IssueChecklist

3. ContractisvoidableORbasisforrescission

because: 1. Nocontractduetoinvalidofferoracceptance: a. Infancy(Kieferv.FredHoweMotors) a. Noassentorwillingnesstoenterbargain(Owenv.Tunison) b. Mentalinfirmity(Ortelerev.Teacher's i. UnlessperceivedbyPandareasonableperson(Lucyv. Board) Zehmer) c. Illegaloragainstpublicpolicy b. Advertisementwithanyspecifics(Lefkowitzv.GreatMinn. (Henningsenv.BloomfieldMotors) Surplus) d. Duress c. Offerlapsedafterspecifiedorreasonabletime e. Modificationwithoutnewconsideration d. Offerordied,evenifoffereedoesn'tknow (AlaskaPackers'Ass'nv.Domenico) e. Offerrevoked,regardlessofhowoffereefindsout i. Unlessfairandreasonableinlight (Dickinsonv.Dobbs) ofchangedcircumstances(Watkins i. Unlessoptioncontract &Sonsv.Carrig) f. Offerrejectedbynonconforminganswer,servingasa ii. Unlesspartiescancelandmake counteroffer(Minn.v.ColumbusRollingMill) newcontract(Schwartzreichv. g. Acceptanceinvalid,i.e.performancegiveninsteadofthe BaumanBasch) noticeofpromiseforperformance(Whitev.Corlies) f. Fraudulentormaterial i. Unlessnoticeofacceptancecanbeimpliedbystarting misrepresentation&activeconcealment performance(AlliedSteelv.FordMotor) g. NonDisclosureinspecialcircumstances h. Mannerofacceptanceinvalid(AlliedSteelv.FordMotor) h. Mutualmistakeonmaterialassumption i. AcceptanceinvalidbecausePdidnotcompletelyperform (Sherwoodv.Walker) whenofferinvitedacceptancebycompleteperformance i. Unilateralmistakeifunconscionable (Carlillv.CarbolicSmokeBall) 4. Formcontractunenforceablebecause: j. Indefiniteness(Varneyv.Ditmars) a. Inadequatenotice(Klarv.H&MParcel) i. UnlessPonlyseekingenforcementbypromissory b. Strictconstruction(Galliganv.Arovitch) estoppel,canbelessindefinite(Hoffmanv.RedOwl c. Againstpublicpolicy(Henningsenv. Stores) BloomfieldMotors) 2. Contractcannotbeenforcedbecause: d. Unconscionabilityinacontractof a. Defectiveorabsenceofconsideration adhesion(Henningsenv.Bloomfield i. Promisenotmadeingoodfaith(Fiegev.Boehm) Motors) ii. Illusorypromise(Strongv.Sheffield) 5. Plaintiffmightseektheremedyof: iii. Pgavebenefitofpromiseorperformanceinthepast a. Specificperformance,unless: (Feinbergv.Pfeiffer) i. Damagesadequate iv. PromiseorperformancegivenafterD'spromise ii. Bargainwasunfair (Feinbergv.Pfeiffer) b. Expectationdamages,unless: v. Conditionalpromiseforagift(Kirkseyv.Kirksey) i. Damagewasavoidable vi. Shambargain (RockinghamCountyv.Luten b. Recoverynotallowedbypromissoryestoppel: Bridge) i. Notinduced,Pwouldhavetakentheactionanyways ii. Noefforttosubstituteormitigate (Feinbergv.Pfeiffer) (Parkerv.20thCenturyFox) ii. Notnecessarytopreventinjustice(Feinbergv.Pfeiffer) iii. Costtoremedyanincompleteor c. Recoverynotallowedunderrestitutionforunjust defectiveperformanceisgrossly enrichmentatP'sexpense(Cotnamv.Wisdom) disproportionatetolossinmarket i. Volunteers valueforP(Jacob&Youngsv.Kent) ii. Officiousintermeddlers iv. Unforeseeablelossesattimeof iii. Otherremediesavailable(Callanov.OakwoodPark) contracting(Hadleyv.Baxendale) d. Recoverynotallowedundermoralobligation v. Uncertainty(Ferav.VillagePlaza) i. Thisisnotanoldunenforceablecontractthatwas c. Reliancedamages reaffirmed d. Restitutiondamages e. Becauseitwasnotinwriting,perthestatuteoffrauds e. Nominaldamages MYLEGS f. Liquidateddamages i. Defenses thecontractcanbeenforcedbecause: i. Unlessapenaltythatis 1) Equitablyestoppedbecausedefendantasserted unreasonablecomparedtoactual itwassigned damages(Gustafsonv.State) 2) Partperformance ii. Unconscionablysmall(Henningsen 3) Landconveyedalready v.Bloomfield)

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NewFinalOutline
ConsiderationasaBasisforEnforcement Rule: Considerationforthedefendant'spromiseisapromiseorperformancethatwasbargainedforin exchangeforthedefendant'spromise. Examples: Withapromisetosettleaninvalidclaim,theplaintiffmusthaveagoodfaith andreasonablebeliefin thepossiblevalidityoftheclaim,Fiegev.Boehm (promiseofchildsupportforbastardOK) Apromiseisillusory ifitdoesnotimposeanyexpressorimpliedcommitment,Strongv.Sheffield ("I cancollectthedebtwheneverIwant" performanceofpromiseentirelyatoptionofoneparty) "Youcanbuyuptoamillionwidgets"(illusorybecausecanbe0toamillionwidgets) "I'llgiveyou3%ofallsales"(illusorybecausesalescanbe0) Pastpromises orperformancesbytheplaintiffcannotbegiveninexchangeforthedefendant's promise,Feinbergv.Pfeiffer ("Ipromiseyou$200fortheworkyoudidlastyear") Aconditionalpromisetomakeagift isnotanexchangedforbargain,Kirkseyv.Kirksey ("ifyoucome downtothefarmI'llgiveyouahouse") Asham bargainedforexchangeisnotvalid,("I'llgiveyouadollarforthatPorsche) Abenefit orlegaldetriment arenotrequired,butaresignsofconsideration(adetrimentdoesneedto beinjurious,cansimplybesomethingthepromiseeisotherwisenotboundtodo) IncorrectExamples: Thepromiseorperformanceisnotconsiderationbecausethereitdidnotbenefitdefendantorimpose detrimenttoplaintiff Itcannotbeconsiderationbecausethevalueofthepromisesaresounequal RelianceasaBasisforEnforcement Rule: Acourtcanenforceapromiseonthebasisofreliance,bymeansofpromissoryestoppel ifaplaintiff canshowthedefendantmadeapromise/thedefendantcouldreasonablyexpecttheplaintifftotakean action/theplaintifftookanaction/andtheactionwasinducedbythepromise(takeninrelianceon)/and enforcementofthepromiseisnecessarytopreventinjustice. Examples: Thepromisemustinduceanactiontheplaintiffwouldnothavetaken Enforcementofthepromisemustbenecessarytopreventinjustice,Cohenv.CowlesMediaCo. (fired fromjobisunjustb/creporterreliedonnewspaperspromisetokeephisnamesecret) "MoralObligation"asaBasisforEnforcement Rule: Acourtwillnotenforcetheapromisemerelybecausesomepeoplemightthinkthatthe defendantactedimmorallyinbreakingthepromise. Thecourtwillmakeanexceptionwhenadefendantreaffirmsanoldobligationthatwas: 1. Dischargedbyastatuteoflimitations 2. Dischargedbybankruptcy proceedings 3. Voidablebecauseofinfancy 4. Veryrarelyotherwise,Webbv.McGowin (enforcedpaymentstoworkerwhosavedboss'slife) RestitutionasaSubstituteforEnforcement Rule: Aplaintiffmayseekrestitutionwhentheplaintiffcannotprovethatthedefendantmadeanenforceable promisebutthedefendanthasbeenunjustlyenrichedattheplaintiff'sexpense. CounterExamples: 1. Therehasbeennoenrichmentwhentheplaintiffisavolunteer withnoexpectationofcompensation (doctorsareexceptions) 2. Therehasbeennoenrichmentwhentheplaintiffactedasanofficiousintermeddler ("Imowedyou lawnwhenyouwhereonvacation,Ineed$20") 3. Therehasbeennoenrichmentwhentheplaintiffhasotherremedies Callanov.OakwoodParkHomes ("whyareyousuingmedude?")

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OfferandAcceptance Rules: Anoffer isacommunicationofintent toenterintoabargain,directedaspecificparty, thatinvites acceptance Rule: Acourtwillnotenforcethedefendant'spromiseiftheplaintiffactuallykneworareasonableperson wouldhavehadreasontoknowthatthedefendantwasnotassenting tobebound.Lucyv.Zehmer (justb/c you'redrunkdoesn'tmeanIdidn'tbelieveyou) Examples: Advertisements generallyarenotoffersunlesstheystatealimitedquantityorinvitespecificaction, Lefkowitzv.GreatMinn.Surplus ("1stoneinthedoorgetsthisfor$1") Aquote ofminimumsellingpriceisnotanoffer,Owenv.Tunison Anofferisterminated andcannotbeacceptedafter: 1. Expirationduetolapse oftime(reasonabletimeifnotimeisspecified) 2. Theofferhasbeenrevoked bytheofferor(revocationofanofferiseffectivewhen communicateddirectlyorindirectlytotheofferee) 3. Theofferhasbeenrejected bytheofferee(acounteroffer ispresumedtobearejectionofan offer) 4. Theofferorhasdied (eveniftheoffereedoesnothavenoticeoftheofferor'sdeath,unlessthe offerorhasenteredintoanoptioncontract tokeeptheofferopen) Anofferorcannotrevokeanofferbeforeacceptanceifhehasenteredintoanoptioncontracttokeep theofferopen TheMirrorImageRule treatsanacceptancethatcontainsdifferentoradditionaltermsasarejection andcounteroffer TheMailboxRule statesacceptanceoccursuponproperdispatchoftheacceptance,unlesstheoffer specifiesotherwise Anoffermayinvite acceptancebycompleteperformanceorbyapromisetorenderacomplete performance Anacceptance toanofferinvitingcompleteperformanceisnotvaliduntilperformancecomplete Anacceptancecanbemade bypromisingtorendercompleteperformanceeitherexpresslywithwords orimplicitlybystartingperformance Notice ofacceptanceisrequiredwhenanofferinvitesacceptancebyapromise,unlessitiswaived Notice ofacceptanceisnotrequiredwhenanofferinvitesacceptancebyperformance,unless requested Silence isnotavalidacceptanceexceptwhenacceptancebysilenceisaproperorcustomarymethod Apromiseistoo indefinite toenforceifthecourtcannotdeterminetheexistenceofabreachorthe appropriateremedyforabreach Missingmaterialfacts(i.e.parties,subjectmatter,timeforperformance,price,etc) Vagueness("ifmyshowisasuccess,I'lltakecareofyou") Ambiguity(bookmaking=bettingonsportsormakingbooks?) Omittedorunresolvedterms Partiesmaystillbeliabledespitefailednegotiations Breachofimpliedpromisenottorevokeoffer,Drennanv.StarPavingCo. (pullingbidafterbiddate, applypromissoryestoppel) Breachofassurances,Hoffmanv.RedOwlStores ("Isoldmybusinessandhousedude!!",apply promissoryestoppel) Breachofcontracttonegotiateinparticularmanner,ChannelHomeCentersv.Grossman (letterof intentexchangedforpromisetotakesiteoffmarket,validconsideration)

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StatuteofFrauds Rule: Apromisethatfallsunderthestatutesoffrauds isunenforceableunlessthepromiseisinwritingand signed.Thedefendant'spromisemuststateessentialtermsandissignedbythedefendant. MYLEGS: marriage,one year, land, executor, goods, surety Marriage: Aagreestopay$10,000toBifBmarriesC Mutual promisestomarriageisanexception Year: apromisethatcannotpossiblybeperformedinayear(ifaoralcontractdoesnoexplicitlysayitwill takelongerthanayear,itistreatedasindefinite) Example: AknowsBisterminallyill(9months),signscontractforBtoworkfor5years mustbein writingb/cnowayitcouldbedoneinlessthanayear. CounterExample: AknowsBisterminallyill(9months),signscontractforBtoworkfor"therestofhis life" doesnothavetobeinwritingb/cthiscanbedoneinaday Land: apromisetobuyorsellland,property,leases(+year),butnotcontractstobuildonland Apromisetobuylandisenforceablewithoutawritingafterthesellerhasconveyedtheproperty Underthe"partperformance"doctrine,thesellermaynotassertthestatuteoffraudsasadefenseif thebuyerhassubstantiallyreliedonthepromisetosell(madeimprovements) Executor: ofa will topayadebtoftheestatewiththeirownmoney Example:"inconsiderationforyoudroppingyourclaimby$2500,I'llguaranteetheclaimagainstthe estate(withmyownmoney)" ButNOTunderSoFifthemainpurposeistobenefittheexecutor(i.e.hethengetstheestate) Goods: $500ormore Movablethings,notideasorservices,alsoappliestocontractmodifications Surety: (actsasguarantor)foranotherparty'sobligation,Langmanv.Alum.Ass'nUVA (SoFdoesnotapply whenapartygetssomebenefitinexchangefortakingdebtofanother,thisisnotsurety,itisanormal contract)

PolicingtheBargain Infancy: Apromisemadebyaminority(inmoststates,18years)isvoidableuntilareasonabletimeafterthe personreachestheageofmajorityorifminoraffirmsthecontractaftermajority. MentalInfirmity(TraditionalTest): Apromisebyapersonwho,byreasonofmentalinfirmity,cannot understandthenatureandconsequenceofthetransactionisvoidable. MentalInfirmity(ModernTest): Inafewstates,apromisebyaperson,whobyreasonofmentalinfirmity, cannotactinareasonablemannerinrespecttothetransactionisvoidable,providedthatthepromiseehas noticeoftheperson'scondition. PublicPolicy: Apromiseisvoidifitsenforcementwouldviolateastrongpublicpolicy,(acourtwillnot enforceapromisetocommitacrimeortort) Duress: Apromiseinducedbyanimproperthreatthatleavesthepromiseewithnoreasonablealternativeis voidable,(threatstocommitcrimesortorts,threatstobreakexistingcontractsinbadfaith) ModificationwithoutConsideration: ThePreExistingDutyRulesaysthatdutiesfromanexistingcontract cannotserveasconsiderationfornewpromises,AlaskaPackers'Ass'nv.Domenico (fishermanwerealready obligatedtoperform,thusnonewconsideration) ThePreExistingDutyRuledoesnotapplyifthepartiescanceltheoldcontractandthenformanew contract,Schwartzreichv.BaumanBasch,Inc. (bothpartiesrippedupoldcontract&signedanewone) ModernModificationRule: Promisestomodifycontractswithoutconsiderationareenforceableifthe modificationisfairandreasonableinlightofchangedcircumstances,Watkins&Sonv.Carrig (Pfoundhard rockthatbothPandDdidnotanticipate,DagreedtopayPmoreforexcavatingit) FraudulentorMaterialMisrepresentation: Apromiseinducedbyafraudulentormaterialmisrepresentation, uponwhichthepromiseejustifiablyrelied,isvoidable,(opinionsdonotcount,exceptopinionsbasedon expertise) ActiveConcealment: Promisesinducedbyanactiveconcealmentoffactisvoidabletothesameextenta promiseinducedbyamisrepresentationwouldbe,(hidingdroppings,usingmothballs,floodlights) HalfTruth: Apromisemaybevoidableifthepromiseemisleadsthepromisorbydisclosingsomeofthefacts butnotallofthefacts A BareNonDisclosureofFacts isnotvoidable,except: Requiredbystatute

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Confidentialrelationship Necessarytocorrectbasicassumption MutualMistake: Apromiseinducedbyamutualmistakeastoabasicassumptionthathasamaterialeffectis voidable,unlessthepromisorboretheriskofmistake(poorjudgment,futurepredictionsarenotmistakes) Sherwoodv.Walker (cowwassterile;themistakewasnotaboutqualityorworthbutwenttothevery natureofthething abreedingcowisfactuallydifferent thanabeefcow) Example:AsellsagoosetoBthatboththinkisregulargoose,butturnsoutitlaysgoldeggs=mistake CounterExample:Anoticesgooselaysgoldcoloredeggs,sellsgoosetoB,nomistakebecauseAbore therisktoinvestigatewhyeggsweregoldcolored UnilateralMistake: Insomestates,apromiseinducedbyaunilateralmistakeofthepromisorisvoidableif enforcementwouldmakethecontractunconscionable Unconscionability: Acourtmayrefusetoenforceatermofcontract,orthecompletecontract,ifthe courtfindsthatthetermorthecontractwasunconscionableatthetimethecontractwasmade DenyingSpecificPerformance: Courtswilldenyspecificperformancewhendamageswouldbeanadequate remedy(landisneveradequate),oriftheexchangewasinadequateorunfair

RestitutionUponRescission Rule: Toobtainanequitableremedylikerescission,aplaintiffmustdothatwhichisequitable.Aplaintiff seekingtorescindacontractoftenfirstmustmakerestitutionofanybenefitconferredbytheDefendant Example: Aninfantgenerallymustmakerestitutionwhenrescindingacontractbasedoninfancy.Butacourt willnotrequireaninfanttomakerestitutionifthesubjectmatterofthecontractisnolongeravailable(one exceptionisthatanemancipatedinfantmustmakerestitutionfornecessaries conferredbythedefendant evenifthesubjectmatternolongerisavailable) FormContracts AdequateNotice: Apersondoesnotassenttotermsprintedonaformifthepersondidnothavereasonto knowthattheformcontainedcontractualterms Klarv.H.&M.ParcelRoom (thefontwastoosmallonthebackofthetagtogivepropernotice) StrictConstruction: Courtswillselectmeaningsthatdisfavorthepersonwhodraftingtheform,(youdidn't printmyad,youlostit) PublicPolicyandUnconscionability: Courtswillinvalidatetermsongroundsofpublicpolicyor unconscionabilityinadhesioncontracts Henningsenv.BloomfieldMotors (Defendantsusedunfairbargainingpowertoforceunfairdisclaimers ontoplaintiff,"disclaimerofanywarrantyexceptoneforreplacementofdefectivepartsincarsviolates publicpolicy",thusthiswasacontractofadhesionandvoid) AContractofAdhesion deprivestheweakerpartyofanymeaningfulchoiceevenwhencontractisproperly bargainedfor,(WalMart) Damages SpecificPerformance: Specificperformancemaybeorderedbyacourttomakethedefendantcarryoutthe promisethedefendantmade ExpectationDamages: Theplaintiffhasarighttoexpectationdamages,whichistheamountofmoneyhe shouldhavereceivedhadthedefendantcarriedoutthecontract Expectation=(D'spromise Ddelivered)+othercoststoP (costPexpected P'sactualcost) P's lossesavoided 1. Damages=P'slosscausedbynonperformance(whatPwaspromisedbyD whatDdelivered) 2. Plusanyotherconsequential orincidentallosses(factorybeingshutdown) 3. MinusanycostoflossPavoided bynothavingtoperform RelianceDamages: Aplaintiffmayrecoverreliancedamages(amountofmoneyrequiredtorestorethe plaintifftothepositionheasinhadthecontractneverbeenmade) Restitution: returnanybenefitgiventoD,theenrichmentatPsexpense(reasonableormarketvalue) Example: AstartsbuildinghouseforB,spends$12KtoenrichBby$15K,Acanrecover$15K CounterExample: AfinisheshouseforBfor$50K,marketvalueis$60K,Acanonlyrecover$50Kunder expectationbecauseKisalreadyperformed NominalDamages: Iftheplaintiffprovesthedefendantbreachedthecontract,butcannotprovethe damages,acourtmayawardtheplaintiffnominaldamages,typically$1or6cents

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 LiquidatedDamages: Adefendantmaybeliableforliquidateddamagesiftheamountofdamagess stipulatedonthecontractratherthanlefttocalculationbythecourt Example: Latefees CounterExample: Acourtwillnotenforceliquidateddamagesthatisunreasonablylarge(imposedonly asapenalty)incomparisontoactualoranticipatedloss Plaintiffsmayargueliquidateddamagesareunconscionablysmall LimitationsonDamages Avoidability: Aplaintiffmaynotrecoverdamagesthatcouldbeavoidedwithoutunduerisk,burden,or humiliation;theplaintiffmayhavetomakesubstitute arrangement,suchasundertakingcomparable employment IncompleteorDefectivePerformance: Aplaintiffcanrecoverthelossinmarketvalue in casesofincomplete ordefectiveperformance.Asanalternative,theplaintiffmayrecoverthecosttocompleteorremedythe defectunlessthatcostisgrosslydisproportionate totheprobablelossinvaluetotheplaintiff. Unforeseeability: Theplaintiffcannotrecoverfordamagesthatwereunforeseeable,orthathewasputon noticeof,atthetimethecontract XtakesacementmixertorepairfromY,YinformsXofimportancethedayaftercontractformed=/= foreseeableat timeofcontracting Uncertainty: Aplaintiffcannotrecoverfordamageshecannotprovewithareasonablecertainty

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