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Contracts
University of Connecticut School of Law
Strasser, Kurt A.

CONTRACTS OUTLINE
 
PROMISES
HAWKINS v. McGEE
            (R) The measure of the vendee’s damages is the difference between the value of the goods as they would have been if the warranty as to quality had been true, and the actual value at the time of the sale, including gains prevented and losses sustained, and such other damages as could be reasonably anticipated by the parties as likely to be caused by the vendor’s failure to keep his agreement, as likely to be caused by the vendors failure to keep his agreement and could not by reasonable care on part of the vendee been avoided
            – Restatement §344: Damages
Judicial remedies serve to protect one or more of the following interests of a promise:
            (a) Expectation Interest – Interest in having the benefit of his bargain by being put in as good a position as he would have been in had the contract been preformed
            (b) Reliance Interest – Interest in being reimbursed for loss caused by reliance on the contract by being up in as good a position as he would have been had the contract not been made
            (c) Restitution Interest – Interest in having restored to him and benefit that he has conferred on the other party
 
BARGAIN FOR EXCHANGE
CONGREGATION v. DeLEO
– Congregant makes a promise on his death bed to a rabbi to donate money for a library
            (H) No contract, no B/E
            (R) A hope or expectation, even if well founded, is not equivalent to either legal detriment or reliance
           
– Restatement §17: Requirement of a Bargain
            (1) Except as stated in subsection (2), the formation of a contract requires a bargain in which there is a manifestation of mutual assent to the exchange and a consideration
            (2) Whether or not there is a bargain a contract may be formed under special rules applicable to formal contracts or under the rules state in §§ 82-94
           
– Restatement §71: Requirement of Exchange; Types of Exchange
            (1) To constitute consideration, a performance or a return promise must bargained for
            (2) A performace or return promise is bargained for if it is sought by the promisor in exchange for his promise and is given by the promise 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
            (4) The performance or return promise may be given to the promisor or to some other person. It may be given by the promise or by some other person
 
– Restatement §72: Exchange of Promise for Performance
            Except as stated in §§ 73-74, any performance which is bargained for is consideration
– Restatement §75: Exchange of Promise for Promise
 
only if, the promised performance would be consideration
 
– Restatement §79: Adequacy of Consideration; Mutuality of Obligation
            If the requirement of consideration is met, there is no additional requirement of
                        (a) A gain, advantage, or benefit to the promisor or a loss, disadvantage, or detriment to the promisee; or
                        (b) Equivalence in the values exchanged; or
                        (c) Mutuality of Obligation
 
SCHNELL v. NELL
– Plaintiff’s decedent said she wanted to give a bunch of people $200 a piece but she had no property of her own, thus plaintiff had no legal obligation to give them the money
– The Plaintiff was going to give them the money in installment in consideration for one cent
            (H) No Contract, no B/E
            (R) A consideration of a nominal amount in exchange for a considerable sum of money will not support a contract
            – A moral consideration only will not support a promise
 
HAMER v. SIDWAY
– Uncle promises plaintiff $5,000 in exchange for his promise to not smoke, drink, and play billiards for money until he is 21
            (H) Good Contract, B/E present
            (R) Abandoning some legal right in the present, or limiting his legal freedom of action in the future can constitute consideration
 
BATSAKIS v. DEMOTSIS
– Plaintiff loaned defendant 500,000 Drachmae ($25) in exchange for $2,000
            (H) Good Contract, B/E because the defendant really needed money it, $25 was actually provided some extrinsic value for consideration
            (R) Mere inadequacy of consideration will not void a contract
 
BANK v. HUNTER
– Defendants husband died and was insolvent and had an insolvent company
– Bank held husband’s note and stock of the company
– Bank agreed to give husband’s worthless note in exchange for defendant’s enforceable note
            (H) No Contract, no B/E because the plaintiff gave nothing (not even the worthless stock) in return for defendant’s executable note thus defendant receive nothing in consideration
            (R) Consideration of no value is not consideration
 
– Restatement §74: Settlement of Claims
            (1) Forbearance to assert or the surrender of a claim or defense which proves to be invalid is not consideration unless
                        (a) The claim or defense is in fact doubtful because of uncertainty as to the facts or law, or
                        (b) The forbearing or surrendering party believes that the claim or defense may be fairly determined to be valid
            (2) The execution of a written instrument surrendering a claim or defense by one who is under no duty to execute it is consideration if the execution of the written instrument is bargained for even though he is not asserting the claim or defense and believes that no valid claim or defense exists
 
DYER v. NATIONAL BY-PRODUCTS
– Plaintiff got injured while working for defendan

n a form supplied by the merchant must be separately signed by the other party
            (3) The requirement of the statute of frauds of this Article (§ 2-201) must be satisfied if the contract as modified is within its provisions
            (4) Although an attempt at modification or rescission does not satisfy the requirements of subsection (2) or (3) it can operate as a waiver
            (5) A party who has made a waiver affecting an executor portion of the contract may retract the waiver by reasonable notification received by the other party that strict performance will be required of any term waived, unless the retraction would be unjust in view of a material change of position in reliance on the waiver
 
– Restatement §175: When Duress by Threat Makes a Contract Voidable
            (1) If a party’s manifestation of assent is induced by an improper threat by the other party that leaves the victim no reasonable alternative, the contract is voidable by the victim
            (2) If a party’s manifestation of assent is induced by one who is not a party to the transaction, the contract is voidable by the victim unless the other party to the transaction in good faith and without reason to know of the duress either gives value or relies materially on the transaction
 
– Restatement §176: When a Threat is Improper
            (1) A threat is improper if
                        (a) What is threatened is a crime or a tort, or the threat itself would be a crime or a tort if it resulted in obtaining property
                        (b) What is threatened is a criminal prosecution
                        (c) What is threatened is the use of civil process and the threat is made in bad faith or
                        (d) The threat is a breach of the duty of good faith and fair dealing under a contract with the recipient
            (2) A threat is improper if the resulting exchange is not on fair terms and
                        (a) The threatened act would harm the recipient and would not significantly benefit the party making the threat
                        (b) The effectiveness of the threat inducing the manifestation of assent is significantly increased by prior dealing by the party making the threat
                        (c) What is threatened is otherwise a use of power for illegitimate ends