Second Restatement Contracts and UCC Chapter 1: Meaning of Terms Contract Defined Promise; Promisor; Promisee; Beneficiary Agreement

defined; Bargain defined How a Promise may be made 1 2 3 4

A contract is a promise or a set of promise

or a set of promises for the breach of which the law gives a remedy, or the performance of which the law in so

f which the law in some way recognizes as a duty

TOPIC Contract & Promise

CASE, PAGE NO Bailey v. West, 13 Bolin Farms v. American Cotton, 18

K / NO K IMPT FACTS No K Ownership dispute Forward sales K

Contract & Promise

Consideration

Kirksey v. Kirksey, No K 31 Hamer v. Sidway, 33

Consideration

K Refrained from seeking emp with competitive company Wife given land, had to keep up, pay

Consideration

Langer v. Superior Steel, 36

Consideration

Thomas v. Thomas, K 46

Consideration

Browning v. Johnson, 54

K for cancelled sale

Unconscionability

Jones v. Star Credit, No K 61

Consideration

In re Greene, 66

No K

Ds owed more than fair retail value of purchased object Written instrument under seal to pay mistress, $1 and good & valuable consid

Pre-existing Duty

Alaska Packers v. Domenico, 81

No K

Pre-existing Duty

Angel v. Murray, 85 K

Normal increase was 2025 units per year, then increased 400 units R-Z could refuse to accept whisky for any unforeseen reason

Mutuality

Rehm-Zeiher v. F.G. No K Walker, 93

Good Faith

Wood v. Lucy, 99

Moral Obligation

Mils v. Wyman, 113 No K

Moral Obligation

Webb v. McGowin, K 120

Employee srsly injured saving boss

Moral Obligation

Harrington v. Taylor, 123

No K

P saved Ds life No promise by P to do or refrain from Oral modification of emp agrmt alleged, indef

Promissory Estoppel

Ricketts v. Scothorn, K 129 Blinn v. Beatrice, 142

Promissory Estoppel

Statute of Frauds

Professional Bull Riders, 168

Oral K which by express terms is to last more than 1 yr but contains prov allowing term before 1 yr P was entertainer, no proof of lost earnings Plant needs were unique Ps didnt tell D that mill would be shut down without shaft P demanding renewal of K, threatened to quit unless reempd D considered offer in jest, discussion, modification, signed K Reversed later, judgment for P Prop sold 4/12 acceptance sent 4/15 house rule offer for women

Measuring Remedies

Sullivan v. OConnor, 200

Remedies

Curtice Brothers v. Catts, 207

K- spec perf

Remedies

Hadley v. Baxendale, 213

Mutual Assent / Objective Test

Embry v. Hargadine, K 227

Mutual Assent

Lucy v. Zehmer, 229 K

Implied-in-fact Agreement

Wrench v. Taco Bell, 241

K*

Offer

Lonergan v. Scolnick, 250 Lefkowitz v. Great Minn, 253

No K

Offer

Offer

Leonard v. Pepsico, No K 257

Harrier jet not included in catalog

Offer

Bretz v. Portland GE, 275

No K

Offer

Equitable Life v. FNB, 279

No K K had to be signed by offeror, Vega, trust (wasnt) D withdrew offer before notified of acceptance K binding on written acceptance by contractor or upon perf. Partial order sent with notice of price increase, option to cancel order Informant didnt know reward had been offered, questioned by police Offer said continued use means acceptance

Acceptance by Promise

LaSalle NB v. Vega, No K 284

Acceptance

Hendricks v. Behee, No K 286

Acceptance

Ever-Tite v. Green, K breach 288

Acceptance

Corinthian v. Lederle, 291

No K

Acceptance

Glover v. Jewish War Veterans, 302

No K

Acceptance by Conduct or Silence

Russell v. Texas Co, K 316

Acceptance

Ammons v. Wilson, K 321

Booking didnt constitute K or absolute offer, waited 12 days to refuse

Acceptance

Ammons v. Wilson, K 321

Booking didnt constitute K or absolute offer, waited 12 days to refuse

Acceptance (when effective)

Adams v. Lindsell, 325

Offer letter misdirected by D, accepted by P after D had sold Offer to sell, counter-offer

Acceptance / Counter-offer

Minneapolis Co. v. Columbus Co, 330

No K

Acceptance

Hill v. Gateway, 349 K

Terms inside computer box, arbitration clause

Acceptance

Klocek v. Gateway, No K 352

P offered to purchase, D accepted by shipping Option supported by consid, 2 acceptances sent- diff terms D withdrew offer after P had made dependent bid Subcontractors mistaken bid to contractor K was to buy cotton from ship Peerless, 2 ships w same name

Option Contracts

Humble Oil v. Westside, 376

Options

James Baird v. Gimbel, 388

No K

Options

Drennan v. Star Paving, 392

Inadequate Agreement

Raffles v. Wichelhaus, 402

No K

Indefinite Agreement

Varney v. Ditmars, 409

No K

Boss offered fair share of profits, employee discharged Newspaper ad didnt specify addl Rules

Indefinite Agreement

Lefkowitz v. Great Minn, 253

Incomplete / Deferred Agreement

MGM v. Scheider, 420

Only term in question was start date for filming TV series

Incomplete / Deferred Agreement

Joseph Martin v. Schumacher, 421

No K

Future rent to be agreed upon

Incomplete / Deferred Agreement

Oglebay v. Armco, 425

Close, long bus relationship

Inadequate Agreement

168 and Dodge v. No K Rave Reviews, 438

th

Letter of intent established good faith, not lease agreement P sued T for tort of inducement of breach of K Woman had mental decline, weak evidence

Inadequate Agreement

Texaco v. Pennzoil, K 451

K Capacity: Mental Incompetence

Heights Realty v. Phillips, 475

No K

Unilateral Mistake

Boise JCD v. Mattefs, 490

No K

14% error, city had budgeted for more than next-highest bid bid bond Both parties believed coin was genuine Agreed to buy barren cow P asked D for info, D remained silent P sold 2302 hrs of dance lessons, $31k P seized with fear of his life due to threats Remanded with def of unconscionabili ty Statute regulated beer license

Mutual Mistake

Beachcomber Coins No K v. Boskett, 498 Sherwood v. Walker, 500 Laidlaw v. Organ, 522

Mistake

No K

Fraud and Duty to Disclose

Fraud and Duty to Disclose

Vokes v. Arthur Murray, 526

No K

Duress and Undue Influence

Rubenstein v. Rubenstein, 550

No K

Unconscionability

Williams v. WalkerNo K* Thomas, 564

Illegality

Sinnar v. LeRoy, 604

No K

Illegality and Public Policy

Watts v. Watts, 636 K*

Cause of action supported Oral promise to remove ice house K for sale Deed silent on Q of assignability, form structure makes diff

Parol Evidence Rule

Mitchill v. Lath, 656 Not incl.

Parol Evidence

Masterson v. Sine, 660

Incl.

Interpretation

Pac. Gas v. GW Thomas, 679 ConFold Pac v. Polaris, 682

Incl.

Interpretation

Incl.

3rd party indemnity clause Confidentiality agrmt not extended to proposal

Interpretation

Frigaliment v. BNS, Not incl. 690

Chicken ambig word

Good Faith Duty

Market Street v. Frey, 736

No BF

Lease called for rable consid, GF negot for funding, decreased buyback if not Stdized mass K used by all auto sellers, K of adhesion Pgrm designed to dis absents, pro motivation, failure of cond forfeits bonus Sobriety was waivable condition, D promised to pay full price Time stipd for each perf, concurent K allocated risk, liquidated dmgs/day, option to go to other source

Warranties

Henningsen v. Bloomfield Motors, No K 787

Conditions

Dove v. Rose Acre Farms, 793

No perf

Conditions

Clark v. West, 808

Perf

Conditions

Palmer v. Fox, 831

No Perf

Impracticability

US v. Wegematic, 863

Impracticability

Taylor v. Caldwell, No K 868

Music hall burned down before reserved dates, perf made impossible Bank Board prohibited payment of finders fees Advertised flat for purpose of watching coronation Both mares in foal most of breeding season Delayed steel delivery by months, too cold to pour concrete Late deliveries of steel could ruin Hs business for a year P could cancel agrmt but no provision for D to cancel D breached good faith negotiation but not first-refusal provision

Impracticability

Centex v. Dalton, 884

K cancld

Frustration of Purpose

Krell v. Henry, 898 K cancld

Breach

Taylor v. Johnston, 921

No breach

Compensatory Damages

Spang Fort Pitt v. Aetna, 996

Breach

Compensatory Damages

Hydraform v. American Steel, 1005

Breach

Injunctions

Laclede Gas v. Amoco Oil, 1032

Spec Perf

Injunctions

ABC v. Wolf, 1050

No Spec Perf

Em. Distress & Punitive Dmgs

Boise Dodge v. Clark, 1023

Jury found actual damages Pun. Dmgs $350, punitive $12,500 for car sales fraud

Liquidated Dmgs

Delegation of Duties

D suffered no actual damage Southwest on project, Engineering v. U.S., Liq, Dmgs. $8,300 in 1066 liquidated damages Sally was Sally Beauty v. No K, no competitor of Nexxus, 1164 delgn Nexus, cant be assigned K KMART v. Balfour, K, 3d party P was tenant of 1169 ben shopping center

Third-party Beneficiaries

REASONING Person not required to become obliger unless he desires Keep bargains whether good or bad for us Promise was mere gratuity, no consid Waiver of any legal right is sufficient consideration

RULE? If performance rendered by person without request by another, unlikely person will be under legal duty to pay compensation

Consideration is either some right, interest, profit, benefit accruing to one party or forbearance, detriment, loss, responsibility given, suffered or undertaken by the other

Consider if Consideration exists if one refrains from happening of anything he has legal right to do whether condition will any loss, detriment, benefit benefit promisor Suffic. Consid, motive need not be stated Giving up K of sale was suffic consid, mutual assent proves mutual expectation of benefit Concern for gross inequality of UCC 2-302: court may refuse to enforce K bargaining power, if unconscionable fraud not necessary Nominal consideration, good & valuable not shown

No consideration, consent based Promise to pay a man for ding tht which he solely on agmt to is already under K to do is without perform exact consideration svcs already under K to render SR89D: promise modifying duty under K Contextualism, not fully performed is binding if fair and equitable modification is fair and equitable in view of circumstances not anticipated by parties K was unenforceable by Walker, so lacked in mutuality of obligation Promise to use reasonable efforts to bring profits/revenue has value, P has duty only when the party making promise gains something, or he to whom it is made loses something, that law gives promise validity Promise to pay for remainder of life, morally bound, material benefit rcd Voluntary humanitarian act not suffic consid when promisee cares for, improves, preserves prop of promisor w/o request, suffic consid for subsequent agrmt to pay bc material benefit received

When payee changes position to disadvtg, in Acted on faith of reliance on promise, right of action does promise arise Detrimental NE law: prom est action may be based on reliance replaces promise insuff def to form K but promisees consid reliance is rable and forseeable

Agrmt exply prov that alt perf could Agrmt void if not in writing if not to be be completed in performed within 1 yr of making less than 1 yr

Expectancy or reliance dmgs If damages easy to measure, courts withhold spec perf (equitable)

P entitled to out-of-pocket, worsening of condition, pain and suffering

Specific performance

where 2 parties have made K & 1 broken, damages= arising natly, or rably supposed to been in contemplation of both parties at time of K, prob result of breach D must have Meeting of minds not determined by secret answered as he intentions but by expressed intention; if did to assure P of rable man would understand employment Appearance, modification, provisions show serious bus transaction Implied K where one accepts benefit for which comp usually expected Meeting of minds evidenced by offer/acceptance R71: If words or acts of 1 party have 1 rable meaning, undisclosed intention is immaterial except when known

Implied-in-fact K when intention not manifested by direct words but by implication/deduction from conduct, lang If know/reason to know person making promise does not intend expsn of fixed purpose until further assent, no offer

Cant impose new Where offer is clear, def, explicit, nothing restrictions not in for negot = offer which acceptance will published offer complete K

Ad not unilateral offer, obj rable person standard, no writing SOF P did not rably rely on representations from D Auctioneer must act in good faith in interest of principal

Not P or Ds subjective intent but what obj rable person would understand

Auctioneer may withdraw prop from sale any time before acceptance of bid; bid= mere offer for K

Vega could Offeror has complete control over offer, decline and write may condition acceptance to terms new K but didnt Realtor is agent of principal, notification made to either counts Active perf of work began before notice of dissent given, reasonable delay Non-conforming shipment is counter-offer, may be rejected or accepted Unless offer supported by consid, offeror may w/d at any time before acceptance & comm.

Power to create K by acceptance of offer ends at time specified or reasonable

Shipment of non-conforming goods not acceptance if notify buyer only accommodation

Didnt volunteer info, doesnt No K unless claimant knew of offer when count if giving for giving desired info and acted w/ intention of unconnected accepting motive Cant argue lack R72: if exercise of dominion is tortuous, of intent to accept offeror may treat it as accepance though when retained offeree manifests intention not to accept benefits R72: when because of previous dealings offeree has given offeror reason to understand silence/inaction is assent, acceptance

R69(1)(c): where because of previous dealings or otherwise, it is reasonable that the offeree should notify the offeror if he does not intend to accept.; (1) where an offeree fails to reply to an offer, his silence and inaction operate as an acceptance in the following cases only: D bound at moment of acceptance by P Proposal to accept on diff terms is rejection Writing provides benefits for both sides of comm. Transactions, K formed when consumer inspects box/product Terms are not counter-offer, no unwillingness to proceed w/o P agreement Right to keep option K open for set time, can negotiate re: K of sale Offer withdrawn before accepted Reasonable detrimental reliance D meant one, P meant other- no consensus, no binding K R45: if offer for unilateral K made & part of consid reqd given in response, offeror is bound by K, duty of immed perf conditional on full consid given in time stated or rable Offer to sell imposes no obligation until accepted according to its terms, negotiation remains open

K formed when consumer pays for software (only terms then known count) OR vendor invites acceptance by conduct

UCC 2-207

If irrevocable offer w/ binding option, counter offer does not terminate power of acceptance

fair & rable meaning dep upon intention of parties and subj matter All offers are unilateral, may be withdrawn before acceptance

Promise/agreement of parties must be certain&explicit, full intention may be ascertained to rable degree of certainty, neither vague nor indef where the offer is clear, definite, and explicit, and leaves nothing open for negotiation, it constitutes an offer, acceptance of which will complete the K Where parties have completed negotiations of what they regard essential elements & perf begun on good faith understanding that agrmt on unsettled matters will follow, court will find/enforce K even though elements left for future neg / agrmt if some obj method for determination is avail found in agrmt, comm practice, other usage/custom, will fill in gaps

K would be acceptable if method for determining rent Must be sufficiently certain and specific found in lease or what was promised for law to enforce amt dep on obj promise extrinsic event, condition, standard Agreements to agree enforceable when Court may fill in parties manifested intention to be bound by gaps, diff to terms, intentions specifically definite to be ascertain damages enforced LOI was cursory, indef, conditional, fails to establish objective intent of parties to be Draft any writing making clear when manif. assent, prior there is no K Test of M.C. is whether person is capable of Doctor, fam understanding in Rable manner testimony nature/effect of act

Bid error entitled to relief of rescission if material mistake, enforcement of Kunconscionable, no culpable negligence, no prejudice except loss of bargain, prompt notice of error given Recission for mutual mistake of fact when P did not assume both parties act under mistake and fact risk material, neg failure to know does not preclude Mistake went to Party who has given consent to K of sale whole substance may refuse to execute if assent founded/K of agreement made on mistake of material fact Was not bound to communicate info If undertakes to disclose facts, answer inquiries, must tell whole truth Genrly, actble mirep must be fact, not opinion; Stmt of party having sup knldg may be reg as stmt of fact, although considered opinion if parties on = terms

Age, sex, capacity Unlawful threats which overcome will of considered here person, induce to do act would not legit threat otherwise do, not bound = duress UCC 2-302 is persuasive authority Illegality need not be pleaded, D cant waive defense Balance interest in enforcing K against policy against enforcement How closely bound collat agrmt is to K is decisive factor Integ: whether parties intended writing to serve as exclusive embodiment Unconscionability= absence of legal choice on 1 party + K terms unrably favorable to other party Court will not knowingly aid in furtherance of illegal t/a but will leave parties where it finds them Bargain btwn 2 not illegal merely bc of illicit rship, so long as K is indep of illicit rship and not part of consid or condition Agrmt must be collateral, not contradict express/implied prov of written K, parties not ord expected to embody in writing Ev of oral collateral agrmts should only be excluded when fact finder likely to be misled

Test: whether offered ev relevant to prove Intention, words, meaning to which lang of instrument rably meaning relevant susceptible K minimally ambig but extrins If K ambig, extrinsic ev admissible to resolve ev strongly supported D D expected to make profit, P NY law: usage so long continuous, well allowed 2nd estab, notorious, universal, rable that shipment, D presumption is violent parties refd it believed compliance Give parties what would have stipd for exply if had complete knowledge of future, costs=0 P had no bargaining pwr, Ppl should not be unnecessarily restricted in disclaimer of freedom to K but provisions which tend liability against injury to public- void against PP pub policy Substantial perf, BUT bonus was voluntary, no fraud or BF D could have refused but waived, condition precedent D had right to expect Courts will construe covenants as dependent improvements unless contrary intention clear made by time full price paid Risk of revolution falls on seller, express agrmt, cost was for entire line not one computer

Where performance depends on continued existence of person/thing, impossibility of Implied condition perf arising from perish of person/thing excuses breach of perf Forseeability factor dcrsd, SR 261, 264: Occurrence of event non-o party may still be was basic assumption discharges duty; gov dischgd if event regulation is such event forseen Ask if substance Test: whether event causing impossibility of K needs certain was/might have been anticipated or guarded state of things against Anticipatory breach = one party to bilateral Repudiation may K repudiates K, express or implied (puts out be retracted of its power to perform) Eventuality of damages likely to When parties enter K where time of perf to follow should be fixed later, knowledge of consequences have been of failure to perf imputed at time parties anticipated by agree on date of perf Fort Pitt Lost profits up to Speculative damages not recoverable; 400 sales consequential dmgs (lost profits) only if foreseeable count not rably be prevented by cover Public interest in providing propane to customers, no adequate remedy at law If services are unique, can enjoin employee from providing to another for duration of K Prospective deterrent effect on others like D

SR 370: Spec enfrcmt not decreed unless terms of K so expd that court can determine with rable certainty each partys duty and cond when perf is due

Once employment K has terminated, eq relief only avail to prevent injury from unfair comp or to enforce express anticompetitive covenant

No strict mathematical ratio to be applied

Amount must be reasonable forecast of just compensation for harm caused by breach, harm must be incapable or very difficult of accurate estimation UCC 2-306: lawful agreement for exclusive dealing of goods imposes obligation to use best efforts P beneficiary, also bound to SR 302 submit claims to arbitration

Topic Bases for Liability Contract Consideration = bargained for Seal/Formality Promissory Estoppel Prior Benefit (Srest 86; cf. Webb)