Restatement § 2 Promise – A promise is a manifestation of intention to act or refrain from acting in a specified way, so made as to justify a promisee in understanding that a commitment has been made.
Restatement § 1 Contract – 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 a duty
Restatement § 3 Agreement – An agreement is a manifestation of mutual assent on the part of two or more persons.
Restatement § 3 Bargain – A bargain is an agreement to exchange promises or to exchange a promise for a performance or to exchange performances.
UCC 2-105 Goods – Means all things that are movable at the time of identification to a contract for sale other than the money in which the price is to be paid. “GOODS” also include unborn animals and growing crops
Damages – Intended compensation for a breach, measured in the terms of the contract.
Hawkins v. McGee
§ Hawkins had scar tissue removed from hand by Dr. McGee and had permanent damage to his hand
§ “Guaranteed that his hand would be perfect after the operation”
§ Warranty is part of the contract (He is entitled to the hand he was promised)
§ Because there is a contract, he is entitled to what he was promised.
§ Oral Promise – performance needs to be specific and clear.
Restatement § 17 Requirement for a bargain – The formation of a contract requires a bargain in which there is a manifestation of mutual assent to the exchange and a consideration.
A performance or promise [something of value] in most contracts it will be tangible (money)
§ Legal Requirement that there be some exchange
§ A gift promise IS NOT enforceable
3 COMMON CONSIDERATION ERRORS
1. Benefit/ Detriment Confusion
a. E.g., I promise Sara $200 which means I am giving Sara the BENEFIT of receiving $200 and I am suffering the detriment of losing $200.
b. Each party must suffer a detriment or provide a benefit (No consideration otherwise)
2. Need for a Bargain
a. If there is no bargain for exchange, there is no consideration
b. E.g., I lease an apartment and the lease says no pets and I don’t read and I have an iguana = Consideration because the lease was the bargain.
3. Peppercorn vs. Nominal Consideration
a. Cannot be taken seriously when you are only paying $1 in exchange for hundreds or thousands of dollars
b. However, it is all situational.
Hamer v. Sidway (1981)
§ Story Sr. made an offer if the nephew quit smoking, drinking and gambling he would get $5,000.
§ Story II refrained from doing something that he had every legal right to do.
§ He fully performed the conditions and there was consideration for the promise and a contract.
Mills v. Wyman (1825)
§ The father of the child that died wrote a letter thanking for the plaintiff’s services and promised to pay them for their services
§ Because he promised to pay for something previously completed there is no consideration for the PAST
Langer v. Superior Steel Corp. (1932)
§ Employer promises to give pension of $100 a month as long as he lives as long as he doesn’t go work for a competitor
§ This was not a gift because the letter asks the plaintiff to stop doing something that he had the legal right to do.
In Re Greene (1930)
§ Defendant said he would make his mistress the beneficiary, pay her rent for 4 years and pay her $1,000 a month in exchange for just $1.
§ Prior intimate relations is consideration (past consideration)
§ This was nominal consideration (gift not consideration)
§ “Unless actual consideration is present, there is not a legally enforceable contract”.
Kirksey v. Kirksey (1845)
§ Brother-in-law invites widowed sister-in-law to his land and he would give her a house to raise her family “until they grew up”
§ He gifted the land to her, and it was unclear whether she worked the farmland but he never asked her to.
§ There was absolutely no bargain. (Conditional gift is not a promise)
Allegheny College v. Chautauqua County Bank of Jamestown (1927)
ion or forbearance on the part of the promisee or a third person and which does induce such action or forbearance is binding if injustice can be avoided only by enforcement of the promise
1. Promise (Hawkins v. McGee)
2. Foreseeable (Reasonable) Reliance – at time promise is made, it has to be the person making promise that thinks it is reasonable for the promisee
3. Actual Reliance – After the fact, did the promisee actually change his/her behavior.
4. Injury – Implied (there has to be some kind of damage, you could have relied on something but there was no actual damage)
5. Injustice – injustice can be avoided if the promise is enforced
Rickets v. Scothorn
Equitable estoppel: once you say or act as if something is true, you have to stick with it.
§ She changed her behavior because of the promise the grandfather made, but then he died.
§ She is worse than she would have been.
§ Promise + Reliance & Injury has to be a reliance injury (expectation vs. reliance)
Maryland National Bank v. United Jewish Appeal Federation
§ Organizations changing their behavior in reliance on the donation
§ Giving out money before they get it. Recognition that it is not reasonable to rely on promises until UJA receives the money.
Feinberg v. Pfeiffer Co.
§ Past consideration, company increased her salary and offered her $200 pension per month until she died as a gift. She could have quit the next day. Rewarding her for her service.
§ There was a promise, there was reasonable (foreseeable) reliance, she actually relied, her injury was not getting $200 and she quit work and she wouldn’t have if she weren’t receiving that money.