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Normile v. Miller

Professor Melissa A. Hale

CaseCast ™ –   "What you need to know"

Brief Fact Summary.

Synopsis of rule of law., discussion..

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Contracts Cases Outline

Contract law concerns the creation and enforcement of binding agreements between parties. Generally, the elements of a legally enforceable contract are assent, a valid offer, acceptance, and consideration. Most contract law concepts stem from common law, but some come from other sources, such as the universally adopted Uniform Commercial Code (UCC). Below is an outline of key cases in contract law with links to the full text of virtually every case, provided free by Justia.

• 2 Mutual Misunderstanding
• 4 Destroying an Offer
• 5 Option Contracts
• 6 Acceptance
• 7 Imperfect Acceptances
• 8 Consideration
• 9 Reliance and Promissory Estoppel
• 10 Contract Terms
• 11 Integrated Agreements
• 12 Conditions Precedent
• 13 Definiteness
• 14 Unconscionability
• 16 The Statute of Frauds
• 17 Breach of Contract
• 18 Anticipatory Repudiation
• 19 Excusing Conditions
• 20 Remedies

Assent binds parties in a contract. Assent is measured by the outward manifestations of the parties, rather than the inner, private, or secret intentions of the parties. Assent may be found when a reasonable person in the situation would have believed that there was assent, even if one party lacked subjective intent to be bound.

Lucy v. Zehmer 一 A contract is enforceable if one party reasonably believes that the other party has sufficient intent to enter into the agreement, even if the other party actually does not.

Leonard v. Pepsico, Inc. 一 Generally, an advertisement is not an offer. In evaluating whether an advertisement was an offer, a court will not consider the subjective intents or views of the parties, but what an objective, reasonable person would have understood.

Gleason v. Freeman 一 Whether a binding contract exists depends on the objective expressions of intent to be bound and the definitiveness of the terms of the agreement. When a party’s words create doubt as to their intent to be bound, a court will consider the situation and conduct of the parties under the circumstances. Continuing to negotiate an agreement’s terms may be evidence that the parties did not intend to be bound.

Mutual Misunderstanding

There is no mutual assent if the parties attach materially different meanings to their manifestations. However, the meaning attached by one party may control if that party does not know or have reason to know of a different meaning attached by the other and the other knows or has reason to know of the meaning attached by the first.

Raffles v. Wichelhaus 一 A contract is invalid if there is no meeting of the minds, as is the case when there is a mutual mistake.

An offer is a manifestation of assent by an offeror to an offeree that the offeror commits to a deal on specific terms and gives the offeree the power to assent to the terms and make a contract. If the so-called offeree knows that the so-called offeror does not intend to give the offeree the power to make a contract by simply accepting, there is no offer.

Lonergan v. Scolnick 一 An invitation for offers is not by itself an offer to form an enforceable contract.

Maryland Supreme Corp. v. Blake Co. 一 A mere price quotation and an invitation to enter into negotiations is not an offer, but whether an offer was made depends on the intention of the parties and the facts and circumstances of the case.

Sateriale v. R.J. Reynolds Tobacco Co. 一 An offer to enter into a unilateral contract may exist when an advertiser, in clear and positive terms, promises performance in exchange for something requested by the advertiser, and the recipient of the advertisement reasonably may conclude that acting in accordance with the request would form a contract. Advertisements may be offers when they invite the performance of a specific act without further communication and leave nothing for negotiation. If the offeror retains some discretion in performance, this does not preclude the existence of an offer.

Destroying an Offer

There are four general ways to destroy an offer: rejection or counteroffer, revocation, lapse, or death or incapacity. An offer may be effectively revoked if the offeree learns that the offeror no longer intends to keep the offer open, even if the offer is not expressly revoked. An offer may lapse after a reasonable period of time, depending on the circumstances surrounding the offer.

Dickinson v. Dodds 一 A promise to keep an offer open for a certain period of time is not binding without the consideration and acceptance necessary to form a binding agreement. One cannot accept an offer when they have knowledge that the offeror’s mind is no longer in agreement, even if the offeror did not expressly retract the offer.

Minnesota Linseed Oil Co. v. Collier White Lead Co. 一 An acceptance must be made within a reasonable time after an offer is received, as defined by the circumstances of the case.

Option Contracts

An option contract is a promise that the offeror’s right to revoke their offer will be limited, usually by a period of time. An offer is generally binding as an option contract if it is in writing and signed by the offeror, includes purported consideration, and proposes an exchange on fair terms within a reasonable time. (An offer may also be binding as an option contract if it is made irrevocable by statute.)

Beall v. Beall 一 An option agreement must be supported by consideration to be binding. Otherwise, it is a mere offer to sell, which may be revoked at any time before acceptance. However, an option may be binding if it is accepted within the time limit and before the offer is withdrawn.

Board of Control of Eastern Michigan University v. Burgess 一 One dollar may be valid consideration for an option to purchase land, so long as the dollar is paid or tendered. Written acknowledgment of receipt of consideration merely creates a rebuttable presumption of consideration. If an option contract fails for lack of consideration, the underlying offer will not be affected. However, the underlying offer may then be revoked at any time.

An offeree exercises their power to create a contract by accepting an offer. An offeree usually has a reasonable period of time to accept an offer, unless the offer specifies a time limit. Conduct by both parties recognizing the existence of a contract may be sufficient to show an agreement, even if the moment when a sufficient agreement was formed cannot be determined.

La Salle National Bank v. Vega 一 There is no offer when the so-called offer is not intended to give the so-called offeree the power to make a contract. A contract may dictate certain requirements for acceptance and may specify the mode of acceptance required.

Ever-Tite Roofing Corp. v. Green 一 If the time limit to accept is not specified in the offer, it is within a reasonable period of time. What constitutes a reasonable period of time is determined by the nature of the proposed contract, usages of business, and other relevant circumstances that the offeree knows or has reason to know at the time of acceptance.

Maryland Supreme Corp. v. Blake Co. 一 Conduct by both parties recognizing the existence of a contract may be sufficient to show an agreement, even if the moment when a sufficient agreement was formed cannot be determined. In addition to any contractual language, usage of trade, course of dealing and performance, and general circumstances may be used to determine the terms of the parties’ agreement.

Hendricks v. Behee 一 A valid contract is only formed when acceptance of the offer is communicated to the offeror. Similarly, a revocation is only effective when it is communicated to the offeree before acceptance. Communication of acceptance of a contract to an agent of the offeree does not bind the offeror. However, when an agent of the offeree obtains notice that the offer was withdrawn, that notice is binding upon the offeree.

Adams v. Lindsell 一 Under the mailbox rule, an offer is accepted when the acceptance is put into the mail by the offeree.

Carlill v. Carbolic Smoke Ball Co. 一 An advertisement may be an express contractual promise to pay when evidence of the advertiser’s sincerity, such as a deposit of the reward in a bank, would lead a reasonable person to think that they had the power of acceptance. Acceptance of such an offer may be made by performance, and no prior notice of the acceptance is required.

Marchiondo v. Scheck 一 An offer that invites acceptance by performance, which does not also invite acceptance by promissory acceptance, may not be revoked after performance has begun. Beginning performance effectively creates an option contract conditional on completed performance in accordance with the offer’s terms.

Imperfect Acceptances

Imperfect acceptances (or implied rejections) may take the form of counteroffers, acceptances with conditions, or responses containing new terms. Under the mirror image rule, acceptance generally must be coextensive with the offer and may not include additional terms or conditions. The mirror image rule is different for transactions falling under Section 2-207 of the UCC.

Gresser v. Hotzler 一 Under the mirror image rule, acceptance must be coextensive with the offer and may not introduce additional terms or conditions. Immaterial variations included in an acceptance will not hinder contract formation. However, a material term or condition introduced in the acceptance may preclude contract formation.

Diamond Fruit Growers, Inc. v. Krack Corp. v. Metal-matic, Inc. 一 Under UCC Section 2-207, a common-law counteroffer containing different or additional terms operates as an acceptance if the responding form includes a definite and seasonable expression of acceptance. Between merchants, such terms become part of the contract unless the offer expressly limits acceptance to its terms, the terms materially alter the contract, or a party objects to the terms. If the definite and seasonable expression of acceptance is expressly conditioned on assent to the different or additional terms, a contract is not created unless the offeror assents to the new terms. If the conduct of the parties recognizes the existence of a contract, but the offeror does not assent to the new terms, only the terms on which the parties’ forms agree will remain, and any other terms may be replaced with UCC terms.

Klocek v. Gateway, Inc. 一 Additional terms included with a product do not become part of a contract if the purchaser is not a merchant, unless the purchaser expressly agrees to them.

Hancock v. American Telephone & Telegraph Co., Inc. 一 Clickwrap agreements, which require a computer user to consent to terms and conditions by clicking on a dialog box, are typically upheld when they were clearly presented to the consumer, and the consumer had an opportunity to read the agreement and unambiguously accepted the terms.

Consideration

Consideration may be virtually anything for which one would bargain in exchange for a promise. Consideration may be a return promise, some kind of property, an affirmative action, or the forbearance of a legal right. Usually, consideration is a return promise. A contract will be unenforceable if it lacks consideration or an adequate substitute.

Reed v. University of North Dakota 一 Surrender of a legal right by signing a release form in exchange for participation may constitute consideration.

McCormick v. Dresdale 一 The forbearance of a legal right may qualify as valid consideration for a settlement agreement, but claims forgone that were false and made in bad faith may not constitute valid consideration.

Kirksey v. Kirkse y 一 A mere gratuitous promise without consideration is not enforceable, even if the promisee reasonably relied upon the promise and incurred a detriment.

Hamer v. Sidway 一 The forbearance of a legal right may still be valid consideration even if such forbearance benefited the promisee and did not benefit the promisor.

Schnell v. Nell 一 Consideration of one cent, which is clearly nominal, cannot support an exchange of $600. Furthermore, a moral consideration cannot support a promise, nor will a compromise of a legally groundless claim. Past services, love, and affection cannot be legal consideration for the promise to pay money to a third person.

Hooters of America, Inc. v. Phillips 一 There is no consideration if a return promise is in fact illusory. An illusory promise is one that makes performance optional and is, therefore, no promise at all. A promise to arbitrate when one party retains the right to modify or terminate the agreement, thereby creating an imbalance of obligation, is an illusory and unenforceable promise.

Alaska Packers’ Ass’n v. Domenico 一 There is no consideration when a party refuses to perform that which they are already bound to perform until the other party agrees to increased compensation for that same performance.

Angel v. Murray 一 A contract modification is generally unenforceable without additional consideration, and a promise to perform a pre-existing duty is not valid consideration. However, if the parties voluntarily and in good faith agree to a modification, it may be enforced without additional consideration if it is made to fairly and equitably address unexpected or unanticipated circumstances that arise during performance.

Reliance and Promissory Estoppel

When a promisee reasonably and foreseeably relies on a promise to their detriment, the promise is enforced to avoid injustice. Similarly, when an offeror should reasonably expect to and does in fact induce the offeree’s substantial action or forbearance before acceptance, a binding option contract may be enforced to the extent necessary to avoid injustice.

Ricketts v. Scothorn 一 When a promisee alters their position for the worse in reliance on a promisor’s promise, and the promisor should have expected that alteration as a reasonable and probable consequence of their promise, the promise may be enforced under the doctrine of equitable estoppel.

Dixon v. Wells Fargo Bank, N.A. 一 It is not necessary that there be an intent to mislead or deceive for an otherwise unenforceable contract to be enforced under the doctrine of promissory estoppel. Instead, under the circumstances, it must be unjust to allow one party to walk away from the natural or reasonably anticipated detrimental consequences of their representations or conduct when they take advantage of or string along another party. In such cases, pre-contractual liability should be limited to reliance expenditures.

Salsbury v. Northwestern Bell Telephone Co. 一 For reasons of public policy, charitable subscriptions should be binding even if there is no consideration or detrimental reliance.

Contract Terms

Contracts may contain both express and implied terms. If a dispute arises because contract language is ambiguous, a court may consider evidence other than the language contained therein, such as the circumstances surrounding the contract. Courts sometimes infer contract terms by examining circumstances such as course of performance, course of dealing, and usage of trade.

Threadgill v. Peabody Coal Co. 一 A party may be bound by trade usage if they had actual knowledge of the trade usage, or if the trade usage was so well established as to suggest constructive knowledge. When a party has not expressly agreed to be bound by trade usage, it may only be binding if it is reasonable, generally meaning that the usage must not be illegal or violative of public policy.

Wood v. Lucy, Lady of Duff-Gordon 一 An implied promise may exist when a contract’s express terms lack mutuality of obligation.

Billman v. Hensel 一 Financing clauses impose an implied obligation to make a reasonable and good-faith effort to satisfy the condition. A promisor cannot be excused from performance because of a condition precedent when they prevented the performance of the condition themselves.

Locke v. Warner Bros., Inc. 一 A contract that gives one party discretion affecting the rights of the other party imposes a duty to exercise that discretion in good faith and in accordance with fair dealing. In cases of subjective satisfaction, so long as dissatisfaction is asserted in good faith, it does not matter whether such dissatisfaction is reasonable.

Traders Bank v. Dils 一 Generally, there is no fraud when a promise is not performed, but an exception exists when the device used to accomplish the fraud is the promise itself. Fraudulent inducement is based on a party’s fraudulent representation of their intention to perform, rather than a breach of the agreement to perform.

Frigaliment Importing Co. v. B.N.S. Int’l Sales Corp. 一 When a contract term is in dispute, a court will consider the language of the contract; definitions of the term from other sources, such as dictionaries and regulations; the circumstances surrounding the agreement, including preliminary negotiations; trade usage; and course of performance. A court will also consider whether one party knew or should have known how the other party interpreted the contract.

Random House, Inc. v. Rosetta Books LLC 一 Contract language is ambiguous if a reasonably intelligent person who has considered the context of the agreement and applicable customs, practices, usages, and terminology could objectively interpret the language in more than one way. If contract language is ambiguous, a court will consider extrinsic evidence to interpret it. If contract language can most reasonably be read to convey one certain meaning, the party wishing to deviate from that interpretation bears the burden of negotiating for language expressing that deviation.

Integrated Agreements

Only a binding, completely integrated agreement discharges prior agreements to the extent that they are within its scope. An agreement is not completely integrated if it omits a consistent, additional agreed term either agreed to for separate consideration or naturally omitted under the circumstances.

Trident Center v. Connecticut General Life Ins. Co. 一 There is no prohibition against the use of parol evidence in interpreting contracts under California state law, no matter how thoroughly they appear to be integrated.

Mitchill v. Lath 一 An oral agreement may alter a written contract if it is a collateral agreement, it does not contradict express or implied provisions of the written contract, and it is one that parties would not ordinarily include in the written contract. An oral agreement may not alter a written contract if it is closely related to the subject of the written agreement.

Masterson v. Sine 一 Parol evidence may not be used to add to or alter the terms of an integrated agreement. To determine whether a written contract was an integration, meaning a complete and final embodiment of the terms, a court will consider whether the parties intended their writing to serve as the exclusive embodiment of the agreement. If an agreement is only partially integrated, parol evidence can be used to prove elements of the agreement that are not reduced to writing.

Luther Williams, Jr., Inc. v. Johnson 一 The parol evidence rule does not prevent a court from admitting testimony concerning an oral condition precedent. Parol testimony concerning an oral condition precedent is admissible when the contract is silent on the matter, the testimony does not contradict the writing, and it may be inferred under the circumstances that the parties did not intend the writing to encompass their entire agreement.

In re Soper’s Estate 一 When contract language is ambiguous not on its face, but when practically applied, parol evidence is admissible to determine the parties’ intent.

Conditions Precedent

If parties include a condition precedent in their agreement, the performance obligations to which the condition precedent applies will not become due until the condition precedent is satisfied.

Luttinger v. Rosen 一 A contract is not binding if a condition precedent, meaning a fact or event that the parties intend must exist or take place before performance, is not met.

Dove v. Rose Acre Farms, Inc. 一 An employer may not be obligated to perform under a bonus contract until the employee has satisfied all required conditions, even if those conditions seem especially strict.

Evans, Mechwart, Hambleton & Tilton, Inc. v. Triad Architects, Ltd. 一 A pay-when-paid provision operates only as a timing mechanism, while a pay-if-paid provision operates as a condition precedent that may discharge the duty to pay if the parties clearly intended to create such a condition precedent.

Definiteness

A contract may be unenforceable if a material term of the agreement is too indefinite. A contract will not fail for indefiniteness if the parties intended to make a contract, and there is a reasonably certain basis for giving an appropriate remedy.

Varney v. Ditmars 一 The words “fair” and “reasonable” may be definite enough to be enforceable, depending on the circumstances of the case, especially when they are used synonymously with “market value.” However, such words may be too indefinite to be enforceable when their meaning cannot be determined with a reasonable degree of certainty under the circumstances.

Community Design Corp. v. Antonell 一 An uncertain contract may nevertheless be enforceable when one party benefits from another party’s performance. A jury may properly determine the exact terms of such a contract.

Walker v. Keith 一 An agreement to agree, even in a renewal option, is not enforceable. Only option contracts that specify all the material terms with substantial certainty and leave nothing to be agreed upon in the future are enforceable.

Moonlenaar v. Co-Build Companies, Inc. 一 If a renewal clause leaves rent to be determined by a subsequent agreement, it is implied that the new rent will be “reasonable” or the “fair market” value, and is thus specific enough to be enforceable. Parol evidence may be used to explain the implicit term and show what the parties intended. There may be additional reason to enforce a renewal option when a party has already paid valuable consideration, such as higher rent.

Unconscionability

A contract may be unenforceable for unconscionability in certain circumstances. A court may consider such factors as the relevant bargaining power between the parties, their relationship, the ability of the accepting party to review and understand the contract before signing, and whether the terms unreasonably favored one party.

Williams v. Walker-Thomas Furniture Co. 一 Unconscionability, including an absence of meaningful choice on the part of one of the parties together with contract terms unreasonably favorable to the other party, may be a valid defense to the enforcement of a contract.

Vernon v. Qwest Communications Int’l, Inc. 一 In Colorado, a contract is unconscionable if it is both substantively and procedurally unconscionable. Relevant factors include unequal bargaining power, lack of opportunity to read the document before signing it, use of fine print, an absence of evidence that the provision was commercially reasonable, the terms of the contract, the relationship of the parties, and the circumstances surrounding the formation of the contract.

A contract may be rescinded when a mistaken belief related to a basic assumption of both parties materially affects the agreed performance. However, rescission may not be appropriate when the party challenging the contract has assumed the risk of loss related to a mistake.

Estate of Nelson v. Rice 一 A party bears the risk of mistake when they are aware at the time of contracting that they have only limited knowledge of the facts to which the mistake relates but treat such knowledge as sufficient. One who is consciously ignorant may be said to have assumed the risks associated with that ignorance.

Grenall v. United of Omaha Life Ins. Co. 一 A decedent’s unilateral mistaken belief that they were in good health when purchasing an annuity is not a valid basis to rescind the contract. The burden of such a risk is reasonable because it is an inherent part of a life annuity contract.

The Statute of Frauds

The statute of frauds provides that certain agreements are not enforceable without a written document signed by the party against whom enforcement is sought. Agreements that fall under the statute of frauds include contracts not performed within one year of the making of the contract, contracts for the sale of goods worth $500 or more, and contracts involving an interest in land.

Radke v. Brenon 一 A letter written to offer land for sale is sufficient to satisfy the Minnesota statute of frauds. Under the statute, a note or memorandum may be sufficient evidence to enforce an oral contract so long as the writing expresses consideration, is signed by the selling party or their lawful agent authorized in writing, and states expressly or by necessary implication the parties to the contract, the land involved, and the general terms and conditions of the sale. When all the evidence clearly indicates that an oral contract was made, a court may overlook technical requirements that would otherwise lead to an outcome contrary to the statute's purpose.

DF Activities Corp. v. Brown 一 There is an exception to the UCC's statute of frauds when the party against whom enforcement is sought admits in court that an oral contract for sale was made. However, once one party has submitted a sworn statement denying the existence of a contract, the other party cannot continue a lawsuit under the exception, hoping that the first party will perjure themselves.

McIntosh v. Murphy 一 A court has discretion to ignore the statute of frauds to avoid injustice, especially considering the doctrines of part performance and equitable estoppel.

Breach of Contract

Once a party breaches a contract, the other party has the right to sue for damages. If the breach is material, the party may have the right to suspend their own performance while pursuing damages. A breach is not material if there was substantial performance of the contract.

Kingston v. Preston 一 If a condition precedent is not met by one party, the other has no duty to perform, since their obligation to perform does not arise until the condition is satisfied.

Jacob & Youngs, Inc. v. Kent 一 Parties are obligated to fully perform under their contracts, but a trivial and innocent omission may sometimes be excused to the extent that damages may be limited to the difference in value between the performance bargained for and the actual performance, rather than the cost of replacement.

Anticipatory Repudiation

Anticipatory repudiation occurs when one party unequivocally manifests their intention not to perform their contractual obligations before they become due. Generally, an aggrieved party may await performance for a reasonable period of time or pursue a remedy for the breach.

Hochster v. De La Tour 一 Once a party repudiates their contractual obligations, the other party has the right to sue under the contract, even if performance has not yet become due.

Norcon Power Partners, L.P. v. Niagara Mohawk Power Corp. 一 If one party reasonably believes that the other will commit a breach by non-performance, they have the right to demand adequate assurance of future performance. This UCC principle is equally applicable under New York common law.

Excusing Conditions

Certain conditions may excuse a party from performing their contractual obligations. Under the doctrine of impossibility, a party may generally be excused from performance if performance becomes impossible or impracticable due to no fault of their own. Under the doctrine of frustration of purpose, a party may be excused from performance if their principal purpose for contracting is substantially frustrated by no fault of their own.

Acme Markets, Inc. v. Federal Armored Express, Inc. 一 If the non-occurrence of a condition would cause a disproportionate forfeiture, a court may excuse the non-occurrence so long as the condition was an immaterial part of the agreement. To determine whether a forfeiture is disproportionate, a court must weigh the extent of the obligee’s forfeiture against the importance of the risk against which the obligor sought to protect and the degree to which that protection would be lost if the non-occurrence was excused.

Alderman v. Davidson 一 A party’s waiver of their right to enforce one provision of a contract may waive their right to enforce another provision if their waiver intended such a consequence as indicated by their conduct. Even if the party did not intend to waive their right, they may be estopped if their conduct induced the other party into reasonably believing that strict compliance was not necessary.

Zwick v. Lodewijk Corp. 一 A clause in a lease providing that a lessor’s failure to act on any default does not waive the right to declare a default is not effective. A non-waiver provision may be considered evidence of non-waiver, but it itself can be waived. Additionally, the statute of frauds does not bar an oral modification to extend the time for performance, including payment.

Taylor v. Caldwell 一 Impossibility may excuse a borrower or bailee from returning a bailed item if performance becomes impossible because the item has perished, so long as the impossibility is not due to the fault of the borrower or bailee.

Hewitt v. Biscaro 一 Only a governmental order or promulgation of a governmental regulation rises to the level of an event that may excuse performance based on impracticability. A verbal instruction is insufficient. A party may not assert that a condition excuses them from performance if the attempt to avoid performance is not made in good faith and in accordance with fair dealing.

Route 6 Outparcels, LLC v. Ruby Tuesday, Inc. 一 When parties define the contours of a force majeure provision, such contours dictate its application, effect, and scope. A party may not use a force majeure clause to excuse their non-performance when they expressly limited the clause to events beyond the control of the non-performing party. While a global economic downturn is not within a party’s control, their decisions regarding how to cope with the downturn are.

Krell v. Henry 一 When a party’s purpose for contracting is frustrated by the non-occurrence of a condition, the occurrence of which was a basic assumption of the contract, the party’s duties may be discharged so long as the non-occurrence was not their fault.

Remedies for breach of contract protect each party’s expectation interests, reliance interests, and restitution interests. Parties often include liquidated damages provisions in their contracts, under which they agree on damages in event of a breach ahead of time. Parties are also entitled to limit available remedies by including provisions such as damages caps.

Carr-Gottstein Properties v. Benedict 一 A liquidated damages provision is valid when actual damages would be difficult to calculate, so long as the agreed amount is a reasonable forecast of likely damages and not so disproportionate an amount as to be punitive in nature.

O’Brian v. Langley School 一 A party opposing a liquidated damages provision may be entitled to conduct discovery to prove that the provision is an unenforceable penalty.

Nohe v. Roblyn Development Corp. 一 A court has discretion to compare the damages fixed in a liquidated damages provision to actual damages and choose not to enforce the liquidated damages provision if the difference between the provision and actual damages is unreasonable.

Ash Park, LLC v. Alexander & Bishop, Ltd. 一 When a contract for the sale of land is breached, a court has discretion to order specific performance, regardless of whether it is demonstrated that a legal remedy would be inadequate.

Reed Foundation, Inc. v. Franklin D. Roosevelt Four Freedoms Park, LLC 一 A court may order specific performance even if this would offend aesthetic considerations.

i.Lan Systems, Inc. v. Netscout Service Level Corp. 一 Specific performance may be appropriate when goods are unique or irreplaceable as a practical matter, but specific performance may not be appropriate when it is the contract itself that is unique, rather than the goods.

Grossinger Motorcorp, Inc. v. American National Bank and Trust Co. 一 A liquidated damages provision is only enforceable if the parties intended to agree to settle monetary damages in advance. Therefore, an optional liquidated damages clause is unenforceable because it shows that the parties did not have the necessary intent.

Groves v. John Wunder Co. 一 When a construction contract is breached, the correct measure of damages is the cost of remedying the defect, rather than the difference in value between the land as it was before the contract was made and the land as it would have been had the contract been performed.

Peevyhouse v. Garland Coal & Mining Co. 一 A breach of contract claim cannot give rise to a damages award so substantial that it results in economic waste. If a breach is merely incidental to the main purpose of the contract, and the economic benefit that would result from full performance would be grossly disproportionate to the cost of performance, damages may be limited to the diminution in value to the premises due to the non-performance.

Parker v. Twentieth Century-Fox Film Corp. 一 The measure of damages for wrongful discharge is the salary that the employee would have earned, minus the amount that the employer affirmatively proves that the employee has earned or with reasonable effort might have earned from other employment. However, the employer must show that the other employment was comparable or substantially similar to the job from which the employee was discharged.

R.R. Donnelley & Sons Co. v. Vanguard Transp. Systems, Inc. 一 A non-breaching party’s duty to mitigate damages is suspended when they reasonably rely upon the breaching party’s assurances that they would correct the issue. When reliance is not reasonable, a non-breaching party retains their duty to mitigate, even though the breaching party could conceivably cure the breach.

Hadley v. Baxendale 一 Damages for breach of contract may be any damages naturally arising from the breach or any damages that the parties could have reasonably contemplated at the time when the contract was made.

Manouchehri v. Heim 一 The measure of direct damages for breach of warranty is the difference between the value of the goods as warranted and the value of the goods actually delivered. This value may reasonably be approximated by the cost to repair the goods. In instances in which goods are irreparable or non-replaceable, a court may use other proper grounds to approximate the value.

This outline has been compiled by the Justia team for solely educational purposes and should not be treated as an independent source of legal authority or a summary of the current state of the law. Students should use this outline as a supplement rather than a substitute for course-specific outlines.

Last reviewed August 2024

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Contracts & Transactions

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Project Merchandise: An Introduction to Private Equity

Holger Spamann and Johnathan Robertson

Teaching Guide for Project Merchandise: An Introduction to Private Equity

Digital Currencies

Margaret E. Tahyar, Trevor I. Kiviat, Madison J. Roberts, and Suiwen Liang of Davis, Polk and Wardwell with assistance by Howell Jackson

The Case of the Smoking Tenant

Joseph William Singer and Esme Caramello

After the Sale (B)

After the Sale (A)

AmesCard Role Play Package

John Coates and Karina Shaw

The Case of Cross-Deputization

Joseph William Singer, Jeremy McClane, and Nicholas Price

Diego Primadonna Spanish Language Version

Robert Ricigliano

Sheila Heen

The Case of the Anti-Bacterial Toys

Wendy Jacobs and David Abrams

Zen & Kerry's

Robert C. Bordone

The Vineyard

Pandora's Box

Mark Freeman

Iqbal's Big Venture

Robert C. Bordone and Tobias C. Berkman

Scott R. Peppet and Melissa Bast

Diego Primadonna

Amity Island Focus Group

The Case of the Encumbered Employee

The Case of the Medical Stent

The Case of the Rent-Paying Tenant

David Grossman, Todd Rakoff, Joseph William Singer, with Chris Bates

The Case of the Lead Toys

Todd Rakoff and Joseph William Singer

[email protected]

Contract Law: Analyzing Real-Life Examples and Case Studies

Contract law task partner controls understandings, guaranteeing solidness and consistency in intelligence through guarantees making enforceable commitments for exchanges. Key components of a substantial contract incorporate offer, acknowledgment, thought, lawful capacity, and legal reason, managing enforceability and rights in case of breach. Different contract sorts incorporate express, inferred, one-sided, respective ascension, supporting in arrangement, and debate determination through translation, execution, breach, and cures. It advances belief, certainty in commerce, decency, and equity in lawful relations. Significant in financial exchanges, it maintains rights, and steadiness, and contributes to societal capacities, guaranteeing parties meet their commitments. Generally, Examples of contract law tasks offer assistance is principal in keeping up arrangements inside lawful frameworks, fundamental for businesses and people alike.

Significance in Legal Transactions

Contract law encourages trade exchanges by making understandings that oversee dangers and commitments for deals, administrations, and mergers.

Genuine bequest contracts layout terms like property exchanges, leases, and contracts to ensure buyer, vendor, and tenant interface.

Employment contracts clarify job terms to prevent conflicts and define the employer- employee relationship.

Consumer contracts promote fairness by protecting buyer rights with warranties and dispute resolutions.

Fundamental Concepts in Contract Law

A clear willingness to enter a contract with specific terms communicated to create a legal obligation.

Agreement to the offer with terms communicated to the offeror, forming a binding contract.

Value exchanged in a contract, such as promises or transfer of goods/services/money, is required for validity and enforcement.

Legal capacity is necessary for all parties in a contract, including age, mental competence, and absence of duress.

Contracts must have a legal purpose and cannot involve illegal activities.

Parties must have a genuine intention for a contract to be enforceable.

“Two case studies from real life that demonstrate how contract law principles are applied”

1. Carlill v. Carbolic Smoke Ball Company (Case Study Examples of Contract Law, 1893)

The Carbolic Smoke Ball Company advertised their flu-treating product offering a £100 reward for users who still feel ill. Mrs. Carlill used the product as directed but still got sick leading her to sue. The court ruled the ad as a unilateral offer accepted by Mrs. Carlill’s use of the smoke ball. This case highlights the importance of language and context in contract law when determining offer and acceptance validity from advertisements.

2. Roffey Bros & Nicholls (Contractors) Ltd. v. Williams (1991)

Williams was hired by Roffey Bros & Nicholls to renovate apartments and faced financial issues but didn’t finish on time. Roffey agreed to pay more for timely completion then refused. Consideration and Promissory Estoppel applied. Court inspected on the off chance that the guarantee of additional cash was substantial though. It ruled the guarantee may be substantial if it profited Roffey. The case recognized commonsense benefits as substantial thought extended thought teaching and emphasized promissory estoppel.

Students find contract law assignments difficult because of the complicated legal ideas and principles concerned. Understanding case regulation is vital for applying and interpreting precedent. Contracts vary from fundamental to complex involving more than one event. Legal studies capabilities are vital for locating applicable laws and courtroom rulings. Writing sturdy arguments and efficaciously communicating evaluations are crucial skills for success in settlement regulation assignments especially for college kids new to criminal research.

Introduction to Resources and Services Offering Assistance

Students dealing with challenges with contract regulation assignments can utilize diverse resources for help:

• Google Scholar provides statutes, case regulations, and felony commentary online resources.
• University libraries provide large felony collections and steerage from librarians for locating relevant materials.
• Academic tutoring offerings offer personalized help with contract regulation ideas, case evaluation, research, and writing skills.
• University writing centers assist with structuring arguments, refining writing style, and mentioning prison assets effectively.
• Professional writing offerings online can offer custom-written contract law assignments helper that are tailor-made to students’ desires beneficial for tight time limits or additional help.

Exploration of different types of offers and their legal implications.

Examples of an offer in contract law take specific paperwork with specific criminal outcomes. Advertisements, process offers, public sale bids, buy offers, reward gives and negotiation gives all have awesome implications. Advertisements may be presented with specific terms processes are examples of offers in contract law to create employment contracts when typical auction bids are finalized with the aid of the auctioneer’s statement and purchase and praise form binding contracts upon popularity. Understanding these versions is important for clean and enforceable contracts.

Examination of consideration as a crucial element in contract formation through examples.

Consideration is an essential element of agreement law and may take numerous bureaucracy. Examples of Consideration in Contract Law would possibly contain economic prices for items or offerings like buying a telephone. It may also involve acting services consisting of a house owner hiring a contractor for renovations. Mutual guarantees or forbearance like no longer suing in alternate for debt reimbursement also matter as attention. Surrendering criminal rights or pleasant present duties underneath new phrases are further times. Consideration is crucial for developing enforceable contracts by way of making certain price changes between events.Understanding Types of Contracts in Business Law

Contracts in enterprise law alter commercial interactions of numerous sorts for specific purposes. Express contracts have simply said terms through verbal or written agreements.

Different types of contracts in business  law, for example, rent-implied contracts are inferred from moves which include a client buying items at checkout. Unilateral contracts involve one birthday party’s promise for every other birthday celebration’s unique act like imparting praise. Bilateral contracts include mutual guarantees like a provider handing over goods to a store. Executed contracts have all parties fulfill obligations like a dressmaker finishing a challenge. Executory contracts have responsibilities pending like a contractor building an office. Voidable contracts may be voided for legal motives like a minor voiding a vehicle purchase Understanding. Types of Contracts is important for companies in prison agreements for readability and safety of rights.

Analysis of cases involving misrepresentation and its consequences in contract law

Misrepresentation occurs whilst one birthday party gives the alternative the incorrect impression of a fact in an attempt to get them to signal a contract. Here are a few instances of examples of misrepresentation in contract law cases and their respective outcomes:

Case 1: A vs B (Example of Innocent Misrepresentation) Details: A miscalculated the mileage of a used car that B purchased claiming it had simply driven 20,000 miles due to an odometer blunders.

Consequences: Based on A’s sincere perception in the fake statement, B may additionally cancel the agreement if the misrepresentation is fabricated and damages will also be granted.

Case 2: Example of Negligent Misrepresentation: X v. Y Details: Y, a real property broker falsely states that a residence has by no means flooded. On the premise of this record X purchases the land. Johnson reveals later that the assets flooded within the beyond because of Y’s negligent misrepresentation.

Consequences: X can also request the cancellation of the settlement and pursue damages for any losses brought on by way of Y’s deception.

Detailed examination of examples showcasing fraud, duress, and undue impact in settlement law.

Contracts are voidable with the aid of fraud, coercion, and undue affect. The following are instances of fraud, duress, and undue affect that exhibit each idea:

Examples of fraud in contract law: A providing false financial statements to B during business negotiations, hiding debts and liabilities. If B can show A intended to deceive and induce him, the partnership contract may be voided for fraud.

Examples of duress in contract law: X threatened harm unless Y sold property at a reduced price. Y can void the contract if duress is proven, seeking relief to cancel it in court.

Undue Influence

Examples of undue influence in contract law: A financial advisor exploited their relationship with an elderly client to manipulate him into signing over most of his estate. If D can show this abuse of trust, the contract may be voided for undue influence, giving him back control of his estate.

Explanation of invitation to treat and representation with relevant examples

An example of an invitation to treat in contract law is not a binding offer in contract law but an invitation to negotiate or make an offer. Examples of offers in contract law include advertisements or displays of goods. On the other hand, a representation is a statement of fact during negotiations that leads to contract formation. Unlike contract terms, representations are not automatically part of the agreement unless stated. Examples of representation in contract law, an automobile sales clerk misleadingly claiming low mileage to make a sale. Examining Invitation to Treat and representation is crucial in determining a legally binding agreement and parties’ responsibilities.

Case studies illustrate situations where mutual mistake affects contract validity

In terms of agreement law, mutual mistake takes place when events misunderstand a crucial element that is vital to the settlement. Case research exhibits how it influences the validity of contracts.

Examples of Mutual Mistakes in Contract Law

In S v. K, the agreement became void because both events misunderstood the fee of the cow, believing it to be barren when in reality it changed into pregnant.

A miscommunication concerning the ship to which the contract pertained resulted in a null and void agreement in        R v. W. According to D v. B, a rent was voidable due to the fact both parties concept the mill’s machinery became nevertheless operational. To avoid legal pitfalls in contract law , it’s miles vital to recognize agreements, as these examples demonstrate.

Important components of contract regulation are giving attention, an invitation to treat, illustration, mutual mistake, fraud, duress, and undue impact. Understanding these concepts is essential for effective felony agreements. Further exploration of settlement law can beautify comprehension of rights and duties. Seek professional guidance for deeper knowledge and help with assignments in this dynamic field.