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Contracts
Rutgers University, Newark School of Law
Chen, Ronald K.

 
Class I – August 25,2008

When are problems enforceable? What is a promise?
ü        Promise is a voluntary obligation
ü        Contract is a legally enforceable promise that the law will enforce in some way

Enforcement of a Promise: Hawkins v. McGee
ü        Facts (before any legal process has begun)

ü        Assumpsit is a breach of contract action. (Hawkins sued McGee on assumpsit)

ü        Warranty is type of promise. The promisor is promising the goods of a certain quality (in this case the result of the surgery)

ü        Negligence is an extrinsic authority. You shall act at a certain level of competence. (The count of negligence was a nonsuit)
§          Nonsuit – judge dismisses the charge/not letting it go to jury

ü        How are we making the distinction between the statements McGee made to Hawkins?
(How long recovery would take v. the statement guaranteeing a “one hundred   percent good hand”)
·          Language for the doctor could be excepted in exchange for something else (the opportunity to experiment)
·          Soliciting of business
o         “I will guarantee to make the hand a hundred per cent good hand…” (strong language that provides a functional distinction)
·          The statements regarding hospital stay was not considered by jury/ judge dismissed these statements
o         The judge made the determination not to let these statements be considered – “no reasonable jury could ever” determine otherwise. (Not up to judge to determine the credibility of the witnesses)

ü        Why do we enter into contracts? Expectation

ü        In Hawkins v. McGee, existence of consideration made the promise enforceable

ü        Promise – voluntary manifestation of a commitment to do an act


Remedy of Damages: Hawkins v. Mc Gee

ü        In Hawkins case, the original determination of damage was found by the Supreme Court to be erroneous in its instruction

ü        What if the hand was in the same condition as it was before the operation took place? Measure the difference
o         Courts decided the damages would be resolved based on expectation interest
§          Expectation is the default award of damage remedy
§          Difference in lifetime earnings between hairy and non-utile hand and 100% perfect hand
§          Lifetime pain and suffering of hairy and non-utile hand compared to 100% perfect hand
o         reliance interest
§          Lifetime pain and suffering could be awarded. The damages would be based on the difference between what the hand is now(post op) and what it was prior to op
§          difference in lifetime earning between scarred but utile and hairy and non-utile hand
o         restitution interest
§          doctor’s pre-paid fee

Class II – August 27, 2008

Why aren’t all promises legally enforceable?
ü        It is inefficient to develop judicial enforcement mechanism to enforce all promises

ü        As it concerns the example of McGee’s words to Hawkins, it is not purely an issue of grammar and syntax but context is also key

When is a promise enforceable and when is it not?

ü        If McGee revoked the promise prior to the operation, did he break the contract
o         Yes – promise of providing consideration -> reliance on contract (expectation)
o         Contract law will enforce a promise even though the promise is still at executory level (something that has not been acted)
o         Law will not protect the reliance interest but the expectation interest

Moral Obligation v. Legal Obligation: Congregation Kadimah Toras –Moshe v. DeLeo
ü        Summary judgment – if there is no dispute of facts, jury is not necessary. In these cases, judges will exercise summary judgment which allows the judge to rule on case without trial

ü        Congregation claimed reliance interest because they factored the $25,000 promise into their budget


ü        An oral promise to make a gift is not enforceable. There was no consideration or reliance
ü        “against public policy” – certain types of promises that had to be in writing; i.e. will (Statute of Frauds- old English law)

ü        Difference between moral obligation and legal obligation
§          Moral obligation does not necessarily constitute consideration

Case: Hamer v. Sidway

ü        Mesne assignment

ü        Unilateral v. Bilateral contract
o         Unilateral – accepted by performance (hard for promisee to breach)
o         Bilateral – accepted by return promise






















Class III – September 8, 2008

Main Theory – Promise is enforceable by presence of consideration

Consideration – “a valuable consideration in the sense of the law may consist either in some right, interest, profit or benefit accruing to the one party, or some forbearance, detriment, loss or responsibility given, suffered or undertaken by the other”

ü        As shown in Hamer v. Sidway, courts will not engage in whether the consideration was easy or hard:
Promisor – Benefit (Uncle)
Or
Promisee – Detriment (Nephew–abstaining from acts he had a legal right to do)

Hamer v. Sidway: Promise – was there a bargained for exchange

ü        The nephew giving up rights is all that is necessary to make promise enforceable

ü        “it is of no moment whether such performance actually proved a benefit to the promisor, and the court will not inquire into it, but were it a proper subject of inquiry, we see nothing in this record that would permit a determination that the uncle was not benefited in a legal sense. . . .”
o         By discussing the benefit of the uncle may have received, the court goes down a dangerous road

To make a Promise Enforceable

ü        Valid Consideration
And
ü        Must be Bargained For

Earle v. Angell: Most promises are made with mixed motives

ü        Nephew was under no legal obligation to attend funeral = detriment

ü        What if the promise of $500 was not the totality of his decision to attend the funeral? How can one determine the motive of the actor? Courts will not get into the mixed motive case

Restatement of Contracts, Second Section 71.

ü        (2) suggesting reciprocal inducement

ü        (3) example) life insurance contracts – flow to beneficiary

ü        There was not use of ‘benefit’ or ‘detriment’

ü        The assumption is if it is bargained for, it will satisfy the benefit or detriment requirement

The Value of Consideration: Fischer v. Union Trust

ü        Once father transferred the deed to daughter, the daughter became the owner of the property (completely executed gift to transfer the deed)

ü        Promise by the father was to keep up with payments on the land – was this legally enforceable

, a future cotton allotment
·          any promise to forbear from litigation should constitute valid consideration

ü        Restatement of Contracts Second 1(B) Section 74, Settlement of Claims Duncan v. Black decision is not reconcilable with the Second Restatement 1 (B) Section 74, Settlement of Claims
o         Forbearance to assert or the surrender of a claim or defense which proves to be invalid is not consideration unless
·          1(a) the claim or defense is in fact doubtful because of uncertainty as the facts or the law, or
·          (b) The forbearing or surrendering party believes that the claim or defense may be fairly determined to be valid.  (forbearer is acting in good faith)1(b) the forbearer is acting in good faith
o         First Restatement (page 210)
·          Required an honest and reasonable belief in the possible validity of an invalid claim or defense in order for forbearance
i.     
ü        Duncan v. Black & First Restatement – reasonable and honest belief
ü        Second – Either an honest or a reasonable belief








































Class V – September 15, 2008


Promises Grounded in the Past

Case: Mills v. Wyman

ü        Was there consideration in this case? / What did Mills do that one could argue was an enforceable promise?
o         Mills’ actions in caring for Wyman’s son

ü        Is it necessary that the consideration induced promise? Yes
o         Promise came after consideration. There is no way the consideration (providing shelter to son) induced by the promise made by the father.

ü        A moral obligation is not necessarily enforceable. A moral obligation needs a preexisting obligation to be an effective promise
o         Debts barred by statute of limitations
o         Debts incurred by infants
o         Debts of Bankrupts

ü        Also important to note that Wyman’s son was an adult – parent’s legal obligations end when a child becomes an adultdenny

ü        The issue in Mills v. Wyman is not the lack of a valid consideration(legal detriment did exist in this case – caring for someone) but an issue of bargain or inducement

ü        Payment owed to innkeeper would have changed if it were the case of Mills v. Wyman, Jr.

Case: Webb v. McGowin

ü        What is absent that might have made McGowin’s promise unenforceable?
o         bargained for inducement
o         promise was induced by heroic act but heroic act was not induced by promise

ü        Why is this different than Mills v. Wyman?
One factual distinction between the cases is that in Webb v.