Contracts Outline

Contracts Outline

c.

i.

d.

i.
Maughs v. Porter
1.
In order to determine whether words of condition are consideration for a promise, it is reasonable to determine whether the condition is of benefit to the promisor
e.

i.
Hamer v. Sidway
1.
If the promisee forbears a legal right to something, like drinking and smoking in this case, then there is consideration
f.

i.

ii.
Dyer v. National By-Products
1.

2.

3.
In this case, the P promised his employer not to sue for an accident if he could work for the rest of his life for him. It was proven that the P did not have a legal right to sue his employer for damages arising from an accident, but he had a “good faith” belief that he did have a right to sue, so the ct held that this was sufficient. Compromise of a doubtful right acted in good faith is sufficient consideration for a promise Forbearance of an unfounded claim acted in good faith can be consideration Springstead v. Nees
1.
Parties have to have a legal right to that which they are forbearing in order for it to be a forbearance of a right Promise for a promise as consideration Forbearance of a right as consideration Condition of a promise as considerationQuid pro quo
ii.

g.
Illusory Promise
h.

i.

ii.

iii.

iv.
Mattei v. Hopper
1.

2.
Where the question is one of judgment, the promisor’s determination that he is not satisfied, when made in good faith, has been held to be a defense to an action on a K Although Ks which make the duties performance of one or more of the parties conditional upon his satisfaction, such “satisfaction” clauses have been given effect Weiner v. McGraw Hill
1.

2.
Mutuality of obligation does not require equal sacrifice Mutuality in terms of reciprocity was not necessary when a promisor receives other valid consideration Wood v. Lady Duff-Gordon
1.

2.
In this case, even though the wording of the K did not indicate that the P had to do anything, the ct implied from the language of the K that there was an implied promise that the P would try to sell Lady Duff’s designs, and therefore there was mutuality An implied promise to use reasonable efforts to hold up one’s end of the K was sufficient for consideration De Los Santos
1.
Mutuality is absent when only one of the parties is bound to perform, and the rights of the parties exist at the option of one only
i.

i.
Neither the performance of a duty nor the promise to render a performance already required by a pre-existing legal duty is a sufficient consideration for a return promisePre-existing duty
j.

i.

ii.

1.
If the owner of a $10,000 car offers to trade it for a worthless wristwatch, the cts probably will not enforce this K
2.
Cts may decide there was no bargain in fact and that the stated consideration was a mere pretense If a K or tem thereof is unconscionable at the time the K is made a ct may refuse to enforce the K, or may enforce the remainder of the K without the unconscionable term, or may so limit the application of any unconscionable term as to avoid any unconscionable result If the requirement of consideration is met, there is no additional requirement of equivalence in the values exchanged
k.

i.
Ad Hoc
III.

a.

1)

2)

3)
action which the promisor should reasonably expect to induce
OR

4)

5)
on the part of the promisee or a third person forbearance
AND

6)

7)

8)

9)
if injustice can be avoided only by enforcement of the promise to the promisee’s detriment by the promisee reasonably relying on promisor’s promise which does induce such action or forbearance
IS BINDING

i.

ii.
A charitable subscription or a marriage settlement is binding under subsection 1 without proof that the promise induced action or forbearance The remedy granted for breach may be limited as justice requires
b.
In some states, a promise of a gift to a charitable organization is enforceable even if there is no consideration
IV.

a.

i.

1.

2.

3.

4.
is required to make restitution to the other at another’s expense enriched unjustly A person who has been:
b.
Bloomgarden v. Coyer
i.
Ds in this case thought they were receiving a gift, and there was evidence to suggest otherwise. Therefore, the ct found that the gain they received was not unjust, and therefore they were not liable to the P. Obligation arising from unjust enrichment Unjust enrichment is:
c.
Under promissory estoppel, in order for the theory to be valid, cts have often said that the detriment or change of the Promisee’s position has to be material or substantial
d.

e.

f.

g.
Estoppel is basically a tort doctrine; the wrong is not primarily in depriving the P of the promised reward but in causing the P to change position to his detriment Harvard Law Review
h.
Where a person represents by word or act that he has done or will do something upon the performance of which he should realize that others will rely, he is liable for expected harm caused by the reliance of others and his failure of performance, if his representation was negligently or intentionally false, or if without excuse he fails to perform Harvard Law Review
i.
Wheeler
i.
Where the promisee has failed to bind the promisor to a legally sufficient K, but where the promisee has acted in reliance upon a promise to his detriment, the promisee is to be allowed to recover no more than reliance damages measured by the detriment sustained Siegel v. Spear & Co.
i.

ii.
If a person makes a gratuitous promise, and then enters upon the performance of it, he is held to a full execution of all he has undertaken D promised to insure Siegel’s furniture while Siegel stored it in def’s warehouse, and relying on that promise, Siegel moved his furniture to the warehouse. Furniture burned, and the ct found promissory estoppel. Seavey v. Drake
i.
The expenditure in money or labor in the improvement of the land induced by the donor’s promise to give the land to the party making the expenditure, constituted consideration for the promise
c.

d.

e.
Implied-in-law K – Unjust enrichment Implied-in-fact K – one in which the facts of agreement and consideration are based on implication and inference rather than on explicit assent as in an express KQuantum Meruit
V.

a.

i.

ii.

iii.

1.
Sometimes, cts have found promissory estoppel satisfies the required writing of a K However, the P may be able to recover the value of any benefit conferred on a restitution theory Conversely, if the D has a statute of frauds defense, i.e. the stat. applies, the K is not in writing and no exception applies, the P will not recover on the grounds of an agreement with consideration even if the P proves the K If put to proof, the P must show all the requirements of an agreement with consideration, thus the P will not prevail merely by satisfying the statute of frauds.
b.

i.

1. Suretyship – A K to answer for the debt or duty of another
2. Marriage – A K made upon consideration of marriage
3. Land K – A K for the sale of an interest in land
4. One year – A K that cannot be performed w/in one year of its making
5. UCC – under the UCC, a K for the sale of goods for a price of $500 or more

ii.

iii.

iv.
If the case is within the statute, there is no complying writing, and there is no applicable exception, does any other doctrine mitigate what would otherwise be the effect of non-compliance? If the case is within the stat. and there is no complying writing, does the stat. or the case law recognize an exception? If the case is within the SOF, does a memorandum, note, or other writing satisfy the statute?
c.
Schoor v. Holmdel Heights Construction Co.
i.

ii.

iii.

1.
A special promise to answer for the debt of another person is not enforceable.
iv.

1.
Where a promise is made to takeover all or part of a preexisting duty of a third person to the promisee and the reason for doing so is mainly for the benefit of the promisor’s own interest or business interest rather than the benefit of the third person, the promise is not within the Stat. of Frauds. Rest. Of Ks
d.

i.

1.

2.

3.
States with reasonable certainty the essential terms of the unperformed promises in the K. Is sufficient to indicate that a K with respect thereto has been made between the parties or offered by the signer tot the other party, and
ii.

1.

2.

a.
Even writing that purports to cancel or repudiate the K will suffice if the writing is otherwise sufficient
3.

a.
Any symbol will do if made or adopted with the intent of authenticating the writing as that of the signer.
4.

5.

6.

a.
When the omission or inaccuracy is due to mutual mistake or fraud, the memorandum can be reformed, thereby satisfying the stat. if memorandum omits or inaccurately states a term, some case law permits introduction of oral or written evidence to show the term, but only if the agreement is not integrated. If the original has been lost or destroyed, its contents may be shown by an unsigned copy or by oral evidence May be made or signed at any time before or after the formation of the K Signature need not be han