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spending dollars, the initial allocation of dollars will affect the outcome of the voting) 2. Reliance: Trust, Responsibility, Injury a. The reliance principle begins with the idea that people do rely upon each other in many situations and that such reliance often is morally and politically valuable b. Reliance flows from an indication of trust c. People act relying on a person to act a certain way or to fulfill some action that you reasonably rely to your detriment, when this occurs the other party is liable d. There must be actual reliance, and injury that was foreseeable e. Main components of reliance i. Trust ii. Responsibility of harm iii. Injury f. There is only one promise made in reliance, therefore no contract exists g. To remedy the goal is to place the person in the same situation they were in before the promise or reliance was made h. The reliance principles purpose is to correct wrongs, focusing on harm and out of pocket losses. Those who cause the harm should be accountable i. Compensation is in the form of a Corrective or Restorative Claim injury compensation Equitable Estoppel A defensive doctrine preventing one party from taking unfair advantage of another party when, through false language or conduct, the person to be stopped has induced another person to act in a certain way, with the result that the other person has been injured in some way. Elements: 1. There was a false representation or concealment of material facts 2. The representation was known to be false by the party making it, or the party was negligent in not knowing its falsity. 3. It was believed to be true by the person to whom it was made 4. The party making the representation intended that it be acted on, or the person acting on it was justified in assuming this intent
5. The party asserting the estoppels acted on the representation in a way that will result in substantial prejudice unless the claim of estoppels succeeds. Promissory Estoppel: The principle that a promise made without consideration may nonetheless be enforced to prevent injustice if the promisor should have reasonably expected the promise to rely on the promise and if the promise did actually rely on the promise to his detriment. 3. Restitution: Unjust Enrichment and the Duty to Right Other Wrongs a. The restitution principle holds that one who violates a duty or commits some wrong ought to be required to repair any injury she or he has caused b. One promise, No Contract c. The principle is reduced to the idea that one ought to pay for a benefit unjustly retained. d. By unjust retaining one party must confer a benefit and the other party must retain it restoring a benefit e. Acting without communication between the parties f. A claim for unjust enrichment is generally said to require proof of three elements: i. The plaintiff must show that she conferred a benefit on the defendant and that the defendant retained the benefit (i.e. didnt give it back or pay for it) ii. The plaintiff must show that she did not confer the benefit as a gift some courts say that the plaintiff must prove that she conferred a benefit with an expectation of payment AND iii. The plaintiff must prove that she was not acting officiously in conferring the benefit. To avoid the charge of officiousness, the plaintiff must show some good reason (like emergency) why she did not first negotiate a contract with the defendant before conferring the benefit. g. The Restatement of Restitution 2 (1937) provides: A person who officiously confers a benefit upon another is not entitled to restitution therefore. Implied Contracts Implied in Law (Quasi-Contract) A contract implied in law is not actually a contract but instead a remedy. It is used in restitution cases, in order for a court to find
remedy the court must use an implied in law contract to do so. Dont look at the actions. It is considered a fictitious legal duty to remedy unjust enrichment Implied in Fact Implied in fact contracts do allow you to look at the actions. This actually exists either as a contract in writing, a verbal agreement, or through past conduct
Three Variations on the Objective Test Formalist: Where the reasonable person is positioned outside of the history and the circumstances of the party and who sees the conduct
apart from the context in which they were uttered or performed. A universal observer such as a judge or the law student. Positional: The measurement of the understanding of the reasonable person who is the observer. This is the Embry you are a reasonable person who is not emotionally involved but taking not of the situation. The meanings of words are interpreted according to the understanding of a universal observer who is placed in a position of the recipient of the communication. In Embry the reasonable person does have his job, employment history, and contextual knowledge and concerns. This is the most commonly used variation of analysis of the objective test. Social Identity: this reasonable person test interprets the meaning of words and conduct according to the understanding of an observer who is placed in the position of the recipient of the communication but who also has the social identity of the recipient. This was used in the Steelworker case. The weakness of this test is that it requires the court to determine the understanding of another person. This test arises from Article 8 of the United Nations Convention on Contracts for the International Sale of Goods. 2. An Alternative Theory of interpretation: The Doctrine of Misunderstanding
a. where the parties have different understandings of the terms of the contract then there is no understanding b. In the Peerless case the court ruled that, because each party had a different ship in mind at the time of the contract, there was in fact no binding contract. c. Restatement (Second) of Contracts (1981). Section 20 states in part: i. There is no manifestation of mutual assent to an exchange if the parties attach materially different meanings to their manifestations AND ii. Neither knows or has reason to know the meaning attach by the other. iii. Even though the parties manifest mutual assent to the same words of agreement, there may be no contract because of a material difference of understanding as to the terms of the exchange
b) The number of people to whom the communication is addressed: In many situations, the fact that a communication is sent to more than one person makes it less likely that it was an offer c) How detailed the communication is regarding the terms of K d) Any relevant community practice, course of dealing, course of negotiations, or other circumstances that would effect a reasonable persons interpretation of the communication
G. General Rules 1. Price quotes are not offers **Southworth** a) Exceptions: i. They are sent to a limited number of people ii. They are sent to several people but there are only a limited number of people whom can eventually accept iii. They otherwise communicate a willingness to enter into K with numerous people 2. Generally Ads are not offers; they are invitations to offer a) Exceptions i. They limit the number of people who may accept ii. They invite the reader to do or not do something iii. For some other reason they communicate a willingness to commit. iv. How the detailed the communication is. **They are not transformed into enforceable offer merely by a potential offerees expression of willingness to accept the offer through, among other means, completion of an order form. 3. Rewards a) If a person performs the condition required to receive the award, they are entitled by law to received what was promised 4. Commercials b) Whether an offer has been made depends on the objective reasonableness of the alleged offerees belief that the advertisement or solicitation was intended as an offer (what an objective reasonable person would have understood the commercial to convey) H. Termination 1. Rejection or counteroffer Normille v. Miller 2. Revocation of the offer Normille v. Miller 3. Lapse: the offer is said to simply expire after passage of a specified or reasonable period of time (conversation: till conversation is over; writing: reasonable or specified time (1 yr))
II.
supplementary terms incorporated under any other provisions of this Act. - Conducts trumps writing, as long as there is no objection 3. Knockout Rules: a) Conflicting terms in the offer and acceptance cancel one another out; when there is an offer and additional terms from offeree conflict with terms in the offer, both pieces of writings cannot prevail, thus they cancel each other out. b) different terms are not treated as additional terms for disposition under section 2207(b), c) Section 2207(b) is limited to its express language. d) The offerees form is treated only as an acceptance of the terms in the offers form which did not conflict e) Ultimate K includes those non-conflicting terms and any other terms supplied by the U.C.C. **Course of dealings: btw business entities, there are customs and practices that they are used to dealing with each other. It establishes a pattern **Usage of trade: Same trade as course of dealing, trade practices are fairly well standard act. May not necessarily have been dealing business with the other before **Implied warranty of fitness: a product is deemed fit for the purpose of which it is intended, thus if the product harms one based on something that it is not impliedly fit to do, then the maker cannot be liable for it. **material terms: substantive terms, that information is necessary to the determination of the issue of acceptance (deal breakers) C. Purchase Orders 1. If the offer on the purchase order is unambiguous in inviting acceptance only by signature, then no K exists until the purchase order is signed accordingly; however, if defendants offer is ambiguous in inviting acceptance, a contract could be found to exist. D. Contests 1. Offerers are accepted by their plain and ordinary meanings that were expressed and announced, not by the ones that were left unannounced 2. Accepting a sponsors offer to participate in a contest creates an enforceable contract; thus, awarding a prize to a contest winner is a contractual duty. E. Box top License 1. Standards of 2-207
be fixed in terms of some agreed market or other standard as set or recorded by a third person or agency and it is not so set or recorded. c) An agreement to agree: you must have a mechanism in place to adjust terms and come back to discuss and renew as time goes along. If you cant come to agreement, then the renewal cannot come into place.
Chapter 3. Consideration
Definitions: *mesne: occupying a middle position, intervening and intermediate Sub judica: the instant case Volenti non fit injuria: he who consents cannot resist thereby
2. Where a party does what it is already legally obligated to do there is no consideration and no detriment. 3. Cannot get someone to waive their liability for something that you are legally obligated to do; party cannot condition another parties participation upon waiving something that the 1st party is legally obligated to do. (White v. Villages) C. Illusory promise 1. A statement may sound like a promise yet not be a promise 2. They are not a promise, and cannot suffice for consideration 3. Words of promise which by their terms make performance entirely option with the promisor does not constitute a promise; cannot reserve the right to change your mind. 4. Illusory and Alternative Promises a) A promise or apparent promise is not consideration if by its terms the promisor or purported promisor reserves a choice of alternative performances unless b) One of the alternative performances would have been consideration if it alone had been bargained for; or c) One of the alternative performances would have been consideration and there is or appears to the parties to be a substantial possibility that before the promisor exercises his choice events may eliminate the alternatives which would not have been consideration 5. Alternative promises a) May be made because each of the alternative performances is the object of desire to the promise The promise may desire one performance only, but the promisor may reserve an alternative which he may deem advantages The promise is consideration if it cannot be kept w/out some action of forbearance which would be consideration if it alone were bargained for. If the promisor has an unfettered choice of alternatives, and one alternative would not have been consideration if separately bargained for, the promise in the alternative is not consideration b) Alternatives not dependent on promisors free choice A promise may give the promise a right to choose one of several stated performances. The selection among alternative performances may be left to events not within the control of either party The promise, if bargained for, is consideration if any one of the alternatives are subject to conditions which cannot exist or occur. The promise may be consideration even though a conditional power of choice is left to the promisor. 6. It is immaterial for terms of the contract itself to recite the claimed consideration; there is no requirement that they do.
Complaint only has to state a cause of action for which the court can grant relief. (Maszewski v. Piskadlo) 7. Courts will not presume if a contract was entered into for illegal or moral reasons (Maszewski v. Piskadlo) D. Mutuality of obligation (rejected by restatement (2nd) of contracts) 1. Requires that the parties exchange promises that are equally enforceable E. Considerations must be bargained for 1. Bargained for: the return promise or performance was sought by the promisor in exchange for the promise 2. The promise or performance was the reason or inducement for the promise 3. Getting the performance does not have to be the actual or predominant motive of the promisor 4. The objective appearance is of a bargained for exchange, structured so that the return promise or performance is the price of the promise, is required 5. A promise that is gratuitous is not enforceable without consideration 6. If it violates public policy, then it is invalid; not bargained for, no distinction made
2. Reasonable reliance: reliance is reasonable only if it induced by an actual promise 3. Promise: a manifestation of intention to act or refrain from acting in a specified way, so made as to justify a promise in understanding that a commitment has been made a. A promise may be stated in words, either orally or in writing, or may be inferred wholly or partly from conduct. b. A promise must be distinguished from a statement of opinion or a mere prediction of future events. 4. Both traditional contract and promissory estoppels theories of obligation use an objective standard to ascertain whether a voluntary commitment has been made. Look at the words and actions of the transaction, as well as, the nature of the relationship btw. the parties and the circumstances surrounding their actions. 5. Where the parties have left open some matters to be determined in the future, enforcement is not precluded if there exists a method of determining the terms of the contract either by examining the agreement itself or by other usage or custom that is independent of a partys mere wish, will, or desire. 6. An enforceable agreement may be found even though the determination is left to one of the contracting parties, as long as, he is required to make it in good faith in accordance with existing standard or with facts capable of objective proof. Case: Joseph Hoffman v. Red Owl Stores, Inc. Whether the promise necessary to sustain a cause of action under promissory estoppels must embrace all essential details of a proposed transaction between promisor and promise so as to be the equivalent of an offer that would result in a binding contract between the parties if the promise were to accept the same. 1. It would be a mistake to regard an action grounded on promissory estoppels as the equivalent of a breach of contract action. 2. Conditions to meet requirements of an offer are a. Was the promise one which the promisor should reasonably expect to induce action or forbearance of a definite and substantial character on the part of the promise? b. Did the promise induce such action or forbearance? c. Can injustice be avoided only by enforcement of the promise? 3. Injustice would result here if plaintiffs were not granted some relief because of the failure of defendants to keep their promises which induced plaintiffs to act to their detriment. Case: Jo Laverne Alden v. Elvis Presley 1. Detrimental action or forbearance by the promise in reliance on a gratuitous promise, within limits, constitutes a substitute for consideration, or a sufficient reason for enforcement of the promise without consideration.
2. No injustice results in refusal to enforce a gratuitous promise where the loss suffered in reliance is negligible, nor where the promises action in reliance was unreasonable or unjustified by the promise. 3. The limits of promissory estoppels are: a. The detriment suffered in reliance must be substantial in an economic sense b. The substantial loss to the promise in acting in reliance must have been foreseeable by the promisor c. The promise must have acted reasonably in justifiable reliance on the promise as made 4. Gift is not synonymous with a gratuitous promise. A gift has to be complete to be considered a gift. Case: Guy Kinoshita v. Canadian Pacific Airlines, Ltd. And D.W. Merrell Ronald K. Nakashima v Canadian Pacific Airlines, Ltd. And D.W Merrell 1. If an employer chooses to issue a policy statement, in a manual or otherwise, and, by its language or by the employers actions, encourages reliance thereon, the employer cannot be free to only selectively abide by it. Having announced a policy, the employer may not treat it as illusory. 2. A standardized agreement is interpreted wherever reasonable as treating alike all those similarly situated, without regard to their knowledge or understanding of the standard terms of the writing. 3. To create expectations and induce reliance by employees as a group, it should not be able to escape liability on the grounds that a particular employee was unaware of the rules and thus did not receive a promise.
1. However much the defendant should be impelled by common gratitude to alleviate the plaintiffs misfortune, a humanitarian act of this kind, voluntarily performed, is not such consideration as would entitle her to recover at law. II. Restatement Second section 86 1. A promise made in recognition of a benefit previously received by the promisor from the promise is binding to the extent necessary to prevent injustice 2. A promise is not binding under Subsection (1) a. If the promise conferred the benefit as a gift or for other reasons the promisor has not been unjustly enriched b. To the extent that its value is disproportionate to the benefit Alternative to Restatement Second Section 86 1. A serious promise made in recognition of a benefit received by the promisor or rendered by the promise in the past is not unenforceable by reason of lack of consideration.
III.
C.
Case: William Edwin Van Brunt III v. Robert Rauschenberg Case: Realty v. Valley
1. The doctrine of illegality and public policy refuses enforcement because the purpose or effect of contract violates a law or conflicts with basic public values. 2. The various statutes of frauds preclude enforcement of certain kinds of contracts unless they are evidenced by some writing. 3. The doctrines of age and mental incapacity make contracts entered by young people and people who are mentally challenged voidable.
A.
Case: In the Matter of Baby M 1. Surrogacy contract is invalid because it had a direct conflict with existing statutes and conflict with the public policies of the State, as expressed in its statutory and decisional law. Case: A.C. v. C.B 1. Petitioners sexual orientation, standing alone, is not a permissible basis for the denial of shared custody or visitation. Issue should not be the nature of the sexual orientation, but whether and how those activities affect the child. It is a factual issue and not a matter of law. Thus it should be decided by the Trier of the fact.
B.
Statute of Frauds
1. Generally, oral contracts are fully enforceable, but there are exceptions when the K are covered by one or another statute that requires some written evidence before a K will be legally enforced. 2. A person may not sue for enforcement for the following promises unless the agreements or some memorandum thereof shall be in writing, and signed by the party to be charged therewith.
3. 4. 5. 6. I.
a. A promise of an executor or administrator to answer for the debt of his decedent b. A promise to answer for the debt of another c. An agreement made in consideration of marriage d. A contract for the sale of an interest in land e. Any agreement that is not to be performed within one year from the making thereof and f. An agreement for the sale of goods for a price of more than ten pounds sterling. Writing does not have to be formal, or even signed by both parties K can be enforceable against one party (who signed or adopted the writing) while it is not enforceable against the other party. If one party wrote down the agreement for his or her own files, and the other did not, then the K may be enforceable against the first party but not the second. Writing does not have to be made at the time of contract.
Lack of Capacity 1. Capacity Doctrine promoted the belief that men of European descent are intellectually and morally superior to all other people. 2. 42 USC 1981 provides that all people, regardless of race or ethnicity should have legal right to contract. 3. Contemporary contract law holds that all children are legally incapable of contracting and adults with mental incapacity are legally incapable of contracting, including in some cases, adults rendered mentally incapable by alcohol or drug intoxication. Thus, they are voidable. 4. Minors and mentally disabled may avoid the contract b disaffirming it. However, upon reaching the age of majority or upon recovering capacity he/she may choose to ratify or affirm the contract, and if performance under contract is ongoing, continuation of performance may be treated as implied affirmation. 5. Even if the contract is voided, a child or person with mental incapacity may be liable in restitution if the other party provided necessaries or necessities to the child or person with mental incapacity.
Case: James Halbman, Jr. v. Michael Lemke 1. Absent misrepresentation or tortuous damage to the property, a minor who disaffirms a contract for the purchase of an item which is not a necessity may recover his purchase price without
liability for use, depreciation, damage, or other diminution in value. Case: Shoals Ford, Inc. v. Maxine Clardy 1. To avoid a contract on the ground of insanity, it must be satisfactorily shown that the party was incapable of transacting the particular business in question. It is not enough that he was the subject of delusions not affecting the subject matter of the transaction, nor that he was, mentally weak. 2. A party cannot avoid a contract, free from fraud or undue influence, on the ground of mental incapacity, unless it can be shown that his insanity was of such character that he had no reasonable perception or understanding of the nature and terms of the contract.