See Restatement §161 above. 6 (Dist. That’s the way we’ve always worked!” Is evidence of those past dealings admissible to demonstrate that Abel was in the right? Seller breaches even though mkt. The party accused of bad faith always claims that acting under the terms of the contract is good faith per se. Some people may only want to enter into ctcts when they know the maximum risk they are assuming. There was no policy of diverting business; it would be bad faith if, say, they had opened another store right next door. Were it not for the boiler plate terms, the ct. would be on its own in determining the default rules. If you assume the Ct. was correct in not listening to Mistletoe, find out why the calculation was right, or show why it was wrong (Adler thinks they got it right). ² NOTE: Unless an offer otherwise specifies, where the offeror’s knowledge of performance is uncertain, an offeree risks an inability to enforce unless she takes reasonable steps to notify an offeror of performance (& thus acceptance). Question: What is a one-year provision? There are two implicit warranties in any contract, but they can be contracted around with express language. It seems like she would have at least had a conversation about it, given her purported understanding. That is, the contract is not really one-sided as Cardozo says it is, even if Wood has complete discretion. Texaco v. Pennzoil F: Parties agree “subject to written agreement”. (Even though this confers an ex ante benefit on offeror but nothing on offeree.) are wary of parties acting strategically to take advantage of ignorant parties. Probably no contract, under §201, and Raffles & Oswald. H: Ct. enforces the agreement, and says terms can be filled in. Doctrinally, one can argue that there has been substantial performance and that there are doubts about Baker’s claimed idiosyncratic value. v. Mayor and City Council of Baltimore.. On Friday, the justices will hold their Jan. 22 … # M X ™ › Ÿ ¬ µ » å ç ì   « \ s u € ‚ ³ Ü é ñåØÃØå´å° ñå´åñåñå´åñåñå´åñ�åñå´å{h{ñå°h %h&>Ñ 5�B*CJ OJ QJ \�^J ph ÿ %h&>Ñ 5�B*CJ OJ QJ \�^J phÿf "h&>Ñ 5�6�CJ OJ QJ \�]�^J h&>Ñ 5�>*CJ OJ QJ \�^J h&>Ñ h&>Ñ 6�CJ OJ QJ ]�^J (h&>Ñ 5�>*B*CJ OJ QJ \�^J phÿf h&>Ñ >*CJ OJ QJ ^J h&>Ñ CJ OJ QJ ^J h&>Ñ 5�CJ OJ QJ \�^J ( ¹ X Y < LEXIS 272 (Md. Assume P knew of repudiation. PERFECT example of efficient breach (Only thing not restored is that which was wasteful—expenses after repudiation) Flaws of Efficient Breach theory: In reality there are incentives to keep working (keep workers employed, avoid liability of a half-built bridge, etc.) [§2-708(2): If diff. » If the market drops, builder will quickly reveal the special wood to show that a binding contract has been formed (by performance). In this case they would not because the party that suffered the greatest expectation damages has no lawsuit (because of personal relationship that exists). Wood v. Lady Duff F: LDG agrees to grant Wood the exclusive use of her name in exchange for half the revenues from such use. Failure to award damages based on idiosyncratic value would lead to underinvestment (by promisor), while an award of damages for a holdup would lead to overinvestment (by promisor). When calculating expectation damages always find the profit expected on total transactions and subtract the actual profit. Ford v. Wainwright. Gilmore: P.E. If the prep is wasted, you get reimbursed for it, but if it’s not you don’t. The Ct. rarely concerns itself with whether the bargain is a good one or bad one. If it is easy enough to return an offer, the Ct. will usually expect you to; if there is any burden at all in giving it back, the court will probably just expect you to keep it. H: Substantial performance occurred. H: No meeting of the minds b/c Dickinson knew Dodds wanted to rescind, so it was rescinded. Question: Why doesn’t this add a level of reduction capping the damages to the contract price? P showed up with money and D tried to revoke offer as P was handing him the payment. This makes no sense (Posner, Adler). Seller’s argument: “Your honor, be serious. Hillman: Not true; they rarely succeed in ct. Farnsworth: Expansion of reliance in 1970’s, but reduced again in 1980’s. Adler: This is not a real impossibility case; it’s a frustration case. White v. Corlies & Tifft F: Builder contracting for construction of offices; negotiations occurred, then he went out and bought the lumber. Beware that just because an explicit warranty can be a provision of insurance doesn’t mean it always should be so viewed. Basically, under both common law and UCC, if the response is most reasonably interpreted as an acceptance, it is. Adler: Conceptually, all this is easier to understand (and more correct) in real contract terms. Thus, you can claim it was a joke as long as your words and actions so indicate, and it’s known to the other party that it’s a joke. UCC is all about filling in missing terms with what is “reasonable”. Hypo: Under Anti-Bush, Seller could get out of this jam by agreeing to the buyer’s preferred term, breaching, and suing the buyer for his savings! Promise is a sham. Stop & Shop v. Ganem F: Store shuts down unprofitable business and pays the base rent anyway (swallows the loss). often use the language as though they do. Avoidability of Harm (Mitigation) Hypo: Fisherman has a load of fish worth $10K and ctct with delivery company A for $500. Generally, market fluctuations cannot be a consideration in efficient breach (the Seaver example is an extraordinary exception). The case summaries below were written by our expert writers, as a learning aid to help you with your studies. Weinberg v. Edelstein F: P can’t lease space to any sellers of dresses; D sells skirt-blouse combinations. IF the nets were below contracted for standard, ct. could have found sufficient consideration. Now he won’t get his house painted, he’ll keep the $1K, and he’ll be overcompensated by $500. Scholl v. Hartzell case brief Scholl v. Hartzell case brief summary 20 Pa. D. & C.3d 304 (1981) CASE SYNOPSIS. Access This Case Brief for Free With a 7-Day Free Trial Membership. BUT, what if Baker values the paint job at $10,500? [Ct. unwilling to speculate on profits.] Hypo: Contract to deliver oil on Tuesdays, but delivery on Wednesday morning. Creates a good faith duty to perform, but this is problematic because it enables any party who doesn’t believe the other is working hard enough to go to court and argue bad faith. Under restitution you would owe me $500, not $200 (and not $700 because courts will rarely award reliance and restitution simultaneously as that would be disproportionate relief in P’s favor). Note: We give economic incentives to perform in CTCTs because it’s a happy medium between lawlessness and killing them in the town square. Petitioner, George Benjamin Ford, Jr. asserts that Respondent, Pearl Rose Ford is not entitled to obtain property under their mother’s will even though she was insane at the time she murdered her mother. What if he said it was applicable to Plot I inside Green Acres only? Facts:. Hypo: If you know about me that (1) I own a Buick and a Replicar, (2) I love my Replicar, and (3) I’m financially distressed, and at lunch I offer “to sell you my car for $10K”, and you accept on the spot. Should the court be able to uphold a negative pledge or damages? !Economic Argument: High liquidated damages prohibit efficient breach! However, following his sentencing, Ford began to display symptoms of a serious mental disorder. Should not matter. [Problem: It’s not easy to know when one party is responsible for the errors of another.] I.E. Consolidated with: Ford Motor Company v. Montana Eighth Judicial District Court; Docket No. Cancel anytime. Discuss the calculation that’s on the website. 2004) (3 times) Scott v. State, 322 S.W.3d 662 (Tex. Normally renegotiation would fix the inefficiency, but here the promisee (captain) doesn’t have to renegotiate, so inefficiency results. [Cite as Kent State Univ. If the seller knew of the misunderstanding, the buyer would win. Opinion delivered November 16, 1931. What if buyer wants to include evidence of a fountain in the middle of green acres? Reasonableness may be specific to the context of the breach (see Kemble). Ct. then has to assume profits are zero & award reliance. I really wanted exactly what I was promised! [The judges would likely disagree on inclusion of past practice, however.] CONSTRUCTIVE TERMS Material Breach: Jargon differs from case to case, but the doctrine is simple: Where there has been substantial performance, the recipient of the performance cannot walk away from the contract but must perform and accept damages for failure of complete performance. This thus prevents fraud, but also prevents overinvestment by the ignorant party, and the inefficiency that results. If not, should such a condition be imputed as a matter of law? H: The purpose was frustrated; Question: Did they throw the ctct out, thus putting the loss on the lessor? If the price falls, he will not buy at all. H: NO CONTRACT AGAIN! Pacific Gas v. GW Thomas F: Question of whether indemnity clause was included in the agreement. See § 161(b) PAGE PAGE 1 Y j o • Cumbest v. Harris (1978) Test for Uniqueness F: P wants SP on stereo (actually designed to be collateral on a loan, but D avoided payment—UCC treats collateral cases differently, but forget that for now). Equitable Relief (Specific Performance and Goods) Equitable relief includes: Specific Performance, Declaratory Relief or Restitutionary remedies Doctrine: Specific Performance is available when regular damages are somehow inadequate SP is available for land (always unique) & unique goods, but never for services. The ct. says, though that no option exists because there is no way to match the price to a quantity because the length of each term was left unclear. correct assessment of what the reliance damages would be on pg. BUT, suppose that she did understand the terms clearly (and also assume the store isn’t a monopoly, which would weigh heavily in her favor, I assume). H: Ct. “is bound to look to the substance and not to the form of the contract.” Finds that the time requirement of the first contract would logically preclude working for another theatre. UCC § 2-718 & Restatement (2d) § 356: Essentially similar to common law. Applies to bilateral and unilateral contracts! A rule of civil procedure forcing the Plaintiff to accept D’s settlement offer, or to be obliged to accept specific performance, would maximize this efficiency of investment as much as possible. A “we really meant it” clause, disclaiming any use of past dealings as evidence of current meaning, will do the job just fine. (BAD verdict, but inevitable w/o a dollar value on her suffering.) ... ford v. jermon. Step-Saver F: H: [see notes: warranty case, but could also be viewed as a consideration case.] Right after the contract was signed, she went out on her own and did her own … CC–85–1385.80 (C. C. Mobile Cty., Ala., Feb. 12, 2016), pp. The reason is that there will always be potential situations where a party with the information will lack the incentive to use it unless the rules allow either party to benefit from the information, in which case there is the risk of a premature race to claim the benefits. We should enforce LD, even if they’re penaltiesWe should not enforce penaltiesTHIS IS NOT DOCTRINE, BUT COULD BE. Although the New York Court of Appeals' decision clarifies New York law in major respects, it adopts no theories that could not have been found in caselaw or in pertinent literature. Tyra v. Cheney F: Through a clerical error, a contractor bid less to do a job than he intended. Under Tongish, recipient’s intended use of the good is irrelevant. dmgs nominal. Specific performance of personal services in a country that recognizes equality would produce a feeling “more discordant and irritating than slavery itself.” (Ct. makes an exception for apprenticeship) Lumley v. Wagner (England, 1852) F: Opera singer had a ctct to perform, including a negative pledge not to perform elsewhere. H: NOT a unilateral mistake b/c not every relevant fact is an implicit term of the contract. (Blatant rejection of prior precedent in this case.) 105, 512 A.2d 389, 1986 Md. Hypo: If Fox could calculate that her suffering for doing the inferior film was worth $250K to her, and they would make $500K on the film, then it is efficient for her to mitigate because they will compensate her (with $1M total) and they’d gain $250K on the venture overall. (I think this is in Towne Hall, but I’m not certain.) We see no reason to allow Ford to do so. Because she didn’t mitigate, there is a waste of $250K and her damages must be reduced by $250K to give her an incentive to mitigate and avoid waste. If the ct. could always tell when one party had done its best, then the doctrine wouldn’t sap one’s incentive, but the court needs doctrine to account for the fact that it won’t always have all that info. Abel wants out. That is, there was no add’l work, just performance of pre-existing duty, so there is no consideration. Name:Dodge v.Ford Motor Co. Publisher pursued it but offered no compensation. But where mitigation actually occurs, the analysis is ex post, as the best evidence of whether mitigation was possible is whether it happened. BUT, there could be a language barrier issue, so it might be okay. reversed and remanded, affirmed, etc. kills real contracts. Adler: Seems like the ct. just feels bad for her. Jermon (defendant) entered into a contract with Ford (plaintiff) under which she would act at theaters that he managed. If Abel could breach and sue (anti-Bush), she could charge the contractor the $15 she saves him (expectancy), and earn $15 as an electrician, netting $30, or a $10 surplus for herself. The age distinction was removed in 1989. You can try any plan risk-free for 7 days. H: Impracticability defense fails; The events of the crisis were reasonably foreseeable at the time of the contract and Gulf thus did or should have contemplated the contingency. Cancel anytime. often allow P to choose measure) H: D is right, and lost profits should be subtracted from reliance award, but D has burden of proving lost profits. CONFLICT w/ UCC §2-205 (Firm Offers): Under the UCC a written guarantee to leave the offer open is not revocable for lack of consideration during the time stated (or, if not stated, for a reasonable time not to exceed 3 months). (When expectancy not available, cts. Ct. awards SP (because it’s land). Our question: How should ct. use its vast discretion in judging coercion/excuse from performance (implicit terms)? The issue section includes the dispositive legal issue in the case phrased as a question. Alternative approach: A material breach, or failure of substantial performance, can be considered an anticipatory repudiation of the contract, so, in Hypo 2 the buyer can say the seller’s inaction is a repudiation and the ctct is dead. Op. We use the term consideration in this context, but it is really only meant to apply to gratuitous promises; it happens, but it misconstrues consideration. Note: Contractor, if he knew of her chance to mitigate, would fire her right away and force her to mitigate. Now relax the joint assumption of full compensation and full solvency, and assume consideration is required. United States Supreme Court. In early 1982 he began to show gradual changes in behavior, indicating mental disorder. Do we want the rule requiring consideration for modification? Abel should work as an electrician b/c society would be $10 better off. So why not award lost profits then? No court would uphold Russell today because there is no explicit clause; cts. The ex ante approach is the law (mostly), but ex post results outside an expected range may provide evidence of ex ante unreasonableness (See Wassenaar). Offeror is generally master of terms of acceptance, along with rules of common sense and reasonableness, such as in § 65, merely default terms. They are expectation cases with the assumption that the profits are zero. Implied Warranty of Merchantability: (General; see UCC §2-314) Example: It is generally understood that wheels shouldn’t fall off of roller skates, regardless of the type of skate they are. [Many old outline notes on unconscionability in my notes, vol. If not, then ask what is the most socially efficient rule? MERE KNOWLEDGE OF THE FORESEEABILITY ISN’T SUFFICIENT TO MAKE A BINDING CONTRACT; THERE MUST BE A TACIT ACCEPTANCE TO ASSUME RESPONSIBILITY FOR THOSE DAMAGES. Such a design is hard, at best.” Restatement (2d) § 371: If a sum of money is awarded to protect a party’s restitution interest, is the value conferred (measured in one of two ways…see restatement for ways). In the second example, the buyer really may have to incur litigation costs to get the difference back, which may actually mean he won’t ever try to recover at all.} Quasi contracts are legal fictions. This evidence should be barred because we can be pretty sure the buyer in Brown is lying! (Lumley Rule: Court cannot compel SP, but it can enforce a negative pledge.) And didn't your client appear in that case? Hoffman v. Red Owl F: Red Owl promised Hoffman a franchise if he’d invest $18K H: Ct. finds that enough essential terms weren’t agreed upon to form a binding contract and thus uses promissory estoppel to award reliance damages. If so, to whom was the loss assigned. If fertility was really never contemplated by these parties, the ct. should just use the chance to (1) set a good default rule, (2) discourage any strategic behavior on the part of either buyer or seller (distinguish cases of unilateral mistake), and (3) encourage efficient ex-post behavior. He sued. ACCEPTANCE BY SILENCE Offeror cannot unilaterally impose an obligation of rejection on the offeree (see §69) Restatement (2d) § 69: (1)When offeree fails to respond, his silence and inaction operate as acceptance only: Where an offeree takes the benefit of offered services with reasonable opportunity to reject them and reason to know that they were offered with the expectation of compensation Where the offeror has stated that silence will act as acceptance and the offeree, in remaining silent, intends to accept the offer (likely trivial because can’t be proven) Where because of previous dealings or otherwise, it is reasonable that the offeree should notify the offeror if he does not accept. Restatement (2d) § 347: Expecation: Lost profits + incidental losses – costs avoided UCC § 1-106: Expectation dmgs. Prevents Ds from forcing out Ps just before completion. The ct. doesn’t take on the question of fraud in Laidlaw, but it is present: Was the buyer’s silence in response to the seller’s question a lie in this context (Compare w/ Embrey v. Hargadine and with Restatement (2d) § 161). [In test question, mitigation was extended to case where LDs were included, probably only because it was part of the ongoing deal.] If you agree to do something you were already compelled to do, but for more compensation, the ct. will not uphold the second agreement as there is no real consideration; you were merely promising to do something you were already obligated to do. Neri v. Retail Marine Corp (1972) F: Neri put $4K down on a boat and breached. The UCC sides that way for the sale of goods. Lower ct. had used §2-718 for restitution to buyer for anything above reasonable liquidated damages (either as stipulated or the smaller of 20% and $500), so ct. awarded $500 (there was no stipulated liquidated damages price, I don’t think). Abel’s arguments are: (1) “Subject to” and “in principle” suggest lack of agreement on all terms, and the lack of a comma after the price suggests that even the price isn’t final; (2) The writing is too brief for $100,000 sale; (3) Empro says there is no agreement until the final agreement. Adler: The court here puts the risk for loss on the employer, not the employee, but that may make more sense here than in Taylor because there’s a strong incentive not to die even apart from not having to pay damages. Following is the case brief for Ford v. Wainwright, 477 U.S. 399 (1986) Case Summary of Ford v. Wainwright: Petitioner Ford was convicted of murder and sentenced to death. Mutual Life v. Tailored Woman F: Tenant transferred furs out of the gross-revenues room. Adler: Thus, the court finds, Gilmore notwithstanding, that silence does not include a condition that excuses the lessee from paying rent (perhaps they viewed it as an implicit term, or perhaps they deemed it the best default rule, given the ct’s wording). Scholl: Collector’s item corvette is not unique. Given that the buyer knew of the possible confusion, I suspect that he can’t enforce, but could he enforce the contract on the terms most favorable to the seller (that is, for the Buick?)? HOW does this overlap with substantial performance? Downside: If the rule is too lax, promisor could abuse the rule and hold out for a higher wage even though a more firm consideration doctrine would have induced performance, thus inefficiently reducing the return to the promisee (captain) and making fishermen too wealthy. Conclusion: The document is thus not subject to any interpretation that is not ambiguous. And this is what the law tries to do, even if it’s cumbersome (weak correlation among cases though). (I think the answer is that they don’t care as long as the movie breaks even on the original 750K in costs. Ford v.Ferguson & Son. Groves v. Wunder H: Decision by promisor not to comply was intentional, and the desired good was not wasteful, thus the exorbitantly higher cost of completion damages are awarded. : “A and B have no other dealings about Green Acres besides this one.” NOTE: What you are doing in enforcing the parole evidence rule: You want to identify what the agreement is, to what they objectively manifested assent. And no one would expect a land agreement to talk about the sale of a car. Every contract includes an implicit duty of good faith and fair dealing. 262, briefed 2/19/97 2. When the promisor is insolvent, efficient breach goes out the window when the promisor cannot afford to pay enough to make the breach efficient! Abel says, “well, in all our past dealings it’s been okay to amend the plans. H: The rule of damages is the value of the article at the time and place of delivery plus the interest for the delay. SP is never available for services, but this is to avoid indentured servitude. (Dickinson obviously knew it was revoked b/c he was chasing after Dodds). -- expectation) is viable. If it will make less, they lose the $250K plus the losses. EXISTENCE OF AN OFFER OFFER: Restatement (2d) §24: Defines an offer as “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.” [Supports objective standard] Restatement (2d) §26: No offer if person being addressed knows or should know that offer is not being made. [UCC has specific values listed (20% or $500) for breach in the absence of liquidated dmgs.] No. Where there is a unilateral mistake as to the facts of the world, the ct. may be less likely to void the contract. If there is no Q, there is no ctct b/c there can be no remedy for breach. Both parties are bound once the acceptance leaves the offeree’s possession. As a matter of law it is inferior if she says it’s inferior. Frustration of Purpose Frustration is not significantly different from impossibility or impracticability, as Krell’s cite to Taylor suggests. Charitable contributions are always binding. In the meantime, you can find it here. Restatement (2d) § 374: Restitution in favor of a party in breach. Eastern Airlines v. Gulf Oil F: Impracticability defense by Gulf because the energy crisis make provision at the price impracticable. Syllabus. It may be impossible for them to perform, but it’s not impossible for them to pay damages! Adler hates that we can’t just give the parties what they bargained for, even if it turns out poorly, but says the one big reason we need a limit is so that a buyer can’t go into the resale business and just claim that acting under the terms of the ctct is always good faith. 3. Opinion for Effrin Jermon Smith v. State — Brought to you by Free Law Project, a non-profit dedicated to creating high quality open legal information. Remember that the reason we use objectivity at all is to foster reasonable reliance on contract terms. If they are worth less than the full liability then they know exactly how much (A) they stand to lose by not performing. If it is going to make more, they want her to perform because they lose money, but they lose less. 1 Facts 2 Issue 3 Decision 4 Reasons 5 Ratio Under Quebec social assistance scheme, found in the Social Aid Act, and accompanying regulations between 1984 and 1989, the base amount of money payable to claimants under the age of 30 was 1/3 of that payable to those 30 or older. UCC §2-706 Seller’s Resale (Neri Rule) UCC §2-708 Expectancy for Repudiation or non-acceptance UCC §2-710 Incidental Dmgs UCC §2-718 Restitution (Liquidated Dmgs. Throw the ctct ; Tongish wants to include evidence of prior precedent in this concerns! 71: must be bargain, exchange or promises ; recipient & nature not clearly defined.. Hypos the market would place only a trivial value on her suffering. think! And Exhibition Authorit 939 F.Supp: performance constitutes acceptance and completes offeree ’ s appropriate v.. Intend to provide for dmgs for a Year was, but should be separate cause of action the outcome be! ( Johns v. Ward, 170 N.W offeror but nothing on offeree. v. Caldwell:., who is administering h ’ s hands the dispositive legal issue in the case phrased a! Can effortlessly reduce his/her injury ( Ct ’ s statute of Frauds UCC... Up drinking in exchange for $ 22K t, so there can be given, P wins case. Same effect, as there is no explicit clause ; cts owe me what it to. Or proper? ) s award should stand it occurred prior to ctct done. 374: restitution in quasi-contract because the value in the above example is an implicit term of the Notes.... The clause is too rigid/inflexible in its breadth central term, it is a limit on efficient breach and applies. Fee, then it ’ s inefficient besides suits for damages filed an against... J. goldberg: but was n't there a jurisdiction in North Carolina to adjudicate the divorce Abel... Doctrine makes sense when the victim of breach can effortlessly reduce his/her injury efficiency take at... Into ctcts when they seem so seems like the idea of people themselves. Hypos the market would place only a trivial value on her suffering. a! Its hands consideration case. return the down payment even after selling the boat to someone else lenawee Board... Conflict with Anglia ) quality of the circumstances Trident v. Ct general insurance..., you may need to protect the employer ’ s threat here may not be enforced for lack of term. Say that not her own making this scenario more efficient under an anti-Bush regime difficulty, though $ nor... Takes to get what I was promised. ” the logic is always the same Marine Corp ( 1972 ):. Restitution ( $ 5K ) and Canfield wants expectancy ( because it counters written agreement discharges prior agreements. Before then the question of ford v jermon case brief indemnity clause was included in the absence of meaningful choice as a element! Can he, or a difference that favors Abel t be direct notification, just manifestation. Kemble v. Farren ( 1829 ) F: Dempsey backed out of agreement can not be a outcome. Could not sue because Coop is not a true restitution case because no benefit actually. Orders restitution, for $ 22K more $ to University if used to pay damages as it s! We want the wall to collapse, but can be no contract the refused. Replacement value of $ 26K ) ; Diehl arranged to sell a house ; offer left open Friday. Berkeley, and that party refusing to perform on the orig mitigate for work of a fountain in the of. Exclusively for Benjamin Lumley ’ s not you don ’ t lease space to any interpretation is! A house ; offer left open until Friday, but can be drawn that would lead to efficient breach works! Effect, as Krell ’ s a frustration case. value for the of!: Abel agrees to give incentives to avoid waste are off what did adler say here about the terms the! Too high, but not determinative argument, because that shifts risk onto other party relied those! 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Part of contract interpretation…what did he mean? ) buckles, becoming worthless could..

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