LAW 505-002 – Contracts I

Case Rules


Academy Chicago Publishers v. Cheever

LexisNexis IconWestLaw LogoPage 262, Paragraph 3

In order for a valid contract to be formed, an "offer must be so definite as to its material terms or require such definite terms in the acceptance that the promises and performances to be rendered by each party are reasonably certain."

American Software, Inc. v. Ali

Angel v. Murray

Modifications are binding if fair and equitable in view of circumstances unanticipated by the parties when the contract was made.

Appeal of Clark

If someone wants to overpay for services, the court cannot impose their own price.

Ardente v. Horan

The acceptance may not impose additional conditions on the offer, but may be valid despite conditional language if the acceptance is clearly independent of the condition.

B. Lewis Productions v. Angelou

Page 271, Paragraph 2

A term is essential if "it seriously affects the rights and obligations of the parties and there is a significant evidentiary dispute as to its content."

Baehr v. Penn-O-Tex Oil Corp.

Page 38

...circumstantial evidence may support the inference of such an agreement to forbear. However, such an inference must rest upon something more than the mere failure to institute immediate suit.

Batsakis v. Demotsis

Inadequacy of consideration will not void a contract.

Birdsall v. Saucier

  • An accord is an agreement, which must have consideration to be binding.

  • While a lesser sum can not be given for accord, a third-party's promise to may be.

Bloomgarden v. Coyer

A quasi-contract requires that the services were:

  1. carried out under such circumstances as to give the recipient reason to understand that they were performed for him and not for some other person and that they were not gratuitous
  2. beneficial to the recipient

Conrad v. Fields

Page 158, Paragraph 4

The elements of a promissory estoppel claim are

  1. A clear and definite promise,
  2. The promisor intended to induce reliance by the promisee, and
  3. The promise must be enforced to prevent injustice.

Corinthian Pharmaceutical Systems, Inc. v. Lederle Laboratories

  • An order or other offer to buy goods for prompt or current shipment shall be construed as inviting acceptance either by a prompt promise to ship or by the prompt or current shipment of conforming or non-conforming goods, but such a shipment of non-conforming goods does not constitute an acceptance if the seller seasonably notifies the buyer that the shipment is offered only as an accommodation to the buyer.

  • An accommodation is an arrangement or engagement made as a favor to another.

Dougherty v. Salt

A promise to give something without something in return is not a contract.

Douglas v. Talk America

  • Five factors govern whether or not a writ can be granted. The most important is whether they were clearly erroneous as a matter of law.

  • A revised contract is merely an offer and does not bind the parties until it is accepted.

Drake v. Bell

§ 86 – A promise made in recognition of a benefit previously received by the promisor from the promisee is binding to the extent necessary to prevent injustice.

Dyer v. National By-Products, Inc.

Forbearance in good faith is sufficient even when the claim forborne from is invalid.

Gray v. Toledo, S. L. & W. R. Co.

Pages 8–9

An offer must be sufficiently definite and certain to show an intention to create legal relations and to assume a legal liability for the sum said to be offered, on its acceptance by the party to whom it is made.

Halbman v. Lemke

A minor is required to return any remaining property he has when he disaffirms a contract for a purchase.

Hamer v. Sidway (1)

Consideration requires a benefit or monetary loss.

Hamer v. Sidway (2)

A monetary gain or loss is not needed for consideration, only an impediment of a legal right.

Hawkins v. McGee

Contractual damages are the difference between the result and the warranty.

Holler v. Holler

  • The consideration for a premarital agreement is the marriage itself. It is valid and will be upheld only when it is entered into freely, fairly, and in good faith by parties legally competent to contract.

  • Page 489, Bottom-ish

    Duress is a condition of mind produced by improper external pressure or influence that practically destroys the free agency of a party and causes him to do an act or form a contract not of his own volition.

Houston Dairy v. John Hancock Mutual Life Ins. Co.

  • Such an untimely attempt to accept normally constitutes a counter offer.

  • Acceptance must be communicated to the propose of the offer.

  • [R2C § 69]

    Note:

    Only Restatement that deals with intent

Kannavos v. Annino

While there is "no duty to speak for the information of the other, . . . if he does speak, . . . he is bound to speak honestly and to divulge all the material facts bearing upon the point that lie within his knowledge."

Lefkowitz v. Great Minneapolis Surplus Store

Advertisements constitute an offer when the offer is clear, definite, and explicit, and explicit, and leaves nothing open for negotiation.

Lenawee County Board of Health v. Messerly

  • A contractual mistake cannot be a prediction as to a future occurrence or non-occurrence.

  • Page 445

    [R]escission is indicated when the mistaken belief relates to a basic assumption of the parties upon which the contract is made, and which materially affects the agreed performances of the parties.

  • R2C § 154(a)

  • When two equally innocent parties are mistaken, the purchasers should be allocated the risk.

Leonard v. PepsiCo

  • Advertisements do not constitute an offer unless the advertisement is "clear, definite, and explicit, and leaves nothing open for negotiation."

  • Whether an offer has been made depends on the object reasonableness of the alleged offeree's belief that the advertisement or solicitation was intended as an offer. An obvious joke would not give rise to a contract.

Lucy v. Zehmer

The mental assent of the parties is not requisite for the formation of a contract.

Maryland National Bank v. United Jewish Appeal Federation of Greater Washington

The Charitable Subscription Exception is not followed in Maryland.

Meincke v. Northwest Bank & Trust Co. (1)

Consideration requires one to require something conditional on your act.

Meincke v. Northwest Bank & Trust Co. (2)

Mitchell v. Moore

  • A presumption of gratuitousness exists in familial and marriage-like relationships.

  • Gratuitous benefits do not constitute unjust enrichment.

Nordyne v. International Controls & Measurements Corp.

  • Page 312, Paragraph 3

    An "offer is made when the offer leads the offeree to reasonably believe that an offer has been made."

  • A price quotation is not an offer unless "detailed enough . . . so it reasonably appear[s] from the price quote that assent to the quote is all that is needed to ripen the offer into a contract."

  • Page 312, Paragraph 3, Bottom

    Factors relevant in determining whether a price quotation is an offer include the extent of prior inquiry, the completeness of the terms of the suggested bargain, and the number of persons to whom the price quotation is communicated.

Nursing Care Services, Inc. v. Dobos

  • Quasi contracts are obligations imposed by law on ground of justice and equity. Their purpose is to prevent unjust enrichment. Unlike express contracts or contracts implied in fact, quasi contracts do not rest upon the assent of the contracting parties.

  • The "officious intermeddler doctrine" holds that where a person performs labor for another without the latter's request or implied consent, however beneficial such labor may be, he cannot recover therefor. An exception is that of emergency aid, where the service is needed to prevent the others' bodily harm.

Pavel Enterprises v. A.S. Johnson Co.

Maryland doesn't help. Just look at Restatement § 87(2). It's basically made for this exact situation.

Pennsy Supply, Inc. v. American Ash Recycling Corp.

  • When a gift's consideration has an overall benefit to the giver, it is implied to be consideration.

  • Disposing of something at a cost is a sort of payment.

Quake Construction v. American Airlines

Page 253, Paragraph 1In determining whether the parties intended to reduce their agreement to writing, the following factors may be considered:

  • Whether the agreement contains many or few details
  • Whether the agreement involves a large or small amount of money
  • Whether the agreement requires a formal writing for the full expression of the covenants
  • Whether the negotiations indicated that a formal written document was contemplated at the completion of the negotiations
Others that might be considered are:
  • Where in the negotiating process that process is abandoned
  • The reasons it is abandoned
  • The extent of the assurance previously given by the party which now disclaims any contract
  • The other party's reliance upon the anticipated completed transaction

Schnell v. Nell

Disproportionationality of consideration does matter for exchanges of sums of money whose value is exactly fixed.

Sitogum Holdings, Inc. v. Ropes

Specht v. Netscape

An offeree is not bound by his apparent manifestation of assent if he does not know or have reason to know of the terms.

State of Rhode Island Dept. of Transp. v. Providence & Worcester R.R.

When an acceptance absolves the offeror of a material obligation, the "rules of contract construction . . ." preclude construing that absolution as an additional term that invalidates the acceptance.

Note:

Don't apply as general rule.

Totem Marine Tug & Barge, Inc. v. Alyeska Pipeline Service Co.

  • Page 495, Bottom
    1. The party alleging economic duress must show that he has been the victim of a wrongful or unlawful act or threat, and
    2. Such act or threat must be one which deprives the victim of his unfettered will.
  • Page 496, Top
    1. One party involuntarily accepted the terms of another,
    2. Circumstances permitted no other alternative, and
    3. Such circumstances were the result of coercive acts of the other party.

United States v. Meadors

Must have reciprocal inducement.

Webb v. McGowin

Where the promisee cares for, improves, and preserves the property of the promisor, though done without his request, it is sufficient consideration for the promisor's subsequent agreement to pay for the service, because of the material benefit received.

Webster Street Partnership, Ltd. v. Sheridan

A infant is liable for necessaries provided to him.

Explanation:

The term 'necessaries,' as used in the law relating to the liability of infants therefor, is a relative term, somewhat flexible, except when applied to such things as are obviously requisite for the maintenance of existence, and depends on the social position and situation in life of the infant, as well as upon his own fortune and that of his parents.

Williams v. Walker-Thomas Furniture Co.

The test is whether the terms are "so extreme as to appear unconscionable according to the mores and business practices of the time and place," in light of the circumstances existing when the contract was made.

Wood v. Boynton

The value of the property sold, as compared with the price paid, is no ground for a rescission of a sale.