Select Page

Temple University School of Law
Smyth, Sophie E.

Contracts Outline

I. Remedies for Breach of Contract
A. Three Damage Interests
1. Expectancy — Hawkins v. McGee
a. Gross
b. Net
2. Reliance
a. Essential
b. Incidental — Nurse v. Barnes
3. Restitution
B. Limitations
1. Foreseability – Nurse v. Barnes (limited) and Hadley v Baxendale                                  2. Certainty – Dempsey
3. Avoidability
a. Mitigation
b. Lost volume rule (boat seller)
c. Personal Services
C. Contracting around Default Rules
D. Specific Performance
1. Land
2. Goods
3. Personal Services
a. Lumley Doctrine
b. Moral Concerns
c. Economic Concerns
d. Modern Application
E. Restitution
1. For Breach
2. To Party in Breach
3. Cause of Action
II. Contract Formation
A. Objective Theory of Assent
1. Requirements for Contract
a. Manifestations of Mutual Assent
b. Consideration (“something else”)
2. Offer and Acceptance
a. Offer – Willingness to conclude and invites acceptance to                                                            conclude
b. Options – Firm Offers (limitations of offeror to revoke)
3. Objectivity – Embry Standard
B. Offer
1. Defined
2. Problem with Intent/Interpretation
3. Role of Certainty or Definiteness
Nebraska Seed
Table legs example (Price, Quantity, Time, Place, Manner,                                                    Quality) – Indicators of offer to show definiteness.
C. Acceptance
1. Correspondence
a. Dispatch
b. Manner
i. Invited
ii. Of offer
c. Can be limited by offer
d. Options – Why is there a different rule?
2. Silence
3. Performace – White v. Corlies and Tifft
D. Filling Gaps
E. Subjectivity v. Objectivity
1. Contract
2. Performance
3. Dealings
4. Trade
F. Parol Evidence
1. Extrinisic – spectrum
2. Integration
3. Ambiguity and Vagueness
G. Battle of Forms
H. Statute of Frauds
I. Consideration
J. Adequacy of Consideration

III. Enforceability
A. Promissory Estoppel as Consideration Substitute
1. Family Promises – Ricketts v. Scothorn
2. Land – Greiner v. Greiner
3. Charities – Allegheny College
4. Pensions – Feinberg v. Pfeiffer
5. Construction Bids – Baird v. Gimbel
B. Promissory Estoppel as a cause of action

IV. Performance and Breach

Skip material breach and contract conditions

V. Defenses to Contract
A. Incapacity
1. Incompetence
2. Infancy
3. Intoxication
B. Improper Measure
1. Misprepresentation
2. Duress
a. Improper Threats
b. Economic Duress
3. Under influence
4. Unconsciability
C. Incorrect Assumptions
1. Mistakes
a. Mutual
b. Unilateral and duty to disclose
2. Changed circumstances
a. Impossibility
b. Frustration of Purposes
Contracts Outline

Introduction to Contract:
1. Prima facie case of breach of contract –
a. Elements of mutual assent
b. Enforceability
c. Breach
2. Three dimensions of the law (three levels of legal reasoning)
a. Doctrine
b. Facts
c. Theory

3. Shaheen v. Knight – Penn – court of common pleas of … county, ‘57

Facts: Shaheen (P) made deal with Knight (D), dr., to get a vasectomy, but wife got pregnant,

es) – like in Baby M, you risk losing ability of people to have freedom of contract.  You should be able to contract to do most things. You don’t want to create a class of people who can’t contract. Bad.    “you are not lightly to interfere with this freedom of contract” p. 49.

I. Remedies for Breach of Contract
A. Three Damage Interests
1. Expectancy – attempts to “put the promisee in the position in which the promisee would have been had the promise been performed.” The “benefit of the bargain.” —   Give you what you would have gotten had the person who promised you stuff not breached.
a. Gross – net (profit) + essential reliance (what was necessary to                                                          perform the contract). The full value of the K.
b. Net – the expected profit (before reliance payments)

Hawkins v. Mcgee — Sup Ct of New Hampshire – ‘29

Facts: Hawkins sued Dr. McGee for not making his hand perfect, as promised, during operation. 
Issue: What kind of damages should be awarded here? 
Holding: The difference between “a perfect hand” as promised and his hand as it was left by the surgery is the true measure of damages in this case. Expectancy damage – put him where he would have been should the surgery had gone as he had expected.

Ø      Measurement of the expectation interest — Hooker

Hooker and Sons v. Roberts, Supreme Court of Miss. ’96 pp 81-89

Facts: Hooker was general contractor hired by the public housing authority to refurbish residences. Hooker subcontracted out to Roberts to tear out and refinish and install new ones. Dispute arose over who should have to dispose of them. Hooker argued that Roberts assumed the job when he subcontracted. After dispute, Hooker called it all off. Roberts sued for everything. Lost profits, and reliance costs.
Issue: can you award damages to a party which places them in a better position than they would have been in, had the contract been fully performed. 
(Here: should they get money for storage, where it was in their own place and they didn’t have to spend anything on it — isn’t that unjust enrichment?)