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St. Johns University School of Law
Movsesian, Mark L.

Contracts I

Prof. Movsesian

Fall 2016

I. Background

Contract: A contract is a promise or set of promises for the breach of which the law gives a remedy or in some way recognizes a duty

Promise: a manifestation of intention to act or refrain from acting in a specified way, so made as to justify a p/ee in understanding that a commitment has been made.

Type of Promises in K

Express Promise: intention is manifested by words

Need not be written, it can be oral

Implied in Fact Promise: intention manifested by conduct, not words

Meaning parties conduct implied in the circumstances

Implied in Law Promise (Quasi): no manifestation of intent, express or implied

Law infers a promise in the interest of justice
Court declares there needs to be reimbursement


P confers a benefit on D
D appreciated benefit

Knew about the benefit and did not decline it

Its unjust for the D to retain the benefit w/o reimbursing P

The Difference

Implied in fact is a real K: reasonable person will understand that actions imply a deal
Implied in law K: under the circumstances, it is reasonable to think justice requires D to pay P

++ Bailey v. West >> Not implied in fact because no mutuality of ownership

* Pacta Sunt Servanda: agreement must be kept

Impracticability Exception: something you can’t reasonable foresee

++ Bolin Farms >> Can’t get out of K because circumstances have changed in a way that is unfavorable to one party

Breach of K


Expectation Measure: put the injured party in as good a position as if the K had been performed

(usually reliance + profits loss = EM)

Reliance Measure: put the injured party in as good a position as if the K had not been made – status pro quo ante

(reimbursing for cost incurred in reliance of a K, except for loss profits)

Restitution Measure: restore to P the value of any benefit the P has conferred on D àImplied in Law

(could be well above at capped at EM), only includes direct benefit

Generally, Emotional Distress is a tort and is not usually recoverable unless P tells D prior to entering in K that a breach will cause them anguish and the distress now becomes foreseeable

++ Nose Case >> granted damages except for med bills b/c she would have paid that regardless

P was promised 2 operations; needed 3; beyond repair; sued

Jurisprudence Law

Why do we enforce K’s?

To facilitate trade – encourages people to be better off without making anyone worse off

(promotes free trade, increases welfare of so

should enforce substantively “fair” bargains

Presence of formal bargain not determinative
Was this an adequate exchange?

Unilateral K: a promise exchanged for a performance of an act

Example ~ I promise to give you my book if you give me $50, I don’t want a promise just money

K exists when you give me the cash, not before
Until you give me the cash, I have no obligation to give you the book; no breach

Bilateral K: a promise is exchanged for another promise

Example ~ I promise to give you my book tomorrow, if you promise to give me $50 the day after

K exists the moment we exchange promises today
If I fail to give you my book tomorrow, there is a breach

II. Consideration: The Bargain Requirement

Rationale for the Bargain Requirement

Cautionary: ensures that parties do not incur liability accidently or impulsively ( to avoid accidental gifts)
Evidentiary: relates to the courts who deal with it later
Economic: bargains are the only way for exchange and letting products go to the highest bidder