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Contracts
South Texas College of Law Houston
Page, Phillip E.

Contracts – Page

Definition: A Contract is a set of promises that have a person do or not to do something that is enforceable by law. [Doesn’t have to have document; consideration]

Definition: What is a promise? A promise is an undertaking, however expressed, either that something shall happen or that something shall not happen in the future.
· It may be suggested that a promise is the maker’s statement about his future conduct so made that the maker should expect the person to whom it is made mentally to rely on it as dependable,. It will be observed that the maker’s actual intention is not regarded as important and this is true in the courts.
· Seals were enforceable
CLASS NOTES:

Definition: A promise is a credible assurance or undertaking, however that something will or will not be done in the future that the law will enforce or consider legally significant. [Promise with regard to behavior in the future; bargain; legal obligation]

ROL: If you do not have a promise, you do not have a contract.

Restatement

UCC

Does the UCC apply to this dispute or is it something that is to be resolved under the common law rule? This will usually depend upon this transaction is a sale of goods.

Bolin Farms v. American Cotton Shippers Association.

Eleven Cotton Shippers had made a contract that they would sell cotton at a set price. The defendants agreed to purchase whatever was planted by these farmers on specific acreage at a price agreed upon between January and March of 1973, irrespective of what the price was at the time. The cost of cotton rose tremendously by the later part of that year and they felt that they should be compensated for the difference. The complaints seek a declaration that the contracts are null and void, so that the plaintiffs can achieve a better price than they had bargained for. The fundamental questions in each action involve the enforceability vel non of contracts for the advance or forward sale of cotton grown for the 1973 crop. The holding here shows that if you enter a contract, no matter if it benefits or hurts your business, it is a contract none of the less and you are held responsible for that.

It has shown that in precedent, that the validity of the contracts has been upheld by summary judgment, declaratory judgment, preliminary injunction, and or permanent injunction.

Some facts include: The contracts were made prior to planting. We call them forward sales contracts. Each plaintiff cotton farmer was experienced, having been a cotton producer for several tears and each was familiar with forward sale contract procedure. There had been an upward spiral because of unknown reasons but some may include large exports from China, water and flood conditions in the cotton belt, and late plantings.

One facet of the plaintiff’s attack was that the defendants had inside information at the time.

The holding: Plaintiffs emphasize that the cotton farmer has always been at the mercy of the weather and the boll weevil. This may be true; bit by the firm forward selling, the farmer shifts many of the risks to the buyer. The farmer guarantees neither quality nor quantity. He obligates himself to sell and the buyer obligates himself to buy all the cotton the farmer harvests from identifiable acreage. He sells it as a price at which he figures at the time of the contract he can make a profit in relation to his expectable costs. Against the firm contract he can arrange his crop financing. The depositions reveal the systems used, and there can be no argument that it does give the grower a real limitation of risk.

Theories of Promissory Liability

Five Theories explain which commitments merit enforcement and which do not – Will, Reliance, Efficiency, Fairness, and Bargain

Will and Reliance are party based theories, Efficiency and Fairness are standards based theories and Bargain is the process based theory.

A. Party Based Theories
a. Will – primarily concerned with protecting the promisor. Here the Promisor has chosen to be bound to there commitment. If they break their word, they cannot complain about it since they intended that force could be used against them when they made their commitment. Here the parties willfully go into a contract. “Will theories maintain that commitments are enforceable because the promisor has “willed” or chosen to be bound by his commitment… In this approach, the use of force against a reneging promisor is morally justified because the promisor herself has warranted the use of force by her prior exercise of will. A promisor cannot complain about force being used against her, since she intended that such force could be used when she made such a commitment.
i. Reliance – primarily concerned with protecting the promise. Someone makes a statement. It has become fashionable to assert that contractual obligations are created by a reliance on the promise. A reliance theory is based upon the intuition that we ought to be liable in contract law for our assertive behavior when it creates “foreseeable” or “justifiable” reliance in others, in much the same way that we are held liable in tort for harmful consequences or other acts.
ii. A Statement reasonably foresees that someone would rely on it.
iii. If there is detrimental reliance
iv. The only way that justice can be had is by enforcement of a contract
b. The problem with party-based theories
i. By failing to distinguish adequately between those commitments that are worthy of legal protection and those that are not, both the will and reliance theories have failed in their basic mission. Consequently, actual contract cases must be resolved ad hoc using vague concepts of “reasonableness” or “public policy” or by employing clear but formalistic criteria such as “consideration”
B. Standards Based Theories
a. Efficiency Theories – The relationship between the costs and the benefits of a situation.
i. The term efficiency will refer to the relationship between the aggregate benefits of a situation and the aggre

A. Plastic surgeon screws up nose. Expectation damages are unclear (putting them in the same place had the contract been performed): what is a beautiful nose worth? Court therefore gives her reliance damages – the money and pain & suffering she expended in performing her end of the contract. Gives Reliance – Allowing the injured party to recover the expenses incurred due to his reliance on the contract being performed
1. The damages are as follows, the P was entitled to recover out of pocket expenses and second, that she could recover damages flowing directly and foreseeable from the breach, including disfigurement and plain and suffering from the third operation. The D contends that the judge erred in allowing any damage other than out of pocket expenses, the plaintiff to exception to the judges not measuring damages by the difference in the value between the nose as promised and as it appeared after operations, but waived the exception in the event that the review court overruled the D exceptions.
2. ISSUE: When a surgical procedure does not turn out as promised, is the patient limited to recovering our of pocket expenses?
3. Held: No. D’s exceptions overruled.
a) Agreements between doctors and patients which undertake to bring about a cure or a given result are not unenforceable on public policy grounds, but a higher standard or clear proof pf breach is required.
b) Due to the worsening of her condition, the P should not be confined to out of pocket expenses, but she is entitled to recover also for worsening her condition, for expenses repairing it, and for the plain and suffering involved in the third operation. Had the P decided not to waive recover of pain and suffering in the first two operations, the court would have had to elect between the two measures if recover (reliance and expectation measure)
CLASS NOTES:

Her two charges are breach of contract and medical malpractice. The doctor won on the case of malpractice because he did not fail to show reasonable care. He could have shown extraordinary care. Contract law is a fault free zone. We don’t care about fault, it is totally irrelevant. On the trial court he said she could only get pain and suffering for the third surgery and not the first two. They gave her money to place her back where she would have been had she not entered into contract him. Money for the beautiful pain free world had he not chopped up her nose.