UCC- 1 dash = adopted, 2 dash = proposed
1) What is a Promise?
i) Hawkins v. McGee – hairy hand case
(1) reasonable expectation to get what was promised
(2) promise external, not internally
(3) promise made
(4) introduce damages
(a) expectation measure – recover what expected
(b) reliance measure – recover up to amount originally had
(c) restitution principle – refund back to prior
2) Bargained for Exchange
i) Congregation v. DeLeo – oral promise to give $ at death
(1) QUESTION – Is promise to make a gift enforceable K?
(i) promise to make a gift is not enforceable
(ii) a promise for a promise, promise for performance & promise for non-action, promise for something invaluable are valid – promise for nothing is not
(iii)no reliance on promise
ii) Schnell v. Nell – she promised $ at death, husband wrote K with nominal consideration – NO K
(1) QUESTION – Is consideration sufficient?
(i) Nominal consideration is not valid
(ii) if at outset of marriage she promised she’d be loving, faithful, etc. & he promised to pay $ then consideration
(a) 17: Requirements of a bargain
(i) bargain, mutual assent & consideration
(b) 71: Requirement for exchange:
(i) to be consideration, performance or return promise must be bargained for – can be act, forbearance, & may be given to 3rd person
(c) 72: performance which is bargained for is consideration, except:
(i) performance of legal duty
(ii) settlement of claim
(d) 75: a promise which is bargained for is consideration, except:
(i) conditional promise (if promisor knows condition cannot occur)
(ii) illusory promise – a promise or apparent promise is not consideration if by its terms the promisor reserves a choice of alternative performances, unless each of alternative performances would have been consideration or looks like promisor would eliminate non-consideration option – ie. A offers to sell as many items as B (purchaser) wants at x price – no consideration b/c B has promised nothing in return.
1. easily fixed by B saying will “only” buy from A
(e) 79: adequacy of consideration, mutuality of obligation – if consideration is met – consideration doesn’t have to be “equal” per se
iii) Hamer v. Sidway – uncle tells not to drink, smoke, etc.
(1) QUESTION: Is refraining from action consideration?
(i) promise to refrain from action = CONSIDERATION
(ii) uncle got what he wanted – ie. nephew not to smoke, etc.
iv) Batsakis v. Damotsis – to pay $2k for $25 worth of drachmae in WWII
(1) QUESTION: Is K with inadequate consideration enforceable?
(a) YES – sometimes
(i) subjective value of money – she needed the drackmae
(ii) risk on Π side as to whether he’d ever get paid, also worth something
v) Newman & Snell’s State Bank – widow promises to pay dead husbands note, gets (though bank holds) worthless stock
(1) QUESTION: Was there consideration, given stock was worthless?
(i) note was not legally enforceable, stock was worthless, no K
(ii) seems simply like bad bargain, as emotional value of having note & stock – leaning in direction of not enforcing bad bargains
vi) Dyer v. Nation By Product – lost foot in work accident, employer promises to never lay off if no claim brought, later fired
(1) QUESTION: Is forbearance in good faith consideration?
(i) good faith & reasonable ground for claimant’s beliefs can be consideration (Corbin)
(ii) the fact that claim itself is ill-founded is not in itself enough to prevent forbearance from being consideration (Corbin)
(a) § 74 – law favors compromise
(i) the requirement that the forbearing party assert the claim in good faith sufficiently protects the policy of law that favors the settlement of controversies
vii) Wickham & Burton v. Farmer’s – Wickham offers coal for sale at X price, Farmer’s agrees to price, but no quantity, Wickham doesn’t sell, Farmer’s buys elsewhere & sues Wickham – Illusory Promise
(1) QUESTION: Is K void for want of mutuality?
(i) K is void if quantity to be delivered is conditioned solely on the will, wish, or want of the buyer
1. according to K, Farmer’s didn’t have to buy anything
(ii) not certain there was ever a bargain in the first place
1. add minimums to K
2. make an exclusive K
viii) Wood v. Lucy, Lady Duff – K to create exclusive right for Wood to endorse clothing using Lady Duff name, Lucy endorses other designs & withheld profit, Wood sues – Illusory Promise
(1) QUESTION: Can “use best efforts” be sufficient consideration?
(i) look to intent of parties – promise to use best efforts
1. will send reports, has knowledge of copyrights
2. Wood won’t make $, either, unless actually sells something
(2) UCC § 2-306
(a) lawful agreement for exclusive imposes obligation b
promises to pay pension, later stops paying, says gift
(1) QUESTION: Is promissory estoppel appropriate where party announces intention & other party then makes promise?
(i) no reliance on promise
1. promise didn’t induce behavior – intent was already there
2. promise wouldn’t have changed behavior
3. since it didn’t change behavior, no injustice
(ii) no certainty on Haye’s part that $ would continue as he asked each year if it would continue
(iii)SOLUTION – need bargained for exchange – ie. if you work one more week, I promise to pay you pension of X
(iv)SOLUTION – had he relied on promise, ie. bought boat, perhaps
iii) Drennan v. Star Paving – Π is GC, uses Δ’s offer of bid to win larger bid, Δ later says bid was wrong, doubled price
(1) QUESTION: Can Δ be held to original bid? Did Π rely on bid?
(i) Δ’s offer constituted promise to perform
(ii) Δ knew GC would rely on bid (nature of contracting business)
(iii)Δ didn’t specify bid was revocable in any way
(iv) SOLUTION – GC have form that says use of any offer = acceptance
(a) § 90 – promissory estoppel
(b) § 45 – option K
(i) if unilateral K made & part of consideration requested in the offer is given or tendered by the offeree in response thereto, the offeror is bound by a K
(3) UCC – § 2-205
(a) an offer by merchant to buy or sell goods in a signed writing which by its terms gives assurance that it will he held open is not revocable, for lack of consideration
iv) 1st Nat’l Bank of Logansport v. Logan Mfg. Co. – bank looking to increase business makes all sorts of promises to Logan to bring mfg to town – loans fall through
(1) QUESTION: Is K enforceable on grounds of promissory estoppel?
(i) no written or oral K found (application for loan not offer, talking about future loans not offer
(ii) there was, however
1. promise by the promisor
2. made with the expectation that promisee would rely on it