Contracts Quiz: Key Cases and Principles

Contracts

• Contracts are legally binding agreements
• Key facts and rules are necessary to understand contract principles.

Nature and History of Contract

• Shaheen v. Knight:

  • P contracted with D for sterilization, but it failed and resulted in an unintended child.
  • P claimed damages, but D argued there was no warranty of cure.
  • Implied warranty of cure does not exist in contracts.
  • No damages awarded if there is no harm stemming from the breach.

• Hawkins v. McGee:

  • P contracted with D for a 100% good hand surgery and was dissatisfied with the result.
  • Damages were awarded based on difference between the promised result and the actual result. (expectation interest), excluding pain and suffering.
  • Law of Contract formation means an enforceable contract is made if a reasonable person believes the defendant was making a firm offer.

• Nurse v. Barns:

  • P contracted with D for the use of iron mills.
  • D breached the contract resulting in damages.
  • If the damages are natural and foreseeable due to the breach, then reliance damages can be recovered even if they exceed damages based on the expectation interest of the contract.

• Hadley v. Baxendale:

  • P and D were in a contract dispute, and D was to deliver a spare part.
  • Breach of contract only results in foreseeable damages at the time of the contract.

Remedies for Breach

• Chicago Coliseum Club v. Dempsey:

  • P and D contracted for a boxing match.
  • D breached the contract and P sought damages.
  • Damages must be proven with reasonable certainty in an action for breach of contract.
  • Only recoverable damages include post-signing damages.

• Winston Cigarette co:

  • Details are unknown from the text.

• Mistletoe Express v. Locke:

  • P contracted with D for a year long business contract.
  • D breached and P sought reliance interest damages.
  • Reliance interest damages are awarded if the breaching party was deprived of an opportunity due to the breach of contract.

• Rockingham County v. Luten Bridge Co:

  • D accepted a contract to build a bridge, but the county breached.
  • The non-breaching party is only entitled to damages up to the point they received notice of breach of contract.

• Parker v. 20th Century Fox:

  • D breached the contract and P sought damages.
  • To mitigate damages, a party is obligated to seek other available employment of a different or inferior kind that are equally reasonable.

• Neri v. Retail Marine:

  • A buyer contracted to purchase a boat but became hospitalized and wanted to breach the contract, to get a refund for deposit.
  • A lost volume seller is entitled to recover the profit (reasonable overhead plus incidentals) they would have made on a lost sale, regardless of resale.

• Wassenaar v. Towne Hotel:

  • P had a contract with a stipulated damages clause.
  • The employee had no duty to mitigate damages after a breach.
  • Damages are not reduced if the damages after breach are greater than damages during the contract.

• Lake River:

  • P contracted with D for the supply of abrasive for steel.
  • D breached the contract and P sought damages.
  • A court will look at reasonable damages at the time of the contract, and will not impose unrealistic damages.

• Loveless v. Diehl:

  • P contracted with D to lease a farm for three years with an option to purchase.
  • D breached the contract, and P sought specific performance.
  • Default remedy for breach of land-sale contract is specific performance.

• Cumbest v. Harris:

  • D breached a contract to sell equipment to P, and P sought specific performance.
  • If an item has unique/irreplaceable value specific performance is granted.

• Sedmak v. Charlies Chevrolet Inc.:

  • P contracted with D to buy a Corvette and put down deposit.
  • D breached the contract and P sought specific performance.
  • Specific performance may be granted when the goods are unique and special/there is no other/similar available item.

• Dallas Cowboys v. Harris:

  • P contracted with D to play football but D breached by agreeing to play for another team.
  • P sought an injunction.
  • Courts may issue an injunction to prevent a breach of personal service contract if they are a person of exceptional skill or knowledge, but will not enforce specific performance of service contracts.

• Britton v. Turner:

  • P worked for D for 9.5 months and then claimed quantum meruit.
  • Quantum meruit is calculated by the reasonable value for services provided.
  • If an employee voluntarily breaches a service contract, the amount of work accomplished is factored into the calculated damages.

• Vines v. Orchard Hills:

  • P contracted to buy a condo.
  • P breached, then sought restitution.
  • The buyer is entitled to restitution only when the buyer’s overpayment exceeds damages to the seller or is considered unjust enrichment.

• Cotnam v. Wisdom:

  • P contracted with D for medical services, but D died.
  • P sought damages but D opposed the claim.
  • Damages must be proven by appropriate calculation of reasonable value of services provided if the contract is deemed successful.

• Martin v. Little, Brown & Co.:

  • P notified D of plagiarism in a published work.
  • P sought restitution for unjust enrichment.
  • A plaintiff can recover for unjust enrichment, if the defendant illegally gains a profit from the use of another party's material in their project/work.

• Lucy v. Zehmer:

  • P attempted to purchase land from D.
  • D said the deal was a joke, but it was still valid in court.
  • Intentions during an agreement are determined by outward expression in the agreement, not by the inward thoughts of the parties.

• Nebraska Seed Co. v. Harsh:

  • P sent letter to D offering to buy seeds.
  • D refused to deliver seeds and P sought a resolution to the contract.

• An offer must be specifically stated to be legally binding.

-Lefkowitz v. Great MN Surplus Stores: - D made an advertisement for sale of furs. - P attempted to buy, but D stated item was only for women. - Advertisements don't always constitute offers, whereas specific offers do.

• Leonard v. Pepsico:

  • P brought a suit for specific performance of a promotional ad for a Harrier jet.
  • P claimed the promotional advertisement constituted a valid offer.
  • Advertisements, such as those for promotional items, do not automatically constitute offers.

• Ardente v. Horan:

  • P contracted with D to buy D's house
  • P put down deposit and made offer for house, and D declined. The buyer's request for included items did not imply valid and binding acceptance of the offer.

• Carlill v. Carbolic Smoke Ball:

  • D published an advert offering reward for using a product.
  • P used the product and got sick.
  • The advert constitutes a unilateral offer, not simply an invitation to an offer.

• Petterson v. Pattberg:

  • P tried to pay off a mortgage to D in person, but D had already sold the mortgage to someone else.
  • D did not have to provide notice that the offer was revoked because there was no binding contract yet.

• Dickinson v. Dodds:

  • D offered to sell land to P.
  • D revoked offer before P accepted.
  • An offer can be revoked before acceptance.

• Hobbs v. Massasoit Whip Co.:

  • P consistently sent eelskins to D, who sometimes did not reply.
  • D later disposed of and damaged P's eelskins.
  • P brought claim against D, but D argued silence does not constitute acceptance.
  • Silence can, on occasion, constitute an implied acceptance if a party has reason to know of the offer and that the other party will be benefited by their acceptance.

• Nguyen v. Barnes and Noble:

  • P contracted with D to buy tablets.
  • D offered an option to arbitrate in their contract terms.
  • A user is bound to a contract that is presented to them and they do not refuse.

• Raffles v. Wichelhaus:

  • P and D were in contract dispute because of differing connotations of the same term.
  • Contractual agreements require parties to have a mutual understanding of the terms.

• Oswald v. Allen:

  • P and D disagreed on the definition of "swiss coins" in a contract for the sale of items.
  • A contract can be voided if the parties had differing understandings of the terms that were contained within the agreement.

• Weinberg v. Edelstein:

  • P had an agreement to sell items, D breached.
  • Restrictive covenants are generally considered to be part of a contract which can be enforced.

• Frigaliment Importing Co. v. BNS International Sales Corp:

  • D and P had a contract for the shipment of chickens.
  • A court may look at performance history to interpret contracts when there is more than one definition of a term.

• Sun Printing v. Remington Paper:

  • P and D contracted for the sale of paper.
  • P argued that critical terms of the contract were vague, forcing the court to rule.
  • The law requires that contracts have specific details, especially the price and quantity, to be valid.

• N.Y. Cent. Iron Works v. US Radiator:

  • D and P were in a long-standing contract and P exceeded the expected number of products ordered..
  • P would not be entitled to more items that were not part of the existing contract unless additional modifications are made.

• Eastern Air Lines v. Gulf Oil Corp:

  • An existing contract was interpreted as a valid requirements contract based on prior dealings between the parties' prior consistent performance.

• Diamond v. Krack:

  • P brought a suit against D for breach of warranty of title because of a disclaimer for damages clause D had proposed.
  • If both parties' actions after a contract shows acceptance, then the contract is considered signed and valid.

• Step-Saver Data Systems v. Wyse Tech:

  • P seeks for breach of warranty, D provided a warranty box and D argues the box top warranty is a material alteration.
  • Unilateral contracts require acceptance of an offer as presented; material alterations require separate, explicit acceptance to become part of the agreement.

• ProCD v. Zeidenberg:

  • P had a contract with D for the sale of software.
  • D argued a license agreement found inside the software box was not valid.
  • A license agreement found inside the product is considered, and binding, if the buyer retains and uses the product.

• Hill v. Gateway:

  • D included an arbitration clause in the packaging of a computer.
  • P argued there was no agreement/no explicit acceptance/that arbitration clause is not valid.
  • The product's packaging materials represent a valid conditional contract.

• Klocek v. Gateway:

  • D included an arbitration clause in the packing of a computer.
  • P argued the products were delivered, but there was no acknowledgement of the provided terms.
  • The acceptance of the product implies acceptance of the terms in the agreement.

Test your knowledge of the key principles of contract law with this quiz covering important cases such as Shaheen v. Knight and Hawkins v. McGee. Explore the implications of contract breaches and learn about enforceable agreements. Perfect for law students or anyone interested in legal principles.