Consideration

Question 1

Congregation Kadimah v. DeLeo MA 1989, 199

Answer 1

Consideration

Key Facts:
Decedent made oral promise to give $25,000 5 times. Died before giving gift. Cong. planned to name library after him but hadn’t started construction.
Holding/Takeaway:
No consideration: Decedent didn’t ask for library to be named after him. And no reliance - “A hope or expectation, even though well founded, is not equivalent to wither legal detriment or reliance.”

Question 2

In re Bayshore FL 2006, 202

Answer 2

Consideration

Key Facts:
elevator didn’t go up to the 11th floor penthouse that π purchased. ∆ promised π (after purchase) that they would extend it to the 11th floor. 20 years later they still hadn’t.
Holding/Takeaway:
π can point to no consideration that he provided to induce a promise obligating Bayshore to pay for an alteration. Not an actionable promise.

Question 3

Hamer v. Sidway NY 1891, 206

Answer 3

Promissory Estoppel / Consideration

Key Facts:
Uncle promises π $5000 to get to 21y/o w/o drinking, etc. Π complied and in a letter exchange both parties acknowledged the agreement but uncle decided to keep money “on interest.” Uncle died without paying out.
Holding/Takeaway:
It is enough that something is promised, done, forborne or suffered by the party to whom the promise is made as consideration for the promise made to him. Judgment for the π.

Question 4

Batsakis v. Demotsis TX 1949, 613

Answer 4

Consideration / Duress

Key Facts:
In Greece during WWII, Batsakis lent Demotsis $25 in exchange for a note saying D owed B $2000+interest. Once in US, sues to recover
Holding/Takeaway:
Mere inadequacy of consideration will not void a contract. Judgment affirmed and damages awarded for the full $2000 + interest.

Question 5

Embola v. Tuppela WA 1923, 616

Answer 5

Consideration / Duress

Key Facts:
Tuppela had gold mine, lost it while in an insane asylum. Got out and π helped him out. Asked π for $50 to go to AK to recover gold mine and told π he would give him 10Gs if he got his mine back. Π gave him $$. Recovered mine and attempted to make good on promise but his trustee interfered.
Holding/Takeaway:
f π is of sound mind and enters willingly into contract it is not inadequate. Plus this is not a “loan” but an investment. Risk of losing money was extremely high.

Question 6

Earle v. Angell MA 1892, 209

Answer 6

Consideration

Key Facts:
Aunt promises nephew $500 + travel expenses to attend her funeral.
Holding/Takeaway:
Holmes- sufficient consideration to attend funeral (+ peace of mind?)

Question 7

Whitten v. Greeley-Shaw ME 1987, 209

Answer 7

Consideration

Key Facts:
Contract b/w two lovers which places conditions on only one party. The only clause operating to π’s favor was written by the ∆ and not requested by π.
Holding/Takeaway:
Not bargained for no consideration. This is basically a case where both parties gave gifts, no bargain.

Question 8

Marmer v. Kaufman MI 2009, 211

Answer 8

Consideration

Key Facts:
Feuding uncle wanted some of money left to his nephews by their mother (his sister). They made oral promise to give him some money but didn’t follow through. He sued claiming as consideration: (1) family unity & (2) break in estate tax.
Holding/Takeaway:
1) Family unity is neither a legal detriment to π nor a legal benefit to Richard, no consideration. 2) Estate tax savings are merely a side benefit, and they are not π’s to give. The oral promise lacks consideration.

Question 9

Fisher v. Union Trust MI 1904, 213

Answer 9

Consideration

Key Facts:
Father gave daughter property and made oral promise to pay off mortgage, daughter gave father $1. Father died and defaulted on mortgage. Bank seized, daughter sued estate for promise to pay mortgage
Holding/Takeaway:
Only consideration for the deed and the agreement (to pay the mortgage) was the father’s love for th π. The condition was meritorious (equity will not aid a volunteer). Gift not bargained for.

Question 10

Sharon v. Sharon CAL 1885, 217

Answer 10

Consideration

Key Facts:
∆ promised to pay π every month for not visiting him in his hotel. Didn’t pay and π sued.
Holding/Takeaway:
Not going to his hotel room was giving up a legal right. There is consideration.

Question 11

Martin v. Little PEN 1981, 494

Answer 11

Unjust enrichment/ Implied contract

Key Facts:
FACTS: Π wrote editor and informed him pf plagiarized. He offered to send a copy of his book with highlights. He did not request any payment for his services. ∆ invited π to send him the book, which he did. ∆ sued for plagiarism and π contacted him demanding compensation for his services. ∆ denied that there was a contract but sent $200. Π sued to recover ⅓ of the damages from the suit.
Holding/Takeaway:
Implied contract - When a valuable service is rendered with knowledge and approval of recipient and the service is of a character that is usually charged for. Not here because person being benefited must do something from which his promise to pay can be inferred. Quasi-contract - unjust enrichment. No contract exists but the obligation to pay is created by law for reasons of justice. Not here, this is not a wrongfully secured benefit. Volunteers have no right to restitution.

Question 12

Mills v. Wyman, Mass. 1825, p.220

Answer 12

past act promises, moral obligation

Key Facts
Father/defendent promised to pay plaintiff for expenses incurred caring for his sick son before his death
Holding /Takeaway
promise NOT enforceable; moral obligation alone is not sufficient consideration; past consideration applies to revival of a past obligation, here there was none
Dissent/Critique

Question 13

Webb v. McGowin, Ala. 1935, p. 225

Answer 13

past act promises, moral obligation

Key Facts
plaintiff falls on tree in lumber mill so it will not fall on/kill defendent; plaintiff gets seriously injured; defendent promises to pay $15 weekly for rest of plaintiff’s life
Holding /Takeaway
plaintiff received a material benefit (not dying) at the detriment of defendent; moral obligation is sufficient consideration to support subsequent promise if promisor received material benefit
Dissent/Critique

Question 14

Harrington v. Taylor, N.C. 1945, p. 228

Answer 14

past act promises, moral obligation

Key Facts
plaintiff intervened to stop defendent’s wife from splitting his head open with an ax; plaintiff sustained hand injury/mutilation; defendent subsequently promised to pay for her damages
Holding /Takeaway
plaintiff’s act was voluntarily performed, does not constitute consideration
Dissent/Critique
how to distinguish from Webb?

Question 15

Edson v. Poppe, S.D. 1910, p. 232

Answer 15

past act promises, unjust enrichment

Key Facts
plaintiff built a well on defendent’s property at the request of defendent’s tenant; defendent subsequently promised to pay plaintiff for the well
Holding /Takeaway
building well adequate consideration for subsequent promise; promise enforcable; no indication work was gratuitous, defendent benefitted from building of well
Dissent/Critique

Question 16

Muir v. Kane, Wash. 1909, p. 232

Answer 16

past act promises, moral obligation, unjust enrichment

Key Facts
oral (unenforcable under statute of frauds) contract for broker to secure buyer for defendent’s home; plaintiff broker found buyer, written contract for sale of home contained promise to pay plaintiff $200 for services rendered
Holding /Takeaway
defendent had moral obligation to pay plaintiff for services already performed, adequate consideration for subsequent promise to pay
Dissent/Critique

Question 17

In re Schoenkerman’s Estate, Wis. 1940, p. 233

Answer 17

past act promises, moral obligation

Key Facts
defendent’s mother in law and sister in law provide childcare and household services, defendent executed notes promising to pay for the services before he died
Holding /Takeaway
presumption that family services are gratuitous, but overcome by notes’ reflection of moral obligation constituting consideration
Dissent/Critique

Question 18

Kirksey v. Kirksey, Ala. 1845, p. 238

Answer 18

gratuitous promises, promissory estoppel

Key Facts
plaintiff’s brother in law/defendent promises her (a widow with children) housing/land to tend until the children are grown, but makes them all leave after 2 years
Holding /Takeaway
promise was a mere gratuity
Dissent/Critique
is picking up and moving (60 miles) + tending the land not reliance?

Question 19

Prescott v. Jones, N.H. 1898, p. 241

Answer 19

Promissory Estoppel

Key Facts
insurance agent that insured plaintiff’s buildings sent plaintiff letter saying would renew with same terms unless notified to the contrary; plaintiff did not reply (or pay), defendent did not renew insurance, p buildings burned down
Holding /Takeaway
letter from insurance agent represented an intention, was not a promise; plaintiff did nothing to renew insurance policy
Dissent/Critique
no reliance on insurance agent’s statement?

Question 20

Ricketts v. Scothorn, Neb. 1898, p. 239

Answer 20

gratuitous promise, reliance, equitable estoppel

Key Facts
defendent/grandpa promised to pay plaintiff/granddaughter/Katie $2000 with interest so she didnt have to work; no requirement for her to stop working, but Katie voluntarily gave up her job
Holding /Takeaway
gratuitous promise, not a bargained for exchange; BUT, defendant’s promise intentionally induced plaintiff to alter her position for the worse, she relied on the promise, so an equitable estoppel precludes defendant from arguing lack of consideration
Dissent/Critique

Question 21

Allegheny College v. Nat’l Chautauqua County Bank, N.Y. 1927, p. 242

Answer 21

(not a) gratuitous promise

Key Facts

Question 22

Goodman v. Dicker, DC Circuit 1948, p. 283

Answer 22

promissory estoppel

Key Facts
franchise agreement unenforcable under contract, but promise that would grant franchise was relied upon to detriment.

defendants held liable for reliance damages but not for lost profits

restatement damages rule = ‘as justice requires’

Question 23

American Nat’l Bank v. AG Sommerville Inc., Cal 1923, p. 285

Answer 23

estoppel in pais

Key Facts
car sale, buyer signed saying he received cars he never actually received. seller assigned right to third party plaintiff. Buyer could be precluded from showing falsity of statement of fact because of plaintiff’s reliance

remand to determine whether p acted in reliance on contract statement

Question 24

D’Ulisse-Cupo v. Board of Directors of Notre Dame High School

Answer 24

promissory estoppel

Key Facts

Question 25

Mahban v. MGM Grand Hotels Inc

Answer 25

promissory estoppel

Key Facts
hotel leased space to plaintiff shop, lease permits termination if there is damage. fire happens, defendant sends plaintiff note about when construction would end, then sent notice terminating lease

plaintiff reliance on defand promise, so equittably estopped from claiming right to terminate

Question 26

Seavey v. Drake

Answer 26

promissory estoppel, statute of frauds

Key Facts
dad promises to give son two tracts of land, son gives dad promissory note. son occupies land and makes expenditures. promise not unforcable because of statute of frauds (oral promise).

relief in equity under part performance doctrine

Question 27

Kolkman v. Roth

Answer 27

promissory estoppel, statute of frauds

Key Facts
Oral agreement that K will operate frarm and live in cabin. 3 years later, K has made imporvements, Roth asks for rent. K sues for breach of contract

K established promissory estoppel, exception to satute of frauds

clear case for promissory estoppel

Question 28

Stearns v. Emery-Waterhouse Co.

Answer 28

promissory estoppel, statute of frauds

Key Facts
Hardware store marketing manager position, jury found oral contract of employment for 5 years, plaintiff moved to maine and quit old job for new position, worked for 2 years. Then, plaintiff’s employment terminated

promissory estopppel can apply based on fraudulent promise of employment, but not for employment contracts over one year. too difficult to distinguish reliance

Question 29

Feld v. Henry NY 1975, 361

Answer 29

Mutuality of Obligation: Output Contract

Key Facts
∆ breadmaker agreed to sell π “all bread crumbs produced” and had to give 6 months notice before exiting contract. ∆ stopped producing in the second year of their contract after π wouldn’t agree to a price hike, stating that it was not profitable. Π sued and ∆ said he had not breached contract b/c no longer “producing.”

UCC rejects notion that output contract is lack in mutuality or is unenforceable. Sellers obligation is to use best efforts to supply the goods. Good faith cessation is permitted but not just because you aren’t turning a profit.

Question 30

Davis v. General Food NY 1937, 350

Answer 30

Illusory promise doctrine

Key Facts
Contract: send us recipe. Compensation, if any, at our sole discretion.

If promisor isn’t exposing itself to any risk then it’s illusory and not enforceable. Promise must “commit” you.

Question 31

Nat. Service Station v. Wolf NY 1952, 350

Answer 31

Mutuality of Obligation

Key Facts
Π agreed to purchase gas through ∆’s company in exchange for discount. Oral contract language: as long as π purchased and ∆ accepted order, π would get discount.

Discount is a “term sheet” and a new contract was made very time the π placed an order. Can’t get the discount prospectively. Mutuality of obligation for contract: π had not promised anything [ex. Bound to place order]

Question 32

Wood v. Lady Duff NY 1917, 353

Answer 32

Mutuality of Obligation: judicial contruction

Key Facts
π sued Lady Duff because she agreed to allow him to be the sole licenser of her products but then she broke promise. ∆ says contract is unenforceable b/c the language of the contract doesn’t bind π to anything so there is no consideration.

CARDOZO: court may fill in ambigous contrac terms to make the contract binding on both party. Court reads in an “anti-shirking: duty and find the contract binding and Lady Duff in breach.

Question 33

Drennan v. Star Paving CA 1958 (p. 275)

Answer 33

Promissory Estoppel

Key Facts
D refused to perform certain paving work according to bid. P relied on D’s bid.

Affirmed judgment for P. Part performance as consideration or acting in reliance makes bid binding. D wanted P to rely on bid, which misled P as to cost of paving.

Question 34

Hoffman v. Red Owl Stores WI 1965 (p. 286)

Answer 34

Promissory Estoppel

Key Facts
Ps owned and operated a bakery. P began discussions with D about opening a franchise store. P mentioned he only had $18,000 to work with and D assured him that would be enough. Relying on D’s assurances, P bought fixtures and infrastructure to open a store. P ran it and made business decisions under D’s advice, and D frequently advised P to invest more, until P had to borrow $13,000 from his father-in-law. P told D he could no longer go along with D’s proposal and terminated negotiations. P sued D for fraud.

Affirmed jury’s judgment for P and approved jury’s award of $2,000 damages for loss incurred by P in sale. An action for fraud cannot be predicated on an unfulfilled promise unless promisor intended not to perform; there is no evidence that D intended not to perform, but it would be unjust not to grant P some relief.