Theories

a. Autonomy i. Individuals have moral obligation to keep their promises ii.Normative theory that provides social utility. i.e., reliance and firm expectations on moral grounds. b. Law and Economics

i. Promises should be enforced on efficiency grounds to obtain socially optimal results. c. Pluralism (Just) i. Promises should be enforced to the extent that they promote fairness and substantial justice.

Dyno Construction v. McWane

Dyno Const. bought pipe from McWane which was defective. Dyno argued K was formed when they called in their order. McWane argued their price sheet was an invitation to offer (it said please call) and Dynos order was the offer. Faxd PO (missing limited warranty on back) was K, which Dyno signed and returned. Court agreed. Rule: Typically, a price quote is an invitation to offer rather than an offer. Buyers purchase agreement is actually the offer. Exception: A price quotation may suffice for an offer if it is sufficiently detailed and it reasonably appears that asset to quote is all thats needed for K

R2 24: An offer is the manifestation of willingness to enter into a bargain, so made as to justify another person in understanding that his assent to that bargain is invited and will conclude it.

Bailey v. West

Bailey accepted Bascams Folly for boarding and billed West. Bailey knew there was a dispute over ownership, but accepted horse anyway. TC found a quasi contract b/w Bailey and West, but SC of Rhode Island found Bailey to be an officious meddler (volunteer). Quasi K: 1. There must be a benefit conferred 2. Benefit must be appreciated and accepted by . 3. Acceptance must be such that retention of the benefit without compensation would result in unjust enrichment of .

R2 4: A promise may be stated in words either oral or written, or may be inferred wholly or partly from conduct.

Lucy v. Zehmer

Zehmer offered to sell his farm to Lucy while out drinking one night. After several revisions and negotiations they agreed on a purchase price of $50,000 and Mr. and Mrs. Zehmer signed. Zehmer later claimed he was joking and that he was high as a georgia pine that night. Sale holds, court cannot look to secret intentions of promisor, they must only look at the outward expression of a person manifesting his intention.
R2 2b (comment): The law imputes to a person an intention corresponding to the reasonable meaning of his words and acts. R2 16: A person incurs only voidable contractual duties by entering into a transaction if the other party has reason to know that by reason of intoxication 1. he is unable to understand in a reasonable manner the nature and consequences of the transaction, or

2.

he is unable to act in a reasonable manner in relation to the transaction.

R2 18: Manifestation of mutual assent to an exchange requires that each party either make a promise or begin or render a performance.

Magellan v. Salzgitter

Magellan contracted to purchase steel from Salzgitter and the two parties agreed on some terms. After some meetings and an oral agreement, Magellan issued a Letter of Credit to Salzgitter. Salzgitter then demanded changes, which Magellan refused, and withdrew from the K. Court held that Magellans issuance of LC was assent which jelled K.

CISG Art. 18(a): In that respect...requires an indication of assent to an offer (or counter offer) to constitute its acceptance. Such an indication may occur through a statement made by or other conduct of the offered.

Chateu Des Charmes v. Sabat

Chateau purchased corks from Sabate which eventually spoiled Chateaus wine (oral K). Chateau sued for breach and Sabate tried to enforce a forum selection clause (Perpignon) printed on the back of the invoices mailed with the Corks. Court ruled mutual assent required to change terms of K and that failure to object does not make valid agreement. CISG Art. 9: The usages and practices of the industry are automatically incorporated into any agreement governed by the Convention, unless expressly excluded by the parties. CISG Art. 11: A contract of sale need not be concluded in or evidenced by writing and is not subject to any other requirement as to form. A contract may be proven by a document, oral representations, conduct or a combination of the three.

Lefkowitz v. Great Minneapolis Surplus

Saturday 9 a.m. sharp 2 BRAND NEW PASTEL MINK 3-SKIN SCARFS Selling for $89.50 Out they go Saturday. Each....................................................................$1.00 Court found this constituted an offer, man wins. Where the ad is clear, definite, and explicit, and leaves nothing open for negotiation, it constitutes an offer, acceptance of which will complete the contract.

Leonard v. Pepsi Co.

Leonard saw pepsi commercial and raised $700,000 to get enough pepsi points for a harrier jet. Court found offer was a joke as understood by any reasonable person. Further, the jet was not in the catalog.

Whether an offer has been made depends on the objective standard of reasonableness of the alleged offerees belief that the advertisement or solicitation was intended as an offer.

Ever-tite Roofing v. Green

Green signed credit agreement for roof. When roofers showed up he had already given the job to another company. Evertites agreement states that offer becomes binding once Evertite provides written acceptance or upon commencing performance. Court found that Everitite had begun performing. Rule: Offeror is master of the universe and dictates all terms. Can be withdrawn at any time before acceptance or after reasonable amount of time (depends on nature of the contract proposed, usages of business and other circumstances of the case which the offeree, at the time of his acceptance, either knows or has reason to know.)
R2 30(1): An offer may invite or require acceptance to be made by affirmative answer in words, or by performing or refraining from performing a specified act, or may empower the offeree to make a selection of terms in his acceptance. R2 30(2): Unless otherwise indicated by the language or the circumstances, an offer invites acceptance in any manner and by any medium reasonable in the circumstances. R2 30 (comment): Required form. The offeror is the master of his offer. The form of acceptance is less likely to affect the substance of the bargain than the identity of the offeree, and is often quite immaterial.

But the offeror is entitled to insist on a particular mode of manifestation of assent. The terms of the offer may limit acceptance to a particular mode; whether it does so is a matter of interpretation.

Ciaramella v. Readers Digest

Ciaramella sued employer, received settlement offer, his lawyer agreed orally (we have a deal) but then quit. Ciaramella didnt like the deal and it explicitly stated it must be signed (merger clause). So it was not enforced.

Rule: If parties explicitly do not want to be bound to a deal unless signed, that is acceptable.

Pavel Enterprises v. Johnson

R2 90: A promise which the promisor should reasonably expect to induce action or forbearance on the part of the promisee or a third person and which does induce

such action or forbearance is binding if injustice can be avoided only by enforcement of the promise. The remedy granted for breach may be limited as justice requires. UCC 2-205, Firm Offers: An offer by a merchant to buy or sell goods in a signed writing which by its terms gives assurance that it will be held open is not revocable, for lack of consideration, during the time stated or if no time stated for a reasonable time, but in no event may such period of irrevocability exceed three months; but such a term of assurance on a form provided by the offeree must be separately signed by the offeror. CISG 18: Generally, contract formed when offeror receives the acceptance of the offer. Unless parties have established other means, including dispatch of goods as acceptance, in which case the contract is formed upon dispatch. CISG 16: However, an offer may be revoked if the revocation reaches the offeree before he has dispatched an acceptance. [and yet] an offer cannot be revoked: 1) if it indicates, whether by stating a fixed time for acceptance or otherwise, that it is irrevocable; or 2)if it was reasonable for the offeree to rely on the offer as being irrevocable and the offeree has acted in reliance on the offer.

Pavel used Johnsons sub-bid to win a contract from the National Institutes of Health. Once Pavel knew it was going to get K (low bidder dropped out), it sought updated bids from all subcontractors (bid shopping, chopping, peddling). Then tried to bind Johnson to its bid. Court found that Pavel did not rely on Johnson. Irrevocable Offers: Options contracts, firm offers (Ill keep the offer open for two weeks for $500) and construction bids. R2 87(b), Drennan Rule: An offer which the offeror should reasonably expect to induce action or forbearance of a substantial character on the part of the offeree before acceptance and which does induce such action or forbearance is binding as an option contract to the extent necessary to avoid injustice. See also: R2 90 for promises, UCC 2-205, CISG 18 & 16

Dataserv v. Technology

Dataserv offered some features for sale to Technology. Technology objected to the third party installer. Dataserv proposed another option for the third party installer. Technology rejected this. Dataserv than agreed to drop the third party installer but Tech. said too late. Court held that Dataservs final offer (and Technologys rejection) killed the previous offer, so Technologys offer was no longer available to accept.
R2 38 (mirror image rule): A counter-offer by the offeree, relating to the same matter as the original offer, is a rejection of the original offer, unless the oferror in his offer, or the offerree in his counter-offer states that in spite of the counter-offer the original offer shall not be terminated. R2 39: A counter offer is an offer (See R 24) made by an offeree to his offeror relating to the same matter as the original offer and proposing a substituted bargain differing from that proposed by the original offer.

See: UCC 2-207 (Ionics v. Elmwood), CISG Art. 19 (Filantro v. Chiliwich)

Ionics v. Elmwood Sensors

Ionics bought thermostats from Elmwood Sensors. Ionics includes provision that conflicts will be handled by state court. Sent letter confirming this, Elmwood sent acknowledgement with its own terms. Court decided that conflicting term in ones own writing serves as the objection necessary for 2-207(2)(c) and so only where writings agree will they be in K. Therefore both tossed, and original Iionics PO.
UCC 2-207: Battle of the Forms

1)

A definite and seasonable expression of acceptance or a written confirmation which is sent within a reasonable time operates as an acceptance even though it states terms additional to or different from those offered or agreed upon, unless acceptance is expressly made conditional on assent to the additional or different terms. The additional terms are to be construed as proposals for addition to the contract. [However] Between merchants such terms become part of the contract unless:

2)

a. b.

the offer expressly limits acceptance to the terms of the offer; they materially alter it; or

c. 3)

notification of objection to them has already been given or is given within a reasonable time after notice of them is received.

Conduct by both parties which recognizes the existence of a contract is sufficient to establish a contract for sale although the writings of the parties do not otherwise establish a contract.

Filanto v. Chilewich

CISG Art 19: 1) A reply to an offer which purports to be an acceptance but contains additions, limitations or other modifications is a rejection of the offer and constitutes a counter-offer. 2) However, a reply to an offer which purports to be an acceptance but contains additional or different terms which do not materially alter the terms of the offer constitutes an acceptance, unless the offeror, without undue delay, objects orally to the discrepancy or dispatches a notice to that effect. If he does not so object, the terms of the contract are the terms of the offer with the modifications contained in the acceptance. 3) Additional or different terms relating, among other things, to the price, payment, quality and quantity of the goods, place and time of

delivery, extent of one party's liability to the other or the settlement of disputes are considered to alter the terms of the offer materially.

Chilewich had been importing shoes from Filanto for some time when they tried to add an arbitration clause to their contract. After negotiations, Chilewich included the term in their LC (material change). Filanto didnt respond, court found it to be part of the contract because of their ongoing relationship and art 18(1). CISG Art. 18(1): In general an acceptance to an offer needs a positive act to indicate an acceptance, silence is therefore not an acceptance. CISG Art. 8(3): However, under special circumstances (i.e. a long-term trade relationship which established a regular practice) silence can be interpreted as a constituted acceptance. CISG Art. 19(3): Additionally, an acceptance with modification including material modifications of the contract (i.e. change of price, time or quantity) is considered under the CISG as an counteroffer.

Hill v. Gateway

Hills sued gateway when they were not permitted to return a computer they had kept over 30 days. They objected to the arbitration clause. Judge Easterbrook ruled against them saying they accepted the offer by keeping the computer. Shrink wrap licenses constitute a contract when accepted by the buyer. Mechanism for signaling acceptance (opening package and retaining for 30 days) is valid unless objectionable on grounds applicable to contracts in general. Gateways license is thus the offer and the Hills only made a solicitation for an offer.

Varney v. Ditmars

Varney offered fair share of profits to work extra plus $5 more per week. He refused to work on election day and was fired. He sued and did not receive fair share of profits b/c too uncertain. Cardozo dissented, saying it was a failure of proof, not inherent vague idea. R2 33: Certainty 1. Even though a manifestation of intention is intended to be understood as an offer, it cannot be accepted so as to form a contract unless the terms of the contract are reasonably certain. 2. The terms of a contract are reasonably certain if they provide the basis for determining a. the existence of a breach and b. for giving an appropriate remedy.

Curtis v. Mathews

Curtis agreed orally to buy Mathews wheat for $3.58/bushel and sent Mathews a written memo with the price. He did not include protein content, protein basis or protein scale figures. Custom is that those are determined when wheat is brought to market. Mathews sold to another market, breached and liable for 12k+.
UCC 2-204: Formation in General Even though one or more terms are left open a contract for sale does not fail for indefiniteness if the parties have intended to make a contract and there is a reasonably certain basis for giving an appropriate remedy. UCC 2-305: Open Price Term 1. The parties if they so intend can conclude a contract for sale even though the price is not settled. In such a case, the price is a reasonable price at the time of delivery

2. (4)Where, however, the parties intend not to be bound unless the price be fixed or agreed and it is not fixed or agreed there is no contract...

Hamer v. Sidway

Story promised his nephew 5k if he would refrain from drinking, gambling and using tobacco until he was 21. Claim brought against executor, held up by court as nephew gave up some legal right.

R2 71 i. To constitute consideration, a performance or a return promise must be bargained for. ii.A performance or return promise is bargained for if it is sought by the promisor in exchange for his promise and is given by the promisee in exchange for that promise. iii.The performance may consist of an act other than a promise, or a forbearance

St. Peter v. Pioneer Theater

The St. Peters went to bank night and Mr. St. Peters name was called. He was not paid. The court said The Pioneer offered a unilateral K and the St. Peters showing up was their consideration.

R2 71: Requriement of Exchange; Types of Exchange i. The fact that what is bargained for does not of itself induce the making of a promise does not prevent it from being consideration for the promise. ii.The fact that a promise does not of itself induce a performance or return promise does not prevent the performance or return promise from being consideration for the promise.

Kirksey v. Kirksey

Kirksey asked Aunt Antillico to sell her land and quit the country. I will let you have a place to raise your family. At the end of two years he put her in the woods and then kicked her out. She sued. Court found brothers action was a mere gratuity and did not enforce.

Rules for a valid gift: Promise to give something. No valid consideration. Delivery of gift by donor to donee, With the intent to give.

Wolford v. Powers

Lehman promised Wolfords that if they would name their child Charles Lehman Wolford that he would make the childs welfare his chief object and he executed a note for 10k. His estate would not honor the note. Court found that where there is no fraud, and a party gets all the consideration he contracts for, the contract will be upheld. R2 79: Adequacy of Consideration If the requirement of consideration is met, there is no additional requirement of A gain, advantage, or benefit to the promissor or a loss, disadvantage, or detriment to the promisee; or Equivalence in the values exchanged; or mutuality of obligation.

In Re Green

Woman and bankrupt man had relationship, he gave her money, paid for a house for her. He made a k giving her 1k/mo., assigning 100k life inurance, pay her rent. Woman release him from claims she had and gave him one dollar. She sued bk estate. Court found want of consideration other than past intercourse. Did not believe $1 was consideration, did not believe release of claims was real either. R2 79 comment (d): Disparity in value, with or without other circumstances, sometimes indicates that the purported consideration was not in fact bargained for but was a mere formality or pretense. Such a sham or nominal consideration does not satisfy the requirement of 71.

R2 74: Release from Claims: Part of what it says means that release from claims constitute consideration so long as the claims are believed to be valid by the one releasing them (regardless of whether they are valid) or is bargained for.

Peppercorn Theory

1. When promises, or promise and performance (in unilateral contract) lop-sided argue: Generally irrelevant because adequacy not relevant for consideration to exist. R 2nd 79. 2. Question is: Was there bargain-for-exchange (promise inducing another promise or performance)? a. Yes: Then apply R 2nd 71. End of story. Consideration exists. b. No: a. Then under R 2nd 71 and 79 comment (D) no consideration. Consideration was sham or nominal consideration. Argue: a. hidden gift b. otherwise against public policy

Haase v. Cardoza

Alice Cardozas husband died and left Rose Haase 10k which she never got. Alice felt bad and told her about it when she was sick one day. She promised Rose shed pay her $50/mo. until it was paid off. 8 mos. later Rose asked for a note to cover the balance and payments stopped. Court found there was no consideration and that promise not enforceable. There also was no evidence of a change in position on the part of Rose which could give rise to an estoppel as a substitute for consideration.
R2 90: A promise which the promisor should reasonably expect to induce action or forbearance on the part of the promisee or a third person and which does induce such action or forbearance is binding if injustice can be avoided only by enforcement of the promise. The remedy granted for breach may be limited as justice requires.

A charitable subscription or a marriage settlement is binding under Subsection without proof that the promise induced action or forbearance.

Ricketts v. Scothorn

John c. Ricketts (deceased) gave his grandaughter Katie a promissory note for $2,000, saying none of my grandchildren work, and you dont have to. Katie quit for a while and than got another job later with Johns permission. She sues for 2k, court finds no consideration but that havingly intentionally influenced katie meets the elements of equitable estoppel, so 2k is owed.
R2 90: A promise which the promisor should reasonably expect to induce action or forbearance on the part of the promisee or a third person and which does induce such action or forbearance is binding if injustice can be avoided only by enforcement of the promise. The remedy granted for breach may be limited as justice requires. A charitable subscription or a marriage settlement is binding under Subsection without proof that the promise induced action or forbearance.

Webb v. McGowin

Webb saved McGowin from falling wooden block, suffering severe injury, and McGowin in consideration of this promised him financial support. Whe McGowin died, his estate refused to pay. Court found promise enforceable. Pg 192 casebook. R2 86: Promise for Benefit Received A promise made in recognition of a benefit preivously received by the promisor from the promisee is binding to the extent necessary to prevent injustice. A promise is not binding if the promisee conferred the benefit as a gift or for other reasons the promisor has not been unjustly enriched; or to the extent that its value is disproportionate to the benefit.

Jacobs & Young v. Kent

UCC 2-601. Buyers Rights on Improper Delivery ...if the goods or the tender of delivery fail in any respect to conform to the contract, the buyer may: (a) reject the whole; (b) accept the whole; or (c) accept any commercial unit or units and reject the rest. UCC 2-508 (Cure) Where any tender or delivery by the seller is rejected because non-conforming and the time for performance has not yet expired, the seller may then within the contract time make a conforming delivery. Where the buyer rejects a non-conforming tender which the seller had reasonable grounds to believe would be acceptable with or without money allowance the seller may if he

seasonably notifies the buyer have a further reasonable time to substitute a conforming tender. All wrought iron pipe must be well galvanized, lap welded pipe of the grade known as standard pipe of Reading manufacture. Kent asked them to redo the plumbing, which would be very expensive. He sued. Court found the error was neither fraudulent nor willful and that an ommission both trivial and innocent will sometimes be atoned for by allowance of the resulting damage and will not always be a breach. This is a reasonable person standard.
Substantial Performance Rule (c/l): [A]n omission both trivial and innocent, will sometimes be atoned for by allowances of the resulting damage, and will not always be the breach of a condition to be followed by a forfeiture. In the circumstances of this case the measure of the allowance is not the cost of replacement, which would be great, but the difference in value, which would be either nominal or nothing.

Idiosyncratic bargainer: Intention not otherwise revealed may be presumed to hold in contemplation the reasonable and probable. If something else is in view, it must not be left to implication. (Cardozo).

Shuttle Packaging v. Tsonakis

Tsonakis sold pot making machinery to Shuttle and promised not to sell pots in the same area as Tsonakis does (a bit broad). Shuttle had problems with the equipment, which were ironed out when Tsonakis came over to work with Shuttle. Shuttle attempted to mix 700 pounds per hour of molten plastic with a shovel over the hot extruder of the line. Shuttle did not pay. Court ruled that Shuttle was unlikely to succeed on the merits as their claim was opportunistic (they were short on cash, etc.) and non-payment is the most significant form of breach by a buyer.
CISG Art. 25: A breach of contract committed by one of the parties is fundamental if it results in such detriment to the other party as substantially to deprive him of what he is entitled to expect under the contract,

unless the party in breach did not foresee and a reasonable person of the same kind in the same circumstances would not have foreseen such a result.

Stees v. Leonard

Builder built building which collapsed two times in soft soil. Builders abandoned project claiming soil was owners fault and that owner later had promised to keep the soil drained. Court held that if builder agrees to build something, they are responsible to do so. If unexpected impediments lie in the way, and a loss ensue, it leaves the

loss where the contract places it. Note that oral promise was kept out by parol evidence rule I think. Performers risk rule: Risks associated with performance of an obligation are assigned by default to the performing party (absent prevention by an act of God, the law or another party to the contract). Spearin Doctrine: Government contractors not liable for damages resulting from faulty specifications. Reason: They must follow government specifications and do not bargain over those specifications. Rhone Poulenc Rorer : Express waiver of Spearin rule will shift risk of performance back to contractor.

Taylor v. Caldwell

Plaintiff rented Surrey Gardens and Music Hall for four concerts. It burned down. Court held that both parties must have known that k could not be fulfilled unless when the time for the fulfillment came some particular thing continued to exist. The impossibility doctrine: In contacts in which the performance depends on the continued existence of a given person or thing, a condition is implied that the impossibility of performance arising from the perishing of the person or thing shall excuse the performance. Under impossibility, all parties excused from performance.

Williams v. Walker Thomas

Williams bought furniture over 5 years, k included clause where if she is late with a payment on one item, D can take back all furniture. Court held that she had a duty to read K and is liable. They suggested the legislature pass a statute like that of MD to prevent ks like this.
SUBSTANTIVE UNCONSCIONABILITY Were terms so extreme as to appear unconscionable according to the mores and business practices at the time and place. PROCEDURAL UNCONSCIONABILITY Did party have reasonable opportunity to understand the terms of the contract? for example, were important terms hidden in a maze of fine print and minimized by deceptive sales practices? Consider circumstances surrounding the transaction:

Education Bargaining power (and, hence, meaningful choice)

UCC 2-302: Unconscionable Contract If the court as matter of law finds the contract or any clause of the contract to have been unconscionable at the time it was made the court may refuse to enforce the contract, or it may enforce the remainder of the contract without the unconscionable clause, or it may so limit the application of any unconscionable clause as to avoid any unconscionable result. When it is claimed or appears to the court that the contract or any clause thereof may be unconscionable the parties shall be afforded a reasonable opportunity to present evidence as to its commercial setting, purpose and effect to aid the court in making the determination.

The principle is one of the prevention of oppression and unfair surprise and not of superior bargaining power.

Wolf v. Marlton

Wolfs wanted out of housing contract and wanted their deposits back (they were getting divorced). Builder refused and Wolf threatened to

sell their completed home to an undesirable family such that builder would be unable to sell any other homes in that sub division. Court remanded due to lack of evidence, said if threats were in fact made and if the defendant actually believed that they would be carried out... d was justified in treating k as breached.

Rule is R2 175 (Austin v. Loral). R2 174: If conduct that appears to be a manifestation of assent by a party who does not intend to engage in that conduct is physically compelled by duress, the conduct is not effective as a manifestation of assent.

Austin Inst. v. Loral Corp.

Loral won navy contract for radar sets and kd with Austin for parts. Loral was awarded a second k and Austin said they would not deliver first k if not awarded all parts for second k at higher prices. Loral agreed and sued and won.
R2nd 175 :When Duress By Threat Makes A Contract Voidable (restated by Professor) If a party assents to a contract because of an improper threat Threat to do something illegal. Use of power for illegitimate ends. Consult the precedents in your jurisdiction to see how they answered the question in situations similar to yours. Appeal to the values, norms, and practices of the community.

no reasonable person would resist, then the contract is voidable by that party.

Spies v Brandt & Danann Realty

Spies: Buyer of wilderness camp was told they would make good money which was untrue at the time of sale. Buyer sued to rescind and won. Court said whether the representations were made innocently or knowingly is irrelevant to fraud when made unqualifiedly. A bad motive is not a requirement for fraud. Danann: Lessee sued that it entered into k of sale because of oral representations by lessor found to be false. But lesee signed disclaimer stating they were not relying on any oral statements. Court: Too bad so sad. R2 159: A misrepresentation is an assertion that is not in accord with the facts. R2 164: When misreprentation makes k voidable

A contract is voidable if partys manifestation of assent was induced (in fact) by either fraudulent or material representations upon which the party was justified in relying

R2 164: When a misrepresentation is fraudulent or material Fraudulent means knowing Material means: expects to induce reliance by reasonable person OR recipient R2 169(a): trust v. arms length transactions To the extent that an assertion is one of opinion only, the recipient is not justified in relying unless the recipient stands in such a relation of

trust and confidence to the person whose opinion is asserted that the recipient is reasonable in relying on it.

Keifer v. Fred Howe Motors

Keifer bought a car when a minor and tried to return it. Fred Howe motors tried to sue for misrepresentation. Court denied b/c Keifer was minor and not held to his agreement. Said Howe can sue him under a tort action if it wants, but K stands. The contract of a minor, other than for necessaries, is either void or voidable at his option. Exceptions: by statute, marriage agreement to support illegitimate child Wisconsin rule: Minor may disaffirm contact, but may be liable in tort for misrepresentation. In some other jurisdictions: Minor cannot disaffirm the contract if misrepresented age and may be liable for contractual damages.

Shields v. Gross

Shields had pics taken when she was ten, mom gave consent. She later tried to stop their publication as theyre just not her anymore. While under c/l she might have been able to do so, legislature passed bill abrogating that right and her mothers consent holds.

Dissent: The statute was enacted to protect privacy not to abrogate childs right to disaffirm a contract. State retains right to guard the childs best interest and this means that child may disaffirm the contract.

In re Baby M

Mrs. Whitehead was surrogate, turned over Baby M but took her back and refused to give up parental rights per surrogacy k. Court refused to enforce. Look for: Violation of law or Policy, as established by constitution, law or precedent Discuss with respect to Autonomy Efficiency Plurality (Justness)

Freund v. Washington Square Press

Wash press entered into K with freund to publish book. They had 60 days after receiving to terminate and did not do so after merging with another company. Court found for Freund, but only compensatory damages that were foreseeable. Damages Freund asked for would have put him in far better position than had k performed and should be limited to the natural and probable consequences of the breach to plaintiff. Efficient Breach See R2 344 (expectation, reliance, restitution) [T]he law attempts to secure to the injured party the benefit of the bargain, subject to the limitations of that injuryIn other words: Was it foreseeable? reasonable within the contemplation of the parties, at the time the contract was entered into Can it be measured with a reasonable degree of certainty? and

Was it adequately proven?

R2 344: Purposes of Remedies Judicial remedies under the rules stated in this Restatement serve to protect one or more of the following interests of a promisee: his expectation interest, which is his interest in having the benefit of his bargain by being put in as good a position as he would have been in had the contract been performed, his reliance interest, which is his interest in being reimbursed for loss caused by reliance on the contract by being put in as good a position as he would have been in had the contract not been made, or his restitution interest, which is his interest in having restored to him any benefit that he has conferred on the other party Efficient Breach under CISG: Holmes said The duty to keep a contract at common law means a prediction that you must pay damages if you

do not keep it, and nothing else. Other countries take a different moral view: pacta sunt servanta (promises must be kept).

Klein v. Pepsico

Klein tried to buy a G-II through a broker from Pepsico. After agreeing on terms Pepsico exec withdrew aircraft from market. Klein wanted specific performance, court held that as he was just going to resell it and that there were others out there, monetary damages would suffice. Court noted that rising prices of G-II was no reason to order the equitable remedy of specifc performance
R2 359: Specific Performance Specific performance or an injunction will not be ordered if damages would be adequate to protect the expectation interest of the injured party. The adequacy of the damage remedy for failure to render one part of the performance due does not preclude specific performance or injunction as to the contract as a whole..... Specific Performance or an injunction will not be refused merely because there is a remedy for breach other than damages, but such a

remedy may be considered in exercising discretion under the rule state in 357

CISG Art. 28: Specific Performance If...one party is entitled to require performance of any obligation by the other party, a court is not bound to enter a judgement for specific performance unless the court would do so under its own law in respect of similar contracts of sale not governed by this Convention. A court is not bound to eter a judgment for specific performance if such would not be the usual remedy under the local law that the court would apply.

Hadley v. Baxendale

Millers sent crankshaft for repair b/c mill stopped working. Were told by D that if they brought it by noon, it would be delivered to Greenwich the following day. They did so and it was delayed. Court held that damages should be limited to as may be fairly and reasonably considered either arising naturally or such as may reasonably be supposed to have been in the contemplation of both parties at the time they made the contract, as the probable result o the breach. Remanded to figure that out. Consequential Damages: The Plaintiff can recover those damages that result from special circumstances to the extent that they were communicated to the Defendant.

Delchi Carrier SPA v. Rotorex Corp.

Delchi ordered compressors from Rotorex for air conditioners which did not work. After three years of discovery they claimed consequential damages for 1.7 million dollars, and mostly won. Therefore court decided that lost sales could be awarded to Delchi as well as shipping and customs costs and incidentals related to the two shipments of Rotorex compressors, cost of obsolete insulation and tubing that Delchi purchased only for use with Rotorex compressors. Labor costs for idle factory could be recoverable as variable costs. Since no evidence on this point was provided, the court remanded. Lost of 4,000 units in Italy were not proven with certainty so were not provided. Fixed costs not recoverable. CISG Art 74 (Expectancy interest in the CISG): Damages for breach of contract by one party consist of a sum equal to the loss, including loss of profit, suffered by the other party as a consequence of the breach. Such damages may not exceed the loss which the party in breach foresaw or ought to have foreseen at the time of the conclusion of

the contract, in the light of the facts and matters of which he then knew or ought to have known, as a possible consequence of the breach of contract.

Rockingham County v. Luten Bridge Co. Parker v. 20th C. Fox

R. county rescinded bridge K, but Rockingham kept building bridge anyway. Court held Rockingham had duty to mitigate (stop building) and gave them damages on costs only up to the point of being notified of recission plus expected profits on whole deal. Shirley MacClain sued for damages after movie was cancelled. 20th century claimed she failed to mitigate by refusing to star in a different movie they had. She claimed Big Country was different (and inferior). Court excused her from mitigation. Rule: Employee must take comprable or substantially similar job to mitigate. See R2 350, 351, 352

See UCC 2-715

California and Hawaii Sugar v. Sun Ship

CH kd for a catamaran from Sun and a tug boat from Halter. Tug boat was late and Sun was late. There was liquidated damages clause for 17k per day, Sun did not want to pay b/c tug wasnt ready anyway. Court will not allow each contractor to blame another, Sun is liable. And 17k was determined by parties in advance as fair, court will not step in to check.
R2 356: Damages for breach by either party may be liquidated in the agreement but only at an amount that is reasonable in the light of the anticipated or actual loss caused by the breach and the difficulties of proof of loss. A term fixing unreasonably large liquidated damages is unenforceable on grounds of public policy as a penalty. UCC 2-71: Damages for breach by either party may be liquidated in the agreement but only at an amount which is reasonable in the light of the anticipated or actual harm caused by the breach and difficulties of proof of loss..., a term fixing unreasonably large liquidated damages is void as a penalty.

CISG permits liquidated damages as well.

Coley v. Lang

Coley Kd with Lang to puchase the stock of Langs corp. minus all assets b/c he wants its name for negotiating Ks with US Gov. They wrote informal letter but left some terms undefined. Court held that informal writings are acceptable but not if they leave out terms. This is essentially and agreement to agree and not enforceable. Court also held there was not detrimental reliance by either party as no lost bids could be proven by Coley and timeframe between end of negotiations and original letter was only two weeks.

Hoffman v. Red Owl

Red Owl promised Hoffman it would build a store if he put up 18k. In reliance on that promise, Hoffman sold his bakery and opened another grocery (to learn) and purchased a site. Later Red Owl changed the amount to $24,100 and later increased again. Court awarded Hoffman damages and ordered retrial on damages for sold grocery store.

Brown v. Cara

Parties signed a memorandum of understanding (MOU) to develop Jay St. property. Cara would donate property and Brown would handle design and zoning. After Brown got the property rezoned, Cara pulled out based on being offended by a construction agreement. Court found that MOU was type II agreement and ordered case remanded that they should negotiate. Binding preliminary agreements Type I (complete): reflect a meeting of the minds on all the issues perceived to require negotiation; it binds both sides to their ultimate contractual objective. Preliminary in name only. Factors to consider to determine Type I Preliminary Agreements: Expressed reservation of the right not to be bound in the absence of a writing partial performance all terms agreed

 if agreement is of the type normally put in writing Type II, by contrast, are binding only to a certain degree,reflecting agreement on certain major terms, but leav[ing] other terms open for further negotiation. Type II agreements do[ ] not commit the parties to their ultimate contractual objective but rather to the obligation to negotiate the open issues in good faith in an attempt to reach the ... objective within the agreed framework. Factors to consider to determine Type II Preliminary Agreements: whether the intent to be bound is revealed by the language of the agreement; the context of the negotiations (is it one with numerous contingencies, requiring flexibility) the existence of open terms; partial performance; and

 the necessity of putting the agreement in final form, as indicated by the customary form of such transactions.

Eastern Airlines v. Gulf Oil Corp.

Requirements K for fuel based on Platts Oilgram, which govt started implementing two-tier system of pricing for in 1973. Price of oil increased but PO did not, and Eastern began fuel freighting, which is accepted practice. Eastern wins. UCC 2-306 Requirements K: A term which measures the quantity by the output of the seller or the requirements of the buyer means such actual output or requirements as may occur in good faith, except that no quantity unreasonably disproportionate to any stated estimate or in the absence of a stated estimate to any normal or otherwise comparable prior output or requirements may be tendered or demanded. UCC 1-201: Good Faith is Honesty in fact (subjective standard) and the observance of reasonable commercial standards of fair dealing (objective standard)

Wood v. Lucy, Lady Duff-Gordon

Lady Duff entered into exclusive dealings contract with Wood who agreed to give her one half of all profits and revenues for one year. Lady put her endorsements on other items and Wood sued. Lady claims he did not make reasonable effort to market her items and therefore did not bind to any K. Cardozo holds that he bound himself to a promise to use reasonable effort. In exclusive dealing contracts there is an implied promise that holder of right to exclusively market goods or services of another party will use reasonable efforts to market that good. The implied promise to use reasonable efforts serves as consideration for other party to refrain from marketing her goods or services without express agreement from the holder of the right of exclusive dealing.

Bloor v. Falstaff Brewing

Falsaff entered into distribution contact with Ballantines and ran the label into the ground. Court found that falstaff breached a duty to make their best effort on behalf of Ballantines. UCC 2-306 (2): A lawful agreement by either the seller or the buyer for exclusive dealing in the kind of goods concerned imposes an obligation by the seller to use best efforts to supply the goods and by the buyer to use best efforts to promote their sale, unless otherwise agreed. Good faith, and more: Reasonable diligence Agent: reasonable effort & due diligence

 Principal: refrain from breaching exclusivity deal

Bammert v. Dons Super Valu, Inc.

Karen Bammert worked as an assistant manager at Don's Super Valu for 26 years. On June 7, 1997, her husband, a police officer, assisted in the arrest of Don Williams' wife on a drunk driving charge. On August 28, 1997, Mrs. Bammert was fired. She sued under PE public policy exception. Court dismissed. Employment at will is a stable fixture of our common law and has been since 1871. Employee had to state a clear articulated fundamental and well-defined public policy under the constitution, statute, or judge-made law that justified protection of employees for 3rd Party participation in the enforcement of laws or policy.

Gagliardi Bros. Inc. v. Caputo

Caputo worked for Gagliardi, maker of Steak-umm. In 1974 when patent application was rejected, they made Caputo and other sign noncompete. Court found there was no consideration for this agreement and it was also unenforceable as a covenant not to compete anyway.
R2 188: Ancillary Restraints On Competition A promise to refrain from competition that imposes a restraint that is ancillary to an otherwise valid transaction or relationship is unreasonably in restraint of trade if the restraint is greater than is needed to protect the promisee's legitimate interest, or the promisee's need is outweighed by the hardship to the promisor and the likely injury to the public. Promises imposing restraints that are ancillary to a valid transaction or relationship include the following:

a promise by the seller of a business not to compete with the buyer in such a way as to injure the value of the business sold; a promise by an employee or other agent not to compete with his employer or other principal; a promise by a partner not to compete with the partnership

Alaska Packers v. Domenico

Packers agreed to price for fish, and requested a modification once underway. Court ruled there was no consideration b/c packers were going to render exact same service.

Note that UCC does not have this limitation. UCC 2-209: Modification, recision and waiver An agreement modifying a contract within this Article needs no consideration to be binding.

Monetti SPA v. Anchor Hocking Corp

Mixed K for distribution and purchase of goods. Anchor provided second writing on letterhead indicating there was K and court found this was enough. R2 4: However, for specified types of Ks, the S/F forbids enforcement unless there is: a written memo (a writing) signed by the party being charged OR An applicable exception

Alcoa v. Essex I

Malfunctioning of price index (price not increasing quickly enough) was something that both parties assumed would likely never occur. Moreover, ALCOA did not assume the risk. Court ordered reformation of contract.
R2 152: When both parties enter a contract under a mistaken assumption that is basic to the contract, the contract is voidable by the party adversely affected by the mistake, unless that party ought to bear risk of the mistake. R2 154: A party bears the risk of the mistake if 1. the contract assigns the risk to that party; or 2. the party was aware at the time of contracting that he or she had only limited knowledge of the facts relevant to assessing the risk of the mistake and decided to enter the contract anyway; or 3. it is reasonable, in the circumstances for the party to bear the risk of the mistake.

Sherwood v. Walker

Cow was sold as baron, but then she was pregnant. K was voided for bilateral mistake.

Anderson Bros v. Omeara

Buyer of dredge thought it would work without modification. Buyer argued it was mutual mistake but could not prove selle knew of intentions. Tried on unconscionable unilateral mistake but court found he did not do due diligence (did not properly inspect, etc.). R2 153: Unilateral Mistake When one party enters a contract under a mistaken assumption that is basic to the contract, the contract is voidable by the party adversely affected by the mistake, if that party ought not to bear risk of the mistake, and: it would be unconscionable to enforce the contract; or, the other party had reason to know of the mistake, or the mistake was the other partys fault.

Eastern Airlines v. Gulf Oil Corp. II

Commercial impracticability did not excuse Gulf from performing under the contract because At time that the contract was made, it was forseeable that OPEC would place oil embargo that would increase oil prices. Mere increase in price and resulting loss not an injustice or outright impossibility. R2 261 & UCC 2-615(a): When an event Unexpected at the time of contracting Makes the performance commercially impracticable, the obligation is discharged unless the party ought to bear the risk of the occurrence of the event.

Alcoa v. Essex II

It requires no further discussion to establish that the non-occurrence of an extreme deviation of the WPI-IC and ALCOAs non-labor production costs was a basic assumption on which the contract was made. And it is clear that ALCOA neither assumed nor bore the risk of the deviation beyond the forseeable limits of risk. Mistake (Alcoa) Excuse (Taylor v. Caldwell)