Fall 2018: Contracts

NAME TOPIC PROVISIONS NOTES

There is no implied-in-fact contract where
Bailey v. West Quasi-Contract there is no mutual agreement and “intent to
promise Volunteering ≠ contract
Bolin Farms v. Forward contracts are socially valuable
American Cotton Impracticability §2-615 (hedge the risk both for the buyer and the
Shipp Asss seller) and therefore must be enforced
Where the element of unconscionability is
Williams v.
present at the time the contract is made, the
Walker Thomas Unconscionability §2-302
contracts should not be enforced.
Co.
Procedurally and Substantively
Kirksey v. Kirksey Consideration §71 A gift promise ≠ consideration
C: can be a benefit accrued to one party, or
Hammer v.
Consideration §71 a detriment, forbearance, or loss suffered or
Sidway
undertaken by the other party
Langer v. Consideration exists when one party
Superior Steel Consideration §71 agrees/refrains from doing something, Past
Corp. C is not C, you need an actual detriment
Dehn gave up his legal right to not sue,
Injured Mechanic Consideration §71, §74
silence isn't enough to signify acceptance
Proud Giving up legal right to choose name =
Consideration §71, §74
Grandfather consideration
Lease with an option to buy, intention of C ≠
Consideration
Leasee's Well §71, §89, from C, Under §89 Modification is
Modification
enforceable
Intent to create a valid agreement doesn't
In Re Greene Consideration §72
mean the agreement is valid
Thomas v. Mixed motives are okay, as long one of them
Consideration §81
Thomas works as consideration
Browning v. A release from a contract is valid
Consideration §74
Johnson consideration
Is ø divorcing, leaving him alone enough for
No-Hassle House Consideration §71
C?
The Fine Penny Consideration §71 Gift promises, family, Sham, nominal ≠ C
Apfel v.
Even if an idea is not novel, it can still have
Prudential Bache Consideration §71
value = Consideration
Securities
Pre-existing duty rule. No modification
Levine v.
Modification §73--> §89 without new consideration. Promise not to
Blumenthal
breach ø consideration. OLD RULE
Looks like bad faith extortion if switching
Alaska Packers v.
Modification §89 costs are high for one party. Hold up game,
Domenico
ø enforced
If fair and equitable in light of unanticipated
Angel v. Murphy Modification §89
circumstances = enforceable modification
Home Run Ball Issues w/ Formation §2-302, §161 Unconscionability, Duty to Disclose
Fall 2018: Contracts

What is really unanticipated? Courts are

Dissatisfied
Modification §89 more likely to avoid an actual loss based on
Entertainer's
equity grounds
Subcontractor’s
Added Modification §73,§89 Unanticipated conditions
Inducement
If there is no way for one party to breach,
Illusory Promises–
Rehm v. Walker §77, §71 there is a lack of mutuality and therefore no
Consideration
contract
Constraint on discretion is sufficient to
McMichael v. Promises–
§2-306, §1-304 ensure mutuality of obligation– Good-Faith–
Price Consideration
O/R/E
Mutuality/return promise may be implied
Wood v. Lady Promises– §2-306(2), §1-
from the circumstances surrounding the
Duff Gordon Consideration 304
contract and the nature of the whole writing
Omni Group v.
Illusory Promises– Promise not illusory–Good Faith
Seattle First §1-304, ø§77
Consideration requirement- satisfactory
National Bank
Illusory Promises– Was there consideration based on good
Illusory Bonus §77
Consideration efforts assumed by employers?
Ricketts v. Granddaughter relied on Grandpa's promise
Promissory Estoppel §90
Scothorn and quit her job
Allegheny College Baker 2step- What is valid consideration for
Mutual Benefit–
v. National §71,§90 charitable subscriptions is different from
Consideration
Chautauqua Bank commercial exchanges
Congregation Enforceability of Just putting the expectation of the gift into
§90(2)
Kadimah v. DeLeo Gifts/Promises the budget does not constitute reliance
Disappointed Existing legal duty ø consideration, they will
Consideration §73, §89,§71
Mortgagee argue reliance and P.E.
Friendly Ford
Promissory Estoppel §90 Reliance on the car, justified on it?
Loaner Vehicle
Independent Cab Justified on relying on promise? Nominal
Promissory Estoppel §90
Driver Consideration
Embry v. An oral promise is an offer if a reasonable
Offer §24
Hargadine person would understand it as such
Reasonable person, ø matter if you are
Lucy v. Zehmer Offer §24
joking
When a party requests another party to
disclose an idea and understands that the
Wrench v. Taco
Quasi-Contract other party discloses it with an expectation of
Bell
compensation for the use of the idea, an
implied-in-fact contract is created
Lonergan v. Offer/Ads/Solicitatio An invitation for an offer (the ad) does not
§24, §26
Scolnick n operate as an option contract
Letter was an offer because it passes the
Southworth v.
Offer §24 reasonable listener test, it was sent to a
Oliver
definite group
Hole in One Offer §24 Was it an offer? Reasonable person
Fall 2018: Contracts

When is a Price Final correspondance is more likely to be an

Solicitation an Offer≠Solicitation §24 offer based on definite terms and request for
Offer offer
Lefkowitz v. Great
Offer/Ads/Solicitatio Clear, definite, explicit, and leaves nothing
Minneapolis §24, §26
n open for negotiation
Surplus Store
Leonard v. Offer/Ads/Solicitatio
§24, §26 Puffery ≠ Offer, RP standard
PepsiCo n
Statute of Liberty
Offer/Ads/Solicitatio Definite terms, opennes of the ad mailed, ø
Commemorative §24, §26
n offer
Coins
His and Hers Enforceability & Was there an offer, illusory promise, did it
§77, §
Mercedes Interpretation include a condition, what were the terms?
Mere Image Rule, An offeror has complete
control over an offer and may place
LaSalle National Offer and §30, §58, §2-
conditions of acceptance to the terms…
Bank v. Vega Acceptance 206
Where an offer requires written acceptance
no other mode may be used
Hendricks v. There is no contract until acceptance is
Acceptance §56
Behee communicated to the offeror
Accomodation– An order is not acceptance
Corinthian v. but rather an offer to be accepted by the
Acceptance §2-206(1)
Lederle seller and D never accepted P’s offer for
1000 vials
Commencement of performance, at which
Ever-Tite Roofing
Acceptance §62 point the offer may not be revoked (but
v. Green
preparation ≠ commencing performance)
Little League There could be a legal detriment mid way
Consideration §71, §51, §81
Sponsors through→ might serve as C
Offer and §2-206. §32 Ambiguity of offer, nesessity of notification
Laser Sale
Acceptance §54 and form of acceptance
Dickinson v. An offer may be revoked indirectly through a
Revocation of Offer §43
Dodds reliable source
Humble Oil v.
§45, §25, §87 Once there is consideration (paid for the
Westside Option Ks with C
(1) option) the option is not revocable
Investment Corp.
Until performance begins, the offeror may
Marchiondo v.
Option Ks with C §45 revoke BUT once partial performance has
Scheck
begun, a contract results
No intention of making offer an option, no
Baird v. Gimbel Offer ≠ Option §24, §87 reliance argument can be made, offer was
revocable
Drennan v. Star Option Ks with
§87 (2) Reliance based options
Paving Reliance
Formalist, Empirical, Fiddler (Cardozo),
Dead Guarantor Judicial Approaches -
Economic (Possner)
Effect of First
Related to Option Ks - Cheaper than option, 3rd Party dependant
Refusal
Fall 2018: Contracts

Creation of §45, §87(2),

- -
Reliance Options §54(2)
Bid-Shopping Similar to Drennan, bid shopping makes the
Option Ks §45, §87(2)
Contractor offer revocable and destroys the option
Minneapolis v. Acceptance upon terms varying from those
Columbus Counter-Offer §39 offered is a counter-offer and explodes the
Rolling-Mill power of acceptance
No application of 2-207(1) after “unless”
DTE Energy v. clause so go to 2-207(2) à The term
Battle of the Forms §2-207(1+2)
Briggs regarding forum-selection is material and
therefore falls away under 2-207(2)(b)
Shipment of goods or payment for goods
Textile Unlimited
Battle of the Forms §2-207(3) may constitute acceptance by conduct under
v. BMH
2-207(3)
Acceptance of the additional terms was
Hill v. Gateway Battle of the Forms §2-207
agreed upon when keeping it for 30 days
Terms received with a product do not
Klocek v.
Battle of the Forms §2-207 become part of the contract unless the non-
Gateway
merchant buyer expressly agrees with them
Boise Junior Clerical Error that materially altered the k,
College v. Mattefs Unilateral Mistake §153 Innocent mistake, Enforcement of mistake
Construction would be unconscionable
Right to rescind the contract–Negligent
Beachcomber v. failure of a party to know the facts as to
Bilateral Mistake §152
Boskett which both parties are under a mistake does
not preclude recovery
Just Another
Arbitration Clause, depends on the material
Standards Terms Battle of the Forms §2-207
alteration by the added terms
Case
The Case of the
Unilateral Mistake- Clerical error. Thru
Four Million Mistake §153
CP/CD/UT should not have relied on mistake
Labels
Where a mistake of both parties was made
Sherwood v. as a basic assumption on which the contract
Bilateral Mistake §152
Walker was formed, the contract may be voidable–
cow couldn't have babies
Typically there is no duty to disclose when
Laidlow v. Organ Disclosure- needed? §161 both parties have equal access to the
information
No misrepresentation when a deceitful
Marina District v.
Misrepresentation §162 explanation is given where no explanation at
Ivey
all is required
Although generally a misrepresentation must
Vokes v. Arthur be of fact rather than opinion, this rule does
Opinion ≠ Fact §168, §169
Murray not apply where there is a fiduciary
relationships
Unknown Oil §151, §152, Seller had better position to discover, should
Mistaken Belief
Deposits §154 hold the risk
Metrovic's §151, §152,
Mutual Mistake Argue better possition of allocation of risk
Drawings §154
Fall 2018: Contracts

§151, §152,
Unknown Injuries Mistake/ Disclosure Release, he allocated the risk to himself
§154
Uncommunicative
§151, §152,
Parties and the Mistake/ Disclosure –
§154
Duty to Disclose
Words have no meaning – Intention behind
Pacific Gas v. What do terms Plain Meaning the words used by each party is a relevant
Thomas Drayage are/mean? Rule? consideration because “words do not have
absolute and constant referents”
When the term has a broad meaning, P has
Frigaliment v. What do terms
§1-303 the burden of proving the term intended a
BNS are/mean?
more narrow interpretation
Substantial performance cannot satisfy a
Dove v. Rose
Forfeiture §237, §277 condition when the condition is complete
Acre Farms
performance
In Re Carter's Conditions assumed satisfied upon transfer.
Conditions §224
Claim Conditions can be waived but not warranties
§224, §237, If ≠ if, construe condition to avoid forfeiture
Insolvent Owner Conditions
§277 when there is subtantial performance
Damage, the aggrieved party may sue
Hochster v. De La without waiting until time for performance
Repudiation §2-610
Tour has come due– damages may be claimed
right at antcipatory repudiation
If a party repudiates (2-610) but then retracts
the repudiation (2-611) and the non-
Taylor v. repudiating party acts in reliance of the
Repudiation §2-610, §2-611
Johnston retraction, non-repudiating party no longer
has a claim for anticipatory breach. Implied
Repudiation–hard to argue they have
Alaska Pacific Repudiation may not be inferred by doubtful
Repudiation §2-609, §2-610
Trading v. Eagon or indefinite statements
Oven Cases-
Seller/Buyer Remedies §2-703–§2-716 Remedies
Remedies
Filing litigation on a good faith dispute over
Safe Harbor Repudiation §2-609, §2-611 interpretation is not reasonable grounds for
insecurity