What type of Promises are Enforceable?
o Medical Contracts: The court is not comfortable enforcing a contracts in the medical field, however is the parties themselves use language that constitutes a contract, the court will enforce it. (SULLIVAN v. OCONNOR: a surgeon promised to increase her beauty; HAWKINS v. McGEE: a surgeon’s promised to make her hand 100% could have been interpreted as a promise. Page 4). Reliance is usually the appropriate remedy when no negligence is found.
o Expressed Warranty: UCC Case.
a. Expressed warranty are created when any affirmation of fact or promise made by the seller to the buyer which relates to the goods and becomes part of the basis of the bargain or and description of the goods which is made a part of the basis of the bargain and the product shall conform to the affirmation or promise. (Virginia Code 8.2-313, used in Bayliner v. Crow page 4.)
b. Any description of the goods which is made as part of the basis of the bargain creates an expressed warranty that the goods will conform to that description.
§ Must relate to the actual good bought. (BAYLINER v. CROW: court found that since a boat prop matrix did not specifically address the boat crow bought, it could not have been an expressed warranty.)
§ A statement that is merely the seller’s opinion does not create a warranty.
Types of Remedies
o Do not need to be able actual damages with absolute certainty. The focus should be on Plaintiff’s loss, not on defendants gain. (US NAVAL INSTITUTE v. CHARTER COMMUNICATIONS: charter sold paperback copies of the book before they were supposed to, causing US Naval to lose money of sales of the hardback books. They were entitled to actual damages, even though they could not be calculated with certainty) page 8.
o Do not compensate for loss opportunities because it is very difficult to prove what would have happened if the contract would not have been breached.
o Only allowed one type of recovery. The court generally must choose between restitution, reliance, and expectancy.
1. RESTITUTION INTEREST: Out of pocket expenses/benefit that were conferred to the other party.
2. RELIANCE INTEREST: Put them in the position that would be in if the promise had never been made.
§ Usually the recovery for promissory estoppel (BACARDI) but may award because “as justice requires”
3. EXPECTANCY INTEREST: Put them in the position they would have been in if the promise would have been performed.
§ It is the presumption that you are entitled to the expectancy interest, this is the default.
§ Cannot get more than this.
4. SPECIFIC PERFORMANCE: almost never awarded, is considered an extraordinary remedy. It is usually awarded in sale of real land.
5. PUNITIVE DAMAGES: are damages to punish the person who broke the promise. Punitive damages are not recoverable in actions for breach of contract. (WHITE v. BENKOWSKI page 23). This is because the purpose is to compensate the victim, not punish the wrongdoer. (Efficient Breach)
Basis for Enforcing Contracts
1. Consideration: For a promise to be enforceable, it must be supported by a return promise or performance that was sought by the promisor in exchange for his or her promise and was given by the promisee in exchange for that promise.
Restatement Second Section 71:
(1) to constitute consideration, a performance or a return promise must be bargained for.
(2) A performance or return promise is bargained for is it is sought by the promisor in exchange for his promise and is given by the promisee in exchange for that promise.
(3) The performance may consist of (a) an act other than a promise or (b) a forbearance or (c) the creation, modification, or destruction of a legal relation.
a. Fundamentals of Consideration Page 29
i. Family Contracts
· HAMER v. SIDWAY: found consideration is a nephew forbearing his legal right to drink and smoke in exchange for $5000 from his uncle. Page 34.
a. Any suspension or forbearance of a legal right at the request of another is sufficient consideration to sustain a promise.
b. “Consideration means not so much that one party is profiting as that the other abandons some legal right in the present or limits his legal freedom of action in the future as an inducement for the promise of the first”
ii. A court will not inquire about the sufficiency of consideration as long as the promise is not a pretense.
· Note 4 page 38 Peppercorn: the term peppercorn is used to refer to consideration that is of a trifling value, when it’s sole purpose is to satisfy the element of consideration.
a. Restatement section 71 illustration 5: A desires to make a binding promise to give his
not sought by the brother-in-law in exchange for the gift of land. She just had to move her family in order to accept the gift. Page 56.
· The court considered this a gratuitous promise
ii. Note 2 page 57: Consideration was found when an estranged daughter agreed to meet with her dad who promised her a Tiffany ring. This is because her meeting with him was what he sought in exchange for the promise of a ring.
iii. Note 3 page 57: a court found consideration in a casino’s promise of a free spin on the million-dollar wheel to all diamond club members. She had to go to the casino, register for the card, and allow the casino to gather her gambling habits. This was adequate consideration.
iv. Employee agreements
· Promises not to Compete: (LAND LAKE EMPLOYMENT v. COLUMBER) consideration was found because the court says there was an implied promise of the employer not to fire Columber at the moment. Page 58.
a. “The courts infer a promise on the part of the employer to continue employment for an indefinite yet substantial term” Williston on contracts.
b. Possible consideration is employee otherwise could have been discharged, the employee was actually employed for a substantial time after executing the contract, or the employee received additional compensation or training after signing the agreement.
c. Promises not to compete are a situation where a court will look to the reasonableness of the contract when deciding if to enforce it.
· Employee Handbooks: page 64.
v. Rewards
· A reward offer may be accepted by anyone who performs the service called for when the acceptor knows hat it has been made and acts in performance of it, but not otherwise. Page 66.
