Cases Flashcards
Accord and Satisfaction
ASSOCIATED BUILDERS V. COGGINS: D owed money but made a deal of two separate payments in satisfaction of the entire sum. Although D was late of the payments, P deposited the check and thus waived their right to enforce the original obligation.
Define Accord, Waiver, and Satisfaction.
An ACCORD is a contract under which an obliged promises accept a substituted performance in future satisfaction of the obligor’s duty.
A WAIVER is a voluntary or intentional relinquishment of a known right. Settlement of a disputed claim is sufficient consideration for an accord and satisfaction.
A SATISFACTION is the execution or performance of the accord.
Accord and Satisfaction
Edmonds Case: Minor borrowed 30 pounds from P which court said he didn’t have to pay because as a minor he was bound to a contract. When he became of age, however, he promised to pay and was bound by contract.
Law: A person can waive a right not to pay if they feel morally obligated, but it must be done on their own accord. [Upheld even though no present consideration.]
Detriment
Keyme v. Goulston: P sent granddaughter to D’s school and D promised he would pay a portion of the tuition. Court held that there was consideration that didn’t seem reasonable, just as non-bargained for benefit sometimes count as consideration to enforce a promise, so does non-bargained for detriment.
Law: Non-bargained for detriment will stand for consideration.
Forbearance
KIM V. SON: Kim invested in Son’s company and lost all his money. One night Son drunkenly wrote on a paper (in his own blood) that he was going to pay him back. A year later Kim sued Son claiming that the promise was enforceable as a promissory note, and further that his forbearance in not suing sooner was consideration. Court found that Kim had no legal grounds to sue on and therefore alleged forbearance not to sue was NOT consideration.
Law: If a claim is wholly invalid, neither forbearance to sue nor a compromise thereof can be good consideration. The compromise of a claim, either valid, doubtful, undisputed (but not void) is good consideration, the claimant giving up his or her asserted right to recover the whole amount is consider for a promise to pay a lesser amount.
DETRIMENT: Promisee does something or gives up something that he was not legally obligated to do or give up.
Mutual Promise
WEST V. STOWELL: West promised stowell to beat Lord effingham in shooting match. STOWELL promised that if effingham won, he would pay West money.
Law: A promise for a reciprocal promise is good consideration.
Mutual Promise
NICHOLAS V. RAYNBRED: A promise to sell B a cow for 5 punts, the promise to sell was induced by the promise to pay. Promises induced each other.
Law: The thing promised as consideration must itself be adequate consideration if he exchanged for the promise at the time the promise was made.
The transitive property of consideration: When someone promises a benefit, have to pay for benefit; when court enforces promise in exchange for detriment, it is an exchange (a promise detriment is the same as an exchange); detriment and promise must be equal to each other.
Policy: Good because it encourages commerce, action, and reliance of the deal done—increases overall utility in society.
Modification and Waiver: Modification of Judgement Liabilities
FOAKES V. BEER (Majority view): As the result of a previous judgment, Foakes owed Beer money. The two parties entered into an agreement that Foakes would pay part of the money immediate and then make payments every 6 months until he had paid off the debt and in return Beer wouldn’t take any action. Once Foakes paid off the entire principal, Beer sought leave to proceed on the judgement, claiming she was entitled to interest because the debt was not paid off immediately. Foakes claimed there was a contract with no mention of interest which Beer claimed was invalid because she did not receive any consideration. The court forced Foakes to pay Beer the interest.
Law: It is contrary to public policy to make the performance of a legal duty a good consideration.
Payment of a lesser amount cannot serve as satisfaction of a larger amount.
Modification and Waiver: Modification of Judgement Liabilities
Sugarhouse Finance Company v. Anderson: Sugarhouse sued Anderson for nonpayment of a promissory note and obtained a judgement against him for a sum. For two years, Anderson had financial difficulties and couldn’t pay the judgement. When he learned that he could get a loan to help him pay a portion of the judgement, he reached an agreement with sugarhouse to pay a lesser amount. Before the check was cashed, however, sugarhouse found out that Anderson had some property that he was about to sell. Sugarhouse then refused to go through with the settlement. Anderson asked the court to enforce the settlement agreement he made with Sugarhouse.
Law: Modification of a contract where a party incurs a new detriment is valid consideration for the modification.
A modification is enforceable only when bargained for with a new benefit to the promisor or a new detriment to promisee.
Modification and Waiver: Modification of Contractual Liabilities
ALASKA PACKERS ASSOC. V. DOMENICO: Sailors agreed to work for company refused to adhere to original contractual terms and demanded increased compensation. The company’s representative agreed to the higher compensation in a new contract.
Law: A contract must be mutually rescinded without coercion by one party to the other.
Cannot modify a contract for a pre-existing duty as consideration.
Modification and Waiver: Modification of Contractual Liabilities
UCC!
Gross Valentino Printing Co. v. Clarke: P (GVPC) and D (Clarke) entered into a contract for the printing of a magazine published by Clarke. GVPC later informed Clarke that the printing company cost would be increased; Clark informed GVPC that it would not accept the price increase. GVPC filed suit in state court for breach of contract. Clarke asserted the defense of lack of consideration, fraudulent or innocent misrepresentation, and business compulsion. GVPC filed a motion for summary judgement, which was granted by the court. Clarke appealed.
Law: Modification of a goods contract under UCC requires no new consideration, but must be made in good faith.
Modification and Waiver: Modification of Contractual Liabilities
ANGEL V. MURRAY
Overview: Plaintiffs, citizens, filed a civil action seeking repayment of additional fees paid to defendant refuse collector by defendant city budget director under a contract. Defendant refuse collector was awarded a contract with the city. He requested additional payments to cover unexpected increases in refuse. Plaintiffs alleged the payments violated the city charter and were made without consideration.
Law: modifications to meet changes in circumstances and conditions are valid, it is what a reasonable person in good faith would do.
Modification and Waiver: Modification of Contractual Liabilites
Lumber Enterprises, Inc. v. Hansen
Overview: Hansen’s agreed to a special pricing arrangement for 30 loads of logs to be delivered in 1986. They were delivered, but at their request over a two-year time period rather than three months. P increased the price and told them to “take it or leave it”. They paid for the first 9 and then stopped payment, P sued.
Law: The test of good faith as to merchants includes observance of reasonable commercial standards of fair dealing in the trade. A market shift which makes performance come to involve a loss may provide such a reason even though there is no such unforeseen difficulty as would make out a legal excuse from performance. Termination is allowed at any time by either party in such a contract with indefinite duration.
Modification and Waiver: Waiver
Pittsley v. Houser
Law: The test for inclusion or exclusion is not whether they are mixed, but, granting that they are mixed, whether their PREDOMINANT FACTOR, is the rendition of service with goods incidentally involved or is a transaction of sale with labor incidentally involved. Whether the predominant factor or main purpose of the transaction is the rendition of services, with goods incidentally involved; or is a transaction of goods with goods with labor incidentally involved.
Modification and Waiver: Waiver
R. Conrad Moore and Assocs., Inc. v. Lerma
Overview: The Lermas (appellees) and R. Conrad Moore Assoc., Inc. entered into an earnest money contract for the purchase of two lots in El Paso. The Lermas tendered a check to Moore for 13,500 as part of the earnest money contract. The sale of the lots was contingent upon the Lermas using Moore as a builder. Later, the Lermas and Moore incorporated the previous contract into a new home residential earnest money contract. This contract provided for the construction of a custom home on the lots for a total price, including the lots of 180,000. The earnest money stated that if the loan was not approved in 60 days from the effective date of the contract, the contract shall terminate and the earnest money shall be refunded; but if the lot was held more than 60 days, earnest money was no refundable. The new contract called for an additional payment of 6500 earnest money, due upon the Lermas’ approval of the house plan. Construction on the house on the began in Dec 1990, and was completed in the summer of 1991. The lermas were ultimately denied credit and were unable to close on the house. In sept 1991, after demanding the return of their earnest money, they initiated this suit in November 1992.
Law: A waiver is an intentional release, relinquishment, or surrender of a known right. Any contract can be waived. Elements:
1. A right must exist at the time of the waiver
2. The party who is accused of waiver must have constructive or actual knowledge of the right in question; and,
3. The party intended to relinquishment its right.
Generally, the parties to a contract intend every clause to have some effect and the court may not ignore any portion of the contract unless there is an irreconcilable conflict. The court will examine and consider the entire instrument and reach a decision so that none of the provisions will be rendered meaningless.
Modification and Waiver: Waiver
Clark v. West
Overview: West told Clark that Clark may drink without forfeiting the $4 per page West would otherwise have a right to withhold under the contract. When Clark turn in his next installment, pages 220-230 (out of 3,470), West is not pleased with Clark’s work. It is acceptable, but not as good as what Clark had been writing. West therefore sends a letter to Clark stating that West will from the date of the letter’s recipes forward insisted that Clark not drink on pain of losing $4 per page. Enforceable?
Law: Voluntary intentional relinquishment of a known right. Reliance or assent not required. No consideration required to be binding. Condition may be waived, and once waived, it cannot be revoked. Can be expressed or implied. Can be retracted unless given for consideration or for the performance it relates to is no longer executory.
Law: You can waive your right to reject an offer if you accept/execute.
