Introduction to Contract Law

Question 1

Lucy v. Zehmer: What is the objective evidence for there being a contract?

Answer 1

When lucy asked for zehmers wife to be included resulting in the contract being edited to include his wife, lucy contacting an attorney after contract negotiations at the bar, etc.

Question 2

specific performance

Answer 2

a court is compelling you to do a certain thing

Question 3

Injunction

Answer 3

the court stopping you from doing something

Question 4

agreement of mutual assent

Answer 4

both parties of a contract agreeing to its contents

Question 5

Lucy v. Zehmer: Evidence against a contract existing

Answer 5

Zehmer refused to bind the contract with the $5, several witnesses said both Zehmer and Lucy were drunk, Zehmer did not directly hand over the contract to Lucy, the contract was written on the back of a restaurant check

Question 6

What is objective theory in law?

Answer 6

The objective theory of contracts holds that an agreement between parties is legally binding if, in the opinion of a reasonable person who is not a party to the contract, an offer has been made and accepted.

Question 7

What are the advantages of the objective theory?

Answer 7

the courts don’t have to second guess what people thought/meant, there’s uniformality in how people are treated, predictable set of rules, avoids people from saying “im kidding” to get out of an agreement, encourages others to trust those who make contracts with them- more likely to enter into a deal- encourages commerce- socially beneficial

Question 8

What are the disadvantages of the objective theory?

Answer 8

if you rely on a solely objective form people can be forced into deals they wouldn’t have agreed to, leads to the signing of agreements with tech companies that are technically enforceable

Question 9

What are expectation damages?

Answer 9

a forward looking remedy, most common remedy for breach of contract, tries to put you where you expected to be if the person kept their promises, you can recover the difference of where you are vs. where you expected to be

Question 10

Based on the idea of expectation damages, if you enter into a contract to paint someone’s house and receive $100 for the job and you were going to spend $10 on the paint then the other party cancels the contract after you purchased the paint, what could you recover?

Answer 10

You would have expected to be up $90, so because you purchased the paint for $10, you would be awarded $100

Question 11

Lucy v. Zehmer: facts

Answer 11

Defendant, husband and wife Zehmer, sold their farm to plaintiff, two brothers Lucy, for $50k via a signed contract. When Lucy attempted to finalize the sale, Zehmer argued the contract is void since it was promised on a joke toward Lucy and that Zehmer as drunk when signing. Lucy sued for specific performance (in VA supreme court of appeal)

Question 12

Lucy v. Zehmer: legal issue

Answer 12

Whether a contract for the sale of a property can be upheld if it was made under the premise of a joke by the seller.

Question 13

Lucy v. Zehmer: holding

Answer 13

Yes, a contract for the sale of a property can be upheld if it was made under the premise of a joke by the seller

Question 14

Lucy v. Zehmer: reasoning

Answer 14

Zehmer was not too drunk to enter into contract. Also, we cannot look at the sellers unwritten intent to determine if a contract is valid or not. We must only refer to their written word. Lucy reasonably believed it was a true sale and valid contract when signing.

Question 15

Foreseeability

Answer 15

A reasonable or likely consequence of an act.

Question 16

Restitution

Answer 16

Restitution is putting a promisor where they would have been if the contract were not created in the first place

Question 17

with the painting example, what would be the reliance interest?

Answer 17

the bucket of paint

Question 18

In Lucy v. Zehmer, what is the reliance interest?

Answer 18

The amount Lucy paid the attorney to look over the title

Question 19

Is restitution a legal or equitable remedy?

Answer 19

equitable

Question 20

In a court case, who is usually the promisor and who is usually the promisee?

Answer 20

Promisee is plaintiff, Defendant is promisor (usually)

Question 21

Shaheen v. Knight: facts

Answer 21

Dr. Knight, Def, performed vasectomy on Shaheen, plaintiff. Shaheen’s wife became pregnant. Shaheen sued for breach of contract. The damages is supporting a child who shouldn’t exist. Dr. Knight claims this lawsuit is against public policy and that physicians need not provide a “implied warranty of cure”, that there are no damages, and he did not perform negligence.

Question 22

Shaheen v. Knight: issue

Answer 22

Did Dr. Knight have an implied warranty of cure? Could Shaheen recover damages for breaching contract to sterilize?

Question 23

Shaheen v. Knight: holding

Answer 23

Dr. Knight did not have an implied warranty of cure and Shaheen could not recover damages for breaching contract to sterilize

Question 24

Shaheen v. Knight: reasoning

Answer 24

To allow damages would mean Dr. Knight must pay for the positive aspects of child rearing- against public policy, there is no “warranty of cure” in PA, ana ction against a physician for malpractice can only occur if there is negligence

Question 25

The contract in Shaheen v. Knight is what kind? Describe it

Answer 25

A special contract; express or explicit contract, one which clearly defines and settles the reciprocal rights and obligations of the parties, as distinguished from one which must be made out, and its terms ascertained, by the inference of the law from the nature and circumstances of the transaction.

Question 26

What is assumpsit?

Answer 26

an action to recover damages for breach of contract; refers to breach of contract as a cause of action

Question 27

Shaheen v. Knight: what is the current state of this case? What court are we in?

Answer 27

We are in a trial court and dealing with the motion to dismiss a complaint

Question 28

Shaheen v. Knight: What was Dr. Knight's first argument and how did the court respond?

Answer 28

its against public policy to have a contract for a vasectomy- some segment of society would find this distasteful the court responded by saying that a contract to sterilize a man is not void as against public policy and public morals. It was so held in Christensen v. Thornby

Question 29

Shaheen v. Knight: What was the 2nd argument by Dr. Knight and how did the court respond?

Answer 29

The dr. was saying the relationship between dr. and patient could be distorted if contracts like this could be enforced. The court responds: it is a contractual relationship if the results aren’t obtained a patient has a cause of action for the breach of contract. This is different than malpractice which relies of negligence claims

Question 30

Shaheen v. Knight: What is the 3rd argument by Dr. Knight and how did the court respond?

Answer 30

No implied warranty of care under PA law and the court responded saying that a doctor and his patient, are at liberty to contract for a particular result but there is no "implied warranty of cure". If that result be not attained, the patient has a cause of action for breach of contract.

Question 31

Why do states not usually recognize an implied warranty of care?

Answer 31

in any emergency incident, if a patient was brought in under critical condition, and the doctor failed to care for them, the doctor could be sued and doctors would be unwilling to perform procedures, especially risky ones and the prices of care would go up because of the higher liability, and doctors would need to explain in great detail and guarded language before doing anything

Question 32

Shaheen v. Knight: What is the 4th argument by Dr. Knight and how did the court respond?

Answer 32

The plaintiff did not charge lack of skill, malpractice, or negligence- maybe they would have a case if they filed under that but because they filed under failure to achieve intended results

Question 33

Shaheen v. Knight: What is the 5th argument by Dr. Knight and how did the court respond?

Answer 33

The plaintiff suffered no damages; the birth was normal, there are positive aspects of raising a child, and it goes against the idea of contract law contract law which is not “you suffered damages” its “your expectation wasn’t fulfilled”- bad

Question 34

Shaheen v. Knight: Why did the plaintiff sue under breach of contract?

Answer 34

because he could recover expectation damages! which is why he didn’t sue under negligence and it may be harder to sue under negligence (its murkier, have to show what the standard of care should have been)

Question 35

Shaheen v. Knight: what was the public policy argument by the court?

Answer 35

To allow damages in this case for the rearing of a child would go against universal public policy; so even though there was a contract, it wont be enforced

Question 36

Shaheen v. Knight: Why was this case unique?

Answer 36

Having a contract means there is a legal remedy so its weird for the court to say there was a contract but there is no remedy; they were trying to keep the contractual element and societal element different. If you have a child you cant force someone else to pay for the child