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Contracts Outline

I. Promise:
Hawkins v. McGee: D says will give 100% perfect hand to P. After operation, Ps hand hairy and P sues for breach of promise. D says there wasnt a promise. --Rule:

II. Contract Formation: Consideration and Mutual Assent


A. Consideration 1. Bargained-For Exchange v. Gratuitous Promise
Hamer v. Sidway: D uncle promises P $5k if P doesnt drink/use tobacco, etc until hes 21. P refrains, then sues for $$. D says its gratuitous promise, and therefore theres no consideration. --Rule: Ks require bargained-for exchange--Benefit and Detriment. Wish-fulfillment can be considered benefit and forbearing rights is a detriment. Langer v. Superior Steel Corp: P, retiree, promised $$ by D, previous company, not to look for another job. --Rule: D claims lack of Benefit. This enough to allow Ct to hear case. In re Greene: Man and Woman enter into K where Man gives Woman a lot of $$ in the future and Woman gives Man $1 (as consideration). CT finds this to be a gratuitous promise. --Rule: CT wont investigate into the reason something isnt consideration, BUT, a party must actually be induced to K for a consideration. Man wasnt induced by the $1.

2. Conditional Promises:
Kirksey v. Kirksey: D, brother-in-law of widowed P, offers land for P to live on. P moves to land and after 3 years, he says they have to leave. P sues for breach, D wins. --Rule: A condition to collect on a gratuitous promise isnt consideration. Allegheny College v. Natl Chautauqua Bank: Woman give $ to college to make fund in her honor. She gives part of the money, then dies, and estate rescinds offer of the rest. --Rule: A condition to a promise amounting to detriment to the promisee creates a Conditional Promise and the condition acts as the consideration.

3. Illusory Promises:
Strong v. Sheffield: Husband owes P father-in-law $, he cant pay. D, wife tells father she will pay for husband if he cant as long as P will forebear from collecting (No time length specified). After 2 years P tries to collect from D. D refuses. CT says was an illusory promise. --Rule: Illusory Promises are when one party has so much leeway in performing as to give that party complete control. Illusory promises are unenforceable. Wood v. Lucy, Lady Duff-Gordan: P enters into K with D for P to use Ds name to endorse stuff and they would split the profit. D starts to endorse with her name w/o telling P. P sues. D says they promise was illusory b/c P wasnt required to actually DO anything. --Rule: There is an implied consideration of Best Efforts in such Ks, which acts as consideration. Rehm-Zeiher Co. v. F.G. Walker Co.: P, whiskey maker, enters into K with D, whiskey distributor, to buy certain quanities of whiskey every year. Term in K says that D doesnt have to buy for any unseen reason. CT says its illusory and unenforceable. --Rule: Terms giving wide discretion to one party dont qualify as consideraton. Mattei v. Hopper: P, land developer, wants to build mall on Ds land. K said P had time to obtain satisfactory leases before going through. After P obtained leases, D said no to selling land, saying that the K was illusory b/c satisfaction gave P too much discretion.

--Rule: Satisfaction can be a legit condition, but it must be genuine (Not just based on caprice). There is Personal and Professional satisfaction.

B. Mutual Assent 1. Theory of Mutual Assent


Lucy v. Zehmer: P, in bar, enters into K with D to buy Ds farm. When P tries to enforce the K, D says he was joking, even though all of his outward acts and words said otherwise. --Rule: Assent is judged by outward behavior, not unexpressed intentions. Embry v. Hargadine: P, employee salesman, says he wont keep working for D unless he got another 1 year employment K. D says Youre all right, dont let that worry you. P keeps working, and then D doesnt give him a 1 year employment K. CT rules it was a K. --Rule: If a reasonable person could find a statement to be assent, it can be considered assent. Assent doesnt need to be an express statement. Intl Casings v. Premium Standard Farms: P and D go back and forth with emails and hammer out an agreement. Then, before its put into an official written record, D tries to back out. CT rules for P. --Rule: Writing a K isnt a necessary condition for a K to be entered into. When 2 parties have a meeting of the minds, a K is entered into. Empro Co. v. Ball-Co: Joseph Martin v. Schumacher: Renter P sues landlord D to rent space at fair price b/c there is no term for renewing the lease in the original K. P is using the UCC here. --Rule: The UCC is only for sale of goods. Landlord can dictate lease price.

2. Offer
Interstate Industries v. Barclay: D sends a price quote to P. P accepts the price quote, but then D cant deliver. P sues for breach of K. --Rule: A price quote doesnt constitute an offer. Craft v. Elder & Johnston: P sees ad in newspaper for sewing machine at $X. Goes to store and D store wont sell it at that price. CT rules for D. --Rule: An advertisement does not (usually) constitute an offer. Lekowitz v. Great Minneapolis Surplus: P sees ad with specific instructions on how to get a product with a limited supply. When he shows up at store D wont sell it to P, even though P has met all the requirements that the Ad said. CT rules for P. --Rule: An advertisement with specific instructions and for a limited supply of items is to be understood as an offer and accepting creates a K. Leonard v. PepsiCo: D has Pepsi Points promotion with a commercial jokingly showing that a Harrier Jet can be had for 7 million points. P collects those points and then D wont give the jet. CT says it was clearly a joke and rules for D. --Rule: Jest does not constitute an offer. Jest if reasonable person would understand it was jest through the context. Consolidated Freightways v. Williams: Consolidated puts up reward sign for info leading up to the arrest of people who are stealing from them. Williams catches someone, and Consolidated tries to say it wasnt an offer. CT rules for Williams. --Rule: Rewards are offers. Can be directed at specific people, but if someone fulfills the request of the reward, s/he is permitted to collect the reward.

Harris v. Time: P sues D for not giving P a calculator watch. P says opening envelope was the consideration that should have made it a K. CT rules for D. --Rule: Although this meets all the reqs of a K, the CT says the law disregards trifles, finding this to be a silly case.

3. Acceptance
Carlill v. Carbolic Smoke Ball Co.: D sells product saying, if you use it for this long in this way, you wont get sick or well pay you $100. D even puts cash in bank to show they mean their promise. P does what D says, and still gets sick. P sues D for the $100. CT says D must pay. --Rule: If reward offered, fulfilling the terms of the reward constitutes an acceptance. Glover v. Jewish War Vets: D puts out reward for any info leading to the arrest of a murderer. P is relative of murderer and in course of investigation, police find her and she tells police where murderer is. THEN she finds out about the reward and tries to collect. CT says she cannot collect. --Rule: One must voluntarily fulfill reqs of a reward to collect on it. Also, reward must induce person to make it a K. Corinthian Pharma v. Lederle Labs

4. Termination of Offers
Ever-Tite Roofing v. Green: D hires P to fix roof. Ds get to house, and find P has hired someone else to fix the roof. D sues for breach of K. CT rules for P. --Rule: Acceptance of a K occurs when the promisee begins the undertaking. Dickinson v. Dodds: P enters into K with D to give the option to buy land, saying the offer was open until a certain date and time. D notifies P that he rescinded offer before P accepts, then P tries to accept. CT rules for D. --Rule: An offer may be revoked at any time prior to acceptance. Tayloe v. Merchants Fire Insur.: P and D in insurance K for a house. P sends in K in mail, before D gets it, house burns down. D refuses to pay the insurance. CT rules for P --Rule: Mailbox Rule: Acceptance is made the day it is sent in the mail.

III. Affirmative Defenses to Contract Enforcement


A. Statute of Frauds
C.R. Klewin v. Flagship Properties McInerney v. Charter Golf Bazak Intl Corp v. Mast Indus. Crabtree v. Elizabeth Arden Corp Chomicky v. Buttolph

B. Infancy
Halbman v. Lemke Dodson v Shrader Webster St. Partnership v. Sheridan

C. Incapacity

Hauer v. Union State Bank Farnum v. Silvano In re Marriage of Davis First State Bank v. Hyland

D. Duress
Duncan v. Hensley Levine v. Blumenthal Alaska Packers Assoc. v. Domenico Austin Instrument v. Loral Corp. Centech v. Getronicswang Co.

E. Misrepresentation
Swinton v. Whitinsville Bank Weintraub v. Krobatsch Stambovsky v. Ackley Stroup v. Conant Vokes v. Arthur Murray, Inc.

F. Unconscionability
Williams v. Walker-Thomas Furniture I: Williams v. Walker-Thomas Furniture II: Frostifresh v. Reynoso I: Frostifresh v. Reynoso II: Zapatha v. Dairy Mart, Inc:

G. Public Policy
In the matter of Baby M: Johnson v. Calvert Marvin v. Marvin: Hewitt v. Hewitt: