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Contracts
University of Illinois School of Law
Maggs, Peter B.

CHAPTER 1 BASES FOR CONSIDERATION
1. Fundamentals of consideration

Hamer v. Sidway (27): Forbearance is valuable consideration
2. Gratuituous Promises

Fiege v. Boehm (34) : Forebearance to assert an invalid claim may serve as consideration for a return promise if the parties at the time if settlement reasonably believed in good faith that the claim was valid.
3. The requirement of exchange

a) Feinberg v. Pfeiffer (39): Past services are not a valid consideration for a promise.
b) Webb v. McGowin (45): A moral obligation is a sufficient consideration to support a subsequent promise to pay where the promisor has received a material benefit.
c) Kirksey v. Kirksey (50): To be legallly enforceable, an executory promise must be supported by sufficient, bargained for consideration
d) Central Adjustment Bureau, Inc. v. Ingram (53): A noncompetition covenant signed at any time up to shortly after commencement of employment is supported by adequate consideration, as is such a clause signed at any time where sufficient post-agreement employment continues
look at both majority and minority opinion
– employee handbook cases: consideration
– reward offers /revocation

4. Promises as Consideration

a) Strong v. Sheffield (69): A purported promise is illusory and not consideration if by the terms the performance of the promise is entirely optional with the promisor
b) Mattei v. Hopper (72): Satisfaction clauses do not render a contract illusory or raise problems of mutuality of performance “honest subjective satisfaction”
c) Eastern Air Lines, Inc. v. Gulf Oil Corporation (76): A requirements contract entered into in good faith is not void for want of mutuality.
d) Wood v. Lucy, Lady Duff-Gordon (83): While an express promise may be lacking, the whole writing may be instinct with an obligation – an impllied promise – imperfectly expressed so as to form a valid contract

5. Reliance as a Basis of Enforcement

a) Ricketts v. Scothorn (86): A promise may be legally binding without consideration if it is reasonably induced action or forbearance and if injustice can be avoided by its enforcement. “Promissory estoppel”
b) Feinberg v. Pfeiffer (91): Where one acts in reliance on a promise, there is an enforceable contract under the doctrine of promisory estoppel.
Small case
c) D & G Stout, Inc. v. Bacardi Imports, Inc.(97): A promise which the promisor should reasonably expect to induce action or forbearance on the part of the promisee and a third person and which does induce such action or forbearance is binding if injustice can be avoided only by the enforcement of the promise.

6. Restitution as an Alternative Basis for Recovery

a) Cotnam v. Wisdom (103): A physician may recover in quasi-contract a reasonable compensation for emergency services rendered on the spot to an unconscious accident victim
b) Collano v. Oakwood Park Homes Corp. (108): Where one party receives benefit from a second party, the first party is not unjustly enriched if there was no direct relationship between the parties and the second party did not expect renumeration from the first at the time the benefit was conferred
c) Pyeatte v. Pyeatte (112): Although restitution is not normally a proper remedy for services provided during a marital relationship, it may be appropriate where one spouse took advantage of another by not performing his part of the agreement between the parties.
d) Dementas v. Estate of Tallas (116)

CHAPTER 2 THE BARGAINING PROCESS
1. The Nature of Assent

Lucy v. Zehmer (120): If a person’s words and acts, judged by a reasonable standard, manifest a certain intent, it is immaterial what may be the real but unimpressed state of that person’s mind
2. The Offer

a) Owen v. Tunison (130): There can be no contract, no meeting of the minds, between the parties unless there is an offer.
b) Harvey v. Facey (Jamaica, 133): A communication regarding only a price term is inadequate to constitute an offer
c) Fairmont Glass Works v Crunden-Martin Woodenware Co. (134): where prices are requested on an order and the vendor quotes those prices to the vendee, the vendor has offered to fill the order and is obligated to fill the order upon receipt within a reasonable time of vendee’s acceptance.

d) Leckowitz v. Great Minneapolis (138)

e) Elsinore Union Elementary School District v. Kastorff (143): Relief from mistaken bids is consistently allowed where one party knows or has reason to know of the other’s error and the requirements for rescission are fulfilled.

f)

3. The Acceptance

a) International Filter Co. v. Conroe Gin, Ice & Light Co. (151): As the offeror is in control of his offer, he may specify the type of acceptance which is required and can dispense with th requirement of its communication.
b) White v. Corlies & Tift (156): Acceptance of an offer must be manifested in such a way as to be communicated to the offeror
c) Allied Steel and Conveyors, Inc. v. Ford Motor Co (162): Where the offeror merely suggests a permitted method of acceptance, other methods of acceptance are not precluded
d) Corinthian Pharmaceutical Systems, Inc. v. Lederle Laboratories (166): A seller’s price list is not an offer to the buyer, and a subsequent partial shipment of the buyer’s order is not an acceptance sufficient to form a contract.
Silence
Hobbs v. Messasoit (p. 171)?
4. Revocation

a) Dickinson v. Dodds (176): An offeree may not bind an offeror by accepting a revoked offer, even if the revocation had not been communicated to him prior to acceptance.
b) Ragosta v. Wilder (181): Where an offer invites an offeree to accept by rendering a performance, an option contract is created when the offeree tenders or begins the invited performance.
Death of offeror; rejection, counteroffer; mailbox rule
5. Precontractual Liability

Drennan v. Star Paving Co. (225): A promise which the promisor should reasonably expect to induce action or forbearance of a definite and substantial character on the part of a promisee and which does induce such action or forbearance is binding if injustice can be avoided only by enforcement of the promise.

Holman Erection Co. v. Orville E. Madison & Sons, Inc. (231)
6. The Requirement of Definiteness

Toys, Inc. v. F.M. Burlington (254)

Oglebay Norton Co. v. Armco (257): If the parties intend to conclude a contract for the sale of goods where the price is not settled, the price is a reasonable price at the time of delivery if the price is fixed in terms of an agreed standard set by a third person or agency and is not so set.
CHAPTER 3 THE REQUIREMENT OF A RECORD FOR ENFORCEABILITY: THE STATUTE OF FRAUDS
1. The Suretyship clause

Langman v. AlumniAssoc. of the University of Virginia (272)

Promise to debtor: it the promise is made to the debtor, the promise does not fall within the suretyship section of the Statute of Frauds. Such a promise is therefore enforceable even though oral, assuming there is consideration.
Promisor is primary obligor: the Statute of Frauds also does not apply to a contract in which the promisor promises to be primarely liable for a third person’s obligation, it applies only where the promisor promises to be secondarily liable
Power Entertainment, Inc. v. NFL Properties, Inc. (: The main purpose doctrine removes an oral agreement to pay the debt of another from the statute of frauds wherever the main purpose and object of the promisor is not to answer for another, but to serve some purpose of its own.
Main purpose rule: a Suretyship promise is enforceable, even though oral, if it appears that the promisor’s main purpose in guaranteeing the obligation of another was to secure an advantage or pecuniary benefit for himself.
2. Requisites of Recording and Signing

In re Arbitration between Acadia Co. & Irving Edlitz (279): When a written agreement providing for arbitration is orally renewed, the parties in effect adopt it as integral part of the new agreement

3. Ameliorating the Operation of the Statute

a) Johnson Farms v. McEnroe (285): Any court may compel the specific performance of any agreement for the sale of real property in case of part performance thereof.

In certain cases, part performance creates an exception to the Statute of Frauds, and makes a contract enforceable – either in full, as in sale of land cases or in part, as in sale of goods cases. Even if the law did not recognize these part performance exceptions, a party who had rendered performance could recover the value of the benefit conferred in restitution. The significance of the part performance exception is that were such an exception is applicable, it allows the performing party to sue on the contract for expectation damages, rather than merely in restitution or quasi-contract for the value of the benefit.
b) Monarco v. Lo Greco (291, 46): The doctrine of estoppel may be used to assert the Statute of Frauds to prevent fraud that would result from refusal to enforce oral contracts in certain circumstances. General reliance principle

CHAPTER 4 POLICING THE BARGAIN
1. Capacity

a) Kiefer v. Fred Howe Motors (301): One might rescind or disaffirm contracts made while a minor
b) Ortelere v. Teacher’s Retirement Bd. (305): A person incurs only voidable duties by entering into a transaction if by reason of mental illness or defect (1) he is unable to understand in a reasonable manner the nature and consequences of the transaction, or (2) he is unable to act in a reasonable manner in relation to the transaction, and the other party has reason to know of his condition
c)
CHAPTER 1 BASES FOR CONSIDERATION
1. Fundamentals of consideration

Hamer v. Sidway (27): Forbearance is valuable consideration
2. Gratuituous Promises

Fiege v. Boehm (34) : Forebearance to ass

ance is binding if injustice can be avoided only by enforcement of the promise.

Holman Erection Co. v. Orville E. Madison & Sons, Inc. (231)
6. The Requirement of Definiteness

Toys, Inc. v. F.M. Burlington (254)

Oglebay Norton Co. v. Armco (257): If the parties intend to conclude a contract for the sale of goods where the price is not settled, the price is a reasonable price at the time of delivery if the price is fixed in terms of an agreed standard set by a third person or agency and is not so set.
CHAPTER 3 THE REQUIREMENT OF A RECORD FOR ENFORCEABILITY: THE STATUTE OF FRAUDS
1. The Suretyship clause

Langman v. AlumniAssoc. of the University of Virginia (272)

Promise to debtor: it the promise is made to the debtor, the promise does not fall within the suretyship section of the Statute of Frauds. Such a promise is therefore enforceable even though oral, assuming there is consideration.
Promisor is primary obligor: the Statute of Frauds also does not apply to a contract in which the promisor promises to be primarely liable for a third person’s obligation, it applies only where the promisor promises to be secondarily liable
Power Entertainment, Inc. v. NFL Properties, Inc. (: The main purpose doctrine removes an oral agreement to pay the debt of another from the statute of frauds wherever the main purpose and object of the promisor is not to answer for another, but to serve some purpose of its own.
Main purpose rule: a Suretyship promise is enforceable, even though oral, if it appears that the promisor’s main purpose in guaranteeing the obligation of another was to secure an advantage or pecuniary benefit for himself.
2. Requisites of Recording and Signing

In re Arbitration between Acadia Co. & Irving Edlitz (279): When a written agreement providing for arbitration is orally renewed, the parties in effect adopt it as integral part of the new agreement

3. Ameliorating the Operation of the Statute

a) Johnson Farms v. McEnroe (285): Any court may compel the specific performance of any agreement for the sale of real property in case of part performance thereof.

In certain cases, part performance creates an exception to the Statute of Frauds, and makes a contract enforceable – either in full, as in sale of land cases or in part, as in sale of goods cases. Even if the law did not recognize these part performance exceptions, a party who had rendered performance could recover the value of the benefit conferred in restitution. The significance of the part performance exception is that were such an exception is applicable, it allows the performing party to sue on the contract for expectation damages, rather than merely in restitution or quasi-contract for the value of the benefit.
b) Monarco v. Lo Greco (291, 46): The doctrine of estoppel may be used to assert the Statute of Frauds to prevent fraud that would result from refusal to enforce oral contracts in certain circumstances. General reliance principle

CHAPTER 4 POLICING THE BARGAIN
1. Capacity

a) Kiefer v. Fred Howe Motors (301): One might rescind or disaffirm contracts made while a minor
b) Ortelere v. Teacher’s Retirement Bd. (305): A person incurs only voidable duties by entering into a transaction if by reason of mental illness or defect (1) he is unable to understand in a reasonable manner the nature and consequences of the transaction, or (2) he is unable to act in a reasonable manner in relation to the transaction, and the other party has reason to know of his condition
c) Cundick v. Broadbent (310): Mental capacity to contract depends upon whether the allegedly disabled person possessed sufficient reason to enable him to understand the nature and effect of the act in issue Cundick v. Broadbent (310): Mental capacity to contract depends upon whether the allegedly disabled person possessed sufficient reason to enable him to understand the nature and effect of the act in issue