Contracts

Front 1

White v. Benkowski

Back 1

P pays D for water; D shuts off water

Rule: Punitive damages are normally not allowed unless there is a tort accompanying the breach of contract

Front 2

Legal Theories of Obligation

Back 2

Obligation arising from:
1. Agreement with consideration
2. Justified reliance on a promise (promissory estoppel)
3. Unjust enrichment
4. Promises for benefit received
5. Tort
6. Solely from "form"
7. Statutory warranty

Front 3

Sullivan v. O'Connor

Back 3

P sues D for botched nose job

Lost expectancy = nose she wanted - nose she got

Restitution = Amount she paid for operation

Reliance = more than restitution but less than expectancy; this is what P got

Front 4

Contract-No contract Dichotomy

Back 4

If there is a contract, P is placed in position as if contract occurred (expectancy).

If no loss of expectancy, no contract

This is not accepted - middle ground = reliance

Front 5

Hardesty v. Smith

Back 5

D buys faulty lamp-improver; P is creditor who wants to collect

Consideration: Doing an act at another's request that is either a benefit to the requesting party or a detriment to the doing party

Front 6

Dougherty v. Salt

Back 6

Aunt promises $3000 to nephew and estate won't pay. (No consideration)

Mutual inducement - Consideration must induce the promise and the promise must induce the consideration

Front 7

Fuller's functions of consideration

Back 7

1. Cautionary function
2. Evidentiary function
3. Channeling function

Front 8

Cautionary Function of Legal Formalities

Back 8

Acts as a check against inconsiderate action; prevents gratuitous promises; consideration prevents hasty promises

Front 9

Evidentiary Function of Legal Formalities

Back 9

There should be evidence of promise since people lie; consideration makes it more likely than not that the promise was made

Front 10

Channeling Function of Legal Formalities

Back 10

If a promise is made in a certain manner, there is indication that the person intended legal consequences; Consideration helps channel thoughts in a way to communicate to others that legal consequences are intended

Front 11

Maughs v. Porter

Back 11

D offers free lottery for car; P wins; D won't give car; consideration

Tramp hypo - difference between consideration and condition of a gratuitous gift

When in doubt as to whether it is a promise or a gift with a condition, look at whether the condition benefits the promisor

Front 12

Hamer v. Sidway

Back 12

Uncle promises $5,000 for a pure Willy; Uncle dies; estate won't pay; consideration

No bargaining or mutual inducement, but nephew gave up legal rights. Court decides case based on detriment to P.

Front 13

Criticism of Hamer

Back 13

Mutual inducement is essential to a legally enforceable contract

Front 14

Baer v. Penn-O-Tex Oil

Back 14

P leased gas station to K. K owed D money. D agreed to pay gas station rent, but didn't. No mutual inducement or bargaining.

Forbearance of a lawsuit can constitute consideration, but there must be bargaining/mutual inducement.

Front 15

Neuhoff v. Marvin Lumber and Cedar Co.

Back 15

P claims D breached oral contract to replace windows for free. No mutual inducement.

Promise to do act (i.e. replace windows) must be given to induce forbearance.

Front 16

Springstead v. Nees

Back 16

Descendants fight over property that sounds like it belongs in Monopoly.

Forbearance is only consideration if party is giving up a plausible/colorable right.

Does not have to be legal/actual, just an honest and reasonable belief

Front 17

Consideration (1st Restatement)

Back 17

Consideration for a promise is
(a) an act other than a promise, or
(b) a forbearance, or
(c) the creation, modification or destruction of a legal relation, or
(d) a return promise,
bargained for and given in exchange for the promise

Front 18

De Los Santos v. Great Western Sugar Company

Back 18

P really wants to ship D's beets; no mutuality

Mutuality - obligation of each party to do something or permit something to be done

Mutuality is absent when only one of the parties is bound to perform.

Front 19

Wood v. Lucy, Lady Duff-Gordon

Back 19

D "creator of fashions" hires manager and then works against him.

Mutuality can be implied: D gives up her rights, this implies strongly that she is getting something in return

Front 20

Weiner v. McGraw-Hill Inc.

Back 20

P alleges wrongful termination because he was promised job security

Mutuality is not necessary for consideration.

In this case, D was receiving other consideration - P was induced to leave job and had turned down other jobs

Front 21

Mattei v. Hopper

Back 21

P is to build a shopping center on D's land; D changes her mind; D was allowed to withdraw if dissatisfied with stores, but not on whim

Two lines of satisfaction:
(1) satisfaction is based on the standard of a reasonable person (objective)
(2) satisfaction is based on good faith (subjective)

Front 22

Preexisting Duty Doctrine

Back 22

If you are promising to do something that you are already legally required to do, the promise is not supported by consideration

Front 23

Immateriality of Motive/Cause

Back 23

Courts don't enforce contracts that are a "mere pretense" to hide gifts

Front 24

Haigh v. Brooks

Back 24

If you exchange something that is bargained for it is a contract even if the thing exchanged is valueless

Front 25

Kirksey v. Kirksey

Back 25

P moves to D bro-in-law's land and is kicked out 2 years later

Land was gift, not consideration. Uprooting and moving was like the tramp hypo (didn't benefit D)

Front 26

Ryerss v. Trustees of Presbyterian Congregation of Blossburg

Back 26

D donates $100 to P who is building a church

Verdict for P for policy reasons - don't want to disadvantage charities that rely on donations

Front 27

Seavey v. Drake

Back 27

P's dad promises land; P lives on and builds on land

Recovery permitted in equity because P's improvements to the land count as consideration

Front 28

Ricketts v. Scothorn

Back 28

P's grandfather told her she didn't have to work anymore, so she quit

Grandfather induced quitting. No reliance but equitable estoppel/reliance

Front 29

Siegel v. Spear

Back 29

P's furniture burns in D's store; D promised insurance but didn't get it

If a person makes a gratuitous promise, and the other party affirmatively acts in reliance on the promise (i.e. brings the furniture to D's store), there is consideration

Front 30

Restatement on Promissory Estoppel

Back 30

If a promise reasonably induces action done in reliance of the promise, the promise is enforceable if necessary to avoid injustice

Front 31

Wheeler v. White

Back 31

D promises to secure money for P's construction project in return for fee and commission on rentals

Contract = agreement with consideration; there was consideration, but no agreement since the terms were indefinite

Promissory estoppel, but P does not get lost expectancy damages, only damages to restore P to position prior to promise because it was partly P's fault for not getting a contract

Front 32

Hoffman v. Red Owl Stores

Back 32

P sells businesses to open grocery store based on D's promises

Verdict for P on theory of promissory estoppel because D should have reasonably expected to induce P's actions, and injustice to P would have resulted if the promise was not enforced.

Front 33

Elvin Associates v. Franklin

Back 33

Aretha Franklin ≠ Broadway star due to fear of flying

No agreement with consideration, but P wins on theory of promissory estoppel because P unequivocally committed herself and D acted at his detriment in reasonable reliance on P's promise

Front 34

Local 1330, United Steel Workers v. US Steel Corp

Back 34

Youngstown OH - steel mills = shitty place to live

Element missing from promissory estoppel - not reasonable to rely on promise under given definition of profitability since it would require business to stay open while losing money (Condition of promise was not met)