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CONTRACTS LAW OUTLINE DEFINITIONS TAYLOR’S POINTS HOLDINGS OF THE CASES POLICY CONSIDERATIONS I.

INTRODUCTION A. THE BARGAIN THEORY OF CONSIDERATION a. CONSIDERATION= BARGAIN FOR EXCHANGE b. GIFT PROMISE: c. PROMISOR’S MOTIVE d. WHAT CONSTITUTES AS CONSIDERATION? e. MUTUALITY OF OBLIGATION AND ILLUSORY PROMISES f. ADEQUACY OF CONSIDERATION g. PROMISES FOR A BENEFIT RECEIVED h. Policies behind enforcing bargain for exchanges i. Hardesty v. Smith (1851) j. Dougherty v. Salt (1919) k. Maughs v. Porter (1931) l. Hamer v. Sidway (1891) m. Baehr v. Penn-O-Tex Oil Corp. (1960) n. Neuhoff v. Marvin Lumber and Cedar Co. (2004) o. Springstead v. Nees (1908) p. De los Santos v. Great Western Sugar Company (1984) q. Wood v. Lady Duff- Gordon (1917) r. Weiner v. McGraw- Hill, Inc. (1982) s. Mattei v. Hopper (1958) B. THE REQUIREMENT OF AN AGREEMENT a. Restatement (Second) of Contracts Section 3 b. THE OBJECTIVE TEST OF ASSENT c. MISUNDERSTANDING ON THE PARTIES INTENT d. THE OFFER i. ADVERTISEMENTS e. ACCEPTANCE: i. MIRROR IMAGE RULE ii. SILENCE AS ACCEPTANCE f. THE OFFEROR g. BILATERAL V. UNILATERAL CONTRACTS i. BILATERAL ii. UNILATERAL h. DURATION OF OFFERS i. A rejection terminates an offer ii. Lapse of Time iii. Revocation 1. Bars to Revocation Option Contracts 2. Bars to Revocation Beginning Performance of Unilateral Contracts 3. Bars to Revocation Offers for Bilateral Contracts iv. Bargaining at a Distance i. Embry v. Hargadine, Mckittirick Dry Goods Co. (1907) j. Lucy v. Zehmer (1954)

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CONTRACTS LAW OUTLINE DEFINITIONS TAYLOR’S POINTS HOLDINGS OF THE CASES POLICY CONSIDERATIONS k. l. m. n. o. p. q. r. s. t. u. v. w. x. y.

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Morrow v. Morrow (1980) Tilbert v. Eagle Lock Co. (1933) Cargill Commission Co. v. Mowery (1916) Raffles v. Wichelhaus (1864) Lefkowitz v. Great Minneapolis Surplus Store, Inc. (1957) Ford Motor Credit Co. v. Russell (1994) Akers v. JB Sedberry, Inc. (1955) Cadwell v. Cline (1930) Dickinson v. Dodds (1876) Marsh v. Lott (1908) Davis v. Jacoby (1934) Blackenbury v. Hodkin (1917) Petterson v. Patterberg (1928) Drennan v. Star Paving Co. (1958) Adams v. Lindsell (1818) i. Mail Box Rule That an offer is accepted upon mailing of the offer. C. AGREEMENTS TO AGREE AND RELATED MATTERS a. The legal significance of Business Draft Agreements i. MEMORANDUMS OF INTENT ii. THE REQUIREMENT OF CERTAINTY IN BUSINESS AGREEMENTS iii. Arnold Palmer Golf Co. v. Fuqua Industries, Inc. (1976) iv. Martin v. Schumacher (1981) b. FORM CONTRACTS BETWEEN SELLERS AND BUYERS OF GOODS i. ROUTES TO THE UCC 1. ROUTE 1: Definite and seasonable expression of acceptance 2. ROUTE 2: Written confirmation sent within a reasonable time 3. ROUTE 3: Acceptance is expressly made in conditional on assent to the additional or different terms 4. ROUTE 4: Buyer doesn’t send the assent conduct of the parties where they are acting like they have a contract but there is no contract on forms ii. Stemcor USA, Inc. v. Trident Steel Corp. (2006) c. ROLLING CONTRACTS i. Hills v. Gateway (1997) ADDITIONAL THEORIES FOR ENFORCING PROMISES a. PROMISSORY ESTOPPEL i. ELEMENTS OF PROMISSORY ESTOPPEL 1. THERE HAS TO BE A PROMISE: 2. PROMISOR’S REASONABLE EXPECTATIONS 3. INDUCEMENT OF ACTION OR FORBEARANCE 4. INJUSTICE ii. AT-WILL EMPLOYMENT iii. Promissory Estoppel & The Courts iv. Kirsey v. Kirsey (1845) v. Wheeler v. White (1965) vi. United Steel Workers v. United States Steel Corp. (1980) vii. Hoffman v. Red Owl Stores (1965)

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CONTRACTS LAW OUTLINE DEFINITIONS TAYLOR’S POINTS HOLDINGS OF THE CASES POLICY CONSIDERATIONS b. UNJUST ENRICHMENT i. This theory has different names 1. Quantum Meruit 2. Restitution 3. Quasi-contract 4. Contract implied law 5. Implied in law 6. Common counts ii. DEFENSES FOR UNJUST ENRICHMENT 1. THE BENEFIT IS A GIFT a. Courts look at the relationship of the parties: i. Business Relationship 1. Quasi-contract ii. Personal Relationship 2. NO BENEFIT 3. BREACH OF ENFORCEABLE CONTRACT & UNJUST ENRICHMENT a. FOR THE INJURED/ NON-BREACHING PARTY: b. FOR THE BREACHING PARTY 4. NO CONTRACT iii. Bloomgarden v. Coyer (1973) iv. Sparks v. Gustafson (1988) v. Gay v. Mooney (1901) vi. Posner v. Seder (1903) vii. Kelly v. Hance (1928) viii. Britton v. Turner (1834) ix. Watts v. Watts (1987) x. Mills v. Wyman (1825) xi. Webb v. McGowin (1935) xii. Edson v. Poppe (1910) c. WARRANTIES i. IMPLIED WARRANTIES 1. IMPLIED WARRANTY OF MERCHANTABILITY 2. IMPLIED WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE ii. EXPRESS WARRANTIES 1. PUFFING/ SALES TALK v. REAL COMMITMENT ON THE SELLER: a. FACTORS TO CONSIDER: 2. BASIS FOR THE BARGAINING REQUIREMENT 3. SAMPLES AND MODELS iii. DISCLAIMERS 1. DISCLAIMERS OF EXPRESS WARRANTIES 2. DISCLAIMERS ON IMPLIED WARRANTIES iv. Keith v. Buchanan (1985) v. Webster v. Blue Ship Tea Room (1964) d. STATUTE OF FRAUDS i. SALE OF GOODS ii. DOES THE STATUTE OF FRAUDS APPLY?

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CONTRACTS LAW OUTLINE DEFINITIONS TAYLOR’S POINTS HOLDINGS OF THE CASES POLICY CONSIDERATIONS

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iii. DOES WRITING SATISFY THE STATUTE OF FRAUDS? iv. Howard v. Holmdel Heights Construction Co. (1975) v. Sterling v. Taylor (2007) vi. McIntosh v. Murphy (1970) vii. Dumas v. Infinity Broadcasting Corp. (2005) REMEDIAL THEORY a. REMEDIES FOR BREACH OF CONTRACT i. EXPECTANCY DAMAGES 1. POLICY CONSIDERATION 2. EFFICIENT BREACH 3. METHODS OF MEASURING EXPECTANCY DAMAGES 4. GENERAL DAMAGES & CONSEQUENTIAL DAMAGES a. An injured party’s lost expectancy consist of two basic components i. Certain Damages General Damages 1. These arise naturally or ordinarily from a breach ii. Special Damages Consequential Damages 5. MITIGATION PRINCIPLE 6. LOSS VOLUME a. LOSS VOLUME SELLERS 7. LOST PROFITS Consequential Damages 8. REPUTATION 9. EMPLOYMENT AND OTHER SERVICE CONTRACTS 10. SALES OF GOODS a. Injured Buyers General Damages b. Injured Sellers General Damages ii. Groves v. John Wunder Co. (1939) iii. Peevyhouse v. Garland Coal & Mining Co. (1963) iv. Rock Island Improvement Comp. v. Helmerich & Payne, Inc. (1983) v. Radford v. De Froberville (1977) vi. Thorne v. White (1954) vii. Freund v. Washington Square Press (1974) viii. Warner v. McLay (1918) ix. Handicapped Children’s Education v. Lukaszewski (1983) x. Cooper v. Clute (1917) xi. Neri v. Retail Marine Corp. (1972) xii. Hadley v. Baxendale (1854) xiii. Armstrong v. Bangor Mill Supply Corp. (1929) xiv. Clark v. Marsiglia (1845) xv. Schiavi Mobile Homes, Inc. v. Gironda (1983) xvi. Parker v. Twentieth Century-fox film Corp. (1970) xvii. In Re Worldcom, Inc. (2007) xviii. Evergreen Amusement Corp. v. Milstead (1955) b. RELIANCE COSTS AS AN ALTERNATIVE REMEDY i. Nurse v. Barns (1664) ii. Chicago Coliseum Club v. Dempsey (1932) c. LIQUIDATED DAMAGES

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CONTRACTS LAW OUTLINE DEFINITIONS TAYLOR’S POINTS HOLDINGS OF THE CASES POLICY CONSIDERATIONS

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i. Liquidated damages provisions are not always enforceable 2 step test to determine enforceability: Restatement (Second) of Contracts Section 339 ii. Courts don’t like penalty provisions Encourage Efficient Breach iii. H.J. McGrath Co. v. Wisner (1947) iv. Truck Rent-A-Center, Inc. v. Puritan Farms (1977) v. Vanderbilt University v. DiNardo (1999) d. REMEDIES FOR PROMISSORY ESTOPPEL i. Reliance damages v. Lost expectancy courts vary ii. Damages could be the change in position in reliance of promise iii. Goodman v. Dicker (1948) iv. Walters v. Marathon Oil Co. (1981) e. RESTITUTION i. Ways to Measure the benefit ii. United States v. Zara Contracting (1944) f. SPECIFIC PERFORMANCE i. Kitchen v. Herring (1851) ii. Curtice Brothers Co. v. Catts (1907) iii. Curran v. Barefoot (2007) POLICING CONTRACTS a. DURESS i. Economic Duress ii. Standard Box Case (1909) iii. Machinery Hauling, Inc. v. Steel of West Virginia (1989) iv. Dunham & Company v. Kudra (1957) b. FRAUD & MISREPRESENTATION i. INNOCENT MISREPRESENTATION ii. NEGLIGENT MISREPRESENTATION iii. FRAUDULENT MISREPRESENTATION iv. FRAUDULENT CONCEALMENT v. CONTRACTS & TORT LAW vi. Bates v. Cashman (1918) vii. Holcomb v. Hoffschneider (1980) viii. Weintraub v. Krobatsch (1974) ix. Porreco v. Porreco (2002) x. Weaver v. American Oil Co. (1971) c. PUBLIC POLICY i. EXCULPATORY CLAUSES ii. COVENANTS NOT TO COMPETE iii. McCutcheon v. United Homes Corp. (1971) iv. Dwyer v. Jung (1975) v. Karpinski v. Ingrasci (1971) d. INEQUALITY OF EXCHANGE i. Constructive Fraud ii. Jackson v. Seymor (1952) e. UNCONSCIONABILITY i. PROCEDURAL UNCONSCIONABILITY

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CONTRACTS LAW OUTLINE DEFINITIONS TAYLOR’S POINTS HOLDINGS OF THE CASES POLICY CONSIDERATIONS

V.

ii. SUBSTANTIVE UNCONSCIONABILITY iii. Ryan v. Weiner (1992) iv. Williams v. Walker-Thomas Furniture Co. (1965) v. Jones v. Star Credit Corp (1969) vi. Fairfield Leasing Corp. v. Techni-Graphics (1992) vii. C & J Fertilizers v. Allied Mutual (1975) viii. Caspi v. The Microsoft Network (1999) CONTRACT MODIFICATION a. PREEXISTING DUTY DOCTRINE b. MUTUAL RESCISSION c. HILLMAN’S MUTUAL VOLUNTARINESS d. Alaska Packers Association v. Domenico (1902) e. United States v. Stump Home Specialties (1990) f. Angel v. Murray (1974) i. Preexisting Duty Rule? g. Flowers v. Diamond Shamrock Corp. (1982) h. Consolidated Edison Co. v. Aroll (1971)

VI.

THE PAROL EVIDENCE RULE AND CONTRACT INTERPRETATION a. INTEGRATED V. NOT INTEGRATED i. NOT INTEGRATED: ii. INTEGRATED b. EXCEPTIONS TO THE PAROL EVIDENCE RULE i. Collateral Contract Exception ii. Ambiguity Exception iii. Proof of Fraud, Duress or mistake c. Parol Evidence Rule & Promissory Estoppel Most courts do not allow promissory estoppel as a basis for bringing in parol evidence. d. DETERMINING ADMISSIBILITY OF THE EVIDENCE i. FACE OF THE DOCUMENT TEST WILLISTON APPROACH ii. NATURALLY TEST CORBIN APPROACH iii. PLAIN MEANING RULE iv. TEST FOR AMBIGUITY v. TRAYNOR’S APPROACH e. Mitchil v. Lath (1928) f. Masterson v. Sine (1968) g. Baker v. Bailey (1989) h. Gold Kist, Inc v. Carr (1994) i. Pacific Gas v. GW (1968) j. Eskimo Pie Corp. v. Whitelawn Dairies, Inc. (1968)

VII.

GENERAL PRINCIPALS OF INTERPRETATION i. Berke v. Phoenix Bridge Co b. MISUNDERSTANDING c. GAP FILLERS i. APPROACHES TO HOW FILL THE GAPS

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CONTRACTS LAW OUTLINE DEFINITIONS TAYLOR’S POINTS HOLDINGS OF THE CASES POLICY CONSIDERATIONS

VIII.

1. What the parties would have done? 2. Creating Incentives 3. Fairness Concerns ii. Haines v. City of NY (1977) iii. Haslund v. Simon Property Group, Inc. (2004) d. GOOD FAITH i. OVERREACHING INTERPRETATION ii. FAILING TO COOPERATE iii. Fortune v. National Cash Register Co. (1977) iv. Midland v. O’Bryant (2000) v. Tymshare, Inc v. Covell (1984) vi. Centronics v. Genicom (1989) THE CONDITIONAL NATURE OF THE DUTY TO PERFORM a. Generally, mishaps fall into two categories b. CONDITIONS i. As a general rule For conditions that are either express or implied ii. PRECEDENT V. SUBSEQUENT 1. Condition Subsequent c. EXPRESS CONDITIONS i. WAYS TO INTERPRET EXPRESS CONDITIONS ii. CONTENT OF AN EXPRESS CONDITION 1. SATISFACTION iii. AVOIDING EXPRESS CONDITIONS 1. IMPOSSIBILITY 2. WAIVER 3. FORFEITURE d. IMPLIED CONDITIONS e. CONCURRENT CONDITIONS f. SUBSTANTIAL PERFORMANCE g. MATERIAL BREACH i. FUNDAMENTAL QUESTIONS: 1. Factors for determining material breach: h. DIVISIBLE CONTRACTS i. ENTIRE CONTRACT ii. DIVISIBLE CONTRACT i. Merritt Hill Vineyards Inc v. Windy Heights Vineyard (1984) j. Jacob & Youngs, Inc. v. Kent (1921) k. Howard v. Federal Crop Ins. Corp (1976) l. Hanna v. Commercial Travelers Mut. (1923) m. Connecticut Fire Ins. Co. v. Fox (1966) n. Holiday Inns of Am, Inc. v. Knight (1969) o. Stewart v. Newbury (1917) p. Plante v. Jacobs (1960) q. O.W. Grun Roofing and Construction Co. v. Cope (1975) r. Walker v. Harrison (1957) s. John v. United Advertising Inc. (1968)

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CONTRACTS LAW OUTLINE DEFINITIONS TAYLOR’S POINTS HOLDINGS OF THE CASES POLICY CONSIDERATIONS IX. X.

ANTICIPATORY REPUDIATION AND PROSPECTIVE INABILITY TO PERFORM a. Hochster v. De la Tour (1853) GROUNDS FOR RIGHTFUL CESSATION a. MUTUAL MISTAKE i. MUTUAL ii. MATERIAL iii. MISTAKE iv. Sherwood v. Walker (1887) b. IMPOSSIBILITY i. Objective Impossibility ii. Subjective Impossibility c. IMPRACTICABILITY d. FRUSTRATION OF PURPOSE

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