If the Facts are against you, Argue the Law,
If the Law is against you, Argue the Facts,
If the Facts and the Law Are Against you, Argue LIKE HELL.
Section I. General Theories of Obligation
Obligations arising from agreement with consideration.
Obligation arising from reliance on a promise (Promissory Estoppel)
Obligation arising from unjust enrichment.
Obligation arising from promises for benefit received
Obligation arising from tort
Obligation arising solely from form
Obligation arising from a statutory warranty
OBLIGATION ARISING FROM AGREEMENT WITH CONSIDERATION
Consideration defined –
Coenen – “bargained for exchange” Something sought by the promisor and given by the promissee the in exchange for the promise.
Restatement 1st of Contracts definition of consideration:
a. Consideration for the promise is:
1. an act other than a promise
2. a forbearance (refraining from one’s legal rights)
3. the creation, modification or destruction of a legal relation, or
4. a return promise
… which is bargained for and exchanged for the promise.
B. Functions performed by Legal Formalities (Fuller):
Evidentiary: The most obvious function of a legal formality is, evidence of the existence and purport of a Contract in cases where controversy arises.
Cautionary: A formality may also perform a cautionary or deterrent function by acting as a check against inconsiderate action.
Channeling: Contracts force objectives into recognizable and communicable forms.
C. Substantive Bases of Contract Liability (Fuller)
Private Autonomy – Contracts allows people power to influence their legal relations with others making “private laws”
Reliance – Contracts recognize a breach of promise may injure one who has changed his position in reliance on the performance of the promise.
Unjust Enrichment – When one party confers a benefit to the other who breaches the K, the first party can recover b/c the second party has been unjustly enriched. Aristotilian view of maintaining proper proportion of goods.
Form – formalities reinforce the making of a proper agreement
Reasons not to Enforce Gratuitous Promises (Fuller)
No consideration is given by one party (Sterile transmission, no exchange)
Such enforcement is not of sufficient importance to our social and economic order.
Hard to prove actual intent to give.
Social Utility (Eisenberg)
The Contract price is generally the most efficient price b/c the commodity price is determined by the interaction of buyers and sellers. It will move commodities to there most valued uses.
Characteristics of Consideration
BARGAINED FOR EXCHANGE –
As long as there is valid consideration, there is no addition requirement that the things exchanged be equal in value. *******In extreme cases where consideration is a mere pretense (tom tick) and that fact is known by both parties, the court will not enforce i
s not regarded by both parties as such. Dougherty v. Salt
3. CONTRACT OR CONDITIONAL GIFT?
Two key questions derived from tramp hypo:
Did the promisor benefit from the acts of the promissee? If so, it is more likely that the promisees act was consideration. However, lack of benefit will not preclude act from being consideration.
Was the promissees act a condition to the promise or the cost of the promise? If the act is only to enable the promissor to receive the gift it is merely a condition.
TRAMP HYPO – Man promises tramp new coat if he will walk around the corner to the store to get it. Tramps walk not consideration since it was condition of receiving a gift. It would be a week argument that the Tramp’s walk was sought by the promissor in exchange for the promise. (In Contrast Brooklyn Bridge Hypo) Promissor should receive benefit in order for their to be consideration (Though not necessary.) Promissee incurring some benefits also will help.
1) Tramp Hypo is a conditional gift promise, not enforceable.
COENAN’S SICK MAMA HYPO – If Coenan goes to see sick mother, she will give him a pair of gold slippers. As in the tramp hypo, going is a condition to receiving the gift. Like in Maughs v. Porter, mama receives a benefit.