Source: https://www.studyblue.com/notes/note/n/contracts/deck/236217
Timestamp: 2019-08-24 00:22:01
Document Index: 12097756

Matched Legal Cases: ['§ 24', 'art 2', '§30', '§35', '§36', '§69', '§69', 'art 2', '§69', 'art 3', '§54', '§54', 'art 2', '§54', 'art 3', '§45', '§62', 'art 2', 'art 2', 'art 3', '§131', '§131', 'art 2', 'art 1', 'art 2', 'art 3', 'art 4', '§17', '§82', '§71', '§71', 'art 2']

Contracts - Law 101 with Pauling at Charlotte School of Law - StudyBlue
o Issue: Whether a newspaper’s breach of its reporter’s promise or anonymity to a news source is legally enforceable.
o Holding: No, a reporters promise of anonymity is given as a moral commitment, which alone cannot support a contract. To impose a contract theory on this arrangement puts an unwarranted legal rigidity on a special ethical relationship, precluding necessary consideration of factors underlying that relationship.
Pierce v. The Clarion Ledger
o Issue: whether a reporter’s promise made to an informant to not publish information until the information was verified constituted a valid contract?
Holding: No, a reporter’s alleged promise not to publish information was a moral obligation, not a contractual requirement which does not give rise to express or implied contractual duties and there is no contractual relationship.
Kilarjian v. Vastola 379 N.J. Super. 277, 877 A.2d 372 (2004)
o Holding: No, although the court held that a valid contract existed and that defendants breached that contract, plaintiff was not entitled to summary judgment or an award of specific performance due to the under hardship that an award of specific performance would cause. Plaintiff entitled to the reimbursement for costs associated with the breach, and was allowed to submit an accounting of those expenses.
All things that are moveable at the time of identification to a contract for sale.
Goods specifically include
The unborn young of animals
Goods specifically excludes
Information, electronic transfer of information that is not incorporated into a tangible product.
If the transaction applies to goods the UCC applies, if purely to services, UCC does not apply. This distinction is often in contention in court.
Pass v. Shelby Aviation, Inc. not reported in S.W.2d, 2000 WL 388775
o Issue: Whether the trial court erred in denying an aviation company’s motions to dismiss an estate’s claims for breach of express and implied warranties under the UCC in relation to a contract to perform annual inspection of an aircraft on the basis that under the predominant factor test the mixed transaction between the parties was not governed under the UCC.
Pass v. Shelby Aviation, Inc. not reported in S.W.2d, 2000 WL 388775 (Holding)
o Holding: Yes, because the transaction between the parties was predominantly a contract for service, with the sale for goods incidentally involved, it is not subject to the warranty provisions of Article 2 of the UCC, and the trial court erred in denying the aviation company’s motions to dismiss.
Predominant Purpose Test (NC)
If the sale of goods is the more significant aspect of the transaction, and the non-sale component is incidental to the sale, Article 2 applies. However, if the sale for goods is ancillary, and the other component is predominant, Article 2 does not apply and the transaction is governed by common law.
Gravaman Test (Not NC)
Under this test the court does not attempt the classify the contract as a whole one way or the other, but applies Article 2 if the controversy in question relates to the sales component, and applies common law if the issue arises out of the service component.
UCC 2-104: The definition of Merchant
A person that deals in goods of the kind or otherwise holds itself out by occupation as having knowledge or skill peculiar to the practices or goods involved in the transaction or to which the knowledge or skill may be attributed by the person’s employment of an agent or broker or other intermediary that holds itself out by occupation as having the knowledge or skill.
UCC 1-304: Good faith obligation
States that have not enacted the revised versions of article 1 and 2 hold that if the party is a merchant they must be honest in fact AND observe reasonable commercial standards of fair dealing in the trade.
o have acquired the goods in good faith in the ordinary course
o from a person who sells goods of that kind, and
o must not know that the sale violates the rights of another person.
Kabil Developments Corp. v. Mignot/Inland 279 Or. 151, 566 P.2d 505 (1977)
Issue: Whether the trial court was proper in allowing the subjective testimony of a party to supplement the objective evidence of what was said by the parties during the contract negotiations.
Kabil Developments Corp. v. Mignot/Inland 279 Or. 151, 566 P.2d 505 (1977) (Holding)
Yes, it is proper to allow a party to provide this subjective testimony of his own sense of the state of negotiations, so long as the jury is not misled into treating this testimony, in its context, as something more than evidence bearing on the behavior and the perceptions of the parties to the negotiations.
When will the court let subjective beliefs regarding contracts into evidence?
When deciding whether or not to let the evidence in if:
o The contract isn't clear AND/OR
o It will mislead the jury (confuse the jury eg. Testimony says the opposite of what the contract said)
o Then you WOULDN’T let the evidence in
James v. McDonald’s Corp. 417 F.3d 672 (2005)
o Issue: Whether the trial court committed clear error by compelling a party to arbitrate his dispute pursuant to an arbitration clause contained within a contract that he failed to read.
o Holding: No, because a party has the affirmative duty to read the contract to which it is a party, the trial court did not commit clear error, and was proper in compelling the parties to arbitration.
Issue: Whether a party is entitled to the specific performance of a contract when the mental assent of the other party is not present, but that party's words and actions have but one reasonable meaning, which express a reasonable manifestation of assent.
Holding: Yes,a party may be entitled to the specific performance of a contract when the words and actions of the other party, judged by a reasonable standard, manifest an intention to agree, regardless of that party's real, but unexpressed assent
The manifestation of willingness to enter into a bargain, so made as to justify another person in understanding that his assent to that bargain is invited and will conclude it. Restatement of Contracts 2d § 24
UCC 2-204: Offer
o A contract for sale of goods may be made in any manner sufficient to show agreement, including offer and acceptance, conduct by both parties which recognizes the existence of a contract, the interaction of electronic agents and the interaction of an electronic agent and an individual.
o An agreement sufficient to constitute a contract for sale may be found even if the moment of its making is undetermined.
UCC 2-204: Offer part 2
o Even though one or more terms are left open, a contract for sale does not fail for indefiniteness if the parties have intended to make a contract and there is a reasonably certain basis for giving an appropriate remedy.
Fletcher-Harlee Corp. v. Pote Concrete Contractors, Inc., 482 F.3d 247 (2007) United States Court of Appeals, Third Circuit.
o Issue: Whether the district court was correct in granting a subcontractor’s motion to dismiss a breach of contract claim filed by a general contractor who purported to accept the subcontractor’s bid as a firm offer when the text of the bid indicated that it was not.
Fletcher-Harlee Corp. v. Pote Concrete Contractors, Inc., 482 F.3d 247 (2007) United States Court of Appeals, Third Circuit. (Holding)
o Holding: Yes, although the subcontractor may have exhausted any goodwill by bucking industry custom, the district court was correct in dismissing general contractor’s claim for breach of contract when the language of the communication was so plain as to indicate that a contract would not be formed.
o People v. Braithwaithe 162 Misc. 613, N.Y.S.2d 284
o Issue: Whether the evidence in a tape recorded conversation between a suspected drug dealer and a confidential informant constituted a valid offer to sell a controlled substance.
o Holding: No, the evidence contained in the taped conversation was simply too insufficient as to show that Defendant had any intent or ability to deliver the controlled substance to the informant.Lefkowitz v. Great Minneapolis Surplus Store, 251 Minn. 188, 86 N.W.2d 689 (1957)
Lefkowitz v. Great Minneapolis Surplus Store, 251 Minn. 188, 86 N.W.2d 689 (1957)
o Issue: Whether an advertisement placed in a newspaper offering fur coats for a special discount to the first customers that arrive at defendant’s store can constitute a valid offer?
Lefkowitz v. Great Minneapolis Surplus Store, 251 Minn. 188, 86 N.W.2d 689 (1957) (Holding)
o Holding: Yes, while the general convention is that advertisements should not be construed as offers, and advertisement could be an offer if, when interpreted in context, it would lead a reasonable prospective buyer to understand that an offer was intended.
Harris v. Time, Inc., 191 Cal. App. 3d 449 (1987)
o Issue: Whether an advertisement for a free calculator watch contained within a magazine’s mass mailing to potential subscribers aimed at enticing them to establish subscriptions with the magazine constituted a valid offer.
Harris v. Time, Inc., 191 Cal. App. 3d 449 (1987) (Holding)
o Holding: Yes, citing the Lefkowitz case, the court held that when a advertisement calls for the performance of a specific act without further communication and leaves nothing for further negotiation, it can constitute a valid offer.
Leonard v. Pepsico Inc., 88 F. Supp. 2d 116 (S.D.N.Y. 1999)
o Issue: Whether a television commercial featuring certain specific products that could be redeemed under a contest, combined with the intentional facetious inclusion of a military jet as a possible redeemable product actually constituted an offer to award the jet.
Leonard v. Pepsico Inc., 88 F. Supp. 2d 116 (S.D.N.Y. 1999) (Holding)
o No. It is well-established that advertisements and order forms are mere notices and solicitations for offer which create not power of acceptance in the recipient. No objective person could reasonably have concluded that the commercial in this case actually offered consumers a military jet.
The offeree’s manifestation of assent to the offer.
o Restatement, Second §30. Form of Acceptance Invited
§ (1) An offer may invite or require acceptance to be made by an affirmative answer in words, or by performing or refraining from performing a specified act, or may empower the offeree to make a selection of terms in his acceptance.
§ (2) Unless otherwise indicated by the language or the circumstances, an offer invites acceptance in any manner and by any medium reasonable in the circumstances.
o Restatement, Second §35. Duration of the Offeree’s Power of Acceptance
§ (1) An offer gives to the offeree a continuing power to complete the manifestation of mutual assent by acceptance of the offer.
§ (2) A contract cannot be created by acceptance of an offer after the power of acceptance has been terminated in one of the ways listed in §36.
o UCC 2-206(1)(a). Offer and Acceptance in Formation of Contract(1) Unless otherwise unambiguously indicated by the language or circumstances:
Keller v. Bones, 260 Neb. 202, 615 N.W.2d 883 (2000)
Whether or not the court of appeal erred in affirming the trial court’s award of summary judgment in determining that a signed facsimile copy sent to the offeree’s agent in a contract for the sale of real estate did not constitute valid acceptance of the offereors’ offer within the specified time for acceptance?
Yes. When a contract is written in clear and unambiguous terms, it is not subject to interpretation or construction; rather, the intent of the parties must be determined from the contents of the contract, and the contract must be enforced according to its terms.
Roth v. Malson, 67 Cal. App. 4th 552, California Court of Appeals
Whether or not the trial court was correct in determining that the buyer’s signature on the “counter to counteroffer” section of a form real estate contract, and insertion of language in the “changes/amendments” section of the contract did not constitute a valid acceptance of seller’s counter offer, even though buyer intended to create a binding contract?
Roth v. Malson, 67 Cal. App. 4th 552, California Court of Appeals (Holding)
Yes, the trial court was proper in concluding that no contract was formed because buyer’s “counter to counteroffer” was a qualified acceptance of defendant’s counteroffer, and a valid acceptance must be absolute and unqualified. A qualified acceptance is a new offer.
The Effective Date of Acceptance
· An acceptance takes effect when it is communicated to the offeror
· This is problematic when acceptances cannot be communicated instantaneously such as in the mail.
· Mailbox rule ONLY applies to acceptances and USPS not to FED-EX or UPS
· Where the mail is an expressly or impliedly authorized medium of acceptance, a properly addressed acceptance takes effect when deposited in the mail.
Cantu v. Central Education Agency, 884 S.W.2d 565
Issue: Whether the acceptance of a special education teacher’s offer to resign her employment by the superintendent of schools, which was mailed prior to the teacher’s attempted revocation of her resignation, was valid under the mailbox rule.
Cantu v. Central Education Agency, 884 S.W.2d 565 (Holding)
Holding: Yes, since the offer did not specify a mode of acceptance, using the mail was reasonable and impliedly authorized under the circumstances, and as such, the acceptance take effect upon mailing.
Okosa v. Hall, 315 N.J. Super. 437
Issue: Whether a premium payment that was mailed by the insured prior to the expiration of an offer by the insurance company to extend insurance coverage under a lapsed policy, but received after the expiration of the offer was valid acceptance under the mailbox rule.
Okosa v. Hall, 315 N.J. Super. 437 (Holding)
Holding: Yes, by authorizing the use of the mail as a means of paying premiums, the insurance company also constituted the postal authorities as its agent, and thus the mailbox rule dictates that a valid acceptance took effect with the insured placed is premium payment in the al, which was prior to the expiration of the offer.
Glover v. Jewish War Veterans of United States, Post No. 58, 68 A.2d 233
Issue: Whether a person giving information leading to the arrest of a murderer without any knowledge that a reward has been offered for such information by a non-governmental organization is entitled to collect the reward?
Glover v. Jewish War Veterans of United States, Post No. 58, 68 A.2d 233 (Holding)
Holding: No, at least so far as private rewards are concerned, there can be not contract unless the claimant when giving the desired information knew of the offer of the reward, and acted with the intention of accepting such offer, since it is impossible for an offeree to accept an offer unless she knows of its existence.
· The usual rule is that failure to respond is considered rejection.
· Because it would not be good public policy to enable an offeror to make an offer in a way that forces the offeree to respond in order to escape being bound to a contract, the general rule is that if an offeree fails to respond to an offer before it expires, this inaction is a rejection.
o Restatement, Second §69. Acceptance by silence or exercise of dominion
a) Where an offeree takes the benefit of offered services with a reasonable opportunity to reject them and reason to know that they were offered with the expectation of compensation.
o Restatement, Second §69. Acceptance by silence or exercise of dominion Part 2
(b) Where the offeror has stated or given the offeree reason to understand that assent may be manifested by silence or inaction, and the offeree in remaining silent an inactive intends to accept the offer.
o Restatement, Second §69. Acceptance by silence or exercise of dominion Part 3
§ (2) An offeree who does any act inconsistent with the offeror’s ownership of offered property is bound in accordance with the offered terms unless the are manifestly unreasonable. But if the act is wrongful as against the offeror, it is an acceptance only if ratified by him.
Ways in which an offeree’s power of acceptance may be terminated
· Lapse of the offer
o As mentioned prior, if no duration is specified in a contract, it is deemed to be left open for a reasonable time.
· Counteroffer
· The death or mental disability of the offeror
o The offer can be revoked at any time before acceptance. The revocation only becomes effective when it is communicated to the offeree. Either he must have received notice of revocation from the offeror (direct revocation) or she must have reliably learned in some other way that the offer is no longer open for acceptance (indirect revocation).
Vaskie v. West American Insurance Co. 383 Pa. Super. 76, 556
Whether the trial court erred in granting summary judgment in favor of a motorist and against an insurance company and determining that the question of whether the time within which the motorist accepted the insurance company’s offer for settlement of a disputed claim was a question of law?
Vaskie v. West American Insurance Co. 383 Pa. Super. 76, 556 (Holding)
Yes, the question of whether an acceptance of an offer was done in a reasonably timely manner is a question of fact, and not an appropriate question to decide when determining a motion for summary judgment. Accordingly, the trial court erred.
Hendricks v. Behee, 786 S.W.2d 610 (Missouri Ct. of App.)
Issue: Did the lower court err in holding that Behee in a real estate transaction effectively revoked his offer to purchase real estate from the prospective seller when the revocation was communicated to the seller’s agent prior to the buyer being notified that the sellers had accepted his offer?
Hendricks v. Behee, 786 S.W.2d 610 (Missouri Ct. of App.) (Holding)
Yes, because the offer was not supported by consideration, an offeror may revoke his offer at any time before acceptance and communication of that fact to him, and there is not contract until acceptance of an offer is communicated to the offeror,
Dickinson v. Dodds, 2 Ch. Div. 463 (1876)
Issue: Did the lower court err in holding that and offer to sell real estate had been accepted before any formal notice of withdrawal of that offer had been given to the buyer, thus creating a binding contract?
Dickinson v. Dodds, 2 Ch. Div. 463 (1876) (Holding)
Holding: No, because there was not consideration given by the buyer to keep the property unsold, the offeror/seller could withdraw the offer at any time prior to acceptance, and no formal retraction was required. Accordingly, since the buyer was aware that the seller had changed his mind and had revoked his offer to sell before there aw any acceptance by the buyer, the trial court erred in deciding that a contract had been formed.
Carlill v. Carbolic Smoke Ball Co., 1 Q.B. 256 (1892)
Issue: Whether the trial court was correct in holding that an advertisement in a newspaper offering a reward for any consumer who purchases and utilizes manufacturer’s product and then still contracts influenza created a binding contract with a consumer who accepted the advertisement’s offer by performance.
Carlill v. Carbolic Smoke Ball Co., 1 Q.B. 256 (1892) (Holding)
Holding: Yes, the trial court was correct in determining that this advertisement constituted an offer to anybody who performed the conditions named in the advertisements, and any consumer who performed such conditions effectively accepted the offer, thus creating a binding contract and entitling them to the reward listed in the advertisement.
Performance as an Exclusive or Permissive Method of Acceptance
· Unless the offer clearly requires acceptance to be only by performance, it can be accepted either by performance or promise.
· Conversely, unless the offer clearly requires acceptance only by promise, it can be accepted by either promise or performance.
· Unless a method of acceptance is un-ambigously prescribed as exclusive, the offeree may accept by any means that is considered reasonable.
Shipment as Acceptance of an Offer to Buy Goods
· UCC 2-206(1)(b) and (2). Offer and Acceptance in Formation of Contract
Shipment as Acceptance of an Offer to Buy Goods pt. 2
Shipment as Acceptance of an Offer to Buy Goods pt. 3
Communication of Acceptance by Performance
Notification need not be given before or at the time of acceptance; it could be given some time afterwards, provided that the offeror had not revoked the offer in the interim.
Restatement, Second §54. Acceptance by Performance; Necessity of Notification to Offeror
Restatement, Second §54. Acceptance by Performance; Necessity of Notification to Offeror Part 2
(2) If an offeree who accepts by rendering a performance has reason to know that an offeror has no adequate means of learning of the performance with reasonable promptness and certainity, the contractual duty of the offeror is discharged unless.
Restatement, Second §54. Acceptance by Performance; Necessity of Notification to Offeror Part 3
(c) the offer indicated that notification of acceptance is not required.
Restatement, Second §45. Option contract created by part performance or tender
Restatement, Second §62. Effect of performance by Offeree where offer invites either performance or promise.
Shrink-Wrap Terms
A document included in the inside of a container and typically not seen by the buyer until he brings the purchase home and opens it, which sets out the various terms on which the product is sold. This document may spell out the warranty and return policy, disclaim liability for harm caused by the product, restrict the product’s use to certain specific purpose, and require any disputes about the product to be arbitrated.
Standard terms proffered by the vendor, included in a link on a web site or in a pop up box when a person orders good or services on the internet.
Terms of agreement that the manufacturer prints on the outside of the box that are readily observable by the purchaser before he decides to select the product.
Rolling contracts (Cash now, terms later)
A contract where the offer and acceptance do not take place simultaneously at the point of purchase, but are deferred until the buyer has had a chance to see the standard terms and to reject a contract on such those terms.
ProCD, INC. v. Zeidenberg, 86 F.3d 1447 (U.S. Court of Appeals, 7th circuit)
Issue: Whether the trial court was correct in holding that buyers of computers software do not have to obey the terms of shrink-wrap licenses because they are not contracts since the licenses are inside the box rather than printed on the outside.
ProCD, INC. v. Zeidenberg, 86 F.3d 1447 (U.S. Court of Appeals, 7th circuit) (Holding)
Holding: the trial court erred. Shrink-wrap licenses are enforceable unless their terms are objectionable on grounds applicable to contracts in general. Since there was notice on the outside, terms on the inside, and a right to return the software for a refund if the terms are unacceptable, any buyer finding such a demand can prevent formation of the contract by returning the product.
Licitra v. Gateway, INC., 189 Misc. 2d 721 (Civil Court City of New York)
Issue: Whether a purchase of a computer was bound by the shrink-wrap agreement contained with the product, which required that all disputes arising from the contract must be submitted to binding arbitration?
Licitra v. Gateway, INC., 189 Misc. 2d 721 (Civil Court City of New York) Part 2
Holding: No, the arbitration clause in this case is not enforceable. Although both federal and state law generally favor the resolution of disputes by arbitration, a party’s consent to arbitration constitutes a waiver of important procedural rights and it must be clearly intended, not given inadvertently though tacit agreement to a shrink-wrap agreement.
Casavant v. Norwegian Cruise Line, LTD., 63 Mass. App. 785
Issue: Whether the trial court was correct in dismissing the claim of cruise travelers who sought to recover a refund for tickets purchased for a cruise that was set to depart days after the September 11th attacks from the same city where terrorist attacks originated.
Casavant v. Norwegian Cruise Line, LTD., 63 Mass. App. 785 (Holding)
Holding: No, the trial court was not correct in dismissing the plaintiff’s claim. Since the standard terms of a cruise ticket are generally imposed by the cruise line and not negotiated, they should be scrutinized for fundamental fairness. As a party of that fundamental fairness, the ticket buyers must be given reasonable time within which to act and to reject the ticketing contract and other terms.
Specht v. Netscape Communications Corp., 306 F.3d 17 (2002)
Issue: Whether the trial court was proper in denying a software manufactures’ motion to compel arbitration n and state the court proceedings on the basis that the agreement to arbitrate was contained in click-wrap language that was contained on a different webpage than the webpage where consumers were direct to download free software.
Specht v. Netscape Communications Corp., 306 F.3d 17 (2002) (Holding)
Yes, the trial court properly denied the software manufactures’ motion. Unlike most click-wrap license agreements that are automatically displayed on a webpage, and require the use to click on an “I accept” button to complete installation of the program, the license in this clause was not presented when the user installed the program.
Issue: Did the lower court err in granting summary judgment in favor of a manufacturer of computer printing toner where the manufacturer provided customers with a discounted price on toner in exchange for their agreement to be bound by certain box top terms printed on the outside of its packaging, requiring the customer to return the empty toner cartridge after its use
Arizona Cartridge Remanufacturers Association Inc. v. Lexmark International Inc. (Holding)
Holding: No, the lower court did not err because the box top terms created a binding contract because consumers had notice of the condition, had a chance to reject the contract on that basis, and received consideration in the form of a reduced price in exchange for the limits placed on reuse of the cartridge.
Traditional common law requires that the acceptance to be a “mirror image” or the offer, and a response with a term different from the offer is not an acceptance; it is a rejection and counteroffer. As a result, no contract resulted from the exchange of the forms.
This common law rule has the effect of giving precedence to the terms in the last communication that occurred before performance began.
Pre-Revision UCC 2-207 . Additional terms in Acceptance or Confirmation
(1) A definite and seasonable expression of acceptance or a written confirmation which is sent within a reasonable time operates as an acceptance even though it sates terms additional to or different from those offered or agreed upon, unless acceptance is expressly made conditional on assent to the additional terms.
Pre-Revision UCC 2-207 . Additional terms in Acceptance or Confirmation Part 2
(2) The additional terms are to be construed as proposal for addition to the contract. Between merchants such terms become part of the contract unless:
(b) they materially (argue both sides of the issue on the exam) alter it; or
Pre-Revision UCC 2-207 . Additional terms in Acceptance or Confirmation Part 3
(3) Conduct by both parties which recognizes the existence of a contract is sufficient to establish a contact for sale although the writings of the parties do not otherwise establish a contact. In such case the terms of the particular contract consist of those terms of which the writings of the parties agree, together with any supplementary terms incorporated under any other provisions of this Act
Lively v. Ijam, Inc., 114 P.3d 487 (2005)
Issue: Whether the trial court erred by refusing to enforce a forum selection clause contained on the back of an invoice that was delivered to a consumer with a computer after he purchased it.
Lively v. Ijam, Inc., 114 P.3d 487 (2005) (Holding)
Holding: No, the trial court was correct. A contract existed between the parties prior to the receipt of the invoice with the forum selection clause since the consumer had already paid for the computer before it was shipped. Since a contract existed before the consumer opened the bos and found the invoice, the forum selection clause materially altered the contract between the parties, and therefore was not party of the contract.
Wachter Management Company v. Dexter & Chaney, Inc., 282 Kan. 365
Issue: Whether the trial court erred in finding that a forum selection provision contained in a shrink wrap license agreement that was received by a construction management company after it had received training form it was not party of a contract, but was an additional term proposed by the software company that the construction company had not accepted.
Wachter Management Company v. Dexter & Chaney, Inc., 282 Kan. 365 (Holding)
Holding: No, the lower court did not err. Since the parties had negotiated prop to entering into the contract for the sale of the software, the written proposal following the parties’ negotiations constituted an offer to sell. That offer was accepted when the proposal was signed and shipment of the software was requested.
Zimmerman v. McColey, 826 N.E.2d 71, (2005)
o Issue: Whether the trial court erred in awarding judgment in favor of motorists injured in an automobile accident and against the estate of a deceased motorist who caused the accident where extensive settlement negotiations had occurred and an oral agreement had been reached, but the parties failed to memorialized those negotiations and oral agreement into a written contract prior to the expiration of the statute of limitations.
Zimmerman v. McColey, 826 N.E.2d 71, (2005) (Holding)
No the trial court was correct It is long standing law that settlement agreements need not be in writing to be enforceable, and the record in this case is clear that the parties entered into an enforceable oral agreement.
Einhorn v. Mergatroyd Prodcutions, 426 F. Supp. 2d 189 (2006)
Issue: Whether a reasonable trier of fact could conclude that a communication laying out some but not all of the material terms of a contract could constitute an offer that invites acceptance by performance.
Einhorn v. Mergatroyd Prodcutions, 426 F. Supp. 2d 189 (2006) (Holding)
Since no particular form is necessary to make an offer, all that is required is conduct that would lead a reasonable person in the other party’s position to infer a promise in return for performance. In this case, the Court could not say that no reasonable trier of fact could find the communication to be an offer, and therefore it was precluded from dismissing the plaintiff’s breach of contract claim.
Norkunas v. Cocharan, 895 A.2d 1101 (2006)
Issue: Whether the trial court erred in entering an order of specific enforcement of a letter of intent in a proposed real estate transaction, when the LOI contemplated the drafting and executing of a subsequent standard from real estate contract, which was never accepted.
Norkunas v. Cocharan, 895 A.2d 1101 (2006) (Holding)
Yes, the trial court erred in holding that the LOI was enforceable contract requiring specific enforcement because the language of the LOI did not support the contention that the parties had reached a final agreement of sale as of the time the LOI was executed. Accordingly, a reasonable person in the position of the seller would have understood the letter of intent to mean that a formal contract offer would soon follow.
Arbitron, Inc. v. Tralyn Broadcasting, Inc., 400 F.3d 130 (2005)
Issue: Whether the trial court erred in holding that under New York law, two parties entering into a licensing agreement for radio ratings and data may not authorized one party to adjust the price of that data unilaterally at some point in the future.
Arbitron, Inc. v. Tralyn Broadcasting, Inc., 400 F.3d 130 (2005) (Holding)
Yes, since the contract in this case unmistakable delegated price-setting authority to a single party, and NY law does not invalidate such contracts, the trial court’s award of summary judgment invalidating the contract was not correct.
Keys to understanding indefinite agreements
· A contract is a final binding agreement between the parties, and an agreement to agree is not a contract.
· The question of whether a manifestation agreement qualifies as a final contract, or is merely an “agreement to agree”, is a matter of interpretation, which requires an examination of the language used by the parties in that particular context.
Keys to understanding indefinite agreements Cont.
· An important consideration in deciding whether a binding contract was formed is the extent to which the parties have settled all the terms, or at least the material terms of their relationship.
· There are some instance where a party may agree to be bound to a contract even where a material term is left open, but there must be sufficient evidence that both parties…
Baer v. Chase, 392 F.3d 609 (2004)
Whether the trial court erred in granting summary judgment in favor of the creator of a television series who claimed that oral discussions with individual who arranged initial meetings that ultimately helped provide information for the show were too vague, ambitious and lacking in essential terms to constitute an enforceable contract.
Baer v. Chase, 392 F.3d 609 (2004) (Holding)
No, the trail court was correct. A contract must be sufficiently definite so that the performance to be rendered by each party can be ascertained with reasonable certainty. If parties to an agreement do not agree on one or more essential, or those essential terms are too indefinite to allow a court to determine with reasonable certainty what each party has promised to do, court generally hold the agreement to be unenforceable.
B. Lewis Productions, Inc. v. Angelou, US District Court , So. Dist. Miss.
Issue: Whether a contract between a promotion company and a famous poet that provide the promotion company the exclusive right to exploit the poet’s original literary works for publication in greeting cards and similar products, but failed to articulate several other essential terms should be deemed unenforceable due to vagueness.
B. Lewis Productions, Inc. v. Angelou, US District Court , So. Dist. Miss. (Holding)
Holding: No, to be enforceable, a contract must be sufficiently definite to enable the court to ascertain the intent of the parties with reasonable certainty, and an agreement cannot be enforced if it lacks essential terms. . In those instances, a court must attempt to attach a sufficiently definite meaning to the bargain, and should be especially willing to do so if a party has fully of partly performed.
Jenkins v. County of Schuylkill, 441 Pa. Super. 642
Whether the trial court erred by sustaining a county’s demurrer to the complaint of a property owner who claimed that the county breached an agreement to negotiate in good faigh in the negotiation of a proposal for the lease of a building to house its 911 emergency management center.
Jenkins v. County of Schuylkill, 441 Pa. Super. 642 (Holding)
No, the trial court was correct. In the absence of a clear commitment to bargain in good faith, the usual rule of the free market prevails: Each party is free to pursue its own self-interest in trying to make the deal most favorable to itself, and the other party has no recourse, aparty from terminating negotiations, if the first party makes unreasonable demands. It is evident that the facts as pleaded in this case do not give rise to such a cause of action.
Issue: Whether the lower court erred in holding that a contract existed between a publisher and the widow of a famed author, when several essential terms of the contract were lacking, and the courts had to supply those omitted terms.
Academy Chicago Publishers v. Cheever (Holding)
Holding: Yes, both the trial court and court of appeals erred by holding that a contract existed. Both courts went too far to supply omitted essential terms, and the arrangement in this case was too indefinite to enforce a contract.
The Statute of Frauds: Requirements
§ A writing or record
§ A signature
§ Sufficient content to evidence a contract
Restatement, Second §131. General Requisites of a Memorandum
o Unless additional requirements are prescribed by the particular statute, a contract within the statute of frauds is enforceable if it is evidenced by any writing, signed by or on behalf of the party to be charged, which
Restatement, Second §131. General Requisites of a Memorandum (Part 2)
(a) reasonably identifies the subject matter of the contract
How to apply the statue of frauds Part 1
Is the contract subject to the statue of frauds?
If no, the contract need not be in writing to enforceable. Stop here
If yes, ask question two
How to apply the statue of frauds Part 2
Is there a signed writing in a form sufficient to satisfy the statute?
If yes, the contract is enforceable
If no, the contract is not enforceable unless the third question can be answered affirmatively.
How to apply the statue of frauds Part 3
Is there a recognized exception to the statute of frauds that will allow enforcement of this contract even though it is subject to the statue and there is not writing sufficient to comply with it?
Six Types of Contracts Covered by the Traditional Statute of Frauds
o Contracts to answer for the debt or obligation of another.
o Contracts of executors of administrators to answer for the duty of the decedents.
o Contracts made upon consideration of marriage.
o Contracts for the sale of land or the transfer of an interest in land
o Contracts that cannot be performed within a year of execution
o Contracts for the sale of goods for the price of $5,000.00 (revised) or more, or $500 (pre-revised).
Roberts v. Karimi, F. Supp. 2d 174 (E.D.N.Y. 1999)
§ Issue: Whether a seller in a prospective real estate transaction can be held liable under a real estate contract even though the seller never signed the actual real estate contract, but executed other documents related to the transaction.
Roberts v. Karimi, F. Supp. 2d 174 (E.D.N.Y. 1999) (Holding)
Yes, In this case, the seller drafted a note to his attorney, and a signed affidavit filed in relation to an ancillary lawsuit that affirm the existence of a contract. Accordingly, the seller’s note and affidavit affirm and combine with the unsigned memorandum of sale to form a writing sufficient to meet all the requirements of the statute of frauds and show that the parties really did reach an agreement to sell the property.
C.R. Klewin Inc. v. Flagship Properties, Inc., 600 A.2d 772 (1991)
Whether the statute of frauds requiring a writing for an “agreement that is not to be performed within one year form the making thereof,” renders unenforceable an oral contract that fails to specify explicitly the time for performance when performance of that contract within one year of its making is exceedingly unlikely?
C.R. Klewin Inc. v. Flagship Properties, Inc., 600 A.2d 772 (1991) (Holding)
No, an oral contract that does not say in express terms that performance is to have a specific duration beyond one year is, as a matter of law, the functional equivalent of a contract of indefinite duration for the purposes of the statute of frauds. Like a contract of indefinite duration, such a contract is enforceable because it is outside of the proscriptive force of the statute regardless of how long completion of performance will actually take.
UCC 2-201. Formal Requirements; Statute of Frauds Part 4
International Casings Group, Inc. v. Premium Standard Farms, Inc., 358 F. Supp. 2d 863 (2005)
Whether the applicant showed a likelihood of prevailing on the merits when the case goes to trial on the issue of whether in a contract of emails between the seller and the buyer satisfy the statute of frauds?
International Casings Group, Inc. v. Premium Standard Farms, Inc., 358 F. Supp. 2d 863 (2005) (Holding)
Yes, by hitting the send button, the parties intended to presently authenticate and adopt the content of the emails as their own writing, and this is enough to satisfy the UCC given the breadth of its definition of signature, and the applicant is likely to prevail on the merits regarding the formation of a binding contract which satisfies the statute of frauds.
Bazak International Corp. V. Tarrant Apparel Group, 378 F. Supp. 2d 377 (2005)
Issue: Whether a genuine issue of material fact existed concerning the applicability of the Statute of Frauds to an oral agreement between two textile merchandising companies that was confirmed by an electronic mail message thus satisfying the merchant’s exception to the statute?
Bazak International Corp. V. Tarrant Apparel Group, 378 F. Supp. 2d 377 (2005) (Holding)
Yes, significant issue of material fact existed precluding summary judgment in this case since the email could constitute a writing “in confirmation” under the merchant’s exception to the Statute of Frauds. To survive summary judgment, the writing need only be sufficient to indicate that a contract for sale has been made, and it is not required to precisely set forth every material term of the contract.
Restatement, Second §17. Requirement of a Bargain
(2) Whether or not there is a bargain a contract may be formed under special rules applicable to formal contracts or under the rules stated in §§82-94.
Restatement, Second §71. The Requirement of Exchange; Types of exchange
· (1) To constitute consideration, a performance or a return promise must be bargained for. DEFINITION OF CONSIDERATION FOR EXAM
· (2) A performance or return promise is bargained for if it is sought by the promisor in exchange for his promise and is given by the promise in exchange for that promise.
Restatement, Second §71. The Requirement of Exchange; Types of exchange Part 2
· (3) The performance my consist of
o (a) an act other than a promise or
o (b) a forbearance, or
o (c) The creation, modification, or destruction of a legal relation.
· (4) The performance or return promise may be given to the promisor or to some other person. It may be given by the promise or by some other person.
Congregation Kamdimah Toras-Moshe v. DeLeo, 405 Mass. 365 (1989)
Issue: Whether the trial court erred in granting summary judgment in favor of the estate of a decedent, holding that the decedent’s oral promise to provide $25,000 to a congregation upon his death where the congregation was not required to do or give up anything was an unenforceable contract?
Congregation Kamdimah Toras-Moshe v. DeLeo, 405 Mass. 365 (1989) (Holding)
No, the trial correct was correct to grant summary judgment in favor of the estate since the promise in this case was entirely unsupported by consideration or reliance.
Issue: Whether the promise from an uncle to a nephew to pay the nephew $5,000.00 if he would refrain from various vices until he turned 21 was an enforceable contract supported by adequate consideration?
Hamer v. Sidway, 124 N.Y. 538 (1891) (Holding)
Yes, consideration means not so much that one party is profiting as that the other abandons some legal right in the present, or limits his legal freedom of action in the future, as an inducement for the promise of the first. In this case, the nephew restricted his lawful freedom of action within certain prescribed limits upon the faith of his uncle’s agreement, and thus adequate…
Whitten v. Greeley-Shaw, 520 A.2d 1307 (1987)
Issue: Whether the trial court erred in entering judgment in favor of the holder of a promissory note in a foreclosure action and claiming that the note was an enforceable contract with adequate consideration, but dismissed the debtor’s counterclaim premised on another agreement between the praties that the court deemed unenforceable for lack of consideration.
Whitten v. Greeley-Shaw, 520 A.2d 1307 (1987) (Holding)
No, the trial court was correct. Although a promise to forbear from engaging in an activity that one has the legal right to engage in, can provide necessary consideration, it cannot if it was not sought after by the other party and motivated by his request. In this case, the promises in the second agreement were not ”bargained for” and were not given in exchange for return promises, and as such cannot constitute the consideration necessary to support a contract.
Pennsy Supply Inc. v. American Ash Recycling Corp., 2006 Pa. Super. (2006)
Issue: Whether the trial court erred in holding that a subcontractor’s relief of a supplier’s legal obligation to properly dispose of hazardous material, an dthus allowing that supplier to avoid the cost of disposal, did not constite sufficient consideration to support a contract because the hazardous materials were given free of charge and therefore constituted a gift conditioned on the subcontract agreeing to sipose of th emarerial properly.
Pennsy Supply Inc. v. American Ash Recycling Corp., 2006 Pa. Super. (2006) (Holding)
Yes, the trial court erred. Look it up.
Carlisle v. T&R Excavating, Inc., 123 Ohio App. 3d 277 (1997)
Issue: Whether the tiral court erred in awarding damages in a abreach of contract claim and holding that a contract was supported by adequate consideration where an excavation company agreed to provide excavation services free of charge to tis former bookkeeper for her new business based on the pas work performance and service provided by her to the company
Carlisle v. T&R Excavating, Inc., 123 Ohio App. 3d 277 (1997) (Holding)
Yes the trial court erred. A requested performance attached to a gratuitous promise is a condition and not consideration, not because the nature of the requestd performance itself, but because of the reasonable understanding of the promisor and the promisee, that the performance is request as a condition of the promise and not as the price or ecahnbe for the promise.
Kessler v. National Presto Industries, 1995 WL 871156 (1995).
Issue: Whether the manufacturer of a pressure cooker that exploded and injured a consumer was a third party beneficiary of a broadly worded release that the consumer executed in favor of an unaffiliated insurance company and its policy holder, including the consideration provided for in the release.
Kessler v. National Presto Industries, 1995 WL 871156 (1995) (Holding)
Yes, the general rule of contract law is that courts will not inquire into the adequacy of the consideration in a contract, unless the consideration is so “grossly inadequate” as to shock the conscience of the court. Although $750.00 may not be sufficient to cover the consumer’s medical bills in this case, it is not so grossly inadequate as to “shock the conscience of the court.” Therefore, the court will neither inquire into the adequacy of consideration.
Gottlieb v. Tropicana Hotel and Casino, 109 F. Supp. 2d 324 (2000)
Issue: Whether the participation by a contestant in a gambling promotion can constitute adequate consideration that would support the formation of an enforceable contract against a casino providing the promotion.
Gottlieb v. Tropicana Hotel and Casino, 109 F. Supp. 2d 324 (2000) (Holding)
Yes. Courts have held that the minimal detriment to a participant in a promotional contest is sufficient consideration for a valid contract. In this case, the contestant had to go to the casino and wait in line to participate in the promotion, and permit the casino to gather information about her babbling habits. Additionally, by participating in the game, she was a party of the entertainment that casinos, by their very nature, are designed to offer.