CONTRACTS CASES

Question 1

An OFFER must show INTENT to be BOUND IMMEDIATLY upon acceptance, not just an invitation to negotiate.

Answer 1

Lonergan v. Scolnick:

SALE OF LAND USING AD IN PAPER. MAIL COMMUNICATION WAS BAD. SOLD TO THIRD PARTY.

Question 2

A counteroffer acts as a rejection of the original offer.

Answer 2

Normile v. Miller

THE DEFENDANT THOUGHT THE COUNTER OFFER WAS AN EXCLUSIVE OPTION.

Question 3

always use the PREDOMINANT FACTOR TEST.
if predominant factor test = goods, UCC rule article 2 governs formation

Answer 3

Princess Cruises

CRUISE SHIP REPAIR CASE.

Question 4

if the parties intended a LETTER OF INTENT to be binding then there can be an enforceable contract.

Answer 4

Quake v. American Airlines Inc.

AIRPORT LETTER OF INTENT CONSTRUCTION CASE.

Question 5

In a unilateral contract, once an offeree begins substantial performance, the offeror may not revoke the offer

Answer 5

Cook v. Coldwell Banker

EMPLOYER PROMISED AN END OF YEAR BONUS BUT BREACHED THAT CONTRACT.

Question 6

Shrinkwrap terms only become binding if the buyer has notice of them and the option to return the product.

Answer 6

DeFontes v. Dell, Inc.

SHRINKWRAP COMPUTER CASE.

Question 7

CONSIDERATION ONLY NEEDS MUTUAL DETRIMENT, not benefit

Answer 7

Hamer v. Sidway
UNCLE PROMISED AN UNCLE CASH IF HE DIDN’T DRINK UNTUL 21

Question 8

a promisorry note without consideration is just a gift.

Answer 8

Dougherty v. Salt

A CHILD’S AUNT GAVE HIM A PROMISSORY NOTE

Question 9

Promissory estoppel CAN override the Statute of Frauds when necessary to avoid injustice.

Answer 9

Alaska Democratic Party v. Rice

A WOMAN MOVED TO ALASKA BASED ON THE ORAL PROMISE FOR A JOB

Question 10

When either PAYMENT has been MADE AND ACCEPTED OR GOODS have been MADE AND ACCEPTED the SOF does not bar enforcement under the UCC

Answer 10

Buffaloe v. Hart

Sale of BARNS case with the accepted check signed by the non-enforcing party.

Question 11

CLICKWRAP terms must be presented such that a reasonable person would see them.G

Answer 11

Long v. Provide Commerce, Inc.
FLOWERS CLICKWRAP CASE.

Question 12

Even minimal actions, such as opening an envelope, can suffice as consideration when tied to a promise.

Answer 12

Harris v. Time, Inc.
R
NEWSPAPER SENT ADS REQUIRING ACTION TO GET A CALCULATOR

Question 13

Bring in principles of interpretation when there is ambiguity even after reading the whole contract.

Answer 13

Prochazka v. Bee-Three Development, LLC
There was ambiguity in a termination agreement for a lease.

Question 14

PAROL EVIDENCE IS NOT ALLOWED WHEN A CONTRACT IS FULLY INTEGRATED

Answer 14

Thompson v. Libby
SALE OF LOGS CASE

Question 15

WHEN A CONTRACT WOULD NOT MAKE SENSE OTHERWISE, WE CAN IMPLY TERMS EVEN consideration

Answer 15

Wood v. Lucy, Lady Duff

Lady Lucy Duff argued there was no binding contract because it did not explicitly outline consideration in her advertising contract.

Question 16

REASONABLE PERSON test when measuring satisfication.
GOOD FAITH TEST for artistic design

Answer 16

Morin v. Baystone Construction, Inc.

The parties were arguing what the standard of satisfaction was in their contract to build a wearhouse.

Question 17

There is an implied warranty to ensure that construction meets certain standards, even without explicit terms.

Answer 17

Speight v. Walters

Homeowners find defects in how their house was built after they bought it on the second market.

Question 18

Good faith includes an obligation to perform contractual duties with sincerity and intent.

Answer 18

Locke v. Warner Bros., Inc.
Warner Bros. made a bad faith pay or play deal.

Question 19

When terms are ambiguous, courts consider trade usage, course of performance, and prior dealings to clarify the meaning.

Answer 19

Frigaliment Importing

International Sales Corp.
Dispute over the term “chicken” in a contract.

Question 20

Unconscionability has both procedural and substantive elements that must be analyzed.

THERE ARE 2 TYPES:
PROCEDURAL UNCONSCIONABILITY: unfair BARGAINING POWER
SUBSTANTIVE UNCONSCIONABILITY: unfair TERMS

Answer 20

Higgins v. LA
This was the MTV cribs case. There were unfair terms and unfair bargaining power.

Question 21

COMMON LAW requires OPTIONS contracts WITH CONSIDERATION

UCC allows OPTION contracts WITHOUT CONSIDERATION.

Answer 21

Berryman v. Kmoch
OPTION ON LAND WITHOUT PAYING THE PRICE

Question 22

MULTIPLE DOCUMENTS can be read together satisfy the writing and signing requirement of the SOF.

Answer 22

Crabtree v. Elizabeth Arden

AN EMPLOYEE NEEDED TO PROVE THEIR EMPLOYMENT CONTRACT.

Question 23

Lying about matterial facts to induce a contract makes it voidable.

Answer 23

Syester v. Banta
A WOMAN WAS misled into purchasing dance lessons under false pretenses.

Question 24

Public policy can step in and dictate enforceability in employment contracts.

Answer 24

Valley Medical v. Farber

A doctor signed a noncompete. Public policy wanted doctors to keep working so they voiced the term.

Question 25

CHANGED CIRCUMSTANCES must come from UNFORESEEN EVENTS.

Answer 25

Hemlock Semiconductor v. Solarworld This was the CHINA Polysilicon case.

Question 26

Modifications in the common law require consideration. Surrendering the right to sue can be consideration. UCC AND CISG ALLOW modification in GOOD FAITH even WITHOUT CONSIDERATION

Answer 26

Alaska Packers FISHERMAN TRY TO MODIFY CONTRACT ON THE BOAT

Question 27

a party may be entitled to equitable relief for negligence that would cause forfiture

Answer 27

J. N. A. v. Cross Bay A TENANT WAS LEASING A RESTAURANT AND DID NOT KNOW ABOUT RELET DEADLINES

Question 28

Expectation damages are calculated by the contract price minus actual market price. (can be achieved by the reasonable sale of asset)

Answer 28

Crabby’s Inc. v. Hamilton MARKET VALUE OF A BREACHED RESTAURANT SALE WAS LOW

Question 29

Lost profits are recoverable even from third party contracts if they are known at the time of contracting.

Answer 29

Florafax A breach of contract lost the defendant a known third party contract.

Question 30

A party cannot recover for avoidable damages after learning of the breach.

Answer 30

Luten Bridge CONSTRUCTION COMPANY KEPT BUILDING THE BRIDGE AFTER BREACH

Question 31

Burden is on breaching party to show that the non-breaching party did not mitigate damages.

Answer 31

Maness v. Collins AN EMPLOYEE WAS FIRED UNFAIRLY BUT DID NOT MITIGATE HIS CONTRACT

Question 32

CAN NOT RECOVER ATTORNEYS FEES or PUNITIVE DAMAGES IN THE U.S. CISG does not mention attorneys fees: APPLY THE FORUMS LAW ON THAT.

Answer 32

Zapata Hermanos This was the international treaty case for the sale of cookie tins.

Question 33

Damages for breach include the additional expenses incurred to obtain substitute performance.

Answer 33

Handicapped Children’s Education Board v. Lukaszewski Teacher quitting and the school paid more to replace her.

Question 34

Damages MUST BE FORESEEABLE. communication of potential losses must be made at time of contracting.

Answer 34

Hadley v. Baxendale The mill was shut down due to a broken part. It got delayed in the mail but never clear that the mill's continued use relied on the delivery.

Question 35

Before Promissory estoppel, promises that were relied on had no way to enforce.

Answer 35

Kirksey v. Kirksey FAMILY MEMBER BREAKS PROMISE TO HOUSE A WOMEN AND FAMILY

Question 36

Even in family context, when a party reasonably relies on a promise and not enforcing it would cause inequality use promissory estoppel.

Answer 36

Harvey v. Dow A FATHER BREAKS PROMISED TO GIVE LAND TO HIS DAUGHTER. SHE BUILT A HOUSE

Question 37

Promises made to charitable institutions can be binding when the institution relies on the promise.

Answer 37

King v. Trustees of Boston University MLK PROMISED TO LET HIS DOCUMENTS LEFT AT BU

Question 38

The reliance on a promised pension causes detriment when broken and deserves damages under promissory estoppel

Answer 38

Katz v. Danny Dare, Inc. AN EMPLOYER BROKE A PROMISE FOR A PENSION THAT THE EMPLOYEE RELIED ON.

Question 39

If the sale is between merchants, a writing signed by the party seeking to enforce the contract where this writing was received by the other merchant and not objected to within 10 days of receipt

Answer 39

The Statute of Frauds under the UCC MERCHANT CONFIRMATION rule:

Question 40

WHAT ARE THE CANONS OF CONSTRUCTION

Answer 40

1. Construe ambiguities against the drafter. 2. Interpret the contract as a whole rather than in pieces. 3. Construe words according to their ordinary meaning unless it is clearly shown that both parties meant to use them in a technical sense. 4. Prioritize written provisions over typed ones. 5. Interpret the contract in a way that will make it enforceable. 6. Focus on specific terms rather than general terms. 7. Focus on negotiated terms rather than generic terms.

Question 41

PRINCIPLES OF INTERPRETATION TERMS

Answer 41

The contract language controls. (“Why didn’t you put it into the contract?”) Course of performance (How did the parties behave under the contract?) If an issue arises during the course of performance, a party needs to make its objection known immediately and consistently. Silence counts against you. Course of dealing (How did the parties behave in prior dealings with each other and other parties) Custom or trade usage (What does the industry do?); Only applies if people should reasonably know the industry

Question 42

restitution without a promise if INOFFICIOUS with intent to charge PREVENT HARM IT WAS IMPOSSIBLE TO GIVE MATERIAL CONSENT IF THEY COULD, THEY WOULD CONSENT

Answer 42

Pelo Pelo was hospitalized INVOLUNTARILY given MEDICAL CARE, which he REFUSED TO PAY.

Question 43

WHEN interpreting AN AMBIGUOUS CONTRACT USE WHAT THE REASONABLE PERSON WOULD ASSUME THE CONTRACT TO COVER.

Answer 43

C & J Fertilizer, Inc. v. Allied Mutual Insurance Co. There was an ambiguous term in an insurance agreement where the insurance holder thought that that coverage applies.

Question 44

A past act is not sufficient consideration for a subsequent promise unless there are special circumstances.

Answer 44

Mills v. Wyman FATHER PROMISED TO PAY THE CARETAKER OF HIS DEAD SON

Question 45

PAROL EVIDENCE IS ALLOWED to clarify ambiguous terms or supplement an incomplete contract.

Answer 45

Taylor v. State Farm Mutual Automobile Insurance Co. There was an AMBIGUOUS insurance coverage question in a SETTLEMENT.

Question 46

EVEN a breaching party can get restitutionary damages after the non breaching party is made whole

Answer 46

Lancellotti v. Thomas SANDWICH SHOP CASE.

Question 47

Restitution damages are appropriate when expectation damages are negative.

Answer 47

United States ex rel. Coastal Steel Erectors, Inc. v. Algernon Blair, Inc. NEGATIVE PROFIT CRANE CASE.

Question 48

Under the UCC: When a contract for goods does NOT SPECIFY A DURATION, the terminating party must provide REASONABLE NOTICE OF CANCELLATION.

Answer 48

Leibel v. Raynor Manufacturing Co. Garage door dealer case.

Question 49

A warranty claim has to be very clear. It did not work if the warranties are for different items or uses

Answer 49

Bayliner Marine Corp. v. Crow My cold call boat fishing case. A warranty claim has to be very clear. It did not work in Bayliner

Question 50

IF BREACH IS NOT MATERIAL YOU CAN NOT WITHHOLD PAYMENT

Answer 50

Jacob & Youngs, Inc. v. Kent A CONTRACTOR USED THE WRONG PIPE BUT IT WAS THE SAME QUALITY.

Question 51

Contracts involving minors can be voided, but restitution may be required to avoid unjust enrichment.

Answer 51

Dodson v. Shrader A minor, bought a truck and sought to rescind the contract after it was damaged.

Question 52

Mental incapacity must be proven with evidence to void a contract.

Answer 52

Sparrow v. Demonico Sparrow entered into a contract during a mental health crisis and later claimed incapacity. The court found that there was no medical evidence to support incapacity.

Question 53

Super Unfair contracts favoring one party may be invalidated for unconscionability.

Answer 53

Williams v. Walker-Thomas Furniture Co. Williams entered a furniture leasing contract with terms that were disproportionately favorable to Walker-Thomas.

Question 54

using economic duress to force a party into making the agreement is voidable.

Answer 54

Totem Marine Tug & Barge, Inc. v. Alyeska Pipeline Service Co. Totem Marine alleged it was forced into a settlement under economic duress due to financial pressure from Alyeska.

Question 55

undue influence is not just simply a bad setting, it has to be extremely clear

Answer 55

Martinez-Gonzalez v. Elkhorn Packing Co. LLC This was the employee arbitration case. Not good setting but no economic duress or undue influence.

Question 56

The court HELD that the material nondisclosure is grounds for rescission.

Answer 56

Hill v. Jones The sellers did not disclose termite damage to the buyers. The buyers claimed nondisclosure.

Question 57

public policy can step in and do what is best for the interests of another party affected by a contract.

Answer 57

P.M. v. T.B. This was the surrogate family case. The court found that enforcing the contract would not be in the best interest of the child, aligning with public policy.

Question 58

FULL LOSS OF VALUE is necessary for SUBSTANTIAL FRUSTRATION OF PURPOSE.

Answer 58

Mel Frank Tool & Supply, Inc. v. Di-Chem Co. Chemical Leasing case. Not all chemicals are prevented from being stored

Question 59

modification is unenforceable if entered through economic duress.

Answer 59

Kelsey-Hayes Co. v. Galtaco Redlaw Castings Corp. The molding manufacturer dramatically raised prices and the part manufacturer had to accept.

Question 60

Courts enforce the express condition, finding that strict compliance was required.

Answer 60

Oppenheimer & Co. v. Oppenheim, Appel, Dixon & Co. THIS WAS FOR A LEASE IN NYC Oppenheimer failed to meet a strict condition by not delivering a consent letter on time.

Question 61

Emotional distress damages are not recoverable unless they are for an emotionally based contract.

Answer 61

Erlich v. Menezes MESSED UP HOUSE CAUSES EMOTIONAL HARM

Question 62

There is no need to mitigate for lost-volume sellers: (if they sell a high volume already)

Answer 62

Jetz Service Co. v. Salina Properties A PARTY BREACHES A CONTRACT WITH A LAUNDRY MACHINE VOLUME SELLER

Question 63

RELIANCE DAMAGES RELIANCE DAMAGES: seek to return to the non-breaching party any expenses wasted on the contract. They are capped by the provable expectation damages. Also reduced by the amount the non-breaching party did or could have mitigated its losses. The category of expenses was foreseeable to the breaching party.

Answer 63

Wartzman v. Hightower Productions, Ltd. FLAGPOLE RISKY VENTURE IS DAMAGED. When calculating expectation damages is too hard we use Reliance damages. Walser v. Toyota Motor Sales, U.S.A., Inc. TOYOTA DEALERSHIP PROMISSORY ESTOPPEL CLAIM You can't use expectation damages under promissory estoppel. Courts have high discretion to limit damages under promissory estoppel.

Question 64

courts allow restitution to prevent unjust enrichment, even in relationships that are almost marrige.

Answer 64

Watts v. Watts PRETEND MARRIAGE CASE LEADS TO UNJUST ENRICHMENT.

Question 65

CHECK THIS P’s injuries are sufficient detriment and decedent’s bodily preservations a sufficient benefit to constitute consideration. D’s conduct also manifested intention to keep the promise. And, safe to assume that if there was time to exchange promises before the event happened, D would have agreed to the exchange.

Answer 65

Webb v. McGowin COWORKER PROMISES PAYMENTS FOR LIFE AFTER HAVING HIS LIFE SAVED.

Question 66

Restitutionary recovery is limited to the value of benefits not received or conferred unjustly.

Answer 66

Shaffer v. George Washington University COVID STUDENTS CASE.

Question 67

Even in commercial settings, When a party reasonably relies on a promise that induces action or forbearance, = promissory estoppel

Answer 67

Aceves v. U.S. Bank, N.A. US BANK PROMISED NOT TO FORECLOSE ON A HOUSE IF THEY DIDN'T FILE BANKRUPTCY

Question 68

Failure to make timely payments is a material breach. A material breach that undermines the contract’s fundamental purpose allows the non-breaching party to terminate.

Answer 68

Sackett v. Spindler NEWSPAPER COMPANY FAILS TO MAKE TIMELY PAYMENTS

Question 69

Specific performance is proper if 1. They can't be adequate compensated by damages 2. The difficulty of judicial supervision is less than the remedy’s effectiveness. 3. The defendants hardship is less than the plaintiffs benefits

Answer 69

City Stores Co. v. Ammerman

Question 70

An injunction may not be used to force a party to comply with an exclusivity provision in a personal-services contract.

Answer 70

Reier Broadcasting Company, Inc. v. Kramer

Question 71

when contracts are ambiguous, contracts may be enforced/modified to make them align with the justice.

Answer 71

Ricketts v. Adamson THE DOUBLE JEPORDY SNITCHING CASE

Question 72

a non-breaching party has no duty to mitigate damages when there is a valid liquidated clause

Answer 72

Barrie School v. Patch

Question 73

Courts can prevented full performance damages when it is disproportionate to the benefit gained.

Answer 73

Peevyhouse v. Garland Coal & Mining Co. PROPERTY DAMAGE DISCREPENCY CASE

Question 74

A Party Must make it clear when they are repudiating – clear manifestation of the intent not to perform.

Answer 74

Truman L. Flatt & Sons Co. v. Schupf sale of the asphalt plant

Question 75

When demands for assurances are not met, a party can end the contract

Answer 75

Hornell Brewing Co. v. Spry Arizona beverage case to the shady guy in Canada