Term
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Definition
punitive damages available for breach when breach is a tort that would allow punitive damages |
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Term
| Acquista v. N.Y. Life Insurance (2001) |
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Definition
"Insurance companies can be held liable for consequential damages, even going beyond amount in policy, for D acting in bad faith during breach of contract." |
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Term
| Kirksey v. Kirksey (1845) |
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Definition
Brother-in-law let P live on his land then kicked him off. Promises of generosity that involve no mutual exchange aren’t binding. Detriment of promisee is necessary for consideration. |
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Term
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Definition
"Uncle promises nephew money for not smoking. A contract is binding if it entails any detriment to the promisee, including any restrictions of liberty, even if those restrictions were beneficial." |
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Term
| Langer v. Superior Steel (1932) |
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Definition
Retiree got pension if he didn’t work for competitors. A gratuitous promise with conditions is a contract if promisee follows those conditions. |
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Term
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Definition
mistress case - past consideration is no consideration - illegal consideration is no consideration. |
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Term
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Definition
"[e.g. $1] isn’t sufficient to form a contract, but bar is very low." |
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Term
| Alaska Packers v. Domenico (1902) |
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Definition
Fisherman holdout. Common law: modification under threat of breach/duress isn’t consideration. |
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Term
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Definition
good faith modifications must have objective (actual changed circumstances) and subjective (new circumstances motivated modification) reasons. No new consideration needed to make it binding for other side. |
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Term
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Definition
promise to modify is fair and equitable in light of changed circumstances. Only objective standard. |
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Term
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Definition
trash collector allowed to ask for more money b/c amount of trash was greater than expected at time of contract. |
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Term
| Roth Steel v. Sharon (1983) |
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Definition
"Steel supplier not allowed to extort buyer by threatening breach in bad faith. It’s ok to modify if actual costs go up, but not if only opportunity costs go up." |
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Term
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Definition
"obligation is illusory if there’s no concrete reciprocal promise, or can be cancelled at will of promisor. Ct can void contract or fill in terms (in case of businesses or merchants, who should know customs of trade, not individuals) to remedy situation." |
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Term
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Definition
seller is required to produce all that the buyer can buy. |
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Term
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Definition
buyer agrees to buy all that is produced by seller. |
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Term
| Rehm-Zeiher Co. v. F.G. Walker (1913) |
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Definition
D had to sell all whisky P wanted to buy. Not firm requirement contract. Not enforceable for lack of consideration by mutuality of obligation. |
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Term
| McMichael v. Price (1936) |
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Definition
"requirement contract for middleman to buy from D all sand P could resell. Contract binding b/c of exclusivity, thus mutuality of obligation." |
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Term
| Wood v. Lady Duff-Gordon (1917) |
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Definition
Exclusive right to market P’s name creates binding contract (for split profits) b/c of implied duty to make reasonable effort to exercise that right. |
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Term
| Omni Group v. Seattle (1982) |
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Definition
“if satisfactory” clause in contract for sale of land doesn’t render promise illusory b/c P is bound by trade customs and implied duty of good faith. |
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Term
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Definition
"D’s promise made in exchange for P’s past aid to D’s son wasn’t binding, b/c gratitude for actions already performed isn’t sufficient consideration." |
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Term
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Definition
D’s moral obligation to fulfill a promise (to repay P’s gratuitous payments on D’s farm) isn’t consideration. Promise not binding. |
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Term
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Definition
P crippled at work saving D’s life. Moral obligation allowed as consideration for past injury b/c promisor (D) received material benefit. Exception made b/c injury occurred at work saving a coworker. |
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Term
| Harrington v. Taylor (1945) |
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Definition
"P’s hand crushed saving D’s life from wife’s axe. Moral obligation insufficient to create binding contract, b/c P acted altruistically, not relying on compensation. Gender bias assumes female selflessness at home versus calculating male at work." |
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Term
| Ricketts v. Scothorn (1898) |
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Definition
"D promised granddaughter $ so she didn’t have to work, so she quit her job. P’s reliance on D’s promise created promissory estoppel, substituting for consideration." |
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Term
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Definition
"D promised school estate gift. Memorializing someone after death is sufficient consideration for a promise of an estate gift, so promise was binding. If promisee takes on obligations in reliance [naming scholarship after D], promise is binding." |
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Term
| Feinberg v. Pfeiffer (1959) |
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Definition
"retirement benefits promise. When D makes a promise to P such that P alters her situation for the worse in a way that was a foreseeable consequence of D’s promise, promissory estoppel bounds D to that promise. Doesn’t matter if D didn’t intend reliance." |
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Term
| Grouse v. Group Health (1981) |
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Definition
"P quit job to take D’s offer, which D withdrew. P’s detrimental reliance on D’s promise was consideration; D owed reliance damages [not expectation]." |
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Term
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Definition
says reliance is a full substitute for consideration if enforcement is only way to avoid injustice; [expectation damages?] |
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Term
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Definition
"Contract’s material terms must be in writing if: amount in question $500 or more, can’t be fully performed w/in a year, land conveyance. Exceptions: specialty goods; admission to agreement; goods accepted or paid for" |
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Term
| North Shore Bottling (1968) |
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Definition
Contract to be exclusive distributor of D’s beer isn’t in writing. Statute of Frauds ‘one year clause’ doesn’t apply b/c it was possible for D to perform w/in 1 yr. |
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Term
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Definition
Minor car case. Minors can’t enter into contract. 1) if benefits are kept after infancy ends (18th birthday) then contract becomes valid. 2) Minor can be estopped from using age to his benefit if he affirmatively misrepresents his age. |
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Term
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Definition
burden of proving incompetence is on party alleging it as a defense. |
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Term
| Heights Realty Ltd v. Phillips (1988) |
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Definition
P took advantage of old lady in land sale. Incompetent/senile D couldn’t enter contract. |
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Term
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Definition
"if contract is fair, other party isn’t aware of mental defect, and there’s partial performance, no avoidance to the extent of the performance." |
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Term
Embry v. Hargadine, McKittrick Dry Goods (1907) |
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Definition
"P relied on D’s implication of contract renewal. Boss’s intent would induce a reasonable person to rely, even w/o actual intent to create contract." |
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Term
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Definition
Joke contract enforceable b/c D’s didn’t reveal joke until after contract had been formed. |
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Term
| Lonergan v. Scolnick (1954) |
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Definition
An offer is only made if it is made clear by the offeror that the offeree’s assent would complete the formation of a contract |
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Term
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Definition
Objective manifestation of willingness to enter a bargain required for contract formation |
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Term
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Definition
Offer isn’t binding if offerer makes it clear that further assent is needed. |
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Term
| Lefkowitz v. Great Minneapolis Surplus Store (1957) |
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Definition
"P responded to ad for woman’s coat. Ads are only enforceable if they are clear, definite, and explicit, and leave nothing open for negotiation." |
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Term
| Leonard v. Pepsico (1999) |
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Definition
"Harrier jet case. 1) An offer must be able to be reasonably construed as an offer in order to be binding; 2) “offeror is master of his offer,” so offeror can control mode of acceptance [in this case using the catalogue]." |
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Term
| Hendricks v. Behee (1990) |
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Definition
D withdrew offer to buy house when seller had accepted offer but not notified D yet. There is no contract until the acceptance of an offer is communicated to the offeror as required by the offeror. |
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Term
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Definition
Shipment of non-conforming goods isn’t acceptance (Mirror Image Rule) |
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Term
| Acceptance by Performance |
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Definition
"unilateral contracts invite acceptance by performance or exchange. Intention and notice not necessary, but knowledge of offer is." |
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Term
| Carlill v. Carbolic Smoke Ball (1893, UK) |
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Definition
"Offers made to the public that promise something upon performance, e.g. lost dog reward signs, don’t require promisee to notify promisor of acceptance beforehand. Reasonable interpretation of ad is binding." |
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Term
| Glover v. Jewish War Veterans (1949) |
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Definition
P not entitled to reward for helping find murderer b/c P needed to have knowledge of D’s offer in order to accept. |
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Term
| Industrial America v. Holton (1951) |
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Definition
"P, broker, cut out of deal after setting it up. P’s knowledge of offer and performance constituted acceptance." |
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Term
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Definition
"Order for shortening not responded to by seller. Silence when previous practice would indicate acceptance is acceptance, Rest.69(1)(c). UCC 1-203(3), 2-206(1)(a)." |
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Term
| Adams v. Lindsel (1818 UK) |
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Definition
Acceptance letter delayed in mail. |
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Term
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Definition
"when not otherwise specified, this is the default standard: acceptance occurs when it is mailed, regardless of how long it takes for letter to arrive. Revocation doesn’t occur until it is received. UCC is phasing out this rule." |
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Term
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Definition
counteroffer blows up original offer. |
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Term
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Definition
counteroffer w/ additional terms is acceptance unless it’s expressly dependant on assent to those terms. |
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Term
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Definition
"If sections (1) or (2) voids contract but parties act as if there’s a contract, the parts they agreed ona re binding and UCC fills in the gaps." |
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Term
| Minneapolis & St. Louis Ry. v. Columbus Rolling Mill (1886) |
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Definition
D gave price quote for specified quantity. P accepted for quantity outside of that range. This was a counteroffer b/c it wasn’t mirror image. |
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Term
| Leonard Pevar v. Evans (1981) |
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Definition
"Battle of the Forms: Knockout rule: court will knock out terms from forms that conflict and keep the rest, filling in the gaps w/ UCC standard provisions." |
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Term
| Hill v. Gateway 2000 (7th Cir- 1997) |
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Definition
P’s ordered computer from D over phone. It arrived with an “approve or return” list of terms to agree with or send computer back w/in 30 days. Terms binding. |
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Term
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Definition
revocable by notifying offeree unless there’s an option. |
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Term
| Dickenson v. Dodds (1876 UK) |
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Definition
"D gave P 2 days to accept, but sold before period ended. D not bound by agreement to keep offer open b/c there was no consideration for the option. Offer is revocable at any time unless an option is purchased." |
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Term
| Option Contracts- Rest.87(1)(a) |
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Definition
"Offeree pays (or some other consideration) to keep offer open, effectively buying offeror’s power to revoke offer. Mailbox rule doesn’t apply." |
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Term
| Humble Oil v. Westside Investment (1968 TX) |
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Definition
"P bought option to buy, tried to accept w/ modifications, then accepted outright. A option bought w/ consideration survives counteroffer and negotiation, unlike a normal offer, so counteroffer doesn’t void original offer contracted for in option." |
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Term
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Definition
"says opposite: Firm offer by merchant, if in writing and signed, isn’t revocable during reasonable period (max 3 mo.) if its terms state that it’ll be held open." |
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Term
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Definition
An offer which the offeror reasonably expects will (and does) induce reliance is binding as an option contract to the extent necessary to avoid injustice. |
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Term
| Drennan v. Star Paving (1958 CA) |
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Definition
Subcontractor’s mistaken bid irrevocable b/c of reliance by P in accepted general bid. Substantial foreseeable reliance can sometimes operate as substitute for consideration when doing otherwise would create injustice; damages limited to reliance. |
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Term
| Raffles v. Wichelhaus-“Peerless” case (1864 UK) |
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Definition
"D’s not liable for breach when they accepted goods from ship named “Peerless” even though it was the wrong ship. Contract void for unclear terms, b/c they meant different things in contract." |
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Term
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Definition
"If there’s a manifestation of misunderstanding, even if the parties don’t recognize it, then there’s still no contract. [Moving towards an objective test]; (2)if one party knows the other is mistaken, the mistaken interpretation is binding." |
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Term
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Definition
Material terms of contract must be clear to be enforceable (objective approach). |
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Term
| Joseph Martin Deli v. Schumacher (1981 NY) |
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Definition
Option to renew lease at rate “to be agreed upon” isn’t binding b/c material term is too vague. |
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Term
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Definition
"Quantity must always be specified, b/c the UCC default quantity is zero." |
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Term
| Empro Manufacturing v. Ball-Co (1989 7th) |
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Definition
"D not bound by letter of intent to sell, even if signed, b/c it was subject to approval of P’s shareholders & board. “Subject to” clauses are objective manifestation of intent not to be bound, voiding contract." |
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Term
| Promissory Estoppel- Rest. 90 |
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Definition
"Where performance begins on a promise that can be reasonably expected to be fulfilled, the promise can be binding if justice requires enforcement." |
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Term
| Hoffman v. Red Owl Stores (1965 WI) |
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Definition
"P took many detrimental steps relying on D’s promise of a store. P won on grounds of promissory estoppel, but estoppel damages limited to restitution b/c it’s not actual breach." |
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Term
|
Definition
"Mutual Mistake: If both parties are mistaken as to a material fact assumed during formation, contract is voidable" |
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Term
| Beachcomber Coins v. Boskett (1979 NJ) |
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Definition
"P bought fake coin from D that both thought was rare. Mistake voided contract, b/c enforcement would’ve been more onerous to P than rescission, which is prevented by P’s negligent failure to detect mistake." |
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Term
| The Barren Cow: Sherwood v. Walker (1887) |
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Definition
"Cow sold as barren turned out to be fertile, greatly increasing it’s value. When a material mistake changes the actual nature of a good contracted for, the contract is voidable." |
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Term
| Laidlaw v. Organ (1817 U.S.) |
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Definition
"D avoided P’s question about new info, and got good deal b/c of knowledge. Buyer has no duty to disclose, e.g. regarding market." |
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Term
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Definition
a non-disclosure is equivalent to a misrepresentation when (d) there’s a relationship of trust and confidence. |
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Term
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Definition
Sellers knowingly hid termite damage from buyer’s inspector and failed to disclose it. P won b/c difficulty of P gaining info increases burden on D to disclose. |
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Term
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Definition
"a non-disclosure is equivalent to a misrepresentation when (b) party knows disclosure would correct other party’s basic assumption on which contract is based, and non-disclosure violates good faith." |
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Term
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Definition
Contract made under duress by threat that leaves victim no reasonable alternative is voidable (unless 3rd party makes threat and other party relies on threatened party). |
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Term
| Austin Instruments v. Loral Corp (1971 NY) |
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Definition
Subcontractor threatens breach in order to get increase price of performance and get another contractor; P gave in b/c it couldn’t find any substitute supplier in time. Contract void for duress. |
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Term
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Definition
Preexisting Duty Rule: modification (w/ implied duty of good faith) of a contract needs no consideration. (despite Alaska) |
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Term
| Machinery Hauling v. Steel of W.V. (1989) |
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Definition
"D made P eat costs of D’s bad merchandise under threat of withholding future business. Threat of withholding future business is hardball, not duress, b/c there was no contract for future business. Rest176 doesn’t list this type of threat as improper." |
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Term
| UCC 2-302(1) and Rest. 208 |
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Definition
"The only role of the ct in unconscionability cases is negative, voiding the entire contract or the unconscionable parts. No damages." |
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Term
| Procedural Unconscionability |
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Definition
"results of a defect in the bargaining process, e.g. duress, fraud, undue influence" |
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Term
| Substantive Unconscionability |
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Definition
"the terms themselves show unconscionability, ex-post." |
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Term
| Williams v. Walker-Thomas Furniture (I) (1965) |
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Definition
"rent-to-own case: P bought furniture from D, defaulted after substantial payment, so D repossessed all furniture following small print. Contract of adhesion declared unconscionable b/c gross inequality of bargaining power, thus procedural unconscionability." |
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Term
| Jones v. Star Credit (1969) |
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Definition
"selling P on welfare a $300 freezer for total of $1400. Ct reformed contract, giving P difference b/t value and price paid. Facts showed substantive unconscionability." |
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Term
| Ferguson v. Countrywide Credit (2002 9th) |
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Definition
P’s employment contract required arbitration. Contracts are unconscionable if they element of surprise (all contracts of adhesion do) and there’s inequality of bargaining power (as there was). |
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Term
| Coursey v. Caterpillar (1995 6th) |
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Definition
There is a higher standard for unconscionability in a commercial setting b/c there’s a presumption that commercial entities have the relevant information. |
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Term
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Definition
Limitation of consequential damages for personal injury isn’t unconscionable in commercial damages. |
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Term
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Definition
restitution generally unavailable for illegal contacts. |
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Term
| Sinnar v. Le Roy (1954 WA) |
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Definition
"Contract to bribe a public official in unenforceable, so D didn’t have to return money. If illegality is serious, ct will leave parties as their found; if illegality isn’t central, ct can still enforce it (this changed under 2nd Rest.)" |
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Term
| Rest. 2nd 178(2) Balancing Test |
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Definition
"When action isn’t illegal, it may be unenforceable if public policy outweighs interests in enforcement [illegal immigrant emp. contracts], weighing these factors: parties’ justified expectations, resultant forfeiture if enforcement denied, public interest in enforcement" |
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Term
| Data Management v. Greene (1988 AK) |
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Definition
"D’s covenant not to compete unenforceable b/c it’s overly broad. Covenants not to compete generally unenforceable for public policy preference for competition, unless a legitimate interest is protected and the scope is reasonable (which this one’s wasn’t)." |
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Term
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Definition
Blue Pencil Rule- Ct can cut out unconscionable part. |
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Term
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Definition
Contract b/t non-married cohabitating common law couple not unenforceable for public policy. Refusal to enforce would give unjust enrichment. |
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Term
| Mitchill v. Lath (1928 NY) |
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Definition
Oral agreement to remove icehouse can’t add to written contract for sale of land. |
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Term
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Definition
"Oral contract can only alter written contract if 3 conditions are met: agreement is collateral, doesn’t contradict express or implied provisions, not clause that would ordinarily embodied in writing" |
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Term
| Masterson v. Sine (1968 CA) |
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Definition
Parol evidence is inadmissible if ct decides that they’d have been included in writing if agreed upon. |
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Term
| Alaska Northern v. Alyeska (1984 AK) |
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Definition
Prior agreement b/c inconsistent w/ current contract. Parol evidence isn’t admissible when the words of a contract are not reasonably susceptible to the interpretation advanced by that evidence. |
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Term
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Definition
Parol evidence inadmissible if agreement is fully admissible; (2) agreement is only partially integrated if (a) separate terms are agreed to for separate consideration or (b) it omits a naturally omitted term. |
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Term
| Pacific Gas and Electric v. GW Thomas (1968 CA) |
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Definition
Contract allocated risk of damage to property to P. Ct allowed extrinsic evidence that industry standard limiting risk allocation to 3rd parties |
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Term
| Kemp Fisheries v. Castle (1988 9th) |
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Definition
"no extrinsic evidence b/c contract fully integrated. If P wanted warranty, he should’ve included it in commercial contract. UCC doesn’t apply in admiralty." |
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Term
| Frigaliment v. BNS (1960 NY) |
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Definition
"P and D differed over meaning of “chicken” (young or old). No dispositive evidence proving narrow usage. Ct rules against P, b/c if he wanted to use the narrower meaning he should’ve specified it. Low price should’ve tipped him off." |
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Term
| UCC1-205- Ambiguous Terms |
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Definition
"when term is ambiguous, common usage governs, unless expressly otherwise." |
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Term
| Rest. 202- Common Meanings |
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Definition
"words should be interpreted in light of circumstances, using common meaning in general and technical meaning when used in technical field." |
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Term
| Rest. 206- Contra Proferentem |
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Definition
"When terms are ambiguous, ct will construe terms against drafting party." |
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Term
|
Definition
"every contract implies a duty of good and fair dealing in contract performance and enforcement. Duty of good faith can’t be waived, but it can be defined in contract." |
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Term
| Patterson v. Meyerhofer (1912 NY) |
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Definition
D intentionally prevented P’s performance by undercutting him at auction. P entitled to expectation damages (lost profit) from contract w/ D. You’re not freed from contract by making other party’s performance impossible |
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Term
| Iron Trade v. Wilkoff (1922 PA) |
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Definition
"D isn’t relieved of contract when P drives up market price by buying out D’s supplier, but no bad faith. Making contract difficult or unprofitable doesn’t void it. The more a party is aware of actions effects, less general ct will be." |
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Term
|
Definition
Seller’s damages for repudiation: contract price minus market price at time of breach. |
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Term
|
Definition
Good faith in the case of a merchant means honesty in fact and the observance of reasonable commercial standards of fair dealing in the trade.” |
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Term
| Hennington v. Bloomfield Motors (1960 NJ) |
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Definition
"Dealer’s express warranty doesn’t supercede implied warranty of merchantability, b/c it’s a contract of adhesion. Public interest not to allow car makers to contract out of implied warranty." |
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Term
|
Definition
Condition: event upon whose occurrence performance depends. |
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Term
| Dove v. Rose Acre (1982 IN) |
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Definition
"P not awarded employment contract bonus for substantial performance b/c P didn’t strictly adhere to its terms. Express conditions rarely struck down as unconscionable. Contract wasn’t adhesion, so power to contract respected." |
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Term
| Wall-Noon Corp v. Hill (1975 CA) |
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Definition
D didn’t give landlord notice that roof needed repair. P claimed he could’ve fixed roof cheaper. P’s express duty to repair implies D’s duty to notify P of need for repair. D pays 2/3 cost of repair (to prevent P’s unjust enrichment). |
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Term
|
Definition
Covenant to pay P was concurrent and dependant (upon covenant to grade streets in subdivision). Promises in contracts are assumed to be dependant unless words or intentions of parties show otherwise. |
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Term
|
Definition
"When construction is bad, damages are reasonable cost of completing performance, or if unreasonable, diminution in value." |
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Term
| Grun Roofing v. Cope (1975 TX) |
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Definition
P’s bad roofing job wasn’t substantial performance; full replacement needed. D not entitled to compensation. The mistake was so essential that it defeated the purpose of the contract. |
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Term
| Lowy v. United Pacific Insurance (1967 CA) |
|
Definition
Dispute arose about additional work after 98% completion. Failure to perform one part of a divisible contract (separate prices for each part) doesn’t prevent recovering for performance on an earlier part. |
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Term
| Impracticability and Changed Circumstances |
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Definition
doctrine provides a default term to assign risks in occurrence of an unforeseen event. |
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Term
|
Definition
"No duty to perform when supervening event, the assumption of which was basis for formation, makes performance impracticable, (161- unless your fault makes performance impracticable)." |
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Term
|
Definition
Frustration of purpose for which contract was formed voids contract. |
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Term
|
Definition
"It doesn’t matter if impracticability or frustration existed at time of contract, unless you knew about it." |
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Term
| Mineral Park Land v. Howard (1916 CA) |
|
Definition
"“All the gravel available” didn’t include underwater gravel. P was in better position to know about his land. A thing is impossible in legal contemplation when it’s not practicable, such as when it can only be done at an excessive and unreasonable cost." |
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Term
| Taylor v. Caldwell (1863 UK) |
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Definition
D not obligated to provide concert space after music hall burnt down. Rest.263- destruction of thing performance depends satisfies 261-Impracticability. |
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Term
| Canadian Alcohol v. Dunbar Molasses (1932 NY) |
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Definition
D not relieved for duty to supply P b/c source dried up. Doctrine of Impracticability doesn’t include normal failure of supply unless specifically written into contract. Otherwise wholesale contracts would be unreliable. |
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Term
| U.S. v. Winstar (1996 US) |
|
Definition
"W takes over failed bank in exchange for regulation help (as consideration). When new law blocked regulation, W gets damages for breach. When govt. is party, change of law doesn’t void contract for impracticability." |
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Term
|
Definition
"ALCOA forced to bear risks of price changes in gas market. Contract showed forethought, so ct won’t change it." |
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Term
|
Definition
"objective standard for construing repudiation, regardless of actual intent. (more explicit than Rest.)" |
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Term
|
Definition
"objective standard for construing repudiation, regardless of actual intent. Verbal or by conduct." |
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Term
| Plotnick v. Pennsylvania Smelting (1952 3rd) |
|
Definition
Installments. Tardy payment isn’t material breach w/o reasonable suspicion of insolvency. Rescission not allowed for technical failure. |
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Term
| Reliance Cooperage v. Treat (1952 8th) |
|
Definition
Seller sent letter of anticipatory repudiation. Buyer had no duty to mitigate until breach. Overturned for goods by UCC:UCC2-713(1) |
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Term
|
Definition
"You have duty to mitigate when you learn of the breach. Damages are difference b/t contract price and market price at time P learned of breach, plus consequential damages, minus saved expenses." |
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Term
|
Definition
"P can only recover damages that couldn’t have been avoided w/o undue risk, burden, or humiliation (if at all)." |
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Term
| UCC 2-712 “Cover”; Buyer’s Procurement of Substitute Goods |
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Definition
"objective test- D must pay difference in market price of actual result and market price of contracted result (minus money saved by P in refusing to perform in exchange). P has duty to mitigate, to “cover” with good faith purchase of substitute goods." |
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Term
| UCC 2-713: Buyer’s Damages for Non-delivery or Repudiation |
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Definition
"Damages for breach are difference b/t market price at time breach [not repudiation] is learned of and contracted price (minus savings from P’s non-performance, if any) plus consequential damages." |
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Definition
P gets costs of repairing errors unless it’s unreasonably higher than damages and creates economic waste. |
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Definition
subjective test- loss in value to P plus consequential damages minus savings in P’s failure to perform in exchange. |
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"the UCC doesn’t cap damages at expectations; when market changes diminish value of expectation damages, restitution may be appropriate." |
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Definition
P entitled to lost profit damages even though P mitigated entire cost by renting jukebox to someone else. Buyer liable for loss unit profit when supply is infinite. 2-708 (2). |
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Term
| Inchaustegui v. 666 5th Ave (2000 NY) |
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Definition
"When landlord party takes action to make up for failure of tenant to get insurance, landlord is owed costs of that remedy (insurance premiums) plus any other expenses resulting from the breach." |
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Term
| Peevyhouse v. Garland Mining (1962 OK) |
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Definition
"D didn’t have to repair P’s land after mining it, b/c contractual obligation to repair was much $29k, but value loss was $300. When economic benefit to P is grossly disproportionate to the enormous cost of performance to D, damages are only diminution of market value caused by D’s breach." |
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Term
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Definition
"cost of performance is proper measure of damages if it doesn’t involve unreasonable economic waste; if it does, then diminution in value caused by breach is proper measure of damages." |
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Term
| Hydraform v. American Steel (1985 NH) |
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Definition
P consequential damages for losses in yr D failed to deliver steel. Future lost profits are only awarded as far as they’re foreseeable |
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Term
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Definition
"damages must consider anticipated harm, actual harm, difficulties of proof of loss, and inconvenience of alternative remedy." |
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Term
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Definition
ct can order specific performance when goods are unique or circumstances are proper. |
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Definition
ct has discretion to grant specific performance. |
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Term
| Laclede Gas v. Amoco Oil (1975 8th) |
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Definition
Specific performance ordered b/c of public interest in heating town. |
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Term
| NIPSCO v. Carbon Cty Coal (1986 7th) |
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Definition
"Decreased cost of energy made coal mining no longer profitable. No specific performance b/c it would prevent efficient breach. Miners who lost their jobs b/c of closed mine aren’t parties to suit, so their losses are irrelevant." |
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Term
| Walgreen Co v. Sara Creek Property (1992 7th) |
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Definition
P got injunction preventing another pharmacy in mall despite contract precluding it. Injunction allowed parties to determine cost of damages; both more accurate and less costly to ct. |
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Term
| Varney v. Ditmars (1916 NY) |
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Definition
D guaranteed P “fair share” of profits for continuing to work til end of yr. No contract formed b/c “fair share” is too vague. No contract when essential term is omitted. Cardozo dissent: there was intention to create contract; jury could determine what fair share was. |
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Term
| Oglebay Norton Co. v. Armco (1990 OH) |
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Definition
P modified fleet in reliance on contract w/ D based on market price, which D tried to change/void when market went bad. When parties show intention to be bound, the court can fill in the gaps left by the parties in order to reach a fair and just result. Specific performance ordered b/c damages would be too difficult to calculate. |
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Term
| Vokes v. Arthur Murray (1968 FL) |
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Definition
D misrepresented P’s ability to dance. Even though there’s generally no duty to disclose facts, “if a party undertakes to do so he must disclose the whole truth.” A breach of good faith voids a contract. Also, relationship created fiduciary duty. P considered D’s opinion to be fact. |
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Term
| Centronics v. Genicom (1989 NH) |
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Definition
D refused to release undisputed funds from escrow when only part of sum was disputed. D didn’t act in bad faith by refusing to release undisputed part b/c he didn’t give up that right in contract. 4-part test: does D have discretion to deprive P of contract’s value; legally enforceable contract; did D exercise discretion beyond reasonable limits; did abuse of discretion cause P’s damages? |
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Term
| Ever-Tite Roofing v. Green (1955) |
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Definition
P could accept by performance. When P had loaded trucks w/ materials and driven to site, D had hired someone else. As long as performance takes place in a reasonable time given circumstances of promise, it completes contract (assuming contract allows acceptance by performance) if done before other party notifies of intent to withdraw. |
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Term
| Corinthian Pharmaceutical v. Lederle Labs (1989) |
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Definition
Price of vaccine changed after order was placed. 1) A published list of prices inviting an offer isn’t itself an offer (when seller makes that clear). 2a) A computerized response to an offer isn’t necessarily acceptance (in 1989, but not now). Also, see UCC. |
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Term
| Russell v. Texas Co. (1956) |
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Definition
Letter to D using P’s land said continued use constituted acceptance of offer. D used land for a bit and then notified of intent to decline, but D’s silence was construed as acceptance, so contract was formed. This is only the case when language of offer is unambiguous. |
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Term
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Definition
additional terms are treated as proposals for addition to contract. B/t merchants, they’re added to contract unless: initial offer limits acceptance to terms of offer, terms materially alter contract, notification of objection already made or is made w/in reasonable time. |
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Term
| Klocek v. Gateway (KS-2000) |
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Definition
The purchaser is the offeror, not the vendor, so the vendor isn’t master of the offer and can’t dictate terms of acceptance. Instead, it accepts by shipping product. Also, D didn’t make acceptance conditional, and only gave 5 days. UCC 2-207 applies, despite what Hill ct said. |
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Term
| James Baird Co. v. Gimbel Brothers (1933-2d) |
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Definition
P relied on subcontractor D’s mistaken proposal in its accepted bid; D withdrew offer before P accepted general contract award. Learned Hand: A proposal isn’t binding just because it is relied upon; it must be supported by consideration. (No longer good law) |
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Term
| Marchiondo v. Scheck (1967 NM) |
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Definition
D revoked offer to sell after P, broker, found a buyer. A unilateral contract to pay a commission of sale is binding upon performance. Rest.45: Once partial performance begins, a contract is formed requiring offeror to pay offeree upon full performance. Partial performance effectively created an option contract. D owed P commission. |
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Term
| Copeland v. Baskin Robbins (2002 CA) |
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Definition
When negotiations fail before contract formation, no expectation damages (b/c no breach), so, if there’s promissory estoppel, only restitution (but none in this case, even though D negotiated in bad faith). No common law duty of good faith before contract formation. |
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Term
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Definition
Unilateral Mistake: If only one party was mistaken as to a material fact, the contract is voidable if a) enforcement of the contract is unconscionable, or b) the other party knew or should have known of the mistake, or the other party caused the mistake. |
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Term
| Boise Junior College v. Mattefs Construction (1969 ID) |
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Definition
D’s mistake was bigger than entire profits from contract. Void. 5 element test: 1) Mistake was material, 2) enforcement would be unjust b/c mistake was a substantial percentage of contract, 3) D didn’t fail to exercise reasonable care (given the rush of bidding), 4) P wouldn’t be prejudiced (b/c it would only lose windfall from mistake), and 5) D gave P notice of mistake promptly (when P tried to accept). |
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Term
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Definition
Waiver of Condition: P’s salary as writer contingent on sobriety. D verbally waived restriction. Sobriety was immaterial condition of contract; no consideration needed for it. You can waive a condition, but not consideration. Conditions can be modified/waived w/o consideration unless they’re material. |
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Term
| Jacob & Youngs v. Kent (1921 NY) |
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Definition
D refused to pay contractor who violated contractual requirement for specific pipe brand. Cardozo: Performance was substantial. Mistake was unintentional and immaterial, specific would’ve been economically wasteful. No reduction in price owed to contractor. Pipe brand wasn’t a condition precedent. Dissent: this violates autonomy to contract for whatever you want. |
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Term
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Definition
Factors for determining if failure to perform is material - if not you can take advantage of substantial performance: Is contract divisible? Extent to which injured party: will be deprived of expctd benefit, can be adqutly compensated; e.t.w. party failing will suffer forfeiture; likelihd party failing will cure performance; if party failing’s behavior is in good faith. |
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Term
| Britton v. Turner (1834 NH) |
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Definition
Employee didn’t finish yrlong contract, sued for compens’n for 9.5 mos. Recovers under quantum meruit. (Willful breach precl’d substantial perform’ce claim.) A worker who only completes part of contract is entitled to reas. value of work (up to contracted value) - damage caused by failure to fulfill contracted rqmt. Labor contracts imply accept. of performance on day-to-day basis. |
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Term
| U.S. v. Wegematic (1966 2nd) |
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Definition
D failed to deliver computer under contract that explicitly called for liquidated damages for delay. D can’t claim impracticability for failing to develop new technology, it assumed that risk. Could’ve used condition subsequent clause. |
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Term
| UCC 2-612- Breach of Installment Contract |
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Definition
(2) If failure to perform substantially impairs value of contract to other party, there is breach on the whole. (3) But aggrieved party accepts reinstatement if he accepts a nonconforming good w/o canceling contract or only sues regarding past breach or demands performance for future installments. UCC doesn’t allow waiting until time for performance is up unless that is still w/in a commercially reasonable time. |
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Term
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Definition
The non-repudiating party has three choices:1) Wait until time for performance ends (or commercially reasonable time) and the sue for actual breach; 2) Anticipate breach and sue for damages; 3) Suspend performance and do (1) (UCC 2-609 only) |
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Term
| Taylor v. Johnston (1975 CA) |
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Definition
Horse breeding case. D anticipatorily breached, but P refused to accept repudiation by demanding performance. D’s making performance difficult isn’t breach in itself, so P breached by not waiting until end of time for performance before using another stallion. You can’t deny repudiation, wait a while, and then infer breach. Either accept repudiation or don’t. |
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Term
| UCC 2-609-Doctrine of Adequate Assurance |
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Definition
The right to adequate assurance arises when you have reasonable grounds for insecurity. It entitles you to suspend your performance while awaiting reply and to cancel contract if assurance isn’t given. Requirements of the demand: it must be based on reasonable insecurity; it must be in writing; adequate assurance can’t have already been given. When demanding party is worried about insolvency, it can require financial documents, etc. |
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Term
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Definition
where the breach results in defective or unfinished construction, damages are a) diminution in market value or reasonable cost of completing performance or b) reasonable costs of completing or remedying defects (as long as costs aren’t disproportionate to value of improvements). |
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Definition
Comment: If there is anticipatory repudiation, the other party is required to arrange a substitute transaction within a reasonable amount of time. The firmer the repudiation, the less time will be considered a reasonable amount to wait. The vaguer the repudiation (e.g. oral, or tentative), the longer the acceptable wait is. |
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Term
| Bernstein v. Nemeyer (1990) CT |
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Definition
No restitution in this particular losing contract, b/c even though D breached, D still took huge loss. Restitution is measured in terms of gains by D received through breached contract, not losses to P. It’s either 1) reasonable value to D of what he received or 2) extent to which his interests advanced. |
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