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Contracts

Question	Answer
HURLEY V. EDDINGFIELD	Voluntariness: A person cannot be compelled to enter into a contract of employment. Doctors do not have a duty to rescue or provide aid.
POUGHKEEPSIE BUYING SERVICE, INC. V. POUGHKEEPSIE NEWSPAPERS, INC.	Voluntariness: A person doesn’t have to enter a contract against their will. A newspaper isn’t obligated to print everything it receives – it is not a common carrier.
COTNAM V. WISDOM	Some contracts (doctor's emergency services) can be implied in law (and payment is required). A person’s ability to pay does not alter the value of the services. Must pay even if operation fails.
Coase Theorem	The effect of a legal rule depends on the cost of transacting around the rule.
3 types of contracts	(1) Express; (2) Implied-in-fact; (3) Implied in law/quasi-contract/constructive
BALFOUR V. BALFOUR	Contracts are not legally enforceable unless they are understood to be at the time they are made. Husband and wife cannot enter into an oral contract with one another. Do not enforce contracts in families.
ARMSTRONG V. M’GHEE	To determine if there was the meeting of the minds necessary to form a contract, don’t look to what parties were actually thinking, but how manifested intent through actions. Express contract even w/o actual meeting of the minds.
NOBLE V. WILLIAMS	Contracts cannot be unilateral. (teachers bought school supplies: should have filed for breach of contract or made mandamus; cannot do beneficial intervention b/c not beneficiaries)
SOMMERS V. PUTNAM BOARD OF EDUCATION	dad drives kids to school; beneficial intervention: (1) grave public concern; (2) obligor failed or refused with knowledge of facts, or appears impossible; (3) intervener not meddler, proper person
BOSTON ICE CO. V. POTTER	A person cannot be thrust into a contract with another without their consent (with exception of doctor situation, above) [P doesn't have pay ice company he doesn't like after that company acquired the company he contracted with; no opportunity to refuse]
CONTINENTAL FOREST PRODUCTS, INC. V. CHANDLER SUPPLY CO.	The amount of unjust enrichment is the measure of recovery in a quasi-contract: Not the actual amount, but the amount which it would be unjust for one party to retain. [evil lumber middleman; D has to pay, but gets to use set-off against other company]
SHAHEEN V. KNIGHT	If you haven’t suffered a harm, you cannot collect damages. [failed vasectomy--not damages b/c they chose to keep the child when could have put him up for adoption]
SCHOOL TRUSTEES OF TRENTON V. BENNETT	Promisor must insure against contingencies in the contract (or bear the risk). [schoolhouse, latent defects in soil -> builder bears risk]
Holmes on Contracts	Contracts are about allocating risk. Default: promisor is insurer of promisee--incentivizes promisor to provide for contingencies. Promisor still liable if impossible/parties should be able to allocate risk of impossibility to promisor if they want.
ACME MILLS & ELEVATOR CO. V. JOHNSON	The correct measure of damages in breach of contract case is the difference between the contract price and the market price at the place and time of delivery. [wheat seller breached; conflict was which market price to use; efficient breach case]
Schwartz: Case for specific performace	(1) damages undercompensatory; (2) promisees already have incentive to get damages when they are sufficient--if suing for SP, then indicates that they need SP; (3) promisees have better information on if SP better than damages in given case
LUMLEY V. WAGNER	Court cannot enforce specific performance for personal service contracts. However, can make it very difficult to breach (this is the “Lumley Doctrine”), i.e. by injunction order not to perform for competitors. [opera singer case]
STOKES V. MOORE	Can have covenant not to compete (injunction) written into actual contract [law is skeptical of them, but can be enforced if have consideration and limited in scope]
CAMPBELL SOUP CO. V. WENTZ	Must have clean hands to invoke equitable remedy. [campbell soup could have gotten injunction to get carrots (unique good), but contract too one-sided/unconscionable (P can reject carrots, but D can't resell w/o P's permission)]
HADLEY V. BAXENDALE	damages: (1) fairly and reasonably be considered either arising naturally, i.e., according to the usual course of things, or (2) such as may reasonably be supposed to have been in the contemplation of both parties, at the time they made the contract
Consequential damages	special damages coming from one party, most people wouldn’t suffer these in breach. consequential damages are compensated only if they were in parties’ minds when contract was made.
Possible tests for consequential damages	1. Objective: Reason to Know – Risk shifts to promisor if he has reason to know about special circumstances of promisee [used now] 2. Subjective: Tacit Agreement – knows, or either explicitly or implicitly agrees to accept the risk [Holmes]
GLOBE REFINING CO. V. LANDA COTTON OIL CO	Do not get damages for lost customers or expenses of transport, unless expressly considered in the bargain). Notice of special condition does not automatically qualify as fulfilling Hadley’s contemplation requirement. [Carter this this case is wrong]
SULLIVAN V. O’CONNOR	In some doctor-patient situations, proper measure of damages isn’t restitution or expectancy, but reliance. [bad nose job; gets p&s for extra surgery under reliance and expectation; could have gotten p&s for first two as well but didn't ask]
HAWKINS V. MCGEE	Expectancy damages for bad hand operation=value of perfect hand -value of hand in present - p&s from operation done correctly
FREUND V. WASHINGTON SQUARE	In case of breach, P is entitled to what breach costs P, rather than what contract would have cost D to complete. [professor does not get publication costs b/c those are D's expenses, not P's benefit; royalties+promotion too speculative]
JACOB & YOUNGS, INC. V. KENT	usual rule: damages=cost to complete contract properly exception: if amount from that rule >> diminishment in value (economic waste), and D has substantially performed, then award diminishment in value [Reading pipe case]
PEEVYHOUSE V. GARLAND COAL & MINING CO.	economic waste: land restoration would be $29k, diminution in value only about $300 -> will not award cost of restoration or SP
GAINSFORD V. CARROLL	Timing for damages: Calculate damages at the time the article ought to have been delivered. [bacon sale; buyer should go buy new goods as soon as he knows of breach]
PANHANDLE AGRI-SERVICE INC. V. BECKER 1982	If you’re the buyer and want consequential damages, have to try to make covered transaction. [P was buying hay from D to resell; did not get lost profits (consequential damages) b/c did not try to cover]
YOUNG AND ASHBURNHAM’S CASE	For a contract to be enforceable, the parties must agree to a price [guy who stayed and ate at the inn didn't have to pay, action of debt]
action of debt	2 defenses (easy to get out of, only applied with agreed-upon sum): wager of law (find 11 people to swear) and wager of battel (fight or hire people to fight)
Slade’s Case	160x: established action that would be available when no precise money was due was the action of assumpsit, which had originally been a tort action for the harm you suffered from breach of contract
action of convenant	required seal, also hard to do
UPTON-ON-SEVERN RURAL DISTRICT COUNCIL V. POWELL	bound by saying he wanted a fire brigade, even if he meant free and even if other side also thought it would be free
VICKERY V. RITCHIE	When there is quasi contract, must pay promisee in quantum meruit (based on market value). Thus, can enter contract by actions and apparent relationship b/t parties [bathhouse and evil architect-P and D saw different prices; D pays full price]
DAVIS V. GENERAL FOODS CORP	Vague language interpreted in favor of D. Contract cannot be unilateral. [P gave recipe; D never made real promise]
ANDERSON V. BACKLUND	A contract cannot be vague - the actual promise must be clear from the text [dehydrated cows; D's words are prediction, not promise]
HERTZOG V. HERTZOG	Contracts can only be implied if there is no other plausible explanation for the relationship. A contract b/t a father and son is merely a constructive contract (i.e., no contract at all)
HEWITT V. HEWITT	Overturns notion that oral contracts b/t unmarried couples are unenforceable (which existed b/c tantamount to paying someone for sex and undermines “appeal” of marriage) [lived together and he assured her were married; then separated; P wins, then D wins]
LEFKOWITZ V. GREAT MINNEAPOLIS SURPLUS STORE, INC	An advertisement only constitutes an offer if it includes some explicit words that make it more than a generic promise. However, an ad can serve as a binding offer. [man tries to answer ad; rejected by store]
MOULTON V. KERSHAW	An offer cannot have ambiguities [salt-dealers, P says accepted; D says it didn't make offer-did not have quantity]
JENKINS TOWEL SERVICE, INC. V. FIDELITY-PHIL. TRUST CO	A letter soliciting bids is an offer - not an invitation to offer [letter said would give to highest bidder; P submitted and Esso submitted same amount, but Esso had zoning conditions; D gave to Esso; court says P gets it]
PRESCOTT V. JONES	Silence is not acceptance (this has since been changed somewhat). Limits master of the bargain theory [fire insurance not renewed]
NATIONAL UNION FIRE INSURANCE CO. V. JOSEPH EHRLICH	Silence is acceptance if you have a preceding relationship which indicates that it should be. [prior course of dealings, D had paid bill; here kept bill--indicates assent, so must pay]
silence is acceptance when (RST 69]	1) offeree takes benefit of services with reasonable opportunity to reject and knows not free 2) offeror allows silence as acceptance and offeree intends to accept by being silent 3) previous dealings
AUSTIN V. BURGE	If you take an item that is sent to you - though you didn’t ask for it -- you are accepting that item [should have thrown away newspaper or taken to post office], but relaxed by statute in some states
COLE-MCINTYRE-NORFLEET CO. VS. HOLLOWAY	A seller must respond to a contract within a reasonable time, or silence (and the delay) will be deemed acceptance. [buyer put in order with seller's traveling salesman; past relations; did not take opportunity to reject]
LANGELLIER V. SCHAEFER	An acceptance must be a simple acquiescence to the last offer - without adding new conditions. [P trying to buy D's lot to get street re-graded]
BUTLER V. FOLEY	The person who makes the offer bears the responsibility of mistakes in communication. [if party makes counteroffer, risk transfers to them]
UNITED STATES V. BRAUNSTEIN	An acceptance must be an unequivocal agreement to the terms. The initiator (here US) is liable for their own mistakes. [US tried to accept but made typo in price term--no contract]
CUSHING V. THOMSON	The Mailbox Rule: An offer is accepted as soon as it’s placed in the mail. It cannot be withdrawn once acceptance has been mailed.
RHODE ISLAND TOOL CO. V. UNITED STATES	Treat revocation the same as acceptance – b/c now sender can get control of the letter back. Says acceptance effective on receipt, overturns mailbox rule [P selling US Navy bolts]
Hobson's choice	take it or leave it
UCC 2-207(2): battle of forms, what happens to additional terms	only applies if both are merchants. terms are included unless a) offer expressly limits acceptance to terms of the offer b) materially alter it c) notification of objection
last-shot doctrine	last person to send terms wins; treat each set of new terms as counteroffer, until accepted by accepting performance--favors seller
ROTO-LITH, LTD. V. F. P. BARTLETT & CO.	example of last-shot doctrine: seller's acknowledgement and invoice said no warrantee; buyer sued on warrantee for glue for vegetable bags that did not work; court says no warrantee (Carter thinks court reads UCC incorrectly)
AIR PRODUCTS & CHEM, INC. V. FAIRBANKS MORSE, INC.	opposite of Roto-Lith: Changes made in the final acceptance can’t become part of the contract unless buyer expressly agrees to those terms [sale of motors for planes, no warrantee is material alteration b/c background law UCC says warrantee]
WOODBURN V. NORTHWESTERN BELL TELEPHONE CO.	Rare, usually goes the other way: If a person doesn’t read a contract, he may not be bound to its contents.
DAVIS AND CO. V. MORGAN	A promise made without consideration is not enforceable [employer offered $120 for staying; P says he understood it $10/month including past months; P discharged, wants bonus for past; can't be for parts of job already did-no consideration]
SCHWARTZREICH V. BAUMAN-BASCH, INC.	A contract of employment can simultaneously be set aside by the parties and a new one made in its place; employee wants to leave; employer gives raise to stay; says new contract, so consideration not an issue
THE MABLEY AND CAREW CO. V. BORDEN	A certificate that is gratuitous on its face can have sufficient consideration to be enforceable. [court finds consideration in fact that woman worked at place until her death--didnt' leave]
CARLILL V. CARBOLIC SMOKE BALL CO	An advertisement can create an enforceable contract (with sufficient consideration). The acceptor doesn’t have to tell the offeror prior to acceptance. [consideration was increased sales and woman's inconvenience at use]
TAFT V. HYATT	Determining right of reward. One can only collect a reward if one “accepted” the terms with knowledge of the offer. One cannot collect an offer if one’s attempted acceptance failed.
Fuller's 3 formal functions of consideration	1) evidentiary; 2) cautionary; 3) channeling
THOMAS V. THOMAS	Consideration is needed for binding agreement - h however, even a peppercorn may do [husband had provided that wife could live there for 1L ground rent--this is enough to make it a contract]
REAL ESTATE CO. OF PITTSBURGH V. RUDOLPH	Formalism: 1$ in hand paid is legal consideration for an option [wife did not agree to real estate sale--can't take back]
SWINDELL AND CO. V. FIRST NATIONAL BANK	Requirement/ Output contracts were not enforceable at common law - mutual promises are required for enforceable contracts [court would not enforce agreement where bank promised to extend as much credit as D needed; this would make credit cards illegal]
GREAT NORTHERN RAILWAY V. WITHAM	A unilateral contract (a requirements contract) is enforceable (and has consideration) once an order has been placed [buyer's giving first order counts as consideration for seller's promise]
UCC 2-306 (requirements/output)	Resolves this by saying that requirements and output contracts must occur in good faith and be based on history of requirements or estimates made at time offer is made. Thus, they are enforceable only for a “reasonable quantity”
EASTERN AIR LINES, INC. V. GULF OIL CORP.	A requirements contract is enforceable in light of changing prices if they are foreseeable [Eastern did fuel freighting, but allowed b/c industry custom]
SIEGEL V. SPEAR AND CO.	If a person reasonably relies on an oral promise, it is enforceable [D storing P's furniture for free; D said he would insure furniture (also gratuitiously); court says consideration b/c P left furniture in return for promise, Carter says reliance]
FISHER V. JACKSON	Quitting a previous job is not adequate consideration to make a binding contract for life-time employment - it is merely incident to taking the new job. [Carter says P loses b/c court doesn’t think the reliance was reasonable]
CHAPMAN V. BOMANN	If someone acts in reliance on a promise, it is enforceable. Statute of Frauds can’t be used as an instrument of fraud. [P signed doc, but not signed by D; nevertheless takes out loans for house; D refuses; P gets SP based on promissory estoppel]
DRENNAN V. STAR PAVING CO.	Reliance can make an offer irrevocable. Party that makes the mistake bears the loss. [subcontractor can't revoke offer that general contractor relied on to submit bid]
WOOD V. LUCY, LADY DUFF-GORDON	contract not void for want of mutuality merely because it lacks obligations on its face, if it can be implied from the nature of the contract. Relaxes need for formalism in contracts [implied that consideration was that he would make best efforts]
HAMMOND V. CIT FINANCIAL CORP	“best efforts” requirement to limit D's ability to terminate the contract at will; D couldn’t discharge P unless it was dissatisfied in good faith with P's performance. [P had exclusive right to sell; D sells at low price, offers P compromise commission]
GURFEIN V. WERBELOVSKY	As long as there was one clear opportunity to enforce the contract, consideration can be inferred [D would ship w/in 3 months but P could cancel; D says no consideration b/c P not bound; court says P would be bound once D shipped, so not one-sided]
HAMER V. SIDWAY	There is sufficient consideration if the promisee is giving up a legal right. Consideration can be unilateral (detriment or benefit) [nephew not smoking/drinking/gambling is consideration, waiving of legal right to do so]
ALLEGHENY COLLEGE V. NATIONAL CHAUTAUQUA COUNTY BANK OF JAMESTOWN “ALLEGHENY COLLEGE CASE”	A charitable contribution can have sufficient consideration to be enforceable [promised to will 5k, gave 1k while alive; fund was to be named after her; Cardozo says naming condition is consideration--probably not right]
Moral consideration doctrine	In general, past events can't be consideration; exception - if the past events create a moral obligation that the person would want to discharge
LAMPLEIGH V. BRATHWAIGHT	Not all courts: If a party offers payment after a promise is already done, the payment can be made binding by the earlier promise. [P tried to get pardon for felon at felon's request (this is key); felon promised him money after]
GILLINGHAM V. BROWN	can enforce agreement to discharge past debt (had to sue on new agreement b/c previous debt past statute of limitations)
WEBB V. MGOWIN	An oral promise to pay someone for a kind service is binding (but one must consider the timing of the promise) [D injured in saving P's life; P dies and executors stop paying; desire to discharge moral obligation sufficient consideration for promise]
HAIGH V. BROOKS	Sometimes courts will be very generous in interpretation of consideration in order to be fair [court found consideration in P's returning of earlier written guarantee for same debt, even though first had questionable validity]
COOK V WRIGHT	Once a party forgoes litigation (and concedes culpability), he can’t retract his admission and go to court (unfair to party that relied on his admission). Any other decision, would undermine power of settlement [D found out he would not have been liable]
MARKS V. GATES	Disproportionate consideration (in relation to the possible returns) may not be enforceable in the interest of fairness. Can’t have speculative consequences [Gates lent money for gold prospecting in return for interest in land; land turned out to be $$$]
Loan v. Investment	an investment is contingent upon the success of the enterprise (which may or may not happen), whereas, with a loan, one has to repay the money absolutely.
EMBOLA V. TUPELLA	Disproportionately small consideration (in relation to potential rewards) can be enforceable if the agreement was an investment (with a risk) rather than a loan. [D got small loan from P to get land back; would pay a lot if got land back]
US V BETHLEHEM STEEL	wartime contract for boats; seller demanded high prices; US claimed fraud and duress; no fraud--US entered voluntarily; Frankfurter dissent
AMERICAN HOME IMPROVEMENT CO V. MACIVER	Companies must give full disclosure of information to their patrons [court says unconscionable b/c pays a lot of transaction costs/interests--Carter thinks this is wrong/bad math/bad econ]
WILLIAMS V. WALKER-THOMAS FURNITURE CO.	Unconscionable bargains are not enforceable [finds unconscionability in add-on clause (store gets to repossess all furniture until all paid off), but Carter/Rakoff say can't tell if this welfare improving by giving them credit]
PATTERSON V. WALKER-THOMAS FURNITURE CO.	A party cannot claim unconscionably high prices without a factual predicate [did not allege fraud, duress, coercion; can't get discovery just on allegation]
JONES V. STAR CREDIT CORP	Price alone can make a K unconscionable [fridge worth $300; door to door installment purchase for $900+interest/transaction; judge says clearly taking advantage b/c of disparity and sellers knew P was poor]
RAFFLES V. WICHELHAUS	If there is an ambiguous term in the contract, it is unenforceable - Creates incentive for parties to draft better contracts [2 ships Peerless, court says no contract, so D wins]
RICKETTS V. PENNSYLVANIA R.R.	A person shouldn’t be bound by their agent if that agent is acting beyond his authority [P's lawyer lied to him about signing waiver of rights against D; P wins b/c P lawyer signed away rights not in scope of employment--carter says wrong]
WOOD V. BOYNTON	A sale is valid if the seller was truly mistaken at time of sale re: value of the good (i.e., not fraud) [buyer and seller thought diamond was regular stone; seller ordinarily bears the risk]
SHERWOOD V WALKER	D thought cow was barren; sold to P who thought he could make breed; cow was with calf; D keeps and P trying to get; court says mistake in entire thing bargained for--invalidate contract
LAIDLAW V. ORGAN	A contract to purchase at too low a price is not binding if buyer knows price is too low [D (seller) asked P about blockade affecting price; P was silent; D claims fraud after prices go up; court says D wins only if fraud, no duty to disclose]
Kronman	disclose casual, don't disclose deliberate
Sheppele	disclose deep, don't disclose shallow
SWINTON V. WHITINSVILLE SAVINGS BANK	Caveat Emptor - D is not obligated to reveal information to P regarding product’s defects (since changed) [sold house with termites]
PARADINE V. JANE	English law “didn’t recognize impossibility as an excuse for nonperformance” [D sued for rent; defends that land is occupied by hostile German prince; court says only acts of God can be defense]
HALL V. WRIGHT	If becomes impossible to fill marriage contract, he must still pay damages (but not held to specific performance). Again - can’t get out of contracts [D says medical condition where marriage would risk his life]
TAYLOR V. CALDWELL	Retrenchment – one may be able to escape contract if it’s impossible. Encourages individuals to provide for contingencies in their contracts. [hall burned down before contract to rent happened--D does not have to pay because "implied condition"]
KRELL V. HENRY	A person is not bound to their agreement if the very reason for the K no longer exists [renter of room to watch coronation excused from contract when coronation delayed due to king's illness]
impossibility (early and later)	early: God, Law (supervening illegality), act of other party commercial impractibility (later): strikes/intangibles; death of promisor for personal service that is not delegable still reluctant to find for price changes
CANADIAN INDUSTRIAL ALCOHOL CO. V. DUNBAR MOLASSES CO	A contract for sale of goods to be purchased from a middleman does not include an implied term that duty is conditioned upon production of the middleman’s supplier
LLOYD V. MURPHY	Doctrine of commercial frustration only applies when 100% of the value of the contract is lost [D leased land to run auto dealership, but could not during the war b/c of law; D not excused b/c still could do other things with land or sublet]
AMERICAN TRADING AND PRODUCTION CORP V. SHELL INTERNATIONAL MARINE LTD.	Increased price alone will not invalidate a contract unless it is extreme [P to ship oil for D; war in Middle East forces a cost-increasing change of path. Suit for additional costs (30 percent).]

Created by: kli3

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