Contracts Cases

Front 1

Hawkins v McGee

Back 1

"hairy hand", were drs. statements enforceable promise?, court said it could possibly be construed as such, enough to go before the jury.

Front 2

Hamer v Sidway

Back 2

Nephew's forebearance from legal right to drink was consideration for uncle's promise to pay

Front 3

Fiege v Boehm

Back 3

gratuitous promise question, it's not gratuitous if you have reason to believe

Front 4

Feinberg v Pfeiffer Co.

Back 4

Action in the past: retirment pay was a gift.

Front 5

Mills v Wyman

Back 5

Moral obligation: even though there was a moral obligation to pay for care of son, there was no exhcange

Front 6

Webb v McGowin

Back 6

Moral obligation: worker crippled when saved boss's life, would the boss have agreed if there had been time, also there was a material benefit to boss (his life)

Front 7

Kirksey v Kirksey

Back 7

Requirement of bargain, was it a gift cast in the language of a bargain or a real bargain, court said it was a gift because there was no bargain.

Front 8

Central Adjustment Bureau, Inc. v Ingram Assoc

Back 8

Requirement of a bargain in non-compete agreements: was the employee's continuing to work consideration? Court said yes.

Front 9

Strong v Sheffield

Back 9

Illusory promise to not ask for repayment on a note until "such time as I want"

Front 10

Mattei v Hopper

Back 10

Real estate deal with a "satisfaction" clause was upheld even though the clause was subjective (fancy, taste or judgement discussion), RST Second 265

Front 11

Eastern Air Lines, Inc. v Gulf Oil Corp.

Back 11

UCC saves the illusory promise! Eastern says in contract "buy the fuel that it needs", UCC 2-306(1) says it's ok as long as they are acting in good faith

Front 12

Broadnax v Ledbetter

Back 12

Reward offer may be accepted by anyone who performs teh service called for when the acceptor knows that it has been made and acts in performance of it, but not otherwise. HOWEVER, RST Second 51 would say if he learned of the offer in the middle of performance, he could collet if he completes performance.

Front 13

Simmons v United States

Back 13

Diamond Jim III fish, if someone knows of an outstanding offer, they may accept the offer by rendering performance even if the performance is done for other reasons.

Front 14

Wood v Lucy, Lady Duff-Gordon

Back 14

Implied contract through imperfectly expressed terms, promise looks to be illusory but not because Cardozo says look at the reasoning, and implications to get to intent

Front 15

Ricketts v Scothorn

Back 15

Grandaughter relied on grandpa's promise to support her,

Front 16

Feinberg v Pfeiffer Co.

Back 16

Where Feinberg relied on the promise of Pfeiffer Co. for a pension, and her reliance was foreseeable to Pfieffer Co., her reliance was grounds for enforcing the promise.

Front 17

Cohen v Cowles Medica Co.

Back 17

Cohen sued for breach after his name was discolsed by newspaper as a source, foreseeable reliance by him on confidentiality

Front 18

Cotnam v Wisdom

Back 18

Drs. who performed surgery on an accident victim (who was unconscious and couldn't solicit services) were reimbursed on restitution basis, paying reasonable amount for their services

Front 19

Lucy v Zehmer

Back 19

Would a reasonable person in position of P think that D was serious by his words and actions in making a contract? Doesn't matter what was really in the person's mind.

Front 20

Owen v Tunison

Back 20

Whether a statement of "it would not be possible for me to sell for less than XXX" was an offer; court said no, the language appears to be that of negotiation.

Front 21

Harvey v Facey

Back 21

Bumper Hall Pen; Mere statement of the lowest price that would be accepted did not constitute an offer.

Front 22

Fairmount Glass Works v Crunden-Martin Woodenware

Back 22

Where there was a request for pricing and pricing was given with specific language that indicated a completed agreement if the buyer accepted the terms, it was an offer and with buyer's order it became a contract. wuestions in this regarding how the acceptance was made, and trade customs.

Front 23

Lefkowitz v Great Minneapolis Surplus Store

Back 23

Can an advertisement be construed as an offer, acceptance of which would form a contract? Court said yes, the ad was clear and definite and didn't leave anything open to negotiation. The house rule only selling to women was used as excuse.

Front 24

Elsinore Union Elementary School District v Kastorff

Back 24

Allowed contractor to recind contract based on his unknown clerical error. RECISSION may be had for mistake that is not a mistake in judgement, and if recission wouldn't be unconscionable

Front 25

Mesaros v United States

Back 25

coin collector, the ad was only an invitation to make offer, not the offer itself

Front 26

International Filter Co. v Conroe Gine, Ice & Light Co.

Back 26

Question was, who made the offer? That question was important in determining acceptance. If no acceptance, no contract.

Front 27

White v Corlies & Tift

Back 27

Question was how acceptance was asked for. P said it was by perf which he did by buying lumber, court said it was by assent "going down to Dey Street" and even if it was by perf he had to notify them he had started.

Front 28

Ever-Tite Roofing Corp v Green

Back 28

Work began when they began loading their trucks, which was perf cause the contract said perf was OK for acceptance. Green didn't give Ever-Tite adequate notice they weren't going ahead with the contract.

Front 29

Corinthian Pharmaceutical Systems, Inc. v Lederle Laboratories

Back 29

Shipment of goods is acceptance, but under 2-206 if the goods are non-conforming and the seller lets buyer know that they are sent only as an accomodation, it's treated as a counter-offer.

Front 30

Dickinson v Dodds

Back 30

Dodds made offer to third party to sell land after making an offer to Dickinson. The offer was NOT an option contract per the court and the offer was terminated by indirect revocation.

Front 31

Dorton v Collins & Aikman Corp.

Back 31

There was an arbitration clause that in the acceptance form; offeror didn't object and didn't materially alter the contract so the clause was enforced.

Front 32

C. Itoh & Co. Inc. v Jordan Int'l Co.

Back 32

2-207 MATERIALITY issue; P sent D PO for steel, D sent back acknowledgement w/arbit. clause, P never objected to arbit. clause and D shipped goods and P accepted, steel was defective and P wanted to avoid abrbit. Court said arbit clause NOT part of K, dropped out under 2-207 (3) since they didn't agree and there was no gap filler.

Front 33

Northrop Corp v Litronic Industries

Back 33

2-207 DIFFERENT TERMS; Illinois juris; court took a middle road and said diff terms dropped out and replaced with UCC gap fillers.

Front 34

Drennan v Star Paving Co.

Back 34

Sub-contractor's mistakenly low bid was revoked but only after reliance on it by contractor in making and getting a bid; court said couldn't revoke based on contractor's reliance.

Front 35

Hoffman v Red Owl Stores

Back 35

Hoffman's detrimental pre-contractual reliance was awarded damages because Red Owl induced action and action was taken; RST 90

Hint 35

Promissory Estoppel

Front 36

Kiefer v Fred Howe Motors, Inc.

Back 36

Capacity question, Kiefer could void the contract even tho he signed a boilerplate language stating he was of age.

Front 37

Cundick v Broadbent

Back 37

Wife said husband was incompetent when made land deal. Court said he acted like a competent person, and held them to the contract. Capacity issue.

Front 38

Alaska Packers' Ass'n v Domenico

Back 38

Pre-existing duty rule, the packers already had a pre-existing legal duty so there was not consideration for the second contract.

Front 39

Schwartzreich v Bauman-Basch

Back 39

Avoiding pre-existing duty rule by recission: Court allowed them to call it two contracts, first of which was recinded

Front 40

Watkins & Son v Carrig

Back 40

Court followed RST 89, said the oral agreement for the higher price after finding rock was legit

Front 41

Alaska Packers' Ass'n v Domenico

Back 41

The packers had a pre-existing duty in their already formed contract, under RST 73 there was no consideration for the new contract based on that reason.

Front 42

De Cicco v Schweizer

Back 42

This is a third-party question, marriage, a promise by A (the father) to B (the future son in law) to induce him not to break his contract with C (the daughter) is void BECAUSE there is already a pre-existing duty for B to marry A, Cardozo was fudging because daughter is not a promisee.

Front 43

Austin Instrument, Inc. v Loral Corporation

Back 43

Classic case of economic duress. Loral had no choice but to agree to a higher contract price, held hostage by no choice.

Front 44

Swinton v Whtinisville Sav. Bank

Back 44

Termite infested house, not disclosed to buyer, court said there was no duty to disclose

Front 45

Kannavos v Annino

Back 45

Greek guy buying apt building; said there was fraud because of the way they advertised it.

Front 46

Vokes v Arthur Murray, Inc.

Back 46

Misrepresentation to Vokes; generally has to be an issue of fact but in this case there was superior knowledge on part of Arthur Murray; also, law says if you are going to disclose something you have to disclose it all.

Front 47

McKinnon v Benedict

Back 47

Benedict was suing for injunction to prevent McKinnon from developing land, saying there was no adequate remedy at law; court denied, saying the contract was unfair based on inequality of the consideration.

Front 48

Tuckwiller v Tuckwiller

Back 48

Question of unconscionability; Ms Morrison contracted with Ms Tuckwiller to care for her the rest of her life, she died before much care could occur, court held it as valid and refused to reallocate risks, like in McKinnon

Front 49

Black Industries, Inc. v Bush

Back 49

Middleman who made profit on wartime goods. Not void on public policy cause neither the P nor the D actually contracted with the govt.

Front 50

O'Callaghan v Waller & Beckwith Realty Co.

Back 50

Exculpatory lease in standard rental agreement, court ruled for D, dissent said that's nuts, says it relieves D landlords of liablility and is actually very bad for public policy.

Front 51

Klar v H. & M. Parcel Room, Inc.

Back 51

The claim stub was not a contract because it would not have been conceived as such by the bailor, and if the bailee wanted to limit liability had to inform bailor.

Front 52

Graham v Scissor Tail

Back 52

Adhesion contract required by union was upheld, because Graham knew what the contract entailed having worked with them before.

Front 53

Williams v Walker-Thomas Furniture Co.

Back 53

UCC 2-302, Williams bought furniture and stereo on contract with cross collateralization, question is whether there is procedural unconscionability, lower court said they found no grounds to declare it unconscionable but could have if there had been legislation. Appellate court said it appeared unconscionable and trial court has the power to find it so and remanded to trial court. Dissent said Williams knew exactly what she was doing, and that the court shouldn't stand in the way fo freedom of contract. IN CLASS we noted the way to fix this would have been to have Williams initial by the clause. Also, we discussed exploitation. Unconscionability was defined as absence of meaningful choice on the part of one of the parties together with contract terms which are unreasonably favorable to the other party.

Front 54

Jones v Star Credit Corp.

Back 54

UCC 2-302, Welfare recipient Jones bought a freezer on credit for an amount much higher than retail, question is price unconscionability, court reformed the contract on its idea of fairness and held that Jones only had to pay the amount they had already paid and no more. Controversy was that poor people need credit but also need to be protected.

Front 55

Armendariz v Foundation Health Psychcare Services, Inc.

Back 55

Issue is policing an adhesion contract. Armendariz entered employment contract with D that had arbitration clause that limited her remedies under arbitration but didn't limit D's remedies. Court held contract not enforceable. Relied on both procedural and substantive elements to find unconscionability. Looked at both on a sliding scale, the more you have of one the less you need of the other. Also said you need to look at the clause in the context of the whole agreement, not in isolation. NOTE in casebook says in 2001 Supreme court held that mandatory arbitration agreements in employment agreements are generally enforceable under the Federal Arbitration Act unless there are grounds at law or in equity for revocation of the contract, of which this case is an example of an equity issue.

Front 56

Scott v Cingular Wireless

Back 56

Issue is unconscionability of class arbitration waivers. Scott and others bought phones and plans from Cingular that included mandatory arbitration clauses, and the arbitration clauses included prohibition of consolidation of cases and class arbitration. Court ruled that a clause that unilaterally and severly limits the remedies on only one side is substantively unconscionable under Washington law because it denies meaningful remedy class action would allow to small claims folk. Dissent disagrees, saying Cingular would pay costs under arbitratioin clause so don't need class arbitration.

Front 57

Campbell Soup Co. v Wentz

Back 57

Wentz contracted with Campbell's to sell Chantenay carrots, price went up, Wentz sold to neighbor who sold on open market, Campbell asked for specific performance, court said specific performance would have been the appropriate legal remedy but denied it due to the harshness they found in the adhesion contract with Wentz. Point is to look very specifically at the facts of the case, i.e. could Campbell's have covered with the same carrots.

Front 58

Klein v PepsiCo, Inc.

Back 58

Klein engaged in trying to buy a Gulfstream G-II plane from PepsiCo, deal fell through mid-stream, Klein asked for specific performance, court said Klein could have covered with another G-II and besides he was only buying it for resale, so it didn't really matter.

Front 59

Morris v Sparrow

Back 59

Keno the horse was owned by Morris and was to be part of compensation for satisfactory work by Sparrow. Sparrow broke the horse, Morris reneged, court said equity is not the normal remedy, it will be where special and peculiar reasons exist which render it impossible for the injured party to obtain relief by way of damages in an action at law.

Front 60

Laclede Gas Co. v Amoco Oil Co.

Back 60

Laclede was distributor, Amoco supplier, Amoco terminated, Laclede couldn't cover the contracted gas cause of worldwide oil shortages, court said because of the rule that specific performance was the correct remedy because the contract was specific as to duties of each party were, and because damages would not be adequate since Laclede couldn't get long-term contracts at a similar price.

Front 61

Walgreen Co. v Sara Creek Property Co.

Back 61

Court affirmed injunctive relief against Sara Creek not to put another pharmacy in the mall. Court weighted costs and benefits of injunction verses damages, talked about bilateral monopoly with injunction, but decided injunction was best because the lease had ten years to run.

Front 62

Vitex manufacturing Corp v Caribtex Corp

Back 62

Question was whether to consider overhead as part of Vitex's costs in determining the amount of profits lost, court says overhead costs not part of the formula for damages. Vitex was in the virgin Islands, Caribtex imported cloth into the islands and then exported it to the U.S.

Front 63

Laredo Hides Co., Inc. v H & H Meat Products Co., Inc.

Back 63

Laredo bought hides from H & H and then sold them to tanners in Mexico, H & H breached, Laredo covered and sued. Court gave relief under UCC 2-712 because the goods purchased for cover were substitute goods, even though Laredo had to spot-purchase because they didn't have storage facilities. Lessons from this case: for buyer's rights for breach start with UCC 2-711, go to 2-712 for cover, 2-713 for damages, 2-716 for specific performance.

Front 64

R.E. Davis Chemical Corp. v Diasonicas, Inc.

Back 64

The court found that for a lost-volume seller, they can skip directly from § 2-706 (the possibility of reselling the stuff that was repudiated upon) to § 2-708 (getting your basic damages or lost profits). As always, the standard is that we want to put the injured party in as good a position as performance would have done. Court took issue with the definition of a lost volume seller usually used, and the court concluded that the plaintiff had to show that it was in their interest to actually produce and sell the extra unit in order for them to collect as damages the profit they would have made from that extra unit.

Front 65

United States v Algernon Blair, Inc.

Back 65

QUANTUM MERUIT ALLOWS RECOVERY FOR REASONABLE VALUE OF PERFORMANCE, UNDIMINISHED BY ANY LOSS WHICH WOULD HAVE BEEN INCURRED BY COMPLETE PERFORMANCE.

Front 66

Rockingham County v Luten Bridge Co.

Back 66

Luten Bridge kept working on a bridge when county commissioners told them to stop, they didn't mitigate damages, no recovery

Front 67

Jacob & Youngs v Kent

Back 67

contractor didn't put specific kind of pipes in the house that were noted in the contract, RULE: When the defect is insignificant, the court will find that there was substantial performance and excuses the breach of using the same type and quality of pipe which parties had agreed were the same except for brand name. Measure of damages is not the cost to rip out the old pipe and install the new, but the difference in value which in this case is zero dollars.

Front 68

Groves v John Wunder Co.

Back 68

Wunder made contract w/Groves to lease land and was supposed to leave a uniform grade after removing sand and gravel, didn't do that, breached deliberately, question was should damages be based on the difference in value or upon the value of the work that D didn't do in grading the property (property value was less than the cost of the grading). Court said correct doctrine was the cost of remedying the defect.

Front 69

Peevyhouse v Garland Coal & Mining Co.

Back 69

Peeveyhouse leased land to the mining company, who wouldn't reclaim it as was in the contract, damages were limited to diminution in value (which in this case was about $300) because the work to reclaim was grossly disproportionate to the value and because the contract provision for reclamation was just a side clause. Dissent said that was dumb, plaintiffs were entitled to specific performance because it was something they obviously wanted done by insisting the clause was in the contract.

Front 70

Hadley v Baxendale

Back 70

Crankshaft at the mill case, RULE: damages should be based on foreseeability of damages when the contract is made for the damages D could know or that P informed him of.

Front 71

Kenford Co. v County of Erie

Back 71

Foreseeability problem; Kenford bought land around a proposed stadium, stadium didn't get built, they sued for money they didn't make in increased land value, court said no to these damages cause it wasn't foreseeable, court got it wrong and was manipulating doctrine, it was clearly foreseeable.

Front 72

Fera v Village Plaza, Inc.

Back 72

Lease for a book and bottle shop breached, leasee sued for damages including lost profits, court said OK to lost profits because it was reasonable, dissent said it was too speculative.