Ks After Midterm

What is the general definition of promise?

What is the general definition of promise?

Assurance that something will or will not be done in the future

What is the R§2 definition of promise?

A manifestation of intention to act or refrain from acting in a specific way which justifies that a commitment has been made

When is something a condition on a gift?

If happening of condition does not benefit the promissor

When is something not a condition on a gift?

If the happening of a condition does benefit the promissor

If something is a condition on a gift, does this mean there is KSN?

No, do a KSN analysis

What is the test we use for KSN?

The bargain theory

Bargain theory elements

1. to constitute KSN, the return promise or performance must be bargained for.

2. It is bargained for if it is sought by the promisor in exchange for his promise and is given by the promisee in exchange for the promise

What are the steps of a KSN set up?

1. Identify disputed promise

2. Identify promissor and promisee of disputed promise

3. Identify return promise or performance

4. Do bargain theory analysis on the return promise or performance

Legal detriment

Giving up a legal right

What is NOT KSN? (traditional K)

Moral obligation, inadequacy of KSN, past services, condition on a gift, promises to gift

Moral obligation

Love, respect, desire for justice, affection, etc.

What do you get if reliance is established? (not 87(2))

A basis for a contractual obligation

Promissory Estoppel

Promise enforcement based on reliance

What contractual obligation do you look for first in a fact pattern?

Traditional K

Promissory estoppel elements (R§90) (Reliance)

Promise

Foreseeable reliance

Detrimental reliance

Avoid injustice (balancing test)

Court can adjust remedy

Sub-elements for detrimental reliance (R§90)

Action or forbearance

Promise induced reliance (but-for)

Reasonable reliance

When do you discuss if the courts can adjust the remedy in a promissory estoppel analysis

Only discuss if all the elements of promissory estoppel are not a slam dunk

2 types of restitution

non-promissory and promissory

Main elements of a Watts claim

One party conferred a benefit from another unofficiously

Appreciation or knowledge of the benefit by the benefitting party

Acceptance or retention of the benefit under circumstances that make it unjust for the party to retain the benefits

Unofficiously rule

Interference in the affairs of another is justified by the circumstances

How do you tell if it is unjust for a party to retain the benefits under a Watts claim?

It is unjust if the benefit is conferred non-gratuitously

How do you test if a benefit is conferred non-gratuitously (Watts Claim)

Intent to charge

If no intent to charge then test if it was conferred as a gift

How do you test if there was an intent to charge (Watts Claim)

Burdensome/expensive

Do they normally charge for the benefit?

Can you normally pay for the benefit?

Nature of relationship of parties

What is the test to see if a benefit was conferred as a gift (Watts claim)

Would a reasonable person under these circumstances believe it was conferred as a gift?

What does it mean if a benefit was conferred as a gift under a watts claim?

Then the benefit was conferred gratuitously and the 3rd element of the watts claim fails

What does it mean if there was intent to charge for a benefit in a watts claim

then the benefit was conferred non-gratuitously and the 3rd element of the watts claim is satisfied

When would you ask if the benefit was conferred as a gift in a watts claim

If intent to charge can not be clearly established

Quantum Meruit

labor and services

Quantum valebat

delivery of goods

Promissory restitution elements (R§86 breakdown)

A benefit previously received by the promisor from the promisee

A subsequent promise made in recognition of a benefit

The promise is binding to the extent necessary to avoid injustice

A promise is not binding if (3 things)

What is the requirement of a benefit in both restitution claims

The benefit must be able to be reduced to an economic value

Factors to consider to determine if binding the promise will avoid injustice (Promissory restitution claim)

Definite and substantial character of the benefit received

Formality in the making of the promise

Part performance?

Factors to consider when determining formality of a contract

Was the promise made immediately after the event or after deliberation?

Is the promise written or oral

Where was the promise made

A promise is not binding if: (R§86 (2))

The promisee conferred the benefit as a gift

or the promisor has not been unjustly enriched

or if the value of the promise is disproportionate to the value of the benefit

A promise is not binding if the promisee conferred the benefit as a gift. What is the test for if the promisee conferred the benefit as a gift (R§86 (2)

Would a reasonable person believe the promisee was conferring the benefit as a gift?

Also look at relationship of parties

R§86 (2) - if the promisor has not been unjustly enriched, what happens?

Then the promise is not binding.

How do you test if someone is unjustly enriched (86(2))

How burdensome was the conferring of the benefit?

R86(2) - If the value of the promise is disproportionate to the value of the benefit received, what happens?

The promise is still enforced, but it is limited to the value of the benefit received

If a benefit was conferred pursuant to another K, what happens? (promissory restitution)

There is no unjust enrichment to the promisor so the promise is not binding. Promissory restitution claim fails.

What do you get if SoF defense is satisfied?

The K is unenforceable

What is the statute of frauds

A doctrine that requries certain Ks to be evidenced by a writing to be enforceable

SoF defense analysis

1. Is the K within SoF?

2. If yes - is the SoF satisfied? (is there a writing that satisfies the memo requirement?)

3. If no - Is there an applicable exception to the SoF?

If a K is not within the SoF, what happens?

There is no SoF issue and the parties move forward as normal

If there is a writing that satisfies the memo requirement for the SoF, what happens?

The SoF defense is defeated.

If there is an exception to the SoF defense, what happens?

The SoF is defeated even if there is not an evidenced writing

Traditional classes of Ks covered by SoF

Marriage provision

Year provision

Land provision

Exeecutor provision

Goods provision

Suretyship provision

When is a K within suretyship provision?

If there is a K where someone is answering for the debt of another. It is not within the SoF unless the promise is made directly to the person who is owed the debt

When is a K within the marriage provision of the SoF?

Any promise for marriage that is not a mutual promise to marry (marriage for money)

When is a K in the executor provision of SoF?

When the executor handling the affairs of a decedent’s estate orally promises to personally pay a debt incurerd by the decedent before death or decedent’s estate after death. The promise must be to pay from the executor’s personal money

When is a K within the land provision of SoF?

Ks involving land , leases, mortgages, ownership, etc. This does NOT apply to leases for less than 1 year.

When is a K within the one-year provision of SoF?

When a promise in a K cannot be fully performed within a year from the time the K is made. If performance within 1 year is possible in any way then it is not within the SoF.

Is a lifetime K within the one-year provision of SoF?

Generally no, the SoF is not triggered by a lifetime K because it is possible to be completed within a year if the person dies. Courts disagree on this approach and some argue that it is within the SoF. Do analysis on both

Memo requirements for SoF writing (not including goods provision)

The writing must reasonably identify the subject matter of the K, must be sufficient to indicate that a K has been made or offered by the person signing, must include the essential terms of the K, and must be signed by or on behalf of the party who does NOT want the K.

When can the writing requirement for SoF be satisfied by more than 1 writing?

If one of the writings is signed by the party who does NOT want the K AND both writings clearly indicate they are related to the same transaction

What constitutes a signature under SoF writing requirement and UCC?

Any symbol, logo, signature, letterhead, from the desk of, which is made with intention to authenticate the writing

If a K is within the goods provision of SoF, what is the memo requirement?

The writing must evidence a K for the sale of goods for $500 or more, it must include the quantity, and must be signed by the party who does NOT want the K.

What is the only exception to the SoF we are discussing?

Part performance exception

Part performance exception for SoF: Goods provision

If a K is within the goods provision but is not evidenced by a signed writing, the K is enforceable If a buyer accepts the goods from the seller but only to the extent of the payments made or quantity of goods accepted

Part performance exception to SoF: one-year provision

If a K is within the one-year provision but is not evidenced by a writing, someone can recover for any part performance done but cannot recover for the remainder of the K.

Part performance exception to SoF: Land provision

An oral agreement for the sale of real estate may be enforceable by a buyer who has taken possession and made valuable improvements to the property

3 policing perspectives for avoiding enforcement of a K

Status, bargaining misbehavior, substance

Classical approach to avoiding enforcement of a K

Judges want to enforce the agreement as it was made between the parties

Bargaining misbehaviors

Duress, undue influence, misrepresentation, unconscionability

Substance (policing perspective for avoiding enforcement)

Unconscionability

Common law duress

any threat of physical harm

Elements of duress

1. Wrongful or improper threat

2. No reasonable alternative but to agree to the K

3. Threat induces the making of the K

4. Threatening party caused the distress

Examples of wrongful or improper threats (duress)

Threat of criminal or tortious conduct

Bad faith threat to breach a K or withold payment

Assertion of a false claim

Examples of reasonable alternatives (duress)

Available legal remedies, finding market substitutes, tolerating minor threats

Tests for if a threat induces the making of a K (duress)

Subjective standard: the threat substantially contributes to the making of the K

Other court approaches: if first 2 elements are met then the threat induced the making of the K

general rule - if the person’s will was overcome

Tests for if the threatening party caused the distress (duress)

Majority - The threatening party directly caused the distress

Minority - The threatening party took advantage of the distress

What does economic or regular duress get you?

An avoidable K

Avoidable K

A K will be binding unless a party takes steps to avoid the K.

Void K

Not deemed a K at all