Common Law in Contemporary Society Contracts

hawkins v mcgee

A doctor explicitly guaranteed a patient a 100% perfect hand via a skin graft surgery. The experimental procedure failed, leaving the plaintiff's hand scarred, disfigured, and covered in coarse hair growing from the chest skin graft.

-An explicit, concrete guarantee of a specific medical outcome creates an enforceable contract/warranty, independent of medical negligence

-Damages are measured by the difference between the value of the promised condition and the value of the actual condition received

-Pain, suffering, and medical expenses inherent to undergoing the agreed-upon procedure cannot be recovered under a contract theory

uniform commercial code

standardized laws designed to govern commercial/business transactions

-all 50 states have adopted full or part

-does not apply to real estate or service contracts

-terms only valid if state has adopted UCC

UCC article 1

-ucc must be liberally construed to simplify, clarify, and modernize commerical law, permit the expansion commercial practices through custom and agreement and promote uniformity across states

-every contract or duty within the UCC imposes an obligation of good faith in its performance and enforcement, defined as honesty in fact and the observance of reasonable commercial standards of fair dealing

-most provisions can be modified, or waived by agreement between parties

-unless displaced by part of ucc, common law still applies (both apply)

merchant

someone who

1. deals in the goods that are the subject of the contract

2. holds himself as having knowledge or skill particular to the practice or goods involved in the contract OR

3. employs someone who has such knowledge or skill

formal contract

transfers of real estate, recognizance, checks, letters of credit

contract elements

1. an offer must be made

2. an acceptance must be given

3. something of value must be exchanged (consideration) (otherwise it is a gift)

offer

promise to do something, sets parameter for agreement and gives other party to bind them to contract

-must be obvious to outside observer that offeror meant to be bound

offer elements

1. parties

2. subject matter of the contract

3. price

4. time for performance

5. offer must be communicated to the offeree (usually only becomes an issue in cases of rewards)

lefkowitz v great minneapolis surplus store

A store published newspaper advertisements offering brand-name items (fur coats and a stolen fur piece) for $1.00 each on a "first-come, first-served" basis. When the plaintiff arrived first with his dollar on both occasions, the store refused to sell to him, attempting to invoke an unwritten "house rule" that the deals were meant for women only. The court held that the clear, definite terms created a binding contract.

-While general ads are normally mere invitations to deal, an advertisement becomes a binding offer if it is clear, explicit, leaves nothing open for negotiation, and specifies how acceptance occurs (e.g., "first-come, first-served")

-Once an offeree performs the requested act (arriving first with the payment), a valid contract is formed, and the seller cannot retroactively add unstated conditions or house rules

quantity

what must always be included in terms (otherwise, some may be missing as long as its not too many)

requirement contract

party agrees to buy all its requirements for a particular product from other party

output contract

party agrees to deliver its entire output of a particular product to other party

termination of offer

can be done through offeror’s actions (unless option contract), offeree’s actions, or by operation of law

option contract

potential buyer gives consideration (usually money) to keep offer open for stated time period

merchant’s firm offer

merchant can make offer that is irrevocable for a reasonable time, even without requirement of additional conideration, for firm offer:

1. offer has to be made by merchant

2. in signed writing

3. that assure buyer the offer will remain open for a specific period of time or reasonable time

mirror image rule

requires acceptance to exactly mirror offer (common law rule for real estate, service, or employment)

battle of the forms

for ucc sale of goods, use of additional or different terms will not prevent contract from being formed

non merchants

additional terms in acceptance become suggestions, offeror would have to explictly agree to make them part of contract

both parties merchants

additional terms added to acceptance become part of contract UNLESS

1. original offer limits acceptance to its terms

2. terms “materially alter” contract (surprise or hardship)

3. offeror rejects to terms

Ehlen v Melvin

The buyer sent a purchase agreement to the sellers, who altered it by handwriting substantive changes, initialing them, signing it, and sending it back. The buyer did nothing, remained completely silent, never signed the modified paperwork, and later tried to enforce the deal. The court held that no contract was formed because modifying terms acts as a counteroffer, and remaining silent does not constitute acceptance.

-Under the common law, an acceptance must be absolute and unconditional; any material alteration or addition made by an offeree operates as a rejection of the original offer and constitutes a counteroffer

-Mere silence, inaction, or failure to sign a modified agreement does not legally constitute acceptance of a counteroffer. Mutual assent requires clear, objective external expressions of agreement

quasi-contract

no agreement, but in order to avoid unjust enrichment, court orders party that benefited to pay

ameripro search v fleming steel co

AmeriPro provided recruitment services that benefited Fleming Steel. When a dispute arose over payment and the exact nature of their agreement, Fleming ultimately ended up owing nothing because a valid express contract governed the terms, or because the elements of unjust enrichment were not met.

-Quasi-contractual claims (like unjust enrichment or quantum meruit) are barred if a valid, express contract governs the identical subject matter between the parties

-To recover under unjust enrichment when no express contract exists, the plaintiff must prove it would be inequitable for the defendant to retain the benefit without paying its reasonable value

consideration

-must be present for a valid contract, something of value on each side

-whatever is exchanged must be detrimental to party giving it up or beneficial to party recieving it

hamer v sidway

An uncle promised his nephew $5,000 if the nephew would refrain from drinking, smoking, swearing, and gambling until he reached 21 years of age. The nephew fully performed by abstaining from those lawful activities. Years later, the uncle died, and his estate refused to pay, arguing that the uncle received no actual benefit from the nephew's restraint. The court held that the contract was fully enforceable because the nephew suffered a legal detriment by giving up his legal rights

-The voluntary waiver, suspension, or forbearance of a lawful legal right constitutes a sufficient legal detriment to form valid, enforceable consideration.

-Consideration does not require a tangible economic benefit to flow to the promisor; a legal detriment to the promisee alone is entirely sufficient.

unconcionable contract

contract of such unequal bargaining power that the terms are a “shock to the conscience”

merchants

can modify contract with no new consideration given

permissory estoppel

occurs when a court allows detrimental reliance to substitute for consideration. people rely on their detriment, but cannot sue for breach of contract bc promises are not tangible enough to amount to consideration, but it would be unfair to person relying on promise

1. promise made with intent to induce action

2. it must do so, and

3. court must believe it would be unjust not to enforce the promise

minor

if you are this, contract may be voidable (only enforceable against the adult party) or can disaffirm

dissafirm

for a minor- doing this is taking back your legal obligation, you would have to return whatever you have if it regards sale of goods, but depreciation and use doesn’t matter

necessities

minors are liable for these things if they are involved in contract, must pay reasonable value of goods/services

quality motor inc v hays

A 16-year-old minor wanted to buy a car from a dealership. When the dealer refused to sell directly to a minor, they used an adult straw purchaser to structure the transaction. Soon after, the minor sought to disaffirm the contract and get a full refund. The dealership balked, arguing they should get a credit deduction for the car's depreciation and use while the minor had it. The court held that the minor could disaffirm and get his money back without paying for normal wear and tear.

-Contracts with minors (under 18) are generally voidable at the minor's option

-Under the traditional common-law rule, a disaffirming minor only needs to return whatever of the property remains in specie (in its current form) and is not required to pay for ordinary wear, tear, or depreciation

lucy v zehmer

Over drinks at a restaurant, Zehmer wrote and signed an agreement to sell his farm to Lucy for $50,000. The next day, Zehmer claimed he was joking, drunk, and didn't seriously intend to sell. The court ordered specific performance, establishing that objective manifestations override secret intent.

-Contract formation is judged by outward manifestations of intent, not a party's secret, unexpressed subjective state of mind.

-Unless a party is completely devoid of reason/understanding, voluntary intoxication does not void a contract.

defenses to contracts

minor, mentally ill or disabled, intoxicated

mental incompetance

can cause analogous situation to minors, if someone has court-appointed gaurdian they cannot enter into contracts (contract is void, not just voidable)