Contracts Outline Shepherd
Enforcing Private Agreements
1. Introduction to Contract Law
a. The nature and history of contract
a. Shaheen V Knight
b. Freedom of contract and public policy
a. In Re Baby M
2. Damages for Breach of Contract
a. The three damage interests
A. Hawkins V McGee
B. Nurse V Barns
C. J.O. Hooker and Sons V Roberts Cabinet Co.
D. Tongish V Thomas
b. Three Limitations on damages
A. Remoteness/Foreseeability of Harm
i. Hadley V Baxendale
ii. Hector Martinez and Co. V. Southern pacific Transportation Co.
iii. Morrow V First National Bank of Hot Springs
B. Certainty of Harm
i. Chicago Coliseum Club V Dempsey
ii. Anglia Television Ltd. V Reed
iii. Mistletoe Express Service V Locke.
C. Avoidability of Harm
i. Rockingham County V Luten Bridge Co.
ii. Parker V 20th Century Fox
iii. Neri V Retail Marine Corp.
c. Contraction around default rules of damages
A. Liquidated Damages vs Penalty Clauses
i. Kemble V Farren
ii. Wassenaar V Towne Hotel
iii. Lake River Corp v Carborundum Co.
3. Other Remedies and Causes of Action
a. Specific performance and injunctions
i. Contracts for Land
1. Loveless V Diehl
ii. Contracts for Good
1. Cumbest V Harris
2. Scholl V Hartzell
3. Sedmak V Charlie’s Chevrolet
iii. Contracts for Personal Services
1. Mary Clark A woman of Colour
2. Lumley V Wagner
3. Ford V Jermon
4. Duff v Russell
5. Dallas Cowboys Football Club v Harris
b. Restitution- Damage interest and cause of action
a. Restitution for Breach of Contract
i. Bush V Canfield
b. Restitution to the party in breach
i. Britton V Turner
ii. Vines V Orchard Hills
c. Restitution and Quasi Contract
i. Cotnam V Wisdom
ii. Martin V Little, Brown and Co.
c. Tortious interference with contract
a. Lumley V Gye
b. Texaco V Penzoil
4. Reaching an Agreement
A. The objective theory of assent
a. Embry V Hargadine, McKittrick Dry Goods Co.
b. Lucy V Zehmer
B. What is an offer?
a. Preliminary Negotiations
i. Nebraska Seed Co. V Harsh
ii. Leonard V Pepsico
b. Written Memorial Contemplated
i. Empro Manufacturing v Ball-Co Manufacturing
ii. Texaco v Penzoil
c. Revoking an offer
i. Dickinson V Dodds
C. What is an acceptance?
a. Acceptance that varies terms?
i. Ardente V Horan
b. Acceptance by correspondence- the mailbox rule
c. Acceptance by performance –Unilateral contracts
i. Carlill v Carbolic Smoke Ball Co.
ii. Leonard v Pepsico
iii. White V Corlies & Tift
iv. Petterson V Pattberg
d. Acceptance by Silence
i. Hobbs V Massaoit Whip Co.
D. E-Commerce and Mutual Assent
a. Caspi v Microsoft Network
b. Ticketmaster V Tickets.com
c. Specht v Netscape Communications
d. Specht v Netscape Communications
5. Discerning The Agreement
A. Interpreting the meaning of the terms
a. Ambiguous Terms
i. Raffles v Wichelhaus
ii. Oswald V Allen
b. Vague Terms
i. Weinberg v Edelstein
ii. Frigaliment Importing Co. v. BNS International Sales Corp.
B. Filling Gaps in Terms
a. Agreements to Agree
i. Sun Printing & Publishing Assn. V Remington Paper & Power Co.
ii. Texaco V Penzoil
b. Illusory promises
i. New York Central Iron Works Co. V United States radiator Co.
ii. Eastern Airlines v Gulf Oil Corp.
iii. Wood v Lucy, Lady Duff-gordon
C. Identifying the Terms of the agreement
a. Form contracts or “Contracts of Adhesion”
i. Carnival Cruise Line v Shute
b. Which Terms were agreed to?
i. Step Saver Data Systems V Wyse Technology
6. Written Manifestations of Intent
A. Interpreting a Writing the Parol Evidence Rule
B. Reforming A Writing
C. Requiring A writing
D. Satisfying the requirement of a signature
7. Multiparty transactions
A. Transferring rights or duties to third parties
B. Manifesting Assent through an agent: Types of Authority
C. Third-Party Beneficiaries of a Contract
a. Intended beneficiaries
b. Distinguishing Intended from Incidental Beneficiaries
The Nature and History of Contract:
Shaheen v Knight (PA Ct. Common Pleas,1957) pp8-11
Facts:Shaheen contracted with Dr. Knight to perfor
olls Ct. pp41-42
Facts: A man sells what he may invent or the patent for said invention before the invention is created or in existence.
Issues: Can a man contract to sell for future ideas?
Reasoning: Public policy may make void a contract that is for a crime, or is immoral but to extend this doctrine further would be to violate the public policy of contract that men of age and competent understanding may freely and voluntarily enter into contract.
Law: Public policy alone is not enough for a court to void a contract
The Three Damage Interests
Hawkins v McGee (1929) Supreme Court NH pp 61-64
Facts: Hawkins contracted with Dr. McGee to receive a skin graft on his hand. The doctor is alleged to have said that he stated that he agreed to make the hand a perfect hand. He pleaded with the family to let him perform the operation. George Hawkins consented. The resulting operation left Hawkins with a hand that had a larger scar and was not able to function as well.
1. What is true measure of the plaintiff’s damage?
2. Can a doctors representation constitute and give rise to a contract?
1. Expectation Interest: The difference between the value of a good hand and the hand in its present condition
Reasoning: The suffering that Hawkins endures does not measure the difference in value. Some suffering was anticipated with the surgery and he was willing to undergo the normal suffering of surgery as part of his consideration. However this suffering did not furnish a test of the value of a good hand or the difference between the hand which McGee promised and the one that resulted from the operation as this suffering could not be expected.
Law: The expectation interest applies to a case where a special contract is made
Glossary: non suit- you may sue at a later date within the statute of limitations.
McGee v United States Fidelity and Guaranty Co. (1931) US Ct of Appls. 1st Circ. pp 64-66
Facts: When the result of the Hawkins trial case is that a nonsuit is ordered on the count of negligence the Insurance company refuses to pay for damages in the Hawkins V McGee case. McGee brings suit.
Issues: Does the general policy cover a special contract?
Reasoning: There was a special contract made which was failed to be delivered and damages are not being recovered for malpractice error or mistake in practice
Nurse v Barnes (1664) p 69 (kings bench?)
Facts: One man contracts to enjoy iron mills for 6 months for 10lbs
Issues: How much in damages may be awarded?
Reasoning & Law: A jury is not bound to only give damages equal to loss but also all special damages
J.O. Hooker & Sons v Roberts Cabinet Co. 1996 Supreme Ct. of Miss.
Facts: J.O. Hooker subcontracted to Roberts and then unilaterally ended the contract 4 days after work had commenced. Roberts brought suit.
1. Is a damaged party entitled to a reward encompassing all costs of a contract?
2. Is a damaged entitled to a reward exceeding their direct losses?
3. Is this contract governed by the U.C.C.?