Contracts Cases

Lucy v. Zehmer

• Facts: Zehmer’s unexpressed intention was to form the contract as a jest, joke, dare, but his outward expression was serious. Lucy and Zehmer drafted contracts and even had Zehmer’s wife sign. Zehmer tried to retract the deal, claiming it was fake instantly, and tried to claim intoxication. Zehmer drove home and was not intoxicated; neither was the other party, despite drinking. 

Joseph Martin Jr., Delicatessen Inc. v. Schumacher

• Facts: Landlord leased a retail store to the Deli with a Five-Year Term. Graduated Rent Renewal Clause: The Tenant may renew this lease for an additional period of five years at annual rentals to be agreed upon. Landlord wants to charge $900; Tenant wants FMV rate: $545

 Mesaros v. United States

• Facts: The U.S.S. Mint mails an advertisement to coin collectors. Coin collectors don’t receive Statue of Liberty coins. Credit card problems

Lefkowitz v. Great Minn. Surplus Store

• Facts: Defendant’s newspaper advertisement offers fur coats, black lapin stoles for $1.  Plaintiff shows up and is refused under “house rules.” Plaintiff wants the fur coat / black lapin stole for $1! 

Leonard v. PepsiCo

• Facts: Pepsi launches Pepsi Stuff promotion. Collect points, redeem for prizes. Commercial includes points for products including a Harrier jet. Catalog: Includes Order Form.  Does not include the Harrier Jet. Plaintiff tries to redeem points and cash for the Harrier Jet and is not allowed to get one.

Hamer v. Sidway

• Facts: William Story Sr.’s (“William”) promise to pay $5,000 (Worth $180,000 today).​ Nephew William Story, II (“Willie”) writes; Uncle acknowledges debt.​ Uncle passes away; Willie’s assignee makes claim to William’s executor. Promise to Nephew: If you refrain from drinking, tobacco, swearing, cards, or billiards for money until 21, I will pay $5,000.​ “The nephew assented thereto.” Is this a binding contract; bet or wager; a gift; or just advice/ dinner conversation?

Mills v. Wyman

• Facts: Levi Wyman, 25 years old, falls ill and dies. Plaintiff cared for him during his illness

 King v. Trustees of Boston University

• Facts: MLK was an alumnus of BU’s graduate school. Wants to leave papers to either Morehouse College or Boston University.  BU plans to expand its library’s special collections section. Asks to obtain MLK papers.  MLK deposits initial papers with BU on July 16, 1964.

Feinberg v Pfeiffer Corp.

• Facts: Resolution passed during a stockholders’ meeting gave Mrs. Feinberg a $200/month pension upon her retirement.​ Feinberg continued to work for 1.5 years and then retired, at which point she began receiving the monthly pension.

East Providence Credit Union v. Geremia

• Facts: In 1963, H & W (defendants) buy a new vehicle. East Providence Credit Union (plaintiff) issues a loan. The clause requires H & W to maintain car insurance. If they cannot, EPCU may obtain insurance and add the cost to their loan’s principal. In 1965, H gets sick; they can’t afford insurance. W asks EPCU to obtain insurance. EPCU doesn’t. • Wreck occurs—total loss.  EPCU sues H & W, who counterclaim. 

Elvin Associates v. Franklin

• Facts: EA is putting on a Broadway show. They seek out Franklin for the title role—long negotiation. Meanwhile, EA consults with Franklin and prepares for the show. Franklin’s agent says the final proposal is acceptable. EA sets up financing, hires people, plans for rehearsals. Franklin doesn’t show up.

Cosgrove v. Bartolotta

• Facts: Bart wants to open a restaurant. Bart asks Cos, a corporate attorney, for help. Seeks a $100k loan, business/legal advice. Cos to receive interest on the loan and 19% ownership. Cos helps Bart negotiate a lease, form an LLC, etc. Bart finds alternative financing; cuts Cos out of the deal. Restaurant opens and is successful. Cos sues for Breach of K.

Hoffman v. Red Owl Stores, Inc.

• Facts: Hoffman and wife want to open a Red Owl grocery store as a franchisee. Hoffman negotiates with Red Owl’s agent, Lukowitz.  Hoffman invests $18k; promised a Red Owl Store to manage.  Hoffman’s Preparation Efforts: Sells bakery business. Buys and sells a small grocery store for practice. Finds and rents a residence in a new town.  Takes an option on a site for future Red Owl store. Everything is ready to go. Get your money together, and we are set.” Moving the Goalposts: Red Owl demands more money. Hoffman will bring in his father-in-law as a partner.  Red Owl doesn’t want to make the father-in-law a partner. Deal falls apart

Ypsilanti v. General Motors Corp.

• Facts: GM owned and operated two automotive manufacturing plants in Ypsilanti, Michigan, that employed 9,000 and 4,500 workers, respectively. Under state statute, GM requested and received 11 different tax abatements on property worth over $1.3 billion. Local township officials approved the tax abatements. Assurances: “We are dedicated to retain and/or increase jobs at Ypsilanti and will maintain this dedication in the future. We intend to keep this facility a viable operation for the community and GM.” “Upon completion of this project and favorable market demand, it will allow Willow Run to continue production and maintain continuous employment for our employees.” Nobody wants a Chevy Caprice!  GM decides to leave town.

Meyer v. Christie

• Facts: Bank discloses customer’s financial information (false info) and causes a real estate development project to collapse.  Privacy policy prohibited the disclosure. 

McDonald v. Mobil Coal Producing, Inc.

• Facts: Employee sues for wrongful discharge. Company didn’t follow employee handbook requirements.  Includes statement: This is not an employment contract. 

James Baird Co. v. Gimbel Brothers and Drennan v. Star Paving Co.

• Comparing Facts: Both cases involve general contractors using subcontractor bids to win construction jobs. Both subcontractors screw up quotes and try to renege.

Carlill v. Carbolic Smoke Ball Company

• Facts: D put out an ad for their product; if you use these balls, you will not get sick. P did so and got sick. 

Ellenson v. Megadeth, Inc.

Brackenbury v. Hodgkin

Dickinson v. Dodds

• Facts: Dodds makes an offer to Dickinson to buy his house, but the offer is left open until 9 am on Friday. Dodds sells the property to Allan. Dickinson finds out on Thursday afternoon that Dodds is selling to Allan. Dicikson tries to deliver acceptance to Dodds ' mother-in-law and the train station the next day. But Dickinson says he is too late. 

Pro CD, INC. v. Zeidenburg

• Facts:  ProCD sells a digital database of telephone directories, “SelectPhone,”  Sold on a CD. It has tiered pricing. Consumers get it cheap. Commercial users pay much more. To make its price discrimination work, the seller must control arbitrage. Commercial users can’t buy and resell data from the consumer version. The consumer license is encoded on the CD, and it is printed in the manual. It appears on the user’s screen every time the software runs. Click yes to proceed. License limits use to non-commercial purposes. Matthew Zeidenberg bought a consumer package of SelectPhone from a retail store. He resells the directory info on his website to paying subscribers.

Hill v. Gateway

• Facts: Hill orders a computer over the phone from Gateway.​Computer arrives with additional terms inside the box, including an arbitration clause.​ Hill has problems with the computer’s performance and parts and wants to sue (in court) under a variety of statutes.

Klocek  v. Gateway 

• Compare with Hill case:  Here, same facts as Hill v. Gateway. (Only factual change is that customers have only 5 versus 30 days to make a return).​ Here, however, the Court reaches a different conclusion, i.e., that the arbitration contract is not binding.​ Unlike in Hill, here the court applies a UCC 2-207 analysis. You can have a battle of the forms with only one form.

Carnival Cruise Lines, Inc. v. Shute

• Facts: Plaintiffs – Eulala and Russel Shute go on a fabulous cruise! They live in Washington State.  Carnival is based in Miami. Left-hand corner of each ticket: IMPORTANT! PLEASE READ…. Acceptance of the ticket is acceptance of each and all terms and conditions of the Passage Contract Ticket. All disputes shall be litigated before a court in the State of Florida, USA, to the exclusion of the courts of any other state or country. They boarded in LA. Sailed to Puerto Vallarta. Eulala slipped and fell, injured self, during a guided tour while the ship was in international waters. Ps sued in federal court in Washington state.

Specht v. Netscape Communications Corp.

• Facts/Procedural History: Plaintiffs allege that SmartDownload transmitted their private user data to Ds without permission. Alleged violation of electronic surveillance statutes. Netscape is using cookies to track and identify their data. Five users agreed (clicked “yes”) to a scrollable text license agreement to download software. The software did not mention the SmartDownload plug-in. Its license included an arbitration provision. The SmartDownload software license was further down the page; users didn’t have to “agree” to begin the download. The trial court denied Netscape/AOL’s motion to compel arbitration and dismiss court proceedings. Defendants appeal

FTEJA v. Facebook

• Hyperlinked Terms of Use was sufficient notice in a case involving forum selection

Berkson v. Gogo LLC

• Terms of use unenforceable absent evidence that reasonably prudent users would have notice of them;  Enforceable when users are encouraged by site design to see them. Unenforceable if link is obscured, buried, unlikely to be seen

Step-Saver Data Systems v. Wyse

• Facts: Step-Saver: Computer consultant/intermediary for medical and legal offices. They put together a multiuser system for offices with TSL’s operating system and Wyse’s computer terminals.​ Step-Saver ordered the Multilink Advanced operating system from TSL.​  Many of Step-Saver’s customers began to complain about malfunctions. Neither TSL, Wyse, nor Step-Saver is willing to take responsibility for the problems.