Contracts 2

js5389's version from 2015-12-15 03:29

Internet (cont'd)

Question Answer
DeFontes v. Dell FactsDefendants essentially argued that when plaintiffs purchased the computers from defendants, they became bound by a terms and conditions agreement, which defendants asserted was accepted by plaintiffs upon accepting the delivery of the goods.
DeFontes v. Dell HoldingThe court found that the hearing justice properly denied defendants' motion to compel arbitration on the ground that the plaintiffs did not agree to be bound by the terms and conditions agreement. The court found that, in reviewing the language of the terms and conditions agreement, it could not be said that it was reasonably apparent to plaintiffs that they could reject the terms simply by returning the goods.
DeFontes v. Dell TakeawayProCD is good
DeFontes v. Dell CodeInterpretation, Internet
ProCDIf a buyer is presented with additional terms and offered the opportunity to reject and return the goods and subsequently does not reject the goods, then the buyer will have accepted those terms.

Promissory Estoppel

Question Answer
KlocekTerms received with a product do not become part of the contract unless the non-merchant buyer expressly agrees to them.
Kirksey v. Kirksey FactsPlaintiff abandoned her place of residence and moved in with the Defendant based on Defendant’s letter inviting Plaintiff. After 2 years, the Defendant asked her to move out.
Kirksey v. Kirksey HoldingThe promise is gratuitous and not enforceable. There was no mutuality in the agreement and thus no consideration.
Kirksey v. Kirksey TakeawayPromissory estoppel antecedent case.
Kirksey v. Kirksey CodePromissory Estoppel
Harvey v. Dow FactsDows’ (D) daughter, Harvey (P), contended that the Dows’ (D) general promises was to transfer some of their land to her and that the actions of her father, Jeffery Sr. (D), which included the approval of the site of her house, obtaining a building permit for it and building a substantial part of it himself at the same location supported a claim for promissory estoppel which points to the fact that the Dows (D) were promissorily estopped from conveying a deed to a parcel of land on which she had built a house.
Harvey v. Dow TakeawayThe court must consider the alleged promisor’s conduct as well as any generalized promises the promisor has made when considering a claim of promissory estoppel, in determining if all of the promisor’s actions, taken together, constitute a “promise” to the claimant.
Harvey v. Dow CodePromissory Estoppel
King v. Trustees FactsPlaintiff, wife of the late Martin Luther King, Jr., initiated this action to recover some of King’s papers from Defendant Boston University. King provided the papers and other items to Defendant along with a letter indicating that upon his death they would become the property of Defendant.
King v. Trustees TakeawayIf donative intent is clear, charitable subscriptions will be enforced according to the donor’s intent when specificity of the donor’s promise, consideration, and reasonableness of the charity’s reliance are considered.
King v. Trustees CodePromissory Estoppel, Charitable Subscriptions
Katz v. Danny Dare FactsPlaintiff Katz suffered a head injury while employed by the Defendant Danny Dare, Inc. Plaintiff was subsequently convinced to retire after being offered a pension. After retiring, Plaintiff worked for Defendant on a part time basis, but after two and a half years Defendant cut and then eliminated Plaintiff’s pension.
Katz v. Danny Dare HoldingUnder these facts, the Court finds that Plaintiff voluntarily retired in reliance on the promise of a pension. Plaintiff did not have to show that he gave up something he had a legal right to. Instead, Plaintiff only needed to show that the elements of promissory estoppel were all present.
Katz v. Danny Dare TakeawayPromissory estoppel requires a promise, reasonable and detrimental reliance on the promise, and injustice that can only be avoided by enforcing the promise.
Katz v. Danny Dare CodePromissory Estoppel
James Baird Co. v. Gimbel Brothers FactsPlaintiff used a bid submitted by Defendant, in creating a bid. Plaintiff seeks to enforce Defendant’s bid.
James Baird Co. v. Gimbel Brothers HoldingCan’t enforce bid.
James Baird Co. v. Gimbel Brothers TakeawayA general contractor cannot enforce a bid made by a subcontractor as a bilateral contract when the general contractor is under no obligation to use the subcontractor’s bid if awarded the job and the general contractor did not accept the subcontractor’s bid before it was revoked. A general contractor is also unable to enforce the subcontractor’s bid based on promissory estoppel when there is no consideration
James Baird Co. v. Gimbel Brothers CodePromissory Estoppel, Offer
Drennan v. Star Paving Co FactsDefendant subcontractor submitted a low bid for paving portion of a project, which was relied upon by Plaintiff, the general contractor. Later, Defendant refused to perform the work for the price it had bid saying that they had made a mistake in the bid and could not do the work for less than an amount which was nearly twice as much. Plaintiff found another contractor willing to do the work but sought damages for the difference from Defendant’s bid.
Drennan v. Star Paving Co HoldingA party that can reasonably expect another party to rely on a price offered to do work cannot revoke that offer on the basis of mistake. With knowledge of other parties reliance, the party that makes the mistake will bear the loss that it caused the other party in reliance.
Drennan v. Star Paving Co TakeawayThere was no consideration to support an irrevocable offer, and using the bid to calculate the final overall bid was not acceptance. Thus, the offer was revocable and no binding contract had yet been formed. But the court relies on reliance as means for the general contractor to recover, section 90 of the Restatement says that “a promise which the promisor should reasonably expect to induce some action or forbearance of a definite and substantial character by the promissee and which does induce such acting is binding if injustice can only be avoided by enforcement of the promise.”
Drennan v. Star Paving Co CodePromissory Estoppel, Unilateral Contract


Question Answer
Credit Bureau Enterprises, Inc. v. Pelo FactsPlaintiff Credit Bureau Enterprises brings this action to compel Defendant Pelo to pay medical bills arising from an involuntary hospitalization. Defendant was hospitalized after he threatened to commit suicide. Initially, Defendant refused to sign a release, but later read and signed the release.
Credit Bureau Enterprises, Inc. v. Pelo HoldingWhen a person is provided medical services and consent is irrelevant due to medical incompetence, that person is required to pay for the benefit received from those services.
Credit Bureau Enterprises, Inc. v. Pelo TakeawayA contract implied by law is one imposed by law on the parties regardless of their assent. Unjust enrichment is one way the law implies a contract between parties. Where one party unjustly benefits at the expense of another, unjust enrichment requires that the benefiting party make restitution. In other words when a person is not acting officiously performs a service for another, which are known and accepted, a promise to pay for the services is implied by law. Restitution may be required even if the services are not requested or voluntarily consented to, for example when consent is impossible or immaterial due to age or mental impairment.
Credit Bureau Enterprises, Inc. v. Pelo CodeRestitution
Watts v. Watts FactsThis case involves a dispute between Plaintiff and Defendant over their respective interests in property accumulated during their nonmarital cohabitation relationship, which spanned twelve years and produced two children.
Watts v. Watts HoldingCohabitant/wife who was denied share of accrued family wealth in divorce may have unjust enrichment claim because forewent opportunity to educate herself, gain income, contributed work to the business / caring for family, and allowing all benefits to accrue to husband was unfair
Watts v. Watts TakeawayThree elements must be proven for unjust enrichment: (1) benefit conferred on the defendant by plaintiff; (2) appreciation or knowledge by the defendant of the benefit; and (3) acceptance of the benefit by the defendant under circumstances making it inequitable for the defendant to retain the benefit.
Watts v. Watts CodeRestitution

Promissory Restitution

Question Answer
Mills v. Wyman FactsPlaintiff gratuitously accepted into her home and cared for Defendant’s son, who was sick, jobless and homeless and away from his parents. Defendant wrote a letter promising to pay Plaintiff’s expenses for such help.
Mills v. Wyman TakeawayA verbal promise, without any consideration, cannot be enforced even if refusal may be disgraceful. The court requires a pre-existing obligation to enforce a promise.
Mills v. Wyman CodePromissory Restitution
Webb v. McGowin FactsThe Plaintiff, Webb (Plaintiff), in trying to save the Defendant, McGowin’s (Defendant) life, seriously injured himself. Defendant promised to pay Plaintiff a stipend for life and later ceases payment. Plaintiff sued to enforce the promise.
Webb v. McGowin TakeawayA subsequent promise is enforceable where the promisor has received a material benefit from the promisee.
Webb v. McGowin CodePromissory Restitution


Question Answer
Joyner v. Adams FactsPlaintiff Joyner leased property to Defendant Adams. The lease provided for suspension of a rent increase for a specified time if there was complete development of the subdivision during that time.
Joyner v. Adams TakeawayDon’t construe a contract against the drafter unless that party is more sophisticated, other side didn’t have lawyers, etc
Joyner v. Adams CodeInterpretation
Frigaliment v. BNS FactsDefendant B.N.S. International Sales Corp. contracted to sell chicken to Plaintiff, Frigaliment Importing Co. Defendant sent chicken complying with the weight requirements of the contract. Plaintiff argues that the chicken sent did not comply with the terms of the contract because the term “chicken” means young chicken.
Frigaliment v. BNS TakeawayHierarchy of Evidence for Interpretation (Frigaliment)
Express Language of Contract
Course of Performance (the transaction at issue)
Course of Dealing (if repeated performances)
Trade Usage or Understanding
Frigaliment v. BNS CodeInterpretation
C& J Fertilizer v. Allied Mutual FactsPlaintiff C & J Fertilizer, Inc. purchased a burglary policy from Defendant Allied Mutual Insurance Co. After Plaintiff’s premises were burglarized, Defendant denied coverage under the policy on the basis that there were no visible marks or physical damage to the exterior of the premises.
C& J Fertilizer v. Allied Mutual TakeawayTo apply the reasonable expectations doctrine, the Court looks at the reasonable expectations of the parties when there is an adhesion contract and interprets any non-bargained for terms according to the reasonable expectations of the non-drafting party.
C& J Fertilizer v. Allied Mutual CodeInterpretation, Reasonable Expectations

Implied Terms

Question Answer
Wood v. Lucy, Lady Duff-Gordon FactsDefendant was a fashionable woman and designer capable of increasing the sales of certain goods by her endorsement. Defendant entered into an exclusive agreement with Plaintiff allowing him to place her endorsement and market defendant’s designs and keep half of the profits. Plaintiff claimed she broke the contract by placing endorsements without his knowledge and keeping all the profits too herself.
Wood v. Lucy, Lady Duff-Gordon HoldingThe circumstances supported a promise by implication that Plaintiff would use reasonable efforts to place the endorsements and market the designs. Unless he gave his efforts neither party would gain anything from the contract. Also the one-half profit arrangement was a promise to use all of his efforts in order that the contract would have value to Plaintiff.
Wood v. Lucy, Lady Duff-Gordon TakeawayMutuality or a return promise may be implied from the circumstances surrounding the contract and the nature of the whole writing.
Wood v. Lucy, Lady Duff-Gordon CodeImplied Terms
Leibel v. Raynor Manufacturing Co. FactsAppellant Liebel, entered into a verbal dealership agreement with Appellee Raynor Manufacturing Co. The agreement did not address duration. Appellee terminated the agreement after two years.
Leibel v. Raynor Manufacturing Co. HoldingWhere there is a relationship of manufacturer-supplier and dealer-distributor, reasonable notice of intent to terminate an ongoing verbal agreement is required under the UCC.
Leibel v. Raynor Manufacturing Co. CodeImplied Terms
Seidenberg v. Summit Bank FactsSeidenberg and another plaintiff (Ps) sold their insurance brokerage business to Summit Bank (D). D later terminated Ps and Ps brought suit for breach of contract, contending that D had failed to honor its obligations regarding joint marketing, thereby impacting negatively Ps’ expected compensation and future involvement. Ps claimed that their allegations gave rise to an inference of bad faith and that D had never been committed to developing the business with Ps, and that D had merely sought to acquire Ps’ business to operate it themselves.
Seidenberg v. Summit Bank TakeawayA claim under the implied warranty of good faith and fair dealing is not negated merely because the claimant had equal bargaining power, had engaged counsel, or was not financially vulnerable when negotiating the agreement. These are factors which the trier of fact may consider in weighing the sufficiency of plaintiffs’ claim but they are not the only factors.
There are limits and the implied covenant of good faith and fair dealing cannot override an express term in a contract.
Seidenberg v. Summit Bank CodeImplied Terms, Good Faith