Exam Review ± Contracts II April 17, 2011 Questions by May 7th, or 1x per day after that.

3 hours 180 minutes, 180 points C+ 90 points. 1 hour: 60 minutes 60 points 30 multiple question ± 2 minutes per question. Specific Performance will be the 1st question. The qiestion on the slide is pretty much it. 16/30 C+. 24-23, top.

2 remaining hours 120 minutes, 120 points. Long and short essay questions 1 policy question / 15 minutes. Everything comes right of the 1st ± (a) FALSE (b) FALSE ± not unique enough. Not extraordinarily unavailable (c) FALSE ± we never award specific performance in personal services contracts. (d) TRUE. False statements is usually messy, no sense. If it reads easily and it makes sense, it can be true. POLICY questions POLICY TENSIONS / VALUES (a) Fairness and Predictability. P (b) Freedom of Contract (c) Economic Efficiency vs. accountability for commitments (damages limitations) SPECIAL SUBSTANTIE TOPICS (a) Implied obligation of good faith and fair dealings (b) Limits on Contract Enforcement ± Unconscionability / Public Policy.

Walker Thomas Jacob and Young Hadley v. If you lok at the circyms. At the time of rge K d they realize that they . Page 191. How can you tell which party bears the risk in cases of Mistake? Restatement provides relevant standard.(c) Limits of Damages ± punitive damages CASE NAMES Remember what these cases stand for: Unconscionability Case ± Willams v. Review Questions 1. Baxendale Restatement Section Numbers NONE To the extent that we talked about in class. Intended beneficiary2. Restatement saus you look first in the contract if there is something in the contract that says who bears the risk. we need to know the substantive rule. And you see that the party who is now contending mistake. Section 154.

. Is correct answer. legal claim that provides basis for liability Measure of Recovery ± DAMAGES> Sometimes when she asks about liaibility. If time. Reliance Damages Question ± 1. then we should talk about damages.Contracts II Class ± April 17 Basis of Liability ± legal claims in which you can get relief. She does not wantus to talk about damages if she asks about liability. people talk a lot about damages. then go into analysis to reliance damages. Basis of Liability ± What is the legal claim? What are the legal theories driving the claims for relief? Basis for liability. Note 6 page 974. Damages questions ± start with expectation damages. If she asks directly about damages. then we have to jump in reliance damages (if expectation is not certain enough). Close to the line whether or not expectations damages are certain enough.

Ultimately. A car dealer was mistakenly told that he was approved to be a Lexus dealer and in reliance on this promise. The Defendant instituted a three-step process to establish its dealerships.´ A few days later. The jury found for the Plaintiff on the promissory estoppel claim. among others. Is it proper to limit the damages in a promissory estoppel claim to out-ofpocket expenses? .breaching party Wartzman v. when all conditions were satisfied. Walser (Plaintiff). Toyota Motor Sales USA. was looking for prospective automobile dealers for its new line of Lexus automobiles. The Defendant. Reliance damages? If too speculative to go with expectation damages. Restitution damages is appropriate even when a non breaching party«. Issue. the prospective dealer had to fill out an application and propose a dealership plan. The Plaintiff appealed seeking lost profits from loss of the Lexus dealership. the Plaintiff was not granted the dealership. First. After the Plaintiff applied for the dealership. his father bought property for the new dealership. Brief Fact Summary. an agent of the Defendant told Plaintiff that its letter of intent had been approved and that ³you¶re our dealer. Hightower Walser v. to discuss the possibility of the Plaintiff becoming a Lexus dealer. the Defendant would approve the agreement. Synopsis of Rule of Law. Then the Defendant would issue a letter of intent containing the final conditions that had to be satisfied before the deal would become final. The Plaintiff brought suit on a promissory estoppel claim. However. The Defendant contacted the Plaintiff. Damages from a promissory estoppel claim may properly be limited to out-of-pocket expenses Facts. Franchise fee + equipment ± equipment resale + pre contract legal / travel = Lancellotti .Restitution Damages question ± 1 is correct. the Plaintiff was notified that this was a mistake and that additional financial information was necessary. but limited damages to out-of-pocket expenses. Not liquidated so no pre judgment interest. Finally. the Plaintiff¶s father had purchased property to be used for the new dealership. Toyota Motor Sales (Defendant).

000 if it had completed the job. The court relies on the permissive language of the Restatement and the court opinions to reason that it is within the discretion of the courts to limit relief in the manner. Algernon Blair (Defendant). Synopsis of Rule of Law. It found that it did not as the evidence showed that the deal was ³far from a certainty.´ the negotiations were still in the preliminary stage and the Defendant tried to rectify the situation as soon as possible by informing the Plaintiff of the mistake only a couple days after it was made. The Plaintiff filed suit to recover for labor and equipment furnished. but the Defendant refused to pay for the crane rental. The court then examined whether the court abused its discretion by limiting the relief to out of pocket expenses. regardless of whether he would be entitled to recover for suit on the contract. Furthermore. the district court found that the Plaintiff was precluded from recovering because it would have lost more than $37. However.000. even if he could not have recovered in a breach of contract suit? . The Plaintiff rented cranes in order to fulfill its contractual obligations. Is a subcontractor permitted to recover for the value of services rendered. Inc Brief Fact Summary. A subcontractor justifiably breached a construction contract due to lack of payment and then brought suit to recover the cost of labor and equipment it furnished. Facts. The Defendant subcontracted with The Plaintiff. entered into a construction contract with the United States for the construction of a naval hospital. Inc. Yes. The court held that relief may be limited to the party¶s out-of-pocket expenses made in reliance on the promise. Algernon Blair. v. After completing approximately twenty-eight percent of the job. Coastal Steel Erectors. the Plaintiff terminated its performance because of the Defendant¶s refusal to pay for the crane rental. The court noted that Minnesota adopted the doctrine of promissory estoppel found in the Restatement (Second) of Contracts.´ The Minnesota courts have interpreted this to permit limiting relief to out-of-pocket expenses. The Defendant. which provides that ³the remedy granted for breach may be limited as justice requires.Held. Judgment affirmed. to perform steel erection and supply certain equipment in conjunction with Defendant¶s contract with the United States. the Plaintiff failed to demonstrate that they lost an opportunity by relying on the De fendant¶s promise United States ex rel. Issue. A subcontractor may recover in quantum meruit for the value of labor and equipment furnished. Discussion. Coastal Steel Erectors (Plaintiff). The district court found that the Defendant¶s refusal to pay for the crane rental was a material breach of the contract and that the Defendant owed the Plaintiff $37.

Synopsis of Rule of Law. Titan Sports. Thomas Brief Fact Summary. Otherwise. Pennsylvania should follow the modern view of contract law. which is determined by the amount for which such services could have been purchased Discussion. Yes. which allows a breaching party to recover ³any benefit Ventura v. The Appellant entered into an agreement with the Appellee. where the Appellant agreed to purchase the Appellee¶s luncheonette business and to rent the premises on which the business is located. Eventually. The court then found that precluding the Plaintiff from recovering would allow the Defendant to be unjustly enriched. The Appellant paid $25. However. In return. The measure of recovery from quantum meruit is the reasonable value of performance. The court examined the policy behind restitution in contract law and reasoned that its purpose is to prevent unjust enrichment. it failed to build the addition. The Appellant then sued. The court held that the Defendant breached the subcontract by not paying for the crane rentals. the Plaintiff should recover in quantum meruit. the Appellee built the addition. Yes. the Appellant agreed to build an addition onto the structure in which the business was located.000. Therefore. The Appellant lost interest in the business and the Appellee resumed possession. Judgment reversed. A breaching party is entitled to restitution in excess of the loss caused by the breach Facts. Inc .000 as specified by the agreement. Therefore. demanding his payment of $25. the Defendant would have benefited from the very services for which it refused to pay Lancellotti v. The court examined case law of other jurisdictions to find that the non-breaching party has a right to recovery in quantum meruit. Issue. recovery in quantum meruit is permitted even if the party would have lost money on the contract. Is a breaching party entitled to restitution for payments he made prior to his breach? Held.Held. in addition to paying rent. Judgment reversed and remanded for further proceedings. This case involves an agreement where one party breached and then demanded return of payment that he made prior to breaching.

The court found that the district court was correct in awarding damages for the exploitation of the Plaintiff¶s image prior to his relationship with Bloom as his relationship with the Defendant was governed at this time by the oral contract. misappropriation of his likeness and quantum meruit. The Plaintiff eventually filed suit complaining of fraud. The court also held that the Plaintiff was entitled to quantum meruit even though he waived his royalties in an express agreement with the Defendant because the Plaintiff was defrauded into entering into this contract. was a professional wrestler. The Plaintiff briefly terminated his relationship with the Defendant to become an actor. the Defendant owns the videotapes with the Plaintiff¶s commentary and the Plaintiff is not arguing that he was performing . the Plaintiff entered into a second oral agreement with the Defendant to become a commentator. the Plaintiff entered into a new contract with the Defendant that waived the right to royalties. The jury found that the Defendant had defrauded the Plaintiff regarding its royalties policy and that it misappropriated the Plaintiff¶s likeness so that the Plaintiff was entitled to compensation. When the Plaintiff returned. The district court found that the Plaintiff was not entitled to a jury trial on his quantum meruit claim and vacated the jury verdict. Inc (Defendant).´ With this information. After suffering medical problems. Issue. which was silent as to royalties. as it did not illegally infringe on the Plaintiff¶s rights. Titan Sports. Bloom tried to negotiate with the Defendant regarding the Plaintiff¶s royalties and was told that it was against the Defendant¶s policy to pay royalties.Brief Fact Summary. The Plaintiff. unless it was to a ³feature performer. Therefore. Under this oral contract. he entered into another oral agreement with the Defendant. No mention was made of royalties. which did not mention royalties. Yes. Synopsis of Rule of Law. the Defendant could not have been unjustly enriched. Judgment affirmed. A professional wrestler and commentator entered into an oral contract that was silent on the subject of royalties and then entered into a second contract where he was fraudulently mislead regarding the subject of royalties. In fact. He entered into an oral contract to wrestle for the Defendant. Jesse Ventura (Plaintiff). The Plaintiff then hired Barry Bloom as his talent agent. The dissent argues that the Plaintiff should not have received quantum meruit for the recovery of royalties before he entered into the express contract with the Defendant because Minnesota does not recognize a right of publicity. Is quantum meruit available where one provides services under an express contract? Held. the Plaintiff was again employed as a commentator. An action for quantum meruit may be based upon benefits unjustly received from intellectual property. Quantum meruit is available in cases where there is an existing contract if the contract is silent regarding the benefit for which recovery is sought or when one is fraudulently induced into entering into the express contract Facts. Dissent.

The Defendant. as the Defendant misrepresented its policy on royalties and Plaintiff relied on this misrepresentation. Ammerman Brief Fact Summary. Jagels received a letter from the Defendant offering him ³the opportunity to become one of our contemplated center¶s major tenants with rental and terms at least equal to that of any other major department store in the center´ in the event that the Defendant received the proper zoning permits. stating that his store was greatly interested in becoming a tenant in the Defendant¶s proposed shopping mall site. wrote a letter to be used in a hearing before the zoning board. The dissent points to the fact that Minnesota does not recognize the invasion of privacy torts Discussion. Ammerman (Defendant). even when the contract has left terms open for future negotiation Facts. the court examined whether there was merit to the Plaintiff¶s quantum meruit claim by determining whether the Defendant was unjustly enriched by the Plaintiff¶s publicity. the President of one of the Plaintiff¶s stores. v. the Defendant was unjustly enriched as he infringed on the Plaintiff¶s right to publicity. the fact that some terms are left open does not render specific performance an inadequate remedy . was trying to develop a shopping center. The Plaintiff. The court held that where legal remedies are inadequate or impracticable and material terms of the contract are definite. other than those specified by his contract.any additional duties. The court found that the Minnesota Supreme Court would recognize the right to publicity and therefore. (Plaintiff). Where legal remedies are not practicable or adequate. specific performance may be an adequate remedy to enforce a contract. Mr. The court also examined the terms of the agreements to find that the district court did not err in awarding damages. Co. the court found that it is well settled that unjust enrichment and quantum meruit may arise from fraud. In the hopes of acquiring a lease in the new shopping center. A department store contends that it was promised a lease in a developing shopping mall. Is specific performance the appropriate means to enforce a contract where certain terms are left open for future negotiation? Held. Judgment for the Plaintiff. As the Minnesota Supreme Court had yet to address the issue of publicity rights. was trying to negotiate a lease with the Defendant. First. Moreover. the court found no clear erro City Stores Co. Yes. the court predicted how it would rule on such a case. In return. Jangels. As the district court found that the elements of fraud were satisfied. The Plaintiff now seeks specific performance of this promise. Issue. Mr. in exchange for helping the developer obtain the necessary zoning permits. but ran into zoning obstacles. City Stores. Synopsis of Rule of Law.

The court reasoned that because the Plaintiff was promised a lease with terms ³at least equal´ to that of the other major tenants. The court also reasoned that remedies at law would not be adequate because they could not compensate the Plaintiff for the future advantages it would receive by being located in a suburban shopping center. the material terms could easily be ascertained by examining the other tenants¶ leases.Discussion. The court also reasoned that forcing the Defendant to give the Plaintiff a lease would not be especially detrimental or result in a hardship to the Defendant .