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    CONTRACTS Dow Fall 2015

    Important Definitions

    Contract=legally enforceable agreement; O+A+C

    Offer=omet!"ng t!at create t!e #ower of acce#tance

    • $%t be clear& 'ef"n"te& e(#l"c"t %c! t!at a reaonable #eron )now w!at t!e #art"e !a*eagree' to w!en t!e offerree acce#t

    Acce#tance=omet!"ng t!at m"rror t!e offer 

    Con"'erat"on=enef"t to #rom"or,Detr"ment to #rom"ee + arga"ne' For 

    • arga"ne' For=-n'%ce' act"on

    Principles

    • Free'om of Contract.#art"e to a / are act"ng "n accor'ance w, t!e"r "n'"*"'%al w"ll

    • T!ere are no com#%lory contract

    • $ater of t!e Offer."n 'eterm"n"ng a /& "t " t!e w"ll of t!e #arty t!at control

    o Co%rt g"*e benef"t of amb"g%"ty to offerree& !owe*er 

    •  No #arty can ma)e anot!er a 'ebtor aga"nt !" or !er w"ll

    • $%t%al"ty #r"nc"#le.%nt"l bot! #art"e are bo%n'& ne"t!er are bo%n'

    aw)"n * $cee #at"ent %e for 31004 #erfect !an'

    • 6 Dr7 went o%t of !" way to ol"c"t t!e o#erat"on& !ow "ntent be!"n' #rom"e

    • D No reaonable man wo%l' %n'ertan' t!at *erbal warranty on a %rgery " a

    3contract%al relat"on

     Ruling: Evidence shows that both parties believed the verbal warranty—solicitation showed Dr.’s intent to create a “100% perect hand!

    8!at abo%t 'amage9

    1

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    CONTRACTS Dow Fall 2015

    Overview of Doctrine: Rule and Counter-rule

    %rley *7 :''"ngf"el'& #7 5 fam"ly #!y"c"an 'oen Dr7 6erform %rgery on fatally "n?%re' #at"ent w,o / 

    • 6 T!e #at"ent wo%l'

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    CONTRACTS Dow Fall 2015

    Sommer *7 6%tnam '7 of :'%c7& #7 1E Fat!er 'r"*e c!"l'ren to c!ool

    • 6 Re%ete' c!ool to 'o "t ?ob& b%t 'en"e'!e " ent"tle' to reco*ery from "nter*en"ng

    • D Da' !o%l'

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    CONTRACTS Dow Fall 2015

     Ruling: non liability or bare nondisclosure67n "any other urisdictions not disclosing about &nown deect is raud 

    Caveat emptor"let purc$aser tae care of $is own interest

    2$at assumptions is someone permitted to mae ,2$at would a reasona#le personassume

    a'ley *7 a(en'ale& #7 10 m"ll !aft re#a"r 

    • 6 a(en'ale breac!e' / an' !o%l' #ay t!e 'amage for !ow long t!e m"ll wa cloe'

    • D a'ley '"'n T%r)"! bat! !o%e,!"tty arc!"tect

    • 6 %"l'er 'eer*e to be #a"' amo%nt t!ey arrange'

    • D Cl"ent 'eer*e to #ay amo%nt t!ey arrange'

     Ruling: (here is no # bc o the architect’s deceit ust an agree"ent o pay"ent. , is entitled to air value o his labor and "aterials or “)uantu" "eruit! $what one has earned'

    4

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    CONTRACTS Dow Fall 2015

    Offer and Acceptance

    -n'ef"n"te Contract

    Jef)ow"tH *7 reat $"nn7 S%r#l% Store& #7 1E> f%r coat a'

    • 6 A' offer wa e(#l"c"t an' 6 met w"t! #ro#er acce#tance

    • D T!e offer wa not '"recte' to male; Storeed to oer! not “will sell!

    An offer must #e clear& definite& and e!plicit suc$ t$at t$e reasona#le person nows w$att$e parties $ave agreed to.

    $o'e of Acce#tance

    6recott *7 Mone& #7 2>E F"re b%rn bl'g 'own an' no "n%rance

    • 6 Mone ent letter ay"ng to acce#t #ol"cy renewal& be "lent

    • D 6ol"cy la#e'.'em%rrer 

     Ruling: ilence cannot be acceptance to turn ?ones’s oer into #—brea&s "utuality principle bc silence could be interpreted as acceptance or [email protected] and oeror would never &now

    Carl"ll *7 Carbol"c Smo)e all Co7& #7 >@> mo)e 2 ball& get "c) • 6 A' tate' term an' 6 met t!em

    • D 6 '"'n

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    CONTRACTS Dow Fall 2015

    F"rm Offer

    D"c)"non *7 Do''& #7 >1 merc!ant offer to ell !o%e& ell to ot!er #eron

    • 6 Do'' ma'e offer to ell !o%e an' attem#te' to acce#t before re*ocat"on

    • D D"'n2 %b,gen contractor 

    • 6 $a'e b"' bae' off [email protected] b%"lt b"gger generator

    • 6 t!e / " "n*al"' b,c term were la"' o%t bae' on "He of generator& w!"c! wa c!ange'

    • D T!ey !a*e a / w, ma(7 an' m"n7 et o%t.not "n*al"'

     Ruling: *hanging si>e o generators aects "a3. price but not "in. price—hal o # is invalid 

    Sc!legel $fg7 Co *7 Coo#er

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    CONTRACTS Dow Fall 2015

     Ruling: 2ailbo3 rule states acceptance occurs when dispatched in the "ail5 peror"anceordered 

    R- Tool Co * KS& #7 >5 R-T b"' on bolt an' ma)e m"ta)e

    • 6 R-T tr"e' to correct t!e"r m"ta)e an' re*o)e before too late

    • D too late& t!ey were awar'e' b"' before re*o)"ng Ruling: no binding contract bc R7( withdrew bid beore acceptance was eective

    3Kn"lateral agreement

    Da*" *7 Macoby& #7 >E5 Caro come to ta)e care of 'y"ng a%nt an' %ncle

    • 6 Da*"

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    CONTRACTS Dow Fall 2015

    Consideration

    rat%"to% 6rom"e an' Rel"ance

    S"egel *7 S#ear& #7 2E5 tor"ng f%rn"t%re for t!e %mmer 

    • 6 cre'"tman %n'ertoo) t!e *ol%ntary act of f"n'"ng "n%rance for f%rn"t%re

    • D "t wa a grat%"to% #rom"e& t!ere wa no con"'erat"on for f"n'"ng "n%rance

     Ruling: Bhen a person "a&es a gratuitous pro"ise and then enters peror"ance $ta&ing in the urniture' he is held to ull e3ecution. iegel gave pear the urniture ater the pro"ise and placed his ull conidence in hi".

    Kn'erwoo' Ty#ewr"ter Co7& #7 2I try"ng to f"n' a %bleaer 

    • 6 Realty Co7 a)e' for %"table %bleaer an' t"me an' money wa #ent "n f"n'"ng one

    • D T!e / wa ?%t a benef"t for Kn'erwoo'& no con"'erat"on on "t

     Ruling: Bhen

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    CONTRACTS Dow Fall 2015

    6Consideration is as muc$ a form as a seal9

    o%let *7 o%let& #7 @>0 w"fe #rom"e not to %e !%ban' for car wrec) 

    • 6 ee)"ng #ayment from acc"'ent "n N& / wa ma'e "n $: w"t! no con"'erat"on

    • D / wa "gne'& eale'& an' 'ate' "n $: t!at w"fe wo%l'n1 fat!er #rom"e money owe' to 'ea' w"fe to !" 'a%g!ter

    • 6 Fat!er ga*e note w"t! eal to 'a%g!ter #rom""ng money

    • D eal " #re%m#t"*e of con"'erat"on& b%t t!ere wan $"ll ta)e care of 8yman

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    CONTRACTS Dow Fall 2015

    • 6 Too) care of !" on an' wa #rom"e' com#enat"on

    • D #at con"'erat"on " no con"'erat"on.'oen

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    CONTRACTS Dow Fall 2015

    • D re*o)e' t!e offer before #ayment wa ten'ere'

     Ruling:

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    CONTRACTS Dow Fall 2015

    Crabtree *7 :l"H7 Ar'en& #7 @E> em#loyment / "n #"ece

    • 6 e !a' / for o*er a year an' t!" wa "n '"fferent wr"tten ac)nowle'gement

    • D / for o*er a year #erformance m%t be on a wr"tten / b,c tat%te of fra%'

    R%l"ng Ser"e of 'oc%ment at"f"e !a*"ng a / "n wr"t"ng to at"fy tat%te a long a one

     #"ece " "gne' by #eron aga"nt w!om enforcement " o%g!t7

    -m#erator Realty *7 T%ll& #7 E01 oral agreement on to# of wr"tten / for lan'

    • 6 T%ll nee' to #ay b,c t!ey !a' a / 

    • D -R #rom"e' on to# of wr"tten / to 'o omet!"ng an' "t wan

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    CONTRACTS Dow Fall 2015

    a. >ull Integration"a#solutel( ever(t$ing is e!pressed in t$e * and no e!trinsic

    evidence is allowed

    #. Partiall( Integrated"su#+ect matter of t$e agreement is complete& #ut

    suggests furt$er agreements weren't addressed in t$at writing& so some

    evidence can #e allowed to e!plain& #ut not to var( or contradict

    c. ?nintegrated"muc$ of w$at parties agreed to isn't in t$e writing so ruledoesn't appl( and all e!trinsic evidence is allowed

    3. vidence ma( #e parol ,nonwritten or written

    0. Applies to onl( t$ings agreed on #efore formationnever su#se/uent

    B. Onl( applica#le w$en part( is tr(ing to var( or contradict t$e writing

    Common 4rend: strict& ro#ust PR to defeat a#ilit( of parties to assert fraud and t$erefore&

    allow more cases to end at summar( +udgment

    Crawfor' *7 France& #7 E>2 arc!"tect 'raw %# e(#en"*e !otel #lan

    • 6 ma'e / to 'e"gn t!e !otel 3%"table to t!e"r nee' an' #erforme'& nee' #ayment

    D tol' arc!"tect !otel !o%l'[email protected] Seller of #ro#erty 'on

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    CONTRACTS Dow Fall 2015

     Ruling: “= purported written agree"ent which the parties designed as a "ere sha" lac&s legaleicacy and that e3trinsic parol evidence! is ad"issible to show that the written agree"ent wasa sha" and not "eant to be the authority.

    Raffle *7 8"c!el!a%& #7 EI cotton from a !"# name' 6eerle

    • 6 Agree' to b%y cotton from 6eerle Bcom"ng "n Oct7 an' "t ne*er !owe'• D Agree' to ell cotton from 6eerle Bcom"ng "n Dec7 an' !e '"'n6 man"fet aent& or 27 >6 br"ng %"t to enforce t!e #rom"e& or >7 >6 'etr"mentally rel"e on t!e #rom"e

    Jawrence *7 Fo(& #7 1>>> Cre'"tor enef"c"ary

    • 6 olly ga*e Fo( >00& w!"c! !e wa %##oe' to #ay to Jawrence t!e ne(t 'ay.t!e

    con"'erat"on wa Fo(

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    CONTRACTS Dow Fall 2015

    • D Sea*er wa ?%t a t!"r' #arty to a #rom"e btw $r7 an' $r7 eman.no r"g!t

     Ruling: “the right o the beneiciary to sue on a # "ade e3pressly or his beneit has been ullyrecogni>ed!—eaver alone was da"aged by the breach o # 

    QQ"%e of grat%"to% #rom"e ar"e !ere

    SoconyLac%%m *7 Cont"nental Ca7& #7 1> contractor an' mater"alman

    • 6 CC #ro*"'e' a %rety bon' an' nee' to #ay o%t for t!e labor 'one t!at wan

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    CONTRACTS Dow Fall 2015

    %. Dissolving usiness

    3. Delectus Personae* for dut( peformed #( specific person

    0. 8etoffspecial arrangements of a * ,Cont. >orest

    S#eelman *7 6acal& #7 1I2 3$y Fa"r Ja'y Royalt"e #rom"e

    • 6 6acal wante' S#eelman to !a*e t!e f%t%re r"g!t from t!e #ro'%ct"on after !" 'eat!

    • D -t wa only a g"ft for t!e f%t%re.not enforceable

     Ruling: +uture rights o an e3isting # are assignable even i the a"ount hasn’t beenconclusively intended—git was valid bc it intended to "a&e irrevocable present transer 

    Jangel *7 etH& #7 1500 Real etate a"gnment

    • 6 T!e a"gnment wa ma'e to Def7 an' t!ey nee' to #erform t!e"r '%t"e

    • D T!e a"gnment of r"g!t '"'n

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    CONTRACTS Dow Fall 2015

    Remedies

    T!ree Categor"e

    • :(#ectat"on Damage='"fference btw w!at wa #rom"e' an' w!at wa rece"*e'.#%t

    "n?%re' #arty w!ere t!ey wo%l'

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    CONTRACTS Dow Fall 2015

    S%ll"*an *7 O1 'eforme' noe after #lat"c %rgery

    • 6 6a"n an' %ffer"ng 'amage& a well a t!e lo to !er career 

    • D A #ec"f"c #rom"e for 3#erfect noe from 'octor cannot be ta)en er"o%ly

     Ruling: ullivan can collect [email protected]@poc&et e3penses $restitution' and lost earningsoreseeable

    da"ages ro" relying on D’s breach $reliance'

    Fre%n' *7 8a!7 S7 6re& #7 111> e(cl%"*e / to #%bl"! a man%cr"#t

    • 6 want #ec"f"c #erformance or t!e royalt"e !e wo%l'

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    CONTRACTS Dow Fall 2015

    a"nfor' *7 Carroll& #7 112I / to b%y bacon

    • 6 Carroll '"'n

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    CONTRACTS Dow Fall 2015

     Ruling: speciic peror"ance is a “discretionary re"edy to prevent substantial inury where noade)uate re"edy at law obtains!5 the pay"ent or L yrs o wor& ro" , to D is considerationenough or a covenant to not co"pete.

    Cam#bell So%# Co7 *7 8entH& #7 [email protected] carrot farmer to# 'el"*er"ng

    • 6 w"t!o%t #ec"f"c #erformance& 'amage wo%l' be SO !%rtf%l an' "ncalc%lable• D t!e / wa %nconc"onable.way too one"'e'

     Ruling: # is too [email protected] to be awarded w e)uitable relie $*lean 8ands Doctrine' though thiswould’ve been a situation where speciic peror"ance was probably necessary

    Sec%r"ty Sto*e *7 Amer7 R7 :(#re& #7 11EE tran#ort t!e f%rnace to e(!"b"t

    • 6 Jot tra*el e(#ene an' AR: !o%l'