Bailey v. West

Bascom's Folly -

-          Horse is bought but upon receiving it West said it was lame so he returned it to Strauss to get his money back.  Strauss says he bought it fine that shipping made it lame. The driver, Kelly calls West’s trainer who says not to bring back the horse because it’s not his responsibility. Kelly takes the horse to Bailey’s farm. Bailey takes the horse in not knowing who the exact owner is. No Consideration - No intent to contract

Quasi Contract

Quasi contracts are not explicit (written or oral) nor implied (based in facts) but rather based on if there was a benefit received. If so, then the persons receiving and giving the benefit were in a contract (unjust benefit).

BOLIN FARMS VS. AMERICAN COTTON SHIPPERS ASSOCIATION

Before the cotton had been planted Amer. Cotton shippers said they would buy all the Cotton on Bolin Farms regardless of the quality, making a “forward” contract. The Farmers used the contract to take out a bank loan to pay for farming materials, etc. Suddenly cotton prices sky rocketed due to weather, demand, etc. (changes that had no relevance to the contract). Now the farmers feel they can get a better deal for the cotton so they try to break the contract.

Court says that they took a risk that the value would go up when they signed the contract but they still have to honor the contract.

KIRKSEY V. KIRKSEY

Widow is offered lodging by her late husbands brother but then gets kicked off the property. Court says there was a reliance on it but that it was a gift (gratuity) so it can be revoked. And there is no consideration (the brother-in-law won't get anything from the wife if she refuses to come live in his house).

Consideration creates a contract when:

1) promise for a promise, promise for an action, or action for a promise. In these cases there would be a contract would’ve been made. 2) But only if it is sought by the promisor in exchange for his promise and is given by the promise in exchange for that promise.(only if it isn't gratuitous)

Hamer vs. Sidway

Uncle Willie says at an anniversary party that if his nephew doesn’t smoke, drink or gamble until he is 21 (5 to 6 years) that he would pay him $5,000 (equivalent to about 100,000 today). The nephew agrees in front of the party and on his 21^st birthday the nephew writes his uncle a letter saying that he would like him to follow through on his offer but the uncle says he is proud but won’t pay him for a few more years once he is mature and he will pay interest on it. 12 years go by and the uncle dies before the kid can claim the money.

Court says there was a contract because there was forbareance and the uncle was of sound mind to enter into a contract

Langer v. Superior Steele

Received a letter stating that afte he retired he would get $100 a month for the rest of his life as long as he didn't work for a competitor. The company stopped paying after 4 yrs even though the man complied.

He cashed and signed off on the check indicating that he agreed to the contract because he was taking the money. Under the theory of promissory estople (pg. 38) that if you reasonable rely on someone else’s action would secure the contract (though it was not bargained for, no consideration)

Sect. 75 restatement

Consideration for a promise is: 1) an act other than a promise, or 2) an act other than a promise, or 3) the creation, modification or destruction of a legal relation, or 4) a return promise

bargained for and given in exchanged for the promise.

Jara v. Supreme Meats

Father is shareholder and on the board of the son's company. Son and father talk on phone that increases in executive pay should be voted on by all executives (3). Son and friend ingnor this and increase their pay w/o vote. Father sues for breach of contract. Court says it wasn't in writing and there was no consideration because there was no bargain for exchange. Restatement 71

Thomas v. Thomas

A husband claimed on his death bed that when he died his wife should get his house containing all the belongings or 100 pounds a year. Upon his death the executors of his estate (his two brothers) wrote down that the wife was allowed to live in the house as long as she paid 1 pound a year & kept the house in good condition and the wife agreed. Upon the death of one of the co-executors died (a brother) the other turned the wife out of the house. Because the husband did not put it in his will that the house go to his wife the executors did not have to give it to the wife. However, because the executor wrote a contract with the wife and there was a bargain (she got to live there they got a pound and for the house to be taken care of) it has to be upheld.

Browning v. Johnson

Browning agrees to sell Johnson his practice and equipment and writes up a contract. Before he sells it too him though Browning wants out of a contract, so they come up with a second contract to cancel the sell contract (“give it up”) in which Browning will pay Johnson 40,000 to void the contract. Before this contract goes through Browning changes his mind again and wants to void both contracts and go back to his state before the contracts so Johnson sues saying the contract should be held up. The trial court says that the second court has value so it has to be up held so Browning appeals. The trial court says that 40,000 doesn’t sound like enough to break a contract but just because a bad deal was made doesn’t mean it can’t be upheld. The court continues on to say that there is adequate consideration in the second contract, even though he could’ve gotten out of the first contract without creating the second contract.

Apfel v. Prudential-Bache Securities

Apfel was offering Prudential a computer program to issuance of bonds online. He allows them 1 month to consider buying it from him. They bought it from him and he agree that he wouldn’t give it to anyone else. They bought it but then found out that the idea wasn’t a novel one and in fact it was already in public domain and they couldn’t patent the idea. They try to get out of the contract with him, but the court says that even though it was a bad deal that they still have to pay him.

Jones v. Star Credit Corp.

The Jones (welfare recipients) are sold a fridge (worth $300) for $1200. Unlike in the previous 2 cases these people didn’t have a lawyer to protect them from a big company. Because they were poor this man took advantage of them by selling them a fridge for an inflated price. We have to right to make good or bad deals but the court must protect the ignorant from people who want to take advantage of them without worry of reprocussions. The court looks o UCC 2-302

Sect. 79(b) Restatement

Freedom to contract: If the requirement for consideration is met there is no additiotnal requirement of equivilence in the values exchanged

Fiege v. Boehm

P says she is pregnant with Ds bastard child. They enter into a contract that D will pay for medical expenses, lost earning and $10/week as long as she has the kid on the condition that she does file bastardy proceedings. She gives up the kid for adoption but D won't reimburse her for medical expenses. She bring bastardy charges and breach of contract. Turns out the kid wasn't his but the court said P and D entered into the contract on good faith and so there was consideration...contract upheld.

Levine v. Blumenthal

Man signs a lease with a landlord for $2,100 ($275/mo) for the first year and $2,400 for the second year. When the first year ends the tenant says that he can’t afford to make higher rent payments. The landlord agrees to break the first contract and made an oral agreement saying that he can stay for the second year still paying the same price as the first year. After the second year the tenant says he doesn’t want to renew and can’t even afford to make the last month’s rent. The landlord sues him for the last month’s rent and $25 for every month during the second year saying the first contract was never broken.

Alaska Packers' Assoc. v. Domenico

Fisher men sign on to work the season for a certain price. half way through the work they stop working and demand higher pay. The foreman agrees to the conditions to finish work but when work is done refuses to pay.

Court says the foreman didn't have the authority to agree to the terms and they were already obligated to perform such tasks so they can't renegociate on them.

Angel v. Murray

Preexisting duty rule. Trashman contracts with city to pick up all trash city produces for 5 years. There is a substaintial increase in the number of developed houses so city counsel agrees to pay more money. Courts says that because the increase was beyond was expected by the trashman to fulfill that extra money promied by city councle has to be paid.

UCC 2-209

Rehm - Zeiher Co. v. F.G. Walker Co.

P wants to buy all output of whiskey but price of whiskey goes up so D wants out of contract. D can't get out, only P can because of change of price. There was mutuality and consideration.

McMichael v. Price

Requirements contract.

Price is in the business of selling sand and enters into a contract with McMichael that McMichael will buy all the sand they need (all they can buy and then turn around and sell) from Price at 60% of whatever the average market value for that quality of sand for the next ten years.  Price tries to get out of the contract saying that he was inexperienced in selling sand at the time the contract was made. The defense says that he may have been inexperience at the time, but he was about to go into the sand business which is why the contract was made.

The court said that they both entered into a contract that is mutually binding so they can’t get out of it.