Select Page

Contracts
Rutgers University, Newark School of Law
Tractenberg, Paul

CONTRACTS OUTLINE

Types of Contracts
1.      Unilateral
-promise given in exchange for performance
-offeree could walk away from the promise

2.      Bilateral (mutuality of obligation)
-promise given for a promise (exchange of promises)
-a reciprocal relationship develops
-consideration needed on both sides
-K enforceable at the point where they exchange promises

White v. Benkowski (consideration case)
F-W’s speak to B’s about supplying water
-W’s argue that they bought house in consideration for B’s promise to supply water.
I- Whether an enforceable agreement w/consideration exists
H-P able to receive nominal damages, not compensatory damages
Punitive damages are generally NOT allowed for breach of K actions

Sullivan v. O’Connor (use of compensatory “expectancy” damages)
F-Surgeon performs plastic surgery and creates a worse nose for P.
I-What is the measure of damages to be applied where liability is found?
H- P allowed to recover out-of-pocket expenses; pain and suffering as applicable
-expectancy damages gave her $ for difference b/t beautiful nose and worsened nose.
-reliance damages would have given her $ for difference b/t original nose and worsened nose
-Liability in contract

Theories of Obligation:

1.      Consideration (Bargained for exchange)
-Predominant theory

Bargained for exchange (B/E) theory
-promisee’s detriment suffered in exchange for promisor’s benefit
-need to show that there was a legal detriment to the promisee and benefit to the promisor and each party induced the other
*Offer and acceptance reflects B/E

Bargain-agreement, manifestation of mutual assent
Legal Detriment
-a forbearance, which does not have to be greater than the benefit
-any relinquishment, yielding of a legal right
-an immediate act, future act, complete or partial abandonment, etc.

Use of an objective vs. subjective std.

Not likely to work when there is:
Gift Promises (gratuitous promise)

oss, trouble or inconvenience on the part of seller without benefit to buyer is good consideration.”

Maughs v. Porter (gift promise)
F-D held an auction and P gave $5 to participate. Her name was chosen but D refused to pay for its delivery.
R-Where a promisor derives a benefit from a promise to give a gift, and the promisee incurs a corresponding detriment, the promise is supported by consideration and enforceable.


Mattei v. Hopper
F-D was obligated to sell, but P was only had to buy if he was satisfied with the leases.
R-An agreement that contains a satisfaction clause is not ilusory (lacking consideration or mutuality of obligation) if performance of the condition can be judged by a reasonable person standard or if the party subject to the satisfaction clause acts in good faith.