Breach of Contract: unlawful failure by a party to perform its obligations pursuant to contract.
I. ENFORCING PROMISES
a. Three Ways
1. Restitution: benefit conferred on the D. I gave you something of value and I want it restored to me.
2. Reliance: Put P back with position she was in before agreement
3. Expectancy: difference between a condition as a promised, and the result
b. Meaning of enforcement: which ones we are going to care about and which one are we going to let slide, what is legally enforceable, is this the type of promise that is enforceable.
1. US Naval
1. Damages for breach of contract are generally measured by a plaintiff’s actual loss.
2. Economics of Remedies
1. Sullivan v O’Connor
c. Consideration as a Basis for Enforcement
1. Fundamentals of Consideration: Consideration: means not so much that one party is profiting as that the other abandons some legal right in the present or limits his legal freedom of action in the future as an inducement for the promise of the first.
1. Hamer v Sidway: Kid promised money from uncle if he stopped doing bad things, Uncle dies, kids want money. Forbearance is valuable consideration
a. Forbearance: refraining from doing something that one has the legal right to do.
i. This is valuable consideration
2. Gratuitous Promises:
1. Fiege v. Boehm: Child out of wed lock, dude promises to take care if she doesn’t sue him for basterdy proceedings. Forbearance to assert an invalid claim may serve as consideration for a return promise if the parties at the time of the settlement reasonably believed in good faith that the claim was valid.
a. Subjective element, does she have a good faith belief.
b. Objective element: reasonable belief.
3. Requirement of Exchange: Action in the Past
1. Fienberg v. Peiffer Co.: (old lady): gift pension, starting making payments and then stopped.
a. Past services is not valid consideration for a promise.
b. Mills (boy dies on boat death father said he’d pay): gratuitous promise to pay, it is not enforceable, the idea behind this concept is that moral consideration does not count. Cant be enforced. Never made any payments
2. Webb (mill wood case): “material benefit” only claims that are valid to the estate. Made payments until dude died. Estate execute said It was not consideration because they bargained for a past action and gratuitous promise. Past consideration is insufficient (one thing is not being given for another) BUT in this case there is a contract because there is consideration. Allowed McGowin to continue to still be living there fore the bargain of exchange occurred (implied an exchange given the nature of the situation) according to the SPECIFIC situation!
a. moral obligation is a sufficient consideration to support a subsequent promise to pay where the promisor has received a material benefit
4. Requirement of Bargain:
1. Kirksey v. Kirksey: Widow moves on brothers land cause he said if he she came she could stay, he doesn’t gain anything she gains then loses more, therefore To be legally enforceable an executory promise must be supported by sufficient ba
llusory or raise problems of mutuality of performance!
4. Eastern Air Lines: had a contract with oil company, oil company bounces.
a. A requirements contract entered into in good faith is not void for want of mutuality.
b. This is a requirements contract: Are contracts in which one party agrees to supply as much of a good or service as is required by the other party. For example, a grocery store might enter into a contract with the farmer who grows oranges under which the farmer would supply the grocery store with as many oranges as the store could sell. Eastern will only buy from Gulf Oil.
c. Output contract: is an agreement in which a producer agrees to sell its entire production to the buyer, who in turn agrees to purchase the entire output, whatever that is. Seller can sell only to buyer, but B is free to Buy from others.
d. UCC: only deals with contracts involving goods.
5. Lady Duff Gordon: She had a contract to sell cloths with this dude, she then goes and sells her own cloths, dude sues.
a. Rule: while an express promise may be lacking, the whole writing may be instinct with an obligation – an implied promise – imperfectly expressed so as to form a valid contract.
b. A bilateral contract can be express, implied in fact, or a little of each.
c. The finding of an implied promise for the purpose of finding sufficient consideration to support an express promise is an important technique of the courts in order to uphold agreements with seem to be illusory and to avoid problems of mutuality of obligation.