Contracts Lucy v. Zehme Case Summary Chart

TOPIC CASE FACTS RULE R.R. v. M.H. Mutual Assent- apparent intention Lucy v. Zehmer Contract drafted and signed while both parties drunk; one claims contract is valid while other insists it was a joke. Test for mutual assent: Would a reasonable person consider the parties’ outward actions a manifestation of intent? BUT: offeree bound if knows subjective intent of offeror Mutual Assent- ad vs. offer Leonard v. Pepsico, Inc. Leonard demanded a jet from PepsiCo that was advertised as part of a rewards program but was not included on the rewards order form. An advertisement does not ordinarily constitute an offer unless it includes a statement of commitment or some invitation to take action without further communication. Commercial was clearly done in jest, which to a reasonable person would not create a contract. Lonergan v. Scolnick Ad with Clear Offer of Reward Solicitation of an offer is not itself an offer. No offer if “offeree” knows “offeror” does not intend to be bound until after further manifestation of assent. J.D. Fields & Company, Inc. v. U.S. Steel International, Inc. The buyer alleged breach of contract and promissory estoppel regarding two transactions for steel pipe in which the buyer claimed that its purchase orders created binding contracts that the seller failed to fill. A statement will be considered an offer if a reasonable person would think that they can complete the deal by simply giving their assent. Kearney v. Equilon Enterprises, LLC D held promotion that advertised a free ski lift ticket with the purchase of 10 gallons of gas. P sought to collect and was given a 2-for-1 voucher that required the purchase of 1 ticket at full price to redeem the other. P claimed ad was a contract and D had breached. If an advertisement is clear, definite, and explicit, and leaves nothing open for negotiation, then the advertisement constitutes an offer, acceptance of which will complete the contract. Dickinson v. Dodds Parties entered into an arrangement whereby D said he would sell his property to P for a set sum. The offer would terminate on Friday at nine. P found out on Thursday that D offered to sell to another, quickly tried to notify D of his acceptance of the offer, but other sale had been completed. Promises to keep an offer open until a certain time will be only a promise if made by binding by consideration and acceptance necessary to form a binding agreement. Minnesota Linseed Oil Co. v. Collier White Lease Co Minnesota v. Collier (oil, telegraph, 3 days): Acceptance of oil price 3 days after the offer is too late when considering the volatile market and the communication tool (telegraph) that shows urgency. Beall v. Beall þBeall v. Beall (option for 3 years, but no payment for option): Cecilia could revoke her offer because Carton didn’t pay for his option. The question was “Did she revoke?” ✓ Maybe Carton thought previous $100 was enough. But here, initial K and option were separate. ✓ Cecilia might argue that “I revoked by offering the land to David. Indirect revocation.” Bd of Control of East. Mich. Univ. v. Burgess A written acknowledgment of receipt of consideration merely creates a rebuttable presumption that consideration has, in fact, passed. Neither the parol evidence rule nor the doctrine of estoppel bars the presentation of evidence to contradict any such acknowledgment. LaSalle Nat’l Bank v. Vega þLa Salle National Bank v. Vega (Trust’s execution): There was no acceptance because Bank didn’t accept in the method Vega offered. þEver-tite Roofing Corp. v. Green (Roof, brick, another company): There was acceptance by part performance when Ever-tite loaded bricks. Ever-Tite Roofing Corp. v. Green when an offer does not specify the period of time in which it must be accepted, the offeror must allow the offeree a reasonable amount of time in which to when an offer does not specify the period oftime in which it must be accepted, the offeror must allow the offeree a reasonable amount of timein which to accept the offer. In the case at hand, the court reasoned that D knew that there wasthis credit check process and evidence shows that P had proceeded with due diligence. D had a right to withdraw the offer before it was accepted, but would have had to allow a reasonable amount of time to pass. The court states that what constitutes a reasonable amount of time is aquestion of fact dependent upon the circumstances of the contract in each case. accept the offer. In the case at hand, the court reasoned that D knew that there was this credit check process and evidence shows that P had proceeded with due diligence. D had a right to withdraw the offer before it was accepted, but would have had to allow a reasonable amount of time to pass. The court states that what constitutes a reasonable amount of time is a question of fact dependent upon the circumstances of the contract in each case. Davis v. Jacoby Plaintiff's uncle requested that they come visit to take care of Defendant's wife and business dealings. If they did, he promised they would inherit everything. Contract was formed upon Plaintiff's agreement to visit and assist Defendant, not upon P starting the journey. Mutual promises made = bilateral contract, which is formed upon the making of promises (offer and acceptance). Hendricks v. Behee The purported buyer mailed a proposed agreement to purchase the real estate and the purported sellers signed the proposed agreement. Before the purported buyer had been notified that his offer had been accepted, he contacted the purported sellers' real estate agent and notified her that he desired to withdraw his offer to purchase the real estate. A dispute arose regarding whether a binding contract had been made and the escrow money holder filed an interpleader action. Unless the offer is supported by consideration, an offeror may withdraw his offer at any time before acceptance and communication of that fact to him. To be effective, revocation of an offer must be communicated to the offeree before he has accepted. Carlill v. Carbolic Smoke Ball Co. Defendant's advertisement said that if a user of its medicinal product got sick after properly using it, Defendant would pay a certain amount to sick person. Plaintiff got sick after using the product and sued for the money. The offer was similar to a reward (unilateral contract). performance = acceptance. notice was properly given to Defendant of performance. There was consideration: Defendant got its product used, Plaintiff was inconvenienced Laredo Marchiondo v. Scheck Gresser v. Hotzler i. Rule: where a party knows his silence will be misinterpreted, he may be bound by the offer of another party, even if the party did not respond to or explicitly accept the offer. Seller agreed to pay Plaintiff a percentage to sell a house, with the offer open for 6 days. On day 6, Defendant found another buyer and sold to him, while Plaintiff found a buyer that same day. A unilateral offer must be left open for a reasonable time once offeree has begun performance. i. Rule: A contract does not exist absent acceptance of all material terms ii. A counteroffer is created when one party makes an offer and the other party proses new material terms iii. Mirror image rule: offer must be identical to the acceptance, otherwise it is just a counteroffer (restatement 58/59) iv. Exceptions: 1. Modification (objective manifestation of unconditional acceptance exists separately from proposed modification- restatement 61) 2. Immateriality- if changes are immaterial, some courts may still find aK Dorton v. Collins & Aikman Corp. After plaintiffs purchased several carpets from defendant, it discovered the carpets were composed of a cheaper carpet fiber than what was promised. Plaintiffs sued defendant. The case was removed to the district court on the basis of diversity. Defendant moved for a stay pending arbitration and asserted plaintiffs were bound to an arbitration agreement, which appeared on the reverse side of defendant's printed sales acknowledgement form. The court denied the stay and found no arbitration agreement existed. In order to fall within the Uniform Commercial Code, U.C.C. § 2-207(1), it is not enough that an acceptance is expressly conditional on additional or different terms; rather, an acceptance must be expressly conditional on the offeree's assent to those terms. Klocek v. Gateway, Inc. Plaintiff alleged that the computer manufacturer induced him and other consumers to purchase computers and special support packages by making false promises of technical support, while scanner manufacturer breached a duty to warn consumers that its products are incompatible with Gateway computers. Terms received with a product do not become part of the contract unless the non-merchant buyer expressly agrees to them. Raffles v. Wichelhaus Plaintiff offered to sell a certain amount of cotton to Defendant. The cotton would be brought from India on a ship called the Peerless. There were apparently two ships with that name, and the Defendant and the Plaintiff were each thinking about different ones. One was supposed to leave from Bombay in October, and the other was supposed to leave in December. When the cotton arrived in England, the Defendant refused to pay. The ship that he was expecting to bring him the cotton had left India in October. the contractual terms were ambiguous regarding the ship, and the court first attempted to apply generally accepted terms; when that failed, because there was no generally accepted term for shipping vehicle, the court found (2) that there was no meeting of the minds as to the ship, and invalidated the contract. This was (3) a mutual mistake case because both parties were mistaken as to the thing agreed upon, and neither could be held to the terms of the contract. Varney v. Ditmars i. Rule: For a contract to be valid, the agreement made must be definite and explicit enough to permit the full intent of the parties to be ascertained with a reasonable degree of certainty Comm. Design Corp. v. Antonell When determining whether a contract is unenforceable for want of certainty, the court will look to whether the complaining party conferred a benefit upon the party in breach Reed v. Univ. of North Dakota his suit against NDAD had to overcome the fact that he had signed a liability release before the race. The player argued it was unenforceable for lack of consideration. No, said the court, there was consideration of the release, and therefore it was enforceable. Kirksey v. Kirksey The plaintiff is the wife of the defendant's dead brother. The plaintiff lived on public land and would have attempted to secure that land. Defendant stated that he would let plaintiff have land on which she could raise her family. One or two months after receipt The promise on the part of the defendant, was a mere gratuity, and that an action will not lie for its breach. of the letter, plaintiff abandoned her land and moved to defendant's land, where they were moved into comfortable houses with land to cultivate. Two years later, defendant moved plaintiff and her family to uncomfortable houses in the woods, and after that required her to leave the land altogether. Hamer v. Sidway Plaintiff, at the age of about 15, received a promise from his uncle for $5000 if he abstained from alcohol, tobacco, swearing, and playing billiards and cards for money until his 21st birthday. Upon Plaintiff's 21st Birthday, Plaintiff wrote uncle to tell him he performed his part of the agreement. Uncle responded, saying that he would give plaintiff the promised $5000, but not yet, because the plaintiff would probably blow it on cigarettes, booze, card games, and the local pool sharks. Uncle would keep it until Plaintiff is deemed ready, and at that time, Plaintiff would receive money plus interest. Two years later, Uncle died without having fulfilled promise. Keena v. Groupon Alaska Packers’ Ass’n v. Domenico There is no consideration for a contract created solely to modify an existing contract and whose purported consideration is work done for the first contract. Harrington v. Taylor A humanitarian and voluntary act followed by a promise is not valid consideration. Mills v. Wyman Moral obligation is sufficient for a express promise when good or valuable consideration has existed. The act done was in the past and past consideration cannot be binding on a contract Moral obligation is sufficient for a express promise when good or valuable consideration has existed. The act done was a gratuitous act b/c son is of age, and act was in the past and past consideration cannot be binding on a contract Webb v. McGowin The plaintiff saved the defendant from an injury which caused himself an injury, and the defendant promised that he would take care of him for the rest of the plaintiff’s life with a certain amount of money. The defendant died, and the executor of his will refused to continue making the payments. When there is a moral obligation of the promisor, along with a material and substantial benefit to him, then the consideration may be sufficient. Ricketts v. Scothorn Plaintiff grandfather promised to pay defendant $6,000 if she quit her job. She quit her job, he died and estate refused to pay. When the plaintiff is influenced by the defendant to alter his position on the faith of the promise, promissory estoppel may allow him to recover. Weitz Company, LLC v. Hands, Inc. a claim of promissory estoppel requires a plaintiff to show: (1) a promise that the promisor should have reasonably expected to induce the plaintiff's action or forbearance, (2) the promise did in fact induce the plaintiff's action or forbearance, and (3) injustice can only be avoided by enforcing the promise. The promise need not be definite enough to support a unilateral contract, but it must be definite enough to show that the plaintiff's reliance on it was reasonable and foreseeable. Congregation Kadimah TorasMoshe v. DeLeo The courts will not enforce a promise in favor of charity where there is no showing of any consideration or reliance.