Contracts Case Briefs - Lecture notes All PDF

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Table of Contents I.

Introduction.....................................................................................................................4 A.

Introduction...............................................................................................................................4 1. 2.

II.

Promissory Liability............................................................................................................................4 Hawkins v. McGee..............................................................................................................................4 Remedying Breach.............................................................................................................................5 Hawkins v. McGee..............................................................................................................................5

Contract Formation..........................................................................................................6 A.

The Consideration Requirement................................................................................................6 1.

2.

B.

Requirement of a Bargain..................................................................................................................6 Hamer v. Sidway.................................................................................................................................6 Feinberg v. Pfeiffer Co. Part I..............................................................................................................7 Kirksey v. Kirskey.................................................................................................................................8 Illusory Promises................................................................................................................................8 Strong v. Sheffield...............................................................................................................................8 Mattei v. Hopper.................................................................................................................................9 Structural Polymer Group, Ltd. v. Zoltek Corp..................................................................................10 Wood v. Lucy....................................................................................................................................12

Mutual Assent..........................................................................................................................13 1. 2.

3.

4. 5.

The Objective Test............................................................................................................................13 Lucy v. Zehmer..................................................................................................................................13 Offer.................................................................................................................................................14 Owen v. Tunison...............................................................................................................................14 Fairmount v. Crunden-Martin..........................................................................................................15 Lefkowitz v. GMSS............................................................................................................................16 Acceptance.......................................................................................................................................17 White v. Corlies................................................................................................................................17 Ever-Tite v. Green.............................................................................................................................18 Termination of Offer.........................................................................................................................18 Dickinson v. Dodds...........................................................................................................................18 The Requirement of Definiteness....................................................................................................19 Oglebay v. Armco.............................................................................................................................19

III. Alternative Bases of Liability..........................................................................................20 1.

2. 3.

Promissory Estoppel.........................................................................................................................20 Ricketts v. Scothorn..........................................................................................................................20 Feinberg v. Pfeiffer Part II.................................................................................................................21 Restitution........................................................................................................................................22 Cotnam v. Wisdom...........................................................................................................................22 Precontractual Liability....................................................................................................................22 Baird v. Gimbel.................................................................................................................................22 Drennan v. Star Paving.....................................................................................................................23 Hoffman v. Red Owl..........................................................................................................................24 Channel v. Grossman........................................................................................................................25

IV. Performance and Breach................................................................................................26 A.

The Parol Evidence Rule...........................................................................................................26

Mitchell v. Lath.................................................................................................................................26 Masterson v. Sine.............................................................................................................................27 Bollinger v. Central Penn..................................................................................................................28

B.

Interpretation..........................................................................................................................29 Raffles v. Wichelhaus........................................................................................................................29 Pacific Gas v. Electric Co...................................................................................................................30 Greenfield v. Philles..........................................................................................................................31 Trident Center v. Conn. Gen. Life.....................................................................................................31 Hurst v. W.J.Lake...............................................................................................................................32

C.

Conditions and Waiver.............................................................................................................33 Luttinger v. Rosen.............................................................................................................................33 Peacock v. Modern Air......................................................................................................................34 Gibson v. Cranage.............................................................................................................................34

D.

Substantial Performance and Perfect Tender...........................................................................35 Jacob v. Kent.....................................................................................................................................35 Bartus v. Riccardi..............................................................................................................................36 Britton v. Turner...............................................................................................................................36

E.

Good Faith...............................................................................................................................37 Dalton v. ETS.....................................................................................................................................37 MSA v. Frey.......................................................................................................................................38 Bloor v. Falstaff.................................................................................................................................39

V.

Remedies.......................................................................................................................39 A.

Specific Performance...............................................................................................................39 Campbell Soup v. Wentz...................................................................................................................39 Morris v. Sparrow.............................................................................................................................40 Laclede v. Amoco..............................................................................................................................40 Walgreen v. Sara Creek.....................................................................................................................41

B.

Expectation Damages...............................................................................................................42 Laredo Hides v. H&H.........................................................................................................................42 Plante v. Jacobs................................................................................................................................42 Groves v. John Wunder....................................................................................................................43 Peevyhouse v. Garland.....................................................................................................................44

C.

Limitations on Damages: Avoidability, Foreseeability, Certainty..............................................44 Rockingham v. Luten........................................................................................................................44 Parker v. Twentieth Century.............................................................................................................45 Hadley v. Baxendale.........................................................................................................................46 Fera v. Village Plaza..........................................................................................................................47

D.

Remedial Clauses.....................................................................................................................48 Dave Gustafson & Co. v. State..........................................................................................................48 Lake River v. Carborundum..............................................................................................................49

VI. Defenses to Contractual Obligation................................................................................50 A.

Failures of Basic Assumptions: Mistake, Impracticability and Frustration.................................50 Sumerel v. Goodyear........................................................................................................................50 Stees v. Leonard...............................................................................................................................51 Renner v. Kehl...................................................................................................................................52

B.

Duress and Contract Modification............................................................................................52 Alaska Packers Ass’n v. Domenico....................................................................................................52 Austin Instrument v. Loral Corp........................................................................................................53

C.

Adhesion Contracts, Duty to Read, and Unconscionability.......................................................54 Graham v. Scissor-Tail, Inc................................................................................................................54 Klar v. H&M Parcel Room.................................................................................................................55 Williams v. Walker-Thomas..............................................................................................................56

I.

Introduction A.

Introduction

1. Promissory Liability Hawkins v. McGee (NH. 1929) (p.2 of [Farnsworth]) 1. Procedural History  P sued D for breach of contract.  Jury ruled in favor of P.  D appeals, challenging the finding of liability. 2. Facts  P burned his hand by touching an electric wire.  D, eager to experiment on skin grafting, asked to operate on the hand guaranteeing that he would retore it “one hundred percent”  D took a piece of skin from P’s chest and grafted it onto P’s burned hand and produced a “hairy hand”. 3. Issue Is D’s promise of making P’s hand “a hundred percent perfect” enforceable, when D spoke the words with the intention that they should be accepted at their face value, as an inducement for the granting of consent to the operation by P? 4. Holding Yes. Words spoken with the intention that they should be accepted at their face value in order for another to accept an offer constitute enforceable promise. 5. Reasoning Rule Sub-rule Reason for the rule Application to the facts D repeatedly solicited from the plaintiff’s father the opportunity to perform the operation of which he had little previous experience. This would be a reasonable basis for the further conclusion that, if defendant spoke the words attributed to him, he did so with the intention that they should be accepted at their face value, as an inducement for the granting of consent to the operation by the plaintiff and his father, and there was ample evidence that they were so accepted by them. 6. Disposition Judgment affirmed.

Comments The hairy hand

RULE OF LAW A party’s statement can form the basis of a contract where all the circumstances can be interpreted as indicating that the statement was intended to induce the other party’s action. [Casenote p.85]

2. Remedying Breach Hawkins v. McGee (NH. 1929) (p.11 of [Farnsworth]) 1. Procedural History  P sued D for breach of contract.  The trial court ruled all damages awarded by the jury above $500 were excessive.  P appeals, contending that the damages were not properly calculated. 2. Facts  P burned his hand by touching an electric wire.  D, eager to experiment on skin grafting, asked to operate on the hand guaranteeing that he would retore it “one hundred percent”  D took a piece of skin from P’s chest and grafted it onto P’s burned hand and produced a “hairy hand”. 3. Issue In calculating P’s damages, what standards should be applied? 4. Holding P’s measure of damages should be the difference between the value to him of a perfect hand or a good hand, such as the jury found the defendant promised him, and the value of his hand in its present condition, including any incidental consequences fairly within the contemplation of the parties when they made their contract. 5. Reasoning Rule The measure of damages is the difference between the value of the machine, if it had corresponded with the warranty and its actual value. Sub-rule Reason for the rule The purpose of the law is ‘to put the plaintiff in as good a position as he would have been in had the defendant kept his contract.’ (expectation interest) Application to the facts The present case is closely analogous to one in which a machine is built for a certain purpose and warranted to do certain work. P’s suffering was a legal detriment suffered by him which constituted a part of the consideration given by him for the contract.

Comments

RULE OF LAW The true measure of a buyer’s damages is the difference between the value of the goods as they would have been if the warranty as to the quality had been true and the actual value at the time of sale, including any incidental consequences within the contemplation of the parties when they made their contract. [Casenote p.95]

6. Disposition Remand.

II.

Contract Formation A.

The Consideration Requirement

1. Requirement of a Bargain Hamer v. Sidway (NY.Ct.App. 1891) (p. 53 of [Farnsworth]) 1. Procedural History  P sued D for payment of a sum of $5000 and interest as promised.  Claim rejected.  P appeals. 2. Facts  D agreed to and with P, that if he would refrain from drinking liquor, using tobacco, swearing, and playing cards or billiards for money until he should become 21 years of age, then D would at that time pay him P the sum of $5000 for such refraining, to which P agreed,”  Later in a letter, D acknowledged that P “in all things fully performed his part of said agreement. 3. Issue Can P establish the consideration requirement of a legally enforceable promise, when P, upon a reward promised by D, sustained from his legal rights to drink liquor, use tobacco, and play cards or billiards for money? 4. Holding Yes. 5. Reasoning Rule Consideration means not so much that one party is profiting as that the other abandons some legal right in the present or limits his legal freedom of action in the future as an inducement for the promise of the first. Sub-rule 

 

A valuable consideration in the sense of the law may consist either in some right, interest, profit, or benefit accruing to the one party, or some forbearance, detriment, loss, or responsibility given, suffered, or undertaken by the other. In general, a waiver of any legal right at the request of another party is a sufficient consideration for a promise.” [Parsons on Contracts, 444.] Any damage, or suspension or forbearance of a right,

Comments Uncle’ Promise

RULE OF LAW Forbearance is valuable consideration.

will be sufficient to sustain a promise.” [Kent, Vol. 2, 465, 12th Ed.] Reason for the rule Application to the facts  Drinking liquor … are legal rights.  P refrained from these rights.  It is sufficient [consideration] that P restricted his lawful freedom of action within certain prescribed limits upon the faith of his uncle’s agreement. 6. Disposition Judgment reversed. Feinberg v. Pfeiffer Co. Part I (SL.Ct.App 1959) (p. 80 of

Comments

[FW])

1. Procedural History  P sued D for breach of contract.  The judgment of a bench trial was for P for the amount of the pension and interest due.  D appeals. 2. Facts  Write this sectio...