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Contracts II
Elon University School of Law
Levine, David S.

4/14/11 3:31 PM
I. Unjust Enrichment
A. Background Intro
·         Unjust enrichment is a cause of action
o   Aka “quasi-contract” and “contract implied law”
§  Found a contract just to apply remedies
·         Elements:
o   Benefit conferred on recipient
o   Unjust to retain benefit without compensation
B. Types
·         “Officious intermeddler”
o   Someone who does not have intent to confer a gift, person offering service intended to be compensated for service.  Recipient might not request, but might also not want it.
§  Windshield washer.
·         “Volunteer”
o   Confers the benefit with the intent to give a gift.  Courts don’t always use these terms. 
o   No intention of being paid.
C. Remedies
·         Restitution=remedy for unjust enrichment
·         Party must give benefit back
·         Quantum merit= valuation method SERVICE
·         Equal to market value of service conferred
·         Quantum valebant= market value of goods conferred GOOD
D. Purpose
·         Enforceable rights even if there are no promises
·         Manufacturing contract that was never created for sole purpose of creating a remedy
o   Unconscious person never assented to consent.  Assuming you consent for services rendered, ie ER, we know that it is the right thing to do. 
E. What to do differently
·         Get intentions in writing, make your intent very clear
II. Defenses
A. Types
·         Void= as if contract never happened
·         Voidable= one party has option to deem contract void
·         Unenforceable= valid contract but no remedy
B. Misrepresentation
·         Agreement is voidable if assent justifiably induced by fraudulent or material misrepresentation
·         Savis, he mis-represented what he was really doing with his time
·         Restatement §162
o   Misrepresentation is fraudulent if the maker intends his assertion to induce a party to manifest his assent and the maker
§  A. knows or believes that the assertion is not in accord with the facts or
§  B. does not have the confidence that he states or implies in the truth of the assertion, or
§  C. knows that he does not have the basis that he states or implies for the assertion.
·         Misrepresentation Continuum
.                                              .                                                   .
Fraud                                 Reckless                                      Negligence
·         Puffery= vague or ambiguous statements
III. Mistake
A. Misunderstanding is when parties use same words but attach irreconcilably different meaning to them
·         Elements:
o   Parities have different meanings for the same word or words
o   Neither party know the other’s meaning
o   Words are material to the contract
o   One party’s meaning is not more reasonable than the other’s
·         Examples
o   Raffles case: two separate peerless ships from Bombay
o   Fifty Six Twenty case
§  Did he have authority to do that? His understanding reasonable?
·         Contracts rarely fail due to misunderstanding
B. Mistake
·         Elements:
o   Facts exist at time of contract
o   Parties of contract
o   Fact relates to basic assumption underlying contract
o   Mistake as a material effect on contract’s value
o   Complaining party does not bear the risk. 
o   Risk allocations:
§  By contract
§  Reckless about lack knowledge
§  Reasonable for party to bear

o   Impracticability= supervening fact that makes performance impractical … versus..
o   Frustration of purpose= supervening fact makes performance moot
o   Force majeure= act of God/ event outside parties’ reasonable control
·         If force majeure affects basic contract assumption and makes performance impractical/moot, performance excused unless contract specifies otherwise
o   Ex. Cruise or something where weather may permit and act
·         Restatement § 261
o   Where, after a contract is made, a party’s performance is made impracticable without his fault by the occurrence of an event the non-occurrence of which was a basic assumption on which the contact was made, his duty to render that performance is discharged, unless the language or the circumstances indicate the contrary.
§  Subjective: I cannot provide
§  Objective: It cannot be done
·         All about who bore risks?
E. Frustration of Purpose
·         Krell v. Henry
o   Performance not impossible because he could have come and Henry could have still paid.. Court still decided to excuse performance because purpose of visit was frustrated.
·         Restatement 265: Claim of Frustration of purpose
o   Elements:
§  1. Purpose that is frustrated must be have a principal purpose of that party
§  2. Frustration must be substantial
§  3. Non occurrence must have been a basic assumption