Cached image of the outline is presented below
Contracts
Law= prediction of decision (what the decision maker will do)
Process of decision…those that are authoritative and controlling.
Social Process- ppl seeking values thru institutions using resources
Values- the things ppl seek (irrespective of what they should seek)
Institutions- constructs of decision-making plains specialized in making values
Resources- values u have u use to obtain values u seek (ex. Power to obtain respect ect)
Institution of Exchange- to obtain wealth…(differing opinions each holding they will make a profit)
The median of exchange is usually> money
Most exchanges are for financial purposes…contracts are mostly about money. Mostly about the commercial exchange.
Exchange institution- process of decision
Exchange= There is an agreement btw 2 parties with claims on each side…if the claims are not met they may look to a formal decision maker to issue a decision. The decision informs the actors…leading to more decisions…. a process of decision.
Interpersonal Relationships-
Dr. Watson- style of learning
Concepts of free volition- ppl have the rt to enter any contract they want to or not
Social control- using the authority…not to enforce the contract as u have entered it
Paired opp of legal reasoning: legal rules runs in pairs of rules that are opp
Arguing if facts are a or c facts … who wins.
Law of Contract- the rules
Function of contracts- what functions exist under the contracts
RE; coop owner overlooking Operation Sale By:
Can u watch from window? Yes
Can u invite friends? Yes
Can u invite strangers and charge? No
Can u enter an agreement with anyone to video tog? No
Can u have a network broadcast from ur window? No
You can do it for personal use but can't make money off it.
Why? Bc the organizers of the event have a property right! - They have the right to profit from their property…
If A then B.- it's a rule, not a conclusion derived from an empirical (positive) outcome.
You apply the rules to the facts> if A is present you have B
- Where does this rule come from?
The fact that they sold the exclusive rights does not indicate that they had the exclusive rights to sell! (The fact that they sold them is irrelevant)
- They do not own it bc they sold it!! They sold it bc they own it. They own it bc they put money into it.
Suie logistic- the first one of its kind
(Pittsburgh was the first case of its kind…first commercial broadcast of a sporting event on radio.)
CONTRACTS ENSURE INDV. RIGHTS
5. PITTSBURGH ATHLETIC CO v. KQV BROADCASTING CO.
District Court of the United States, (W. D. Pa.), 1938. 24 F. Supp. 490.
2. Statement of the case: The Pittsburgh Athletic Co. has sued KQV Broadcasting CO. to prohibit them from broadcasting reports during the “Pirates” games in the future.
3. Facts: -PAC owns the field and team (ect.)
-The PAC has granted exclusive rights to a broadcasting comp.
Defendant admits to broadcasting games and will cont. to do so.
4. Procedural History: PA co. filed a bill of complaint July 1938 asking for a preliminary injunction. The defendant contests to this on the basis that no home games were being played since May 1938 and the defendant did not intend to broadcast away games. In regard to the injunction, there was an affirmative defense claiming that it was w/in their legal rights. The plaintiff was awarded preliminary injunction.
5. Issue(s): -Does the plaintiff have a property right?
- Is the defendant in violation of it?
6. Holding: One has a property right over the news of events that goes on during or shortly after the event. Defendants are in violation due to unfair competition.
7. Reasoning: They competed w/ the private comp that PAC contracted w/.
8. Notes: The news of ball games is not a general publication and therefore does not fall under dissenting views, that it is public knowledge.(“ticker cases”)
-In regard to the case of INS copying news bulletins from ANS…both companies were trying to make a profit from the general public news, which is not the case here.
In the Australian case, Victoria Park Racing v. Taylor 37, injunction was refused bc there was neither a trespass nor a NUISANCE created by the defendant (ie competition)
“Is n/t sacred anymore?”- What rights does the ballpark owners have in altering its structure if its considered a town landmark?
Australian case cant be authority bc there is no binding precedent in Australia.
Did they win bc they had property rights or did they had a property right bc they won?
DOCTRINE OF UNFAIR COMPETITION- is the basis of rejecting the Australian case, because they don't have it
Where did the court get the rule If A then B for commercial broadcasting games
(they had no precedent)> PROPERTY RIGHTS. Where did the judge come up with this rule to grant the injunction? HE MADE IT UP, but not saying so overtly.
Why did he do this? There is no certain answer perhaps to increase GDP
GDP- a measure of a nations wealth…the judge's decision generates a higher GDP
doctrine of unfair competition”- has to do with the case bc the “goods” ie the broadcasts by KQV, were so similar to the broadcasts by PAC stations that it took away listeners from them…customers are “confused” will listen to either station…
the plaintiff's product >the broadcasts are a product of extensive expensive incurred by owning a baseball field (ect)
the defendant does not incur any of these expenses
commercial damage to the plaintiff is a loss of profit thru a loss of listeners that will listen to the defendant's broadcast instead.
Query: the “product” a baseball club creates is, the right title and interest in and to the baseball games…and news, reports, descriptions or accounts of games….the broadcasts of the games is a product bc the plaintiff put time, labor, money ect…into their product (the broadcasts)
PAIRED OPP IN THE COURTS OPINION: bc PAC has a contract with General Mills…they must ensure sole broadcasting but KQV has no contract with them so they can do what they want on their own private prop.
(whether or not the play-by-play info is general news or private property…)
4a. prosperous economies= market economies
self-enforcing markets- emerge spontaneously (some are irrepressible)
socially-contrived markets- emerge w/ institutional arrangements on a continuing basis (in the richest countries of the world)
silent trade- non spoken given transactions btw indv. W/o govt or inst. in common.
Conditions for markets: 1. gains from trade sig.
2. trades are self-enforcing (by making the trade simultaneous, reputable, w/in family ect)
Reciprocity- quid quo pro> this for that
Promissory - in the future will complete the contract
9th c. >Transactional law- litigated by local resources
Sir Henry Maine, Ancient Law:
Status- the law of progress
The movement of progressive societies= movement from status to contract
Adam Smith on Justice, Policy, Revenue, and Arms 131:
Breach of contract= slightest of all injuries
18th c. contract= emphasis on the promissory basis of the contractual branch of civil liability
contract by correspondence= law of offer and acceptance
contracts was= the law of reciprocity
Writ of covenant- req a “seal”, evidence of contract= BONDS
Prob w/ covenant> they could only recover for the nonperformance, and not for the damages incurred as a result of the nonperformance.
Trespass > Writ of dept= to recover goods> re: dept on a duty or owing-obligation
But if one voluntary entrusted property s/o else cant be negligence…so:
Common calling req ppl to do an adequate job, and if not = Liability to perform a decent job.
Writ of detinue= to recover fixed sums> re property
They did not have CONTRACT OF EXECUTARY LAW- an undone action (promissory liability)…didn't do s/t one promised to do (not coming thru with a contract)
Dept sur contract- suing for dept from an informal agreement
Breach of assumpsit- failure to pay on time
Or failure to act upon a contract- BREACH OF CONTRACT
(distinction btw misfeasance and nonfeasance was abandoned)
Assumpsit- did not need a BOND (evidence of contract)
Compurgation- wager of law (defendant swears he owes n/t)
Bilateral contract- two clauses…this for this… if not…this
Pickring v. Thoroughgood= abandoned the distinction btw misfeasance and nonfeasance
(buyer v. seller…who was filing a claim based both on a reg contract and a dept sur - informal contract, cant collect double remedies.)
11th c. new ct system came forth:
2 royal cts: 1. king's bench- can file claim on assumpsit
2. common pleas- only file claim w/ writ of dept- purchase writ from chancler's office
(this was during FEUDAL PD)
Nobles were upset…bc writ gives common ppl rights…so took away writs (which took around rights)
#2. was eventually abandoned in: SLADE'S CASE: both parties agreed on fact but there was no BOND of evidence…and so King's bench prevailed.
**this marked the final stage in the unification of the law of contract thru the action of the assumpsit
Writ of trespass- re: land (1st writ issued)
Trespass on the case= origin of negligence (misinformed action caused damage)
2 kinds of assumpsit cases: a. special - all details of transactions had to be set out specifically.
b. indebitatus- merely a alleged dept and promise to pay
quasi contract-implied, is circumstantially proved.
Implied in fact v. implied in law
Consideration= a detriment to the promise or a benefit to the promiser.
actual- 1. express- they are words of promised exchange (written or oral)
2. implied in fact - you implied promise to an obligation and even tho its not expressed you must pay.
Contract implied in fact- there is a contract
quasi - not a contract (there are none), but the relief is for contractual remedies
contract implied in law- there's obligation
absence in VOLITION- no agreement
-Can you refuse to enter into a contract with anyone? For the most part yes, w/o discriminating against religion, race ect.
Public utilities- have monopolies in exchange for which society imposes certain req (incl rt of refusal…must provide svc to a/o who wants it and can pay for it.
-Does a Dr. coming upon a ill person in the st. have a legal resp to help them?
No, not legally but morally.
Construct a legal theory which does least damage to the facts under which you can demonstrate liability on the physician:
156 Ind. 16, 59 N.E. 1058 (1901)
Statement of the case: Intestate sued Physician for wrongful death, as a result of physician's refusal to enter contract. (or bc they were already in a contract bc the Dr. was the family physician…)
Facts: -Defendant was a practicing physician duly licensed under the laws of the State
he had been decedent's family physician
decedent became dangerously ill and sent for the defendant
defendant refused aid to the decedent
no other patients required defendant's immediate service
Procedural History: The heir of the decedent, sued physician for $10,000 damages for wrongful death of his intestate. The court sustained the physician's demurer to the court. The appellant is the heir and the appellee is the physician. The appeals court affirmed the judgment of the trial court.
Issue: Is a physician bound to enter into contract with anyone needing services?
(Is there a preexisting contract because the physician was the decedent's family practitioner?)
Holding: The physician is not bound to enter into contract with anyone needing services.
Reasoning: The licensee does not engage that he will practice at all terms.
Dissenting Views: As the physician was the decedent's family practicioner, he had already entered into a contract with him and as such can not refuse treatment as he is bound.
Query: Had the Dr. treated the patient and there was no prior agreement re: the fee and Dr. submitted bill for $15,000, it would be said that the Dr. is entitled to the fee bc had s/t happened he would have been held responsible.
The criteria relevant to the determination of the bill by the legal process would be the proportion of danger for the patient and the trouble of preserving him to the Dr. >Implied contract in fact
Elements of contract: 1. offer 2. acceptance 3. consideration
Hypo: Construct a theory in which the plaintiff would win w/o changing the facts too much: - Template: If there is an actual contract, there's an express contract, if there's none there is an implied contract in fact, and if there isn't there's a quasi contract, implied in law.
The only way to find the Dr. liable is to find him obligated to come and treat: is EXLCUSIVITY- the patient only goes to this Dr. for services “family physician”…he loses rt to deal w/ any other Dr.
In exchange… the dr. loses the rt of refusal to deal…(must always render services)
Implied in fact: 1. no express agreement to pay an implied contract
2. if you got it you pay for it
250 U.S. 300, 307 (1919):
Sherman anti-trust act- to prohibit monopolies, contracts, to preserve the rt of freedom of trade.
This does not incl the private sector in which a trader ect has rt to use own discretion as to w/ whom he will deal.
In US V. TRANS-MISSOURI FREIGHT ASSOCIATION: a retail dealer has the unquestioned rt to stop dealing with a wholesaler for reasons to self…
GREAT ATLANTIC & PACIFIC TEA CO. v. CREAM OF WHEAT CO.
There is a liberty to trade and a FREEDOM OF CONTRACT.
The A&P case shows that there is freedom of contract…re: the Hurley case, the Dr. was under no obligation to enter into contract with the decedent. AND the freedom to refuse to deal with…or to terminate a contract.
{ The Sherman Antitrust Act was aimed at preserving free and unfettered competition as the rule of trade- “unfair competition, as brought forth by the PA co. v. KQV…shouldn't exist as an argument for the plaintiff….this is a PAIRED OPP!!}
POUGHKEEPSIE BUYING SVC V. POUGHKEEPSIE NEWSPAPER
205 Mis 982, 131 NYS 2d 515 (Sup ct.1954)
Statement of the Case: A buying svc comp sues a newspaper comp in the town for refusing to allow the comp to advertise in the paper
Facts: Defendant refuses to allow plaintiff's publications
Issue: Does a newspaper comp have the freedom to contract w/ whom they please? (Is it a public or private entity?)
Holding: The newspaper can refuse to deal…or enter contract w/whom ever they wish. As a commercial venture… they have to follow the laws of the land, re: production.
Reasoning: Bc they are a private business.
CONTINENTAL FOREST PRODUCTS, INC. v. CHANDLER SUPPLY CO.
95 Idaho 739, 518 P. 2d 1201 (1974)
Statement of the case: Continental sued Chandler for lumber they sent to them, plus late fee interest, which Chandler had ordered elsewhere.
Facts: -Defendant/appellant Chandler placed an order w/ employee Barker at NAM, w/ whom they had a credit.
-Ed Barker left his employment for NAM and began working for Continental. On July 2, 1969, Chandler received acknowledgment for the plywood order from Continental with the same purchase order #s as Chandler had received from NAM.
-On July 7 the president of Chandler sent back these acknowledgments with “purchased from NAM”>Continental claims they never received this.
-Chandler received the shipment from Continental with invoices, and tried to render payment to NAM.
-The payment rendered to NAM was the amt. Minus the credit.
- NAM returned all payments, denying Chandler owed them any money.
-Chandler refused to pay Continental the amt w/o deducting NAM's trade dept.
Procedural History: Continental sued Chandler for the amt of $10,231.45. Chandler denied that it owed Continental any money or that Continental had sold it any goods. The trial ct. found in favor of Continental for $11,559.93. Chandler moved for reconsideration of the memorandum opinion, which the motion ct denied. Appellant assigned as error the trial court's failure to find that Continental's claim was subject to Chandler's rt of set off against NAM (for the exchange due to dept that NAM owed Chandler)> THE RT TO ENTER INTO CONTRACT W/ WHOM EVER ONE PLEASES!! The trial ct found in favor of Continental pursuant to the fact that they had a QUASI/IMPLIED CONTRACT” The appellate ct. reversed and remanded the judgment to alter the award owed to the plaintiff.
ARGUMENT Of Continental: There's an actual contract- but there is none.
There's an implied in fact contract- but there was none.
There's a quasi contract, on the grounds of “unjust enrichment”. Chandler has been enriched by Continental, w/o payment.
Issue: When a depter liability is based on a quasi contract, may he deduct a credit owed by a 3rd party not related to the creditor?
Holding: He may, he has to pay the principal minus that credit.
Reasoning: There was an actual contract (quasi) and there was unjust enrichment. Defendant is liable for whatever he was unjustly enriched for (minus the credit). Freedom of contract, and deceived into believing he had a contract w/ s/o else, the deceiver, Continental should be responsible for that.
Dissent: A set off can only be applied if parties and dept are mutual, here there is n/t mutual.
Why is this case here? What is the core of this controversy?
-The fact that North America went insolvent (bankrupt), if not for that there would be no case (insolvent- a financial situation, not the actual act of filing)
-There is a ZERO SUM GAIN- one party will lose, and the other wins…
This case is here bc: Chandler has the right of refusal to deal w/ whomever he pleases.
They both have valid claims…the judge weighed the claim in favor of Chandler.
3 Types of Contractual Arrangements: 1) Express contract- where the parties expressly agree regarding a transaction. 2) Implied in fact contract- where there is no express agreement but the conduct of the parties implies an agreement from which an obligation in contract exists. 3) implied in law contract/quasi contract- it is not a contract, rather an obligation imposed by law to bring about justice and equity w/o reference to the intent or agreement of the parties (or in spite of an agreement btw the parties.)
Involves a calculation by the judge for the relative unjustness on part of the judge. He selects one party over another.
Boston was so wrong, as to supercede the moral issue to repay them.
Issues: a. unjust enrichment to defendant b. rt to enter contract w/whom one pleases.
Porch ex: mow lawn…no actual contract, but implied in fact (if you get svc and payment is expected) MUST SAY NO- to get out of it
TEMPLATE: a. Actual express contract- there is one…Potter had one with CIC…when BIC bought out CIC and so they got an ASSIGNMENT from them (they get the contract rights).
* but in Massachusetts at that time…in order for the Assignee to sue the Connoisseur, he had to sue in the name of the Assignor…so, even though BIC had an express contract w/ they had to sue in the name of CIC (as they failed to do so…) the court found a technical legal point to make them loose.
BUT- they sued on it in the wrong name
b. implied in fact contract- bc Potter did not ask BIC to provide ice for them (so it is not implied that they want the services and will pay for them.
quasi contract- no contract at all,
must be an absence of contract (in this case there is a contract, so you can't sue saying there's a quasi contract)
must have unjust enrichment
(must have volition -rt to choose w/whom to deal and w/whom not to. (no effort on part of the connoisseur to tell them they will provide svc for them, and no effort on part of the recipient to refuse the svc))
Potter's refusal to deal was a volition…
Reprehensibility: volition is entered into quasi contract, where normally it wouldn't have been a criteria for a quasi contract
Another reason (besides for the fact that there was an actual contract sued in the wrong name) that the court rules against BIC:
What was the likelihood that they delivered ice for an entire yr w/o paying?
Unjust enrichment balances against unvolitional entrance into a contract
Prob it wasn't an entire yr the ice comp went w/o payment…bc no comp collects only after a yr of svc.
Potter wins: a. whatever amt of ice got w/o payment (prob not a yr)
b. Potter is no longer obligated to be w/in the contract w/ BIC
When u sell a good or service (porial)= SALE
Sell a contract right = ASSIGNMENT
Statement of the case: Boston Ice Co. sued the defendant for nonpayment of goods.
Facts: - Defendant had ordered ice from the plaintiff in the past but had canceled his order bc he was unsatisfied.
-Defendant ordered ice from Citizen's Ice comp. Soon after CIC was taken over by BIC.
-According to BIC they sent notice to the defendant of the takeover but the judges did not find evidence of this b4 the delivery and consumption of ice.
Procedural History: BIC sued Potter for the amt of the ice. The Superior ct. had a motion of General denial, and did not find that there was any implied contract btw the parties. The plaintiff brought up an exception of a lack of off set, and the exception was overruled.
Issue: Can original party to a contract be replaced w/o the consent of the other contracted party?
Holding: No, consent must be granted and they should have the option of breaking the contract.
Reasoning : There is no evidence that Potter knew about the takeover b4 receiving the goods.
Notes: In Boulton V. Jones, the defendant was not forced into a quasi contract bc they had prior dealings with a diff comp and should not be forced into a contract with a diff comp…especially bc the defendant had a set off with the other comp. with a running acct.
The existence of a set off cannot be a test to determine that there is no implied assumpsit btw the parties, nor can lack there of be an implied assumpsit. (if there is one it is sufficient a reason for why the defendant should prevail…but lack there of does not mean the plaintiff can maintain his action.)
Moral issue- The fact that it was known to the plaintiff that the defendant did not desire to enter into contract with him…is added reason why as not to have forced the defendant into a quasi contract with him.
10a. Query: The 2 most impt consequences is, 1) It would force the defendant into a contract he clearly did not wish to enter 2) It would set a precedent that the lack of a set off btw 2 companies would be sufficient for an implied contract btw the new comp.
2 word characterization of the case: A SWINDLE
Humble- scammed them; he took the money from selling the cigars ect, and pocked it.
The shortest distance btw the plaintiff and their money is by suing Humble, why didn't they sue Humble? A. he has no money B. he's gone
Bc he's gone there's a ZERO SUM GAME-one of the parties are going to lose.
5 concrete legal arguments
p to d in round 1: Suing based on: DOCTRINE OF PRINCIPLE AGENCY- you are resp for the actions of your agent (as set forth in the contract)
d to p in round 2: Agent did not have the ACTUAL AUTHORITY- to purchase the goods, it was out of the scope of his responsibilities.
p to d in round 3: you are responsible under APPARENT AUTHORITY-the principle is resp for the actions of the agent w/in the scope of employment, even if the agent lacks the actual authority, but has the apparent authority>that a third party would assume you have(even if it is specifically against the principle agent)
d to p in round 4:You had no RELIANCE, bc the principle was undisclosed (didn't even know we existed)
p to d in round 5: It would be promoting undisclosed principles- a bad outcome
Undisclosed principles would become>mischievous…it would promote swindles and fraud.>
PURE POLICY ANALYSIS- the broad goal in economic efficiency is to make society more money, the more specific goal is - MINIMIZE SWINDLES, they are dead weight loses on social welfare.
If the court found in favor of the owner…the SELLER is resp…they would have to incur costs to investigate the companies.
If the court found in favor of the seller…the OWNER is resp…they would have to incur costs to have more control and greater precautions over their employees.
As a Policy: the cost incurred is less for an owner to monitor employees, then for a seller to investigate all buyers. (this is an added incentive for s/t they have to already do)
So they put the POLICY on the LEAST COST AVOIDER- which would be the owner.
RELIANCE- we allow the third party to hold the principle liable (even if they acted against the scope) bc one acted on the agent's apparent authority.
DISREGARD LAW…> WHAT IS THE EFFICIENT OUTCOME OF THIS CASE (AS AN ECONOMIST)?
(must have an articulated goal, which is consistent w/ economic efficiency)
In CONTINENTAL and BOSTON ICE, the core issue is= VOLITION (right of refusal to enter contract)
THIS CASE IS THE PAIRED OPPOSITE! - HERE IS ANTI-VOLITION.
There was no unjust enrichment…and yet the principle is responsible
Prophylactic- to prevent an undesirable affect
Statement of Case: Cigar supplier sued the owner of a beer-house for the price of the goods, when the agent, who ordered them for the hotel, failed to pay.
Facts: - A man sold his beer-house to the defendant, but stayed on as their agent. His name was on the door and the license was still in his name.
-He was to purchase bottled ales and mineral water only, and the rest of the goods for the beer-house would be purchased by the new owners.
-The plaintiff sold the manager cigars and other goods not knowing that he was no longer the owner.
Procedural History: The owner of beer-house items sued a beer-house for the price of goods and was awarded that amount. The owner of the beer-house appealed on the grounds that they should not be held responsible for the actions of their agent. The appeal was dismissed.
Issue: Should an undisclosed principle be liable for the contract entered into by his agent, if it is under the normal course for such an agent's duties.
Holding: A principle is liable for all the acts of the agent which are w/in the authority usually confided to an agent of that character.( The owner is held liable for those purchases his agent makes even without his approval.)
Reasoning: Under the doctrine of principle agent, the principle is responsible if it was doen in the scope of the job.
Dissent: Had the agent acted in the name of the owner then the owner should be liable, but as the agent acted in his own name the owner should not be liable.
QUERY: Watteau didn't sue Humble bc a principle is liable for all the acts of the agent…
The defendant argued, the existence of an undisclosed principle (that the agent was not to purchase a/t aside from ales and water), could defeat the apparent authority doctrine…however…in this case the agent violated the principle in a way that the plaintiff would have never known it was a violation, even had they known Humble was only an agent.
The most efficient outcome here is the difference btw the liability of an agent vs. the liability of a dormant partner…who would not be liable for the price of the goods.
The loss should be placed on the agent in the form of a salary cut.
The owner of the beer-house can avoid the loss at least cost…
In both NOBLE and COTNAM, they both claimed unjust enrichment…and the issue of VOLITION, comes to play.
150 Ky. 439, 150 S.W. 507 (1912)
No man can make s/o else their own debtor w/o their volition> entirely.
Why is the outcome in NOBLE diff than COTNAM?
-The degree of intermeddling was far more officious in Cotnam rather than in Noble: Even tho there was unrequested services…in NOBLE there was an unreq service done and they knew they didn't want it done. In Cotnam there was an unreq service done but obviously they would've req the svc if they were conscious.
Statement of the case: Teachers sue school board for reimbursement of funds they spent to run the school Facts: Teachers were contracted to teach. School board did not pay rent for school -room or buy supplies. Teachers purchased the supplies and paid the rent on their own.
Procedural History: The teachers sued for reimbursement. The trial court sustained the defendants demurer. The court of appeals affirmed.
Issue: Can one make another their debtors on their own volition?
Holding: No, the school board could have been req by mandamus at suit of any proper party to furnish a place for the conduct of the school.
Reasoning: They had their teaching contract, and if the board mad it impossible for them to teach, they had their right of action on their contract.
Query: In supp of an opp result:
1. There was a quasi contract.
2. or Implied in fact contract: you asked for it, you got it, pay for it> while the svcs were going on the school board know about it and they didn't stop it.
3. or principal agency concept: the contract established them as the agent, and they were acting on behalf of the principle. (it cant work bc then the agent is suing the principle, its not the sellers suing the school board)
but can use it in a concept of Subrogation- (like insurance comp. who reimburse you for your damages and, then they have the right to stand in your shoes to sue and make that money back) you sell s/o the right to stand in your place, in exchange for them to pay for your depts. So… when the teachers bought the things for school they could've become a subrogation for the suppliers.
13. COTNAM v. WISDOM> plaintiff Dr.
83 Ark. 601, 104 S.W. 164 (1907)
Statement of the case: Physicians sues a decedent's estate for services rendered to the patient.
Facts: A man was severely injured in an accident. While he was unconscious a physician was summoned to attend to his needs. The physician called upon a surgeon, and together they rendered services. The patient died regardless.
Procedural History: Physicians sue for $2000, and are granted $400. Defendants appeal on the grounds that evidence of the decedent's estate and inheritors should not have been submitted to the jury. In appellate court the decision was reversed.
Issue: Can one enforce a contract for s/t he already had an enforceable duty to do.
Holding: No, there was no consideration-whereby both parties would benefit.
Reasoning: Why should the employer have to pay more for the same services? The employee was already bound in contract for a lesser amount.
Notes: Inconsistency btw this case and Hurly (where physician is summoned) is, that case a physician was not bound in a contract…but here the decedent is.
If the decedent had a daughter that said, “do a/t poss. I will pay…”, she would not be liable bc he sent the bills first to the decedent…assuming he (his estate) is resp…he did not take the promissory note of the daughter at face value.
Query: The financial position of a patient is not a relevant consideration in the setting of a doctor's fee in this case bc in order to do so the financial condition of the patient must be a factor contemplated by both parties when the services were render and accepted. This could not apply to a physician called in an emergency.
A quasi contract merely req a reasonable comp for services rendered. The services are the same no matter who the patient is. The surgeon is entitled to fair comp for his time, service and skill.
The claim that was indulged in Cotman but denied in Noble was the right to refuse to enter contract.
14. DAVIS & CO. v. MORGAN
117 Ga. 504, 43 SE 732 (1903)
What was the nature of the employment? Must have been s/o req indv skills bc he's offered a 25% increase to stay. Before the end of the contract he was fired, so it had to be s/t where he was not req full time, like seasonal employment.
In this case there wasn't an exception given bc it was done in bad faith…the employer didn't have total free volition. He had to pay more bc of the tactics of the employee.
(left him in a bind), under DURESS- the contract was started already and the employer had no other options.
The court uses social control to strike down.
Statement of the case: Employee sues employer for additional wages promised.
Facts: Employee had a year- long contract to receive $40 a mo. The employee got a higher offer elsewhere, and so the employer offered him more per month to stay. The employer terminated employee's job early.
Procedural history: Employee sued for lost wages and extra amt promised him.
Issue: Is a nudum pactum- bare contract w/o consideration on both parts.
Preexisting duty rule- if there is an existing preexisting duty, it cannot be used again as consideration (you cant promise to do s/t that you already promised to do)
Holding: No there must be consent on both parts.
Reasoning: Why should the employer have to pay more for the same services? The employee was already bound in contract for a lesser amt.
UCC § 2-209: MODIFICATION, RESCISSION AND WAIVER
An agreement modifying a contract w/in this Article needs no consideration to be binding.
A signed agreement, which excludes modification or rescission except by a signed, writing, cannot be otherwise modified or rescinded, but except as btw merchants such a req on a form supplied by the merchant must be sep signed by the other party.
The req of the statute of frauds sec of this article must be satisfied if the contract as modified is w/in its provisions.
Although an attempt at modification or rescission does not satisfy the req of subsections 2, or 3, it can operated as a waiver.
A party who has made a waiver affecting an executory portion of the contract may retract the waiver by reasonable notification received by the other party that strict performance will be req of any term waived, unless the retraction would be unjust in view of a material change of position in reliance on the waiver.
The promise here was not gratuitous, because it was not as a result of s/t unexpected that just turned up. The employee knew the job demands and the salary he was getting for it.
Query: This is in this section because “individualistic ideals and their erosion” the fact that there was NO CONSIDERATION shows the erosion of this contract.
15. SCHWARTZREICH v. BAUMAN-BAUSCH, INC.
231 N.Y. 196, 131 N.E. 887 (1921)
Schwartzreich was a designer of coats.
To have a new contract there would have to be: a. a contract
b. A contract to terminate
If there were a 3-step approach, there would be a period in time w/o a contract, w/ a moment in time where they are not obligated. But…there was only a 2 step contracts: their argument is that the 2nd contract nullified the 1st and was a new contract at the same time.
2 Corbin § 7.15 (1993): this is circular reasoning; they should have just labeled this as an exception to the general rule.[Handout from read if you will pile]
Here the employee came to the employer b4 the contract started and so the employer had more options.
Statement of the case: Employee sues for the difference in salary of his new contract.
Facts: Employee has a contract for $90. When employee is offered more money from a diff comp, employer offers employee more money, making a new contract.
Procedural History: Employee sues and jury rules in his favor. The trial justice dismissed it. The appellate term reversed this ruling, for the verdict of the jury. Appellate term affirmed.
Issues: The preexisting duties were terminated by a new contract. It would take a contract to terminate a contract.
Contracts can be fulfilled by: 1. Performance
Does one contract end when another begins?
Holding: There is no longer a preexisting duty w/ the new contract.
Reasoning: New consideration is nec. Otherwise why would s/o agree to paying a higher price for the same services.
Notes: Posner says: Bc the higher price offered by a 3rd party, is a genuine opportunity, the promisor should be allowed to terminate subject only to his obligation to make good the promisee's loss form the breach. Hence he should be allowed ot negotiate w/ the promissee over a modification that will compensate the promiser for the lost opportunity.
However Bauman-Basch has been a victim of compulsion!
Query: the courts circular reasoning was that the employee would be losing out by working for Bauman under the same contract, and so he should be allowed to renegotiate for a lost opportunity.
“ IN THE ABSENCE FO FRAUD OR WARRANTY, THE VALUE OF HE PROPERTY SOLD, AS COMPARED WITH THE PRICE PAID, IS NO GROUND FOR A RESCISSION OF THE SALE”
-If s/t is a diff in degree= not rescindable
-If s/t is a diff in kind= may be rescindable
-When you buy s/t that is worth more and you don't tell the seller it's fraud.
- The transfer of a house is done w/ 1. contract 2. closing w/ deed-actual land.
If it's before closing and you find out you paid more for it than worth, you can't rescind b/c of Caveat emptor- buyer beware
Opp is Caveat venture- seller beware
SALE of LAND-a/t on the land as a fixture, and a/t on it up to the sky and mineral rights underneath
If you sell a house and then you find out it's worth more, can't rescind.
If you sell a house and then find out there's oil on it, b4 closing it's not rescindable.
What's the diff btw a house w/ oil under and w/o? diff in value
Is the difference in kind or difference in degree a difference in kind or a difference in degree?
If things can switch from being a diff in kind to being a diff in degree then…
64 Wis. 265, 25 N.W. 42 (1885)
Statement of the Case: A woman sues to recover the possession of a diamond.
Facts: A women takes her stone into a store w/o knowing what it is. The jewelry storeowner offers her $1, and she refuses to sell it. Later the woman comes back to the store and offers to sell it for the previous price. She sells it for $1, but when she finds out the true value she gives the dealer $1.10 and demands it back, but he refuses.
Procedural History: The case went to trial court where the judge directed a verdict for the defendants. The plaintiff moved for a new trial and the motion was denied. The appellate court affirmed
Issue: Can the sale be rescinded, and so revest the title to the plaintiff?
Holding: In the absence of fraud or warranty, the value of the property sold, as compared with the price paid, is no ground for a rescission of the sale.
There are no just reasons for rescinding the sale. The only reasons for rescinding a sale are: 1. The vendee was guilty of some fraud in procuring a sale to be made to him; 2. There was a mistake made by the vendor in delivering an article which was not the article sold (a mistake ads to the identity of the thing sold)
Reasoning: 1. Plaintiff cannot allege that she was induced to make the sale. 2. There is no pretense of any mistake as to the identity of the thing sold.
Notes: 1. `Pure', contract doctrine- is blind to details of subject matter and persons.
2. The risk of mistake was properly placed on Mrs. Wood.
3. How should a court decide on whom to place the risk, in the absence of an express allocation by the contracting parties?
Kronman: it should be placed on the better information-gatherer in order to reduce “the transaction costs of the contracting process.”
Boynton would be the better information gatherer as he is in the field.
Was the buyer “unjustly enriched”? Or was it “just” because Mrs. Wood assumed the risk that the stone was more valuable than the two parties had originally thought?
This is a contract based on mistake.
4. Had Mrs. Wood discovered the value after they made the agreement but b4 she handed it over she would have been entitled to keep it as in Sherwood bc the quality had changed for life.
Doctrine of Laesio enormis- a seller could rescind a contract for the sale of land, if the price received was less than one-half of the reasonable price; the buyer could validate the contract by ageing to pay the full price.
Query: To determine the value of a gem stone one should go to an appraiser. The legal protection would be for the value they assessed it for.
It would not have made a difference if D knew value of gem- stone and just offered $1, because it was the seller's resp to check it out.
If the jeweler sued in replevin, he might not get the stone bc it changed in value.
Policy Questions: No an estimate should not be held resp…
Restatement of Contracts 2nd §§ 151 and 154
[Handout from read if you will pile]
66 Mich. 568, 333 N.W. 919 (1887)
Statement of the case: Man sues a cattle owner for replevin for possession of a cow.
Facts: A man went to buy a cow and was told it was probably sterile. He bought it anyway. When he came to get his come the defendants refused to let him have her bc she was w/ calf, and so she was worth more bc she was not barren.
Procedural History: The trial court found in favor of the plaintiff, but the appellate court reversed judgment and granted a new trial.
Issue: Is there a misapprehension as to the substance of the thing bargained for, if the thing if the difference is material to the substance of the whole contract.
Holding: A party who has given an apparent consent to a contract of sale may refuse to execute it, or to avoid it if the assent was found upon the mistake of a material fact.
Reasoning: She is not the animal the plaintiff bought. The mistake of the parties went to the whole substance of the agreement. The mistake changes the animal's quality substantially for all time.
Dissent: There was no fraud involved. “The mistaken party, acting entirely upon his own judgment…is remediless if he is injured through his own mistake.”
Notes: 1. In Kennedy v. Panama Mail Co., Kennedy subscribed for 1600 shares at £7 per share. But the defendant exceeded their authority in negotiating the contract, which was repudiated by the government. A second contract was negotiated to the mail company. In the end the mail company won a suit against Kennedy for the original amt and the counterclaim for the lesser amount. This claim is like Sherwood bc the item has changed in value like the cow (unlike the diamond). It supports the majority opinion in Sherwood.
2. Posner: “how would the parties have allocated the risk?” the owner in most cases has superior access to info concerning the actual o r probable characteristics of his property (like a seller of house is liable for any latent defects).
Had the plaintiff been a butcher it wouldn't have made a diff, its still the sellers risk that should have been taken.
3. In Smith v. Zimbalist, a violinist bought a violin but it was worth less then he originally thought. Smith sued and lost for the unpaid balance bc the “parties to the contract are not bound where it appears each of them is honestly mistaken, and Smith had warranted by signing that the violins were genuine. Had Zimbalist wanted to recover the $2000 the court would've prob said at the time u paid that amt it was worth to you that…if it changed bc u didn't check out the value u risked it…
5. In AIP c. V. Walker, walker sold land to AIP for one price to be used for redevelopment. Only after the contract was signed the Dept of Environment listed the property and the building on it could not be broken down. The value of the prop went down. AIP sued to pay the lesser price but lost.
6. In City of Everett v. Estate, money was found in a safe sold at an auction. The Estate was given back the money bc they had not intended to sell it w/ the money inside, only the safe itself.
7. In Cady v. Gale, an oil-bearing land was discovered after sale, the Supreme Court of Appeals reversed the lower court and ordered the seller convey his interest in the land and account to he buyer for interim rents and profits.
8. In Bell v. Lever Bro LTD., (1931), the Lever Bro comp paid Bell for an early termination of contract, but they could've done it w/o money bc Bell had breached the contract by divulging comp secrets. The trial court and appellate division found in favor of the Lever Bro but the House of Lords reversed judgment in favor of Bell bc they are bound and are protected form the effects of facts unknown to them.
3 Corbin §§597-603, 605-612, 614
[handout from the read if you will pile, must photocopy?]
Note w/ Sherwood: “P believed cow would breed”, this is of no consequence because it was the sellers own duty…
15 US (2 Wheat) 178 (1817)
Statement of the Case: A buyer files suit to recover possession of tobacco.
Facts: Be At the time of this incident there was the war of 1812, and the British was blocking the port of New Orleans.
This limited the demand of tobacco, to w/in the city (they were unable to export tobacco there), reduced demand so…price went down.
A treaty leading to the removal of a blockade would increase the value of the tobacco.
Buyer had better sources of the knowledge of cessation of hostilities. He did not share this knowledge w/ the seller.
Before completing a purchase for tobacco, a seller asks the buyer if he knows of any info, which might enhance the value of the tobacco. The buyer remained silent, upon which the purchase was made at a certain price. The seller delivered the tobacco to the buyer after the news of the treaty had become public, but he subsequently took possession of the tobacco, whose value had risen. > bc of fraud.
Procedural History: On the issue of whether or not there was fraud, the judge took this issue out of the jury's hand. Judge issued a directed verdict for plaintiff on the facts. The appeals court reversed judgment and remanded for a new trial, to let the jury decide. Further, the judge should charge the jury, which a buyer is not bound to disclose, but he's not allowed to mislead. But his measure of nondisclosure calculated to misleads.
Issue: Was buyer's method of nondisclosure done to mislead the seller? Did he intend to mislead the sell by his actions?
If freedom of contract is unlimitied there can be no duty to deal fairly. The common law is: Caveat emptor and caveat vendador>neither has to disclose, but they cant mislead either.
Holding: He was not bound to communicate this info, if the means of acquiring it were equally accessible to both parties. But each party must not impose on the other.
Reasoning: The jury must decide whether one party practiced any imposition.
Note: 1. According to Restatement 2nd §161(d): where the other person is entitled to know the fact because of a relation of trust and confidence between them. Today this case would be decided that the buyer had an obligation to share the information with the seller.
2. Verplanck: the concealment of such facts is unfair and a breach of confidence. There is the diff btw what a moral person ought to do and what the standard person would do.
Prosser: “the law…full disclosure of all material facts must be made whenever elementary fair conduct demands it.”
3. Kronman: info generated by chance need not be made available, but info by deliberate searching should be.
RC 2d §161: A person's nondisclosure of a fact known to him is equivalent to an assertion that the fact does not exist in the following cases: (a) When he knows that the disclosure of the fact is necessary to prevent some previous assertion from being a misrepresentation or from being fraudulent of material.
(b) Where he knows hat disclosure of he fact would correct a mistake of the other party as to a basic assumption on which the party is making the contract an if non-disclosure of the fact amounts to a failure to act in good faith and in accordance with the reasonable standards of fair dealings.
RESTATMENT of CONTRACTS 2d 161- in a Fiduciary relationship- (siblings, lawyer client), law imposed by society, to act fairly, competently, loyal> not req in contracts at large.
19. SWINTON v. WHITINSVILLE SAVINGS BANK
311 Mass. 677, 42 NE 2d 808 (1942)
In this case the termites a. were not readily noticeable b. the seller knew about them. The common law position, the seller need not disclose this info (even if it would effect the sale). The parties bargaining w/ ea other are free, absent fraud to disclose or not.
Statement of the case: A buyer sues the seller of a house for concealment of info.
Facts: A man buys a house and subsequently discovers it has termites. He is forced to invest a lot of money to fix up the house. The seller knew of this problem.
Procedural History: Defendants demurer is sustained. The appeals court affirmed this motion.
Issue: Is a seller held liable for concealment of info.
Holding: No, there is a law of non -liability for non -disclosure.
Reasoning: It would set a bad precedent.
Notes: There is an aspect of implied warranty…
In Obde and Cohen, the courts rejected the Swinton case based on the assertion that it is a frauds for a seller to fail to disclose a known defect that cannot be discovered by means of a reasonable examination, whether not the buyer asked specific questions regarding the possibility of its existents.
There have been changes to common law caveat emptor (buyer) as a result of statutes. By the UCC (adopted in 49 states). Significant therein is the absolution of caveat emptor in regard to goods, due to an implied warranty, that they will fit for the purpose they are sold (it can be disclaimed, “as is”-w/o warranties)
Pre-UCC-no warranties unless explicit
Post-UCC-implicit warranties>rejects caveat emptor
In regard to real estate many states have enacted laws, req seller to fill out detailed forms of mandatory disclosure (this is not a warranty)…this is virtually non existent bc most houses today are bought w/ bank loads, req inspections.
NY recently has passed additional laws of mandatory disclosure by statute… to disclose info known to the seller> but does not provide a warranty…
BLAIR v. NATIONAL SECURITY INSURANCE CO (1942), “if I know land is oil bearing and he doesn't it's not dishonest it's `smart business'. (w/o which there'd be no competition.
21. STERNAMAN v. METROPOLITAN LIFE INS. CO. (1902), “the power to contract is not unlimited”
-certain contracts are not illegal, but a promise or term as being unenforceable on grounds of public policy.
When it says a contract is void as an issue of public policy…ex. I contract you to rob a bank…it's void a deal made bc it goes against public policy.
Ex. If landlord puts in a clause…saying the landlord is not liable for negligence…it is void bc its in violation of public policy (Diff Than the legal issues.)
SCHOOL TRUSTEES OF TRENTON v. BENNETT
Concept of impossibility- legal term is the literal one, PAIRED OPP…if possible then its enforceable and there's liability… but if impossible it's impossible it's enforceable. (If A>B…If C>D)
Statement of the case: School board sues guarantors of contractors for failure to complete the job.
Facts: Builders were contracted to build a covenant. In middle of the job the wind blew down the house twice. The builders cease to build, claiming there was a defect in the soil that prevents them from building.
Procedural History: The trial court rules in favor of the plaintiff. The Supreme court affirms.
Issue; If a house falls down before its completion by reason of defect in the soil, does the loss fall upon the builder or the owner.
Holding: The loss falls upon the builder who must rebuild it. It was not impossible just more expensive, it is a lit. in impossible.
Reasoning: The builder entered into the contract and must complete it unless it is impossible.
Notes: Should the loss fall upon the most efficient risk-bearer.
Holmes: “The only universal consequence of a legally binding promise, is that the law makes the promisor pay damages if the promised event does not come to pass. In every case it leaves him free from interference until the time for fulfillment has gone by, and therefore free to break his contract if he chooses.”
Mid 19th c England (population and GNP-gross national prograss, doubled in that pd)-mid of industrial rev.
Pre Hadley rule: (shaped by the naivety and crudeness of the contemporary system)
A plaintiff could sue for damages if there was a breach of contract. The critical factor at that time was a liberal view of causation…(this happened, bc of this, bc of this ect). The consequences from the action to the next could still be felt…this was changed later on: to significantly narrow the ability to sue for causation. (Those effected several stages away could not.
9 Ex. 341, 156 Eng. Pep. 145 (1854)
Hadley's mill was steam powered…(technologically advanced…yet) there was a crane shaft> a mechanical device where the power is changed in its direction (to turn)
This crane shaft was hand crafted (unevenness of technology…steam-high, power, but mechanical crane shaft. The old shaft had to be brought to the company to be modeled after. The breach occurred bc the shaft was sent by canal…the old means of shipment as opposed to RR…the delay gave way to damages: TIME IS MONEY…the units for measuring time.
The legal system was underdeveloped.
Hadley sued Pickford for the claim of delay. Before going to trial however, they abandoned all claims regarding a. breach of contract- for especially quick delivery
They sued on the second claim b. policy- common carriers were obligated to deliver w/in a reasonable time.
(A move from status to contract= modernization) this case is peculiarly antiquated on this.
Hadley refashioned a substantive law change…damages should be awarded only for the natural consequences arising
Pre Hadley- can get for damages due to natural consequences: a. by not exacerbating damages on defendant's part b. the proximate cause proof-that the damage was caused by the breach of contract (cause could be shown over a long chain).
Post Hadley- natural consequence:
2-part rule: a. normal consequence-damages from breach of contract…these are the consequences that arise naturally over the natural course of things (if you breach there will be these causable outcomes…if seller decides not to sell goods to buyer ect)
b. Special circumstances- Even if it is damages not readily conceivable…when you enter into a contract you know that a consequence of a breach will be this special consequence.
(unless there was notice of special sit. Excluded)
Judge concluded: 1. No Hadley b. consequences= there was no notice of special services (that it was the only shaft and no business w/o it)> but…the carrier was told that there needs to be urgency… and the servant said there was special svc. Discrepancy! - The reporter heard what he did…but the judge heard otherwise. (This problem does not exist today…the court account is written by the judge).
2. No Hadley a. consequences= in the ordinary course of things it was not foreseeable that by the act of shipping your shaft that the carrier would know that a delay would consequence in lost profits (that a miller would not have a spare shaft, or that the mill would be stopped solely on the fact that the shaft was broken)>the issue appears to be one of fact not of law, whether or not it was `special'.
Later to get `special' consequences…you have to prove in essence the existence of an additional special agreement > TACIT agreement
UCC rejects this: consequential damages are available for any circumstances for which the seller had reason to know that a breach of the contract would lead to this consequence. {It converts Hadley a to Hadley b…that they are in the same boat…and it's a reason to know standard.}
3. The court should not take profits in mind when estimating the damages.
The case was sent back to the trial judge and told not to give it to the jury…just to find if damages (found there were none).
{This limited the liability of these corporations that were the economic systems of the industrial revolution.}
Query: Has free volition gained a free hold here? In point of Hadley B…there is no free volition bc one will only enter the contract if in case of unusual circumstances…you will be responsible.
Statement of the case: A miller sues a repair company for damages from loss of profits due to a delay.
Facts: A miller sends his crane shaft via a delivery service and asks when it will be delivered. They said the next day. It was delayed and the miller lost business in those days.
Procedural History: The trial court found in favor of the plaintiff. The appeals court (Exchequer
court) reversed judgment for a new trial due to mistrial re: rules.
Issue: Should the party that brakes a contract be responsible for more than the amount would be in a general such instance.
Holding: Only if the party knows about the special circumstance should they be obliged to pay for that extra amount.
Reasoning: “The amount which would have been received if the contract had been kept, is the measure of damages if the contract is broken.”
Notes: Holmes: “By subjecting all contract claims to a test of foreseeability, it diminishes the risk of business enterprise…”
Do you have to intend to be in contract to be in contract? If you intend to be in contract are you automatically in contract? If you specifically intend not to be in contract are you specifically not?
It depends- sometimes you are and sometimes you aren't.
Calling s/t a contract doesn't nec make it one…calling it not doesn't nec make it not.
Section 1. Contract as a promissory transaction
RESTATEMENT OF CONTRACTS SECOND
§1. CONTRACT DEFINED- a promise or a set of promises for the breach of which the law gives a remedy, or the performance of which the law in some way recognizes a duty.
1.1 Corbin §3 (1963): Contract has been made to denote 3 diff kinds of things in various combinations:
acts- of the parties expressing their assent, or some part of these acts.
document- a physical document executed by the parties as an operative fact in itself and as lasting evidence for their having performed other necessary acts expressing their intentions
legal relations- resulting form the operative acts of parties, always including the relation of right in one party and duty in the other.
§2 PROMISE- a manifestation of intention to act or refrain in a specified way, so made as to justify a promisee in understanding that a commitment has been made.
(the centerpiece of contractual obligation)
§3 AGREEMENT DEFINED; BARGAIN DEFINED- An agreement is a manifestation of mutual assent on the part of two or more persons. A bargain is an agreement or exchange promises of rot exchange a promise for a performance or to exchange performances.
§17 REQUIRMENT OF A BARGAIN- The formation of a contract requires a bargain in which whereis a manifestation of mutual assent to the exchange and a consideration.
§18 MANIFESTATION OF MUTUAL ASSENT- requires that each party either make a promise or bargain or render a performance.
§22 MODE OF ASSENT: OFFER AND ACCEPTANCE- 1. The manifestation of mutual assent to an exchange ordinarily takes the form of an offer or proposal by one party followed by and acceptance by the other party.
2. It may be made even though neither offer nor acceptance can be identified and event ho the moment of formation cannot be determined.
§23 NECESSITY THAT MANIFESTATIONS HAVE REFERNCE TO EACH OTHER- to a bargain
23.UCC §§ 1-101—1-109, 1-201—1-204, 2-102—2-106
UCC §1-201 GENERAL DEFINIONS-
(11) “Contract”- the total obligation in law which results form the parties' agreement as affected by this Act and any other applicable rules of law.
(3) “agreed” or “agreement”- the bargain in fact as found in the language of the parties or in the course of dealing or usage of trade or course of performance or by implication from other circumstances.
L.R. 2 K.B. 571 (C.A. 1919)
The court refuses to recognize this as a contract…based on the subjective intent of the parties… the judge was effectuating a long standing PUBLIC POLICY- not withstanding legal actions favoring the disillusion of marriage.
If he allows this to go thru…it will be a precedent for non marriage.
There was an offer, an acceptance…perhaps even consideration…but the courts ruled that this is not the type of agreement we'll enforce bc the parties did not intend for it to be enforced.
Statement of the case: A woman sues her husband for an agreed upon alimony.
Facts: They agreed upon an amount for which the husband would support the wife while they were still tog.
Procedural History: The wife wins in the trial court, but the husband is allowed to appeal.
Issue: Whether an agreement btw a husband and wife as an arrangement constitute as a contract.
Holding: No it is a common occurrence, and saying that it is one would be to set a public policy.
Reasoning: Even though there is consideration form both parties, they are not contracts bc the parties did not intend that they should be attended by legal consequences.
Notes: An intent to form a legal relation is a requisite for the formation of contracts…cannot be accepted. The law, not the parties, fixes the requirements of a legal obligation.
TINALEA clause-“This is not an legally enforceable agreement.”
Restatement 2d §21 c) - “contracts w/in the family present more of family law than of the law of contracts
§190- an agreement changing some essential incident of the marital relationship in a way detrimental to the public interest in the relationship is unenforceable on the grounds of public policy.
25. DAVIS v. GENERAL FOODS CORP.
21 F. Supp. 445 (S.D.N.Y. 1937)
An abstract idea cannot be the subject of a property right…unless…
General Foods says…compensation will be at our discretion, giving way to no legal consequence> the courts honor this.
The fact that no price was agreed to is no impediment of lack of express contract…
But Davis may say… “quasi contract”- unjust enrichment for General Foods.
But Davis may say … “implied in fact”- bc they asked for the idea they got it…now pay for it…but the court used it at own discretion.
Statement of the case: A women sues General Foods for breach of contract.
Facts: Women sends idea to General Food Inc. They acknowledge the idea and say she may be compensated at their discretion.
Procedural History: Defendant's motion to dismiss was granted. On appeal it was affirmed.
Issue: Is the reliance upon an alleged contract, a quasi contract or obligation implied in law.
Holding: The plaintiff did not rely upon it as a contractual obligation but trusted the fairness and liberty of the defendant, there is no contact and no misreliance upon a supposed contract, and no legal obligation.
Reasoning: Discretion is not a contract.
3 legal stratagems to find for p:
(hand out) Advertising, NYT, Oct. 16, 1997- No fear of good ideas for commercials, just potential lawsuits.
26. THE MABLEY & CAREW CO. v. BORDEN>plaintiff
129 Ohio St. 375, 195 N.E. 697 (1935)
They basically gave her a life insurance policy…if she worked till her death they'd pay her beneficiary a specific amount…to retain her until she died.
But the certificate says: this is a purely voluntarily and gratuitous measure…and carries no legal obligation. (If we dishonor our promise you can't sue us.)
In this case they sought s/t (of value) and they got it= consideration, this contract is a Unilateral contract- a promise for a service (ill give you a if you do b)
Bilateral contract- a promise for a promise (ill give you a for b)
The court finds that there is a unilateral contract…there was an offer…and acceptance (she stayed on).
This is enforceable…you induced s/o to do s/t which she did not have to do…so we will compel you to honor it.
Statement of the case: A beneficiary of a deceased woman sues the company she worked for to recover amt promised.
Facts: A woman works for a company. In appreciation and incentive to keep her there they issue a certificate stating that if she dies while employed, her beneficiary signed on the certificate will receive the amt of the employees last year salary.
Procedural History: Trial court finds in favor of defendant on grounds that the certificate was not a binding contract. Appellate division reverses. Court of Appeals affirms in favor of plaintiff.
Issue: Is a certificate issued for one's beneficiaries, gratuitous, or as incentive to continue work.
Holding: The certificate was an inducement for the employee to continue in the employ of the company.
Reasoning: There is consideration on both parts. Employee can leave more to her beneficiary, employer can ensure a loyal employee.
Notes: A contract was intended by the defendant.
34 Mich. L. Rev. 129, (1935)- It is generally accepted that where it is apparent that there was no intention to contract there can be no contract.
Williston: “the law, not the parties, fixed the requirements of a legal obligation”
Addison 261 (Westmoreland County Ct., Pa. 1795)
Suit in replevin- seek the return of an object that is wrongfully possessed by s/o else…bc the horse died…it turned for a suit in damages.
Judge finds that the buyer did not believe that the seller was serious…so in taking possession of the horse he did so w/o a contract. Even though objectively the nec for a contract existed, but subjectively they found there was no contract.
The jury awarded the plaintiff = to $400 today. By doing so they are saying that even though the law says the buyer owes the money, he's in fault…by in large the seller is in greater fault than the buyer, so he's only awarded a tiny amount of what the horse was worth.
Statement of the Case: A man sues another for replevin of his horse that he allegedly sold him.
Facts: A man sells another his horse “in jest” for £5 ($250- today). When the seller asks for the horse back the buyer refuses. [Worth at least $25,000]
Procedural History: The jury found for the plaintiff for £8 ($400- today).
Issue: Is a contract w/o intent, seriousness, and fair both parties binding.
Holding: No, the amount is an indication that the intent of the owner was not to sell.
Reasoning: The seller was obviously joking as the jury interpreted it as such and awarded him more than the horse was allegedly worth.
159 Minn. 423, 199 N.W. 90 (1924)
Statement of the case: Landlord is suing tenant for rent. Tenant counter claims for loss of cattle due to breach of contract.
Facts: Tenant had land and running a business that wasn't doing well. The landlord is concerned about getting paid. Landlord told tenant to increase his cattle stock and could only do so if landlord assured a steady water supply. Tenant claims landlord assured that he would.
If there were a contract (but there wasn't)…what would be the contract?
If tenant buys additional cattle… landlord provides water. This is a unilateral contract> a contract for a promise.
There's consideration- because by providing water and you increase your business, it will increase the likelihood of you paying me the rent.
Procedural history: The trial court denied defendant's counter claim. The appeals court affirmed.
Issue: was there a contract.
Holding: The court rules that the words used: “Minnesota hasn't failed us yet…” does not constitute a contract. It is too indefinite to be a promise (an offer).
Reasoning: Contracts must be certain in terms and not so indefinite and illusory as to make it impossible to say what is promised.
Restatement of Contracts 2d §33
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.
The terms of a contract are reasonably certain if they provide a basis for determining the existence of a breach and for giving an appropriate remedy.
The fact that one or more terms of a proposed bargain are left open or uncertain may show that a manifestation of intention is not intended to be understood as an offer or as an acceptance.
§ 2-204. Formation in General.
(1) A contract for sale of goods may be made in any manner sufficient to show agreement, including conduct by both parties which recognizes the existence of such a contract.
(2) An agreement sufficient to constitute a contract for sale may be found even though the moment of its making is undetermined.
(3) 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.
* Restatement & UCC seem to differ here:
Restatement says even if manifestation of intention is intended to be understood as offer, not a contract unless terms = “certain” (must be able to provide basis for determining breach & remedy) if terms are left uncertain, may be purposefully not a contract
UCC says even though terms are left indefinite & even if moment of making contract = undetermined, if parties intended to make a contract & reasonably certain basis for giving appropriate remedy, it's a valid contract.
Query: The contract alleged by p is: “Why don't you get some more cattle on here and make good use of all that grass and make some money…Never mind the water, John, I will see there will be plenty of water…”
27a. SULLLIVAN v. O'CONNOR> it is not common for a suit against a physician for breach of contract. (Most likely breach of contract.)
363 Mass. 579, 296 N.E. 2d 183 (1973)
If there were a contract what would it be?
I promise to make you a good nose…if you pay.
Physician argues: a. I never made that promise.
b. The ordinary prudent person would not seriously believe and interpret that, “this surgery will enhance your beauty” is warranty to guarantee improvement. (Like Armstrong…there it was not serious and here it was not a warranty- only in a goods case.) To sustain the burden of proof you need a lot more to show that there was warranty.
Statement of the case: Patient sues physician for breach of contract and malpractice.
Facts: A woman gets a nose job and it is worsened. She is forced to have an additional operation to try and correct the damages…but to no avail.
Procedural History: Plaintiff wins in trial court. Defendant appeals on the grounds that the judge wrongly charged the jury with extraneous info.
Issue: Can a physician be held liable for damages incurred when a promise does not result in the expected? Holding: Yes, the expected outcome was not reached.
Similarity btw the doctor's claim and p's claim in Armstrong = there was no actual contract as there was the lack of the seriousness element involved.
28a. SHAHEEN v. KNIGHT> This case makes clear that a doctor can contract…(its rare) so as to be able to be sued for a breach.
Statement of the case: Man sues physician for breach in contract resulting in major expenses.
Facts: Physician performed vasectomy on man to make him sterile. The man got his wife pregnant and now has another child.
Procedural History: The court rejected defendant's preliminary objections for the complaint, but later found in favor of defendant.
Issue: Was there a contract to guarantee no children would be born due to a vasectomy?
Holding: There was a contract…but the court chooses not adhere to it.
Reasoning: It would be against public policy to allow for such a decision. No, to allow damages in a suit as such would mean that physicians would have to pay for the fun, joy, ect that comes with child rearing.
31. INTRO to SECTION 2: 3 Corbin §§ 541, 562; 1 Corbin §§ 1.19, 1.20 (1993); UCC § 2-305; Restatement of Restitution, § 107, comment b and §§ 151-155;
Casebook pgs 866-868: The Unruliness of Words…
Subjective theory of contracts- “meeting of the minds” v. objective theory
HOTCHKISS V. NATIONAL CITY BANK OF NY, 200F. 287, 293 (SDNY 1911), aff'd, 201F 664 (2d Cir. 1912), 231 US 50 (1913).
Learned Hand: “A contract has n/to to do w/ individual intent of the parties…it is an obligation by law to certain acts of the parties…words…represent a known intent.
1 WILLISTON ON CONTRACTS §95: “If a written contract is entered into, the meaning and effect of the contract depends on the interpretation given the written language by the court.”
RICKETTS v. PENNSYLVANIA RR, (1946)
`actual intent' theory induced much fictional discourse which imputed intentions the parties did not have…but objectivists also went too far: 1. Treated all contractual agreements same way 2. Excluded
as legally irrelevant, consideration of the actual intention of the parties.
2 theories divergent from objective and subjective: 1. `Assumption of risk'- the parties assume the risk that the facts upon which the contract is mad, may prove to be non-existent. 2. Business is conducted on the assumption that those who bargain are fully informed as to all vital facts…a contract based on a mistake to any such fact…should be set aside in order to prevent unjust enrichment to he who made the mistake.
MARTIN v. CAMPANARO>plaintiff
156 F.2d 127 (2d Cir. 1946)
Statement of the case: Employees sue trustee of comp. for increased wages suggested.
Facts: Employees have a series of one yr contracts. During negotiations for a new contracts, employees continued working at latest contract's salary. The War Labor Board entered an order recommending pay increase retroactive to the day the last contract had expired. Defendant refused.
Procedural History: District court found in favor of the defendant because the implied in fact contract created by the conduct of the parties contained the same terms as the old contract. Court of Appeals reversed.
Issue: Is an implied in fact contract to be upheld here when the considerations of the parties were clearly not in a continuum.
Holding: No, although the parties continues to perform, they have mutually assented to a new contract bc the union was seeking higher wages.
Reasoning: They are entitled to recover on a `quantum merit basis'- 1. contract implied in fact to pay the reasonable value of the services. Or 2. to prevent unjust enrichment the claim and may recover on a quasi- contract, as if … for that reasonable value.
Section 2. THE TRIPARTITE DISTINCTION OF CONTRACTS
Express> genuine contract, source of obligation= intent of parties
Implied-in -fact> genuine contract, source of obligation= intent of parties (only diff btw express, is that this type is circumstantially proved.)
Implied-in-law (quasi)> source of obligation= imposed to bring justice w/o reference to the intention of the parties.
-Courts do not make contracts for the parties, they carry out the intent of the parties.
YOUNG AND ASHBURNHAM'S CASE
3 Leon. 161, 74 Eng. Rep. 606 (C.P. 1587)
Statement of the case: Man sues for price of food taken by defendant as a guest at his inn.
Facts: Young owned inn. Defendant took food but the p and d had not agreed on a price. D didn't pay.
Issue: Will an action of dept lie where parties didn't; agree on a price.
Reasoning: There was no such thing as an implied contract.
HERTZOG v. HERTZOG> Claim of express contract by father to son.
Statement of the case: Man sues father's estate to collect wages promised in an alleged contract.
Facts: Man works for his father and lives there till his father's death. His wife does too. Father dies and his new wife inherits all. Man claims there was a contract btw him and his father for a salary that he is entitled to.
Procedural history: The court finds no express contract. The court rejects implied in fact contract…bc you asked for it you got it… and there was expectation of payment…but in this case…father asked for it…he got it but AFFILIAL RELATIONSHIP…payment was not expected (bc family).
This is a rebuttible presumption to prove he expected payment….but he didn't prove it.
The lower court rules in favor of the son. The higher court reversed and ordered a new trial.
Issue: Is there a contract.
Holding: No there is no evidence of a contract, the evidence presented leads us to believe in the absence of one.
Reasoning: If it were not a parent and child one might assume contract bc there would be no other purposes, but in this case it is seemingly evident that the son got room and board and was not merely a servant.
320 Pa. 408, 182 A. 699 (1936)
Claimants of estate: 1st - Government in taxes
2nd- Officials (Lawyers ect.)
4th- legatees (Beneficiary or statutory heir…only after creditor is paid)
Woman wants to boost herself from legatee to creditor (manager) bc if there's not enough money for creditors, legatees don't get anything.
She's being greedy…so they deny her bc they say there is no contract.
Statement of the Case: A widow sues her husband's estate for wages owed.
Facts: A man dies intestate and wife gets half his estate. She sues for wages owed as his general manager.
Procedural History: The lower court does not find in her favor. The appellate court affirms.
Issue: Was there any contract.
Reasoning: “The policy of law req that one seeking to recover for services rendered a decedent, w/ whom there is a close family relationship, must show an express agreement in terms clear and unequivocal.”
CROPSEY v. SWEENEY> this case cries out for a quasi contract. This is the wife as a housepainter…she thought she was contributing…but it was…to the wrong marriage (house).
Statement of the case: Women sues supposed husband's estate for services.
Facts: Man is married and sep from wife. During sep remarries. Wife divorces on grounds of adultery. The courts never recognized his second marriage bc man convicted of adultery can't remarry in spouses lifetime. Bc they were never married supposed wife sues for wages as if a servant.
Procedural History: she is denied.
Issue: Can a woman collect as if there was a contract when clearly there wasn't?
Holding: no, there's no warrantee. >but this is not plausible rational
Reasoning: She should collect but as public policy she doesn't.
Statement of the case: Supposed widow sues husband's estate for what she would've been entitled to had she really been his husband.
Facts: Women marries man- a contract, based on the fact that he was not already married. They lived married for 14 years. When he died it was discovered that they were never really married bc he had a previous wife.
Procedural History: Woman loses in trial court but wins in appellate court.
Issue: May a supposed spouse recover damages for breach of warranty where decedent lacked legal capacity to marry?
Holding: Yes, she's entitled to warranty in the amount she would have receive dif she had legally been his widow.
Reasoning: There was fraud in the contract that she didn't know about.
62 Ill. App. 3d 861, 380 NE2d 454 (1974)
Statement of the case: Woman sues supposed husband for amt she'd be entitled to if they were really married.
Facts: Woman gets pregnant, and man says they will live tog as husband and wife w/o marriage. They live tog for 17 yrs…
Procedural History: Trial court denies plaintiff. Appellate court reversed and remanded.
Issue: Is one entitled to the benefits of marriage in the absence of a genuine marriage?
Holding: Yes if it is clearly proved that it was a `marriage' and not just a sexual orientation.
Reasoning: All 3 types of contracts were involved.
An implied in fact contract exists when svc rendered w/o express contract, and must pay.
*But exception: if claiming party is part of same family= law assumes done gratuitously
This presumption is an assumed biased…that can be proven otherwise.
Hypo: Good Samaritan son…would probably claim more than the rest of the children.
Factors that can make the presumption weaker or overcome> common sense elements:
If the claimant left his home to take care of the ailing relative
The degree to which the work benefited the relative.
The defendants motive at having work done.
***5. Who are the relevant parties?
Who are the claimants…are they unsecured creditors, or the legatees? Those factors would have to be taken into acct.
6. To minimize claims after the decedent passes on…to eliminate fraud…and will contests…Changes the decedent could've made but didn't.
The easier it is to undo the will the more room there is for fraud.
34. COTNAM v. WISDOM> plaintiff Dr.
83 Ark. 601, 104 S.W. 164 (1907)
Statement of the case: Physicians sues a decedent's estate for services rendered to the patient.
Facts: A man was severely injured in an accident. While he was unconscious a physician was summoned to attend to his needs. The physician called upon a surgeon, and together they rendered services. The patient died regardless.
Procedural History: Physicians sue for $2000, and are granted $400. Defendants appeal on the grounds that evidence of the decedent's estate and inheritors should not have been submitted to the jury. In appellate court the decision was reversed.
Issue: Can one enforce a contract for s/t he already had an enforceable duty to do.
Holding: No, there was no consideration-whereby both parties would benefit.
Reasoning: Why should the employer have to pay more for the same services? The employee was already bound in contract for a lesser amount.
Notes: Inconsistency btw this case and Hurly (where physician is summoned) is, that case a physician was not bound in a contract…but here the decedent is.
If the decedent had a daughter that said, “do a/t poss. I will pay…”, she would not be liable bc he sent the bills first to the decedent…assuming he (his estate) is resp…he did not take the promissory note of the daughter at face value.
Restatement of Restitution §116
SOMMERS v. PUTNAM BOARD OF EDUCATION
113 Ohio St. 177, 148 NE 682 (1925)
Statement of the case: Man sues school board for reimbursement of transportation of his children to and from school.
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