— Outline —
I. Bases for enforcing promises à need consideration or reliance
A. Consideration as a basis for enforcement
1. Fundamentals of consideration
i. To constitute consideration, a performance or a return promise must be bargained for.
ii. A performance or return promise is bargained for if it is sought by the promisor in exchange for his promise and is given by the promisee in exchange for that promise.
iii. The performance may consist of:
1. An act other than a promise, or
2. A forbearance
iv. The performance or return promise may be given to the promisor or to some other person. It may be given by the promisee to some other person.
– Hamer v. Sidway àUncle promises to pay nephew to not drink. Uncle’s promise is enforceable. Nephew gave something up and that is consideration. A waiver of any legal right at request of another party is sufficient consideration.
– Gratuitous promises
– Fiege v. Boehm à D promised P child support but didn’t pay b/c child not his; P still awarded damages b/c made contract in good faith and forbore on bringing paternity suit.
2. Action in the past
– Fienberg v. Pfeiffer Co. à P was promised a retirement of $200 a month. P retires a year and half later and was paid until the Board of Directors dies. Successor decides to discontinue payments. One – way promise was enforceable because of reliance.
– Mills v. Wyman à Mills cared for Wyman’s sick son till his death and Wyman promised to pay for Mills’ costs: care for son is not direct material benefit to father: not enforceable. Benefit was conferred in the past and does not constitute consideration.
– Webb v. McGowin à Webb hurt himself to save McGowan’s life and McGowan promised to repay Webb for lifelong injuries: direct material benefit to McGowan: enforceable, but see below P suffered detriment in process of rescuing the deceased. There would be injustice if workman is not paid as promised.
– Technical defenses
3. Requirement of a bargain
– Kirksey v. Kirksey à wife move’s to brother-in-law’s after he promises her and and home, but she doesn’t promise anything: not enforceable as no consideration, despite reliance
– Central Adjustment Bureau v. Ingram à Ps were held to have given consideration for Ds’ covenants not-to-compete by giving Ds continued employment for a reasonable time. The ct made an exception in this case to Restatement 2nd § 71 – no exchange required; only continued employment for a reasonable time. Ct in this case did not follow bargain theory.
4. Promises as consideration
– Strong v. Sheffield à D promised to pay her husband’s debt to P (promissory note). P’s promise to forbear collection “until such time as he wants it” is not conside
there was another means for recovery – could sue Pendergast’s estate for restitution.
II. The bargaining process
A. The nature of assent
– Lucy v. Zehmer à Drunk land sale in cafe. Court said a valid contract because both assented. Look to the outward expression as manifesting intention rather than secret unexpressed intention.
B. The offer
– Owen v. Tunison à P wanted to buy D’s property and wrote a letter asking if D would sell it for $6,000. D wrote back and said that he couldn’t sell unless he received $16,000. P thought this was an offer and wrote back, stating that he accepted D’s “offer.” The court ruled that D’s letter was not an offer, but merely an invitation to an offer.
– Fairmount Glass Works v. Crunden-Martin à buyer wrote seller, asking lowest price: seller responded with price “for immediate acceptance”: court said it was not just price quote, but a definite offer to sell
– Advertisements as offers
– Lefkowitz v. Great Minneapolis Surplus Store à ad stated that first three people to come to store could buy a mink coat for $1: offer existed b/c ad was sufficiently detailed