Contracts Week 4

White v. Village of Homewood

waiver was invalid because the fire department did not provide any consideration

Alaska Packers v. Domenico

A contract modification is unenforceable for lack of consideration if one party agrees to perform only what they were already legally obligated to do under a pre-existing contract, rendering the new promise to pay more for the same duty void

Restatement (2d) 89 Modification of Executory Contract

*MINORITY RULE

A promise modifying a duty under a contract not fully performed on either side is binding

(a) if the modification is fair and equitable in view of circumstances not anticipated by the parties when the contract was made or;

(b) to the extent provided by statute; or

( c ) to the extent that justice requires enforcement in view of material change of position in reliance on the promise.

Angel v. Murray

a contract modification is binding without new consideration if it is voluntarily agreed upon, fair and equitable in light of unanticipated circumstances that arose during performance, and not obtained through coercion. This rule allows for adapting contracts to unexpected challenges. *MINORITY VIEW

3637 Green Road v Specialied Component Sales

the equitable doctrine of part performance can render oral modifications to a written lease enforceable, even when the lease contains a no-oral-modification clause, if the parties' actions demonstrate a clear waiver of that clause. 

The consideration:

landlord: Promise to lower rent

Tenant: promise to continue renting for another month

(Begin Post Midterm Info) Restatement (2d) 90. Promise Reasonably Inducing Action or Forbearance

(1) A promise which the promisor should reasonably expect to induce action or forbearance on the part of the promisee or a third person and which does induce such action or forbearance is binding if injustice can be avoided only by enforcement of the promise. The remedy granted for breach may be limited as justice requires.

4 elements of promissory estoppel

1. there must be a promise

2. the promisor should reasonably expect the promisee to either act or refrain from acting in reliance on the promise

3. the promisee must in fact act or refrain from acting in reliance on the promise, and not for some unrelated reason; and

4. injustice can only be avoided by enforcing the promise, in whole or part.

Gratuitous Promise (AKA donative or gift promise)

a promise without consideration (unenforceable)

Harvey v Dow

the Maine Supreme Judicial Court ruled that a promise enforceable under promissory estoppel does not need to be explicit but can be inferred from a promisor's actions, such as actively supporting and encouraging substantial investment, even if initial verbal assurances were too vague to constitute a formal contract. The court held that parents' actions in assisting their daughter build a $200,000 house on their property indicated an intention to fulfill a general promise to transfer the land, making it inequitable not to uphold that implied commitment. (THERE MAY BE IMPLIED PROMISORY ESTOPPEL CASES)

Hayes v Plantations Steel Company

a promise to pay a pension is unenforceable under the doctrines of consideration or promissory estoppel if the employee had already decided to retire before the promise was made, because the retirement was neither bargained for nor induced by the promise.

Katz v Dare

a promise of a pension, which induces an employee to retire and detrimentally rely on that promise, is enforceable under the doctrine of promissory estoppel to prevent injustice. 

James Baird v Gimbel Bros (1933)

a subcontractor's bid is a revocable offer not accepted by a general contractor's use of it in a primary bid, and promissory estoppel does not apply to make it irrevocable in commercial contexts. BID IS REVOCABLE UNTIL ACCEPTED. MINORITY VIEW.

Drennan v Star Paving (1958)

Under the doctrine of promissory estoppel, a subcontractor's bid becomes irrevocable if a general contractor reasonably and detrimentally relies on it when formulating their own bid, even without formal acceptance or consideration. The ruling enforces the bid to prevent injustice, binding the subcontractor to their offer. BID IS NOT REVOCABLE IF RELIED UPON (CONTRASTED WITH JAMES BAIRD V GIMBEL BROS. BUT TEXTBOOK SAYS BAIRD IS STILL GOOD LAW.) MAJORITY VIEW

Restatement (2d) 87 Option Contract

(2) An offer which the offeree should reasonably expect to induce action or forbearance of a substantial character on the part of the offeree before acceptance and which does induce such action or forbearance is binding as an option contract to the extent necessary to avoid injustice.

Hoffman v Red Owl Stores

a promise reasonably expected to induce, and which does induce, detrimental action by the promisee is binding under promissory estoppel to prevent injustice, even if the promise is too indefinite to form a full contract. MINORITY RULE

Kenneth Prenger v Cyril Baumhoer

the Missouri Court of Appeals determined that a promise supporting a promissory estoppel claim must be as definite as an offer required for a traditional contract claim. MAJORITY RULE

Detrimental reliance

acts as a substitute for consideration on the part of the promisee