Contracts- Pro. Roy
Is there a contract?
Lens through determining a contract? Objective Theory
Hamer v. Sidway 1891 [Unilateral Contract] – not enforceable when it is executory.
Promise of $5000 if Plaintiff lived up to the promise to refrain from drinking, gambling, etc. The uncle intends to pay for his promise, but we don’t know when. The executor after the death does not want to pay b/c he says there is no consideration.
Elements of consideration: Benefit (promisor) and Detriment (promise) test.
Health and the well-being of the nephew is the benefit of the uncle. The detriment to the nephew is a relinquish/waiver of his legal rights under this promise. The court used case law to decide for the plaintiff b/c he said that the benefit to the agreement is not necessary and the detriment is the only important factor in this test.
Questions to ask to determine if the agreement is binding:
Would a reasonable person interpret the agreement as a binding contract?
Is the bargaining issue legal?
Is the detriment legal?
Baehr v. O-Tex Oil Corp.
The plaintiff leased gas stations to Kemp who was the owner of Webb Oil Company which made him the payer of the lease. Plaintiff has a contract with Kemp, Kemp has a contract with defendant, and defendant promises the plaintiff that they would pay but never admits responsibility. There never was an agreement between the P and the D.
A promise is an assurance that a thing will or will not be done in the future.
Restatement Second- Promise definition: A manifestation of intent to act.
There was a legal promise even though there was never a written contract b/c they agreed to pay if you look at the transactions independently.
The plaintiff argues that there was consideration b/c of forbearance from suit according to the Restatement 2nd §71,72.
Modern test for consideration►Bargain for exchange- if you do or do not do this, I promise I will do this later.
Causation for promise….
Court decides that the act of forbearance has to be in exchange for the promise. The promise has to solicit the forbearance.
Cosideration: If…. Then I promise that …….
Page 48, neither practical nor reasonable…..Do you agree?
Dougherty v. Salt
Evidence of consideration in the note is “value received” –to denote that this was not just a gift but it is just a sham b/c it is still a gift
Jury in trial court found for the plaintiff that the note was a contract.
The Court of appeals reversed the ruling. There was no reliance of the detriment.
The high court reinstated the lower courts opinion.
The promisor’s intent was for the boy to have the money.
No consideration b/c it is onesided b/c the nephew is not obligated to perform anything in the future (you can’t have past consideration).
To idea of consideration is not found in feelings or a gift
Batsakis v. Demotsis
The defendant- borrower says the consideration is lacking b/c the exchange rate is so
Trial court ruled in favor of the plaintiff –lender for a portion of the amount about $750.
The Court of appeals ruled in favor of the plaintiff and said that the consideration can not be waived and ruled for the $2000 for the lender
Nominal consideration matters that the amount of money is needed and wanted.
If someone really needs the money and is willing to give up an unconscious able amount to get what they want there is consideration.
Plowman v. Indian Refining Co.
Plaintiff’s argument is they were promised pension until they die. Also, their past services, relationship with the employees, moral obligation, them picking up their checks at the office supports consideration.
Defendant’s argument is that the pension was gratuitous (no consideration); the person who gave them the contract was not authorized, and there was never a set time frame.
The court ruled in favor of the defendant b/c there was never consideration.
Promissory Estoppel- Reliance….enforce a contract without consideration b/c an injustice would occur otherwise.
Kirksey v. Kirksey (1845)- reliance on classical application of contract
The lower court ruled in plaintiff’s favor, but the Al. Sup. Ct. reversed the decision b/c they stated that the brother-in-law’s promise was a gratuitous promise and there was no breach of a contract. His feeling good about his family is not consideration for a promise.
Is their a promise? Yes
Is it supported by consideration? Yes, b/c there was a detriment to the plaintiff. & No, b/c there is no bargain-for-exchange b/c the brother-in-law gets nothing for the promise.
Greiner v. Greiner- reliance on early application of Prom. Est.
The lower and appeals court ruled for the defendant and ordered a deed to be made in favor of Frank.
Is there any consideration given for the promise?
The Plaintiff argues that there was no bargain-for-exchange, but the court states that Frank relied on the promise and Rest. 1st §90 supports there ruling [doctrine of Promissory Estoppel].
Is reliance reasonable/ foreseeable to induce an action by the promisee, and is injustice avoided by the enforcement of the promise.
Wright v. Newman
The promise to the mother is an implied promise of support through the father’s actions to his son by placing his name on the birth ce
ion with a promise
Credit Bureau v. Pelo
Mentally unstable and threatening to harm his self
Personally liable for medical bill when involuntarily was hospitalized for bipolar disorder
If a person received the benefit should pay for it if it would be unjust for him to keep the benefits without payment.
The hospitals claim falls under Restatement of Restitution § 116- saving a life…………. A person who has supplied services to another is entitled to restitution if it is impossible for the other to give consent b/c of mental impairment or the other’s consent would have been immaterial.
§117- Preservation of another’s things, credit, and property
“Pure” restitution without a promise.
Intent to charge► cuts out people who don’t have the intent to charge
*Restitution without a promise –pure restitution
*Restitution without a promise- unjust enrichment
Commerce Partnership v. Equity Contracting
Implied contract- lack of contractual relationship
Equity was subcontracted by a general contractor for Commerce for work to stucco the building for $17,100. Equity did not sue the general contractor b/c he had filed bankruptcy. Therefore, Equity sued Commerce under a Quasi-contract- unjust enrichments. The fact that is disputed is whether or not commerce paid for the work to the general contractor. Would it be unjust to keep the benefit of the subcontractor while the subcontractor was never compensated?
Watts v. Watts
Cohabitation of two unmarried persons for 12 years with two children is the fact of the case.
A contract implied in law- quasi contract, unjust enrichment; no contract but principles of equity will apply; falls under restitution
A contract implied in fact- there is conduct or actions that imply a promise b/t the parties; a contract that is enforceable by law; does not fall under restitution
Benefit inferred by the plaintiff to the defendant without compensation. Is it fair?
Reasonable value of services or increase of wealth of defendant- choices pg. 371
Public Policy- some contracts are unenforceable by courts on this ground. You