Intro and Promises
Intro
Contracts reflect business practices
- Substitute for mutual trust
Format of class
- How to form contracts
- How to defend against claims
- How to get out of a contract
Sources of Contract Law
- Principly from Common Law
- USC (Universal Commercial Code)
- Article II
- Only apples to sales of goods
- What are “goods”?
- https://www.law.cornell.edu/ucc/2/2-105
- (1) “Goods” means all things (including specially manufactured goods) which are movable at the time of identification to the contract for sale other than the money in which the price is to be paid, investment securities (Article 8) and things in action. “Goods” also includes the unborn young of animals and growing crops and other identified things attached to realty as described in the section on goods to be severed from realty (Section 2-107).
- Restatements
- What is the dominant rule?
- Not law (until cited by a judge)
- We will reference as if it is
| Primary principles | Exception / Affirmative Defenses |
|---|---|
| Autonomy, the right to enter freely into a contract | Paternalism, protect those who cannot protect themselves |
| Integrity, do what you said you would do | Social Justice, what is right? |
| Efficiency, give to those who will use the resource best | Administrability |
What is a Contract?
An enforceable promise
So what is a promise?
See: Hawkins v McGee
Hawkins v. McGee
Hawkins v. McGee, 84 N.H. 114, 146 A. 641, 1929 N.H. LEXIS 61
AKA “THe Hairy Hand Case”
Assumpsit: Write that a contract was only partially performed (or defective). Now can include those that were non-performance.
Facts
- Doctor (D) grafted skin from chest of P to his right hand
- D, ~“You’ll be out in 3-4 days.”
- D, “I will guarantee to make the hand 100% perfect or 100% a good hand”
Procedural History
Trial by jury, verdict for the plaintiff.
Hawkins also pursued malpractice, but it was thrown out. Nonsuit: Judge intervention. Not saying the doctor was negligent.
Both P & D appealed.
P: Just capped the damages to $500 D: Just shouldn’t have allowed the jury to decide if it was a real contract.
Issue
- Is this a contract?
- Were the damages excessive?
Is this a contract? Really, is this a promise? The two promises were ~“You’ll be out in 3-4 days.” and “I will guarantee to make the hand 100% perfect or 100% a good hand”. Court says the 100% perfect is a promise because of the repeated solicitation. It is an objective response to all the statements.
Were the damages excessive? See below, Remedies.
Holding
New Trial
The jury was properly informed about the question of is this a contract, and the damages should be held to the expectation of surgery.
Reasoning
The instructed measure of damages was improper because the correct measure of plaintiff’s damages was the difference between the value of a perfect hand and value of his hand in its post-operation condition. The pain resulting from the operation was a legal detriment suffered by plaintiff in consideration for the contract.
Remedies
Types:
- Punitive: Not in contract law (see: Torts)
- Compensatory
- Specific: Do over (e.g. you will have to re-do action for client)
- Substitutional: $$$
- Expectation: How much for the contract to have been completed?
- Reliance: How much worse off are you because the contract isn’t completed?
- Restitution: Get back what you gave? (e.g. if you already paid)
- In
Hawkins v. McGee, the court said they should have used expectation for more $$$.
Major Mat v Monsanto
Ruled for Monsanto
What is a contract, revisited?
Contract is an enforceable promise.
To be enforceable the contract must have
- Mutual assent
- Consideration
Embry v Hargadine, McKittrick Dry Goods Co.
To talk about mutual assent.
Facts
A had a contract for a year employment that expired Dec 15. On Dec 23rd, he told D that he was going to leave unless his contract was extended a year. D told him to continue working.
Procedural History
Court ruled in favor of D
Issue
Would a reasonable person take D’s statement as a continuation of previous contract’s terms?
Holding
Reversed and remanded the lower court
Reasoning
The conversation did not include renegotiation of terms, and told the A to continue working. It would be taken that A demands of a new contract were agreed to.