Cases

Question 1

ALLEN v. BISSINGER, CO.

Answer 1

Facts: P sold copies of ICC and said contract was formed with D to sell him the reports, D says he didn’t assent to this.

§ Issue: Was a contract formed when acceptance reasonably refers to subject matter of the offer?

§ Rule: a contract is formed where applying a reasonableness standard, an acceptance through not exactly the same language of an offer clearly refers to the offer so that parties manifest intention of agreeing

Question 2

Feldman v. Google, Inc.

Answer 2

Facts: P clicked on online agreement to place ads through Google (D) but
said there was no K as he did not have notice and therefore did not assent
to the terms

§ Issue: Is an online clickwrap agreement binding?

§ Rule: An online clickwrap agreement is binding where the online user has
reasonable notice of the agreements terms and it is clear by clicking accept the user agrees to be bound by the terms.

Question 3

Ray v. William G. Eurice Bros

Answer 3

Facts: D signed a K with new building plans and failed to perform them.
P sued for breach. D said he never saw new terms.

Issue: Is a party bound to signed document he has the capacity to read and understand?

o Rule: party is bound to a signed document which he has read with the capacity to understand it absent fraud, duress or mutual assent

§ Significance: example of duty to read, being bound to objective assent not meeting of the minds

Question 4

Skrbina v. Fleming

Answer 4

P signed away benefits thinking it was new hire forms court found she should have read)

Question 5

Lucy v. Zehmer

Answer 5

court found it reasonable to believe sale of farm was agreement not joke

Question 6

Leonard v. Pepisco

Answer 6

court found it unreasonable to believe you could trade Pepsi points in for a jet)

Question 7

Normile v. Miller

Answer 7

Facts: P sought specific performance for the sale of Ds property after he accepted Ds counteroffer within time period set for acceptance in original offer but after D sold property to P.

§ Issue: Can a purchaser accept a counteroffer after receiving notice its been revoked if acceptance is within time period of original offer?

§ Rule: A purchaser does not have the power to accept a counteroffer after receiving notice of revocation by accepting counteroffer within time period of original offer.

Significance: prior to acceptance (unless there is an option) an offeror can revoke an offer

Question 8

Longergan v. Scolnik

Answer 8

Facts: P made several written inquires about advertised land, but it was
sold to another.

§ Issue: Was there an enforceable K where P sent letter saying he wanted to
buy the land?

§ Rule: there is no enforceable contract where communications do not
evidence a definite offer and acceptance.

Question 9

Izadi v. Machado

Answer 9

Facts: P attempted to buy a car from D for certain terms made by
advertisement. D refused Ps offer and P sued D for breach of K.

§ Issue: Can offer be inferred from an advertisement where it is reasonable
to believe a certain enforceability?

§ Rule: If offer is conveyed by the objective reading of an ad it doesn’t
matter that advertiser did not intend for binding offer.

Significance: this shows the exception to the traditional rule

Question 10

Cook v. Coldwell

Answer 10

Facts: P was a former employee of Coldwell Bank (d) who alleges she
accepted Ds offer of a bonus by substantial performance and relied on
bonus. D did not give P bonus because she left Coldwell.

§ Issue: Can a unilateral K be revoked if offeree has already started
performance?

§ Rule: in the context of an offer for a unilateral K the offer may not be
revoked when the offeree has accepted the offer by substantial
performance.

Question 11

Santeriale v. R.J Reynolds Tobacco Co.

Answer 11

Facts: P participated in Ds customer loyalty program through which he
could obtain merchandise. D refused to provide merchandise in
accordance with terms of programs months before its official termination.

§ Issue: Is lack of mutuality fatal to a claim of breach in a unilateral K?

§ Rule: lack of mutuality is not fatal to a claim of breach of a unilateral K.

• Lack of mutuality: idea that both parties agree to be bound

Question 12

Walker v. Keith

Answer 12

Facts: D the lessor contended that the option provision in his lease with P
the lessee did not fix rent with sufficient certainty to constitute an
enforceable K with the parties.

§ Issue: where the essential terms such as price are not contained can a K
still exist?

§ Rule: where the essential terms such as price are not contained in an
option K and no standards are included whereby such terms may be
judicially determined—no contract exists.

Common Law Rule: you cannot enforce contracts missing essential terms if a
party is aware such term is missing

Question 13

Quake v. American Airlines

Answer 13

Facts: American Airlines (D) canceled its agreement with general contractor for construction of an expansion of its airport facilities, Quake Construction Inc (P) a subcontractor alleged that the letter of intent was a binding offer

§ Issue: although letters of intent may be enforceable, are they if they were not intended to be binding?

§ Rule: although letters of intent may be enforceable such letters are not necessarily enforceable unless the parties intend them to be contractually binding.

Question 14

Hamer v. Sidway

Answer 14

Facts: D decedent promised to pay $5000 to P assignor if he would forbear
from the use of liquor, tobacco, swearing or playing cards or billiards for
money until his 21st birthday

§ Issue: Is a waiver of any legal right at the request of another party
sufficient consideration?

§ Rule: a waiver of any legal right at the request of another party is a
sufficient consideration for a promise.

Significance: detriment need not be economic, it is suffieienct to relinquish a legal right

Question 15

Pennsy Supply Inc. v. American Ash

Answer 15

Facts: P contended that its disposal of a hazardous material it had obtained for free from American Ash Recycling Corp. of Pennsylvania (D) constituted consideration necessary to support various breach of contract, warrant and merchantability claims.

§ Issue: does relief of legal obligation constitute sufficient consideration to ground contract and warranty claims?

§ Rule: relief of a manufacturer’s legal obligation to dispose of a material classified as hazardous waste, such that manufacturer avoids the costs of disposal, constitutes sufficient consideration to ground contract and warranty claims brought by disposer.

Question 16

Willinston’s Tramp ex

Answer 16

if a man told a tramp “walk around the corner and buy yourself a new coat on me” no reasonable person would view this as consideration because it’s just walking around the corner. This is obviously a gift
§ It is a fine line to find consideration or gift, courts like to push to find consideration in order to enforce contracts
§ A good way to see is whether promise is whether the occurrence of condition would benefit promisor if so it is fair that occurrence was consideration

Question 17

Dougherty v. Salt

Answer 17

Facts: P was attempting to recover on note from aunt promising money §

Issue: is a note that is not supported by consideration enforceable?

§ Rule: a note not supported by consideration is unenforceable
• what could Aunt Tillie have done to ensure gift was made?

o Nominal consideration: small consideration to simply
keep enforceable K (RST 2nd 71 rejects this)

o Could try promise under seal: RST 95 says this is only
okay if common law allows promise under seal, rare

o Executed or testamentary gift: give the gift as cash or
leave in a will as last will and testament

Question 18

Dohrman v. Swaney

Answer 18

Facts: P a neighbor of Mrs. Rogers contended the purported contract Mrs.
Rogers had entered with him whereby he would be entitled to $4 million from her estate along with her apartment was supported by adequate consideration and was not unconscionable and not product of fraud

Issue: Will a contract fail as a matter of inadequate consideration?

Rule: where consideration supporting a purported contract is so grossly inadequate as to shock the conscience of the court, K will fail.

Question 19

Plowman v. Indian Refining Co

Answer 19

Facts: P and others sought to enforce a benefit agreement between them
and their former employer Indian Refining Co (D)

§ Issue: are past services enough to support an enforceable contract?

§ Rule: past services are not sufficient consideration to support the
enforceability of a contract to provide continuing payments to former employees.

• Significance: Legal consideration is necessary not just love and respect
• Note: may be able to recover via PE in commercial context

Question 20

Marshall Durbin Food Corp. v. Baker

Answer 20

Facts: Marshall Durbin Food Corp (D) contended that a contract that
purported to pay Baker (P) a former employee, his salary for five years upon the happening of certain triggering events was invalid for lack of consideration

§ Issue: Is an agreement supported by sufficient consideration to create an enforceable K where one party has illusory promise, second party has promise of unilateral contract contingent on first parts performance?

§ Rule: an agreement is supported by sufficient consideration to create an enforceable contract where one party has made an illusory promise, the second party has made a promise of a unilateral contract that is contingent on first party’s performance and first party has performed to fulfillment

Question 21

Jannush v. Naffziger

Answer 21

Facts: P owned Festival Foods concession business they said had an
enforceable K with D because terms identified and D breached K

§ Issue: Does UCC apply?

§ Rule: UCC applies in contract that is primarily for the sale of goods and is
enforceable where, although many terms are missing, essential terms exist

Question 22

E.C Styberg Engineering Co. v. Eaton Corp.

Answer 22

Facts: P a components manufacturer, contended that D an automobile
parts producer and P had K for D to purchase 13k transmission parts from

§ Issue: Does UCC apply? If so was a K formed?

§ Rule: Under UCC a contract for the sale of goods is not formed where the
communication evidence ongoing negotiations but no agreement to price,
quantity and monthly production volume

Question 23

Princess Cruises, Inc. v. General Electric Co.

Answer 23

Facts: P issued a purchase order for repairs from D upon inspection D
found additional work needed. P had to cancel a cruise and paid full
amount of K later finding repairs not properly done.

§ Issue: Does the UCC apply?

§ Rule: When the predominant purpose of maritime or land based K is
services rather than goods the UCC is inapplicable and common law rules

Question 24

Brown Machine, Inc. v. Hercules, Inc.

Answer 24

Facts: D which purchased a trim press from P through boilerplate forms refused to indemnify P in a lawsuit brought by a D employee who was injured while using the trim claiming P language was a counteroffer

§ Issue: Was this a counteroffer or an acceptance?

§ Rule: an offeree’s reply that purports to accept an offer but make
acceptance conditional on the offeror’s assent to the terms not contained in
the original offer is a counteroffer rather than an acceptance.

Question 25

Paul Gottlieb & Co v. Alps South Corp.

Answer 25

Facts: P contended that a limitation of liability clause on the back of a
standardized goods K did not materially alter the K it had with D so the clause should not as a matter of law be excluded from the K to limit P liability to D for consequential damages

§ Issue: Is this a material alteration that should be omitted from K?

§ Rule §2-207 finds a limitation of liability clause does not materially alter the K where it does not as a matter of law cause unreasonable surprise or
hardship

Question 26

DeFontes v. Dell, Inc.

Answer 26

Facts: D contended that P who bought computers from D were bound by
arbitration provision in Ds terms which D contended P accepted by
accepting delivery of computers.

§ Issue: Did P accept the terms in accepting the computer?

§ Rule: terms and conditions included with consumer goods are not binding
on consumer who accept the goods where the ambiguity would not be
reasonably apparent to reasonably prudent consumer

Question 27

Hines v. Overstock.com

Answer 27

Facts: P brought a class action for a restocking fee charged by D contending the fee was never disclosed. D asserted that the K governing the transaction was on the website in browsewrap terms

§ Issue: Is P bound to the fee because it was on website?

Rule: terms and conditions on an online K are not enforceable where a particular user does not have actual notice of the terms and conditions and a reasonable user of the website would not have seen them.

Question 28

ProCD and Hill(Majority Rule)

Answer 28

ProCD and Hill vendor, not purchaser is the offeror and as such is the master of the offer and determines the mode of acceptance to which the purchaser is bound (this adheres to UCC §2-204 which says K Is in any manner sufficient to show agreement)
§ Rationale: this is more efficient by encouraging use of standard forms
§ Criticism: it doesn’t give explanation as to why the purchaser is not the
offeror which is the more natural reading

Question 29

Minority Rule: from Klock v. Gate

Answer 29

shrinkwrap terms are vendors proposal for
additional terms of K governed by §2-207 (2) and are not part of K unless agreed
§ Rationale: K law is rooted in mutual consent and majority rule stretches
the idea of consent to its breaking point
§ Criticism: both parties are bound when vendor accepts payment waiving
right to return (although §2-207 (3) gap fillers may allow some return)

Question 30

Mutual assent

Answer 30

each party intends to enter the contract and agrees with the other to do so on mutually acceptable terms

Question 31

Objective Theory

Answer 31

interprets not in light of what utterer actually meant or what the other party actually understood but from the standpoint of what a reasonable person in the position of the party to whom manifestation was made would believe
Under the objective theory mutual sent is present if a reasonable person in position of the parties would believe it was made