Contracts Notes

9/7/17

Unconscionability goes to the formation of an agreement, not to the performance of an agreement

William v. Walker Thomas cross collateral portion struck out, struck out offending clause

If someone else (landlord) has not yet signed contract, you can change things that you want.

In Europe if someone breaks promised act in contract, they have to do that act

In USA if someone breaks promised act, they can pay back equivalent in cash

Expectancy plaintiff ex post whole (offset expected costs) (calculated from time of contract),
wouldnt get back doctors fee because you would have paid this even if the surgery was successful.

Would recover lost earnings with respect to the promised nose. (prior nose and
promised nose)

Reliance plaintiff ex ante whole (calculated from time of breach) putting the plaintiff back in
the position they were in prior to bargain.

Lost earnings difference between prior nose and damaged nose

One may be better than the other

Restitution - return of benefit conferred directly on other party

Disgorgement return of benefits conferred plus profits

Injunctions specific performance and negative if you want something specific (sentimental
item)

Punitive damages if there has been tort like (malicious) behavior. Threatened but rarely
awarded in contract arguments. Also called exemplary damages.

Mitigations

Damages are compensatory

In medicine expectancy damages may not be appropriate because outcome is always uncertain. Usually
awards reliance damages.

Sometimes awards for pain and suffering.

Doctors fee reliance

Cant get pain and suffering from breach of a commercial contract (unless you suffer physical harm)
but cant get money because you were sad that you didnt buy a cool car
Images both threatening to law and treated with great credulity

Can threaten economic and reputational consequences for breach of contract then legal consequences.
Taking to court is usually a last step.

Hadley v. Baxendale - Lost profits are a special loss, and would not be recovered until specified in the
contract

Not concerned with fault in contract, only concerned with promises and breaches

Internalization

You can recover emotional loss if it is foreseeable

Jarvis v Swan Tours recover for loss of enjoyment

Foreseeability and remoteness

Case where you can be awarded money for disappointment

No real reason to distinguish between pecuniary or non-pecuniary benefit/loss

You dont have to be at fault to breach a contract, the promise just has to be broken

If a product is known to be sold upon arrival, there is a forseeable probability of a fluctuation in price,
but dont know which way

on the cards 1/52 chance

Two stage test: what occurs naturally from the breach of contract?

Fired employee may have pecuniary loss, but cannot get recovery for emotional distress

Unless sometimes they have acted illegally

Bad faith termination, may be better to argue as a tort

Remoteness of damage

Emotional loss

9/12/17

Failure to file on time is the single most reason to lose lawsuits

What you promise should be done paper chase movie

A promise should be formulated in the future tense I will, a commitment to not changing your point of
view
Consideration provide good evidence of agreement, make sure both parties thought carefully about
entering into the contract, seriousness, channeling function allows parties to predict when their
promises are legally enforceable.

Historically was about avoiding extreme detriment to one party

First req. in common law is a threshold requirement: promise not enforceable if not responded to.

Contract contraho- drawing together, quid pro quo, exchange of promises, mutual, reciprocal

Something that is legally recognized of value has to pass between the two parties

No requirement of consideration in civil law systems, will enforce a gratuitous promise as long as they
have a reason

Exchange of promises is executory. Subsequent actions are technically irrelevant

Kirksey v. Kirksey

Promise to give land to sister in law after widowed.

Mean assignment

give can mean legally at face value that it is a gratuity (social promise)

Hamer v Sidway

Unilateral contract promise for an act, if it happens then there is a contract

Promisee cant breach a unilateral contract

Reward example: lost pet $100 reward, people dont get paid anything just for looking

He was underage when they agreed, contract doesnt actually happen until he was 21

Case thats badly argued by the plaintiff Hamer (debt collector)

Court is saying that consideration is not an actual detriment, is a legal detriment

He may be benefitted by giving up rights, but is a legal detriment because he loses those rights

If you request it, because of your request the court deems it beneficial to you, even if a reasonable
person might not think so (how can you reconcile this with Edwin Farnham Greene?)

Will is not a contract, its a declaration from the testator, gratuity, entirely donative

Custos bonos mores against good morals. Court can choose to enforce based on the social norms.

Bad man theory theory that prediction is the best form of advice

Langer v Superior Steel (1932)

past consideration is no consideration motive is no consideration

fiction of law the court is being very inventive to create consideration, as a social good to make
companies enforce pension promises, even though this case looks like a gratuity

Promissory estoppel equitable device invented 1890s US law. A promise that the promisor should
reasonably expect the promisee to rely on, and they do rely on to their detriment, then enforceable to
the extent necessary to ensure justice.

This is how they could have enforced pension even without the ban on competitive
employment condition

Pennsy Supply v American Ash

Exchange of aggrite, it is a good so it is covered by UCC

If not stipulated, it is implied that the item is suitable for intended use

Implied promise on both sides, implied contract because there is a commercial contract

Selling something that becomes worthless is not grounds for termination of a contract

Parol evidence rule the presumption that the writing is the entire evidence, not what was said

Unjust enrichment

Pinnels case 1602 monetary debt (special case) cannot be satisfied by a lesser sum than promised on
the day due, unless you vary the circumstances (pay a day early, give a horse as well, etc)

Not good consideration for the monetary difference in many jurisdictions

Novation and modification

Modification is justified as long as it promises to do the same thing because of different circumstances

Stilk v Myrick Admiralty is very similar to realty if you charter a boat it is a lease not a license

Contract to crew a ship is a promise to do everything that the captain asks you to do

Policy argument if crew demanded more wages when there was a storm, captain would be
forced to agree, but if they dont crew the ship will sink

Theyre really threatening to destroy the ship and its good

So the contract has no consideration because it is made under duress

Hartley v Ponsonby circumstance changes so much that the new contract is enforceable, even though
against the traditional admiralty law

Otiose

Lynyrd Skynrd cant just write under protest when signing to indicate duress

Anaphoric designator

Hold harmless you will indemnify other party, pay for all the other partys costs
Modifications are volitional you dont have to agree

Maher could have tried to get relief through commercial impracticability (cant possibly fulfill the
contract due to unforeseen change of circumstances)

Omnium gatherum clauses