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Contracts
University of Kansas School of Law
Hoeflich, Michael H.

Case
Issue/Holding
Rule of Law
Reasoning and Notes
1. Continental Forest v. Chandler Supply Co.
 
“the lumber case”
 
Holding: there was neither an express nor implied in fact K since there was an express rejection of any intention to K w/ P but that a quasi K existed
 
*An EQUITY case
1. In the Matter of Baby M.
 
“the baby adoption case”
HOLDING: Such prebirth K under which a woman agrees to be impregnated, through artificial insemination, by a man not her husband and to give up, irrevocably, all parental rights upon the birth of the resulting child for the purpose of permitting the natural father and his wife to adopt the child as their own where the woman is to be paid $10k and where there is no showing that the woman is an unfit mother or that the natural father and his wife are fit parents is void as counter to laws governing adoption and termination of parental rights and the public policies of keeping children with both of their natural parents and of treating the rights of natural parents equally concerning the custody of children.
*a promise for a promise isn’t a K if the K is against public policy
*A PUBLIC POLICY case
 
*WHITEHEAD ARGUES: Surrogacy K is invalid because:
…It conflicts with public policy since it guarantees that the child will not have the nurturing of both natural parents, presumably NJ’s goal for families.
…It deprives the mother of her constitutional right to the companionship of her child.
…It conflicts with statutes concerning termination of parental rights and adoption.
…She claims primary custody w/ visitation rights for Mr. Stern, both on a best-interests basis as well as on the policy basis of discouraging surrogacy contracts. The standard for determining best interests where the infant resulted from a surrogacy contract is that the child should be placed with the mother absent a showing of unfitness.
*STERNS ARGUE: K is valid and should be enforced. They have a right to privacy, which includes the right of procreation and the right of consenting adults to deal with matters of reproduction as they see fit. Given the circumstances, the child is better off in their custody with no residual parental rights reserved for Mrs. Whitehead. Furthermore, the statute which grants full parental rights to a husband in relation to the child produced, with his consent, by the union of his wife with a sperm donor denied him equal protection of the laws.
*COURT SAYS: K is void, remand for determination of Mrs. Whitehead’s visitation rights.
 
2. Hurley v. Eddingfield
 
“the just b/c I’m a MD doesn’t mean I have to be your MD case”
Issue: Whether a physician’s refusal to provide care can be negligent.
 
Holding: No.
 
*just b/c a MD has a license to practice doesn’t mean he has to take every case presented to him
*The court ruled that the state licensing requirement does not require physicians to accept terms of practice. The court rejected analogy to innkeepers and common carriers.
 
 
 
A PUBLIC POLICY case
3. Watteau v. Fenwick
 
“the tied/free house/pub case”
Issue:
 
Holding:
 
 
*PRIVITY OF CONTRACT: K requires mutual intent to K, which requires: 1. intent to K’s goal and 2. Intent to K’s parties
 
*An ECONOMIC ANALYSIS – LEAST COST AVOIDER case
*Introduces “APPARENT AUTHORITY” – the kind of authority commonly held by someone in that position as authority
*DOCTRINAL ARGUMENT: (brewery: you mess us up, you mess up the others
*DOCTRINE OF MISTAKE (unilateral v. bilateral)
4. Griffith v. Byers Constr. Co.
 
“the salty soil case”
 
SKIPPED
Issue:
 
Holding: Court held that there was no lack of privity between developer and ultimate purchasers which would preclude maintenance of action for fraudulent concealment of soil defect by developer
 
*“Appellants contend there is or should be an implied warranty on the part of the developer of homesites that the soil will sustain grass, shrubs and trees. They argue there is no reasonable distinction between implied warranties in product liability cases and in cases involving the sales of developed homesites.”
5. Raffles v. Wichelhaus
 
“the dude, I was expecting the cotton on the earlier Peerless boat case”
 
…a MISUNDERSTANDING case
 
…a case on making of agreements/mutual assent
Issue: Is the K void b/c each of the parties thought that the shipment was coming by a different ship?
 
Holding: Yes. Where there is mistake of material fact, there is no binding K.
*There is no right to contradict by parol evidence a written K good upon the face of it. 
 
*when one contracts to buy sth, 1 should be specific about the object as one wants… b/c the purchaser is the least cost avoider
 
*RULE: In the absence of evidence to the contrary, ambiguities in contracts will not be enforced.
*An ECONOMIC ANALYSIS – LEAST COST AVOIDER case
*Reasoning: The moment it appears that two ships called Peerless were about to sail from Bombay there is latent ambiguity, and parol evidence may be given for the purpose of showing that the D meant one Peerless and the P another.  That being so there was no consensus between the parties and therefore no binding K.
*Dissent:  The K was for the sale of a number of bales of cotton, which the P was ready to deliver.  It is immaterial by which ship the cotton was to arrive upon.  If the K was for the sale of a ship named the Peerless and two existed, then the question of what was meant or the intention of the parties would be relevant.  The P did not have any goods
*there was no

erroneous?
 
Holding: Yes. When there is a mutual mistake of material fact as to the thing being purchased, the sale may be rescinded.
*A party who has given an apparent consent to a K of sale may refuse to execute it, or he may avoid if after it has been completed, IF the assent was founded, or the K made, upon the mistake of a material fact -such as the subject matter of the sale, the price, or some collateral fact materially inducing the agreement; and this can be done when the mistake is mutual.
 
*RULE: Sherwood illustrates the older test of mutual mistake, which is no longer good law. The older test holds that “. . . if there is a difference or misapprehension as to the substance of the thing bargained for, if the thing actually delivered or received is different in substance from the thing bargained for and intended to be sold, then there is no contract.”
*An ECONOMIC ANALYSIS – LEAST COST AVOIDER case
*Reasoning: (Morse) If there is a difference or misapprehension as to the substance of the thing bargained for; if the thing actually delivered or received is different in substance from the thing bargained for, and intended to be sold, then there is no K. The K maybe rescinded UNLESS there is some warranty.
*There is also a policy reason to put the burden of the loss on the seller because he had access to more information, and so should have known the cow might become pregnant.
*use NOMINALIZATION to set price based on uncertainty
*Judge Sherwood dissented, thinking that there may have been fraud/collusion
*the majority decision was wrong!!! …they fudged the facts to get the decision they wanted!!!
*When you have a case with one object, 2 discriptors and there’s mutual uncertainty as to the value of sth, … the economic way (least cost-avoider) is the better way to analyze the case… “uncertainty cases.” …the SELLER was the least-cost avoider!
 
*Sherwood’s Argument: P and D entered into a K memorialized by a memorandum, for the sale of a cow at 5 ½ cents per pound.  D thought her barren, P thought she wasn’t.
*Walker’s Argument: The material fact that the cow was not barren, which was a material condition in determining the price and for the sale of the cow should allow the D the right to rescind.