the space’s landlord consented to OAD’s (D) construction plans. If OAD (D) did not receive written notice by a specified date, the entire agreement would be deemed “null and void.” The parties later extended the deadline in writing. On the day of the extended deadline, Oppenheimer (P) notified OAD (D) by phone that the landlord’s consent had been obtained. The next day, OAD (...
- Appeal to the state’s highest court from an appellate court’s ruling that the plaintiff had substantially complied with an express condition precedent.
- The doctrine of substantial compliance does not apply to express conditions precedent, but it does apply to implied conditions precedent and to contractual promises. Distinguishing between an express condition and an implied condition is relatively easy because the express condition is spelled out in the agreement. However, in some situations, it can be difficult to distinguish between an express condition precedent and a contractual promise. Commonly, the existence of a condition precedent is signaled by the words “if” or “unless and until,” to signify that the chain stops if the condition does not occur. There is no legal obligation unless and until the condition occurs, and it may not occur. In contrast, a contractual promise is an obligation that a party is saying it will make sure occurs. If a party does not fulfill a contractual promise, the party breaches the contract and can be liable for damages. It is also possible for a contractual requirement to be both an express...
- (Ciparick, J.) No. The doctrine of substantial compliance may not be applied to excuse an express condition precedent. A condition precedent is an act or event that must occur before a contractual duty to perform a promise arises. Conditions precedent can be express or implied. Implied conditions precedent are imposed by law to do justice, and substantial compliance with these conditions can be sufficient. In contrast, an express condition precedent is one the parties specifically agreed is a necessary trigger for some contractual obligation. The contractual obligation is triggered only if the express condition precedent either (1) occurs in strict accordance with its terms or (2) is excused. An express condition precedent may be excused by waiver, breach, or some forfeitures. However, because strict compliance is necessary, substantial ..., the parties’ agreement stated that the OAD (D) had no obligation to enter into the sublease “unless and until” it received written notice of...
- : A condition that is not explicitly expressed, but that is imposed by the court to avoid injustice; also called a constructive condition.
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Roth v. Speck 9 results (showing 5 best matches)
- (Quinn, J.) Yes. The measure of damages for breach of an employment contract by an employee is the cost of obtaining other service equivalent to that promised and not performed. Compensation for additional consequential injury may be recovered if at the time the contract was made the employee had reason to foresee that such injury would result from his breach.
- Roth (P) owned a hair salon and agreed to employ Speck (D) as a hairdresser for one year. Speck (D) was compensated with a salary. Speck (D) was an exceptional hairdresser who maintained a large customer base. After six and a half months, Speck (D) stopped working for Roth (P) and immediately began working for another salon for a better salary. Roth (P) hired a replacement employee who he paid $350. However, this employee was not profitable and therefore he was let go. A second replacement also failed to earn his salary and was employed at a loss to the Roth (P). Roth (P) filed suit for breach of contract. The trial court held that Speck (D) had breached the contract and awarded Roth $1.00. Roth (P) appeals to the District of Columbia Municipal Court of Appeals.
- Where a plaintiff proves a breach of contract duty he is entitled to damages; however, when he offers no proof of actual damages or the proof is vague and speculative, he is entitled to no more than nominal damages. The measure of damages for a breach of an employment contract by an employee is the cost of obtaining other services equivalent to those promised but not performed. Compensation for additional consequential injury may be recovered if at the time of contract, the employee had reason to foresee that such injury would result from his breach
- Is the value of an employee’s services an appropriate measure of damages in a breach of employment contract case?
- An employer brought a breach of contract claim where the employer could not find a suitable replacement for an employee in breach of his employment contract.
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DeFontes v. Dell, Inc. 9 results (showing 5 best matches)
- courts have generally looked more favorably upon sellers and licensors seeking to enforce the provisions of “agree now, terms later” contracts. The analysis of the relevant UCC provisions endorses the enforceability of additional terms included in shrinkwrap and mail order “in the box” contracts on the theory that a purchaser who disagrees with the later-presented terms can reject the terms and avoid contract formation by returning the goods. Over time, the approach to later-presented terms has become the majority view, but, as this case demonstrates, just because a court adopts the analysis does not necessarily mean that it will find the terms-later contract enforceable.
- DeFontes (P), as class representative, sued Dell (D), alleging that its collection of taxes on purchases of optional service contracts violated the Deceptive Trade Practices Act, since service contracts were not taxable in Rhode Island. There were no allegations that Dell (D) wrongfully held onto any of the tax monies collected. Dell (D) filed a motion to compel arbitration of the dispute pursuant to the arbitration clause in the parties’ purported agreements. The hearing justice found that although the plaintiffs could have reviewed the terms and conditions in their agreements had they clicked on a hyperlink on Dell’s (D) website, the link was too inconspicuous and thus insufficient to put customers on notice of the terms and conditions. The terms and conditions were also, however, included in the packaging of the computers. The hearing justice noted that shrinkwrap agreements—paper agreements enclosed within the packaging of a product—are generally sufficient to put consumers on...
- Dell (D) argues that a terms and conditions pamphlet included with a product becomes part of the contract, and there is much support for this position. But not all courts agree. Having reviewed the case law pertaining to shrinkwrap agreements, we conclude that it is unreasonable to expect a seller to apprise a consumer of every term and condition at the moment she makes a purchase. We therefore decline to adopt the minority view, urged by the plaintiffs, that a contract is fully formed when a buyer orders a product and a seller accepts payment or arranges shipment. Thus, the central question here is whether the terms and conditions agreement used by Dell (D) made it clear that, by accepting the product, the consumer was accepting the terms and conditions, and that the consumer could reject the terms and conditions by returning the product. Here, the plaintiffs would have had to refer to a separate “Total Satisfaction Return Policy” in order to get the full message, and even then, we...
- (Williams, J.) No. Arbitration is a matter of contract and a party cannot be required to submit to arbitration any dispute that he has not agreed so to submit. Under the UCC, contracts for the sale of goods may be formed in any manner sufficient to show agreement, including conduct by both parties that recognizes the existence of such a contract. If contract formation occurred in this case at the moment Dell’s (D) sales agents processed a customer’s credit card payment and agreed to ship the goods, as the plaintiffs argue, any later-provided terms would necessarily be treated under the UCC as additional terms in acceptance, confirmation, or offers to modify the existing contract. But the modern trend seems to favor placing the power of acceptance in the hands of the buyer after she receives goods containing a standard form statement of additional terms and conditions, as long as the buyer retains the power to accept or return the product.
- Purchasers of Dell (D) service contracts sued for trade practice violations based on Dell’s (D) charging of taxes on the services, and Dell (D) moved to compel arbitration of the dispute.
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Barrie School v. Patch 11 results (showing 5 best matches)
- The Patches (D) enrolled their daughter in the Barrie School (P) for the 2004–2005 school year. The contract with the school provided for a $1,000 non-refundable deposit and payment of the $13,490 tuition balance in two installments. The agreement further provided that written notice of cancellation must be provided by May 31, 2004 or the full tuition payment would be required. The Patches (D) cancelled by fax on July 14, 2004. The Barrie School (P) filed a breach of contract action seeking the remaining tuition balance. The Patches (D) argued that the agreement had been procured by fraud, that it was a contract of adhesion, that the damages constituted a penalty, and that the school had a duty to mitigate damages. The trial court found that there was a valid contract between the parties, including a valid liquidated damages clause. The court further found that the contract was not one of adhesion and there was no fraud in the inducement. However, the court opined that the school...
- State’s highest court’s review of an appellate court decision affirming the trial court’s decision in the parents’ favor on the mitigation of damages issue.
- As noted in the opinion, Judge Richard Posner of the Seventh Circuit Court of Appeals described the distinction between liquidated damages and the duty to mitigate in . In that case, a party to a shipping contract failed to fulfill the terms of the agreement after market prices shifted. Although the court found that the contractual clause at issue was invalid as a penalty, it nonetheless explained the distinction between mitigation of damages and liquidated damages as follows: “[M]itigation of damages is a doctrine of the law of court-assessed damages, while the point of a liquidated-damages clause is to substitute party assessment; and that point is blunted, and the certainty that liquidated-damages clauses are designed to give the process of assessing damages impaired, if a defendant can force the plaintiff to take less than the damages specified in the clause, on the ground that the plaintiff could have avoided some of them.”
- ADHESION CONTRACT
- With regard to the duty to mitigate damages, generally, when one party breaches a contract, the other party is required to make all reasonable efforts to minimize the loss sustained from the breach and can charge the defendant party only with such damages as, with reasonable endeavors and expense and without risk of additional substantial loss or injury, he could not prevent. But liquidated damages differ fundamentally from mitigation of damages. While mitigation is part of a court’s determination of actual damages that have resulted from a breach of contract, liquidated damages are the remedy the parties to a contract have determined to be proper in the event of breach. The agreed-upon sum replaces any determination of actual loss. When the liquidated damages clause represents a reasonable attempt by the parties to agree in advance upon a sum that will compensate the non-breacher for any harm caused by the breach, in lieu of the compensatory contract damage to which the non-...
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Seidenberg v. Summit Bank 9 results (showing 5 best matches)
- (Fisher, J.) Yes. The covenant of good faith and fair dealing is contained in all contracts and mandates that neither party may do anything that will have the effect of destroying or injuring the right of the other party to receive the fruits of the contract. In granting the defendant’s motion to dismiss, the trial court relied on two central points: the parties’ equal bargaining power and the plaintiffs’ assertion of oral discussions unreflected by the written contract. Unequal bargaining power is but one factor in finding a breach of the implied covenant of good faith and fair dealing. Equal bargaining power and the advice of competent counsel at the formation of the contract are not determinative. We also find that the trial court’s consideration of the parol evidence rule as an insurmountable obstacle was erroneous. Parol evidence may be admitted to provide understanding into the parties’ intentions, and an understanding of the parties’ intentions is essential to a determination...
- State appellate court review of the trial court’s finding that the plaintiffs failed to state a claim on which relief could be granted and dismissal of the case.
- : An implied obligation resting on the assumption that the contracting parties will act in good faith and deal fairly with each other without breaking their word, using disingenuous means to avoid obligations, or denying what the other party obviously understood
- The covenant of good faith and fair dealing is contained in all contracts and mandates that neither party may do anything that will have the effect of destroying or injuring the right of the other party to receive the fruits of the contract.
- The guiding principle in the application of the implied covenant of good faith and fair dealing arises from the fundamental notion that a party to a contract may not unreasonably frustrate its purpose. Here, the plaintiffs alleged that, although the contract expressly provided the defendant with discretion regarding its own performance, bad faith served as a pretext for the exercise of a contractual right to terminate the agreement. Despite Summit’s (D) express contractual right to terminate, there was an expectation that the relationship would last until the plaintiffs reached retirement age. These allegations were enough to survive a motion to dismiss to allow the plaintiffs the opportunity to fully develop their facts and arguments.
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Wartzman v. Hightower Productions, Ltd. 12 results (showing 5 best matches)
- (Getty, J.) No. When anticipated profits are too speculative to be determined, monies spent in part performance, or in preparation for or reliance on the contract, are recoverable. Recovery based on a reliance interest is not without limitation. If it can be shown that full performance would have resulted in a net loss, the plaintiff cannot escape the consequences of a bad bargain by falling back on his reliance interest. When, however, the breach has prevented an anticipated gain and made proof of loss difficult to ascertain, the injured party has a right to damages based on his reliance interest. The breaching party has the opportunity to show any loss the injured party would have suffered had the contract been performed. In this case, the law firm knew or should have known that the success of the venture rested on the ability of Hightower (P) to sell stock and secure advertising as public interest in the venture accelerated. The very lifeblood of the corporation depended on its...to
- Reliance damages are awarded for losses suffered as a result of reasonable reliance on a promise. The amount of reliance damages is based on what it would take to restore the injured party to the economic position he or she occupied before that party acted in reasonable reliance on the promise. Reliance damages may be awarded after a breach of contract or based on a claim of promissory estoppel. Expectation damages, by contrast, are also awarded for breach of contract, but in an amount intended to put the injured party in as good a position as if the breaching party had fully performed its contractual duties. As shown in this case, when expectation damages would be too difficult to prove, reliance damages are the better option.
- : An amount of money specified in a contract to compensate a party for injuries suffered because of a breach of contract by the other party to the agreement; the amount agreed to in advance of a breach of contract to serve as compensation for any injury or damage suffered, thereby precluding any liability in excess of the amount stipulated in the contract.
- When anticipated profits are too speculative to be determined, monies spent on part performance, or in preparation for or reliance on the contract, are recoverable.
- : Any lessening of the damages caused by tort or breach of contract; legal requirement that the injured person, in the exercise of ordinary care, use reasonable efforts to minimize the damages arising out of the injury.
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Totem Marine Tug & Barge, Inc. v. Alyeska Pipeline Service Co. 12 results (showing 5 best matches)
- Under the traditional rule, to prevail on a claim of duress, a party had to show that the agreement was entered into for fear of loss of life or limb, mayhem or imprisonment. The concept has since broadened to include myriad forms of economic coercion which force a person to involuntarily enter into a particular transaction. On the one hand, courts are reluctant to set aside agreements because of the notion of freedom of contract and because of the desirability of having private dispute resolutions be final. On the other hand, there is an increasing recognition of the law’s role in correcting inequitable or unequal exchanges between parties of disproportionate bargaining power and a greater willingness to not enforce agreements which were entered into under coercive circumstances. Courts have not attempted to define exactly what constitutes a wrongful or coercive act, as wrongfulness depends on the particular facts in each case.
- Totem (P) contracted with Alyeska (D) to transport pipeline construction materials from Texas to Alaska. Before the materials reached Alaska, Alyeska (D) terminated the contract without giving a reason for the termination. Totem (P) then sought payment from Alyeska (D) of approximately $300,000, indicating that it faced bankruptcy if not paid soon. Alyeska (D) offered Totem (P) $97,500 to settle all claims, which Totem (P) accepted. Totem (P) filed a complaint against Alyeska (D) seeking to rescind the settlement on the ground of economic duress. Alyeska’s (D) motion for summary judgment was granted and Totem (P) appealed.
- SUMMARY JUDGMENT
- Appeal from summary judgment for Alyeska (D) in contract action seeking to rescind settlement agreement.
- (Burke, J.) Yes. The party alleging economic duress must show that he has been the victim of a wrongful or unlawful act or threat, and such act or threat must be one which deprives the victim of his unfettered will. This requirement may be satisfied where the alleged wrongdoer’s conduct is criminal or tortious but an act or threat may also be considered wrongful if it is wrongful in the moral sense. Typically, those claiming such coercion are attempting to avoid the consequences of a modification of an original contract or of a settlement and release agreement. In many cases, a threat to breach a contract or to withhold payment of an admitted debt has constituted a wrongful act. Economic duress does not exist, however, merely because a person has been the victim of a wrongful act; in addition, the victim must have no choice but to agree to the other party’s terms or face serious financial hardship. Thus, in order to avoid a contract, a party must also show that he had no reasonable...
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Lancellotti v. Thomas 11 results (showing 5 best matches)
- (Spaeth, P.J.) Yes. The non-breaching party in a breach of contract case should not obtain a windfall from the breach. To allow the injured party to retain the benefit of part performance without making restitution of any part of such value is the enforcement of a penalty or forfeiture against the contract breaker. The earlier common law rule did not allow a breaching party to take anything from the breach. Now, however, § 374 of the Restatement (Second) of Contracts represents a more enlightened approach, based on the premise that rules of contract law are not rules of punishment. Under the new rule, the party who committed a breach should be entitled to recover any benefit in excess of the loss that he has caused by his own breach. The case is remanded for further proceedings consistent with this opinion.
- The non-breaching party in a breach of contract case should not obtain a windfall from the breach.
- : (Latin) He promised. In contracts, it is a promise, either oral or written but not under seal, by which a person agreed to do or pay for something. The term is used in connection with the recovery of damages for breach of contract.
- Pennsylvania has not adopted § 374 of the Restatement. Where a binding contract exists and there is no allegation that the contract itself is void or voidable, a breaching party is not entitled to recovery. The UCC provision in accord with the Restatement, cited by the majority, applies only to the sale of goods. Moreover, the trial judge’s assessment of the witness’s credibility supported a resolution in the sellers’ favor. I would affirm.
- In July 1973, the parties entered into an agreement in which the plaintiff agreed to buy the defendant’s luncheonette business and to rent the business premises from the defendant. The agreement required the plaintiff to pay $25,000 upon signing the agreement and to build an addition onto the building, which would be 75% complete by May 1974. In exchange, the buyer did not have to pay rent for the first summer season. The agreement initially provided that, if the condition was not satisfied, the lease would automatically terminate. An August 1973 addendum modified the contract, providing that if the addition was not constructed in accordance with the agreement, the buyer would owe the sellers $6,665 as rental for the summer season. At the end of the 1973 season, problems arose with regard to construction of the addition. The parties were unable to resolve their differences and the buyer was no longer interested in running the business, so the sellers took over. The buyer sued the...
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Speight v. Walters Development Co. 12 results (showing 5 best matches)
- (Larson, J.) Yes. The implied warranty of workmanlike construction is a judicially created doctrine implemented to protect an innocent home buyer by holding the experienced builder accountable for the quality of the construction. It addresses the inequities between the buyer and the builder-vendor by requiring that a building be constructed in a reasonably good and workmanlike manner and be reasonably fit for the intended purpose. Home buyers are ill-equipped to discover defects in homes, which are increasingly complex, and therefore must rely on the skill and judgment of the vendor. In order to maintain a claim under the implied warranty, the buyer must show (1) that the house was constructed to be occupied by the buyer as a home; (2) that it was purchased from a builder who constructed the home for the purpose of sale; (3) that, when sold, the house was not reasonably fit for its intended purpose or had not been constructed in a good and workmanlike manner; (4) that, at the time...
- Appeal by the plaintiffs from a summary judgment entered against them in their suit for breach of the implied warranty of workmanlike construction, which was affirmed by the court of appeals.
- The Speights (P) owned a home built by Walters Development Co. (D). The home was originally custom built for the Roches, who sold it to Rogers, who in turn sold it to the Speights (P). After purchasing the home, the Speights (P) noticed water damage and mold. A building inspector determined that the damage resulted from a defectively constructed roof and defective rain gutters. The Speights (P) sued Walters (D), alleging a breach of the implied warranty of workmanlike construction. Both parties moved for summary judgment, raising the issue of whether remote purchasers like the Speights (P) could pursue a claim for breach of the implied warranty. Walters (D) also raised a statute of limitations defense. The district court held that the Speights (P) could not maintain an implied warranty claim, and that, in any event, such a claim would be barred by the statute of limitations. The court of appeals affirmed.
- a privity of contract is required in a breach of contract action; the defendant must be a party in interest to the plaintiff’s contract).
- As the court notes, the lack of privity between the subsequent purchaser and the builder is not an impediment to allowing a subsequent purchaser to recover on an implied warranty claim. Requiring privity to sue for breach of an implied warranty has been disfavored in products liability cases, and many jurisdictions find similar justifications for extinguishing the privity requirement in the purchase of a home. From a practical perspective, many latent defects are often not discoverable for some time after completion of a house. By the time the defects come to light, the original purchasers may have sold the home. For that reason, subsequent purchasers, too, need protection from faulty construction. The reality is that our society is increasingly mobile, and a home’s ownership is likely to change hands a number of times. A blanket rule prohibiting subsequent purchasers from recovering for a breach of the implied warranty of workmanlike construction would work a substantial injustice.
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Kelsey-Hayes Co. v. Galtaco Redlaw Castings Corp. 10 results (showing 5 best matches)
- Federal district court hearing on the defendant’s motion for summary judgment and the plaintiff’s motion for leave to file a second amended complaint.
- (Cohn, J.) Yes. A contract is voidable if a party’s manifestation of assent is induced by an improper threat by another party that leaves the victim no reasonable alternative. Economic duress can exist in the absence of an illegal threat. The threat must simply be wrongful. Even lawful and non-tortious acts may be wrongful depending on the circumstances. Kelsey-Hayes (P) has alleged a wrongful act here, stating that Galtaco (D) threatened to breach its contract and go out of business, stopping production and delivery of castings unless Kelsey-Hayes (P) agreed to significant price hikes. Kelsey-Hayes (P) has presented a triable issue of fact that it had no reasonable alternative other than to acquiesce. No other casting makers were able to immediately provide an alternative source. Kelsey-Hayes’s (P) customers, including Ford, may have had to halt production of their vehicles. Kelsey-Hayes’s (P) ordinary remedy of accepting the breach and then suing for damages would have been...summary
- The facts of this case mirror an example of economic duress cited in
- Kelsey-Hays (P) made brake assemblies that it sold to automakers. Galtaco (D) supplied castings to Kelsey-Hayes (P), which Kelsey-Hayes (P) incorporated into its brake assemblies. In 1987, the two companies signed a three-year requirements contract under which Galtaco (D) would be the sole source of castings to Kelsey-Hayes (P) in exchange for fixed prices for the first year and scheduled price reductions for the next two years. By 1989, Galtaco (D) had experienced continued financial losses for several years. As a result, the company made the decision to quit making castings. Recognizing that an immediate shutdown would cause hardship to its castings customers, Galtaco (D) offered its customers, including Kelsey-Hayes (P), an agreement to keep its foundries operating for several months in exchange for a castings price increase of 30%. Kelsey-Hayes (P) accepted future shipments but it failed to pay Galtaco (D) for 84 of the final shipments. Kelsey-Hayes (P) sued, contending that the...
- Did the plaintiff present enough evidence that it executed the modification of its original agreement with the defendant under duress to survive a motion for summary judgment?
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Harvey v. Dow 12 results (showing 5 best matches)
- (Mead, J.) Yes. A promise that the promisor should reasonably expect to induce action or forbearance on the part of the promisee or a third person and that does induce such action or forbearance is binding if injustice can be avoided only by enforcement of the promise. Stated simply, the doctrine of promissory estoppel applies to promises that are otherwise unenforceable and is invoked to enforce such promises so as to avoid injustice. Here, if the evidence consisted only of the Dows’ (D) general promises to convey land as a gift or inheritance, we would agree that Harvey’s (P) claim of promissory estoppel should be denied. However, the evidence included an important second component: the Dows’ (P) acquiescence, support, and encouragement of Harvey’s (P) construction of a house on the property. Harvey’s (P) father agreed to the location of the home, obtained a building permit, and built a large portion of the house himself. In a promissory estoppel analysis, the promise relied on by...
- The Dows (D) owned 125 acres of land. The Dows (D), their son, and their daughter, Teresa Harvey (P), each had a house on the land. The family had discussed since the children were young how the land would eventually pass to the children. Harvey (P) first installed a mobile home on the property, with her parents’ permission, and then later built a house on the lot where the mobile home once stood. The Dows (D) provided part of the financing for the home from their home equity line of credit. Harvey (P) stated that part of the repayment plan was that, once she had repaid them, they would transfer title to the lot where the house stood to Harvey (P). At some point after the house was built, Harvey (P) asked her father for a deed to the land so she could obtain a mortgage to finance other projects. The Dows (D) refused to provide the deed. Harvey (P) filed a complaint seeking a judgment compelling the Dows (D) to convey the real property to her, or for damages for breach of contract,...
- On remand, the court again found against Harvey (P) on the issue of promissory estoppel. The court reasoned that the Dows’ (D) conduct failed to create an enforceable promise because it remained unclear (1) when they intended to convey the land; and (2) how much land they intended to convey, beyond the particular parcel on which the house sat. Although the court acknowledged that the Dows (D) were “subject to a limited enforceable obligation to perform sometime in the future,” the court found that relief was unavailable because the “issue presented here is whether the [Dows (D)] are subject to a
- : Deception, deceit; trickery. An act using deceit, such as intentional distortion of the truth or misrepresentation or concealment of a material fact to gain an unfair advantage over another in order to secure something of value or deprive another of a right. Fraud is grounds for setting aside a transaction at the option of the party prejudiced by it or for recovery of damages. “Actual fraud” involves a deliberate misrepresentation or concealment. A court may infer “constructive” or “legal fraud” either from the nature of a contract or from the relationship of the parties.
- : The principle that a promise made without consideration may nonetheless be enforced to prevent injustice if the promisor should have reasonably expected the
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P.M. v. T.B. 8 results (showing 5 best matches)
- The public policy favoring freedom of contract is very strong and thus courts should be reluctant to deny enforcement of a contract that was properly made by consenting adults. The decision here raised a number of potential public policy concerns that might justify a refusal to enforce a surrogacy contract. On the other hand, the Iowa Legislature specifically exempted traditional or generic surrogacy contracts from the criminal law prohibiting baby selling, so the public policy questions have arguably been dealt with.
- (Waterman, J.) Yes. Neither traditional nor gestational surrogacy contracts are prohibited by statute, and so are enforceable. The only Iowa legislation specifically mentioning surrogacy ( ) exempts traditional “surrogacy arrangements” from the criminal statute that prohibits selling babies. The Iowa Legislature tacitly approved of surrogacy arrangements by exempting them from potential criminal liability for selling children. Here, the gestational surrogacy contract was legally enforceable in favor of the intended, biological father and against T.B. (D), who had no genetic connection to the child. P.M. would not have entrusted the embryos to the surrogate mother, and the child would not have been born, without the reliance on the surrogate’s contractual commitment. A contrary holding invalidating surrogacy contracts would deprive infertile couples of the opportunity to raise their own biological children and would limit the personal autonomy of women willing to serve as surrogates
- P.M. (P) signed a contract with T.B. (D) to serve as a surrogate mother. In exchange for future payments of up to $13,000 and medical expenses, T.B. (D) agreed to be impregnated with embryos fertilized with P.M.’s (P) sperm and the ova (eggs) of an anonymous donor. T.B. (D) agreed to deliver the baby at birth to P.M. (P). T.B. (D) became pregnant with twins, but after demanding additional payments, refused to honor the agreement. The babies were born prematurely, and one died. P.M. (P) sued to enforce the contract and gain custody of the surviving child. The district court, after genetic testing, ruled that the contract was enforceable, terminated the presumptive parental rights of T.B. (D), established paternity in P.M. (P), and awarded him permanent legal and physical custody. T.B. (D) appealed.
- P.M. (P) sued to enforce the surrogacy contract T.B. (D) signed.
- A GESTATIONAL SURROGACY CONTRACT IS ENFORCEABLE
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Plowman v. Indian Refining Co. 8 results (showing 5 best matches)
- (Lindley, J.) No. Something that has been delivered before a promise is executed and is therefore made without reference to the promise cannot properly be legal consideration for that promise. The long and faithful services of the employees in this case were touted as consideration, but past or executed consideration is a self-contradictory term. Consideration is something given in exchange for a promise or in reliance on the promise. Appreciation for past services afforded the employer is not sufficient consideration. If there is no legal consideration, no motive such as respect or a desire to do justice will support a promise. In the absence of a valid agreement to make payments for the rest of the employees’ lives, the arrangement in this case was revocable at the pleasure of the defendant employer. Here we have a mere gratuitous arrangement without consideration, and therefore the “agreement” is void as a contract. Viewing the testimony in a light most favorable to the...
- The plaintiffs also argued that there was “moral consideration” for the alleged contracts in this case. The doctrine of moral consideration has received approval in some courts, but quite generally it is condemned because it is contrary in character to actual consideration. Early Illinois cases recognized the doctrine, but it has been modified and no longer prevails in Illinois. In
- On July 28, 1930 or thereabouts, the vice president of Indian Refining Co. (D), allegedly called the employees with many years of service into his office, individually, and made with each of them a contract to pay them, for the rest of their natural lives, a sum equal to one-half of the wages the employees were then being paid. The consideration for the contract arguably arose out of the long-term employment relationship of the parties, which was being terminated due to economic conditions, and the company’s desire to provide for the future welfare of the aged employees. The payments were regularly made until June 1, 1931, at which time the recipients were advised that the payments were terminated. The former employees sued. The company argued that the payments were gratuitous, continuing at the pleasure and will of the defendant, but the employees asserted that the vice president, who made the promises, had ample authority to make a binding contract. Irrespective of whether such...
- Federal district court consideration of the plaintiffs’ claim for breach of contract.
- CASE VOCABULARY
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City Stores Co. v. Ammerman 13 results (showing 5 best matches)
- (Gasch, J.) Yes. The mere fact that a contract, definite in material respects, contains some terms that are subject to further negotiation between the parties will not bar a decree for specific performance. Some jurisdictions have opposed granting specific performance of contracts for construction of buildings and other endeavors that require extensive supervision of the court, but the better view is that such contracts should be specifically enforced unless the difficulties of supervision outweigh the importance of specific performance to the plaintiff. Here, the existing leases contain detailed specifications that will be identical to those in the lease granted to the plaintiff. The site for the plaintiff’s store has already been settled by the design of the center. If the parties are not in good faith able to reach an agreement on certain details, the court will appoint a special master to help settle their differences, unless they prefer to voluntarily submit their disputes to...to
- : 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; the fulfillment or achievement of one’s obligations under a contract.
- A shopping center developer sought a zoning permit to build a shopping center in Tyson’s Corner, Virginia. It faced stiff competition from another nearby planned shopping center development. The defendants promised to give Lansburgh’s Department Store an opportunity to become a major tenant in the Tyson’s Corner center on terms at least as good as those offered to other major department stores, in exchange for assistance from Lansburgh’s in securing the necessary zoning for the tract. The defendants sent the plaintiff a letter containing the essence of that agreement. The plaintiff considered this an option contract, but the defendants denied that contention. The court agreed with the plaintiff, finding that the letter formed a binding unilateral contract that gave the plaintiff an option to accept a lease at Tyson’s Corner. The plaintiff sought specific performance of the contract.
- OPTION CONTRACT
- The mere fact that a contract, definite in material respects, contains some terms that are subject to further negotiation between the parties will not bar a decree for specific performance.
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Syester v. Banta 9 results (showing 5 best matches)
- (Snell, J.) Yes. A contract is voidable for misrepresentation where the defendant knowingly made false and material representations in order to deceive and defraud the plaintiff into entering into a contract. The evidence was such that the jury could find that there was a concerted effort, lacking in propriety, as to constitute fraudulent overreaching. The court found no reason for interfering with the jury’s conclusion that “there was a predatory play [by Banta (D)] on the vanity and credulity of an old lady.” Banta (D) argued that its representations were nothing more than mere expressions of opinion or “puffing.” However, the question of whether representations are opinion, which normally does not amount to misrepresentation, or fact, which may, depends upon the facts and circumstances of each case. The jury verdict was not beyond the scope of the evidence or the instructions. Affirmed.
- A contract is voidable if a party’s manifestation of assent is induced by either a fraudulent or a material representation by the other party upon which the recipient is justified in relying.
- FALSE AND MATERIAL MISREPRESENTATIONS, KNOWINGLY MADE BY ONE PARTY TO INDUCE THE OTHER TO ENTER A CONTRACT, MAY RENDER THE CONTRACT VOIDABLE
- A contract may be voidable for misrepresentation where a party knowingly made false and material representations in order to deceive and defraud the other party into entering into a contract.
- May a dancing student void contracts for dancing lessons and releases from liability for misrepresentation where the dancing school knowingly made false and material representations in order to deceive and defraud the student into entering into the contracts?
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Buffaloe v. Hart 10 results (showing 5 best matches)
- (Greene, J.) Yes. A check may constitute a writing sufficient to satisfy the requirements of the Statute of Frauds only if it contains a writing sufficient to indicate a contract of sale between the parties, is signed by the party against whom enforcement is sought, and states a quantity. The check in this case was not signed by the Harts (D), so it fails to meet these requirements. However, the part performance exception to the Statute provides that the absence of a writing will not be fatal to contract enforcement if the seller delivers the goods and they are accepted by the buyer. Acceptance may be inferred from the buyer’s conduct in taking physical possession of the goods or some part of them. The buyer is also required to deliver something that is accepted by the seller. This something may be a partial payment (which may be made by check) that is accepted by the seller. The question of whether there has been acceptance is one for the jury. Here, the plaintiff told several...
- The part performance doctrine is an equitable principle that enables courts to recognize and enforce oral contracts despite their legal deficiencies. It provides an exception to the statutory bar to enforcement of oral contracts. In most jurisdictions, part performance is proven if the buyer pays the purchase price, takes possession of the property, and makes improvements on the property, all with the permission of the seller. By applying the doctrine, a party can establish the existence of a contract despite the lack of any written evidence.
- : The doctrine providing that partial performance of an oral contract in reliance on the other party’s promised performance may act to remove the contract from the Statute of Frauds.
- Buffaloe (P), a tobacco farmer, rented five barns from the Harts (D) pursuant to an oral lease agreement. The Harts (D) insured the barns during the lease period. In 1988, Buffaloe (P) decided to purchase the barns. The Harts (D) accepted his offer. Buffaloe (P) could not obtain financing or insurance coverage on the barns at the time of purchase, so the Harts (D) agreed to accept installment payments and continue insuring the barns through 1989 if Buffaloe (P) reimbursed them. In October 1989, Buffaloe (P) decided to sell the barns, even though he had not yet paid for them. After placing a newspaper ad, he found buyers for all five barns. When Mrs. Hart (D) called him and said she wanted to “settle up,” Buffaloe (P) informed Mrs. Hart (D) that he was going to sell the barns, and she said that would be fine with her. Within a few days, Buffaloe (P) gave the Harts (D) a check for $5,000, the agreed-upon installment payment, which stated, on the memo line, “payment for the five barns....
- Did the actions of the parties in this case take the sale contract out of the Statute of Frauds?
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United States ex rel. Coastal Steel Erectors, Inc. v. Algernon Blair, Inc. 10 results (showing 5 best matches)
- United States ex rel. Susi Contracting Co. v. Zara Contracting Co., 146 F.2d 606 (2d.Cir.1944)
- Many courts have made similar rulings on questions of this nature. In addition to the Fourth Circuit here, the Second Circuit in
- Algernon Blair, Inc. (Blair) (D) entered into a contract with the United States (P) for the construction of a naval hospital. Blair (D) then subcontracted with Coastal Steel Erectors, Inc. (Coastal) (P) to conduct steel erection operations and supply equipment as part of Blair’s (D) 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 responsibility under its subcontract with Coastal (P), and refused to pay those costs. Because of this refusal to pay, Coastal (P) terminated its performance, after Coastal (P) had completed roughly 28% 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...
- As much as he deserves. An equitable doctrine that allows a party to recover for the value of his labor and materials furnished to another even though there was no actual contract so that the other party will not be unjustly enriched. The suit is based on an implied promise to pay.
- Should a subcontractor who justifiably ceases work after the main contractor breaches the contract be entitled to restitution based on the value of the services already rendered?
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Normile v. Miller 11 results (showing 5 best matches)
- : An 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; the fulfillment or achievement of one’s obligations under a contract.
- (Frye, J.) No. A valid contract between two parties can only exist when the parties’ assent to the same thing in the same sense, and their minds meet as to all terms. A meeting of the minds requires an offer and acceptance of the exact terms and that the acceptance be communicated to the offeror. If the terms of the offer are changed or any new ones are added by the acceptance, there is no meeting of the minds and no contract. The effect of a qualified acceptance conditioned on new terms is to make a new counter-proposal upon which the parties have not yet agreed, but that is open for acceptance or rejection. The reply from the seller in this case was actually a counteroffer and a rejection of the buyer’s offer. The seller changed the terms of the buyer’s offer in several material respects, most notably regarding payment of the purchase price. Segal (P), ...buyer, submitted an offer that the defendant accepted. Once the defendant and Segal (P) entered into a contract, the defendant...
- Miller (D) listed real estate she owned for sale by a local realtor. The same day, another realtor showed the property to Normile (P). Normile’s (P) realtor prepared a written offer that included less favorable terms than Miller (D) had asked for, as well as a “time is of the essence” clause requiring acceptance of Normile’s (P) offer within one day. That same evening, Miller’s (D) realtor presented Normile’s (P) realtor with a counteroffer that included several changes to Normile’s (P) offer. Normile’s (P) realtor informed Miller’s (D) realtor that Normile (P) was unhappy with some of Miller’s (D) changes, and when the meeting between the realtors concluded Miller’s (D) realtor believed that the seller’s counteroffer was rejected. Within hours, another prospective buyer, Segal (P), made an offer that included essentially the same terms that the seller had included in the counteroffer, and the seller accepted that offer. The next day, Miller’s (D) realtor informed Normile (P) that...to
- A valid contract between two parties can only exist when the parties’ assent to the same thing in the same sense, and their minds meet as to all terms.
- : The cancellation or rescinding of power or authority granted to another ( revocation of an offer to contract; revocation of a will; revocation of a deed or instrument).
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Drennan v. Star Paving Co. 11 results (showing 5 best matches)
- 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... ...on...
- On July 28, 1955, Drennan (P), a licensed general contractor, was preparing a bid on a school job. Bids had to be submitted before 8:00 p.m., and it was customary in that area for general contractors to receive the bids of subcontractors by telephone on the day set for bidding, and to rely on them in computing their own bids. A contractor’s bid had to include the names of subcontractors who were to perform one-half of one percent or more of the construction work. Late in the afternoon of July 28, Johnson, Drennan’s (P) secretary, had a telephone conversation with an estimator for Star Paving (D). The estimator stated that he was bidding on behalf of Star Paving (D) for the paving work and that his bid was $7,131.60. Star Paving’s (D) bid was the lowest bid for the paving. Drennan (P) computed his own bid accordingly and submitted it with Star Paving (D) listed as the subcontractor for the paving. When the bids were opened, Drennan’s (P) bid was the lowest, and he was awarded the
- 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.
- BILATERAL CONTRACT
- 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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Pennsy Supply, Inc. v. American Ash Recycling Corp. of Pennsylvania 10 results (showing 5 best matches)
- The court notes here that, first and foremost, it is axiomatic that consideration is an essential element of an enforceable contract. Consideration consists of a benefit to the promisor or a detriment to the promisee. Generally, consideration must actually be bargained for as the exchange for the promise. But, as the court pointed out in this case, the bargain theory of consideration does not require bargaining over the and the consideration be in the relation of reciprocal inducement, and that test was met here. The plaintiff therefore deserved the chance to take its breach of contract claim back to the trial court.
- MOTION TO DISMISS
- A recycling company provided a paving company with a base aggregate product at no charge, but when the paving company used the product on a paving project, it developed cracks and required extensive repairs, and the “free” aggregate product had to be disposed of as a hazardous waste; the paving company sued, but the court dismissed the breach of contract claim.
- Pennsy (P) was a paving contractor. American Ash Recycling (D) supplied a product called AggRite to Pennsy (P), at no cost, to be used as a base aggregate on a paving project. The paving developed cracks and required extensive repairs, as well as disposal of the AggRite, which was considered a hazardous waste. Pennsy (P) sued American Ash (D) for breach of contract, but the court held that there was no enforceable agreement because there was no consideration. At best, American Ash (D) had made a conditional gift. Pennsy (P) appealed.
- State appellate court consideration of the trial court’s dismissal of the plaintiff’s breach of contract claim.
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Dodson v. Shrader 10 results (showing 5 best matches)
- (O’Brien, J.) Yes. Although a contract with a minor is voidable, the other contracting party may be entitled to compensation for devaluation of the purchased article while it was in the minor’s hands. Where the minor has not been overreached in any way, and there has been no undue influence, and the contract is a fair and reasonable one, and the minor has actually paid money on the purchase price, and taken and used the article purchased, the minor ought not to be permitted to recover the amount actually paid, without allowing the vender of the goods reasonable compensation for the use of, depreciation, and willful or negligent damage to the article purchased, while in the minor’s possession. If there has been any fraud or imposition on the part of the seller or if the contract is unfair, or any unfair advantage has been taken of the minor inducing him to make the purchase, then the rule does not apply. Whether there has been such an overreaching on the part of the seller, and the...to
- State high court review of rescission of purchase contract.
- : To abrogate, annul, avoid, or cancel a contract, and in doing so, to restore the parties to the position they occupied before the contract was made; the abrogation or voiding of a contract, removing all obligations of the parties, and restoring them to their original positions.
- The underlying purpose of the “infancy doctrine” is to protect minors from their lack of judgment and “from squandering their wealth through improvident contracts with crafty adults who would take advantage of them in the marketplace.” However, there is a trend to balance the rights of minors against those of innocent merchants, in light of modern conditions under which minors transact a great deal of business for themselves long before they have reached the age of legal majority. Accordingly, the court in Dodson adopted the rule followed by a minority of states at the time permitting reasonable compensation to the vendor, where the contract was otherwise fair, for the use of, depreciation, and willful or negligent damage to the article while it was in the minor’s possession.
- Although a contract with a minor is voidable, the other contracting party may be entitled to compensation for devaluation of the purchased article while it was in the minor’s hands.
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Crabby’s Inc. v. Hamilton 10 results (showing 5 best matches)
- On appeal, the buyers (D) claimed that the contract terminated when they did not furnish the seller (P) with a copy of a written loan commitment within 30 days of the contract. The court agreed and affirmed the trial court’s judgment.
- Crabby’s Inc. (seller) (P) sued for breach of contract when Hamilton (buyer) (D) failed to appear at closing, seeking the difference between the sale price with the buyers (D) and the price they obtained in a subsequent sale that occurred eleven and a half months after the breach. After a trial to the court, the Circuit Court entered judgment in favor of the seller (P). On appeal, the buyers (D) claimed that the contract terminated when they did not furnish the seller with a copy of a written loan commitment within 30 days of the contract. The seller (P) countered that the buyers (D), by their conduct after entering into the contract, waived the financing contingency provision. The court agreed and affirmed the trial court’s judgment.
- (Lynch, J.) Yes. After the 30-day deadline, the buyers (D) agreed to extend the closing date, accepted a set-off for repairs, entered an assignment of the contract to the second buyer, arranged for early possession, accepted a key, and switched the utilities to the property to their names. The trial court’s determination of the fair market value was supported by substantial evidence. It was not unreasonable to use the price obtained at the sale that occurred 11 and ½ months after the breach. The buyers (D) failed to show that the seller (P) was at that time compelled to sell. Buyers (D) fail to cite to any authority for the proposition that a sale in which the seller (P) is highly motivated or badly wants to sell, as opposed to being compelled to sell, eliminates that sale from being considered as a fair market value sale of the property.
- A seller’s measure of damages for a buyer’s breach of a contract for the sale of land with a structure on it is the difference between the purchase price and the fair market value of the property on the date of breach. That is, the measure of damages is the difference between the contract price and the fair market value of the property on the date the sale should have been completed. An essential element of the seller’s case is proof of market value, and if he does resell
- Crabby’s, Inc. seller (P) sued for breach of contract when defendant buyers (D) failed to appear at closing, seeking the difference between the sale price with the buyers and the price they obtained in a subsequent sale that occurred eleven and a half months after the breach. After a trial to the court, the Circuit Court entered judgment in favor of the seller (P).
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Watts v. Watts 8 results (showing 5 best matches)
- mirrored a marital relationship in all respects except for the formal marriage. The court could have adopted this level of relationship as a basis for recovery under either a contract or unjust enrichment theory. However, the court did not choose that objective rule. Rather, the court left it to the trial court to determine subjectively whether, based on the particular facts and circumstances, a recovery was warranted
- (Abrahamson, J.) Yes. An unmarried cohabitant may seek a property settlement under contract and unjust enrichment theories
- Sue Ann Watts (P) lived with James Watts (D) for twelve years. During this time the parties held themselves out to be married and executed legal documents as a married couple. Sue Ann Watts (P) assumed James Watts’ (D) surname and gave birth to two children who were given her live-in partner’s surname. After their relationship dissolved, Sue Ann Watts (P) brought an action to order an accounting of James Watts’ (D) personal and business assets accumulated during the period that they had lived together. The trial court dismissed the plaintiff’s action on the ground that the state statute that authorizes a court to divide property does not apply to the division of property between unmarried persons.
- An unmarried cohabitant may seek a property settlement under contract and unjust enrichment theories.
- CASE VOCABULARY
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Pop’s Cones, Inc. v. Resorts International Hotel, Inc. 9 results (showing 5 best matches)
- SUMMARY JUDGMENT
- The court provided an illustration from
- State appellate court review of a trial court decision granting summary judgment to the defendant.
- Pop’s (P) was an authorized TCBY franchise selling frozen yogurt products. Resorts International (D) operated a hotel along the boardwalk in Atlantic City. Pop’s (P) sought to relocate to a space owned by Resorts (D). The president of Pop’s (P) had a number of discussions with the executive director of business development and sales for Resorts (D). They specifically discussed a site along the boardwalk operated by The Players Club. To assuage concerns about the performance of a TCBY at that location, Pop’s (P) was offered the opportunity to operate a vending cart on Resorts (D) property to test the traffic flow. As summer came to a close, Pop’s (P) informed Resorts (D) that it had the option to renew its current lease, and that Pop’s (P) would need to give the landlord notice if it were not going to renew. Resorts (D) informed Pop’s (P) that the deal was essentially done and that all they needed was an official signature, so Pop’s (P) gave notice that it would not be extending its...
- Did the plaintiff state a promissory estoppel claim sufficient to survive a motion for summary judgment?
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Chen v. Chen 14 results (showing 5 best matches)
- (Cappy, C.J.) The court should have limited its consideration of this case to principles of contract law.
- (Baer, J.) No. Intervention by a person not a party to an action is appropriate only when the determination of the action may affect a legally enforceable interest of such person, whether or not such person may be bound by a judgment in the action. To determine whether the daughter has a legally enforceable interest here, we must evaluate the settlement agreement according to contract principles. A fundamental rule in construing a contract is to ascertain and give effect to the intent of the contracting parties. Turning to the two-part test applied by the courts below, we conclude that the first part of the test sets forth a standing requirement that leaves discretion with the court to determine whether recognition of intended beneficiary status would be appropriate, while the second part of the test defines the two types of claimants who may be intended as third-party beneficiaries. In this case, the circumstances indicate that the mother intended to give her daughter the benefit...
- State courts and legislatures have often recognized the obligation of parents to support their children. Moreover, many state legislatures have empowered courts and state agencies to establish child support guidelines, in part to provide apportionment of the financial burdens of child support between the parents. The Pennsylvania court noted in that it has also stressed the importance of protecting the best interests of children through child support in its willingness to abandon contract principles in the application of support agreements where the agreed-upon support amount is insufficient. The best interests of a child passing through life’s changes are not implicated in the proceeding at bar, however, Because the daughter is grown, the court recognizes that a lump sum award would be helpful as she starts her adult life, but the case does not involve the same concerns underlying the requirement that parents provide ongoing support for children during their minority. This case...
- As part of the Chens’ (P) & (D) divorce settlement, the mother agreed to have custody of the couple’s daughter and the father agreed to have custody of their son. The father also agreed to pay child support to the mother for her care of their daughter. If his income increased over time, the amount of child support was to increase as well, but he did not comply with that provision. When the mother was notified that child support would terminate upon her daughter’s eighteenth birthday, she filed a petition for relief seeking to enforce the provision for increases in child support and to collect all arrearages attributable to the father’s salary increases over almost eighteen years. Upon turning eighteen, the daughter filed a petition to intervene as a party to her mother’s action. She claimed a legally enforceable interest as a third-party intended beneficiary under the agreement. The trial court agreed and granted the daughter’s petition to intervene, because recognizing her as an...
- (Castille, J.) The central issue in this case concerns whether recognition of a right to performance in the daughter is appropriate to effectuate the intention of the parties. In resolving this issue, the majority needlessly considers competing policy considerations in concluding that strong public policy favors denying a child’s standing to seek the specific dollars one parent owes the other. Based on the unambiguous words of the property settlement agreement, the mother and father clearly intended for the mother to receive the child support payments for the benefit of the daughter, but not for the daughter to be the direct recipient of the payments. The daughter is not an intended beneficiary; rather, she is an incidental beneficiary. That is enough to decide this case and require reversal.
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Ray v. William G. Eurice & Bros., Inc. 11 results (showing 5 best matches)
- The court explains in this case that the question of a party’s intent is an objective—not subjective—one. The test of a true interpretation of an offer or acceptance is not what the party making it thought it meant or intended it to mean, but what a reasonable person in the position of the parties would have thought it meant. One who makes a written offer that is accepted, or who manifests acceptance of the terms of a writing that he should reasonably understand to be an offer or proposed contract, is bound by the contract, though ignorant of the terms of the writing or its proper interpretation.
- : In contracts, a misconception or ignorance shared by both contracting parties, regarding a material fact, so that the contract does not express the parties’ true intentions. Mutual mistake is grounds for the court to alter the contract.
- The Rays (P) decided to build a house on a lot they owned, and they asked the defendant builder for an estimate to determine whether they could afford it. Eurice (D), President of Eurice Corporation, indicated that the cost would be about $16,000. Mr. Ray (P) then had plans drawn up and showed them to Eurice (D). Together they went over the specifications and made some changes. All the changes they agreed on were noted on the plans, which were given to Eurice (D) so he could make a bid. The Eurice Corporation (D) submitted an unsigned bid for $16,300. Some of the specifications included with the bid were not in accord with those that Ray (P) and Eurice (D) had earlier agreed upon, but mostly in inconsequential ways. Ray (P) then advised Eurice (D) that his lawyer would draw up a contract for the construction of the house. The Rays (P) submitted the contract, which noted that the house would be built according to the specifications submitted therewith. Those specifications were...
- The defendants signed a contract to build a house for the plaintiffs, not realizing that different specifications than they had originally reviewed were attached to the contract; the builder refused to build the house according to the later specifications, and the plaintiffs sued.
- (Hammond, J.) Yes. Absent fraud, duress, or mutual mistake, one having the capacity to understand a written document who reads and signs it is bound by his signature. Neither fraud nor duress is present here, and if there was a mistake, it was unilateral. If a man acts negligently, in such a way as to justify others in supposing that the terms of a writing are assented to by him and the writing is accepted on that supposition, he is bound both at law and in equity. The defendants wrongfully breached the contract to build the plaintiffs a house for $16,300. Reversed.
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Sally Beauty Co., Inc. v. Nexxus Products Co., Inc. 12 results (showing 5 best matches)
- (Cudahy, J.) No. Contracts cannot be assigned to competitors or wholly owned subsidiaries of direct competitors of one of the parties to the contract. The exclusive distribution agreement called for Best’s “best efforts to distribute Nexxus (D) products. Nexxus (D) refused to accept that Sally (P), the subsidiary of a 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...
- Appeal by the plaintiff from a decision of the district court granting the defendant’s motion for summary judgment.
- Contracts cannot be assigned to competitors or wholly owned subsidiaries of direct competitors of one of the parties to the contract.
- Can contracts be assigned to a competitor of one of the parties to the contract?
- Sally Beauty Co. (P) sued Nexxus Products Co. (D) for breach of contract in canceling their distributorship agreement, and Nexxus (D) asserted that the contract was not assignable to a competitor.
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Erlich v. Menezes 11 results (showing 5 best matches)
- In reversing the judgment of the lower courts, the California Supreme Court held that damages for emotional distress were unavailable to the Erlichs (P). Because the Erlichs (P) could not prove that Menezes (D) had acted with bad intent, such that he was guilty of any fraud or misrepresentation, the Erlichs (P) only remedy was for breach of contract. In reaching its opinion, the California Supreme Court also found the Erlichs (P) could not prevail on an emotional distress claim, when they continued to reside in the residence for five years
- The Erlichs (P) contracted a Menezes (D), a general contractor to build their “dream house” on their ocean-view lot. The Erlichs (P) moved into their home December of 1990. In February 1991, it rained heavily and the Erlichs’ (P) home began leaking. Walls became saturated in an upstairs bedroom, two downstairs bedrooms, and the pool room. The living room filled with three inches of standing water and water poured in streams in several different locations in the house. The garage ceiling became saturated and the plaster liquefied and fell to the floor. Menezes (D) attempted to repair the leaks but was unsuccessful. The Erlichs (P) had their home inspected by a general contractor and structural engineer who, in addition to confirming defects leading to the leakage, found several structural problems with the home. Mr. Erlich (P) testified he was “absolutely sick” and suffered a heart attack after finding out about the problems with the home. Mr. Erlich (P) suffered from a heart... ...to...
- As a general rule, tort remedies are not available in breach of contract actions. The exception to this rule is when the breaching party breaches an additional or special duty, or acts with intent
- At trial, the court awarded emotional distress damages to the couple (P) along with compensatory damages. The case was appealed.
- Plaintiffs contracted with Defendant, a general contractor, to build their dream home. After the rains came, it was discovered that the house was defective. There were leaks in every room and major structural problems. Plaintiffs brought suit for the full costs associated with repair of the home, and for emotional distress.
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Chapter Ten. Expectation Damages: Principles and Limitations 22 results (showing 5 best matches)
- Employment contract was breached by therapist with high blood pressure, caused by the stress of having to continue working at a faraway school, instead of one close to home.
- In order to prove a failure to mitigate damages in a suit for breach of an employment contract, the employer must prove both availability of suitable and comparable substitute employment and a lack of reasonable diligence on the part of the employee to find employment.
- Crabby’s, Inc. seller (P) sued for breach of contract when defendant buyers (D) failed to appear at closing, seeking the difference between the sale price with the buyers and the price they obtained in a subsequent sale that occurred eleven and a half months after the breach. After a trial to the court, the Circuit Court entered judgment in favor of the seller (P).
- As a general rule, attorneys’ fees are not recoverable in an action for breach of contract. The caveat to the rule is that attorneys’ fees may be recoverable in an international contract, when dealing with a party whose laws would allow it to recover
- A seller’s measure of damages for a buyer’s breach of a contract for the sale of land with a structure on it is the difference between the purchase price and the fair market value of the property on the date of breach.
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Chapter Four. The Statute of Frauds 8 results (showing 5 best matches)
- 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.
- A check may constitute a writing sufficient to satisfy the requirements of the Statute of Frauds only if it contains a writing sufficient to indicate a contract of sale between the parties, is signed by the party against whom enforcement is sought, and states a quantity.
- Crabtree (P) sued Elizabeth Arden (D) for breach of contract and Arden (D) claimed that the Statute of Frauds barred enforcement of the contract.
- The chair-elect of the Alaska Democratic Party (D) offered Rice (P) a position with the Party (D) that she previously held, so she quit her position in Maryland working on the Gore campaign and moved back to Alaska in reliance on his representations; a few months later, after offering continuing assurances that the job was hers, the chair told Rice (P) he could not hire her; Rice (P) sued.
- A promise that the promisor should reasonably expect to induce action or forbearance on the part of the promisee or a third person and that does induce the action or forbearance is enforceable, notwithstanding the Statute of Frauds, if injustice can be avoided only by enforcement of the promise.
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C & J Fertilizer, Inc. v. Allied Mutual Insurance Co. 9 results (showing 5 best matches)
- : Contract doctrine holding that a contract will be voided when it is so one-sided and beneficial to one party in the transaction that its terms, when applied, are onerous, burdensome, and oppressive to the other party. The court may void the entire contract or the portion that it finds offensive.
- (Reynoldson, J.) Yes. The objectively reasonable expectations of applicants and intended beneficiaries regarding the terms of insurance contracts will be honored even though painstaking study of the policy provisions would have negated those expectations. Although customers typically adhere to standardized agreements and are bound by them without even appearing to know the standard terms in detail, they are not bound to unknown terms that are beyond the range of reasonable expectations. In this case, there was nothing relating to the negotiations with the defendant’s agent that would have led the plaintiff to reasonably anticipate that the defendant would bury within the definition of burglary an exclusion denying coverage when, no matter how extensive the proof of a third-party burglary, no marks were left on the exterior of the premises. Moreover, the burglary definition in the policy comports neither with the concept a layman might have of that crime, nor with a legal... ...to...
- I dissent from the result reached by the majority because it ignores virtually every rule by which we have adjudicated similar cases and affords the plaintiff ex post facto insurance coverage, which it not only did not buy but which it it did not buy. The starting point of any consideration of a policy provision is a determination of whether the provision is ambiguous, but the majority does not even mention ambiguity. The purpose of the provision at issue in this case is to omit from coverage inside jobs, or those resulting from fraud or complicity by the insured. Such provisions have been upheld as legitimate and unambiguous. We should not meddle with contracts that clearly and plainly state their meanings simply because we dislike that meaning, even in the case of insurance policies. Here, the plaintiff’s officer and director knew that the disputed provision was in the policy, because he stated that “it was just like the insurance policy I have on my farm.” The plaintiff may not...
- C & J (P) operated a fertilizer plant that was insured by Allied Mutual (D). The policy covered “burglary” from the plant, defined as the abstraction of insured property from within the premises by a person making a forced entry, as evidenced by visible marks made by tools, explosives, electricity, or chemicals upon, or physical damage to, the exterior of the premises at the place of entry. When the policy was first sold to C & J (P) by Allied Mutual’s (D) agent, there was no mention that the policy to be delivered would define burglary to require this physical evidence of violent entry at the exterior point of entry. When the plant employees reported for work on April 20, 1970, the front office door was unlocked. They noticed truck tire tread marks in the muddy driveway leading to and from the warehouse door. The door to an interior room in which chemicals were stored was physically damaged and had visible marks made by tools. Chemicals worth nearly $10,000 and some equipment were...
- THE “REASONABLE EXPECTATIONS” DOCTRINE APPLIES TO THE INTERPRETATION OF INSURANCE CONTRACTS
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Chapter Two. The Basis of Contractual Obligation: Mutual Assent and Consideration 36 results (showing 5 best matches)
- A recycling company provided a paving company with a base aggregate product at no charge, but when the paving company used the product on a paving project, it developed cracks and required extensive repairs, and the “free” aggregate product had to be disposed of as a hazardous waste; the paving company sued, but the court dismissed the breach of contract claim.
- When the predominant purpose of a contract is the rendering of services rather than the furnishing of goods, the UCC is inapplicable and courts must draw on common law doctrines when interpreting the contract.
- Purchasers of Dell (D) service contracts sued for trade practice violations based on Dell’s (D) charging of taxes on the services, and Dell (D) moved to compel arbitration of the dispute.
- The lessor and lessee entered into a ten-year lease that included an option to renew for another ten-year period according to the same terms, except that the amount of rent would be recalculated based on then-current business conditions; the parties could not agree on the amount of rent to be paid and looked to the courts to solve their dilemma.
- A court may dismiss a breach of contract claim if the plaintiff’s allegedly lost consideration is so de minimis that providing a remedy does not justify the judicial resources needed to provide relief.
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J.N.A. Realty Corp. v. Cross Bay Chelsea, Inc. 12 results (showing 5 best matches)
- State’s highest court review of an appellate court decision reversing the trial court and granting the lessor’s petition to recover possession of the premises.
- J.N.A. Realty (JNA) (P) leased a building to Cross Bay Chelsea (D) in which Chelsea (D) operated a restaurant. At the time the lease was assigned to Cross Bay (D), it was modified to include a right to renew for a period of 24 years, rather than 10 as stated in the lease with Cross Bay’s (D) predecessor. JNA (P) neglected to give notice to Cross Bay (D) when the lease term was about to expire and Cross Bay (D) failed to timely exercise its option to renew, although the evidence suggested that Cross Bay (D) knew or should have known of the time limits on its renewal obligation. JNA (P) commenced litigation to recover possession of the premises. Cross Bay (D) presented evidence that it had made significant improvements to the property both before and after the option had expired. The trial court held that the tenant was entitled to equitable relief and the appellate term affirmed, but the appellate division granted leave for further review, reversed, and granted the landlord’s... ...to...
- OPTION CONTRACT
- The essence of the holding in this case is that a tenant is entitled to the rule or practice in equity that relieves tenants from forfeitures of valuable lease terms when the default in notice has not prejudiced the landlord and has resulted from an honest mistake or similar excusable fault. Here, JNA (P) had always provided the restaurant with notice of its obligations under the lease, such as the need to pay taxes and insurance by certain dates. Somehow, however, JNA (P) neglected to provide notice of the expiration of the option to extend the lease. Only after the option expired did JNA (P) send a letter stating that the date had passed. Although these facts may present a strong case for equitable relief, the trial court did not consider whether the landlord would be prejudiced by granting such relief to the tenant, so the case was remanded for a new trial.
- : The option holder’s right to buy or sell stock at a future date for a certain price. A “put” option is a contract to sell, while a “call” option is a contract to buy.
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Hornell Brewing Co. v. Spry 9 results (showing 5 best matches)
- (Gans, J.) Yes. Under the UCC, a party, upon reasonable grounds for insecurity, may demand adequate assurance of due performance and until he receives such assurance, if commercially reasonable, suspend any performance for which he has not already received the agreed return. Whether a seller has reasonable grounds for insecurity is an issue of fact that depends on various factors, including the buyer’s words or actions, the course of dealing or performance between the parties, and the nature of the sales contract and the industry. Once the seller correctly determines that it has reasonable grounds for insecurity, it must properly request assurances from the buyer. Courts have not strictly adhered to the writing requirement as long as an unequivocal demand is made. After demanding assurance, the seller must determine the proper “adequate assurance.” The evidence in this case establishes that the plaintiff had reasonable grounds to be insecure about the defendant’s ability to perform...
- In late 1992, Spry (D) approached Hornell’s (P) chairman of the board about becoming a distributor of Hornell’s (P) Arizona beverages. Based on Spry’s (D) aggressive distribution plan and successful reputation, Hornell (P) granted Spry (D) an exclusive right to distribute Arizona products in Canada, and Spry (D) formed a Canadian corporation for that purpose. There was no written agreement to document the arrangement. About a year into the relationship, Spry (P) failed to remit timely payments for shipments of beverages. By February 1994, Spry (D) was $100,000 behind and a $31,000 check was returned for insufficient funds. Canada sales of Arizona iced tea drinks were also disappointing. Spry (D) attempted to secure a line of credit but repeatedly broke his promises to Hornell (P). Spry (D) finally paid up, but then Hornell (P) asked for a letter confirming the existence of a line of credit plus a personal guaranty backed up by a personal financial statement before releasing any more...
- , every contract for sale imposes an obligation on each party that the other’s expectation of receiving due performance will not be impaired. When reasonable grounds for insecurity arise with respect to the performance of either party, the other may, in writing, demand adequate assurance of due performance. Until she receives such assurance she may, if commercially reasonable, suspend any performance for which she has not already received the agreed return. Between merchants, the reasonableness of grounds for insecurity and the adequacy of any assurances offered are determined according to commercial standards. Acceptance of any improper delivery or payment does not prejudice the aggrieved party’s right to demand adequate assurance of future performance. After receipt of a justified demand, the failure to provide, within a reasonable time not to exceed 30 days, such assurance of due performance as is adequate under the circumstances is a repudiation of the contract.
- A promise or pledge to fulfill another’s obligation in case of that person’s default upon that obligation; an agreement to be secondarily liable for the debt(s) of another upon that person’s default on that debt.
- THE FAILURE TO PROVIDE ADEQUATE ASSURANCES OF FUTURE PERFORMANCE MAY RESULT IN TERMINATION OF THE CONTRACT
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James Baird Co. v. Gimbel Bros., Inc. 10 results (showing 5 best matches)
- James Baird (P) urges a manner of accepting an offer that is indeed novel. Acceptance of offers—whether by performance, in the case of an offer for a unilateral acceptance, or by communication
- (Hand, J.) No. An offer to make a bilateral contract may be withdrawn at any time prior to acceptance, unless the terms of the offer provide otherwise. James Baird (P) argues that the offer was irrevocable once it was acted upon, and that inclusion of the figure in the bid was effective as acceptance. There is nothing to indicate that Gimbel Bros. (D) intended to make an irrevocable offer, however, or that inclusion of the offer in a bid would be acceptance. The offer stated that it was made for acceptance “after the general contract has been awarded,” which shows that use of the offer in making a bid would not be acceptance. The doctrine of promissory estoppel does not apply here. Promissory estoppel is limited to cases in which there is no formal consideration for the offer, but the offer in this case proposed an exchange that would be fully supported by consideration. There is nothing to indicate that the offer here was for an option that gave James Baird (P) the right to accept...
- Gimbel Bros. (D), a company in the linoleum business, learned that a state agency in Pennsylvania had solicited bids for the construction of a building. An employee of Gimbel Bros. (D) calculated the linoleum requirements for the building, but underestimated the requirements by approximately one-half. Gimbel Bros. (D) sent out an offer to supply linoleum based on the erroneous figures to the contractors likely to submit bids. The offer stated that the offer was for “prompt acceptance after the general contract has been awarded.” After learning of the mistake, Gimbel Bros. (D) telegraphed the contractors to whom it sent its offer, withdrawing the offer and informing the offerees that a new offer would be submitted that would be approximately double the previous offer. The withdrawal reached one of the contractors, James Baird (P), after it submitted a bid for the building with the price of linoleum based on the price originally quoted by Gimbel Bros. (D). James Baird (P) was awarded...
- Did a contract exist between Gimbel Bros. (D) and James Baird (P), where Baird (P) based its construction bid on Gimbel’s (D) erroneous, and later withdrawn, estimate?
- An offer to make a bilateral contract may be withdrawn at any time prior to acceptance, unless the terms of the offer provide otherwise.
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Lonergan v. Scolnick 11 results (showing 5 best matches)
- Scolnick (D) placed a newspaper ad to sell forty acres, reading, “need cash, will sacrifice.” In response to an inquiry from Lonergan (P), Scolnick wrote a letter to him on March 26 describing the property, giving directions, and stating that his bottom price was $2500. The letter further stated, “This is a form letter.” On April 7, Lonergan (P) wrote back asking for a legal description, inquiring if the property was level, and suggesting a certain bank as escrow agent “should I desire to purchase the land.” On April 8, Scolnick (D) answered, saying that that the bank was “O.K.” as an escrow agent, giving the legal description, and saying, “If you are really interested, you will have to decide fast, as I expect to have a buyer in the next week or so.” On April 12 Scolnick (D) sold the property to another for $2500. Two days later, Lonergan (P) received the April 8 letter. On April 15, Lonergan (P) responded, stating that he would immediately have the escrow opened “in conformity...
- : A promise to do or refrain from doing some specified thing in the future; a display of willingness to enter into a contract on specified terms, made in a way that would lead a reasonable person to understand that an acceptance, having been sought, will result in a binding contract
- Restatement of Contracts § 24
- On appeal by the plaintiff from a trial court judgment for the defendant based on stipulated facts.
- : An agreement, either by express act or by implication from conduct, to the terms of an offer so that a binding contract is formed.
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Chapter Five. Express Terms of the Agreement: Principles of Interpretation and the Parol Evidence Rule 11 results (showing 5 best matches)
- Sherrod (D) bid on an excavation contract allegedly based on the general contractor’s representation of the amount of work required; there was actually much more work to be done but Sherrod (D) was only paid the contract price.
- A court may use evidence of standard industry practices and the prior performance of the parties to interpret the contract, if such evidence is not inconsistent with the terms of the contract.
- Nanakuli Paving & Rock Co. (P) sued Shell Oil Co. (D) for breach of their 1969 contract based on Shell’s (D) failure to protect Nanakuli (P) against increases in asphalt prices.
- A real estate seller and buyer disagreed about whether the purchase contract’s terms gave the buyer a right to terminate the contract during the inspection period for a reason that was not related to a failed inspection.
- A contract term is patently ambiguous if, when read in the context of the entire contract, the term is subject to at least two reasonable interpretations.
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Hadley v. Baxendale 12 results (showing 5 best matches)
- 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 Hadley decision, it appeared that both English and American courts would transform this contemplation test into an even stricter one. Some courts supported the idea that a party could not be held liable for consequential damages unless that party had made a “tacit agreement” to assume that particular risk when making the contract. Fortunately, this restrictive test has not survived to this day,...to
- (Alderson) Yes. A party injured by another party’s breach of contract can only recover those damages that may fairly and reasonably be considered either as arising naturally, or as may reasonably be supposed to have been in the contemplation of both parties, at the time the contract was made, as the probable result of such a breach of the contract. In other words, if the special circumstances under which a contract is made are described by one party to another, it follows that both sides are aware of these special circumstances. Thus, any damages 302 caused by a breach would have been reasonably contemplated by the parties. The measure of those damages would be the amount of injury which would ordinarily follow from such a breach under these circumstances. If, however, a party that breaches the contract did not know of these special circumstances, then he or she could only be presumed to have knowledge of the kind of injury that would result generally from a breach. This is because...
- A party injured by another party’s breach of contract can only recover those damages that may fairly and reasonably be considered either as arising naturally, or as may reasonably be supposed to have been in the contemplation of both parties, at the time the contract was made, as the probable result of such a breach of the contract.
- Should the measure of damages awarded to a party who is injured by a breach of contract be limited to only those damages that are not considered remote by the parties?
- Baxendale (D) failed to deliver a broken mill shaft for Hadley (P) on time, and the delay prevented Hadley from reopening the mill on time.
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Florafax International, Inc. v. GTE Market Resources, Inc. 10 results (showing 5 best matches)
- The floral wire service (P) entered into a two-year contract with a floral products marketer (D) to process consumer orders. Two weeks later, the floral wire service (P) entered into a contract with the provider for telecommunication services (D). The provider (D) failed to perform its duties under its agreement, and the floral wire service (P) brought an action for breach of contract. The jury awarded damages to the wire service (P), including lost profits that would have been earned under the contract with the marketer (D). The appellate court affirmed in part and remanded, holding that the award for lost profits should be limited to a 60-day period in light of a termination notice clause in the collateral contract.
- (Lavender, J.) Yes. The court affirmed in part and reversed in part, holding that lost profits under the collateral contract could be recovered because the contractual relationship between the wire service (P) and the marketer (D) was within the contemplation of the provider when it agreed to provide telecommunication services. The court father held that the notice clause did not preclude recovery beyond the 60-day period because the provider (P) had no right to terminate the contract with the marketer.
- The floral wire service, Florafax International, Inc., (P) entered into a two-year contract with GTE Market Resources, Inc., a floral products marketer (D), to process consumer orders. Two weeks later, the floral wire service (P) entered into a contract with the provider for telecommunication services (D). The provider (D) failed to perform its duties under its agreement, and the floral wire service (P) brought an action for breach of contract.
- Loss of future or anticipated profit is recoverable in a breach of contract action: 1) if the loss is within the contemplation of the parties at the time the contract was made, 2) if the loss flows directly or proximately from the breach—that is, if the loss can be said to have been caused by the breach—and 3) if the loss is capable of reasonably accurate measurement or estimate. An award in the form of a loss of profits, in fact, is generally considered a common measure of damages for breach of contract, it frequently represents fulfillment of the non-breaching party’s expectation interest, and it often closely approximates the goal of placing the innocent party in the same position as if the contract had been fully performed.
- Loss of future or anticipated profit—that is, loss of expected monetary gain—is recoverable in a breach of contract action: 1) if the loss is within the contemplation of the parties at the time the contract was made, 2) if the loss flows directly or proximately from the breach—that is, if the loss can be said to have been caused by the breach—and 3) if the loss is capable of reasonably accurate measurement or estimate.
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Katz v. Danny Dare, Inc. 10 results (showing 5 best matches)
- (Turnage, P.J.) Yes. Three elements must be satisfied to invoke the doctrine of promissory estoppel: (1) a promise, (2) a detrimental reliance on that promise, and (3) injustice can be avoided only by enforcement of the promise. When Katz (P) agreed to retire, he did so as a result of a promise made by Dare (D), to his detriment, by the loss of $10,000 per year in earnings. Dare (D) intended that Katz (P) rely on that promise. The threat of being fired does not remove this case from the operation of promissory estoppel. Retirement was still voluntary on Katz’s (P) part, and the fact is, Shopmaker did not discharge Katz (P) but made every effort to induce Katz (P) to retire voluntarily on the promise of a pension. The test to be applied in this case is not whether Katz gave up something to which he was legally entitled, but rather whether Dare (D) made a promise to him on which he acted to his detriment. The doctrine of promissory estoppel is designed to protect those to whom a...
- The lower court distinguished this case from , in which the Missouri Court of Appeals found that the doctrine of promissory estoppel did apply. The circuit court here found that Katz (P) was not in the same position as Feinberg, because Katz (P) faced the prospect of being fired if he did not accept the pension, whereas there was no such evidence in the case. The circuit court thus found that Katz (P) did not give up anything to which he was legally entitled: if he did not retire he would lose his job and hence his income, so he suffered no detriment. The appellate court in disagreed, finding the facts in both cases to be similar, and the doctrine of promissory estoppel to apply in both.
- Katz (P) worked for Dare (D) from 1950 to 1975. Katz’s (P) wife’s brother, Shopmaker, was the president of Dare (D). In 1973, Katz (P) attempted to intervene in a robbery at one of the stores and was struck in the head. Thereafter, Katz (P) was somewhat physically and mentally impaired, and he made some mistakes at work. Shopmaker decided to offer Katz (P) a pension to encourage him to retire, or they would have to let him go. Katz (P) accepted a pension of $13,000 per year for life rather than be fired. Katz (P) continued to work part time for another company, and eventually Shopmaker asked Katz (P) to return to Dare (D) one-half day per week. After Katz (P) returned to Dare (D), Dare (D) cut the pension payments in half. When Katz (P) refused the half payments, Dare (D) terminated the payments completely. Katz (P) brought suit, basing his claims on the doctrine of promissory estoppel, among other theories. The trial court found that Katz did not give up anything to which he was...
- State appellate court review of three circuit court decisions (each relating to a different time period) in the defendant’s favor.
- Three elements must be satisfied to invoke the doctrine of promissory estoppel: (1) a promise, (2) a detrimental reliance on that promise, and (3) injustice can be avoided only by enforcement of the promise.
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Rockingham County v. Luten Bridge Co. 14 results (showing 5 best matches)
- (Parker, Cir. J.) No. Once Luten (P) received notice of Rockingham’s (D) decision not to build the bridge while the contract was still executory, Luten (P) did not have the right to continue working and build the bridge. While Rockingham (D) did not have the right to rescind the 30 contract and would be liable to Luten (P) for damages, Luten (P) was obligated to refrain from taking actions that would increase Rockingham’s (D) damages. Luten (P) should not have proceeded with constructing the bridge. The majority, relying on 3 Williston on Contracts at 2347, held that a plaintiff could not recover damages that could have been avoided. To hold otherwise would be to demand that a defendant pay for work that is of no use to him. Further, assuming the plaintiff’s primary concern is making a profit, he can make use of the time not spent on the defendant’s project to do something else. When a contracting party receives notice of another’s intention to breach an executory contract, he or...
- EXECUTORY CONTRACT
- In a free market economy, the court supposes that parties are free to make or break their contracts to serve the greatest good. By failing to recognize Rockingham’s (D) right to have Luten (P) stop work, Luten (P) lost the right to recover for most of the labor and materials that went in to building the bridge. This might have been a different case had Luten (P) proposed to Rockingham (D) that it could re-use the materials from the bridge in another project and attempted to tear down the bridge it had built to obtain the scrap. There may also be an argument against permitting Rockingham (D) to demand mitigation since Rockingham (D) had to have known that Luten (P) did not take the initial notice of cancellation seriously. The construction of the bridge did not take place in secret, yet Rockingham (D) appears to have done nothing to discourage Luten’s (P) daily efforts to build the bridge.
- Rockingham County Board of Commissioners (D) awarded Luten Bridge Co. (P) a contract to build a bridge; before construction had begun in earnest, Rockingham (D) repudiated the contract. Ignoring the cancellation, Luten (P) built the bridge and sued to obtain the contract price.
- On January 7, 1924, after a close vote, Rockingham (D) voted to award Luten (P) a contract to build a bridge in the county. Because of the continuing disagreement over the project, one of the Commissioners (Pruitt) tendered his resignation. Pruitt quickly withdrew his resignation, but not before the clerk had appointed his replacement (Hampton), who was promptly sworn in. Neither Pruitt nor the other two commissioners who had voted in favor of building the bridge attended any further board meetings on the matter. On February 21, the Board held a regular meeting and unanimously adopted a resolution to cancel the bridge project and notified Luten (P) to stop work. As of February 21, Luten (P) had spent $1900 for materials and labor toward building the bridge. Despite the notice that the project was cancelled, Luten (P) continued work and completed the bridge. Luten (P) then filed suit against Rockingham (D) seeking $18,301.07, its contract price. The three commissioners who had voted...
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Jannusch v. Naffziger 10 results (showing 5 best matches)
- (Cook, J.) Yes. Under the Uniform Commercial Code, a contract for the sale of goods may be made in any manner sufficient to show agreement, including conduct by both parties that recognizes the existence of such a contract. Even though one or more terms are left open, a contract for sale does not fail for indefiniteness if the parties have intended to make a contract and there is a reasonably certain basis for giving an appropriate remedy. However, if the essential terms are so uncertain that there is no basis for deciding whether the agreement has been kept or broken, there is no contract. The essential terms were agreed upon in this case. The purchase price was $150,000 and the items to be transferred were specified. No essential terms remained to be agreed upon. The only action remaining was the performance of the agreement. The defendants took possession of the items to be transferred and used them as their own. Rejection of goods must be within a reasonable time after their...
- The provisions of the UCC apply to contracts involving the sale of goods. When a sale involves both goods and services, the “predominant purpose” test is applied to determine whether the transaction is predominantly a sale of goods subject to the UCC. In this case, significant tangible assets were involved, such that the evidence presented was sufficient to support the conclusion that the agreement was predominantly one for the sale of goods. Accordingly, the UCC governed.
- Under the Uniform Commercial Code, a contract for the sale of goods may be made in any manner sufficient to show agreement, including conduct by both parties that recognizes the existence of such a contract.
- : Statute drafted, formulated, and approved by the Commissioners on Uniform State Laws that sets forth the rules that control commercial transactions and contracts. The statute has been enacted in its entirety by all states except Louisiana.
- UNDER THE UCC, A CONTRACT FOR THE SALE OF GOODS MAY LEAVE OPEN SOME TERMS AND STILL BE ENFORCEABLE
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Valley Medical Specialists v. Farber 9 results (showing 5 best matches)
- VMS (P) sought injunctions enjoining Farber (D) from violating a restrictive covenant. The trial court denied the request and VMS (P) appealed. The court of appeals reversed the trial court’s ruling, modified the covenant, and remanded the case to the trial court. The state supreme court granted review.
- : 1. In a deed, a promise to restrict the use of real property, which is a covenant said to “run with the land.” Restrictive covenants that prohibit selling property to a person of a certain race or unenforceable by courts under the due process clause of the Fourteenth Amendment. 2. In a contract, a promise by the employee or partner to refrain from performing similar work after the contract terminates, which is valid if limited to a reasonable geographical area and period of time.
- (Feldman, J.) No. The burden is on the party wishing to enforce the covenant to demonstrate that the restraint is no greater than necessary to protect the employer’s legitimate interest, and that such interest is not outweighed by the hardship to the employee and the likely injury to the public. Public policy concerns in this case outweigh VMS’s (P) protectable interests in enforcing the agreement. Restrictive covenants between physicians will be strictly construed. The doctor-patient relationship is special and entitled to unique protection. It cannot be easily or accurately compared to relationships in the commercial context. The covenant in this case prohibited Farber (D) from providing any and all forms of “medical care” for three years within a five-mile radius of any office maintained or utilized by VMS (P). The restriction fails because it is larger than necessary to afford fair protection to VMS (P), and so large as to ignore the significant interests of individual patients...
- Despite the freedom to contract, the law does not favor restrictive covenants. This disfavor is particularly strong concerning such covenants among physicians because the practice of medicine affects the public to a much greater extent than other forms of economic activity. Historically, covenants not to compete were viewed as restraints of trade and were invalid at common law. Eventually, ancillary restraints, such as those incident to employment or partnership agreements, were enforced under the rule of reason. The general rule is that a limited restraint is valid when the restraint is reasonable; and the restraint is reasonable when it imposes no shackle upon the one party which is not beneficial to the other.
- : An injunction is an equitable remedy in which the court orders a party to perform or to desist from a particularly act. A permanent injunction is a final disposition in the suit and is indefinite in length of time.
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Aceves v. U.S. Bank, N.A. 11 results (showing 5 best matches)
- Aceves (P) obtained a mortgage loan that was transferred to U.S. Bank (D). After two years, she could no longer afford the payments and defaulted; the loan servicer recorded a notice of default and election to sell the property. Shortly thereafter, Aceves (P) filed for bankruptcy protection under Chapter 7, but she intended to convert the case to a Chapter 13 bankruptcy. Chapter 13 allows a homeowner-debtor to reinstate the original mortgage payments on her home, pay the arrearages over time, avoid foreclosure, and retain the home. U.S. Bank (D) filed a motion in the bankruptcy court to lift the stay so it could proceed with the foreclosure. Before that motion was heard, a representative of the loan servicing company contacted Aceves (P) about loss mitigation opportunities. A day before the auction to sell the home, the loan servicer for U.S. Bank (D) again contacted Aceves (P) to offer a loss mitigation proposal, but Aceves (P) did not agree to the terms and her home was ultimately...
- The driver and passenger of a truck that got pulled over based on an anonymous tip sought to suppress evidence found in the truck, but the court found that the officers had reasonable suspicion to pull them over and allowed the evidence; the defendants appealed.
- The court explained that the elements of fraud are similar to the elements of promissory estoppel, with the additional requirements that a false promise be made and that the promisor know of the falsity when making the promise. Aceves (P) had adequately alleged those facts in this case as well. Fraud is grounds for setting aside a transaction at the option of the party prejudiced by it or for recovery of damages.
- (Thomas, J.) Yes. The elements of a promissory estoppel claim are (1) a promise clear and unambiguous in its terms, (2) reliance by the party to whom the promise is made, (3) the reliance must be both reasonable and foreseeable, and (4) the party asserting the estoppel must be injured by her reliance. In reliance on a pledge by U.S. Bank (D) to work with her in reinstating and modifying her loan, Aceves (P) did not attempt to save her home under Chapter 13. The bank did not engage Aceves (P) in negotiations toward a possible loan solution, but rather proceeded with the foreclosure. We conclude that Aceves (P) reasonably relied on the bank’s promise, that U.S. Bank (D) reasonably expected her to so rely, and that it was foreseeable that she would do so. As a result, she lost her home. The judgment of the trial court is reversed to the extent it dismissed the claims for promissory estoppel and fraud.
- State appellate court review of a trial court decision sustaining the defendant’s demurrer and entering judgment in favor of the defendant.
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Maness v. Collins 8 results (showing 5 best matches)
- (Kirby, J.) Yes. In order to prove a failure to mitigate damages in a suit for breach of an employment contract, the employer must prove both availability of suitable and comparable substitute employment and a lack of reasonable diligence on the part of the employee to find employment. A failure to mitigate damages is an affirmative defense in an action alleging breach of an employment contract. An employer must prove both availability of suitable and comparable substitute employment and a lack of reasonable diligence on the part of the employee. It was error to hold Maness’s (P) alleged failure to mitigate damages barred recovery of any damages because he was barred from such recovery only if the proof showed he, in the exercise of reasonable diligence, would have earned as much or more than he would have earned under the contract, but the employer did not show suitable and comparable substitute work was available. ...finding breach of contract was affirmed, but the... ...failure to...
- In order to prove a failure to mitigate damages in a suit for breach of an employment contract, the employer must prove both availability of suitable and comparable substitute employment and a lack of reasonable diligence on the part of the employee to find employment.
- Maness (P) owned and operated SKM Wood Products, LLC, a wood manufacturing business. An acquaintance of Maness (P), Collins (D), approached him with an offer to purchase the business for $1.3 million. Maness agreed and the parties executed an Asset Purchase Agreement (the Agreement). The new owners of the business, called SKM, LLC (D), included Collins (D) serving as the accountant, Collins’ brother-in-law, Mike Smith (D), working part-time, and Smith’s son, Josh Smith managing the day-to-day operations. Maness (P) entered into a three-year employment contract with SKM (D) to serve as its production manager. Additionally, Maness (P) signed a non-competition agreement. After a few months, it became well known at SKM that Josh Smith had a drug addiction problem and often undercut Maness’s (P) authority with the employees. After Maness (P) fired an employee for unprofessionalism, Smith admonished Maness (P) and re-hired the employee. Thereafter, Maness (P) often sat in his office doing...
- The trial court found that Manness (P) failed to make any efforts to mitigate his damages and therefore should not recover any. As a general rule, most courts agree that the burden of proving that the employee failed to mitigate rests with the employer. The employer is relieved of this burden if it can be proved that the employee has not made any reasonable efforts to obtain such work.
- A FAILURE TO MITIGATE DAMAGES IS AN AFFIRMATIVE DEFENSE IN A BREACH OF EMPLOYMENT CONTRACT SUIT
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Dougherty v. Salt 8 results (showing 5 best matches)
- Absent consideration or another validating device, a promise to make a gift is generally unenforceable by the promisee if the promisor later reneges on the promise. Such promises are often referred to as donative promises, gratuitous promises, or executory promises. Whatever the label, the crux of a donative promise is that it is a one-sided promise to make a gift. The promisee is not obligated to do anything in order to receive the gift. Therein lies the problem of consideration. Classic contract theory requires consideration in every contract in order to make the contract enforceable. The concept of consideration became the mechanism by which enforceable promises were distinguished from unenforceable, gratuitous gifts.
- An eight-year-old boy (P) received from his Aunt a promissory note for $3000 payable at or before her death. The promissory note was made out by use of a preprinted form. The boy’s (P) guardian testified at trial as to how the note came to be given. The Aunt was visiting her nephew (P) and remarked what a nice boy he was. The guardian replied that he certainly was a nice boy and proceeded to tell the Aunt how well the boy (P) was doing in school. The Aunt responded that she would like to take care of the little boy (P). The guardian expressed some doubt, apparently because other relatives had also expressed a desire to take care of the boy (P) but had “take[n] it out in talk.” [Presumably that meant that they were all talk and no action!] The Aunt stressed that she really wanted to do something for the boy (P) and asked the guardian why she couldn’t make out a note to the boy. The guardian replied that he did not think anything would be wrong with making out a note, and the Aunt...
- : The motive or inducement for parties to enter into a contract, or the bargain element of a contract.
- (Cardozo, J.) No. A promise with no consideration is an executory promise and is unenforceable. The statement in the note raises an inference that there was sufficient consideration given for the note. However, the facts of this case as related by the boy’s (P) own guardian are sufficient to overcome and rebut the inference of consideration. As can be seen from the testimony of the plaintiff’s own witness [the guardian], there was no consideration given for the note. The note was simply a voluntary and unenforceable promise of an executory gift, despite the note’s form language as being for “value received.” The boy (P) was not a creditor, nor was the Aunt repaying
- Appeal of a trial court decision in favor of the defendant and an appellate court reversal finding sufficient consideration.
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Geysen v. Securitas Security Services, USA, Inc. 8 results (showing 5 best matches)
- Geysen (P) was an at-will employee for Securitas Security Services, USA, Inc. (Securitas) (D), a security company. Geysen’s (P) job was to procure business for the company. He was paid a salary plus a commission for contracts that he procured. Securitas’s (D) sales-incentive plan provided that commissions would be paid only after work was performed and invoiced to the client. The plan also provided that upon an employee’s termination, “all commissions cease,” except for those invoiced prior to termination. Securitas (D) terminated Geysen’s (P) employment, alleging that he had engaged in improper business activities. Geysen (P) sued Securitas on a number of grounds, including breach of the implied covenant of good faith and fair dealing. Specifically, Geysen (P) claimed that Securitas’s (D) allegation that he had engaged in improper business practices was merely a pretext to avoid paying outstanding commissions that had been fully earned but simply not yet invoiced to the client. The...
- Generally, an employee who is an at will employee may be terminated “for any reason or no reason,” subject to exceptions such as employment discrimination laws. By definition, the at-will doctrine does not apply to a contract with a specified duration. A contract that includes a specified duration is construed to mean that employee may be terminated only for just or good cause.
- (Rogers, C.J.) No. The principle of freedom of contract allows employers and employees to make their own agreements regarding aspects of employment. Connecticut’s wage payment statutes expressly leave the timing of accrual of wages to the agreement between the employer and the employee. Here, there was no violation of the statutes because Geysen (P) was not due his commissions under the express and enforceable terms of that agreement, as the condition precedent to their accrual that the commissionable amounts be invoiced was not satisfied. The trial court improperly determined that the commissions provision violated public policy and was unenforceable. The trial court also improperly struck Geysen’s (P) claim for breach of the implied covenant of good faith and fair dealing as his allegations as to damages he suffered due to the violation of his reasonable expectation regarding the payment of commissions stated a viable claim. The trial court properly struck Geysen’s (P) claim for...
- The principle of freedom of contract allows employers and employees to make their own agreements regarding aspects of employment.
- EMPLOYERS AND EMPLOYEES HAVE FREEDOM OF CONTRACT
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Chapter Eleven. Alternatives to Expectation Damages: Reliance and Restitutionary Damages, Specific Performance, and Agreed Remedies 15 results (showing 5 best matches)
- When anticipated profits are too speculative to be determined, monies spent on part performance, or in preparation for or reliance on the contract, are recoverable.
- A radio station owned by Reier (P) had an exclusive contract with the Montana State University football coach that would be violated if the university contracted with a different station and required the coach to work with that station; Reier (P) sought an injunction to prevent the contract violation.
- The non-breaching party in a breach of contract case should not obtain a windfall from the breach.
- A contract’s existence prevents an unjust enrichment claim only if the contract is enforceable and the issue is covered by the contract.
- The mere fact that a contract, definite in material respects, contains some terms that are subject to further negotiation between the parties will not bar a decree for specific performance.
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Chapter Seven. Avoiding Enforcement: Incapacity, Bargaining Misconduct, Unconscionability, and Public Policy 23 results (showing 5 best matches)
- After Williams (P) defaulted on an installment contract for a stereo set she had purchased from Walker-Thomas (D), Walker-Thomas (D) filed a complaint in replevin for possession of all items Williams (P) had purchased on installment contracts with Walker-Thomas (D).
- A contract is voidable by a person who, due to mental illness or defect, lacked the capacity to contract at the time of entering into the agreement.
- Although a contract with a minor is voidable, the other contracting party may be entitled to compensation for devaluation of the purchased article while it was in the minor’s hands.
- A contract may be voidable for misrepresentation where a party knowingly made false and material representations in order to deceive and defraud the other party into entering into a contract.
- The court may rescind provisions in a contract of adhesion which also contains elements of procedural and substantive unconscionability.
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Alaska Packers’ Association v. Domenico 8 results (showing 5 best matches)
- (Ross, J.) No. If a contractual party demands additional compensation to perform a duty it is already contractually obligated to perform, any agreement to pay more compensation is unenforceable as lacking consideration. We assume Alaska Packers’ (D) superintendent was authorized to contract with the workers (P), and turn to whether this renegotiation was supported by sufficient consideration. Here, the libelants (P) contracted to work for Alaska Packers (D) for a set wage. The workers (P) stopped work for no good reason, knowing Alaska Packers (D) had invested large amounts of money in the fishing operation, that the fishing season was short, and that Alaska Packers (D) could not hire replacement workers once it brought the workers (P) to Alaska. Under these circumstances, Alaska Packers’ (D) superintendent’s consent to increased wages was without consideration, since it was based solely on the workers’ (P) agreement to render the exact services they were already obligated to...
- After a cannery hired sailors for seasonal work, they refused to work unless paid higher wages, knowing replacements were unavailable; when the cannery promised a raise but never delivered, the workers sued.
- If workers demand more compensation to perform the work they already contracted to do, is a promised raise enforceable?
- illustrates the prevailing “pre-existing duty” rule, its policy justification, and potential exceptions. This rule prevents contractors from extorting additional extra-contractual compensation by threatening to breach in the middle of a contract’s performance, after the other party has expended money and effort in reliance. Typically, such a threat at an inconvenient time would force the other party to pay more than he would have agreed to pay prospectively. Here, had the workers initially demanded $100, Alaska Packers (D) would no doubt have found other sailors willing to accept $50. However, once Alaska Packers (D) hired them and brought them to the cannery, replacing them would cost much more than an extra $50 per person, since it would presumably force Alaska packers (D) to either miss the short fishing season, or cause its already-caught fish to rot in storage. Thus, Alaska Packers (D) was willing to promise $100 at that point, though it would not have done so given a choice....
- Alaska Packers’ Association (D) recruited workers, including Domenico (P), to sail from San Francisco to Alaska to work as fishermen/canners for $50 to $60. 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 trial, the court found for the workers (P). Alaska Packers (D) appealed.
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Chapter Twelve. Rights and Duties of Third Parties 7 results (showing 5 best matches)
- Hayes Appraisal (D) contracted with the Vogans’ (P) mortgage company to make periodic inspections of the construction of the Vogans’ (P) home and notify the bank when to make disbursements based on progress, but the appraisal company provided erroneous project reports, resulting in disbursing too much money too soon and leaving the Vogans’ (P) without a completed house.
- A third party who is not a promisee and who gave no consideration has an enforceable right by reason of a contract made by two others if the promised performance will be of pecuniary benefit to the third party and the contract is so expressed as to give the promisor reason to know that such benefit is contemplated by the promisee as one of the motivating causes of his making the contract.
- Contracts cannot be assigned to competitors or wholly owned subsidiaries of direct competitors of one of the parties to the contract.
- Sally Beauty Co. (P) sued Nexxus Products Co. (D) for breach of contract in canceling their distributorship agreement, and Nexxus (D) asserted that the contract was not assignable to a competitor.
- As consideration for a doctor’s promise to perform surgery for no up-front payment, Jones assigned his payment rights under a pending personal Injury action to the doctor, but Jones later attempted to revoke the assignment.
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Martinez-Gonzalez v. Elkhorn Packing Co. LLC 13 results (showing 5 best matches)
- : A form of alternative dispute resolution that is more formal than mediation but subject to fewer formal rules than a traditional court case. In arbitration, the parties present their cases, and a neutral third party, the arbitrator(s), makes a final judgment, which is commonly not appealable.
- , California state law controlled whether economic duress or undue influence existed. The case was filed in a federal court, so federal judges were determining and applying California state law to the dispute. However, the federal judges in both the majority and the dissent seemed to have agreed about what the state law was and what had happened during the signing. The two sides disagreed only about how to apply those primary facts to the law. The majority arguably saw the facts through the employer’s viewpoint, finding that these facts presented an acceptable employment transaction. In contrast, the dissent focused much more on the worker’s viewpoint and whether the worker would feel coerced in those circumstances.
- (Bumatay, J.) Yes. To establish the contractual defense of economic duress, a party must show (1) a wrongful act and (2) a lack of reasonable alternatives to signing the contract. To be wrongful, an act does not need to be criminal or tortious. Otherwise lawful acts of economic exploitation, coercion, or bad faith can be wrongful. However, the wrongful act must be coercive enough to leave a reasonably prudent person with no reasonable alternative but to accept an unfavorable contract. A reasonable alternative is one that a reasonably prudent person would pursue to avoid an unfavorable agreement. Undue influence is a similar contractual defense. Undue influence requires proof that (1) a person was unduly susceptible to influence and (2) the dominant person imposed excessive pressure. A person’s susceptibility to influence increases as the person’s capacity to contract weakens, such as through age, illness, or mental distress. Pressure is excessive if it overbears a person’s will....
- (Rawlinson, J.) The majority is correct about the law, but it could only disregard the district court’s factual findings if they were clearly erroneous—and they were not. Ample evidence supports the district court’s finding that Elkhorn (D) created a coercive environment that made the arbitration agreement a product of both economic duress and undue influence. For economic duress, Elkhorn (D) committed a wrongful act by creating an oppressive, coercive atmosphere around the signing of the employment documents, including the arbitration agreement. Martinez-Gonzalez (P), the primary breadwinner for his family, made the desperate decision to travel to the United States and perform grueling labor because the paycheck was vital. Elkhorn (D) held all the power and took the wrongful act of leveraging that power to coerce him into signing. Martinez-Gonzalez (P) was in the United States on a visa sponsored by Elkhorn (D), had already started working, and had no reasonable alternative... ...to...
- To establish the contractual defense of economic duress, a party must show a wrongful act and a lack of reasonable alternatives to signing the contract.
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Chapter Eight. Justification for Nonperformance: Mistake, Changed Circumstances, and Contractual Modifications 12 results (showing 5 best matches)
- Mama Rizzo’s (D) Vice President asked that more of the basil stems on the leaves it purchased from Brookside Farms (P) be removed at the time of sale, and Brookside (P) agreed to the task for a price increase, which the VP agreed to note on Mama Rizzo’s (D) copy of the contract; he failed to make note of the changes, and then argued that subsequent price increases were not enforceable.
- A contract based on a mutual mistake is voidable unless the adversely affected party agrees to bear the risk of the mistake.
- Ordinarily, oral agreements that materially modify a written agreement within the Statute of Frauds are not enforceable unless one party reasonably relies on the oral promise of another to reduce an oral agreement to writing, in which case the failure to create such a writing will not prevent the relying party from taking the modification out of the Statute of Frauds.
- The Restatement recognizes three distinct grounds for the discharge of an obligor’s contractual duty: the obligor may claim that (1) some circumstance has made his own performance impracticable, (2) some circumstance has so destroyed the value to him of the other party’s performance as to frustrate his own purpose in making the contract, or (3) he will not receive the agreed exchange for the obligee’s duty to render that agreed exchange on the ground of either impracticability or frustration.
- After a cannery hired sailors for seasonal work, they refused to work unless paid higher wages, knowing replacements were unavailable; when the cannery promised a raise but never delivered, the workers sued.
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American Standard, Inc. v. Schectman 10 results (showing 5 best matches)
- (Lavender, J.) Yes. If work is improperly or incompletely performed in breach of a construction contract, the measure of damages is the cost of completion. The general rule of damages for the breach of a construction contract is that the injured party may recover any damages that are the “direct, natural, and immediate consequence of the breach and which can be said to have been in the contemplation of the parties when the contract was made.” The fact that fulfilling the promises would add little or nothing to the property’s value does not change the fact that the defendant breached the contract. Even though the burden placed on the defendant is heavier than 362 anticipated and the completion cost is out of proportion to the end achieved does not, without more, alter the rule that the measure of plaintiff’s damages is the cost of completion. Affirmed.
- American Standard’s (P) property had been the site of various industrial operations since 1870. Until 1972, American Standard (P) operated a pig iron manufacturing plant on the land, which abuts the Niagara River in Tonawanda. American Standard (P) decided to close the plant and entered into a contract with Schectman (D) to sell the business’ structures and equipment to Schectman (D) in exchange for $275,000 and Schectman’s (D) promise to remove the equipment, to demolish the structures and to grade the property as specified. Pursuant to the contract’s terms, Schectman (D) was to remove all foundations, piers, headwalls, and other structures, including those under the surface and not visible to the depth of approximately one foot below the specified grade lines. Schectman’s (D) work substantially deviated from the specified grade lines, and walls, foundations, and other structures existing above the specified lines were not removed. American Standard (P) sued Schectman (D) for...
- In breach of construction contract cases, if the work is improperly or incompletely performed, the measure of damages is the cost of completion.
- American Standard, Inc. (P), after deciding to close its plant, entered into a contract with Schectman (D), a demolition and excavating contractor, pursuant to which the plaintiff agreed to convey the buildings and equipment to defendant in return for the defendant’s payment of $275,000 and his promise to remove the equipment, demolish the structures and grade the property.
- THE COST OF COMPLETION IS THE PROPER REMEDY FOR THE BREACH OF A CONSTRUCTION CONTRACT
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Chapter Six. Supplementing the Agreement: Implied Terms, the Obligation of Good Faith, and Warranties 15 results (showing 5 best matches)
- When a contract confers on one party a discretionary power affecting the rights of the other, a duty is imposed to exercise that discretion in good faith and in accordance with fair dealing.
- The covenant of good faith and fair dealing is contained in all contracts and mandates that neither party may do anything that will have the effect of destroying or injuring the right of the other party to receive the fruits of the contract.
- A subcontractor who was hired to erect aluminum walls during the construction of an auto factory filed suit to recover the balance of the contract price, claiming that the owner of the project unreasonably rejected the subcontractor’s work.
- Locke (P) and Clint Eastwood made a movie together and became romantically involved; when they broke up 13 years later, Locke (P) brought a “palimony” suit and, as part of the settlement, Eastwood secured her a contract with Warner Bros. studios (D), which Locke (P) later alleged to be a sham deal.
- The principle of freedom of contract allows employers and employees to make their own agreements regarding aspects of employment.
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Park 100 Investors, Inc. v. Kartes 9 results (showing 5 best matches)
- On appeal, Park 100 (P) argued that reliance upon a material misrepresentation must be justified and, in an arm’s-length relationship involving knowledgeable business people such as the Karteses (D), such reliance was misplaced. However, where one employs misrepresentation to induce a party’s obligation under a contract, one cannot bind the party to the terms of the agreement. While a person relying on another’s representations must use ordinary care and diligence, the requirement of reasonable prudence in business transactions is not carried to the extent that the law will ignore an intentional fraud practiced on the unwary.
- (Barteau, J.) Yes. Fraud is (1) a material misrepresentation of past or existing fact by the party to be charged, which (2) was false, (3) was made with knowledge or in reckless ignorance of the falsity, (4) was reasonably relied upon by the complaining party, and (5) proximately caused the complaining party injury. In this case, (1 & 2) the statements made by Park 100’s (P) agent, that the personal guaranty was “lease papers” and that KVC could not move into the building until the papers were signed, were each misrepresentations of material facts; (3) Park 100’s (P) agent knew that the document he presented for the Karteses’ (D) signatures was a guaranty and, therefore, knowingly made false misrepresentations; and (4) the Karteses (D) believed that the document they were signing was a lease and reasonably relied upon Park 100’s (P) representative’s statements (5) to their detriment. Accordingly, since the evidence supports the trial court’s findings that the Karteses acted with...
- The Karteses (D) signed a lease for business space owned by Park 100 (P). The lease agreement did not include any provisions for personal guaranty of the lease, nor did the parties discuss such a term during negotiations. On the day before the Karteses (D) were scheduled to move their business into the leased space, Park 100’s (P) agent appeared with “lease papers” for the Karteses (D) to sign, stated that they could not move to the leased property without signing, and presented them with a document entitled “Lease Agreement.” The Karteses (D) signed the document without reading it. Unbeknownst to them, the document was actually a personal guaranty, which Park 100 (P) sought to enforce against the Karteses (D) years later after the Karteses (D) had sold their business interests.
- Landlord’s (P) agent induced tenants (D) to sign a personal guaranty on a business lease by disguising the guaranty as “lease papers.”
- Where a party consents to an agreement based on material representations by the other party, the agreement may be rescinded.
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Chapter Nine. Consequences of Nonperformance: Express Conditions, Material Breach, and Anticipatory Repudiation 10 results (showing 5 best matches)
- The doctrine of anticipatory repudiation requires a clear manifestation of an intent not to perform the contract on the date of performance.
- Termination of a contract by one party due to a breach by the other, and substitution of the injured party’s legal remedies for his contractual rights, is justifiable when the breaching party’s breach is properly classified as a total, rather than partial, breach of the contract.
- Truman L. Flatt (P) sought specific performance of a real estate contract made with defendant Schupf (D), but the defendant claimed that the plaintiff had anticipatorily repudiated the contract due to zoning issues and its request for a lower sale price.
- Spindler (D) offered Sackett (P) many opportunities to pay for the outstanding stock in Spindler’s (D) newspaper business but Sackett (P) continuously missed the final payment; when Spindler (D) finally got fed up, he said the deal was off, and Sackett (P) considered it a repudiation of their contract, relieving him from further performance.
- A tenant missed the deadline to renew its lease and the landlord sought to take back the premises; because the tenant had made significant and costly improvements to the property, the determination of whether the tenant should get the property back despite its mistake turned on whether the landlord would be prejudiced thereby.
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Hill v. Jones 10 results (showing 5 best matches)
- The classical view was that a party to a business transaction could not avoid the transaction because of nondisclosure of material information by the other party. Courts required a party to protect his own interests by requesting information from the other party or by making an adequate investigation before entering into a transaction. The modern view is that in some situations a failure to disclose a known material fact may justify rescission of a contract.
- Appeal from grant of summary judgment in favor of Jones (D).
- (Meyerson, J.) Yes. A seller has a duty to disclose to the buyer the existence of defects in a residential dwelling known to the seller, but not to the buyer, that materially affect the value of the property. Here, the existence of termite damage and past termite infestation has been considered by other courts to be sufficiently material to warrant disclosure. There is also a judicial policy promoting honesty and fair dealing in business relationships. This policy is expressed in the law of fraudulent and negligent misrepresentations. Where a misrepresentation is fraudulent or where a negligent misrepresentation is one of material fact, the policy of finality rightly gives way to the policy of promoting honest dealings between the parties. Reversed.
- Hill (P) later learned that when Jones (D) purchased the residence, he received two termite guarantees that had been given to the previous owner, as well as a diagram showing termite treatment at the residence that had taken place in 1963. The guarantees provided for semi-annual inspections and annual termite booster treatments. The diagram stated that the damage had not been repaired. There was also evidence of holes on the patio that had been drilled previously to treat for termites. After investigating the second time, the inspector found the damage and evidence of past treatment. Jones (D) did not mention any of this information to Hill (P) prior to the close of escrow.
- In 1982, Hill (P) entered into an agreement to purchase Jones’s (D) residence for $72,000. The purchase agreement provided that Jones (D) was to pay for and place in escrow a termite inspection report stating that the property was free from evidence of termite infestation. Escrow was scheduled to close two months later. On a visit to the house and when Jones (D) was present, Hill (P) noticed a small ripple in the wood floor. When he asked if it was due to termite damage, Jones (D) answered that it was due to water damage. The termite inspection report stated that there was no visible evidence of infestation. The realtor notified the parties that the property had passed the termite inspection. After moving into the house, Hill (P) found out through a neighbor that the house had some termite infestation in the past. Hill (P) noticed that the wood leading down the sunken living room was crumbling. Hill (P) called an exterminator who confirmed the existence of termite damage. The...
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Webb v. McGowin 9 results (showing 5 best matches)
- Although this case is arguably one in which a “moral obligation” was held to be sufficient consideration, the distinction here is in 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.” Section 86 of the Restatement (Second) of Contracts codifies the rule relating to moral obligation, but couches it in terms of unjust enrichment. Section 86(1) states that a “promise made in recognition of a benefit previously received . . . is binding to the extent necessary to prevent injustice.” However, pursuant to § 86(2), a promise is not binding if the promisee conferred the benefit as a gift, if the promisor was not unjustly enriched, or to the extent the promise’s value is disproportionate to the benefit received.
- : An express or implied promise by which one person undertakes to do some act for another, or a common-law action for breach of such a promise or for breach of a contract.
- Webb (P) and J. Greeley McGowin worked for W.T. Smith Lumber. Webb (P) was clearing the upper floor of a mill, which required him to drop a pine block from the upper to the lower floor. As he was about to drop the block, Webb (P) saw McGowin on the lower floor. To avoid causing serious death or injury to McGowin, Webb (P) fell with the block in order to cause it to fall in a different spot. While McGowin was spared injury, Webb (P) sustained serious injuries that precluded him from working. In consideration for Webb’s (P) sparing him from injury or death, McGowin agreed to pay Webb (P) $15 every two weeks for the rest of Webb’s (P) life. McGowin made the payments until his own death. Thereafter, the executor of McGowin’s estate (D) made the payments for a while, but then stopped. Webb (P) sued the executor of McGowin’s estate (D) for the unpaid amounts.
- (Bricken, P.J.) Yes. A moral obligation is sufficient consideration for a subsequent promise if the promisor has received a material benefit, even if the promisor had no original duty or liability. The past act of saving a party from death or serious bodily injury, which results in injury to the life-saver, is sufficient consideration for the saved party’s promise to pay the life-saver. The plaintiff argues here that by saving his life, McGowin received a benefit far in excess of money. From this benefit, McGowin was morally bound to compensate Webb (P) and, in fact, did compensate him for more than eight years. Webb’s (P) saving of McGowin’s life was a material benefit that created a moral obligation on McGowin’s part to compensate Webb (P), which formed the basis for McGowin’s promise. McGowin’s subsequent promise to pay Webb (P) for saving his life affirmed what Webb (P) had done and gave rise to a presumption that McGowin had requested such services. Also, Webb’s (P) physical...
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Hamer v. Sidway 8 results (showing 5 best matches)
- The executor (D) of Story’s will contends that the contract was without consideration, and therefore invalid. He asserts that the promisee, by refraining from the use of liquor and tobacco, was not harmed but benefited; what he did was best for him, independent of his uncle’s promise,
- (Parker, J.) Yes. A promise is supported by consideration if one party suffers some detriment or forbearance as a result of the promise, but a court will not inquire into the value of each promise. The nephew had fully performed his part of the agreement. The uncle’s executor (D) argued that the agreement was without consideration, that the nephew acted for his own benefit, and that the uncle had not profited from his nephew’s clean living. Courts cannot become entrenched in deciding whether, upon the exchange of promises, the parties are getting equivalent value. The only inquiry a court may make is to determine whether or not, under the facts, one party has given up a present or future legal right in exchange for the other party’s promise. Here, the nephew gave up doing something he had the legal right to do. Consideration can be a right, benefit, or interest accruing to one party, or a forbearance, loss, or detriment suffered by the other party. It does not matter that the nephew...
- William Story promised to pay his nephew $5,000 if he refrained from drinking alcohol, using tobacco, swearing, and playing cards or billiards for money until he was twenty-one years old. The nephew refrained from engaging in the activities for the specified period, and, when he turned twenty-one, he wrote to his uncle, informing him that he was entitled to the $5,000. William Story wrote back that he would hold the money until he believed his nephew was capable of handling it wisely, indicating that he would pay his nephew interest on the $5,000. The nephew agreed to this arrangement, but his uncle died before he paid the money. Hamer (P), the assignee of the nephew’s claim, presented a claim to Sidway (D), the executor of William Story’s estate, for the amount due plus interest. Sidway (D) rejected the claim, and Hamer (P) sued.
- CASE VOCABULARY
- A promise is supported by consideration if one party suffers some detriment or forbearance as a result of the promise, but a court will not inquire into the value of each promise.
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Chapter Three. Liability in the Absence of Bargained-for Exchange: Reliance on Gratuitous Promises, Unaccepted Offers, and the Principle of Restitution 26 results (showing 5 best matches)
- The driver and passenger of a truck that got pulled over based on an anonymous tip sought to suppress evidence found in the truck, but the court found that the officers had reasonable suspicion to pull them over and allowed the evidence; the defendants appealed.
- A subcontractor claimed that it did not get paid for its stucco work on a project, and after the general contractor declared bankruptcy the subcontractor sued the property owner, which claimed it had already paid the general contractor; the court awarded damages to the subcontractor, and the owner appealed.
- An offer to make a bilateral contract may be withdrawn at any time prior to acceptance, unless the terms of the offer provide otherwise.
- An option agreement, to be binding, must be supported by consideration the same as any other contract.
- An implied contract is an obligation imposed by law without regard to either party’s expression of assent either by words or acts.
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King v. Trustees of Boston University 11 results (showing 5 best matches)
- State appellate court consideration of whether the case was properly submitted to the jury.
- a “written instrument is presumptive evidence of consideration.” Other states have tackled the issue in the courts. An Ohio court, for example, held that a charitable pledge is equivalent to a promissory note valid on its face, and is therefore enforceable against the person making the pledge without any consideration. Other state courts have similarly concluded that no consideration is necessary and that a charitable pledge is legally binding once it has been made.
- (Abrams, J.) Yes. A charitable subscription is an oral or written promise to do certain acts or to give real or personal property to a charity or for a charitable purpose. To enforce a charitable subscription or a charitable pledge, a party must establish that there was a promise to give some property to a charitable institution and that the promise was supported by consideration or reliance. The 1964 letter includes two sentences that might reasonably be construed as a promise to give personal property to a charity or for a charitable purpose. The first statement is that Dr. King intended, in subsequent installments, to transfer title to portions of the papers in BU’s (D) custody to BU (D) until all the papers in its custody became BU’s (D) property. The second statement expresses an intent that, in the event of Dr. King’s death, all materials deposited with BU (D) would become, from that date on, the absolute property of BU (D). A primary consideration in enforcing charitable...
- : The delivery of personal property to another under express or implied contract, for some specified purpose, to be returned or accounted for after the purpose is fulfilled.
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Herzog v. Irace 11 results (showing 5 best matches)
- An assignment is 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. An 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. The underlying rationale is based on an estoppel theory, namely that an assignor may not revoke an assignment after the assignee has materially changed position in justifiable, detrimental reliance on the assignment.
- : A party who transfers his rights under a contract to a third party.
- 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, Irace (D) and 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 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.
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Jetz Service Co., Inc. v. Salina Properties 11 results (showing 5 best matches)
- The court first examined whether the
- : 1. Any lessening of the damages caused by tort or breach of contract. 2. Legal requirement that the injured person, in the exercise of ordinary care, use reasonable efforts to minimize the damages arising out of injury.
- (Larson, J.) No. Judgment affirmed. The court first examined whether the Jetz Service (P) was a lost volume lessee, noting “[h]ere, there was substantial competent evidence to support the trial court’s determination that Jetz Service (P) was a ‘lost volume’ lessee. The evidence showed that Jetz Service (P) is in the business of supplying coin-operated laundry equipment; it has several warehouses in which it has available for lease about 1,500 used washers and dryers; it continually looks for new locations in which to install laundry equipment; it would have been able to fulfill the Kansas City lease without using the machines from Salina Properties (D); and it is uncontroverted Jetz Service (P) would have been able to enter into both transactions irrespective of the breach by Salina Properties (D).” Under appropriate facts such as exist here, lost volume status should be conferred upon one engaged in a service-oriented business. As a lost volume lessee, Jetz Service (P) was not...
- a property company breached a contract with Salina Properties (D), a lost volume supplier of coin-operated laundry equipment.
- On appeal, Salina Properties (D) challenges the damages awarded to Jetz Service Company, Incorporated (P), resulting from breach of the parties’ lease of space in which coin-operated laundry equipment was installed in an apartment complex.
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Long v. Provide Commerce, Inc. 9 results (showing 5 best matches)
- Long (P) filed a class-action consumer-fraud suit against Provide. Long (P) claimed, and Provide (D) did not dispute, that Long (P) did not have actual knowledge of the terms of use. Provide (D) filed a petition to compel arbitration based on the Terms of Use. The Trial Court denied the petition.
- (Jones, J.) No. Contractual terms that are linked to the main agreement by a hyperlink must be sufficiently conspicuous to put a reasonably prudent internet consumer on inquiry notice. Where a website makes its terms of use available via a conspicuous hyperlink on every page of the website but otherwise provides no notice to users nor prompts them to take any affirmative action to demonstrate assent, even close proximity of the hyperlink to relevant buttons users must click on is insufficient to give rise to constructive notice. Here, there was no mutual assent to an arbitration provision in the Provide’s (D) Terms of Use and the provision did not bind Long (P) who was unaware of its existence. The website’s checkout flow did not prominently indicate that placing an order was an express acceptance of the Provide’s (D) rules and regulations. An inconspicuous link to the Provide’s (D) Terms of Use in an order confirmation e-mail was not sufficient to put a reasonably prudent internet...
- included on the bottom a hyperlink to Provide’s (D) Terms of Use. The Terms of Use included a compelled-arbitration clause. Website users were not required to click on the hyperlink or otherwise read or assent to the terms of use to complete a transaction. To complete an order on the website, the user was required to fill out certain fields contained in a big white box in the middle of the page and to click “Submit” within the same box. The background of the webpage was lime green. The terms of use hyperlink appeared in light green font in the lime green background, below the white box. The hyperlink was among other items in the lime green area, such as a VeriSign Secured logo and a hyperlink to the website’s privacy policy.
- Contractual terms that are linked to the main agreement by a hyperlink must be sufficiently conspicuous to put a reasonably prudent internet consumer on inquiry notice.
- Appeal from trial court’s order denying Provide’s (D) petition to compel arbitration.
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Mills v. Wyman 9 results (showing 5 best matches)
- Wyman’s (D) son, Levi, became ill while he was passing through Hartford, Connecticut, on his way home to Massachusetts from a voyage at sea. Mills (P) allowed Levi to stay in his house and cared for Levi until he died. Wyman (D) wrote Mills (P) a letter promising to pay him for his expenses in caring for Levi. The only consideration underlying this promise was Mills’ (P) care of Levi. The judge in the court of common pleas directed a nonsuit. Mills (P) filed exceptions.
- Appeal from the lower court’s decision dismissing the case.
- : The dismissal of a case or of a defendant, without a decision on the merits.
- (Parker, C.J.) No. A promise based only on a moral obligation is made without consideration and not enforceable. Wyman’s (D) promise to pay was based only on a moral obligation and was not supported by consideration. Wyman (D) did not request that Mills (P) care for his son, who was twenty-five years old and no longer part of his father’s family. Even though Wyman (D) violated a moral duty to pay Mills (P) for his kindness, the law does not enforce such a duty; rather, it is left to the promisor’s conscience to fulfill his promise. Because Mills (P) did not pay or promise something in exchange for Wyman’s (D) promise to pay, there was no consideration underlying that promise. Affirmed.
- Mills’ (P) kindness, services, and care were not given at Wyman’s (D) request, and Wyman (D) acted only in gratitude with his promise to pay. Failure to fulfill that promise violated a moral duty, but not a legal one. Note that distinguishes moral obligations underlying promises that were, originally, supported by consideration, characterizing such promises as voluntary revivals or the creation of an obligation. Examples the court gave include agreements to pay debts where the statute of limitations has run, agreements to pay the debts of minors, and agreements to pay the debts of a bankrupt debtor.
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Bayliner Marine Corp. v. Crow 7 results (showing 5 best matches)
- Advertisements and marketing documents routinely carry disclaimers, so perhaps it should have come as no surprise to Crow (P) 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) purchased a “3486 Trophy Convertible,” a sportfishing boat manufactured by Bayliner (D). He intended to use the boat for offshore fishing. Before the purchase, Crow (P) took an excursion of approximately twenty minutes on the boat, and piloted the boat for a short period of time. There was no speed measurement equipment onboard the boat during the test, so Crow (P) could not determine its speed. A salesman told Crow (P) that he had no experience with that particular model boat, and had no knowledge of its performance. He gave Crow (P) copies of “prop matrixes,” documents that showed the recommended propeller and engine sizes for each model made by Bayliner (D). The matrix showed that the 3486 Trophy Convertible had a top speed of thirty miles per hour with a “20×20” propeller. The matrix also stated that the data was for “comparative purposes only,” and did not account for variables such as weather conditions. The matrix explained that testing was done with approximately...
- (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. Similarly, the statements in the brochure did not create a warranty. The brochure was only a commendation of the boat’s performance, and it was only Bayliner’s (D) opinion. Statements of opinion cannot create a warranty....
- CASE VOCABULARY
- : A warranty—implied by law if the seller has reason to know of the buyer’s special purposes for the property—that the property is suitable for those purposes; sometimes shortened to warranty of fitness.
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Kirksey v. Kirksey 5 results
- is an example of a case in which the record did not reveal the real “deal” between the parties. This made it difficult for appellate judges to properly decide the case.
- Plaintiff was the wife of Defendant’s brother. She had been a widow for some time, and had several children. Defendant wrote to Plaintiff, living sixty miles distant, saying that if she would come and see him, he would let her have a place to raise her family. Shortly thereafter, Plaintiff removed to the residence of her brother-in-law, who furnished her with a place to live for two years, and then required her to give it up. A verdict of 200 dollars was found for the plaintiff by the Circuit Court.
- Appeal from Circuit Court’s verdict in favor of Plaintiff.
- Kirksey (D) offered his sister-in-law (P) a place to raise her family, and later, told her to leave the house.
- (Ormond, J.) No. When a promise is a mere gratuity, an action will not lie for its breach. The loss and inconvenience which the Plaintiff sustained in moving to Defendant’s is not sufficient consideration to support the promise. Reversed.
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Alphabetical Table of Cases 4 results
Table of Contents 4 results
- Publication Date: July 17th, 2025
- ISBN: 9798895459171
- Subject: Contracts
- Series: High Court Case Summaries
- Type: Case Briefs
- Description: This title contains briefs for each major case in Knapp, Crystal, Prince, Hart, and Silverstein'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.
