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South Texas College of Law Houston
Page, Phillip E.

;/Contracts Outline-Section I: Introduction
I.                   Introduction
a.       A contract-2nd Restatement of Contracts-“a promise or set of promises for the breach of which the law gives a remedy or the performance of which the law in some way recognizes as a duty”
b.      Promise-2nd R.-a manifestation of intention to act/refrain from acting in a specified way to justify a promisee in understanding a commitment has been made
II.                Rules
a.       Default-details what is sufficient to reach agreement & parties’ obligations
b.      Mandatory-meets requirements to displace default, & be “unambiguously stated”-made by courts & legislatures-limits damages and time for non-compete contracts, to protect parties in/outside of contract-hurts freedom of contract
III.             Section I: Part II: Meaning Of Enforcement
a.       Promises-maker’s statement of future conduct, so that the person to whom the promise is made to rely on it as dependable force in commitment,
b.      Warranty-type of promise-indemnifies promisee for any loss, breach create promissory estoppel 
c.       Agreement-the bargain of the parties in fact
IV.             Bolin Farms v. American Cotton Shippers As.-F. Supp. 1353 US Dist. Ct., W. Dist. of LA-1974
a.       Declaratory judgment-farmers wanted to see if they could breach the K, if I have to fulfill it, it’ll hurt-not, but doesn’t seem to hurt, markets are understood to fluctuate, the purpose of a K is to insure against a bad turn in the market
b.      Pacta sunt servanda-the agreement must be kept
c.       If all Ks are enforceable-then casual assurances cannot be made, creates inefficiency
d.      Dividing line between enforceable promises and have some promises not enforceable-the seal-satisfies evidentiary standard
                                                              i.      A document is a good means of sealing that promise
e.       Promisor bound to fulfill contact, but delay is not a breach of K
V.                Formalist theory
a.       Rules > standard, certainty > flexibility, question of law > fact, & individual > community, adhere to norm, not ends, relies on integrity of legal categories and objective language, promotes private prop. & freedom of K, promotes permanence and stability
b.      Courts shouldn’t-no default rules to fill in gaps, excuse mistakes or circumstances not addressed, interpret context beyond K, use relational norms-good faith/cooperation, impose pre-K liability
VI.             Realist Theory
a.       Adjudication-contextual policy choices, substance > form, standards > rules, + attention to equitable factors, emphasis on behavior, and sensitive to imbalance in bargaining, might give relief even if not stated
VII.          What’s Binding
a.       Test of Enforceability-Consideration test-K part of bargain, makes sure the promise is not casual or accidental
b.      Other Theories-Will-protects promisor, binding if promise is assumed, reliance-protects those relying on promises, party-based-protects a party, efficiency/fairness-standards-based-enforces if substantively efficient/fair, & bargain theory-process-based-based on a process
c.       Economic Functions of K Law-gives incentives for value-maximizing conduct, reduces complexity and cost by supplying terms, & assists parties in planning their exchange, Con is to deny breach of a promise when it doesn’t facilitate exchange, for security of parties 
Section II: Introduction to Remedial Measures of Enforcement
I.                   Types of Remedies
a.       A contractual duty is conditioned on the other side not breaching its policies, if a material breach happens the non-breaching party can suspend performance or cancel and sue for damages, a non-material breach-only for damages, suspension or cancellation don’t depend on court judgment
b.      Preference for monetary damages over specific performance-order to act. It is only given if subject matter is unique or monetary damages are insufficient-dependant on court judgment
c.       Assumption is the net gains lost by the breach and other uncompensated losses, put aggrieved party in same position as though D fully performed
d.      Objective is to compensate aggrieved party, not punish the breacher
e.       Loss calculated by: breach must cause loss, # of loss must be found w/ reasonable certainty, loss must be seen at time of contracting, must mitigate damages
f.       Parties can narrow or expand remedies
g.      Winner may also take interest and costs of litigation
II.                Sullivan v. O’Connor-363 Mass 579, 296 N.E.2d 183 (1973) MA SJC
a.       Prof Notes
                                                              i.      Negligence standard for malpractice-doctor was not negligent
                                                            ii.      He made a promise that he did not deliver upon
                                                          iii.      Standard mental state for breach of K-there is none
                                                          iv.      What is the remedy for the breach of K?
                                                            v.      Expectation-what she expected her nose to be-$2500-what she would have enjoy if the promisor had fulfilled his promise. You would have to have undergone two surgeries anyway, that is why she only gets money for the 3rd surgery.
                                                          vi.      Restitution-the taking away from gain of the promisor and giving it to the promisee-give her back her money-unjust enrichment
                                                        vii.      Reliance-puts the P back to where she was-difference between regular and deformed nose-compensate for losses from breach.
                                                      viii.      Specific Performance-if you promised to do something, you are order to do it, a court will not order it if they cannot evaluate whether or not you’ve come up to a level of performance, don’t want to have to supervise
                                                          ix.      Under PE-no squirming-has latitude to enforce equitably
III.             Curtice Brothers Co. v. Catts-68 A. 935 (1907)-  NJ Chancery Court
a.       Prof Notes
                                                              i.      In cases of specific performance-monetary compensation insufficient to prevent harm, unless it is a unique items unavailable on the open market, property usually gets specific performance
                                                            ii.      Courts can enjoin you to prohibit activities-specific performance
                                                          iii.      In Britain, courts couldn’t grant an activity-could not force anyone to do anything-could only move against property not people
                                                          iv.      Ecclesiastical/Chancery Court could do this or not do this, and if you disobey you be jailed or executed
                                                            v.      King’s court lost business to the chancery court, we will give you this relief if a remedy at law (damages) would be insufficient, if you want money go to the King’s court
                                                          vi.      $10,000 for delivery of soybeans, soybeans burned, what is he entitled to? Nothing, if beans cost now $11,000, he will get $1,000-Contract Market Differential, if price went down, he could get them cheaper, gets out of K
                                                        vii.      There’s nothing good or bad about breaching the K
                                                      viii.      If he got a factory and worker’s wages-reliance damages-for factory and wages-$2000, restitution-2K, efficient breach of K-paid more, paid back owner, and still make money, one must be careful, not all promises have to be enforceable, but some must be. What’s the dividing line? Con-does haven’t anything to w/ fairness, efficiency, ethics, or damages. There is likely to a difference between a promise that was bought and what is given-a if, then promise, it is conditional-
                                                          ix.      Restatement 71-Requirement of Exchange, Types of Exchange
I.                    For their to be consideration there has to be a bargained for exchange
II.                  A performance or return promise is bargained for if it is sought after and something is given in exchange
III.               The performance can be
a.       An act other than the promise
b.       A forbearance
c.        The creation, modification or destruction of another legal obligation
IV.                The performance or return promise can be given to the promisor or some other person

e a sliver of inducement
                                                          vi.            B/c nice guys, no incentive, didn’t prompt them in any way-No
V.                Jara v. Suprema Meats Inc.-121 Cal. App. 4th 1238 (2004)
a.       Prof Notes
                                                              i.            If a benefit to Son hoping to solicit help from Dad-Yes
                                                            ii.            The promise was made hoping benefit to Son & R
                                                          iii.            Consideration based on a if, then
                                                          iv.            No expectation of return from Dad by Jr., if return occurred would have con
                                                            v.            His advice and help-con?-no return, has interest
                                                          vi.            If happened already, can’t be con for today’s promise.
                                                        vii.            Did the promise induce con-No? Did con prompt promisor to make his pledge?
                                                      viii.            Guaranty Unanimity, if R won’t vote against me, Jr. won’t do it would have been con
VI.             Thomas v. Thomas-Queen’s Bench-1842 2 Q.B. 851, 114 Eng. Rep. 330
a.       Prof Notes
                                                              i.            Suspicious-upkeep of home not con, but a condition of the agreement for the house. Is promisor get benefit?- anyone must care for the property
                                                            ii.            Pound/year-con? Yes-brothers making promise benefit Ct.-Yes, wasn’t done properly in the will, pound/year
                                                          iii.            Hamer-benefit to promisor-con, detriment to promisee-Widow gave the pound away
                                                          iv.            Did € induce promisors to make pledge? Did the € induce them to keep her in the house? Yes, did promise induce con? Yes. Did the €/yr induce the promisor to make the promise? We mostly want to honor brother, so 1 €-Close enough
                                                            v.            She had to stay unmarried to keep property? What benefit is it to them that she remain unmarried? Keeping her unmarried is a benefit, then con?
VII.          Haigh v. Brooks-Q.B. 1839; Exch.Ch. 1840-113 Eng. Rep. 119.
a.       Prof Notes
                                                              i.            Consideration Problem-language vague-if already happened, can’t be con-Jara. If Haigh already loaned $ before Brooks guaranteed to be secondarily liable of the debt, not a future promise-no con, the other has it
                                                            ii.            Haigh had K from Brooks to guarantee $. Haigh didn’t honor the agreement. If Brooks will give him K of liability for Lees, if Haigh gives up contact-loses cause of action, I will pay for other debts totaling 9666 pounds. When Haigh sues Lees, gets a hold of Brooks, there was no con for my paying the 9666. Haigh got a piece of paper representing his obligation
Brooks has pledge, guarantee-no value. If initial obligation is w/o con, 2ndary obligation-worthless. Paid 9K € for paper w/o con for worthless paper. Is the paper for 9K enforceable? Ct. says Yes. The paper was possibly worth 10 K. Haigh gives up 3% for 97%