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Contracts
Rutgers University, Newark School of Law
Hyman, Jonathan M.

Contracts Course Outline – Briefs

8/26/2008
Lucy v. Zehmer p1

Parties:
o Plaintiffs / respondents: WO Lucy and JC Lucy
o Defendants / appellants: AH & Ida Zehmer:
Issue:
o Whether a written agreement made by two parties must be honored despite one party’s actual intent, unknown to the second party, to the contrary.
Material Facts:
o Lucy had offered to buy the piece of land in question from the Zehmer’s numerous times, but all prior offers had been declined.
o Lucy and Zehmer had discussed the details of the agreement for a significant amount of time, in complete detail.
o Zehmer did not directly state or imply his intention not to sell to Lucy until the following Tuesday
Procedural History:
o Case went to circuit court where it ruled in favor of the Zehmers. That ruling was then appealed to the supreme court of Va.
Holdings:
o Buchanan, J ruled that Lucy had fair reason to believe that the contract Zehmer wrote was a serious and binding agreement, and the facts of the matter presented are consistent with the agreement as binding, so the previous ruling was reversed and specific performance was remanded.
Analysis:
o The judge ruled that none of Zehmer’s actions were apparent to Lucy that the agreement was written in jest. Further Zehmer’s claims of intoxication were not supported by the evidence. Because law states that that an agreement can only be formed by the expressions between the two parties, all expressions outside of that communication cannot be taken into account.

8/26/2008
Northern India Public Service Co. v. Carbon County Coal Co.
Parties:
· Northern India Public Service Co.
· Carbon County Coal Co.

Issue:
· Whether a party can use a force majeure clause in order to opt out of its contractual obligations when fulfilling those obligations would result financial loss which has been indirectly imposed by a ruling body.
Material Facts:
· In 1978 NIPSCO entered in to a contract to buy a fixed rate of coal at a semi fixed price (adjustable floor to account for dramatic increases in market price).
· In 1983 NIPSCO could not raise its rates to account for rising operational cost, but was mandated to buy energy from other companies at a lower rate then would be its cost to operate.
· The commission that regulated the energy buy stated that the responsibility of entering into a long term coal supply agreement rested entirely with NIPSCO
Procedural History:
· Under US District Court NIPSCO sued CCC seeking a declaration of excuse from obligations
· CCC counter claimed for breach of contract and was awarded $181 million by trial jury verdict
· Court ordered NIPSCO fulfill its obligation, but later dissolved the preliminary injunction. In favor of damages
· NIPSCO appealed from damage judgment. CCC appeals the damage judgment in favor of specific performance.
Holdings:
· The court of appeals denies both CCC and NIPSCO’s appeals an upholds the ruling of $181 million in damages to be paid to CCC.
Analysis:
· When NIPSCO entered into the contract to purchase a fixed amount of coal from CCC it was agreeing to assume the risk of market changes for lower fuel costs, in the same way CCC had agreed to assume the risk of market changes for higher costs.
· When the energy commission ruled that the NIPSCO had to explore the possibility of purchasing energy from other companies if it was cheaper then producing it itself, it did not mandate that NIPSCO had to refrain from producing it itself, it only mandated that it could not pass the added cost of production onto the customers if there was a cheaper alternative available .
· The two above points rule out NIPSCO’s claim of force majeure, and frustration and impossibility.
· In the case of CCC’s appeal, the court ruled that specific performance was not appropriate as CCC’s damages were a sufficient remedy, and the losses to the miners and satellite business were irrelevant since they were not parties to the contract and in taking those professions, had assumed the risk of the mine eventually closing.

8/27/2008, 7:02 PM
Hamer v. Sidway
Parties:
· Defendant /respondent: Testator to Story Sr.
· Plaintiff/appellant: Story Jr.
Issue:
· Whether plaintiff’s actions constituted a condition which validated the promise as a legal contract.
Material Facts:
· Story Sr. promised Story Jr. that if he refrained from acts of vice until his 21st birthday Story Sr. would pay Story Jr. $5000
· Story Sr. passed away and the executor of his estate declined to honor the promise on the grounds that the actions of Story Jr. were of benefit to him and not his uncle, and as such the contract was not valid.
Procedural history
· Court ruled in favor of Defendant denieing judgment of Special Term
Holding:
· Judgment reversed and the order of special term affirmed

Analysis:
· Court ruled that even though the act was of benefit to the plaintiff and not to the defendant, the fact that in fulfilling his promised duties the plaintiff suspended the exercise of actions that were his legal right fulfills the contingency of a valid promise for a contract.

8/27/2008, 7:33 PM
Lake Land LLC v Columber
Parties:
· Plaintiff/appellant: Lake Land
· Defendant/respondent: Columber
Issue:
· Whether or not an lack of consideration on an existing employees part regarding a non competition contract is ground for summary judgment
Material Facts:
· Columber signed a noncompetition agreement that he would not engage in any business with a competitor within a 50 mile radius for a period of 3 years after his termination (in 2001)
Procedural history
· Columber plead lack of consideration and trial court ruled in his favor (summary judgment)
Holding:
· Summary judgment reversed and remanded back to trial court for further proceedings
Analysis:
· Court ruled that because Columber was engaged with Lake Land in an at will employment that could be terminated at any time, Columbers continued employment is evidence of consideration within the contract.

8/28/2008
Petroleum Refractionating Corp v Kendrick Oil Co
Parties:
· Plaintiff/appellant: Petroleum
· Defendant/respondent: Kendrick
Issue:
· Whether or not a conditional out constitutes an illusory promise and a lack of consideration.
Material Facts:
· Petroleum company delivered a porting of the order to Kendrick. Kendrick refused future orders on the grounds that it was not the grade they specified.
· Petroleum company sold the remaining oil for $.25 a barrel and sued Kendrick for breach of contract for damages equal to the difference between the specified contract price and $.25
· Kendrick issued a demurrer on the grounds that the out specified in the contract for Petroleum co to not deliver the oil if they stopped making the grade constituted an illusory promise, rendering the contract invalid due to lack of condition.
Procedural history
· Trial

red a position from the defendants managing editor (deceased at the time of the trial)
· Plaintiff was fired 5 years later and sued the owner of the paper seeking damages for breach of contract on the grounds that he was offered life employment.
Procedural history
· Ruling in favor of Plaintiff
· Defendant Appeals
Holding:
· Judgment set aside and the case remanded to render judgment in favor of defendant
Analysis:
· Court rules that none of the facts of the case support the allegations that the plaintiff was offered anything more than a non temporary at will position. Further the fact that he had left his old job does not grant special consideration for a promise (detriment to the promisee) let alone a contract for life employment.

9/2/2008
Ricketts v. Scothorn
Parties:
· Plaintiff/respondent: Scothorn
· Defendant/appellant: Rickets
Issue:
· Whether the promissory note can be honored as a valid contract
Material Facts:
· Ricketts’s testator, the grandfather of the plaintiff, walked into the place of the defendants employments and offered her the note promising her $2000, and 6% interest on that money. He explained that none of his other grandchildren work and she should not have to either.
· The plaintiff then quit her job.
· The testator made one interest payment which the plaintiff used to live off of.
· The testator died and the executor failed to continue on the promise
Procedural history
· Judgment in favor of plaintiff
Holding:
· Judgment affirmed
Analysis:
· Court rules that there was an equitable estoppel which precluded the defendant from alluding the note was not a valid contract.
· Because the offer induced the plaintiff to change her behavior as a result of the execution of the promise it can be enforced as a binding contract. In this case the courts look to reliance as opposed to consideration.

9/2/2008
Cohen v. Cowles Media Co p66
Parties:
· Plaintiff/appellant: Cohan
· Defendant/respondent: Cowles Media
Procedural history
· Trial court rules in favor of plaintiff on grounds of breach and misrepresentation
· Appellate affirms on breach
· Minnesota Supreme court reversed on grounds of lack of consideration
· US supreme court reverses and remands for further proceedings
Issue:
· Whether a promise not to disclose the identity of the informant constitutes an enforceable contract
Material Facts:
· Plaintiff disclosed information to reporters of the defendant new paper under the promise that he would remain anonymous as the source
· Editor decided that he could not remain anonymous and printed his name.
· Plaintiff subsequently lost his job .
Holding:
· On remand Minn supreme court affirms for plaintiff on theory of breach by Promissory Estoppel