A dog breeder would be considered a merchant-seller. Therefore, the dog breeder in selling a dog gives an implied warranty of merchantability. One of the criteria of the warranty of merchantability is that the goods must pass without objection in the trade under the contract description. Here the goods (Wire Terrier) would not have passed without objection in the trade. The sale of a non-pure-bred Wire Terrier as a pure-bred Wire Terrier would constitute a breach of the implied warranty of merchantability. The proper remedy for this type of breach is expectation damages. Expectation damages are computed by taking the value the goods would have had had they been conforming minus the value of the accepted goods. If the goods can be repaired, the courts will probably take the cost of repair as an objective measurement of the difference between the value as is and the value as warranted. If the goods are so defective that repair is impossible, the courts will usually award the cost of replacing the goods, less the salvage value of the goods. Here as the dog cannot be repaired, the value would be the cost of replacement which would be $1000 as this is the cost of a pure-bred Wire Terrier. The salvage value would be the cost that Nancy could resell the non-pure-bred Wire Terrier for, which presumably would also be $150. The expectation damages that Nancy would be entitled to $850 ($1000 replacement value - $150 salvage value). Therefore, Nancy suing for $850 is an appropriate remedy.
It’s interesting that you jump to an implied warranty in light of the express statements made by the seller. This isn’t necessarily wrong, although you pick a more obscure approach and bypass the obvious path of characterizing those statements as an express warranty or as a representation; either of which should get you to the right place.
Your sentence “The proper remedy for this type of breach is expectation damages” may warrant some support. You could cite the general proposition that expectation damages are the preferred remedy, or you might cite statutory support. But this sentence goes to the question’s core, so the statement needs some exploration. While expectation damages are a proper remedy for this situation, I’m not convinced these necessarily lead to the computation of damages Nancy seeks.
Your formula, talking about replacement costs and salvage value, calls for a citation. You make some assumptions about valuations, which is an OK thing to do on my exams (so long as you state the assumptions clearly) but in so doing, you also force the result you want. I don’t want to spoil the fun too much for those who haven’t attempted to answer the question, but this question begs for consideration of other damage computations as well.
Answer to Question 4
The term “different versions” in the contract between Joe and XYZ will most likely be considered an ambiguous term. An ambiguous term is one that has two inconsistent meanings. If the ambiguous term is material and the contracting parties do not attach the same subjective meaning that term, then there is no mutual assent and, therefore, no contract. In Peerless v. Whichelous, the parties were in subjective disagreement as to the meaning of the term “Peerless” and, since neither had reason to know of the disagreement, the court found there was no contract. Similarly, in Oswald v. Allen the contracting parties were also in subjective disagreement as to the meaning of the term and the court held that there was no contract. Based on the rulings of these courts, the contract between Joe and XYZ publishing will probably be void and, therefore, Joe would not be in breach.
However, when both parties to a contract attach different meaning to a material term of that contract and the court can find one of these meanings objectively more reasonable, the court will uphold the contract and enforce the more reasonable definition. The court will determine the more reasonable interpretation with the rules of aid in interpretation in the Restatement (Second). According to this section, words will be interpreted in light of all circumstances, writings will be interpreted as a whole and unless a different intention is manifested, the court will interpret the reasonable meaning in accord with the generally prevailing meaning. In this case, there is not an objectively more reasonable interpretation of the term “different versions.” In order to make this determination the court will look to extraneous facts not provided in this fact pattern. Based on the unavailability of any aid in interpretation, the court will probably not find an objectively reasonable definition and the contract will be void.
The court might uphold the contract, however, according to Restatement (Second) of Contract § 201 if one of the parties knew or had reason to know that they attached different meanings to the term “different versions.” Based on the facts as we know them, it is not apparent if one of the parties knew or had reason to know of a specific meaning.
In the first paragraph, the first three sentences start off strong. Them, the “case squibs” of Raffles [nb: I do notice if you choose to cite a case but then use the wrong name] and Oswald lose my interest and undermine my confidence. I know what those cases say; the question is how do they apply to this circumstance? This illustrates the weakness of the first paragraph. While it’s correct that the words “different versions” could be considered ambiguous, I’d like some explanation of why they will or will not be. Notice the structure of the first paragraph specifically avoids this hard problem: it lays out a general statement, squibs the relevant cases, and then concludes with the outcome. By mixing it up with the facts—what makes those words ambiguous, and why would they be sufficiently ambiguous to fit under the Raffles/Oswald precedent?—you can show me that you are ready to apply the rules.
The first sentence of the second paragraph raises some questions for me. A citation here would have helped. I think it misstates the law—not greatly, but just enough to lead you astray and to shake my confidence that you know where you’re going. The paraphrase of the Restatements is OK (although again, I get nervous if there is any inaccuracy in the way a code is paraphrased) but mostly it just treads water—you aren’t losing any points, but you’re not gaining them either. I’m anxious to see you mix it up with the facts, which gets short shrift. You say “In this case, there is not an objectively more reasonable interpretation of the term ‘different versions,’” but why? I need more than this conclusory statement to see that you have applied the legal principles to the facts you know.
The third paragraph slightly quells some of my concerns from the second paragraph. I was really wondering about that language when reading your declarations in the second paragraph. However, by this point, you seem to have lost focus on the ultimate question you were asked—has Joe breached?—so overall, the answer ends on a weak note. I still have not gotten a clear answer to that ultimate question.
I think this answer would have benefited from more time investment in the organization of the response. Let me offer up one of many possible approaches to organizing the answer:
This is just a 30 minute question, so I don’t expect great depth on anything. But I do expect that you will get your hands dirty with the facts on whether or not Joe breached. Specifically, I would be surprised if an answer achieved maximum points without providing multiple interpretations of the words and how those interpretations lead to different results.
I suspect many of you [not necessarily the person who answered this question] are reluctant to mix it up with the facts because you assume that the words “different version” are a term of art in the industry but you don’t know that because you’re not in the industry. You score points by explaining to me that thinking process. For example, you might say “If the words are a term of art, then X because of Restatements 202(3)(b). However, I’m going to assume that these words are not a term of art, in which case Y.” For what it’s worth, these words are not a term of art (at least, not that I know of). Be very careful about making unstated assumptions that channel your answer to a single conclusion.
Answer to Question 1
The first and most obvious point is that this is not a sale of goods contract so the UCC doesn’t apply. Even if it wasn’t against public policy to sell babies, which it is, this is a contract for the service of bearing 2 kids, or a contract for marriage with a condition that the wife is to bear 2 kids (This will be discussed in more depth later), not the sale of babies.
I do not think Joe has any contract law remedies, for 2 reasons. First, this contract or condition of a contract is probably void for public policy. Second, this does not satisfy the statue of frauds since 2 kids cannot be born within a year, (at least not on purpose, I suppose there could be twins, but that would be very speculative, and that is not what this contract is asking for.) First, for public policy reasons, I don’t think this contract or condition is enforceable. I personally find it appalling to force a woman to do something with her body she doesn’t want to do. Baby M points out that baby selling is illegal and against public policy. Not only that, but I think that case stands for the proposition that you contract for the creation of a baby, forcing a woman to do things with her body against her will. Although, this is not a surrogacy case, and no money is being exchanged, having the baby is the bargained for promise in this case. He is making a promise in exchange for a baby, and I don’t think that is acceptable. If a woman decides she does not want to have a baby, I do not think the court would find this an enforceable provision
Second, this is not a valid contract under the statue of frauds. Restatements section 110 reads, “(1) The following classes of contracts are subject to a statute, commonly called the Statute of Frauds, forbidding enforcement unless there is a written memorandum or an applicable exception:
…(c) a contract made upon consideration of marriage (the marriage provision);
…(e) a contract that is not to be performed within one year from the making thereof (the one-year provision).” No matter whether the babies are the promise itself or a condition of the promise, having 2 babies naturally cannot be performed w/in one year. (We haven’t talked about consideration of marriage in class , at least not that I can remember, and I’m a little unsure how it would actually work in practice, so I’m not going to talk about it) So the contract would be unenforceable.
This is my first chance to apologize for this question. I had thought you might enjoy the non-graded opportunity to revisit some of the material that occupied our first three weeks together, but I have received uniformly negative comments on this question, so I’m sorry for misjudging that. This is also a hard question no matter what, so I know it has created more angst than I had intended. Having said that, I don’t think its difficulty so grossly exceeds the range of difficulty I may give you on the exam, so perhaps some angst has been useful. It should be obvious by now that you are going to get unexpected but easy-to-relate-to fact patterns that require you to apply the rules, and this question illustrates that approach.
OK, let’s move on to the substance of this answer. You’ve raised two important points: public policy and the Statute of Frauds. Your treatment on both of them is good. You discuss the SOF in two different places and I think you should combine the two discussions. We didn’t discuss the marriage portion of the SOF, so I would have been OK if you had omitted that. However, as you correctly point out, there is an SOF issue regarding the contract’s ability to be performed in one year.
I could take issue with your public policy analysis. For example, does it matter here that the child-rearing is being negotiated in the context of marriage, as opposed to Baby M’s context of surrogacy? Recall the language in Shaheen where the judge waxed philosophic on the joys of being a parent. Irrespective of the substance, I think you could have improved your answer by more explicitly considering the Restatement factors.
More generally, there are at least 2 things I was looking for you to discuss in response to this bullet that you didn’t get to:
1. were the terms sufficiently definite to create an enforceable contract? Note you implicitly touch on this issue with your aside about twins. Do twins satisfy the deal or not? I intentionally wrote the language to raise the issue of twins, so it may warrant some additional treatment. You also raise an interpretation issue later when you discuss whether the contract was for marriage or babies. These ambiguities about the contract and what it means warrants a more general discussion about the consequences of the ambiguities on its overall enforceability.
2. promissory estoppel. These facts really beg for a discussion of promissory estoppel, especially where it was used as a misrepresentation remedy (i.e., Goodman, Red Owl).
Assuming that the court did not find the contract unenforceable on grounds of public policy, the writing may give Joe some remedies. First, we must define what the contract is, and there are 2 possibilities. The first is that the contract is the marriage with a condition to have babies. One of them (not really important who) proposed, i.e. made an offer to marry, and the other accepted, i.e. agrees to marry. The father made either his offer or acceptance (depending on who proposed) conditional on having 2 babies within 10 years, the mother agreed. The babies clause would be a condition, because Joe makes it clear that he will not marry her if she does not agree to have 2 kids. The consideration from each of them was the promise to marry. Statue of frauds would not apply because, the contract is in writing. (They would also have a marriage certificate which would codify their marital contract) Once married, and assuming they attempt to procreate with Joe fully capable of making her conceive, he has at least started to perform. (He must continue to successfully attempt to procreate through the time the second child is conceived). By continuing to take birth control, Jane is not performing in accordance with the contract. So she has not fulfilled her duty to perform under the condition. This would be classified as a condition subsequent, where the duty to perform a covenant is excused if the other party does not satisfy a condition. So the proper remedy would be to excuse Joe from his covenant. If Joe’s covanant is to stay married to her forever, in sickness and in health, etc., he is excused from performance. He has no obligation to stay married to her, and I would think the marriage could be divorced or annulled.
The second option for this contract, is that the contract was for the babies. Joe promises to marry her in exchange for her promise to bear and parent 2 kids with him. If this is the case, when she does not perform, or it is clear that she intends not to perform, she is in breach. Standard contract remedies would probably not be applicable here. Obviously the court would not make her specifically perform. Second, expectation interest would probably not get him anywhere, because it would be both speculative and probably against public policy to calculate damages on the basis of the worth of a child. (Shaheen generally supports this, even though it is a totally different scenario) The formula for this would be either lost profits plus consequentials/incidentals or wasted expenses. Lost profits would be very hard to calculate (this would be more of an emotional metric, probably better calculated under tort law), perhaps he could get farther with wasted expense, he could get the money back that he spent on his wife and in preparation to make the baby during the marriage. In theory, this might work, but realistically, a court would not grant this because it would be shocking to society’s values to say that money spent on your wife was a wasted expense. If this is a material breach, he would have the option to rescind the contract. I think it would be a material breach, because this was the entire reason he entered into the contract. So the judge may allow the parties to anull the marriage, divide up the assets, and go their separate ways. These two situations are very theoretical, however, and I don’t think a contracts judge would actually hear these arguments in real life, at least I wouldn’t want to. I think if this was a real situation, it would be very much against public policy.
You write pretty long paragraphs, which can be hard to follow. You might be better served by breaking up the paragraphs or using other formatting tools to facilitate a more structured assessment of your answer.
I also notice that much of what you wrote, especially about the remedies, applies to the first bullet as well. I think you would have been better served putting that material in your response to the first bullet.
My purpose of giving you these additional facts were two-fold: to remove the SOF issue and to provide more concrete terms to see if that prevented the contract from being too indefinite. You acknowledge the first point but, I don’t think, really hit the second.
I like your division of the discussion into the two different ways to characterize the contract (contract for marriage v. contract for babies). I think this division is good and allows your analysis to remain sharp on each point. In practice, you are really arguing that there are two different ways to interpret the agreement, and you discuss each interpretation separately. I could see many of your peers skipping over the complexities of interpreting the agreement, which could result in them confusing the different problems of interpretation with other aspects of their analysis.
Your discussion on conditions/suspension of performance/termination is OK. I think there are a number of ways to reach the conclusion that Joe can exit the agreement if he wants, and you’ve discussed one way.
With respect to the other remedies, you address the major issues but avoid some tough analytical issues. For example, I think there’s more that could be said on specific performance. Once again, it goes to how you interpret the agreement. I’m not convinced that every possible type of specific performance is foreclosed. As for damages, you raise a number of issues here that could have been dealt with in more detail. For example, why are damages speculative? [I agree with you, but you state it rather conclusorily.] Also, you pick an interesting way of characterizing the expectation interest. Could you have stated the formula differently based on Hawkins v. McGee? What about other measures of damages? And do damages really work to address Jane’s breach? What if Joe seeks damages without trying to terminate the contract? There’s a lot more that could be said here.
Note that you have limited time and limited space, so you obviously cannot exhaust every issue to its logical extreme. Your decision to proceed efficiently here on the remedies is a defensible choice and, depending on the strength of the rest of your answer, does not prevent you from being eligible for a maximum score. However, for those of you who choose to explore the remedies piece in more detail, that could (depending on the rest of your answer) also be a path towards a maximum score. I just want to make sure that others reading this answer realize that this answer glossed over some tough issues that you might choose to focus on.
I think a divorce would be a rescission of the contract. I think in this situation the obligations of the parties would be dismissed, since the contract for marriage is now void.
You didn’t really answer this bullet. The key here is that any remedies will now be sought outside of marriage again as opposed to within it. Does that change things?
This would be a mutual mistake of fact. Both parties relied on a basic assumption that they were able to have kids. According to Restatements 154, I do not think either party has borne the risk, either explicitly or implicitly. In this case I think Restatements 152 would apply. A mistake of both parties as to a basic assumption makes the contract voidable to the adversely affected party. If Joe was the one who wanted the kids, it seems as if he would be the party adversely affected. I don’t think it really matters that he is the one who is sterile, because of the mutual mistake, he can void the contract if he wants. If Jane was as excited about the prospect of having kids, and now it is impossible, I think an argument can be made that she is also adversely affected. So she could probably void the contract at her election as well.
There’s more to be said here, but what you say is fine.
If it is negotiated after the marriage, that means that the original contract is for the marriage (Joe promises to marry Jane, and Jane promises to marry Joe). If the writing was negotiated after marriage, that means that the marriage is no longer conditional on having kids. This means that the contract to have kids is a separate agreement. If this is a separate agreement, the promise by Joe is to get Jane pregnant, and the promise by Jane is to bear and help him raise 2 kids. This agreement would have different remedies. They would no longer be able to rescind the entire marriage, because the marriage was not conditional on or made in exchange for the kids. As I mentioned before, I think any court would have trouble finding, expectation or reliance damages for a wife not bearing a child. This again would be a material breach, so Joe would have the option to rescind, but he could only rescind the second obligation, not the whole marriage. So Joe could stop trying to get his wife pregnant if he wanted to.
I think this answer loses its way a little. I’m not sure that marriage and kids can be legally cleaved as you suggest, and I’m not sure what consequences would obtain if Joe stops trying to get his wife pregnant.
Rather than going there, I think the core aspect of this bullet turns on whether the pact to have babies is an amendment to the existing agreement or is a separate new agreement. I think you treat it as the latter, but what about the former?
Overall, I have provided comments on each bullet, but I would read the entire answer and grade it as an integrated whole. As a result, I will consider the places where you’ve done deeper analysis and balance that against the places where the analysis was glib and those areas where the issue was missed completely. Overall, this answer covers a lot of important ground, but there are a number of things I was hoping to see discussed that you didn’t reach.
First of all, this is a contract (transaction) for the sale of goods, so the UCC rules apply. The dog is a good because it is a movable item which Nancy purchased. The seller made a warranty under UCC 2-313, by stating that the dog was a pure-breed and knowing that this was what the sale was for, i.e. the basis for the bargain. He breached that warranty when he gave Nancy a mutt. Under section 2-714 which states, “(1) Where the buyer has accepted goods and given notification he may recover as damages for any non-conformity of tender the loss resulting in the ordinary course of events from the seller's breach as determined in any manner which is reasonable. (2) The measure of damages for breach of warranty is the difference at the time and place of acceptance between the value of the goods accepted and the value they would have had if they had been as warranted, unless special circumstances show proximate damages of a different amount.” So If Nancy notifies the seller she knows it’s a mutt, she should be able to recover the value of a pure breed, $1000 (assuming this was the value of a pure-breed at the time and place of tender), minus the value of what she got, $150 (assuming this was the fair value of a mutt terrier like the one she got, and it would seem reasonable to assume this, because that was the going price at a pet store), which equals $850. So this is the proper remedy.
I like this answer a lot. It gets to the point, speaks with confidence and makes proper use of citations. If you were handwriting the answer or you were running out of words, you would not quote the full text of 2-714. We didn’t spend a lot of time on 2-714, so if you didn’t know/didn’t feel comfortable discussing 2-714, I would be equally happy with a discussion of general Hawkins v. McGee principles. In that respect, I like the parenthetical assumptions made, but note that the parenthetical assumptions assume away some of the problem of determining if we have enough data to compute expectation interests. You could score more points by discussing other ways of computing damages.
First of all, food service at a restaurant is both a sale of goods and contract for services. If the essential purpose of a restaurant is to buy food, so it could be a sale of goods, UCC situation. However, if a court would decide that the preparation and service of the food is the essential purpose of the restaurant, then it would be governed by the restatements and common law. I don’t really know what I think, so I will explain both. If this is a restatements contract, I don’t think there is any manifestation of assent in this sign. Thus no contract can be made from this sign. I don’t think it is in any way binding on the diner to serve you just because you are wearing a shirt and shoes. Under restatements section 24, an offer is only made when the offeror manifests willingness to enter into a contract to justify another into thinking that the bargain is invited. No shirt, no shoes, no service, is merely defining the group of people who are not eligible for service, not inviting performance or acceptance of a contract. In a way it is a bid, or invitation to make an offer. The offer is not actually made until the host seats you or the server takes your order.
If we say that the essential purpose of a restaurant is to sell food, then it would be governed by the UCC, and the offer would be easier to find. Under 2-206, “an offer to make a contract shall be construed as inviting acceptance in any manner and by any medium reasonable in the circumstances”. So under the more liberal provisions of the UCC, this could be a unilateral contract. It could be interpreted as inviting anyone fully clothed to come in and buy food. The acceptance would occur when the customer orders. No consideration is needed under the UCC.
This is a very open-ended question, and I’m interested to see all of the different paths people take with it. Even more so than other questions, there are many paths to success.
This particular answer suffers from a core defect, which is that it does not directly answer the specific question asked, which was under what circumstances would the sign form an enforceable contract. The first paragraph, for example, seems to be taking the position that under the Restatements it would never do so. That would be an acceptable answer, but that position is not stated clearly at all, so maybe that’s not what was intended. Ideally the answer would structure specific situations where the sign would create a contract and explain why.
Having said that, there is a lot of merit to this answer. I like the separate treatment of Restatements and UCC, although I would have been OK too if you selected just one and explored it in more detail. I especially like that the answer makes a strong conclusion on each point—the analysis is laid out, and then the answer picks one conclusion over the others. In particular, the conclusion that the sign is just an invitation to make an offer that limits the class of potential offerors is an aggressive but interesting one.
I’m not sure I agree with the specific instances that constitute offer or acceptance as articulated by this answer. Indeed, as we continue to explore in our vegetarian hot dog example, there are multiple steps in the process of forming a contract in the restaurant context, and specific actions could be variously characterized as an invitation to make an offer, an offer, an acceptance or performance. Note this suggestions another way you could have structured this answer: if the sign is an invitation to make an offer, then X; if the sign is an offer, then Y; if the sign is acceptance, then Z.
The statement that the UCC does not require consideration is an overstatement, although I see where you’re trying to go.
For the few of you who may finally have figured out my twisted way of thinking about the world, this may seem like an easy question. If you haven’t reached that nadir yet, this question warrants more thought. Why did I ask this question? Does it tie into any themes I’ve been banging on all semester? If you can answer those questions, you may find this question easier than it seems.
First, this contract is for the right to publish a book, not the sale of books, so it will be governed under the Restatements and the common law. The real question in this case, is what did the contract mean by “different versions”? Restatements section 204 states, “When the parties to a bargain sufficiently defined to be a contract have not agreed with respect to a term which is essential to a determination of their rights and duties, a term which is reasonable in the circumstances is supplied by the court.” This does not give much guidance as to what the court will do. I do not think there is a sufficient definition of “different versions”. So to find a term that is reasonable, according to restatements 202, the courts may then look to course of performance, course of dealing, or usage of trade. Assuming the parties have no work history together, and XYZ has not approved this or previous articles to be published with only a few words changed, the courts may then look at usage of trade. Is “different versions” a term common to the industry? Does this have a generally accepted meaning? I have no answer to these questions, but I would assume (and will assume for the rest of this answer) there is no industry standard for the meaning of “different versions”. So the court will most likely have to resort to precedent. The first case dealing with this subject is Raffels. According to this case, when there is no clear cut way to determine what is meant by a term, no remedy can be given. So according to this court I don’t think they could find Joe in breach. The friaglement (chicken case) is also on point here. This case seems to stand for, when a party claims that another party is in breach based on the violation of an ambiguous term, the burden is on the party bringing suit to show what the term meant. Perhaps XYZ could then introduce some parole evidence to show what they meant by “different”. If there were no discussions however, I think according to the restatements and precedent, the court would have a hard time deciding that XYZ’s meaning prevails, thus Joe is probably not in breach. However, since the court has a lot of discretion in this case, it is possible that a court would say that it is not reasonable to say that Joe has published a “different” article when in fact he has only changed a couple of words. On the other hand, a court could impose a stupidity tax on XYZ for not drafting their contract better. They could have easily defined how to make an article different, i.e. how many words need to be different, if the focus of the article has to change, if there are certain sections that cannot be republished, etc. I think the court would have a hard time finding Joe in breach, because the term different is not sufficiently defined. Assuming that it is not defined by parol evidence, course of dealing, or usage of trade, the burden is on XYZ to show that Joe is in breach, and I don’t think they can do it.
A sidenote, and perhaps a defense for XYZ, is that when they entered into the contract with Joe, “the article” was the one written by Joe, not the edited version put in print by XYZ. The article Joe changed, may not have been “The article” as defined under contract anymore. Joe may have only been allowed to change the material he had submitted, not the edited article XYZ published. This is probably more of a copyright or property issue though, and I do not want to spend my time on it.
This is generally a strong answer. However, it’s a little hard to follow, if for no other reason than because most of the good stuff is buried in a single long paragraph. A little better presentation (paragraphs, maybe headings or other ways to call attention to the points being discussed?) would help me see the organization of the answer better, and that might help the score. However, I also think a clear sense of how you want to organize this answer before you start writing it would have also helped overall.
For example, I think jumping to Restatements 204 at the beginning is an interesting choice. 204 is relevant to the discussion but I see it as one of several choices that the court can use to interpret the words. Putting 204 where you did isn’t wrong, but I suspect a stronger organizational plan to your answer would have caused you to move that discussion.
Putting aside the organizational issue for a moment, there were many things I like about this answer. I like the questions you ask in the middle of the first paragraph and the associated assumptions you make. These keep you from getting stuck and from channeling your answer down a single path.
I like the case discussion. Notice that the analysis doesn’t mix it up with the case facts, but in this situation that’s OK because the cases are really used just as shorthand for their legal rules, not for their facts.
Finally, I like the way this answer concludes by applying the different policy perspectives to reach different conclusions. Rather than being paralyzed by the seeming squishiness of contract law, this answer embraces that squishiness to show the range of possible outcomes and why a court might stretch or manipulate the analysis to pick one over the other.
Three cautionary notes. First, the score to this answer would be reduced by the organizational issues. Second, the word count on this answer is 629 words. In your exam instructions, I will warn you that a word cap is non-negotiable and I intend to severely penalize answers that exceed the word count by even one word. It would not be hard to prune 29 words from this answer and preserve all the substance, but it would take a little extra time. Finally, I dole out some praise to this answer with some nervousness that some of you will robotically attempt to emulate the praise-worthy aspects. Robotic attempts to do anything on the exam usually fail, so that would not be a great approach. More generally, I remind you that there are many paths to success on the exam, and completely different approaches or positions could be equally or even more praise-worthy.
Again this is a contract for services, not goods, so the Restatements and common law apply. This example is extremely similar to the Martin v. Little Brown case. Inner Light would most likely sue based on a theory of implied contract, or unilateral contract. They would say that the offer was the newspaper ad, and the acceptance was made unilaterally by the patrons by showing up. Or they could say that this is an implied contract in the “ordinary course of dealing and the common understanding of men”. They would most likely argue that they have conferred a service, and even though they did not state the price up front, reasonable people would expect to pay for the service. However, I think they would be wrong in this argument. Martin states, “When a person requests another to perform services, it is ordinarily inferred that he intends to pay for them, unless the circumstances indicate otherwise. Restatement Restitution § 107(2) (1937). However, where the circumstances evidence that one's work effort has been voluntarily given to another, an intention to pay therefor cannot be inferred.” Inner light at no time manifested any intention to ask for money. They were either trying to scam the attendees, by not telling them it cost anything, then trying to charge them later, or they were just stupid. They could have mentioned or collected the money at several points before the seminar concluded. They could have put the price in the newspaper, told the patrons at the beginning of the seminar, or collected the money upfront. Even the name of their company and theme of their seminar seems to suggest this is voluntary. Finding inner goodness is a fairly altruistic goal, and one that people may expect it to be given out of love for man kind, not currency. My point is that this smells like a religious or not-for-profit group by their advertisement. Perhaps the partons could have expected a donation box, but I think the services could be reasonably understood as being given voluntarily (according to Martin.), thus no fee can be charged.
With regard to style, once again you should consider breaking up the big paragraph. Also, here the quotation from the case was more appropriate to make your point than the normal quotation of statutes (indeed, I found the quote pretty effective in context).
As for substance, you’ve hit the nail on the head by discussing the right issue. However, your answer kludges together at least three different doctrines that I’d like you to keep separate: contract formation, restitution as a contract damages measure and restitution as the cause of action. Breaking these three topics apart would substantially improve this answer.
Thus, you would start by discussing contract formation. Was there an offer? Acceptance? Consideration? The answer really glosses over that entire process. Then, if you find a contract, what are its terms? Was price included in the terms? Will the court impute a price? If so, what price is that? Note you might discuss a number of doctrines here, including terms disclosed after the contract is formed and the differences between the UCC and the Restatements regarding the imputation of a reasonable price.
Finally, assuming that the contract fails or does not establish adequate remedies, you would discuss the cause of action of restitution (quasi-contract), where the Inner Light sues for restitution without arguing that an actual contract formed. The discussion about Martin was on point.
You might have noticed that this was a 45 minute question (compared to the previous three questions, which were 30 minutes each). That should be a tip-off that this question probably has a few more things going on than a 30 minute question.
Answer to Question 2
The first issue in determining whether Nancy is suing for the proper remedy is whether the dog breeder’s statements constituted a material misrepresentation or a breach of an express warranty. A misrepresentation is material if it would be likely to induce a reasonable person to manifest his assent, or if the maker knows that it would be likely to induce the recipient to do so. Restatements, § 162. To successfully support her claim on these grounds Nancy would have to prove that she was in the market solely for a pure-bred Wire Terrier. Assuming this is the case Nancy would have a strong argument that the dog breeder’s assertions induced her to agree to the contract, and furthermore, the dog breeder, with his superior knowledge, was likely to know that his assertion would induce Nancy into the contract. If Nancy is successful in proving that the dog breeder made a material misrepresentation the contract she has the option of voiding the contract. If she elects to void the contract, both parties the dog breeder would owe Nancy $850 and Nancy would have to give back the dog.
Nancy’s second course of action in pursuing her remedy is to claim that the dog breeder breached his express warranty. In order to establish breach of an express warranty Nancy must prove the following four elements: (1) the statements were fact, and not opinion, (2) the statements related to the goods at issue, (3) the buyer relied upon the statements as the basis for the bargain, and (4) breach occurred because the statements were not true at the time of delivery. Nancy has a strong argument in proving elements one, two, and four, which leaves only the second element in dispute. Again, Nancy must prove that she was in the market only for a pure bred wire terrier and she agreed to the contract with the dog breeder solely because of this fact. Assuming that she is successful in making a prima facie case against the dog breeder Nancy would be entitled to damages under U.C.C §2-714(2), “The measure of damages for breach of warranty is the difference at the time and place of acceptance between the value of the goods accepted and the value they would have had if they had been as warranted, unless special circumstances show proximate damages of a different amount.” The value of the dog at the time of acceptance was $850. Assuming that the $150 the pet store was offering for a pure bred wire terrier represents fair market value for a pure bred wire terrier Nancy would be entitled to keep the dog and receive $700 in damages from the dog breeder.
The dog breeder is likely to defend the contract on the grounds of mutual mistake. Where a mistake of both parties at the time a contract was made as to a basic assumption on which the contract was made has a material effect on the agreed exchange of performances, the contract is voidable by the adversely affected party unless he bears the risk of the mistake under § 154. (Restatements, § 152). The dog breeder will likely attempt to avoid the default rule imbedded in § 154 by asserting that Nancy bears the risk of her mistake. “A party bears the risk of a mistake when he is aware, at the time the contract is made, that he has only limited knowledge with respect to the facts to which the mistake relates but treats his limited knowledge as sufficient.” (Restatements, § 154). If Nancy really wanted a pure bred wire terrier than she should have made sure that was what she was contracting to purchase.
Nancy made no objections at the time of the sale, thus, it would be reasonable to assume that she treated her knowledge as sufficient and thought she was in fact purchasing a pure bred wire terrier. If the dog breeder’s defense of Nancy’s claim is successful Nancy will not be entitled to damages and the contract will be upheld.
The first paragraph creates two immediate issues. First, it discusses Restatements Sec. 162, which would give Nancy the right to void the contract. But voiding the contract would mean it gets unwound—Nancy gets $1,000 back, the breeder gets the dog back. This is not the remedy Nancy wants, so you’re answering a question that I didn’t ask.
Also, the reference to “superior knowledge” is confusing. I don’t see how to interpret “superior knowledge” as an element of the tests you’re applying. I think superior knowledge is relevant to other defenses, such as mistake, but not here. Therefore, I think the first paragraph has two problems: first, by answering a question that wasn’t asked, and second, by applying an incorrect test. On the exam, these types of mistakes will likely cost you points.
Note that misrepresentation does also show up in contexts other than Restatements 162, specifically in promissory estoppel (Goodman and Red Owl) and warranties. Your second paragraph moves strongly in that direction. You’ve properly cited the right test for warranties. But then I lose you when you say “Nancy must prove that she was in the market only for a pure bred wire terrier and she agreed to the contract with the dog breeder solely because of this fact.” At minimum it would help to get some citations for why you are calling out these elements (in market only for a pure bred; agreed solely because of the fact). Without the citations, I think the marshalling of these facts misapplies the test. Nancy merely needs to show reasonable detrimental reliance.
Discussing 2-714(2) here is appropriate, although as I’ve indicated elsewhere, you don’t need to quote the statute. But where do you get the value of the pure-bred dog as $850? I think this may just be a typo, but it’s an important one as it leads to the conclusion is that the remedy Nancy seeks is not the correct one.
The third paragraph goes back to contract defenses. You need to be careful here. Remember the question you have been asked: is Nancy seeking a proper remedy? If the defense means that her remedy is not proper, then it’s entirely appropriate to discuss the defense. However, if a seller’s defenses might create different remedies, you run the risk of discussing irrelevant topics. I think the third paragraph comes close to being irrelevant. It might have been relevant if you show that the seller always can trump Nancy’s remedies by voiding the contract. But I don’t think that’s a defensible argument. Here, I think suggesting that the seller could void this contract is aggressive (in your earlier paragraph, you talked about the seller’s superior knowledge). Also note that under Restatements 152, the right to void the contract attaches only to the adversely affected party (not the seller, who got enriched by the mistake).
The last paragraph confuses me. I think it argues that Restatements 152 acts as a defense to Nancy’s breach of contract/warranty action, such that the contract remains in place? If so, the argument is mistaken. 152 only creates a right to void the contract.
The author knew that he/she had exceeded the word count cap (in this case, 670 words), but just a reminder to everyone else that you need to count your words if you are typing. Here, trimming 70 words would be easy. For example, you’d be under the word cap if you just removed the quotations to 2-714 and Restatements Sec. 154.
Answer to Question 3
To find an enforceable contract, the sign would have to stand as the offer. By having both shoes and shirt and walking into the restaurant, you have accepted the offer (acceptance by performance). Following this line of thought, the sign represents the restaurant’s willingness to perform, and you have performed by already walking through the door (mutual assent).
So now that you are in the door what have you bargained for? Service. Does this mean, someone to shine your shoes and wash your shirt? Arguable no. For example, if you enter with both shoes and shirt, saddle up to the counter and ask for a shoeshine, it is unlikely a contract would exist. The offer is posted on a restaurant door, and extended to all those who enter the premises conforming to the stated conditions. A restaurant is an establishment that serves and sells food, and “service” in this context could arguably be limited to service of food. If you enter with both shoes and shirt, saddle up to the counter and ask for a soda, the service of the soda at the price specified on the menu could be the bargained for agreement.
What if you enter the restaurant with both shoes and shirt and decide nothing on the menu is appealing, and before ordering anything, decide to walk out, Was there a breach of contract? Arguably no, there was no service performed. In other words, there is the offer and acceptance, but no consideration. The contract is complete once the service is performed by providing the specified item on the menu for the listed price.
If the restaurant were to refuse you service for any reason other than failing to have both shoes and shirt, would you be entitled remedies? Arguable yes, though they would be minimal. You could sue for expectation damages, this would include time, and effort expended to reach the restaurant only to be dismissed. In short, under limited interpretations, the sign can constitute an enforceable contract.
However, one could also argue that this is not a contract at all, but only an invitation to bargain, extended to a limited class of people, those with shoes and a shirt. The offer is the ordering of a food item at the price specified on the menu, and the acceptance is the serving of that item.
There’s a couple of things I liked about this answer. First, the approach it takes shows the range of ways that a student can answer this question. Second, I thought the discussion about interpreting the terms of the contract was also interesting.
However, there are two fundamental problems with this answer. First, the first sentence says “To find an enforceable contract, the sign would have to stand as the offer.” Could the sign constitute an acceptance of an offer made by the customer? Could the sign constitute the integrated terms of a contract formed elsewhere? Based on the way this answer was structured, it is unduly limiting to think of the sign only as an offer.
Second, and more fundamentally, the answer seems to be taking the position that “If no X, then no Y” can be equated with “If X, then Y.” I don’t think these are logically equivalent statements, so at minimum the shifted proposition needs to be defended and explained. If this syllogism shift is a logic flaw (I think it is), it undermines the entire answer.
There are a number of other aggressive statements in the answer. For example, asserting that merely walking in the door of a restaurant constitutes assent to terms needs more explanation. Isn’t this analogous to the approach used by Ticketmaster (“visiting our site means you agree to terms”) and rejected by that court? Also, invalidating the contract for lack of consideration only when the contract is enforced against the customer is a little uncomfortable. Why is there no consideration in that context but consideration in other contexts?
This answer also creates an ambiguity that begs to be explored. I believe it suggests that the contract is “complete” when the order is placed and the food delivered. If this is the case, what was the contractual effect of the sign? It seems like those subsequent developments form the contract we care about. You touch on those points in the last paragraph, which would have benefited from more explanation. Why would the sign be an invitation to make an offer instead of an enforceable contract? The reasons for picking one outcome over the other would be very interesting.
• The first question is whether a contract even exists. A mere exchange of promises doesn’t constitute a contract.
Consideration would create a contract, but it would be one without remedy.
Without a showing of consideration, Joe would have to fall back on promissory estoppel, and show that he has relied on her promise to his detriment.
If you accept the theory of a contract with promissory estoppel filling in for consideration, then you must define what Jane’s promise actually meant. Both sides probably meant at the time that Jane would refrain from using contraceptives. You could read in a “good faith” effort to conceive, whatever that is.
But promissory estoppel has three elements: that there must be a promise that the promisor should reasonably have expected to induce action by the promisee, that in fact produced the action, and that promise must be enforced if injustice is to be avoided. In this case, the promissory estoppel approach fails on the third element.
While it is a sad situation for Joe, enforcing the promise by ordering an injuction (to stop taking contraceptives) or specific performance by Jane is untenable. There are public policy grounds for refusing to order a woman to attempt to conceive a child against her will. Rest. (2) 179 says the court can derive public policy against the enforcement of promises from relevant legislation and the need to protect some aspect of the public welfare, for example, interference with other protected interests. The law, as articulated in statutes and judicial decisions such as Roe v Wade, is that a woman has the right to choose not to bear a child she has already conceived. It follows logically that she has the right to choose not to conceive a child in the first place. As between a person’s right to rely on the promise of a spouse and a person’s right to make his/her own decisions about childbearing, society has a greater interest in protecting the right of a person to make that decision. Conceiving and bearing a child entails unspeakable risks to Jane and to the child and comes with the greatest responsibility ordinary people ever undertake. It would be unfair in the extreme to the child involved. And it would not even accomplish what Joe wanted in the beginning, which was a happily married couple trying to raise a family together. In trying to avoid injustice to Joe, a greater injustice would be done--other protected interested are interfered with.
If Joe were to pursue his case on grounds of promissory estoppel, the only damages he would have a chance of recovering would be for expenses he incurred in reliance on Jane’s promise--outfitting a nursery, for example. But it is arguable that he incurred those expenses at his own risk, as there is no guarantee that even had Jane stopped with the contraceptives, she would have conceived. The nature of the situation (i.e., that Jane could comply completely with the agreement and still be unable for various reasons to conceive and bear two children), probably makes damages of any sort too speculative.
In your first paragraph, you say that mere exchange of promises does not create a contract. This is true because the promises must be bargained for. Note that normally the bargained-for promise is consideration. Hamer v. Sidway. So I’m not clear how you so quickly sidestepped contract formation here.
The fourth paragraph (“If you accept…”) raises some interesting points going to the terms of the agreement. You might have strengthened this discussion by emphasizing that the court may have to stretch to “fill in” all of these terms of the agreement. Might this suggest the agreement was too vague/incomplete to enforce?
I liked the discussion about promissory estoppel and public policy, although the answer did go on quite a bit on the public policy point. I would have thought you could have more succinctly referenced the language from Shaheen and Baby M to hit the points on public policy.
I didn’t totally follow your damages discussion. I’m not exactly sure why it didn’t work for me. Could it be that reliance damages, by definition, can’t be speculative…?
• 2 kids within 10 years
If you establish that an enforceable contract exists here, Joe does not have to wait until the 11th year to sue Jane for breach of contract if she has given him notice that she has no intention of fulfilling the agreement. This constitutes anticipatory repudiation as long as she has been clear and unequivocal. The writing still has no consideration and would fail except as a promissory estoppel case, and damages, if recoverable, would be limited to reliance interest.
The anticipatory repudiation point is a good one.
It does change the result. Divorce would render the original agreement void because there was an implied condition in the agreement that they would be married and having a child. As in Krell, the case of the king’s procession, a court would be likely to find that marriage was “the foundation of the contract.”
The failure of a condition does not render the agreement “void,” it just excuses performance/renders the provision unenforceable. The frustration point wasn’t what I was looking for—I still see this fundamentally as a remedies question—however, it’s an interesting point and would likely get creativity credit.
• Joe is sterile
It does change the result. If neither party was aware that Joe was sterile, the contract would be voidable for failure of a basic assumption or for impossibility. If he has expressly asked for her promise of two children genetically related to both of them, his impotence makes that impossible.
This language “voidable for failure of a basic assumption or for impossibility” is confusing. Failure of a basic assumption generally gets linked to mistake, not impossibility. The impossibility argument is analytically attractive but I don’t think it applies unless the sterility occurred after contract formation.
• negotiated after marriage
It would not change the result. If the contract is negotiated after marriage, it could be construed as an amendment to the marriage contract. As such, it would fail under the Restatements for lack of consideration, unless you go back to promissory estoppel.
I think this answer is incomplete. It could be construed as an amendment, but are there other ways to construe it? Even then, not all amendments automatically fail for consideration. If there is mutual consideration, then the amendment survives. Even without mutual consideration, amendments can be supported under Restatements Sec. 89 in some cases.
The refund of $850 is a proper remedy under the UCC. The implied warranty clause (2-314) applies because it provides that “a warranty that the goods shall be merchantable is implied in a contract for their sale if the seller is a merchant with respect to goods of that kind.” The dog breeder qualifies as such a merchant. UCC 2-314 says also that goods must “conform to the promises or affirmations of fact” made on containers or labels. Obviously the dog has no container or label, but the principle holds. It must also “pass without objection in the trade under the contract description,” which a non-purebred dog would not. It must be fit for the ordinary purposes for which such goods are used. The ordinary purpose of purebred dogs is breeding, and it is unfit for that.
The UCC provision for damages for breach in regard to accepted goods (UCC 2-714) is the difference between the value of the goods accepted--in this case $150--and the value they would have had if they had been as warranted.
The implied warranty is fine, although the express warranty seems like a better approach. Of 314, I think (a) is the best bet. I didn’t buy your reinterpretation of (f). (c) is OK although you have to make an assumption of how dogs are “used.”
The last paragraph is too efficient. What is the value of the goods if they had been as warranted?
OK, it’s a restaurant, so it’s UCC, governing the sale of food and drink. The written sign is a condition to the sales contract. If the condition is met--if a customer wears shoes and shirt as required--the restaurant is obligated to perform the contract of serving, or selling, her food and drink.
Alternatively, assuming the policy the sign declares is based on sanitation concerns for the protection of all customers, a customer who sees the restaurant serving someone who doesn’t have shoes or shirt can object that the store is in breach of the contract created by the store’s offer (selling food in an environment without shirtless and shoeless people) that the complaining customer accepted by performance (that is, coming into the restaurant to buy food).
I think you can state an assumption to get this governed by UCC. However, it’s not obviously so. If you say the words “no service” are part of the contract, then implicitly the UCC does not apply and you need to argue why it does. You may have to discuss what the word “service” can be interpreted to mean. Perhaps this illustrates a weakness of the “contract”?
This answer makes the same logical error that I wrote about the previous time I commented on an answer to this question (equating “If not X, then not Y” with “If X, then Y”). See my other discussion.
The second paragraph appears to argue that all other customers are third party beneficiaries of each contract with an individual user who breaches. This is an interesting argument but we obviously spent very little time exploring the parameters of third party beneficiary doctrines.
This case turns on the interpretation of the word “different.” By Joe’s definition, the minor changes he made to the article constituted enough difference to comply with the contract terms. The publisher would counter that the article published elsewhere was not essentially different from the first one and that he was in breach, and they would be right. This case is governed by the Restatements, which provide that manifestations of intention of the parties are interpreted as consistent with “usage of trade” (Rest. 202). The publisher needs to show that within the trade the word “different” means more than minor changes.
Joe can defend himself by citing Frigaliment, where the court refused to define terms more strictly than the parties themselves did, and can point out that the publishing company is experienced in writing such contracts. But the publisher has a stronger position because Joe made his “minor changes” not to his original document but to the polished, edited version that ran in XYZ’s publication. The focus should be shifted from the question of whether “three additional minor changes” constituted enough difference in the two articles to the fact that the three minor changes were made to XYZ’s published article, and the changes which had been made to the document while it was in XYZ’s possession were left apparently largely intact. (I’m assuming that the three minor changes he made did not amount solely to undoing the editing of the article by XYZ and returning it to its original form.)
For whatever it’s worth, the publisher can also charge that he did not fulfill his duty of good faith and fair dealing.
I like this answer. I especially like that it efficiently gets to the point yet it’s pretty complete. A discussion of the Peerless case (which would absolve Joe by voiding the contract entirely) would have been a nice sweetener.
For other students, notice the low word count (less than 50% of cap). A reminder that it’s not about how many words you say; it’s about picking the right words.
Inner light cannot collect the money. Either their ad was too specific, or it was not specific enough. Either there is a contract and payment was not part of the terms, or there is no contract in the first place due to fact that some terms were left open, or the contract is voidable for failure of a basic assumption.
1) If there is a contract, payment was not part of the terms
There are two ways that you could frame the contract formation here. In most cases, an ad is considered an invitation to make an offer, as it was in Leonard v Pepsico--”a mere solicitation that creates no power of acceptance.” If that is the case here, then the offer is when the attendees show up to attend the seminar, and the acceptance is when the speaker presents the 60-minute program.
There is an exception to the general rule about ads constituting only invitations to make an offer--when the information is so specific as to leave nothing open to negotiation and the ad itself becomes an offer. As in the Carbolic Smoke Ball case, and in the fur coat case, it becomes a unilateral contract, and acceptance of the offer is by performance. If that is the case here, the ad is the offer, and acceptance is by performance when the attendees show up and sit through the seminar.
In either case, payment was not part of the terms. The manifestation of mutual assent extended as far as the seminar and no further.
2) Alternatively, according to Rest. 33, a manifestation of intention cannot be accepted so as to form a contract if the terms aren’t reasonably certain. The terms of cost were not reasonably certain in the ad that intended to be the offer, therefore no contract is even recognizable.
3) Alternatively, if a contract exists, it is voidable for failure of a basic assumption--the attendees did not know about the price. Rest. 153 is particularly apt here: where a mistake of one party as to a basic assumption has a material effect, the contract is voidable so long as he doesn’t bear the risk as part of the agreement, enforcing the contract would be unconscionable, and most significantly, the other party had reason to know of the mistake or his fault caused the mistake.
4) If nothing else works to void the contract, I would try the defense of lack of contractual capacity on grounds of mental incompetence on the part of the attendees. (I know I can’t joke on the exam.)
I really liked the first paragraph—takes a position and addresses multiple applicable doctrines. A strong first paragraph like this really lays the foundation for a good score (of course, the answer has to deliver!).
Point #1 is well-expressed. I could debate the finer points but this portion was nicely done.
Point #2 prompts a few questions. What about the Restatements 34? If the ad fails as a contract, is there a contract somewhere else?
Point #3 also prompts a few questions. As we discussed, unilateral mistake is a pretty rare doctrine, so a careful discussion is warranted. Here, exactly what is the mistake? Certainly, ignorance is not the same as a unilateral mistake. Maybe you’re arguing that IL has a duty to disclose? This point is the weakest part of the answer.
On Point #4, who says humor is verboten on the exam? I’m going to be reading a lot of exams, so why not add a little levity if appropriate? Oh right, maybe it’s because I’m so stiff and serious…
Answer to Question 2
Is the $850, the refund that Nancy seeks to receive in addition to keeping the pure-bred Wire Terrier, the proper remedy?
A misrepresentation is a statement that is not in accord with the facts. A misrepresentation is fraudulent if the maker intends his assertion to induce a party to manifest his assent and the maker is not sure of its accuracy. A misrepresentation is material if it would be likely to induce a reasonable person to manifest his assent, or if the maker knows that it would likely induce the recipient to do so. A misrepresentation makes a contract voidable whenever it is fraudulent or material and induces the other party to assent. A misrepresentation induces assent when it substantially contributes to the party’s decision to enter into the contract. Misrepresentation is grounds for terminating the contract.
A mistake is a belief that is not in accord with the facts. Where parties make a mistake about what the K might do and these assumptions are wrong, the contract is voidable by the adversely affected party unless he bears the risk of the mistake. If the mistake has a material effect on the agreed exchange of performances, relief is usually restitution. A party bears the risk of the mistake if it is allocated to him in the agreement, or the party has limited knowledge with respect the transaction but treats this limited knowledge as sufficient or the court allocates the risk to the party on grounds that it is reasonable to do so.
In this situation, the refund of $850 in addition to keeping the dog is not the proper remedy. Nancy can make a claim that the statement by the seller of the dog was a misrepresentation. His statement is a statement of fact that is fraudulent or material which induces assent by the buyer, Nancy. This is grounds for terminating the contract. If the contract is terminated, Nancy should get back the $1,000 and the dog should be returned back to the seller. However, Nancy should make the arguement that the dog was already in her possession, which is 9/10 of everything, and Nancy should be able to keep the dog as well as get the $1000 back. Mutual mistake would also apply to this situation as grounds for terminating the contract.
The seller might be able to make the claim, if there was a mutual mistake, that Nancy bore the risk of the mistake. If it was a mutual mistake and Nancy agreed to buy the dog “as is”, Nancy would be stuck with paying $1000 for a non pure-bred dog. However, I do not believe that the seller of the dog will be able to get this because he is in the business of selling dogs and should have knowledge about what he is selling to his buyers. This situation looks more like a misrepresentation.
The seller misrepresented a material part of the contract that induced the buyer to enter into the contract which caused the buyer to suffer a loss in money. The contract should be terminated and the buyer should get back the $1000. However, because the buyer has possession of the dog, and possession is 9/10 of everything, the buyer should be able to keep the dog.
This is a real good news/bad news answer. The good news is that it takes a strong position (Nancy can either terminate and get all $ back, or she’s stuck without any remedy). In support of that position, the answer does a nice job explaining the legal reasons and marshalling facts.
The bad news is that this answer is fatally incomplete. It only discusses various defenses to contracts and completely skips over the remedies for a breach of contract. With that omission, it’s difficult not to characterize this answer as wrong. Wrong answers usually get hit pretty hard grade-wise, even if the answer is otherwise well-articulated.
A few specific points:
Under what situations might a sign saying “No Shoes, No Shirt, No Service” constitute an enforceable contract.
An enforceable contract exists when there is an offer, valid acceptance, plus consideration. Normally an offer must be clear, explicit and leave nothing open for negotiation. Advertisements are not generally considered an offer unless they are clear, explicit and leave nothing open for negotiation. The method of acceptance for a unilateral contract is completing the act unless it is otherwise stated. For example, in the Carbollic Smoke Ball case, the offer was accepted at the time the medicine was taken. For a unilateral contract, the offer is not accepted until the act is completed. Therefore, the offeror has the ability to revoke that offer anytime prior to that completion (Peterson v. Pattsberg). There is consideration in a unilateral contract if the performance is bargained for meaning that the performance is sought after by the promisor in exchange for that promise and the promisee seeks out the promise in exhange for his performance.
Once offer, acceptance, and consideration is found, one must look at what is really offering before a contract can be deemed enforceable. For ambiguous terms of a contract, where one side is more objectively reasonable, the contract is enforced under what is considered the more reasonable definition.
In this situation, the contract exists at the time the person walks into the store with shoes and a shirt, as long as the person is wearing everything else that he or she would normally wear (pants). Therefore, an offer exists as long as it is posted at a place where it would be impossible to miss. The acceptance occurs when the person walks into the store fully clothed including a shirt and shoes. There is consideration because the customer seeks service from the seller and the seller expects that its customers be fully clothed.
The buyer might make the argument that the offer is really stating that if shoes and a shirt or worn by him, he should get service. Therefore, he would interpret the sign to mean “Shoes, Shirt, Service.” Therefore, if the buyer were to walk into the store wearing just the shoes and a shirt, he would expect to get served. However, with these terms of the contract, the buyer is not objectively reasonable and the court would find that he would have to be properly clothed besides wearing the shirt and shoes. It is a custom sign that the buyer should be aware about and know that.
Therefore, the contract is enforceable at the time the buyer walks into the store wearing a shirt and shoes and is otherwise properly clothed. Service should be rendered at that time.
The second paragraph is a long list of rules. Stylistically, this approach isn’t strong. Just telling me rules that may apply is better than nothing, but not by much. The real points are scored in the analysis. Simply rearranging the answer to intermix the applicable rules and the associated facts might help.
The next paragraph finally gets to the good stuff. Once again, the answer makes the same logic shift that the last couple of attempts have made. However, this answer makes some arguments to explain the shift, and that’s a huge plus compared to the other answers. But when the answer looks at how the buyer interprets the language, what test is it using? Be careful here (a cite would be very nice). The answer talks about objective reasonability to support the interpolation of the pants clause, but it should be focusing on the core question of how a buyer interprets “If no X, then no Y” into “If X, then Y.” My other comments to the logic shift should also be considered for this answer.
This answer creates other bases to nitpick:
Can the Inner Light company collect the $60 from the attendees of the 60 minute program after the program is over even though the ad did not mention any charge for the event?
In order to have an enforceable contract, there must be an offer and acceptance plus a valid consideration. Advertisements are not generally considered an offer unless they are clear, explicit and leave nothing open for negotiation. In Leonard v. Pepsico, the court held that no contract existed because the contract was not clear and explicit because it did not specify the offeree, and it referred to documentation. Acceptance for unilateral contracts once the act of performance is completed. In order to have a valid consideration, the performance or return promise must be bargained for.
Once offer and acceptance is found, a person may bring in extrinsic evidence into the contract to dispute the contract terms as longs as the contract is not final and complete. This is called parol evidence. A document is final when it is signed and it is complete when additional terms, if agreed upon, would have naturally been included in the document in the view of the court. If terms would have been naturally been agreed upon at the time of the agreement, this evidence must be kept from a trier of fact.
Unjust enrichment is a quasi-contract action when there is no contract, but the court acts as if there is one to provide a remedy. Qausi-contracts applies mainly to the compensation for the reasonable value for services rendered. Unjust enrichment is appropriate for a wrongfully or passively secured benefit. For example, in Cotnam v. Wisdom, a man is thrown from the a streetcar. A doctor came to his aid and helped him out. There was no time to enter into a contract, but the court gave the doctor the reasonable compensation for his services rendered.
In this situation, the advertisement posted in the paper can not constitute a valid offer by the company. It is not clear and explicit and it left open for negotiation. For services rendered, the cost must be included in the offer. Only in the U.C.C. for the sale of goods will the courts fill in the price term. Because this advertisement was not clear and explicit and left the price open for negotiation, the court will not find an enforceable contract and therefore, there can be no remedy when no contract exists.
Even if the court would find that a contract exists, the court will not allow a party to bring in extrinsic evidence if the document is final and complete. This advertisement, if found to be a contract, is final and complete. The price is something that would be naturally included and because it would have been naturally included this evidence must be kept from the court. Therefore, the company would not be able to collect the $60 from the people who attend the show because this evidence about negotiations of the price would not be allowed to be brought forward to the court.
The company might make the argument that the people who attended the show were unjustly enriched and a quasi-contract should be formed because of the benefit they received from the show. However, this is not a valid argument because the company had ample time to enter into a contract with the attendees. Unlike the case where the doctor gave assistance to the man thrown from a streetcar where there was no time to enter into a contract, the company had valid time to make a contract with the attendees. Therefore, no quasi-contract should be formed.
The company should not be allowed to charge the attendees $60 after the event is over without have an enforceable contract that expressly states the price of the event. Therefore, the company will get nothing.
I basically skipped over the first four paragraphs. I would pretty much ignore them for grading purposes. See my comment to the previous answer.
I think Restatements 34 is more flexible than you describe.
The discussion about parol evidence and extrinsic evidence is interesting but would have been enriched with some more clarification. To find that the ad constituted an offer, it has to be complete, so the answer could try to link that standard for completeness with the standard for integrated or completely integrated agreements. I’d like to see some more words on that topic. It does seem odd to treat a “contract” without a price term as integrated, but I’m open to that argument. But more conceptually, are you sure that the price term is “parol” evidence?
It’s good to talk about restitution. I think the Martin case is substantially more relevant than the Cotnam case.
Answer to Question 4
……. Has Joe Breached his agreement?
Probably no. The terms specifically state: “XYZ grants to Joe the right to publish different versions of the Article in other publications.” The parties’ signatures represent the final expression of their intent. In other words, the contract is an integrated agreement (Rstmt § 209). If the parties wanted a different agreement, they should have added those terms into the contract.
However, XYZ could argue that the term “different” is too ambiguous. XYZ bargained for the ownership of the Article and Joe’s interpretation of the clause undermines the entire purpose of the contract. XYZ could argue that parol evidence should be allowed due to the vagueness of the word “different”
Furthermore, XYZ would have the burden of proving that signed version of the contract is not the final expression intended by both parties, but not fully integrated, not an easy task (Rstmt § 209). As in Lucy Lady Duff-Gordon, the court is likely to find the there is a contract, and XYZ’s shortcomings as a shrewd negotiator are not the court’s concern.
XYZ could also try to prove lack of consideration. In Moore v. Elmer, Elmer’s promise to pay the fortuneteller (Moore) more, was not enforceable because she has already received the benefit of the bargain. Like the fortuneteller case, Joe bargained to sell his article with the understanding that he has the right to alter it and submit it for publication in other journals. However, Joe has not compensated XYZ for the additional resources and expert skills that XYZ allocated to the edited article.
Proving lack of consideration would not be easy however. XYZ did provide Joe with the further use of the Article in exchange for its ownership. Ownership would seem to be significant consideration (more than a peppercorn).
To conclude, Joe has the upper hand because he has a written and signed contract and has not done anything he did not have the right to do according to its terms. If XYZ can prove either lack of consideration or that there was a misunderstanding in the use of the term “different” than the contract is void, and no one would be in breach.
I generally like this answer. I think a little more back-‘n’-forth on the different ways to interpret the word “different” would have strengthened the answer. (There are, of course, a number of other relevant doctrines that could have also been addressed as well). The lack of consideration discussion felt a little weak, especially where it appears that the consideration back to Joe is the “further use of the Article.” I think a more natural reading of consideration would find it in the opportunity to publish (remember, that’s what Joe wanted) and perhaps in the editorial services used to (presumably) improve the article for publishing.
Answer to Question 1
The remedies that may be available for a breach of contract include expectation interest, reliance interest, restitution, and terminating the contract.
Expectation interest is not available because the difference between having two kids and having no kids is not quantifiable. In Hawkins v. McGee, the plantiff was awarded the difference between the value of a hairy and a perfect hand. However, in this situation, the difference in value between no kids and 2 kids does not compare with this case because one can not put a value on a human life. In addition, expectation interest does not give him the remedy Joe is after because he wants the two kids.
Restitution interest and reliance interest are not applicable. Restitution interest puts the breaching party back in the position it would have been in had the promise been made. Reliance interest puts the non-breaching party in the position had the promises never been made. Neither remedy is applicable because Joe and Jane do not have any kids.
Terminating the contract is a remedy available to Joe. First, assume that Joe’s condition that he and Mary produced 2 kids together was a contract produced in writing which would fulfill the statue of frauds. Therefore, when Joe and Jane both agreed to have two kids in consideration of their marriage, it was the basis of their bargain. When Jane did not fulfill her obligation to have the kids, she breached their agreement. This breach would be a material breach because it was the basis of the bargain. A material breach allows the non-breaching party to terminate the contract. Joe can terminate the contract.
If Joe and Jane’s agreement was not in writing, the statute of frauds would apply. The statute of frauds states that a contract must be in writing if made in consideration of marriage. Therefore, there would be no enforceable contract between Joe and Jane if it was not in writing. If this were the case, Joe would have no remedies.
Now assume that Joe and Jane both write down that they want to have 2 kids within 10 years of marriage in addition to their discussions. Jane’s action of taking birth control may trigger anticipatory repudiation. Jane’s action of taking control gives Joe reasonable grounds for seeking adequate assurances of performance. Joe has reasonable belief that Jane will not perform under the contract. In response to Joe’s request for assurances, Jane may either respond in writing that she will perform or not respond at all. If she does respond that she will perform, Joe does not have a remedy until it becomes impossible to have 2 kids within ten years. However, if Jane does not respond, then her silence will be treated as an anticipatory repudiation and a breach of their agreement. Therefore, Jane’s breach would be material and grounds for Joe terminating the marriage.
Now assume that Joe and Jane divorce. Having two children was a condition of the marriage contract. A divorce negates the contract which in turn negates the condition. Because there is no contract, both parties are discharged from this performance. Joe does not have any remedies by frustration of purpose. Marriage was the substance of the agreement. When the substance of the agreement was frustrated by the divorce, the purpose of the agreement was frustrated so the parties are discharged from performance.
Now assume that Joe was sterile and neither party knew. Joe would still not have any remedies. Joe would be able to terminate the condition of having children under the marriage. This falls under frustration of purposes where a contract is made and the party’s performance is frustrated without his or her fault of an event the non-occurrence was a basic assumption on which the contract is made, the party’s duty is discharged. The fact that Joe is sterile is not his fault and frustrates the contract because his ability to have children was a basic assumption on which the contract was made. The contract is dissolved, but Joe will not be able to get any remedies.
The contract made after their marriage means that having two children is no longer a condition but merely a promise. The promise is enforceable and thus the contract because it is supported by consideration. The consideration is the two children. Because Jane is taking birth control she is in breach of that promise. The possible remedies for a breach of a promise include expectation interest, reliance interest, restitution, and voiding the contract. Reliance and restitution do not apply. Joe can pursue expectation interest which does not have a value and really does not get what he wants, the two children. The other approach for Joe is that Jane’s action constitutes a material breach, and Joe will have the ability to void the contract.
A contract dealing with children in consideration of marriage makes it difficult to get proper remedies if there is a breach of that contract. What Joe really wants is not available through money damages. He wants the two children, but Joe can not force Jane to have children. This would go against public policy. Money damages will not be available for Joe. Even if they were, these damages would not satisfy what Joe really wants from the contract. All that is really left for Joe is voiding the contract. That does not get him what he wants either, but it is his only option.
I generally like this answer. It moves along quickly: topic, discussion, conclusion; and many of the statements are generally accurate. There’s some points I would have liked to see discussed, but by and large this answer covers a good chunk of what I was looking for. I liked the last paragraph.
Of course, in addition to damages and termination, specific performance/injunction is a third set of remedies that would have been worth discussing.
The discussion on anticipatory repudiation seems a lot more faithful to the UCC approach than the Restatements approach. I’m not sure it works as strongly as stated in the non-UCC context.
I think the frustration of purposes doctrine is not used appropriately in all cases—especially where Joe was sterile all along. We defined the frustration doctrine as a situation where the contract can be performed but doing so is pointless due to intervening events. See Restatements 265. In the sterility case, I think mistake is a much more applicable doctrine.
I thought it was interesting that you found a contract for the post-marriage understanding but not the pre-marriage understanding. I wasn’t clear what you thought was the consideration. What is Joe providing to Jane as consideration? (Let’s not be vulgar here). How is the consideration different from pre-marriage? Note that if they are already married, and then form an additional contract on top of the marriage, “voiding” the additional contract should not affect the underlying marriage “contract.” Or does it?
Answer to Question 3
Word count: 349
The sign can be an offer or a condition. A condition for a restaurant patron to be served by a restaurant is that he or she must wear shoes and a shirt. If it is a condition, there is no enforceable contract because there is no offer, acceptance, and consideration. However, even if the sign is an offer, it still may not be enforceable. The words on the sign represent an offer; the restaurant offers service in the restaurant if the patron accepts the offer by wearing shoes and a shirt. The patron is bargaining for the service of the restaurant.
With a contract present, the patron can breach by taking of his or her shoes and/or shirt while being served in the restaurant. At which point, the patron will (a) be asked to put the clothing back on or (b) be asked to leave the restaurant. The restaurant can breach by refusing service to the patron, even though he or she has shoes and a shirt on.
In the first scenario, the restaurant has the authority to enforce policy. The restaurant’s only remedy against the patron is to enforce the contract, by requiring the patron to leave or recloth. There is no legal remedy that a court could impose on the patron. However, in the second scenario, the patron may have a legal remedy if he or she follows the policy but is refused service. Most likely, the restaurant’s refusal of service is based on some other factor, perhaps some racism going on. In that situation, the patron may have a legal remedy in torts, too. If the court were to award damages to the patron for breach of contract, the remedy is likely to be nominal damages because the court will not grant specific performance or other money remedies.
Expectation, reliance, and restitution damages are based in contracts where there is a transfer of wealth by at least one party. Being served by the restaurant does not fall under this category.
Therefore, the sign may only be legally enforceable in the context of some other legal duty.
I’m not really sure where to begin with this answer. I must confess that I did not understand or follow most of it. Let me focus on just a few of the confusing statements:
This is a hard question because it is so open-ended. I think you will be able to improve your performance on a question like this by really thinking carefully about the issues and doing a careful job of outlining your points. Also, make sure to use the proper vernacular of contract law. References to “policy” and “transfer of wealth” make me wonder where these words are coming from.
Answer to Question 4
Word count: 294
Joe has likely not breached his agreement with XYZ Publishing. The issue here is what “different” means in the contract provision. According to the provision, Joe can publish “different” versions in other publications. First, the fact that Joe published a version of the article in a competitive magazine is not relevant because the provision does not prohibit Joe from submitting the article to a competitive magazine. The provision only says “other publications,” which can include a competitor. Second, the word “different” is vague. The provision does not clearly answer the question of whether three minor changes in the XYZ’s version qualifies as different. According to Restatement 202, words are interpreted in the context of the writing as a whole. Likewise, Weinberg v. Edelstein suggests that custom dictates the interpretation of words, and Frigaliment Importing Co. v. B.N.S. International Sales Corp. suggests that the objective meaning of the word is favorable. From these cases, it’s fair to interpret “different” both objectively and in the context of transferring ownership of an article.
XYZ Publishing edited Joe’s article and considered this to be its own version of the article. Joe was merely editing a version of his article, like XYZ Publishing originally did. Because XYZ Publishing seemed to view its version as different from Joe’s original version, Joe can view his new version as different from XYZ’s, regardless of the amount of actual editing. As long as there is some change in the version, it is a different version. The behavior of XYZ, what appears to be custom, highlights that the mere editing of a version makes it a different version. Therefore, analyzing the objective meaning alongside the custom meaning, “different” includes Joe’s new version, with only three minor changes. Joe did not breach the contract provision.
This is a solid answer. It would have been improved with a little more substance on the law (case discussion, citations), especially where the answer mentions several times that the objective interpretation of the word applies and where the answer discusses custom. Nevertheless, the answer generally gets to the key points. I specifically liked that the competitive issue was tackled head-on. I think an argument could be made the other way, too, but I’m happy with this argument. I also liked the strong statements like “As long as there is some change in the version, it is a different version.”
Word count: 336
The “Inner Light” company cannot collect the $60 from each attendee. No contract existed between the company and the event’s attendees. First, Inner Light is merely trying to create a contract after it performed what it believed was its part of the contract. One cannot create a contract after performance by one party is complete because the other party gave no consideration to the contract. In a hypothetical contract, Inner Light’s part would be performance of the event, and the attendees part would be payment of $60 to Inner Light.
No performance or return of promise was bargained for by the attendees prior to the completion of the event. Rather, Inner Light offered the event, requiring no acceptance, no promise, and no performance in return. In short, the attendees did not bargain for the payment of $60 in return for Inner Light’s performance. Therefore, there was no consideration to form a contract.
Second, the Inner Light company will likely allege that a “quasi-contract” was formed and that it should be reimbursed for the benefit bestowed upon the attendees. The benefit unjustly enriched the attendees. Generally, if someone asks you to do services for them, you should be compensated. Cotnaw v. Wisdom shows that someone who does services can be paid absent an actual contract.
Under these circumstances, no consideration or assent is required by the unjustly enriched party. However, the attendees did not ask the Inner Light company to do services for them; rather, Inner Light merely volunteered to hold this event, in the eyes of the attendees. This case is very similar to Martin v. Little, Brown and Co. In the latter case, a law student volunteered information regarding plagiarism and expected compensation. Likewise, in Inner Light’s case, the company offered an event, which appeared to be free to the objective eye, but now claims that its attendees were unjustly enriched and that the company should be compensated.
Thus, the Inner Light company cannot collect the money from its attendees after the event is over.
The first paragraph has some good stuff but is also a little confusing. The sentence “One cannot create a contract after performance by one party is complete because the other party gave no consideration to the contract” didn’t make sense to me. At minimum, some discussion about gift promises and the use of past consideration would have been helpful in this paragraph.
The restitution discussion was good, although I think this point “appeared to be free to the objective eye” could use some expansion. What did the attendees reasonably expect?
Answer to Question 2
As a result of receiving the wrong breed of dog, Nancy seeks to retain the dog she bought and to recover the $850 difference between the $1000 she paid and the $150 value of the dog. Is there a contract remedy that allows her to keep the dog and receive an $850 refund?
One option available to Nancy is a claim of “misrepresentation.” A misrepresentation is an incorrect factual statement. A material misrepresentation is one that is likely to induce a person to manifest assent. The dog owner made a statement that the dog was pure-bred. Nancy relied on that statement when deciding to pay $1000 for the dog; the misrepresentation induced her assent. If a party’s manifestation of assent is induced by a material misrepresentation, the adversely affected party may void the contract. However, Nancy does not wish to void the contract; she wishes to keep the dog. Therefore, a claim of misrepresentation does not provide the remedy Nancy is seeking.
The “statute of frauds” provides Nancy a second option for a claim. The statute requires any contract for the sale of goods totaling an amount greater than $500 to be in writing. If Nancy’s agreement was not in writing, she then has a claim under the statute. However, the remedy provided by law in such a case is to dissolve the contract. Without a writing, there is no contract. Therefore, under the statute Nancy would have to return the dog and she would then receive her $1000 back. Thus, the statute provides an inappropriate remedy.
Nancy has a third cause of action under the “perfect tender” rule. After acceptance of a good, the buyer may revoke acceptance if: (1) the good does not conform to the buyer’s specifications and the nonconformity substantially impairs the value of the good; (2) the buyer was induced to accept by the seller’s assurances; or (3) the defect was difficult to discover. Because the dog is in Nancy’s possession, I will assume she accepted the dog. Therefore, she has a claim under number 1. Again, she has two choices of remedy. Nancy may either terminate the contract or keep the dog and receive money allowance. Terminating the contract would not allow her to keep the dog. The second choice, however, allows her to keep the dog, but may not allow her to recoup the full $850.
A fourth option Nancy has is to pursue the defense of “mistake." A mistake is a belief not in accord with the facts such as the situation here where both parties believed the dog was a pure-bred dog. Nancy has two remedies to chose from under a defense of mistake. First, she may void the contract. Where a mistake undermines a basic assumption in the contract, the adversely affected party may void the contract. However, she wishes to keep the dog, and voiding the contract would return the dog to its original owner. Second, she may seek restitution. As a result of a mistake, a court may allow restitution to avoid the unjust enrichment accrued by the original owner. Restitution for the mistake would allow Nancy to keep the dog and to receive an $850 refund.
Finally, Nancy has a cause of action under “breach of warranty.” A warranty is a statement of fact the promisor confirms to be true over time. The seller promised the dog was pure-bred. Her statement served as an express warranty because it was the basis of the transaction between the seller and Nancy. That the dog is not a pure-bred serves as a breach of the warranty. Nancy can recover damages that result from that breach of warranty without terminating the contract. Therefore, under a claim for breach of warranty she may keep the dog and recover her $850.
Thus, out of the five claims available to Nancy, restitution as a result of a mistake and breach of warranty are the only two that allow her to keep the dog and receive the $850 refund.
First, note that this answer is 664 words. On the final, this would need to be trimmed. This is not hard to do. You could kill the first paragraph without sacrificing any substance and you’d be almost all of the way there. Second, where you reach the conclusion that a doctrine doesn’t get there, you can significantly expedite that discussion.
On the statute of frauds, note that it renders contracts unenforceable to the extent they have not yet been performed. Since Nancy paid the $1,000, the SOF doesn’t help her get money back.
The perfect tender rule discussion is on the money! I’ve been waiting for someone to discuss it. However, note that you jump over the actual perfect tender rule and discuss how one can revoke acceptance after it is given. This is not necessarily the wrong place to go, but a few more words explaining why you think acceptance has been given already would be helpful. Notice that the perfect tender rule gives Nancy the ability to keep the dog but get money back. An ideal answer would have discussed this point in a little more detail—can she find a way to get all $850 back?—but you got most of the way there.
The mistake discussion is nuanced. Unfortunately, I think it reaches the wrong conclusion in the end, but it’s still interesting. First, note that the answer has shifted back to Restatements instead of UCC. Second, mistake renders the contract voidable. I don’t think we discussed Restatements 158 in class, but I believe it applies to restitution where a party cannot return the benefits it received predicated on the mistake (i.e., where a service was performed based on the mistake). In that case, the party that conferred the benefit that it can’t get back can get restitution.
On breach of warranty, I was looking for a little more detail on exactly how the number computes. You assume away any complexity in your summary statements.
Your last paragraph ends on a weak note because it omits the perfect tender rule discussion that you had correctly raised earlier.
Answer to Question 3
Under what situations might a sign saying “No Shoes, No Shirt, No Service” constitute an enforceable contract?
The sign may constitute an enforceable contract if it is taken as a unilateral contract. The sign, then, serves as an offer. The customer accepts the offer by performance: wearing shoes and a shirt. Additionally, the contract is supported by consideration. Consideration is a performance or returned promise that is bargained for. Here, the accepting party is receiving the consideration of service from the establishment in which he is a patron. The offering party is receiving the consideration of a modicum of hygiene and decorum, as well as the complying customer’s anticipated business. The sign then serves as an enforceable contract because it conforms to the requirements of “offer, acceptance, consideration.”
The sign may also constitute an enforceable contract if imposed by statute. The legislature or a state agency may require customers to wear shoes and a shirt in all restaurants. In such case the sign serves as a manifestation of two separate conditions in two separate contracts. The first condition is imposed by the legislature or state agency upon the restaurant: the restaurant may not operate without posting the sign. The second condition is imposed by the restaurant upon the consumer: the consumer may not enter the restaurant without complying with the sign. Because its terms are imposed by statutory law, the sign constitutes an enforceable contract.
The first paragraph is OK. It takes a strong position, which is nice, and is directly responsive to the question. It does leave open key questions, like what is “service,” but just about all of the other answers have left that open too.
The second paragraph is interesting. It raises an interesting point: perhaps the shoes/shirt obligation is required by statute. However, if this is the case, is this a contract or an educative sign informing patrons of the law? More concretely, if shoes and shirts are required by law, what consideration is the patron providing?
Has Joe breached his agreement with XYZ by making minor changes to the amended article and then publishing it in a competing publication?
Three predominate issues must be resolved to determine whether Joe breached: (1) whether Joe was free to publish different versions of the original article, or whether Joe was only free to publish different versions of the XYZ edited article; (2) how one construes “different versions”; and (3) whether it is material Joe published in a competitive magazine.
First, which article was Joe free to publish different versions of – the original version or the edited version? The transfer of ownership applied to Joe’s initial draft. As such, the editorial changes XYZ made to the original may themselves render a different version. So, naturally, Joe’s additional minor changes become irrelevant; he published a different version than the original. Therefore, he did not breach (accepting that it doesn’t matter that he published in a competitive magazine, which will be addressed shortly).
If, on the other hand, Joe was restricted to publishing different versions of the XYZ amended article, the outcome remains unchanged: Joe did not breach. XYZ granted Joe permission to publish a different version of the article. XYZ edited the article. Joe then made further editorial changes. Thus, the article he published was a different version than the one XYZ published. Because the article Joe published was a different version, Joe did not breach.
It is significant to determine how the party’s define “different versions” to determine whether Joe breached. Without a definition in the contract, the words are ambiguous. Courts use a number of methods to divine the meaning of ambiguous terms: the plain meaning of the word(s); the meaning within the context of the contract; the meaning as applied within the scope of negotiation of the contract; the meaning as applied within context of performance; and the meaning as generally applied in practice of the trade. Because the parties did not provide for a definition, a court is free to impute one. Courts typically rule on the side of affirming the agreement, which favors the notion Joe did not breach.
XYZ may argue that only three minor changes do not alter the article enough to constitute a different version. Fair enough. They should have provided for a definition of “different version” in the contract to support that claim, then. XYZ could have provided provisions in the contract that explicitly detailed what changes were necessary to render a different version. More prudently, XYZ may have resolved all ambiguity by requiring that Joe submit all “versions” of his article that he wishes to publish to XYZ for approval.
Without a definition of “different version” every change, regardless of how minor, yields a different version of the contract.
Finally, that Joe published his “different version” in a competitive magazine does not constitute breach. Injunctive relief is available in contracts for personal services where the individual is endowed with unique skill or ability. Consequently, XYZ may want to seek injunction to keep Joe from publishing in competitive publications (if it can prove Joe has unique slinky skills). However, XYZ did not include in the contract a provision that forbids Joe from publishing in competitive magazines. Therefore, he is in breach of no such provision, and XYZ has no grounds for injunctive action.
In sum, Joe did not breach the contract by making only minor changes to his article then publishing or by publishing it in a publication that is a competitor of XYZ’s.
This answer has a lot of good stuff in it. Well-expressed, logical, thoughtful. A few more citations/case discussions would have been a nice touch, but I don’t think their absence really detracted from the answer.
Two statements caught my eye: “Because the parties did not provide for a definition, a court is free to impute one. Courts typically rule on the side of affirming the agreement, which favors the notion Joe did not breach.” Yes, a court can impute the definition, but there are many doctrines that shape how it does so. The answer discusses those principles later, but this statement on a standalone basis is strong. The next sentence is either too strong or too vague. Perhaps it means that the courts will try to uphold the contract rather than strike it down as fatally ambiguous, but then the part after the comma doesn’t make sense.
The paragraph about injunctive relief is not correct. Injunctive relief is available in a variety of circumstances. The paragraph does apply to injunctive relief to prevent someone from performing their personal services for others in contravention of an employment agreement, but the republication of an already-written article is not the same as personal services. The general conclusion this paragraph reaches is correct, but the inaccurate detour is a bit of a bummer.
Answer to Question 3 (591 words):
For the purposes of this answer, the food (a good) could be a UCC issue, while the service of the food could be a Restatement issue. Both viewpoints will be addressed.
The strongest circumstance I can see for making this sign part of an enforceable contract is if the sign represents either a counter-offer (under the R2d rules) or a conditional acceptance (under the UCC) of terms, from an offer made by the customer to purchase food and service, as a response to advertised prices.
In this circumstance we have a somewhat of an implied contract, since the actions of both parties make the assent of each (customer for food, and restaurant for business) reasonably clear. However, if a court elects to use the Restatements, it could find the bargain for terms are not certain enough under R2d § 33. Generally the Restatement wants a contract to contain the following: subject matter, price, payment terms, quantity, quality, duration, and work to be done (if any). While a court could find a contract without all of these common law requirements, it is unlikely to find one if a contract is too uncertain as to these important terms. However, if a court elects to overlook R2d § 33 and finds valid certainty in the offer and acceptance, the court must also consider R2d § 61. Under R2d § 61 the court could consider the sign to be a counter-offer and not an acceptance to the customer’s offer to purchase food and service. This could be similar to Ardente v. Horan where a buyer of a home added terms to an acceptance and the court held that such an acceptance was actually a rejection. Thus the only way we could have a contract under these circumstances (and R2d § 61) is if the sign were treated as a counter-offer, to which the customer would have to agree to, which they could do by performance (entering the restaurant and requesting food). In this situation, we could have a valid contract under the Restatements.
However, under the more pro-contract UCC, the gaps fillers of UCC § 2-204 would apply and we could reach a contract, even if important terms are not explicitly laid out because both parties appear to want to enter into a contract (the customer wants food and the restaurant wants business, here is our consideration), and thus even if “one or more terms are left open a contract for sale does not fail for indefiniteness . . .” (UCC § 2-204). As far as the treating the sign as a conditional acceptance, the court could also employ UCC § 2-207, since the sign could be viewed as written confirmation of acceptance with additional terms, and §2-207 allows for these additional terms to be added, provided they are reasonable, not objected to, and the offer does not expressly limit acceptance to the terms of the offer (which was not done in this case). Furthermore, since the restaurant could be considered a merchant, the terms could automatically be incorporated into the agreement and we could have an enforceable contract.
However, even if the court follows this logic and finds an enforceable contract, what are the appropriate remedies? With nothing stated, we must rely on the default damages, which here would probably be expectation damages for the non-breeching party, but how helpful would this really be to either party? The restaurant most likely has other customers and the customer has countless other restaurants to visit, so finding an enforceable contract is unlikely to be too helpful.
This is a nice technical answer. The author clearly is ready to get his/her hands dirty with the rules, which can be a plus. As I’m sure you’ve inferred from other answers, I usually don’t expect a technical answer like this, but a well-done technical answer can do very well.
I especially like the approach of treating the sign as terms that get incorporated into some other contract. However, this raises a fundamental question: if the terms do get incorporated into a contract, what consequence? The last paragraph touches on this point, but it could have been more explicitly addressed. If the conclusion is that these terms, once incorporated into some other contract, have no meaning, then are they really “enforceable” at that point?
On that point, the last paragraph disappointed a little. There are other remedies, of course, and the fact that there are other customers and other restaurants seems orthogonal to the topic.
Answer to Question #3 (472 words)
I think one way to make a valid contract from “No shoes, No shirt, No service” is to view it as a unilateral contract. Like Carbolic, where there was an offer made that if anyone who uses the Smoke Ball and gets sick, then you get $$$. In this case the offer would be, if shoes and shirt, then you get eligibility for service. Acceptance would be made by wearing these items. The consideration for the customer would be that he is “eligible” for service. Notice that the customer is only eligible for service, not required to be served.
Looking at it from this way, this unilateral contract would stand in front of the bargain of food for money as a necessary condition for receiving service. Contract A (No shoes….No service) must be met before contract B can be formed.
If you look at the contract as a unilateral contract, there are still problems with making it an enforceable contract. First, I am unclear when the unilateral contract is formed. Is it formed upon entry? If it is, then can a person take their shirt off after entry and still be eligible for service? Secondly, I have a problem with the term “service’ and what it means. All terms are ambiguous, but “service” is ambiguous to the point that the contract might not be enforceable (at least not in the way the restaurant intended). Service might mean numerous things, such as the privilege of entering the building, the privilege of being served food and drinks, the privilege of being allowed to sit at a table. I don’t know what service means.
While a court may use parole evidence to figure out the meaning of the word “service,” it might not be what the restaurant wants and, in effect, make the contract useless. I think both the issue of when the unilateral contract is formed and the ambiguity of the term service would be resolved by changing the contract to “No shoes, No shirt, then you can’t be inside of the restaurant.”
Perhaps another way to look at the sign and still make it enforceable is to consider it part of the contract made when money is exchanged for food. At McDonalds, for example, the menu says that a double cheeseburger is $.99. And one might think that if I produce $.99, I should get a double cheeseburger, but in reality there are other terms standing next to the menu. In other words, the sign on the door is “integrated” into the contract for food. Since the exchange of money for food is a goods contract, the UCC would apply. While I don’t fully understand it yet, I think that UCC §2-207(1) might allow me to add those terms into a contract? If so, then the terms on the door could be enforceable.
This is a very strong answer. Notice why: instead of rote recitation of rules, the answer delves into some complex areas and compellingly exposes some messy ambiguities. Critical thinking, and a willingness to explain and question assumptions, is exactly what I’m looking for.
Specifically, I really like the first two paragraphs. The author takes an aggressive position by theorizing that there are two separate contracts. This shows some careful thinking about the problem. However, it also prompts a question. Is there such a thing as a valid contract by which the outcome is to be eligible for another contract? Or, does the first “contract” really just define a class of offerees for the “second” contract?
The third and fourth paragraphs are outstanding. They totally hit the nail on the head and reflect thoughtfulness.
The last paragraph meanders a bit. Honestly, I think the answer would have been improved without the last paragraph at all. I think the author may be trying to reference back to our (irresolute) vegetarian hot dog example, but I don’t think the paragraph makes a compelling point there.
Answer to Question 4
Joe does not breach his agreement with XYZ by making three additional minor changes to the Article and publishing it in a competitive magazine. Instead, the contract provision allows Joe to make these three additional changes. Therefore, Joe is not in breach.
Once an offer and acceptance is found, the terms of the agreement must be examined before the contract can be enforced. With ambiguous terms, when both parties attach different meanings to a material term of the contract and one side is more objectively reasonable than the other, the court will uphold the contract enforcing the more reasonable definition (R2d 202). In the provision in this contract, “different” and “other publications” are ambiguous terms of the provision. However, similar to the “chicken” case where the word is interpreted in light of its prevailing trade usage, “different” and “other publications” should be interpreted in accordance with their technical meaning. “Different” means anything that is not the same and “other publications” means any other publications other than XYZ Publishing. Therefore, by Joe making three changes to the article conforms with the technical meaning of “different” and publishing the article in a competitive magazine is another publication other than XYZ. Therefore, Joe is not in breach of the agreement but is simply following the terms.
Furthermore, Joe is acting in good faith in relation to the contract. Every contract imposes upon each party a duty of good faith and fair dealing in its performance and enforcement (R2d 205). There are no unstated expectations that are reasonable in this provision. Joe is not acting in bad faith in relation to the contract, but is simply maximizing his profits to the best of his ability.
If XYZ really did not want for Joe to publish different versions of the article in other magazines, they could have worded the provision differently. XYZ should have been more explicit in the provision. They could have stated exactly what they meant by different and limited the other magazines to those not competitive with XYZ by expressly stating those magazines. I think XYZ was really upset that Joe published the article in a competitive magazine not so much that he made three additional minor changes. If XYZ did not want Joe to do that, XYZ should have contracted for it. Because they did not, Joe is not in breach.
Answer to Question 5
I. Can the Inner Light Company collect any money?
Whether or not the inner light company can collect any money depends on whether there is a valid contract. A contract is a promise or a set of promises for the breach of which the law gives a remedy or the performance of which the law in some way recognizes a duty. R2d §1. Thus, in order to determine if the Inner Light Company has an effective remedy available that will allow him to collect money, a valid contract must first be found.
A. Was a valid contract formed?
There are three main elements to a valid contract: offer, acceptance, and consideration. Based on the facts as they are given, the only thing resembling an offer is the newspaper advertisement for the 60-minute programs. Normally, advertisements that do not specify quantity of terms or a permissible mode of acceptance are not considered offers, merely invitations to negotiate. The reader of the advertisement in effect is the offerer when he or she tries to purchase the product (or in this case the service). Traditionally, the only time the court considers an advertisement a valid offer is when they are “clear definite and explicit leaving nothing open for negotiation.” A more detailed explanation of the exact wording of Inner Light’s advertisement may provide valuable insight into this inquiry and/or confirm the assumptions of this analysis. Based on the facts as they are described, however, Inner Light’s advertisement did not include an express mention of the price of this service; therefore, this advertisement will probably not be considered an offer. Without an offer, valid acceptance and consideration are irrelevant.
As the R2d §33 states, “the fact that one or more terms of a proposed bargain are left open or uncertain may show that a manifestation of intention is not intended to be understood as an offer or as acceptance.” While the outcome of this inquiry would most likely be different under the UCC with their gap fillers, we are dealing with a service in this instance, not with goods. Even if a valid offer could be found on these circumstances, the Restatements are less inclusive than the UCC in filling in indefinite terms.
Further, contract law is governed on the objective theory of Contracts. The test is not what each party intended, but what a reasonable person under the same circumstances would have believed. There must be a mutual manifestation of assent, but the court will use a measure of what a reasonable person would consider a manifestation of assent. In this case, it may not be all that unreasonable for the attendees of the Inner Light seminars to assume that there was not a price associated with the service. Regardless of the advertisement only being an invitation to offer, it is not apparent that a valid offer was made once the attendees arrived at the event. No mention of payment was made until after the services were rendered. A reasonable person would expect to have some sort of introductory comments or additional information prior to the seminar if a payment would be expected. Regardless of what the Inner Light Company intended as far as payment, their actions did not indicate to a reasonable person that they expected payment in return for the services rendered.
B. Without a valid contract, will the Inner Light Company collect any money?
In limited circumstances, the courts have held implied a contract to avoid unjust enrichment by one party. They will manufacture a contract in the absence of a valid offer, acceptance, and consideration. In these situations the courts create a quasi-contract and imply that that benefited party (in this case the attendees) has agreed to pay for the benefits received (the 60-minute seminar). It must be shown that the attendees passively received a benefit that would be unconscionable to retain. R2d5. This would be the Inner Light Company’s best chance at recovering under the circumstances. If an aggrieved party is seeking recovery with a quasi-contractual claim, the court will traditionally reward restitution damages. The R2d §371 specifies the formula for measuring restitution damages as the reasonable value of the benefit conferred. I am not sure how one would measure the benefit of becoming aware of their inner goodness. Perhaps the market price of a comparable self-help program would indicate a reasonable measure of the restitution due Inner Light.