Contracts Outline
Fall 2005 – J.J. White
Text: The Modern Law of Contracts, Frier and White
1. A Roadmap for Contract Law
Lucy v. Zehmer (Sup. Ct. Virginia 1954)
Facts
· Two brothers propose to a couple to purchase farm. Husband writes an agreement on receipt, and even corrected a portion after brothers pointed out a flaw. Both husband and wife singed. Both parties were dunk at the time. Zehmer contended it was a joke and that he never had a real intention of selling the farm.
Holding
· Zehmer was not drunk enough to not understand what he was doing. He wrote the contract twice and corrected the wording; plus his actions never gave any indication that he thought it was a joke.
· When making a K, intent is irrelevant, and a person “going through the motions” and appearing earnest to a “reasonable person” forms a K, as long as the other party believes the actions of the other. The K is enforceable.
Misc
· Being high is generally not an excuse, but if one party induces the other to do so, this might be a way out (Rest 2d § 16)
· Here, the appellate court is really making a fact determination about Zehmer’s conduct, whether it thought he was joking.
· Here court calls for specific performance, something it rarely does, but pieces of property are considered to be unique, as there is no real compensation for them.
· The intent of contract is presumed, unless there is some indication to the contrary.
· Generally, courts will not enforce outrageous and obviously skewed contracts, but many factors are taken into account.
· Executory Contracts are just the exchange of promises without any other action. Under common law, these were generally not enforceable, but today they are. People have an expectation that a K will be performed, and that shows some type of “investment” in the K.
· Objective theory of contract says that personal intent has nothing to do with outcome, and that acts, usually words, form the obligation. This helps e-commerce, as there is no human intent needed.
· There are three stages in this K,
to the CISG.
· Generally, CISG is a compromise between civil and common law.
· CISG should generally be interpreted through its language.
· CISG does call for mitigation of damages, but it gives broad leeway to do so.
· Damages seek to “place the aggrieved party in as good a position as if the other party had properly performed the K.” In this sense, they “carry forward,” and take the aggrieved party to an imagined point where performance would have occurred.
· Unforeseeable circumstances may excuse performance if impracticable, but such finding is the exception.
· Our K regime is one of strict liability (pacta sunt servanda).
Why people make contracts
K law is a relatively new development and first arose in the early 17th century. People used to do w/o, probably because life was more local,
