ALLCONTRACTS

• 1. Material benefit bestowed
• 2. Reasonable assumption π would get paid
• 3. Connection between π and ∆
• 4. Exhausted all other possible remedies

• 1. Promise made
• 2. Promisor knew or should have known it would induce some action
• 3. Promisee did take an action
• 4. Action was detrimental
• 5. Only way to avoid gross injustice

• Shipment of books too early.
• Failure to follow K terms is breach.
• Calculate remedy by π's loss not ∆'s gain

The hairy hand case- What is said should be accepted at face value. Promises or Guarantees should be upheld to face value of oral agreement.

Expressed warranties should be accepted for face value but mere opinions or commendations of a sellers product are not expressed warranties and thus are not bases for enforcement.

• Doc made expressed promise of strict performance
• botched nose job on entertainer

Uncle's reward for nephew's purging of vices

• Dude found out it wasn't his!
• Incorecct bastardy proceedings

retirement pension for life promised and relied upon

• brother-in-law offers place to live
• found to be illusory/familial promise

• violation of a non-compete agreement
• EE/� worked for 3 years, ER/� imposed non-compete. After some years EE left ER and opened up his own shop. Court held that non-compete was valid and had sufficient consideration. Continued employment of at will EE is consideration thus BFE.

diamond jim

� sold business to � on credit, �s wife said she would pay if husband didn't. � said he would not collect �until he wanted money� and didn't collect for 2 years. Held: Nundum Pactum, No consideration, illusory promise.

• purchase of land based on obtaining satisfactory leases
• Attempt to get leases in good faith, so promise not illusory and supported by consideration.

• Requirements K - contract in which one party agrees to supply as much of a good or service as is required by the other party.
• Requires reasonable elasticity
• Scope of expansion/contraction must be normal within good faith

• Topic: Performing in good faith
• Fuel freighting was found to be industry standard
• UCC 1-303a 1-303b

• P hired to help in endoresments of D's clothing line
• Court implied non-illusory because of purpose of K

• grandfather offers money to not work
• Reliance

� promised to keep �'s info confidential. � then divulged info to �. � revealed �s info, detriment caused to �...held for � due to promissory estoppel

D promised to continue to distribute rum

• Surgeons voluntarily attempt to help D. D dies, and Surgeon attempts to be compensated for accident victim on street on grounds of Quasi K.
• Held: No K on basis of perf. of voluntary services

P died before paying for shrubbery. Quasi-K not enforced, P failed to exhaust other remedies

• husband and wife agree to put each other through grad school. Husband finishes and want divorce.
• Held: No restitution - unjust enrichment no sufficient in spousal relationship.

• drunken sale of land on back of restaurant check
• No meeting of minds.

• response to request to purchase property says, cant take less than 16K
• No power of acceptance bestowed = no offer = no K

• � wanted asked for lowest price for a product. � replied with lowest price. � sued for specific performance.
• Held: Mere statement of lowest price at which a vendor will sell contains no implied K to sell.

• lowest price for green mason jars
• "for immediate assistance" strong evid. of offer

• Gen Rule: Adversitements are not offers but invitations to make offers
• Test - Whether facts show that some performance was promised in positive in return for something requested AND
• Test - Where the offer is clear, definite and explicit and leaves nothing for open negotiation.

• Ad for 1 mink stole, store said for chicks only.
• Held: for P.

• Mistakes of judgements cannot be rescinded
• Mistakes of error (Clerical) can be rescinded

contractor seeks rescission of winning bid for clerical error

• 1. Mistake of material term
• 2. No result of neglect of legal duty
• 3. Enforcement would be unconscionable
• 4. Other party can be placed in status quo
• 5. Party seeking relief must give prompt notice of intent to rescind
• 6. Must restore or offer to restore everything of value

• water purifier sale if accepted by executive in Chicago "ok"
• notice of approval of acceptance not necessary unless expressly stated

• contract for building offices, silence is not acceptance
• "upon agreement you can begin at once" - P began work anyways without communicating agreement.
• Held: For D. Purchasing of materials (which are not custom) and lack of notification of acceptance = no K

• acceptance by performance but another company already there
• Commencement of performance is acceptance - compared to simply beginning to begin to perform.

• advertisement offering reward in use of product
• "next caller wins" and he called in 3 days later
• Lapse of offer

• indemnity provision for negligence accepted after accident
• Acceptance by assent and part performance

• Permissive - leaves open other methods of reasonable acceptance: Keywords: Should be accepted by, preferably accepted when�
• Exclusive - Setting exact terms for acceptance: Keywords: only accepted when, must be accepted by way of..

• bulk order of medicine before price goes up
• Automated clerical stuff (tracking number) usually != acceptance
• Price list != offer, considered a quote

• offer for sale of property to remain open until Friday
• P intended to accept, but waited. D sold to someone else.
• Held: No valid K
• ALSO - Indirect communication of revocation is sufficient of from reliable source

• OMBSWAR3
• An (o)ffer by a (m)erchant
• To (b)uy or (s)ell goods
• In a (w)riting
• Which gives (a)ssurance that it will be held open
• Is not �evocable for stated time
• Or Reasonable Time no greater than (3) months.

• Offer to sale the fork shop until November 1
• P sends check + Offer
• D returns check, counteroffers with specific terms of acceptance
• P says cant meet specific terms, gives new terms
• Held: offer revocable, no consideration

• arbitration clause on back of purchase agreement
• Carpet purchaser orally agreed to buy. Battle of forms added arbitration clause.
• Case remanded to determine w/o/n arbitration clause materially altered K.

90-day warranty vs. unlimited warranty = materially different terms

• D added license clause to K by placing notice on product without negotiation with P.
• Held: Change is material, thus under UCC additional term not part of K

• P bought software, claims didn't agree to licensing agreement.
• Held: D had time to read/agree to license and return. Not returning = Acceptance.

computer purchase included arbitration clause. Buyers had 30 days to read/decide and kept product = assent and acceptance.

misquoted subcontrator estimate, general wins bid. Recovery via P.E.

• What is and what isn't reliance/PE
• P was not awarded $16,735 b/c loss on activity which he benefitted from (gaining experience in running grocery store)
• Owl Instructed P to sell bakery, move, change lots, this was done in reliance on Owl's words that he would get a Red Owl Store.

• contract with military must be upheld.
• Depsite notification of inability to keep specs, D encouraged P to continue

• lease space in exchange for financing the mall
• Letter of intent given to D, then D backed out
• LOI = consideration, shows intent to be bound

• renewable contact for rental space
• Options K - even if rate is TBD, if it can be determined by market, valid options K

• shipping contract goes awry after 23 years
• Escalator clause became irrelevant, court implied new pricing due to companies being so intertwined

• Workers refuse to fish without pay increase.
• Pre-Existing Duty
• Economic Duress

• solid rock found while excavating cellar
• PED Exception: A K changed to meet new circumstances/conditions is valid

• gov't defense contract - want of exclusive rights, or else cancel current K and wont accept 2nd K.
• Topic: Economic Duress

• homosexual school teacher resignation
• Undue Influence

• 1. Discussion of the transaction at an unusual place or time
• 2. Making the transaction at unusual place
• 3. Insistence that business be conducted at once
• 4. Extreme emphasis on neg. consequences of delay
• 5. Use of multiple persuaders
• 6. Absence of 3rd party advisors
• 7. Statements that there is no time to consult advisor/attorney

• Topic: Concealment
• termite infestation found after buying house
• P never talked to seller, was allowed any/all inspections
• No duty to disclose unless human life is at stake.

• multi-family apartment in violation of city ordinance
• Once you begin to talk you must disclose all

• Topic: Misrepresentation
• bad dancer induced to buy more lessons
• Misrepresentation must be of material fact.

• Topic(s): Disparity in Bargaining power, unconscionability
• The 20 year how you can use your land deal
• Jeweler Businessman against businessman

• Agreeing to take care of an old lady who dies almost immediately
• Unconscionability of transaction is viewed prospectively not retrospectively
• Past realtion/services are not consideration but can be looked at for connection to fairness of K

• Profits at time of war is not a valid reason for a K to be unconscionable
• Public policy reasons that DO make K unconscionable are:
• 1. Inducing pub. officials to act in a certain manner
• 2. Illegal Acts
• 3. Collusive Bidding

• lady fell on sidewalk at condo complex
• Rule: Use of a form K does not in it of itself constitute disparity
• Held: For Realty Co, because she could have not signed K and lived elsewhere

• concert promoter that wanted out of the deal
• Held: K was adhesion, but knowledge between parties made it not unconscionable. The use of a specific arbitrator was

• Standardized form Ks imposed and drafted by a party of a superior bargaining strength
• Normally fully enforceable unless:
• 1. There is a provision that is unreasonable (in reasonableness) against weaker party
• 2. Contract/provision although consistent or reasonable is oppressive

• arbitration clause only seen after purchase of tickets
• Held: That's ok

• dating service overcharging two Plaintiffs
• Even if you sign a K, if it is against CL, Statute or Agency created law, K is void and parties are entitled to full restitution (+ penalties)

• Stereo worth more than monthly allowance
• the dragnet clause

• buying a 300 fridge for 900
• K was found unconscionable: Exorbitant disparity of price carries greatest weight in factors. Limited financial resources of purchaser, knowledge of which is known to seller also entitled to weight.

• Arbitration clause for EE not ER
• K was found unconscionable: Exorbitant disparity of price carries greatest weight in factors. Limited financial resources of purchaser, knowledge of which is known to seller also entitled to weight.

• Adhesion K which limited Class actions
• Held: limiting class actions is unconscionable
• If only could sue as single actions, no one would sue for $4

• student who retook test and results differed.
• A party must perform terms of K in good faith. Not looking at new info (per K terms) was not in good faith.

• Between non-merchants: �honesty in fact in the conduct or transaction concerned�
• Between Merchants: �honest in fact and the observance of reasonable commercial standards of fair dealing in the trade�

• not telling your contract partner about an oversight is not performing in good faith
• Take Away: Diff b/w superior market info & taking advantage of K partner. Duty of good faith doesn�t require complete candor; party may take advantage of another based on superior knowledge of market. BUT a party may not intentionally exploit the other party�s oversight of an important fact.

• stopped promoting our beer after you bought our co.
• best efforts clause imposes obligation to act with good faith in light of ones capabilities

• distributorship ended but upon good faith termination
• Distribution/Franchise Ks are terminable at will unless an expressed otherwise
• Usually allow at least reasonable time for party to recover expenditures spent in reliance on exclusivity

• P sold D business which was for manuf. drug paraphernalia
• court IMPLIED K to be against good pub. policy due to nature of business sold

• K resulted form illegal conspiracy, but K terms were completely legal.
• Rule: A K that is legal on its face and doesn't call for illegal conduct is not voidable simply because it resulted from an illegal antitrust conspiracy.

• Veterinarian was discharged from her job when they found out she intended to compete, had signed non-compete
• Party seeking to enforce non-compete burden to prove it is reasonable, fair and necessary for business interest.
• Must be in writing, part of employment K, based on reasonable consideration, reasonable duration/geo.area and not against pub.policy

• P was terminated because forced Co. to conform to safety laws.
• Held: for P, employees shouldn't be required to perform as part of their job, an illegal act.
• Dissent: Allowing this means employees can coerce employers to retain them

Lawyer gets screwed for begin a whistleblower because he has duty to forego economic gain at times in order to uphold integrity of legal profession.

• the day-of-wedding prenup
• held: for rich husband, because wife could have not signed
• dissent: marriage is different than normal Ks. agreement was inequitable and unfair
• Take away: Ignorance of terms of K is not a defense to enforceability, even if K is not a good bargain for one party.

Surrogacy Ks are invalid. Law prohibits giving/accepting $ in adoption

• Topic: Parole Evidence
• Lease preventing sale of tobacco and exclusive soft drinks, D allowed someone else to sell soft drinks.
• Rule: In absence of fraud or mistake, PER does not allow oral evidence into written K

• Topic: Parole Evid. Rule
• right to repurchase land assignable
• Where K cannot be determined entire from the writing alone, evidence of collateral agreements are allowed.

• Defendant supposed to cover waste with topsoil, does for a bit then stops
• P satisfied burden of proving mutual mistake by showing evidence that D initially complied with terms omitted from writing

replacement of cover of steam turbine

• Topic: PER - Interpretation
• Difference of the stewing chickens
• To interpret a disputed term in a contract, the court will consider (in order of importance): (1) the language of the contract, (2) the preliminary negotiations, (3) trade usage, (4) legal standard, (5) course of performance, and (6) maxims.

• mistaken identity of Peerless boat
• Held: No K - no meeting of the minds or mutual assent

• misunderstanding regarding collective bargaining
• If a party knows or should have known of an ambiguous term in a K and hopes the interpretation of it will be in its favor, when it is not, it cannot simply walk away from the K.

• breach of carrot contract
• Carrots found to be unique and of such materiality that specific performance was necessary

• The G2 Jet that they didn't want to sell
• Held: Specific damages are only permissible when there is no adequate remedies at law

• propane gas distribution. P said that D is supposed to give it's customers propane
• K contained provisions that said P could cancel K if certain conditions were met, but not that D could cancel and so D claimed lack of mutuality.
• Held: for P - there need not be conditions on both side of the agreement.
• Held: No requirement that both parties be mutually entitled to the remedy of specific performance for one party to get it.
• Held: IF public interest is involved, a court may ignore the rule that a decree of specific performance is inappropriate where constant and long-continued court supervision is required.

• virgin islands overhead
• Overhead is part of damages

• cow skins payment delayed
• UCC Method to measure damages is COVER
• Must cover in a reasonable time and reasonable substitute

• medial diagnostic equipment, lost volume seller
• If you carry inventory, you are volume seller
• Volume sellers recover profits EVEN if they mitigate damages by selling the items.

• TOPIC: Measuring Damages - Duty to Mitigate
• breach of buyer on construction of bridge - told to stop building, continued anyways
• Held: Duty to mitigate damages�you can't keep doing what you're doing after repudiation and expect to get paid.

• movie actress loses lead role
• Held: Must mitigate losses but work should be of +/- equal level.
• Flipping burgers != movie star

• Topic: Measuring Damages - Diminution in value
• lease of land in exchange for removal of gravel and sand

• Topic: Measuring Damages - Diminution in value
• strip mine lease, failure to restore land

• negligently failed to deliver on time crank-shaft that runs mill
• Damages must be foreseeable, courier had no way to know delay in delivery would result in shut down of mill

lost profits from book and bottle shop

thirty year lease for fixed rent plus average gross receipts

• Liq. Damages in $/day is okay as long as reasonable in relation to the K
• Relative to actual loss that may be incurred by delay

• Topic: Impracticability
• The quicksand that swallowed the house.
• Held: no excuse, if you make a promise you must hold to it

• Topic: Mutual Mistake
• Both parties thought there was enough water.
• Held: When a material FACT is known to both parties to be important and both parties are mistaken about this fact, you may rescind K

• Topic: Impracticability
• removal of only top section of gravel, other stuff would not be practical to remove
• Held: Cost to take "the rest" would have been ridiculous. Impracticable to take it all.

• Topic - Impossibility
• Music hall burns down before per.
• Held: for music hall owner

• Topic - Impossiblity
• We can't make it without the suez canal�but we did, and you should pay us extra

• Topic: Frustration of Purpose
• Schools bus bodies not available from 3rd Party Co - was in K - and so
• Held: Frustration since both parties knew/had same of purpose and it was frustrated.

• Topic: Impossibility
• Molasses product ceases without notice and claim of impossibility because they didn't make enough
• Held: Actual act must be impossible, not just difficult or burdensome

• Topic: Furstration of purpose - stereotype
• Procession that didn't happen

• Topic: Frustration of purpose - distinguished
• Buyer didn't want to buy, Shipment was good FOB Toronto, seller's purpose and K duty was finished once freight was on board.
• Held: For Banet.

• Topic: Frustration of Purpose
• Jersey barriers no longer needed. K contained clause that if 3rd Party K decreased need for barriers, it would reduce K'd amount of barriers.
• Held: For Paonessa. Parties both knew about the purpose of the barriers.

• Topic: Impossibility
• Partly-Built bridge burned down with all materials on it
• Held: For city. Each party was excused, but city did not have to pay for the materials

• Holly owes 300 to Lawrence. Fox owes Holly 300, promises to pay Lawrence directly.
• Held: Lawrence cans sue as he is an Intended beneficiary.

• Uncle does not leave house to niece after Aunt had asked him to.
• There was nothing in the uncles will to do this, and Niece was incidental beneficiary

• stipulation of Reading pipe not followed
• Courts weigh the purpose to be serviced, desire to be gratified and excuse for deviation.
• Here, pipe made minimal difference, so Builder was found to have substantially performed, and deserved to be paid.
• ALSO, damages were measured by diminution in value because to replace all pipes in the home would be an economic waste.

• sale subject to obtaining mortgage - when they didn't condition was not met. No K.
• Take Away: When language of K unambiguously shows a condition which must occur for the K to be binding.

• seller to deliver rice within two weeks of December
• Non-Occurence of necessary condition allows rescission or to treat as discharge.
• A condition must be performed in such a way as to allow adequate time for the other party to fully perform under the contract.

• rooftop swimming pool "payment within 30 days of finished work, with architect's written approval, upon payment from owner"
• When a K is ambiguous as to conditions, it is a question of law, not factfinder question, as to whether or not it's a conditional K.

• portrait of deceased daughter
• Where parties enter into a K that is not against pub.policy and is not fraudulent the parties are bound by the agreement

• Topic: Waiver - by conduct
• Movie theater to be built in Philadelphia.
• Rule: An intentional waiver of a known right MAY get rid of condition.
• Take Away: When owner did not ask for to see architect certs before, by his conduct in the K, he has waived his right to assert the condition.

• Putting investment into new company, other partner hasn't.
• Use of parol evidence is allowable in order to show that a K is conditional - When it's obvious that the K was conditional upon certain occurrence, even though it may not be in writing and was agreed to orally.

• good and sufficient security
• The person giving the good or service goes first, unless otherwise expressly stated in K

• excavation work but nothing said of payments, then builder demanded payment without completing work
• When K to perform work is made with no payment timing or manner, the work must be substantially performed before payment can be demanded.

• Topic: Measuring Expectation
• interior wall misplaced by a foot.
• Did builder substantially perform? Yes.
• Measure of damages after substantial performance is usually cost of repair however, due to economic waste, Court awarded diminution in value.
• In a K, unless expressly stated, strict compliance has some leeway.

• Topic: Measuring Damages - Severability
• Divisible contract for logs, logger was able to only get some of the logs to desired destination.
• If part to be performed by one party consists of several and distinct items, and the price to be paid is:
• (1) Apportioned to each item; or
• (2) is left to be implied by law;
• such a K will be held severable.

• worker contracted for a year stops work after 8 months
• Held: Quantum Meruit for worker as he substantially performed.

• plaintiff worked for three months, spending more than was paid. Sued for quantum meruit and on severability grounds
• Held: for D (homeowner)
• Performance was so blatantly different than what was K'd for, that there was no unjust enrichment.
• RULE: Where a builder had supplied work and labor for a lump sum K, but has departed from terms of K he is entitled to recover for services/materials unless:
• 1. Work is of no benefit to owner
• 2. work is entirely different than K was for
• 3. Abandoned work and left it unfinished.

• tomato on laundry services sign
• Held: Sign co. materially performed.

• 1. Extent to which injured party will obtain substantial benefit that was reasonably anticipated
• 2. Extent to which injured party may be adequately compensated in damages for incomplete performance
• 3. Extent to which breaching party has already partly performed or prepped to perform
• 4. Hardship on party failing to perform in terminating the K
• 5. Nature of breaching party behavior: Willful, negligent, innocent
• 6. Level of certainty that breaching party will perform remainder of K

• bulldozer annihilates wall, subcontractor doesn't want to rebuild AND wants to be paid.
• Held: ABS for ABS promise so, dependent. Progress payments were agreed on but destruction means work isn't done, and Harris abandoned worksite.

• Plaintiff made it difficult for defendant to buy rails by buying them himself. P then sued D for difference in price (as D was supposed to originally sell to P for less money than P ended up buying the rails for).
• Held: for P
• Rule: Mere increased difficulty in performing a K does not call for prevention, and excuse breach.

• Lack of workmen made roof deck late, NES cries prevention and that stated reason for termination could have been cured.
• Held: for Loranger
• Rule: A party terminating a K for breach may defend it's termination by any reasons it has - not only those which it communicated to the other party.

• The travel companion through Europe
• Take away: You don't have to wait until performance is due to sue - Anticipatory breach

• Bank sold stock to someone else because they claimed Kanavos wouldn't be able to pay
• Rule: Being able to pay is material, but at time of performance, not at time of repudiation.
• W/O/N Kanavos could pay is burden on him to prove, and Q for fact-finder.

• Minweld asks GC (McCloskey) for info/help. McClosky takes this as repudiation.
• Held: for Minweld
• Rule: Asking for assistance/questions etc, is not repudiation. Must be unequivocal communication that you plan not to preferm

• three-week demo job takes much longer,
• P to do work for D. D began working, P failed to sign D�s proposal. P tried to insert a liquidated damages clause unlikely to be accepted.
• Rule: One party may cease performance under an oral K where other party refused to sign a written K.

• plastics contract canceled
• When a seller anticipatorily repudiates a K, buyer�s damages should be based on the mkt price at a commercially reasonable point after the seller notifies the buyer of the repudiation.

• Seacost claims Gov't breached, SC cancels K = Anticipatory Repudiation. US gets new supplier wants damages, Seacoast tries to retract repudiation.
• Held: For US
• If Definite action indicating anticipatory breach has been accepted, cannot repudiate

• Propsal to build tank, asks for proof of escrow unnecessarily
• Hearing someone is financially in trouble is not grounds for seeking assurances.

• electricity contract for 25 years builds to over $600 million
• Norcon had right to ask for assurance, LT K and $600M+
• ALSO - This case showed that CL expanded the UCC right to ask for assurances

• Son worked on farm in exchange for property when step-dad dies. Step-dad left land to someone else.
• Take Away: The Statute of Frauds cannot defeat the enforcement of an oral contract where (1) a party has so substantially changed his position in reliance upon the contract that he would suffer an unconscionable injury if the contract were not enforced and (2) the party seeking to assert the statute of frauds will be unjustly enriched