Bases for Enforcing Promises
I. Consideration as a basis for Enforcement
a. Fundamentals of Consideration
i. Hamer v. Sidway
1. unilateral promise of 5,000 for performance of abstaining from smoking, etc
2. forfeit of a right as valid consideration
c. First restatement – valid and enforceable agreement even if items highly unequal problem with this is that you wind up with courts enforcing agreements that are mere pretense (parties may not have considered them real agreements)
d. Second restatement – Unequal exchange will not be upheld if agreement is mere pretense
i. have to revisit what parties are thinking at the time the agreement is made
e. Gratuitous Promises: An introduction
i. Fiege v. Boehm
1. in this case, this is a question of contract formation (procedural), they were dealing at arm’s length, can operate on unequal knowledge
2. made good faith claim he was the father (he could have been)
ii. Forbearance – being asked not to do something
iii. Set of promises. What do we normally ask about a set of promises to figure out if we have consideration or not?
iv. Are they bargained for?
v. Her promise (not to seek bastardy suit) is conditional on him paying (shows causal relationship)
vi. If you have a promise, and you stop doing it, or don’t do it, that is a breach
vii. Is the breach enforceable? Is there a remedy for it?
viii. What does Boehm do in response to Fiege’s failure to meet his promise? She goes back on her promise.
ix. This case is a civil case. How does this case differ from Hamer?
x. Promise for a promise (not a promise for performance)
xi. Basic question the same – is this promise enforceable?
xii. The law at the time of the case is different. What is the issue here?
1. Is Fiege’s promise to pay enforceable?
xiii. Who is waving a legal right here? The mother. Waiving right to bring him to court.
1. Waiving the right at the request of Fiege.
xiv. We have a waive of a legal right, at the request of another, so this is enforceable.
xv. Why are we still bringing a suit if he was acquitted on the criminal charge?
1. ex onte (“ex antie”), ex post
2. only matters what the intent was at the time of the agreement. We don’t care about what happens ex post. In contracts we tend to look at things ex onte.
xvi. What’s the problem with this contract?
1. Fiege isn’t the baby daddy (ex post)
2. She doesn’t tell him that she’s been sleeping around
xvii. “Good Faith Belief”
1. No fraud
xviii. If she made three of these same contracts, would they all be binding?
xix. Yes, under this logic.
xx. General holding of Hamer – waiver of right valid consideration
1. Bargain of forbearance is consideration, if done in good faith
f. The Requirement of Exchange: Action in the Past
1. In general past consideration is no consideration
ii. Feinberg v. Pfeiffer Co
1. old lady promised pension when she retires
a. gratuitous promise (no consideration) enforced on reliance
iii. Mills v Wyman
1. Father reneges on promise to pay samaritan who previously cared for dead son when he was dying
a. Not bargained for (does not induce an action, gratuitious)
iv. Webb v. McGowin
1. Promises to pay pension for rest of life to employee who sustains injury as only alternative to save live of promisor
a. Moral obligation exception for past consideration rule
i. Time element removed ability to bargain (emergency)
ii. If could have bargained, would have
g. Requirement of Bargain
i. Kirksey v. Kirksey
1. Brother in Law offers to widowed sister in law land to live on
a. For promises to be enforceable must be bargained for consideration
i. Promisor must seek to induce a return promise or performance for his promise
ii. The promise must in fact induce that performance
b. Question of whether requirement to come live with him is consideration or incidental to receiving a gratuitous gift
i. Was living with him what he sought?
c. Issues of Reliance
i. Could he reasonably
iii. Eastern Air Lines, Inc. v. Gulf Oil Corporation
1. Provide gasoline to Eastern for decades
2. parties selected third party price indicator
3. third party indicator did not reflect true value of the oil
4. Oil wants out and alleged that contract was vague
5. UCC 2-306 is gap filler
a. Business entities used tern “fuel requirements” not vague enough to invalidate
b. Instead calculated in good faith
c. If amount is not disproportionate to any stated estimate or reasonably norm
6. Contract tried to mitigate risk, not all risk is foreseeable, and Gulf will have to absorb the loss
iv. Wood v. Lucy, Lady Duff-Gordon
1. Designer and seller contract, Designer promises right to be the only one to sell her designs, seller promises designer half of the profits
2. Designer placed indorsements on fabrics and withheld profits
3. Alleges seller did not bind himself to anything
a. Promise fairly implied
b. Promise to use business for its usual purpose (use best efforts to sell)
c. Promise to pay half profits is a promise to account for the money, no prior duty to market the fabrics
II. Reliance as a basis of Enforcement
i. Ricketts v. Scothorn
1. Grandfather promises granddaughter to pay her $2,000 so she doesn’t have to work
2. Surrenders her job as a result
a. Asserted as consideration
b. Rejected, did not seek to make her quit, it was not conditioned
c. Abandonment of work was voluntary
3. Promissory estoppel
a. Grandfather could reasonably foresee granddaughter acting as she did in response to the promise
b. Granddaughter did rely on it
i. In light of Grandfather’s explicit reason for promise, it was reasonable for her to rely on it and expect that it would be executed
ii. WHAT ABOUT INJUSTICE REQUIREMENT?
c. CONCERN THAT PROMISSORY ESTOPPEL WILL ALLOW GRATUITIOUS PROMISES TO BE ENFORCED TOO EASILY WITH RELIANCE
4. Interesting because even without enforcing promise, she basically ends up in same position (no better no worse)
– Restatement 90 (1st)
promisor should reasonably expect to induce action or