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Utf 8 -cases 1ab Utf 8 -cases 1ab Presentation Transcript

  • Cases on Contracts  Associate Professor Tadas Klimas
  • Herbert v. Durand  Fr Cc § 1134 ‑ Agreements legally made take the place of legislation for those who make them.  They may be revoked only be mutual consent or for causes which the law authorizes.
  • Herbert v. Durand Durand, a journeyman tailor, got an order from Herbert, a bespoke (custom) tailor, to make two coats at a price of 6.50 Fr. per coat. When the work was done Durand claimed that the price was too low and brought an action in the office of the Conseil des prudhommes (Labour Court) on the grounds that he could not live on a wage so disproportionate to the real value of his labour.
  • Hawkins v. McGee Fr Cc § 1149 Damages due to a creditor are, as a rule, for the loss which he has suffered and the profit which he has been deprived …
  • Hawkins v. McGee Principles of European Contract Law Article 9:502: General Measure of Damages The general measure of damages is such sum as will put the aggrieved party as nearly as possible into the position in which it would have been if the contract had been duly performed. Such damages cover the loss which the aggrieved party has suffered and the gain of which it has been deprived.
  •  Δ = McGee, a doctor (surgeon); Π = Hawkins, his patient. Π paid Δ to perform an operation on his hand in order to remove scar tissue. Π testified that Δ guaranteed the hand would turn out “100% perfect” or “100% good”. Additionally, it appears that the Δ had solicited the operation.
  •  The hand was not perfect after the surgery—indeed, it was even worse. Π sued for negligence (which claim was rejected by the lower court) and also for breach of contract. The jury awarded damages to Π, but the trial judge reduced the damages. The plaintiff appealed this reduction in damages.
  •  Issue: As a matter of law, is the standard to be applied in judging whether a contract was formed in which Δ guaranteed a perfect hand an objective one, or a subjective one? That is, are hidden mental reservations on Δs part regarding a guarantee of a perfect hand relevant?
  • Société des Eaux de Vittel v. Dehen
  • Société des Eaux de Vittel v. DehenFacts: When a person in a self-service store placed a bottle of sodainto her basket, proceeded to thecheckout counter, where when shemoved it, it exploded, injuring hereye. The lower court found nonegligence. Therefore the onlyrecovery possible is in contract.
  • Société des Eaux de Vittel v. DehenIssue: Can a public offer be madeby means of pricing items in a self-service store?
  • Barker v. Allied SupermarketSupreme Court of Oklahoma
  • Barker v. Allied SupermarketSame facts
  • Barker v. Allied SupermarketShopper puts back?
  • Barker v. Allied SupermarketShopper puts back?Shop has created a power ofwithdrawal in the shopper
  • Barker v. Allied SupermarketCt remarks that a shopper has nochoice but to comply with thesituation given.
  • Barker v. Allied SupermarketThree ways to accept:Place in basketTake to counterPay
  • Fielders Industries v. SolwestTradingSolomon Islands: High Court (1996)
  • FieldersFacts: Π = Fielders Inds.Π and Δ had been dealing withone another prior to the eventsleading to this lawsuit. Π =manufactures flour, rice, biscuits,etc. and sells wholesale. Δ = awholesaler and retailer in Noro,Western province.
  • FieldersΠ in Oct. 91 sent 4 containerloads to Δ who received and soldthese goods. Π in Dec 91 sent 10container loads to Δ who receivedand sold these goods, altho somewere condemned.
  • FieldersIssue: Can one accept an offer byexercising dominion over goodssent by the offeror?
  • FieldersIssue: Can one accept an offer byexercising dominion over goodssent by the offeror?YES
  • FieldersWhat should defendant havedone?Δ should not have exerciseddominion. He should haveinformed the Π of thisimmediately.
  • FieldersWhat should defendant havedone?Δ SHOULD HAVE CALLED HISLAWYER!!
  • RULE: PAY YOUR LAWYERS!!GET THEMPAY THEMLISTEN TO THEM!!!
  • Cooke v. OxleyKings Bench [United Kingdom] (1790)
  • Cooke v. OxleyKings Bench [United Kingdom] (1790)  Oxley/Offeror made an offer good for a term, good until four o’clock.  Cooke/Offeree accepted and delivered notice of acceptance prior to four o’clock.  Offeror did not perform
  • Cooke v. Oxley  Another way of looking at it: Oxley agreed to give and did give Cooke an option to buy which had to be used by four o’clock or it would lapse.  Did Cooke give anything for this? (No.)
  • Cooke v. Oxley  Issue: Can there be an offer for a term?  Alternative: Must an offer be accepted at once, or can there be a two-stage situation?
  • Cooke v. Oxley  “Historically contract making was a person process between the two parties and perhaps their lawyers. As commerce expanded contracts were still a matter of personal negotiation, though the carrying out of that task might be entrusted to an agent by one or both sides. The advent of a postal service in the late 18th century in Britain created an entirely new problem for the courts. The offer and acceptance were no longer virtually contemporaneous acts between the parties or their agents face to face. Could there be a contract when that occurred? Cooke v Oxley suggested not.”  Dr. Robert N. Moles, Contract L. Lecture, http://netk.net.au/Contract/03Acceptance.asp
  • Cooke v. Oxley  COOKE V. OXLEY HAS BEEN OVERRULED IN THE USA AND DISTINGUISHED IN THE UK.  IT IS NOT GOOD LAW.
  • Maltzkorn v. BraquetFrance: Cour de cassation (1968)
  • Maltzkorn v. Braquet  Facts: In 1961, Braquet made a public offer by means of an advertisement; specifically, to sell certain land for 25,000 Fr. Maltzkorn communicated his acceptance to Braquet. Braquet however repudiated the contract. Braquet admitted that the farm had not been sold at the time of the receipt of Maltzkorns acceptance.
  • Maltzkorn v. Braquet  Issue: is a public offer to sell a thing which can only be sold to one person an offer, or merely an invitation to treat?
  • Maltzkorn v. Braquet  Issue: is a public offer to sell a thing which can only be sold to one person an offer, or merely an invitation to treat?  It is an offer.  To hold otherwise would be to create a rule of law.  Note under French law a sale to the first party would be an effective revocation to the rest of the world.
  • Maltzkorn v. Braquet  Q: What is necessary under French law for an offer (including a public offer) to be revoked?  A: An objective manifestation of the internal, subjective, revocation suffices. It is not only that a revocation is effective upon emission, but a wider, more encompassing, rule: any external manifestation works to prove the revocation (such as a sale of a unique item to a third party).
  • Maltzkorn v. Braquet  Q: Why doesn’t the law allow Braquet to simply change his mind? Or does it?  A change of mind which is completely subjective with no objective manifestation would not be in accord with the objective theory of contracts.  Yet the law does in any event allow Braquet to change his mind; it merely requires an outward manifestation. Secondly, a person is always (although it is not really a function of law but of the legal system) allowed to change his mind, subject to the other partys right to sue.
  • Maltzkorn v. Braquet  Q: How is a public offer revoked in your jurisdiction?  There are three considerations. One, a public offer can generally be revoked by a public revocation. Two, a public offer can be revoked by a private communication, effective as to the persons who receive it. Three, there is a presumption in the case of limited numbers that the offer is good only so far as supplies last; this is problematic (see discussion in the casebook at p. 41)  .
  • Maltzkorn v. Braquet  Q: Would the rule of law stated in the first paragraph be correct in your jurisdiction?  A: Probably not. Under Quebec (§ 1391), Louisiana, and even Lithuanian law the revocation, if sent to a private party, would only go into effect upon receipt. Generally a public offer is revoked by a publicized revocation, which goes into effect upon publication.
  • de Marans v. DeschampsFrance: Orleans (1885)
  • Mrs. Deschamps: Offeror= ΔMr. De Marans: Offeree = Π 12/4 12/5 12/6 Offer Posted Offer Received Revocation Revocation Posted Received Acceptance Acceptance Posted Received
  • De Marans vDeschamps Issue: When is a revocation effective?
  • De Marans vDeschamps Issue: When is a revocation effective? In this case, plaintiff/offeree seeks to show there was a contract formed.
  • De Marans vDeschamps Fr: revocation effective upon emission (information principle) Manifestation defendant wins: no contract formed.
  • De Marans vDeschamps LT: revocation effective upon receipt (information principle), and acceptance effective upon despatch (emission principle) (Lt Cc § 6.169.1 ) Plaintiff offeree wins.
  • De Marans vDeschamps Quebec: revocation effective upon receipt (information principle), and acceptance effective upon delivery (information principle) Plaintiff offeree loses: can prove only that revocation was received at same time as acceptance received. What can’t he prove?
  • Cave cooperative de Noviv. Ricome  France: Cour de cassation (1923)
  • Cave cooperative  Ricome (Π) is seeking to prove a contract was formed; Cave coop. de Novi (Δ) that it was not.
  • Cave emits Ricome Cave emits Ricomesoffer via emits revocation Acceptanctelegr on acceptan on 9/7 after e reaches9/5 11:30 am Δ=Cave ce on 9/7 subsequen at 11:30 t to the am via manifestati telegr on of the revocation
  • Cave cooperative deNovi  Issue: Is an acceptance effective upon emission?
  • Cave cooperative deNovi  Issue: Is an acceptance effective upon emission?  Holding: Yes.
  • Cave cooperative deNovi  What of the fact that Ricome-Π stated he would arrive at 9:00 am in order to sign the contract?
  • Cave cooperative deNovi  What of the fact that Ricome-Π stated he would arrive at 9:00 am in order to sign the contract?  A: No. There are no facts to support the contention that the parties had agreed in advance that no contract would be formed until a formal signing occurs.
  • Jahn v. CharryFrance: Bordeaux (1870)
  • Jahn v. Charry  Facts: Jahn sent telegrams to Charry, offering her to perform in an opera he was staging. He sent them to the wrong address, and under the particular facts he was responsible for this. Charry as a result received the telegrams after a delay. During the time of this delay Jahn sent another telegram revoking the offer. Upon receipt of the first two telegrams, Charry accepted via telegram and incurred expenses.
  • Jahn v. Charry Jahn Jahn sends Charry Charry sends telegram receives telegrams telegram revoking Jahns acceptance; to wrong offer; offer incurs address immediately expenses received by agent of Charry
  • Jahn v. Charry  Q: Can in every case an offeror revoke an offer with no attendant liability?
  • Jahn v. Charry  Q: Can in every case an offeror revoke an offer with no attendant liability?  A: No. While the offeror can revoke the offer in terms of contractual liability, the acts which the offeror has committed (making and then revoking an offer) may, in the particular case, lead to extracontractual responsibility.
  • Delai raisonable  Lt Cc § 6.169.2.2, which would seem upon its face require that the offeree receive expectation damages (meaning that the court would hold a contract had been formed).
  • Delai raisonable  Restatement 2d § 87(2) USA: An offer which the offeror should reasonably expect to induce action or forbearance of substantial character on the part of the offeree before acceptance and which does induce such action or forbearance is binding as an option contract to the extent necessary to avoid injustice
  • Gardner Zemke Co. v.Dunham Bush, Inc. New Mexico: Supreme Court (1993)
  • Gardner Zemke The parties exchanged standard forms which differed materially in regard to a warranty provision. Under the UCC, LT cc, PECL, UNIDROIT no contract would have been formed at this stage.
  • Gardner Zemke Nevertheless the parties formed a contract by conduct: the goods (refridgerating units called chillers) were accepted and paid for.
  • Gardner Zemke The question is under which terms: The seller’s? (Last Shot Rule) The buyer’s? (First Shot Rule) The default terms of the code/law?
  • Gardner Zemke Knock Out Rule: Conflicting terms (material and immaterial (= additional and/or different) ARE KNOCKED OUT.
  • Gardner Zemke Knock Out Rule: After knockout, what remains?
  • Gardner Zemke Knock Out Rule: After knockout, what remains? THE DEFAULT RULES Supplied by the law/code/statute
  • Hill v Gateway  U.S. Ct of Appeals 7th Circuit 1997
  • Hill v Gateway  Facts: П consumer/Hill ordered computer via telephone. Apparently paid by credit card. Gateway sent computer and programs via mail. Inside box were terms, including a term binding the parties to arbitrate disputes. The terms stated that they were applicable if the purchaser did not return the computer and software within thirty days. П did not return them, but now sues for damages and wants the dispute tried in court.
  • Hill v Gateway  Issue: Can a contract be formed in stages?  (Rolling contract).
  • Hill v Gateway  Issue: Can an offeror condition an acceptance upon silent agreement to terms if rejection of offer is contemplated by return of merchandise?
  • Hill v Gateway  LT Cc § 6.186  1. Negalioja netikėtos (siurprizinės) sutarčių standartinės sąlygos, t. y. tokios, kurių kita šalis negalėjo protingai tikėtis būsiant sutartyje. Netikėtomis (siurprizinėmis) nelaikomos sutarties sąlygos, su kuriomis šalis aiškiai sutiko, kai jos tai šaliai buvo tinkamai atskleistos.
  • Wood v Lucy, LadyDuff-Gordon NY State Court of Appeals, 222 N.Y. 88 (1917) (NYS Ct of Appeals is highest ct in state)
  • Wood v Lucy, LadyDuff-Gordon Lucy gave an exclusive right to Wood to market her clothing designs, for a term of one year, for one-half of the profit.
  • Wood v Lucy, Lady Duff-Gordon  Lucy then contracted with Sears, Roebuch & Co. to sell her designs thru their catalog-  Which was a major marketing innovation and a super-move
  • Wood v Lucy, Lady Duff-Gordon  Wood sued for breach.  Lucy argued that there was no contract-
  • Wood v Lucy, Lady Duff-Gordon  Because of lack of obligations on both sides
  • Wood v Lucy, Lady Duff-Gordon  The intermediate ct agreed: the contract did not expressly obligate Wood to enter into even one single contract.
  • Wood v Lucy, Lady Duff-Gordon  The highest ct in NYS held, however, that there is an implied promise of good faith on the part of Wood.
  • Wood v Lucy, Lady Duff-Gordon  Because of the requirement of good faith, Wood had an obligation to try, in good faith, to maximize the amount of contracts it/he entered into on behalf of Lucy.
  • Wood v Lucy, Lady Duff-Gordon  Therefore there was an obligation on Wood’s part.  In Civil-Law terms, the object of his obligation was definable by good faith.
  • Wood v Lucy, Lady Duff-Gordon  This is a nearly-revolutionary case. It allowed open-ended agreements and by implication justified output and requirements contracts, as well as contracts defining price in terms of the market or in good faith-which took the French another 70 years to reach.
  • Wood v Lucy, Lady Duff-Gordon  Questions (taken from Val. D. Ricks, the Story of Contract Law):  What is the issue here?
  • Wood v Lucy, Lady Duff-Gordon  Questions (taken from Val. D. Ricks, the Story of Contract Law):  What is the issue here?  Answer: (TK): Can a requirement of good faith be read into a an exclusive agency contract which does not delineate with specificity the performance required? (Yes.)
  • Wood v Lucy, Lady Duff-Gordon  Questions (taken from Val. D. Ricks, the Story of Contract Law):  2. Who do you suppose drafted this agreement? Why was it drafted the way it was?
  • Wood v Lucy, Lady Duff-Gordon  Questions (taken from Val. D. Ricks, the Story of Contract Law):  2. Who do you suppose drafted this agreement? Why was it drafted the way it was?  Probably Wood. It did not specify a minimum level of performance. It was probably written in the way it was because of uncertainty.
  • Wood v Lucy, Lady Duff-Gordon  Questions (taken from Val. D. Ricks, the Story of Contract Law):  4. If the contract is taken as is, without any implied terms, what is Lucys remedy if Wood does nothing to promote her designs?
  • Wood v Lucy, Lady Duff-Gordon  Questions (taken from Val. D. Ricks, the Story of Contract Law):  4. If the contract is taken as is, without any implied terms, what is Lucys remedy if Wood does nothing to promote her designs?  No remedy.
  • Pilarek v. School of TradeRepresentatives  France: Civ. 19 December 1973
  • Pilarek v. School of TradeRepresentatives (France1973)  Π Pilarek worked (during the exam sessions only?) for the Δ school for pay in each of the four previous years. In 1970 she worked again.
  • Pilarek v. School of TradeRepresentatives (France1973)  Δ school did not pay her.  The contract (apparently oral) between the school and her did not specify the rate of pay for her.
  • Pilarek v. School of TradeRepresentatives (France1973)  Δ claims she worked gratuitously and also that because of the fact that there was a personal relationship between her and the director of the school a gratuitous labor contract should be presumed.
  • Pilarek v. School of TradeRepresentatives (France1973)  The trial court appointed an expert who arrived at a figure of 750 Fr.  Δ argues also that the judgement does not state how this was arrived at.
  • Pilarek v. School of TradeRepresentatives (France1973)  Issue:  Can a tariff and hours be found through testimony or implication?  Does this satisfy the requirements of a certain object?
  • Pilarek v. School of TradeRepresentatives (France1973)  Issue:  Can a tariff and hours be found through testimony or implication?  Does this satisfy the requirements of a certain object?  YES
  • Pilarek v. School of TradeRepresentatives (France1973)  Restatement 2d § 33 Certainty  (2) The terms of a contract are reasonably certain if they provide a basis for determining the existence of a breach and for giving an appropriate remedy.
  • Pilarek v. School of TradeRepresentatives (France1973)  LR CK 6.613.2. Tais atvejais, kai pirkimo–pardavimo sutartyje nei tiesiogiai, nei netiesiogiai nenustatyta kaina ar nenurodyta tvarka jai nustatyti ir šalys nėra susitarusios kitaip,
  • Pilarek v. School of TradeRepresentatives (France1973)  LR CK 6,306.4. Pirkimo– pardavimo sutarties sąlyga dėl sutarties dalyko laikoma suderinta, jeigu sutarties turinys leidžia nustatyti daikto (prekės) pavadinimą ir kiekį.
  • Pilarek v. School of TradeRepresentatives (France1973)  LR CK 6.329.2.  Jeigu iš pirkimo–pardavimo sutarties turinio ir ją aiškinant neįmanoma nustatyti perduotinų daiktų kiekio, laikoma, kad sutartis nesudaryta.
  • France: Madame D. v.Madame B.  France Civ., 1987 liepos 22
  • France: Madame D. v.Madame B.  Ponia D isipareigojo moketi tam tikra pinigu suma poniai B uz tarpininkavima ivaikinant vaika. Ponia B iskele ieskini del 5000 USD. Zemutines grandies teismas priteise 3000 USD.
  • France: Madame D. v.Madame B.  Ponia D apeliavo sprendima: Sutartis negalioja todel, kad nera (teiseto) objekto: yra neteiseta teikti ivaikinimo paslaugas uz pelna.
  • France: Madame D. v.Madame B.  Taip. Sutarties dalis del pelno negalioja.
  • Collinet v. Boudet  France: Com., 1980 m. sausio mėn. 14 d..
  • Collinet v. Boudet  Facts: Π Boudet, a beer distributor, entered into a long term supply contract with Δ Collinet, a bar owner. After four years, in 1972, Π sues for nonpayment.
  • Collinet v. Boudet  Δ affirmatively asserts lack of object for indefiniteness in that the contract specified that the beer was to be supplied for the price which Boudet set in the city of Verdun, selling similar goods to clients of similar size,” but the lower court found that because of competition, the Δ would not be purchasing beer at a price higher than the market price
  • Collinet v. Boudet  Issue: Is the object definite when the price term is the "usual price" as it was in this case?  Holding: No. (French law has since changed).  LT, U.S., CISG, UNIDROIT: YES. A reference to the market price is ok as it is to a seller’s catalog.
  •  6.313 str2. …Kai pirkimo–pardavimo sutartyje nei tiesiogiai, nei netiesiogiai nenustatyta kaina ar nenurodyta tvarka jai nustatyti ir šalys nėra susitarusios kitaip, laikoma, kad šalys turėjo omenyje kainą, kuri sutarties sudarymo metu buvo įprastai toje prekybos srityje mokama už tokius pat daiktus, parduodamus atitinkamomis aplinkybėmis
  • Įmonė Clinique du Plateauprieš sutuoktinius Monsus.  Prancūzija: Kasacinis teismas, 1984
  • Įmonė Clinique  Klinika už 300,000 Fr pardavė savo pagrindinį kapitalą pirkėjams Monsams, kurie turėjo apmokėti 10 lygiomis įmokomis, kasmet birzelio menesi.
  • Įmonė Clinique  The price however was indexed to the price of a day at the (birthing) clinic.
  • Įmonė Clinique  In France an index can be used if it is connected with the activity of (at least) one of the parties.
  • Įmonė Clinique  Aftterwards the Clinic no longer satisfied the criteria for a birthing clinic (gimdymo namų) and it therefore said that the indexing clause is void.
  • Įmonė Clinique  Issue: Is the appropriateness of an index to be judged at the time of formation?
  • Įmonė Clinique  Issue: Is the appropriateness of an index to be judged at the time of formation?  YES.
  • Įmonė Clinique  Note: This is not a case of the index no longer being available or disappearing.  6. Kai kaina turi būti nustatyta remiantis kriterijais, kurių nėra ar kurie išnyko arba negali būti nustatyti, kaina nustatoma remiantis artimiausios reikšmės kriterijais.[NOT]
  • Lizingo bendrovių klientaivaliutų kurso pinklėse  Verslo žinios 2002 11 26 d.  Linas Kmieliauskas, Gytis Vincevičius
  • Lizingo bendrovių klientaivaliutų kurso pinklėse  Nacionalinė vartotojų teisių apsaugos taryba (NVTAT) šiemet gavo trijų vilniečių skundus dėl su “Snoro lizingu” (SL) pernai pasirašytų standartinių išperkamosios nuomos sutarčių. 
  • Lizingo bendrovių klientaivaliutų kurso pinklėse  Tarybai buvo pareikšta, kad lizingo bendrovė nesilaiko išperkamosios nuomos sutarties punkto dėl mokėjimų perkaičiavimo, pasikeitus valiutų kursui. 
  • Lizingo bendrovių klientai  Pernai, dar iki susiejant litą su euru, sudarytose sutartyse buvo įtvirtinta, kad, pasikeitus lito ir USD kursui, šalys susitaria perskaičiuoti mokėjimus pagal nustatytą mokėjimo dieną galiojantį lito ir dolerio kursą taip, kad mokėjimo atitikmuo doleriais nepakistų.
  • Lizingo bendrovių klientai  USD kursui smukus – išloštų vartotojas, pakilus – lizingo bendrovė.
  • Lizingo bendrovių klientai  SL klientai tikina, kad įmonė neatsižvelgė į nuo vasario pasikeitusį USD ir lito santykį bei neperskaičiavo mokėjimų
  • Lizingo bendrovių klientai  What should an attorney advise his client? (The customers were angry because the leasing companies were delaying recalculating the amounts payable.)
  • Lizingo bendrovių klientai  Well, if one is right, don’t pay.
  • Lizingo bendrovių klientai  But in this situation, probably the banks are right.  A ‘lizingas’ is like a loan, and it is not natural to assume that less should be returned than was given.
  • Société Cofratel v. SociétéBechtel  France, Cour de Cassation 1995
  • Société Cofratel v. SociétéBechtel  France, Cour de Cassation 1995  when a contract envisages the formation of further contracts the fact that the price contained in those further contracts is not fixed in the initial contract does not affect the validity of the latter... though any abuse in the fixing of the price may give rise to rescission or damages
  • Société Cofratel v. SociétéBechtel  Case stands for the principle that a framework contract can be valid even if it does not state the price at which services will be rendered in subsequent contracts.
  • Exercises: Object  Distributor distributes beer to retailers. Distributor and Retailer enter into a contract wherein Distributor engages to provide a specified amount of a certain beer to Retailer each month, the price to be that of the Distributor’s latest pricelist minus ten percent
  • Exercises: Object  . At the time of the formation of the contract, the price approximates that prevailing in the market. Several months go by.
  • Exercises: Object  Then the Distributor notifies Retailer of a 200 percent price increase, twice that of the existing market price. Retailer notifies Distributor that it will accept no deliveries at the new price. Retailer then enters into contract with another distributor for a similar product. Distributor sues Retailer for damages.
  • Exercises: Object  Under the PECL (as well as the Lithuanian code), Retailer is not liable for breach of contract. Distributor breached the contract by setting a grossly unreasonable price. This is a material breach. Hence the Distributor cannot recover damages for refusal to purchase the product at the unreasonable price.
  • Exercises: Object  If the jurisdiction (such as Spain or France) has a rule that a contract in which one party has the right to set a price unilaterally does not satisfy the requirement of certainty, then the contract is absolutely invalid.
  • Exercises: Object  2. Buyer communicates to Seller that it wishes to purchase ten gallons of a certain type of paint. Seller tenders performance together with an invoice at a reasonable price. Is there a contract? At what price?
  • Exercises: Object  LR CK 6.313.2. Tais atvejais, kai pirkimo–pardavimo sutartyje nei tiesiogiai, nei netiesiogiai nenustatyta kaina ...laikoma, kad šalys turėjo omenyje ... protingumo kriterijus atitinkanti kaina.
  • Exercises: Object  3. Buyer communicates to Seller that it wishes to purchase ten gallons of a certain type of paint. 
  • Exercises: Object  3. Seller tenders performance together with an invoice at a grossly unreasonable price. Is there a contract? At what price?
  • Exercises: Object  France:  There would be no contract as there has been no meeting of the minds. This means there has been a failure of the object. 
  • Exercises: Object  PECL, LT, CISG, UCC  The contract is for the market price or a reasonable price.  The seller has breached the contract.
  • Exercises: Object  PECL, LT, CISG, UCC  The contract is for the market price or a reasonable price.  The seller has breached the contract.
  • Exercises: Object  [New] (Not in readings):  A contract states the price shall be that of the seller’s latest catalog. Valid?
  • Exercises: Object  [New] (Not in readings):  A contract states the price shall be that of the seller’s latest catalog. Valid?  Yes.
  • Exercises: Object  [New] (Not in readings):  A contract in Lithuania states the price payable in Litai shall be indexed to the Mexican peso. Neither the contract nor the parties have anything to do with Mexico. Valid?
  • Exercises: Object  [New] (Not in readings):  A sale contract in Lithuania states the price payable in Litai shall be indexed to the Mexican peso. Neither the contract nor the parties have anything to do with Mexico. Valid?  Yes, in Lithuania (no in France).
  • Exercises: Object  [New] (Not in readings):  A person contracts to sell his eye to a buyer to be used to replace the buyer’s damaged eye. The person repudiates. The buyer sues for damages.
  • Exercises: Object  [New] (Not in readings):  The buyer sues for damages. The repudiating seller claims the contract is void? Is it?
  • Exercises: Object  [New] (Not in readings):  Yes. The thing in question is not something legitimately in commerce.  Similar things: ancient artifacts, profesional’s clients, illegal drugs, explosives, surrogate pregnancy.
  • Exercises: Object  LR CK 6.306  1. Pirkimo–pardavimo sutarties dalyku* gali būti neišimti iš apyvartos daiktai ... .  *(objektu)
  • Class 7
  • Croize v. Veaux 1929  Veaux, a medical doctor, obtained a licence to exploit a pharmaceutical product and medical treatment from Croize, who was not a medical doctor.
  • Croize v. Veaux  Veaux undertook to advertise this drug or treatment for no less than 6000 Fr. a month. Veaux had to earn 26,000 Fr. a month prior to seeing any profit. The goal was to have Veaux prescribe this cure, it apparently having no scientific value.
  • Croize v. Veaux  Issue: Must the cause or purpose of a contract be prohibited by statute in order to render the contract invalid?
  • Croize v. Veaux  Issue: Must the cause or purpose of a contract be prohibited by statute in order to render the contract invalid?  No.
  • Croize v. Veaux  Lithuania  Lt Cc § 181.1 provides that a ‘convention which is against public order or good morals is null and invalid.’
  • Villaceque v. Levray (France 1879)Facts: Π Levray sued Δ Villacequefor non-payment of 4,750 Fr. 80 cfor three barrels of caramel colorantwhich Levray had sold Villaceque. Δraises as a defense the nullity of thecontract.
  • Villaceque v. Levray (France 1879)The colorant was to be used to colorwine, and it contained arsenic, andto use the colorant thus gives rise toa harmful product.
  • Villaceque v. Levray (France 1879)Issue: Can the cause of a contractbe illicit when, although its object islicit, the contemplated use of theobject is against the public interest?
  • Villaceque v. Levray (France 1879)Issue: Can the cause of a contractbe illicit when, although its object islicit, the contemplated use of theobject is against the public interest?YES
  • Villaceque v. Levray (France 1879)Lt Cc §1.81.3: Unilateral or bilateralrestitution is possible if its applicationdoes not violate imperative legal norms orgood morals, that is, when the purpose ofthe contract, violative of public order orgood morals, was not reached and therules of public law do not provide forproperty sanctions against the parties ofsuch an agreement.
  • Villaceque v. Levray (France 1879)Here the purpose was probablyreached, therefore no restitution.
  • Conte v. Fould  France, Cour de Cassation 1899
  • Conte v. Fould  Facts: Π Conte is a bar-owner who dispensed drinks as agreed by an agent of Δ Fould to potential voters for Δ Fould who was running for parliament. Π is suing Δ in order to obtain payment for the drinks.
  • Conte v. Fould  "[I]t appears from all the circumstances and evidence in the case that the drinks in question were intended, in the minds of the parties, to obtain votes for Fould from those who took part; that, therefore, the cause of the obligation which Conte wishes to enforce is illicit as contrary to statutes, public policy, good morals
  • Conte v. Fould  Issue: If the object of a contract is licit, can the cause be illicit? Was the cause of the contract licit, entertain guests, with only the motive being illicit?
  • Conte v. Fould  Issue: If the object of a contract is licit, can the cause be illicit?  YES
  • Conte v. Fould  Q: Was the cause stated in the contract? That is, was it agreed to entertain the people in order for them to vote for Fould? Is an agreement necessary or mere knowledge?
  • Conte v. Fould  Q: Was the cause stated in the contract? That is, was it agreed to entertain the people in order for them to vote for Fould? Is an agreement necessary or mere knowledge?  MERE KNOWLEDGE
  • Conte v. Fould  Restitution?
  • Conte v. Fould  Restitution?  Under LT law, purpose was achieved, therefore no restitution.
  • Demoiselle Monge v.Veuve Minart  France: Cour de cassation 1964
  • Demoiselle Monge v.Veuve Minart  Facts: Π Monge sues Δ Minart. Minart invoked an affirmative defense of absolute nullity. Π Monge appeals.
  • Demoiselle Monge v.Veuve Minart  Monge worked in Minarts brothel as a chamber-maid. Monge claims she did not know of the fact that it was a brothel at the time of the formation of contract. Monge is owed the balance of her salary —apparently she was paid only part of what she was supposed to have been paid.
  • Demoiselle Monge v.Veuve Minart  Issue: In order for a contract to be illicit, do both parties have to know of the immoral purpose at the time of formation?
  • Demoiselle Monge v.Veuve Minart  Issue: In order for a contract to be illicit, do both parties have to know of the immoral purpose at the time of formation?  Holding: Yes.
  • Demoiselle Monge v.Veuve Minart  3. Vienašalė ar dvišalė restitucija galima, jeigu jos taikymas neprieštarauja imperatyvioms įstatymų normoms ar gerai moralei, t. y. kai nebuvo pasiektas viešajai tvarkai ar geros moralės normoms prieštaraujančio sandorio tikslas…
  • Cohen-Scali v. Roubieu  France: Cour de cassation (1863)
  • Cohen-Scali v. Roubieu  Facts: Cohen-Scali = Π = landlord/lessor sued lessee Δ Roubieu for nonpayment of rent, and, apparently, for renouncing the lease ahead of the stated term. Δ raises as an affirmative defense the nullity of the contract.
  • Cohen-Scali v. Roubieu  By the terms of the written lease Δ renounced the right to sue the Π for any reason whatsoever.
  • Cohen-Scali v. Roubieu  Issue: Does sufficient cause exist in a bilateral contract in which one party has no rights whatsoever?
  • Cohen-Scali v. Roubieu  Issue: Does sufficient cause exist in a bilateral contract in which one party has no rights whatsoever?  Holding: No. As the court said, "such a stipulation being in manifest contradiction with the essential rules of the contract of lease and even with the principle of contract altogether."
  • Cohen-Scali v. Roubieu  Best argument for Π: The Δ agreed not to sue; the parties can limit liability. Δ has rights, he merely waived enforcing them.
  • Cohen-Scali v. Roubieu  Best argument for Δ: The Δ has no rights under this purported agreement; it never really was formed, since there must be in a rental agreement an effective right to enforce the agreement on the part of the tenant.
  • Class 8
  • Régie communale des SourcesNessel v. SARL Eurogadget  France: Cour de cassation (1973)
  • Régie communale des SourcesNessel v. SARL Eurogadget  Π Eurogadget sued Δ Régie communale des Sources Nessel for non-payment for (we surmise--promotional) bottle openers. Π claimed that the total price is 33,000 Fr (60,000 units at 550 per thousand, or 550 x 60 = 33,000 Fr.).
  • Régie communale des SourcesNessel v. SARL Eurogadget  Δ claimed that the total price was understood by it to be 55 per thousand, or 55 x 60 = 3300 Fr. Δ argued the contract is invalid for mistake. The lower appellate court did not reply to the argument that as a matter of law one cannot make a mistake as to price.
  • Régie communale des SourcesNessel v. SARL Eurogadget  Issue: Can price be a substantial quality regarding which a mistake resulting in invalidity can be made?
  • Régie communale des SourcesNessel v. SARL Eurogadget  Issue: Can price be a substantial quality regarding which a mistake resulting in invalidity can be made?  YES
  • Régie communale des SourcesNessel v. SARL Eurogadget  Note: The rule is, however, that a mistake as to value will not be recognized.
  • Berthon v. Vanden Borre  France: Cour de cassation (1968)
  • Berthon v. Vanden Borre  Π Berthon = Lessor sues Lessee Δ Vanden-Borre regarding a repudiated rental agreement. Δ sought to rent a villa on the Côte dAzur for the month of July for 6000 Fr excluding charges (the 2007 equivalent of $1215 USD).
  • Berthon v. Vanden Borre  The "agency acting for Berthon had specified that it was a comfortably appointed villa, but its outside and inside gave the unmistakable impression of a lack of maintenance; the bedding, the doors and walls were in an obviously dirty state; the furniture was clearly insufficient and a large building site ... was in the immediate vicinity of the villa, such as to disturb the peace and isolation of the occupant."
  • Berthon v. Vanden Borre  The Court of Appeal found that the high rent ‘albeit implicitly’ ‘gave rise to a presumption that it would be of a related calibre.’ 
  • Berthon v. Vanden Borre  Issue: Can a mistake be made as to quality such as would invalidate a contract? 
  • Berthon v. Vanden Borre  Issue: Can a mistake be made as to quality such as would invalidate a contract?  Holding: Yes.
  • Berthon v. Vanden Borre  Quality was a substantial quality of the thing for the plaintiff.  This was known to the lessor/plaintiff.
  • Berthon v. Vanden Borre  Note that it is not necessary that the other party know there is a mistake being made; it must know that X is a substantial/essential quality.
  • Choquel v. Camirel  France: Orleans (1931)
  • Choquel v. Camirel  Δ Choquel put ad in paper. Π Camirel bought a chest for 7000 Fr (about 275 U.S. 1931 dollars). П had it examined by expert who found it was "only a poor copy" and that the signature of the artist was a forgery.
  • Choquel v. Camirel  Δ admitted knowing it was not an antique; at first, however, he had maintained that he had thought it was an antique.
  • Choquel v. Camirel  Π purchaser was a collector, but a dilletante; the seller was an expert. Δ admitted the chest was worth perhaps 700 Fr but contended he had the right to sell it at any price.
  • Choquel v. Camirel  Issue: Can evidence of the conduct of the other (non-mistaken) party be taken to show knowledge that the mistake was as to a substantial, determining, element?
  • Choquel v. Camirel  Issue: Can evidence of the conduct of the other (non-mistaken) party be taken to show knowledge that the mistake was as to a substantial, determining, element?  YES
  • Choquel v. Camirel  Assumption of risk?  Inexcusable error?
  • Choquel v. Camirel  Assumption of risk?  Inexcusable error?  No. Purchaser a diletantte/m ėgėjas, seller an expert.
  • Madam D v. Madam M  France: Cour de cassation (1970)
  • Madam D v. Madam M  Π Madam D = a reseller, purchased from Madam M 31 paintings for 55,000 Fr. (about 11,200 in 1966 U.S. dollars). Δ did not pay for them.
  • Madam D v. Madam M  Expert testimony established that some of them were forgeries. Π (the buyer) initiated an action for mistake (and fraud).
  • Madam D v. Madam M  Issue: Can a mistake as to a non- essential quality (aspect) be such as to vitiate consent?  Holding: No.
  • Madam D v. Madam M  What is really going on here is that the buyer bought paintings not on the basis of their originality (which was never stated by the seller)
  • Madam D v. Madam M  But merely as industrial art, decoration.
  • Madam D v. Madam M  But merely as industrial art, decoration.
  • Class 9  Fraud
  • Nugent v Stanley  336 So.2d 1058 (1976)  Court of Appeal of Louisiana, Third Circuit.
  • Nugent v Stanley  Пs sue Δ for rescission of the sale of a business on the basis of fraud.
  • Nugent v Stanley  Plaintiffs testified that during these negotiations it was made entirely clear to Stanley that they wished to purchase a going established business with a good reputation, good will in the community, and an established line of credit with carpet mills and other suppliers.
  • Nugent v Stanley  П further testified that during these negotiations they were assured by Δ that upon consummation of the sales transaction they would acquire in addition to the physical property
  • Nugent v Stanley  some $12,000.00 to $15,000.00 of firm contracts for installation of carpet which had been secured by him
  • Nugent v Stanley  Plaintiff also leased premises from Δ with an option to purchase after six months. Δ reserved right upon non-payment of rent to re-enter and take possession of the premises.
  • Nugent v Stanley  Plaintiff also leased premises from Δ with an option to purchase after six months. Δ reserved right upon non-payment of rent to re-enter and take possession of the premises.
  • Nugent v Stanley  Instead of the 12,000 USD in extant contracts there were only two contracts, neither for profit.
  • Nugent v Stanley  Also the business’s credit was very bad. From some suppliers could not even get Cash on Delivery sales.
  • Nugent v Stanley  Π departed the premises, claiming the contract was invalid for fraud/misrepresentation.
  • Nugent v Stanley  Δ re-entered the premises and took over the business.
  • Nugent v Stanley  The trial court held that a voluntary and mutual rescission had taken place when the purchasers left the premises and the seller took them back.
  • Nugent v Stanley  It also held that the court action initiated by plaintiff was in the nature of one for redhibition.
  • Nugent v Stanley  Redhibition has to do with a defective product or thing. The price can be lowered by the court.
  • Nugent v Stanley  The appellate court said, however, that an action for a reduction of price due to defect and a rescission are mutually exclusive.
  • Nugent v Stanley  Note Δ admitted that Δ assured Π that Δ had a well established business, with good with and an established line of credit, plus approximately $12,000.00 worth of contracts for the installation of carpet
  • Nugent v Stanley  but denied any inference that such casual statements and/or representation(s) may have formed part of the contract of sale and assignment, the terms of which are best evidence of itself.
  • Nugent v Stanley  Ct finds:  Stanley incorrectly represented and in fact grossly exaggerated the value and income of his going business.
  • Nugent v Stanley  It is settled that parol evidence is admissable [sic] for the purpose of establishing that an agreement is subject to annulment because of lack of consent due to misrepresentation and error.
  • Nugent v Stanley  No mutual rescission: parties had rented premises, and rental period had expired. A separate contract.
  • Nugent v Stanley  Π are entitled to rescission of the sale of December 4th are entitled to a return of the purchase price paid by them subject to their return of the property to Δ together with whatever adjustments are necessary to compensate the Δ for Π’s use of the property during the period from December 4, 1972 to June 4, 1973.
  • Dombrovskis v.Baranauskas  Lietuvos Aukščiausiasis teismas  2005 m. spalio 26 d., Vilnius
  • Dombrovskis v.Baranauskas  Π Baranauskas sued Δ for non-return of a 42,000 Lt loan, plus .5% daily interest = nearly 90,000 Lt, plus damages of 12,000 Lt.
  • Dombrovskis v.Baranauskas  Second paragraph of written loan agreement recites that the loan was made on 2001 10.
  • Dombrovskis v.Baranauskas  Δ claims rescission for fraud or mistake.
  • Dombrovskis v.Baranauskas  Δ claims it never received the loan.  That the agreement was blank and given him in a car.
  • Dombrovskis v.Baranauskas  That he understood the agreement to be one for the purchase of a shed/garage in relation to the creation of a new corporation and business.
  • Dombrovskis v.Baranauskas  That he at the time was ill as a paranoid schizophrenic, that this was known to the Π and that he was taken advantage of.
  • Dombrovskis v.Baranauskas  Another man who participated in the negotiations testified that there never was talk of a loan, only a purchase.
  • Dombrovskis v.Baranauskas  The date of the loan agreement and the date of the purported turning over of the money do not coincide.
  • Dombrovskis v.Baranauskas  The loan agreement calls for interest for late payment at the rate of 185% a year!
  • Dombrovskis v.Baranauskas  There was no security given for the purported loan altho the two parties had only known each other for a month.
  • Dombrovskis v.Baranauskas  The trial ct in essence rejected the consideration of any of the above claims and simply affirmed the agreement as written.
  • Dombrovskis v.Baranauskas  Issue: Is extrinsic testimony admissible to prove deceit when a party claims he was deceived as to the consequences of a convention (when the party is clearly unable to fend for themselves)?
  • Dombrovskis v.Baranauskas  Holding: Yes.  The LT Supr. Ct. appears to say that the lower cts erred because they did not consider the facts offered by the defendant in regard to the deceit or error.
  • Dombrovskis v.Baranauskas  LAT: ‘vertinant, ar buvo suklysta, reikia atsižvelgti į sandorio šalies, teigiančios, kad ji suklydo … sveikatos būklę, sandorio sudarymo aplinkybes … .
  • Duty to Disclose  “Another exception is made in view of the particular nature of a party or of a contract. Thus, the manifest frailty of a person of advanced age should put the other party on notice that such a person may not be able to exercise the diligence necessary to inform himself concerning all the circumstances of the contract,
  • Duty to Disclose  so, in such a case, the other party is under a duty to inform the elderly person on the nature and consequences of the instruments to be signed.”  Saul Litvinoff
  • Duty to Disclose  one who fails to give another information that the other should have found by himself commits no fraud since it can be said that any error made in such a situation results not so much from one partys reticence as from the others lack of diligence in protecting his own interest.  Saul Litvinoff
  • Duty to Disclose  It is different, however, when the circumstances are such as to impose on one party a duty to inform the other concerning certain facts, a duty that seems to appear whenever a partys silence, or failure to inform or to disclose, is a flagrant abuse of the other partys ignorance.  Saul Litvinoff
  • First Acadiana Bank v.Bollich  Louisiana: Court of Appeal, 3rd Circuit (1988)  La Cc § 1949-52; Fr Cc §§ 1109, 1110; PECL § 4.103; Lt Cc § 190; Restatement 2d § 161(c)
  • First Acadiana Bank v.Bollich  Facts: ∆ Bollich agreed to guarantee one loan to son for $ 20,000. No facts were presented that ∆ knew he was signing a continuing guarantee agreement—he did not read it..
  • First Acadiana Bank v.Bollich  Bank officer (Laverne) according to ∆‘s testimony knew he (∆) only was to sign as guarantor for one loan. ∆‘s son repaid the $ 20,000 but owed more and therefore the bank sued ∆ under the continuing guarantee agreement.
  • First Acadiana Bank v.Bollich  There was evidence that the bank‘s actions were not credible: the agreement was notarized long after the actual signature was executed ...
  • First Acadiana Bank v.Bollich  Issue: Can a party avoid a contract by claiming mistake (erreur obstacle) in contradiction of its written terms?
  • First Acadiana Bank v.Bollich  Issue: Can a party avoid a contract by claiming mistake (erreur obstacle) in contradiction of its written terms?  Holding: YES
  •  “[I]if in the course of negotiations one party states his impression of the contractual object and asks from the other, ‘Tell me if I am wrong,’
  •  the others silence amounts to an assertion that the asking party is right, and will constitute fraudulent reticence if the one who remains silent knows that the others impression is false …” Saul Litvinoff
  • Lebret v. Fleischer  France: Cour de cassation (1887)  Cass. req. 27 April 1887.”
  •  Lebret = Π; Fleischer = ∆. Lebret sued ∆ Fleischer for non-performance of a payment obligation. The parties had contracted that Lebret‘s ship would free Fleischer‘s, which was stuck on sand. Fleischer was about to lose his ship and argued in vain for less rigorous terms.
  •  He escaped total loss only by agreeing to pay 18,000 Fr (4.3 times more than the lower court ordered ∆ to pay)..
  •  Issue: Is consent vitiated for duress only when the threat emanates from the other party?
  •  Holding: No. It is sufficient that the fear be “caused by a considerable and present evil to which the promisor’s person or wealth is exposed.”
  • Vigneron v. Glaugetas France: Cour de cassation (1919) Casebook 168
  • Vigneron v. Glaugetas Facts: Bed-ridden farmer Duvoisin (‘paralysed, weakened by illness, bedridden, abandoned by members of his family’) yielded to the fear that his share-cropping tenants would not continue to look after him and made a gift or gifts inter vivos to them.
  • Vigneron v. Glaugetas Lower court found duress and invalidated the contract of gift.
  • Vigneron v. Glaugetas Issue: Can it be duress simply when a party is at the mercy of the other? Holding: Yes.
  • Vigneron v. Glaugetas
  • Šlėvė v. Rimkus  LAT (Civ. byla Nr. 3K-3-16/2001 m.) (2001)
  • Šlėvė v. Rimkus Ieškovas F.Šlėvė 1999 m. spalio 7 d. kreipėsi su ieškininiu pareiškimu į Radviliškio rajono apylinkės teismą, prašydamas pripažinti negaliojančiu 1999 m. kovo 3 d. pirkimo-pardavimo sutartį, kuria jis pardavė atsakovui R.Rimkui pastatus, esančius Kėdainių 103A, Šeduvoje.
  • Šlėvė v. Rimkus Pastatai atsakovui parduoti už 71000 Lt, nors jų inventorizacinė vertė yra apie 712826 Lt. Ieškovas teigia, kad pastatus jis buvo priverstas parduoti dėl susidėjusių sunkių aplinkybių, nes buvo skolingas bankui apie 80000 Lt. Be to, pats atsakovas ruošiasi šiuos pastatus parduoti.
  • Šlėvė v. Rimkus Radviliškio rajono apylinkės teismas nustatė, kad ieškovas ginčo sandorį iš tiesų sudarė labai nenaudingomis sau sąlygomis dėl sunkių susidėjusių aplinkybių, todėl 2000 m. balandžio 5 d. sprendimu ieškinį patenkino, pripažindamas tarp šalių sudarytą sutartį negaliojančia ir pritaikydamas visišką restituciją.
  • Šlėvė v. Rimkus Teismas taip pat pripažino negaliojančiu Radviliškio rajono notarų biuro registro įrašą Nr. 1350.
  • Šlėvė v. Rimkus LAT: Tai, kad sandoris būtų pripažintas negaliojančiu būtina nustatyti šiuos požymius: 1) sandorio šalis (šiuo atveju pardavėjas) neturi būtinų gyvenimui sąlygų (neturi būsto, pragyvenimo šaltinio, sunkiai serga jis ar šeimos nariai ir panašiai);
  • Šlėvė v. Rimkus LAT: 2) kita sandorio šalis (pirkėjas) turi žinoti šias sunkias aplinkybes;
  • Šlėvė v. Rimkus LAT: 3) kita sandorio šalis (pirkėjas) pasinaudojo šiomis sunkiomis aplinkybėmis; 4) sandoris buvo sudarytas labai aiškiai nenaudingomis kitai šaliai (pardavėjui) sąlygomis (pvz., ypač maža kaina).
  • Šlėvė v. Rimkus LAT: Šioje teisės normoje įtvirtinta galimybė nuginčyti sandorį dėl to, kad jo sudarymą nulėmė sunkios susiklosčiusios aplinkybės, verslo santykiuose gali būti taikoma tik išimtinais atvejais, nes verslininkas prisiima su jo verslu susijusią riziką ir privalo a priori suvokti,
  • Šlėvė v. Rimkus LAT: kad verslui nepasisekus jis patirs neigiamų turtinių pasekmių, t.y. praras investuotas lėšas, turės parduoti jam priklausantį turtą ir panašiai.
  • Standard Coffee Service Co.v Raymond Babin  Court of Appeal of Louisiana, Fifth Circuit  472 So. 2d 124; 1985 La. App. LEXIS 8963 (1985)
  • Standard Coffee Service Co.v Raymond Babin  The employee, a sales representative, was asked to go to the employers office, without knowing what the meeting was about. When he arrived, he was asked to sign a new employment agreement that contained an arbitration clause and a non-compete agreement.
  • Standard Coffee Service Co.v Raymond Babin  The employee signed the contract under alleged threats of termination. Two years later, the employee was terminated and the employee started a similar business on his own. The employer attempted to institute arbitration proceedings regarding the alleged breach of the agreement, and the employee refused on the basis that the agreement was illegally obtained.
  • Standard Coffee Service Co.v Raymond Babin  The employer filed a petition to compel arbitration with the trial court, which denied the rule to compel arbitration. The employer appealed, and the court affirmed.
  • Standard Coffee Service Co.v Raymond Babin  The court held that the trial court properly found the employee was coerced into signing the contract with threats of his termination, and therefore the contract was not valid. The court held that a reasonable person with the subjective characteristics of the employee would have felt forced into signing the employment contract.
  • Richard v. Buer France: Cour de cassation (1970)
  • Richard v. Buer Π-appellee is Buer, who hired horses to make a short trek to a lake for himself, his son and a female friend. Buer’s horse was frightened and spooked.
  • Richard v. Buer The guide, Richard’s son, advised Buer to kick off the stirrups and to jump off. He did so and broke his leg. Buer sued and won in the lower court, the court stating it was a contract of transport [and hence of result-de resultat].
  • Richard v. Buer Issue: Was the nature of the contract that of transport?
  • Richard v. Buer Issue: Was the nature of the contract that of transport? Answer: It was not. It was a sport, and thus the responsibility must be only of best efforts. (No negligence was proven, apparently.) Therefore the court reversed the judgement.
  • DEJEAN v. LOUISIANAWESTERN R. CO.  167 La. 111 (1928)  Supreme Court of Louisiana.
  • DEJEAN v. LOUISIANAWESTERN R. CO.  Facts: Π sued ∆ to recover value of 25 bales of cotton. ∆ claimed fire started not due to negligence on its part. Statute states: ‘Carriers ... liable ... unless prove loss … occasioned by’ force majeure.
  • DEJEAN v. LOUISIANAWESTERN R. CO.  Q: Is the obligation of the carrier one of best efforts, of guarantee, or of result?
  • DEJEAN v. LOUISIANAWESTERN R. CO.  Q: Is the obligation of the carrier one of best efforts, of guarantee, or of result?  A: Of result. Consult Lt Cc § 6.718.5: party under such an obligation must prove force majeure (a mere proof of diligence is not enough).
  • DEJEAN v. LOUISIANAWESTERN R. CO.  Q: If the obligation had been merely one of diligence, who would have won and why?
  • DEJEAN v. LOUISIANAWESTERN R. CO.  Q: If the obligation had been merely one of diligence, who would have won and why?  The carrier.
  • DEJEAN v. LOUISIANAWESTERN R. CO.  Q: If the obligation had been merely one of diligence, who would have won and why?  The carrier. The ∆ did not adduce any proof that the fire did indeed start via a spark from a cotton gin which then smouldered, undetected, for a long time, only to burst into flames during transport. If it had, ∆ would have won.
  • Louis Dreyfus Corp. v.Continental Grain Co.  Louisiana: Court of Appeal, 4th Circuit (1981)
  • Louis Dreyfus Facts: The contract called for Π to sell grain to ∆ upriver at a set price and for ∆ to sell grain (not the same grain, but the same amount and quality) downriver. The effect of the contract was such that a given amount of grain upriver would be sold and the same amount would be repurchased downriver, at a premium indicative of the transport cost. The Mississippi river froze between St Louis and Cairo for 34 days; it was officially closed by the U.S. Coast Guard.
  • Louis Dreyfus Corp Therefore the ∆ was actually unable to transport the grain—but there was grain available for the ∆ to buy and to resell to Π at the downriver location: except that in order to do this the ∆ would have sustained a significant loss, because the market price downriver was up.
  • Louis Dreyfus (Note that, ostensibly, the contract calls for the ∆ to sell grain, not transport it.) Therefore ∆ invoked force majeure, arguing that the contract was a through- put contract, essentially one of transport, and not of individual sale and purchase. The Π argued it was a contract of purchase-sale.
  • Louis Dreyfus Corp. (Note that, ostensibly, the contract calls for the ∆ to sell grain, not transport it.) Therefore ∆ invoked force majeure, arguing that the contract was a through- put contract, essentially one of transport, and not of individual sale and purchase. The Π argued it was a contract of purchase-sale.
  • Demoiselle Monge v. Veuve MinartMonge worked in Minarts brothel asa chamber-maid. Monge claims shedid not know of the fact that it was abrothel at the time of the formationof contract. Monge is owed thebalance of her salary—apparentlyshe was paid only part of what shewas supposed to have been paid.
  • Chapter 12Right to Withhold Performance
  • Dubosc v. Soc des Eaux deChâtel-GuyonFrance: Cour de cassation (1934)Cass. civ., 5 December 1934
  • DuboscFacts: Π Dubosc sued ∆ fordamages. Π had several timesrefused without good cause toidentify himself by showing his“bathing” membership card.
  • DuboscFacts: The ∆ had returned hismoney, the return of which Πaccepted, but ∆ had suspendedperformance and had retained Π’scard. The trial court found that ∆had the right to suspendperformance. Π appeals on thefollowing ground:
  • DuboscDoes a party have the right tosuspend performance if this isequivalent to a complete and totalbreach—when resolution(termination) of the contract canbe ordered only by a court?
  • DuboscIn this case the ∆ does not havelesser means of putting pressureon the ∆. It is difficult to conceiveof how it could withhold a lesserpart of its performance.
  • DuboscAnother justification is that theexceptio is founded on the idea ofcause, and non-performance of oneobligation justifies the non-performance of the correspondingone, each obligation being thecause of the other.
  • DuboscThe third argument is one ofnecessity:Official Comment to PECL § 9.201:‘In some cases the aggrieved partycannot practicably withhold part ofits performance - for instance, manyobligations to perform a servicemust realistically be performed in fullor suspended in full.’
  • DuboscThis link is to an account of astudent being forcibly ejected from auniversity library in California in2006 for not identifying himself andfor refusing to leave: http://abclocal.‌go.‌com/‌kabc/‌story?‌‌section= kabclocal&id=‌4763689&ft=exLg
  •  SA Coronet France v. SARL Marseille Marine France: Cour de cassation (1973)
  • Coronet-France signed an agreement granting Marseille Marine (MM) an exclusive right to sell its boats in a specified area for three years in exchange for a promise to sell at least nine boats a year and to pay a debt in instalments by way of bills of exchange. MM did not sell any boats the first year and stopped paying the instalments.
  •  CF sent a letter to MM purporting to terminate the contract and to give the exclusive distributorship to another company. The contract apparently did not allow for unilateral termination, even in the case of essential non-performance.
  •  Issue: If a distributor has stopped its performance because of the non- performance of its exclusive agent, can it grant another party an exclusive agency in the same area?
  •  No. Under French law, that is. Yes under other systems. But that is qualified by the right to cure.
  •  Holding: No. This would be the same as a unilateral termination (resolution/rescission), which the contract did not allow for. The contract is still in force, and the creditor (the party making use of the right to stop performance) must remain ready to perform.
  • Olsona Co. v. Spauda,Inc.  Lithuania: Supreme Court (1999)
  • Olsona Co. v. Spauda,Inc.  Facts: On March 6, 1998 Olsona co. and Lithuanian National Radio and Television entered into an agreement by which LNRT undertook to publish an advertising supplement for Olsona. Olsona listed eight telephone numbers to take orders for advertisements.
  • Olsona Co. v. Spauda,Inc.  The numbers actually belonged to Spauda, Inc., but under a lease agreement between Spauda (∆) and Olsona (Π), Olsona had the right to use them. Olsona did not perform its monetary obligation vis à vis the telephone lines, and therefore ∆ disconnected four of them. Π claims it lost 90,000 Litas profit because of this.
  • Olsona Co. v. Spauda,Inc.  Did the Δ have a right to suspend its performance?
  • Olsona Co. v. Spauda,Inc.  Did the Δ have a right to suspend its performance?  The opinion relates that the trial court did find that the Δ had a right to disconnect the phones.
  • Olsona Co. v. Spauda,Inc.  Perfect example of proportionality.
  • Olsona Co. v. Spauda,Inc.  Q: Assuming the damages had been proven, what is the best argument that the ∆ had a right to suspend its performance?
  • Olsona Co. v. Spauda,Inc.  Q: Assuming the damages had been proven, what is the best argument that the ∆ had a right to suspend its performance?  A: In a bilateral contract, one party‘s obligation has as its objective cause the performance of the other party. Therefore non-performance excuses non-performance. This right to suspend was exercised proportionally.
  • 14 SpecificPerformance
  • Jalagier v. SociétéImmobilière LeRabelais  France: Cour de cassation (1963)
  • Jalagier  This relatively recent and very short case illustrates the attitude of the Cour de cassation (the "supreme court") of France towards specific performance, or, as it is known in the Continental law, performance in kind.
  • Jalagier  As pointed out by Barry Nicholas, the result is that the creditor has a right to have what was done destroyed;
  • Jalagier  there is no requirement that the creditor prove damages, which indeed in this instance he could not (having arguably received more than he had had a right to receive).
  • Jalagier  Contractor built floors exceeding height limit  Was ordered to tear down
  • Jalagier  LT Louisiana PECL?  Nope.
  • Jalagier  LT Louisiana PECL?  Nope.  Unproportional.  LR CK § 6.213.2.2.
  • Jalagier  PECL  Applying § 9:102 (2)(b), the court would deny the prayed-for relief because "performance would cause the debtor unreasonable effort or expense."
  • Chem de fer d’Orléans v.Vidal  France: Cour de cassation (1924)
  • Chem de fer d’Orléans v.Vidal  Facts: Furniture being transported by rail was damaged. Lower court ordered their repair by the railroad company.
  • Chem de fer d’Orléans v.Vidal  Issue: Can a court compel a party to do an act which it is not obliged to do under law or contract?
  • Chem de fer d’Orléans v.Vidal  The case stands for the proposition that if specific performance is available that a party may be ordered to repair a faulty performance. But the lower court in this case had ordered repair of damages, not of the performance.
  • Weingarten v. Northgate Mall  Supreme Court of Louisiana  Louisiana: 404 So.2d 896 (1981)
  • Weingarten v. Northgate Mall Π=Tenant-Weingarten sued developer of shopping mall seeking permanent injunction to tear down an addition to a mall.
  • Weingarten v. Northgate Mall The lease provided that specific performance could be had without the necessity of showing irreparable harm or inadequacy of money damages.
  • Weingarten v. Northgate Mall The place where the addition was built had been a parking lot and Π’s customers now had fewer spaces; also some of the lot had been restricted for future expansion by Π. The trial court denied the relief.
  • Weingarten v. Northgate Mall The Supreme Court held that: courts are empowered to withhold specific performance in some exceptional cases even when specific performance is possible,
  • Weingarten v. Northgate Mall under circumstances of case, court would not specifically enforce lease by ordering destruction of major part of $4,000,000 building which shopping center developer erected in an area reserved to its tenant for customer parking.
  • Weingarten v. Northgate Mall we conclude that the legislative aim of the redactors of the code was to institute the right to specific performance as an obligee’s remedy for breach of contract except when it is impossible,
  • Weingarten v. Northgate Mall greatly disproportionate in cost to the actual damage caused,
  • Weingarten v. Northgate Mall no longer in the creditor’s interest, or of substantial negative effect upon the interests of third parties.
  • Weingarten v. Northgate Mall  Rule 1): Regarding certain types of obligations, such as the obligation to deliver a thing, the court must grant specific performance, unless the specific performance is impracticable.
  • Weingarten v. Northgate Mall  Rule 2): In regard to other obligations, there seems no longer to be a right to specific performance, but it is at the discretion of the court.
  • Suchan v. Rutherford  Supreme Court of Idaho  410 P.2d 434 (1996)
  • Suchan v. Rutherford Δ vendor counterclaims for specific performance of what is essentially a contract for the sale of a farm in which the purchase price is payable over eighteen years.
  • Suchan v. Rutherford Is specific performance available to the vendor in a real estate contract when the price is payable over 18 years?
  • Suchan v. Rutherford Is specific performance available to the vendor in a real estate contract when the price is payable over 18 years? Under PECL answer would be no.
  • Suchan v. Rutherford  PECL § 9:102: Non-monetary Obligations  1) The aggrieved party is entitled to specific performance of an obligation other than one to pay money, including the remedying of a defective performance.
  • Suchan v. Rutherford Is specific performance available to the vendor in a real estate contract when the price is payable over 18 years? Usually in the USA cts have granted sp perf to the vendor as well as the purchaser.
  • Suchan v. Rutherford Is specific performance available to the vendor in a real estate contract when the price is payable over 18 years? LT: Much less clear.
  • Suchan v. Rutherford Lt Cc § 6.213. Demand for Execution of the Agreement If a party does not perform a monetary [payment] obligation, the other party has the right to obtain specific performance.
  • Suchan v. Rutherford LT: Not really disproportunate. Price is more or less market price.
  • Suchan v. Rutherford LT: The best argument under Lithuanian law on the obligors part would be that the ordering of specific performance would greatly complicate the obligors situation (Lt Cc § 6.213.3).
  • Suchan v. Rutherford LT: There is no codal provision in LT (there is in Louisiana) regarding practicality of supervision by the court.
  • Northern Indiana Pub. Ser.Co. v Carbon County Coal Co.  United States Court of Appeals, Seventh Circuit  799 F.2d 265  Decided Aug. 13, 1986
  • NIPSCO In 1978 NIPSCO and Carbon County signed a contract whereby Carbon County agreed to sell and NIPSCO to buy approximately 1.5 million tons of coal every year for 20 years, at a price of $24 a ton subject to various provisions for escalation which by 1985 had driven the price up to $44 a ton.
  • NIPSCO The contract was a fixed price contract, did not provide for change in price to favor seller, and stated exact amount of coal to be provided.
  • NIPSCO Nipsco used the coal to generate electricity.
  • NIPSCO NIPSCO, as things turned out it was indeed able to buy electricity at prices below the costs of generating electricity from coal bought under the contract with Carbon County;
  • NIPSCO NIPSCO repudiated the contract.
  • NIPSCO Carbon County (supplier-seller) moves for specific performance.
  • NIPSCO Carbon County (supplier-seller) moves for specific performance.
  • NIPSCO Carbon County’s mine shut down, as NIPSCO was the only customer.
  • NIPSCO although a $$ judgement (121 million) will make the owners of Carbon County whole it will do nothing for the miners who have lost their jobs because the mine is closed and the satellite businesses that have closed for the same reason. Only specific performance will help them
  • NIPSCO specific performance is available only if damages are not an adequate remedy (Anglo-American rule!)
  • NIPSCO As to miners “But since they are not parties to the contract their losses are irrelevant. “
  • NIPSCO Indeed, specific performance would be improper as well as unnecessary here, because it would force the continuation of production that has become uneconomical. No one wants coal from Carbon Countys mine.
  • NIPSCO With the collapse of oil prices, which has depressed the price of substitute fuels as well, this coal costs far more to get out of the ground than it is worth in the market.
  • NIPSCO With continued production uneconomical, it is unlikely that an order of specific performance, if made, would ever actually be implemented.
  • NIPSCO Carbon County is seeking specific performance in order to have bargaining leverage with NIPSCO,
  • NIPSCO Under PECL Or LT?
  • NIPSCO Under PECL Or LT? Disproportional. (Same result.)
  • NIPSCO Why does Posner claim that forcing CCCC to take coal from the ground would impose “costs on society greater than the benefits”?
  • NIPSCO Why does Posner claim that forcing CCCC to take coal from the ground would impose “costs on society greater than the benefits”? Wasteful and uneconomic. Far cheaper to buy substitute.
  • NIPSCO Why in such a contract should specific performance not be ordered?
  • NIPSCO Why in such a contract should specific performance not be ordered? 1. Adequacy of money damages (USA)
  • NIPSCO Why in such a contract should specific performance not be ordered? 1. Adequacy of money damages (USA) 2. Disproportunate cost to recalcitrant buyer (who could buy much much cheaper on the market)
  • NIPSCO Why in such a contract should specific performance not be ordered? Impracticality of supervision (coal mine closed) (but not a criteria in LT and PECL, is in Louisiana and elsewhere)
  • NIPSCO 5. How does Posner know that the parties will settle out and not perform the injunction?
  • NIPSCO 5. How does Posner know that the parties will settle out and not perform the injunction? The costs are prohibitive but most importantly they can settle so that everyone wins.
  • NIPSCO Then Carbon County would be making a profit of only $20 on each ton it sold to NIPSCO ($40- $20), while NIPSCO would be losing $30 on each ton it bought from Carbon County ($40- $10). Hence by offering Carbon County more than contract damages (i.e., more than Carbon Countys lost profits), NIPSCO could induce Carbon County to discharge the contract and release NIPSCO to buy cheaper coal. For example, at $25, both parties would be better off than under specific performance
  • NIPSCO 6. Why does Posner say that NIPSCO must pay damages? Why is there normally a damages right?
  • NIPSCO 6. Why does Posner say that NIPSCO must pay damages? Why is there normally a damages right? The risk of the change in market prices was assumed by NIPSCO. There is normally a damages right as a basic principle of contract law. No defenses are here available.
  • NIPSCO There is normally a damages right as a basic principle of contract law. No defenses are here available.
  • Madison Square GardenBoxing Inc. v. Earnie Shavers  UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK  434 F. Supp. 449  1977
  • Madison Square GardenBoxing Inc. v. Earnie Shavers
  • Mad.Sq.Gdn v. Earnie Shavers  Known as the "The Acorn" and "Black Destroyer", Shavers compiled one of the most amazing records in boxing history.
  • Mad.Sq.Gdn v. Earnie Shavers  At one point he won almost thirty fights in a row by knockout. He scored over 20 victories in the first round alone, including that over Ken Norton.
  • Mad.Sq.Gdn v. Earnie Shavers Shavers fought Muhammad Ali at the Madison Square Garden on September 29, 1977 and, while almost flooring Ali with a right in the second round, he lost a close decision. Ali later said Shavers was the hardest puncher he ever faced.
  • Mad.Sq.Gdn v. Earnie Shavers Π Madison Sq Gdn seeks specific enforcement to enjoin Δ Shavers, a heavyweight contender, from participating in any boxing match until he fulfills his contractual obligations to plaintiff.
  • Mad.Sq.Gdn v. Earnie Shavers Shavers wants to fight for someone else and has received a 30,000 USD advance for it.
  • Mad.Sq.Gdn v. Earnie Shavers This is a personal services contract.
  • Mad.Sq.Gdn v. Earnie Shavers LT Cc 6.213 (vykdymas natūroje galimas nebent) 5) neįvykdyta prievolė yra išimtinai asmeninio pobūdžio.
  • Mad.Sq.Gdn v. Earnie Shavers PECL  Article 9:102 (2) Specific performance cannot, however, be obtained where:  (c) the performance consists in the provision of services or work of a personal character or depends upon a personal relationship
  • Mad.Sq.Gdn v. Earnie Shavers But This is of an obligation not to do.
  • Mad.Sq.Gdn v. Earnie Shavers  Louisiana Civil Code  Specific Performance  §1986. Right of the obligee  Upon an obligors failure … not to do an act …the court shall grant specific performance.
  • Mad.Sq.Gdn v. Earnie Shavers  Ct found  Shavers to be without question Earnie Shavers talents are "unusual, unique [and] extraordinary"
  • Mad.Sq.Gdn v. Earnie Shavers  Ct found And that the contract is not unconscionable
  • Mad.Sq.Gdn v. Earnie Shavers  Ct found  the Garden would be to a measurable extent, irreparably injured as a viable promoter of major boxing matches were Shavers with impunity able to simply disavow a prior agreement with the Garden to take advantage of a later- made more attractive offer.
  • Mad.Sq.Gdn v. Earnie Shavers  French Law of Contract  Where ... the Comedie Francais sought to enforce against one of its actors his contractual undertaking not to appear with another company, an astreinte was imposed.
  • Mad.Sq.Gdn v. Earnie Shavers  1. Why not order an injunction?
  • Mad.Sq.Gdn v. Earnie Shavers  1. Why not order an injunction?  Best arg: personal services.
  • Mad.Sq.Gdn v. Earnie Shavers  2. What kinds of damages will Top Rank seek from Shavers? Will Top Rank succeed? Why is a negative injunction necessary?
  • Mad.Sq.Gdn v. Earnie Shavers  2. What kinds of damages will Top Rank seek from Shavers?  Expectation damages (lost profits)  Will Top Rank succeed?  Probably.
  • Mad.Sq.Gdn v. Earnie Shavers  Why is a negative injunction necessary?  Damages … would Shavers have the money?
  • Mad.Sq.Gdn v. Earnie Shavers  Why is a negative injunction necessary?  Also-damage to Madison Sq Garden’s reputation and ability to arrange such events.
  • Mad.Sq.Gdn v. Earnie Shavers  3. What other jobs are enough like Shavers’ that an employer could get a negative injunction to prevent harm from a breach?
  • Mad.Sq.Gdn v. Earnie Shavers  LR CK § 6.213 (galima nebent)  3) turinti teisę gauti įvykdymą sutarties šalis gali protingai gauti įvykdymą iš kito šaltinio;
  • End Chapter on Sp Perf
  • Class 15  Damages
  • Hadley v. Baxendale  England: Court of Exchequer (1854)
  • Hadley v. Baxendale  Δ undertook to transport a crankshaft to another town to be repaired, and then to return the crankshaft. [1] Hunter, Modern Law of Contracts § 14:10 [supra n. 88].
  • Hadley v. Baxendale  There was evidence to indicate that the Π millers (Hadley) had informed ∆ that the matter was urgent, and that the ∆ stated “they could quickly deliver the broken crankshaft to and from the town in which the repair shop was located.
  • Hadley v. Baxendale  The defendants did not deliver as rapidly as they promised; consequently, there was a substantial delay in getting the shaft repaired and back to the mill.
  • Hadley v. Baxendale  The plaintiffs did not have a spare shaft, and the mill was shut down the entire time that the shaft was in transit and in the shop.
  • Hadley v. Baxendale  Because the defendants did not live up to their promises of speedy delivery, the plaintiffs sought to recover from them the profits they lost for the time that the mill was closed.”
  • Hadley v. Baxendale  Π did not inform Δ that the crankshaft was the only one they had and that therefore the mill was inoperable until it was repaired and returned.
  • Hadley v. Baxendale  Π did not inform Δ that the crankshaft was the only one they had and that therefore the mill was inoperable until it was repaired and returned.
  • Hadley v. Baxendale  Is a party liable for damage it caused but did not foresee?
  • Hadley v. Baxendale  General damages. A party is entitled to recover damages which flow naturally from a breach.
  • Hadley v. Baxendale Special damages. A party is entitled to recover damages which otherwise were in the contemplation of the parties at the time of the formation of the contract.
  • Hadley v. Baxendale Best arg. for Π: ∆’s non-performance (delay in performance) did indeed cause the damages complained-of and therefore ∆ should be liable for them.
  • Hadley v. Baxendale Best arg. for Π: ∆’s non- performance (delay in performance) did indeed cause the damages complained-of and therefore ∆ should be liable for them.
  • Hadley v. Baxendale Q: Must a party expressly agree to special damages in order to be liable for them? What if a party at formation merely has knowledge that the other party would suffer lost profits in the event of a breach?
  • Hadley v. Baxendale Larroumet: Droit Civil “If an obligor knows at formation that if it fails to perform that the other party will be liable under a second contract with a third party to that third party,
  • Hadley v. Baxendale Larroumet: Droit Civil then the obligor, if it fails to perform, will be liable for the second party’s losses for failure to perform under the second contract.”
  • Rockingham County v.Luten Bridge Co.(The Bridge To Nowhere Case)35 F.2d 301.United States Court of Appeals, FourthCircuit, 1929.
  • Rockingham County v.Luten Bridge Co.Π Luten Bridge undertook toconstruct a bridge for appellant-defendant Rockingham County.
  • Rockingham Cty v. Luten Brdge Co. Π Luten Bridge undertook to construct a bridge for appellant- defendant Rockingham County.
  • Rockingham Cty v. Luten Brdge Co. Rockingham County repudiated the contract.
  • Rockingham Cty v. Luten Brdge Co. At the time of the repudiation, Π had spent ~ 1900 USD. (The county cancelled the road construction as well.)
  • Rockingham Cty v. Luten Brdge Co. Π Luten Bridge did not cease work. It constructed the bridge (now leading to nowhere) and sued for nearly 19,000 USD.
  • Rockingham Cty v. Luten Brdge Co. Ct: “His remedy is to treat the contract as broken when he receives the notice, and sue for the recovery of such damages, as he may have sustained from the breach, including any profit which he would have realized upon performance, as well as any other losses which may have resulted to him “
  • Rockingham Cty v. Luten Brdge Co. No right to pile up damages.
  • Rockingham Cty v. Luten Brdge Co. This is sometimes called the ‘duty’ to mitigate.
  • Rockingham Cty v. Luten Brdge Co. Not really a duty since duties are owed to the other party.
  • Binka v. Bartusevičius Lietuvos Aukšč. Teismas Civilinė byla Nr. 3K-3-344, 1999 m.
  • Binka v. Bartusevičius Ieškovas R.Bartusevičius kreipėsi į teismą ir nurodė, kad, susitaręs su atsakovu A.Binka, 1998 m. gegužės 18 d. perdavė pastarajam suremontuoti automobilį ,,AUDI-200", pagamintą 1988 m.
  • Binka v. Bartusevičius Tačiau, kaip teigė ieškovas, A.Binka automobilio nesuremontavo, pats juo naudojosi, o 1998 m. gegužės 23 d. paliko stovėjimo aikštelėje prie savo namų, iš kur automobilis buvo pagrobtas.
  • Binka v. Bartusevičius Ieškovas prašė priteisti iš atsakovo septyniolika tūkstancių (17000) Lt nuostoliams dėl automobilio praradimo atlyginti. Žemesnės grandies teismas patenkino.
  • Binka v. Bartusevičius Atlygintinų nuostolių dydis nustatytas pagal specialistų pateiktą realią automobilio vertę jo vagystės metu
  • Binka v. Bartusevičius Atlygintinų nuostolių dydis nustatytas pagal specialistų pateiktą realią automobilio vertę jo vagystės metu
  • Binka v. Bartusevičius Binka (Δ kasatorius (‘apeliantas’)) teigia, kad todėl, kad mokėtini nuostoliai ribotini automobilio įsigijimo faktinę kainą: 9295 Lt (~ 8000 Lt mažiau nei buvo priteista).
  • Binka v. Bartusevičius Teismas: “turto pirkimo kaina neparodo tikrosios turto vertės “
  • Binka v. Bartusevičius Teismas: “turto pirkimo kaina neparodo tikrosios turto vertės “
  • Binka v. Bartusevičius damnum emergens ar lucrum cessans
  • Binka v. Bartusevičius damnum emergens But why not lost profits?
  • Chem. de fer du Midi v.Bosquet France: Cour de cassation (1913)
  • Chem. de fer du Midi v.Bosquet France: Cour de cassation (1913) Fr Cc § 1150; PECL § 9:503; Lt Cc § 6.258.4; Restatement 2d § 351
  • Chem. de fer du Midi v.Bosquet Facts: Π Bosquet’s train was late. He missed an appointment to clinch a deal. The lower court awarded him 200 Fr. The railroad had offered 15 Fr.
  • Chem. de fer du Midi v.Bosquet Is the railroad liable for all of the Π’s damages, irrespective of whether they were foreseeable?
  • Chem. de fer du Midi v.Bosquet Holding: No. Under Fr. Cc 1150, an obligee is liable for only foreseeable damages. It could not have foreseen Π’s damages.
  • Chem. de fer du Midi v.Bosquet Did Bosquet seek to recover general or special damages, using Anglo- American terminology?
  • Chem. de fer du Midi v.Bosquet Best arg. for Bosquet: The damages were in fact caused by the railroad. Additionally, they should know that from time to time a passenger who is delayed by their late performance will sustain such damages as are being claimed.
  • Chem. de fer du Midi v.Bosquet Best arg. for railroad: It neither knew nor should have known that Bosquet if late would sustain such damage.
  • Chem. de Fer P.-L.-M. v. Barthe France: Cour de cassation (1930) Fr Cc § 1150; PECL § 9:503; Lt Cc § 6.258.4; Restatement 2d § 351
  • Chem. de Fer P.-L.-M. v. Barthe France: Cour de cassation (1930) Fr Cc § 1150; PECL § 9:503; Lt Cc § 6.258.4; Restatement 2d § 351
  • Chem. de Fer P.-L.-M. v. Barthe Facts: 210 kilos of seedlings were delayed. The railroad had knowledge of the fact that they were live seedlings and therefore had to be delivered without delay.
  • Chem. de Fer P.-L.-M. v. Barthe As a result, by the time of delivery the seedlings were dead. The lower court awarded damages in order both to reimburse the Π for the cost of the seedlings but also for one year’s lost profits on a vineyard.
  • Chem. de Fer P.-L.-M. v. Barthe Issue: Were the lost profits foreseeable?
  • Chem. de Fer P.-L.-M. v. Barthe Yes. They were foreseeable since the railroad had knowledge of the nature of what it was shipping, and late shipment of such an article would cause such damages.
  • Chem. de Fer P.-L.-M. v. Barthe Best arg. for ∆: The damages are not sufficiently proximate. (Answer: But they are foreseeable: no one ships 210 k of live seedlings for nothing.)
  • Chem. de Fer P.-L.-M. v. Barthe Best arg. for Π: The ∆ had knowledge Π would suffer special damages, therefore they were foreseeable and therefore ∆ is liable.
  • Soileau & Coreil v Trans-Western PublishingCourt of Appeal of Louisiana, Third Circuit542 So. 2d 198; (1989)
  • SoileauΠs are attorneys. Contractedwith ‘yellow pages’ firm whichpublishes business advertisingin a publ. called “The TelephoneBook.”
  • SoileauBut another law firm’stelephone number waspublished in place of the Π’s!
  • SoileauΠs sue for damages.
  • SoileauΔ however claims damages arelimited by the terms of theiragreement to the price paid foradvertisement (which was 170USD).
  • SoileauCourt: It is well established in ourjurisprudence that such limitation ofliability clauses as in the presentcase are valid and not against publicpolicy.
  • SoileauNote:If bad faith (including grossnegligence) were proven,limitation would not be giveneffect.
  • Chapter 16
  • Chapter 16Jacob & Youngs v. KentCourt of Appeals of New York[1]230 N.Y. 239, *; 129 N.E. 889, **; (1921)[1] Highest court in the State of New York.
  • Chapter 16Jacob & Youngs v. KentCourt of Appeals of New York[1]230 N.Y. 239, *; 129 N.E. 889, **; (1921)[1] Highest court in the State of New York.
  • Jacob & Youngs v. KentRestatement 2d § 243;Quebec Cc §§ 1604, 1606;PECL § 8:103
  • Jacob & Youngs v. KentRestatement 2d § 243;Quebec Cc §§ 1604, 1606;PECL § 8:103
  • Jacob & Youngs v. KentRestatement 2d § 243 (4 … a breach bynon-performance gives rise to a claim fortotal breach only if it so substantiallyimpairs the value of the contract to theinjured party at the time of the breach thatit is just in the circumstances to allow himto recover damages based on all hisremaining rights to performance.
  • Jacob & Youngs v. KentKent (∆) hired Π to build a 77,000 USDcountry home; construction ceased in1914. This is the equivalent of $1,551,919.50 in 2005 U.S. dollars. [1][1] Lawrence H. Officer, Samuel H. Williamson, Purchasing Power of Money in theUnited States from 1774 to 2005, http://www.mswth.com/ppowerus/ (last updated Aug.,2006).
  • Jacob & Youngs v. KentThe contract contained the followingclause: ‘All wrought iron pipe must be wellgalvanized, lap welded pipe of the gradeknown as “standard pipe” of Readingmanufacture.’
  • Jacob & Youngs v. KentAfter the house was constructed, itwas discovered that the builder hadinadvertently used other pipe of thesame quality.
  • Jacob & Youngs v. KentTo replace it would have cost the builder agreat deal, since it would have meantrebuilding substantial portions of thehouse. The owner, Kent, refused to makethe final payment of 3,483.46 USD.
  • Jacob & Youngs v. KentIssue: Must performance be absolutelyperfect, or does substantial performancesuffice?
  • Jacob & Youngs v. KentIssue:Secondarily, is the performance in thiscase substantial? (that is, is the breachhere material or mere default?)
  • Jacob & Youngs v. KentCardozo:From the conclusion that promises maynot their uttermost minutiae without asacrifice of justice, the progress is a shortone to the conclusion that they may not beso treated without a perversion of intention.
  • Jacob & Youngs v. KentCardozo then finds that in principle, ifthere is no material breach in this particularcase, that the homeowner would be able tosetoff the difference between theperformance and the (objective) value ofthe contracted performance, which wouldbe nothing or nominal.
  • Jacob & Youngs v. KentBest arg. for ∆ (homeowner): The breachwas material; Reading pipe was contractedfor, but not tendered.
  • Jacob & Youngs v. KentBest arg. for Π (builder): The breach wasinadvertent and trivial; there is nodifference in value, and therefore thebuilder’s obligation was substantiallyperformed.
  • Marek v. McHardyLouisiana: Supreme Court (1958)234 La. 841; 101 So. 2d 689
  • Marek v. McHardyLouisiana: Supreme Court (1958)234 La. 841; 101 So. 2d 689La Cc § 2016;CISG § 72;PECL 9:304;Lt Cc §§ 6.219, 6.220;FLOC 238
  • Marek v. McHardyFacts:Π was employed by ∆s, agroup of physicians. Contractprovided for salary & that after 36months of work Π would bepartner with 10 % of thepartnership.
  • Marek v. McHardy At 34 months ∆ advisedFacts:Π that he would not become apartner but would have topurchase it. Π ceased workingand seeks damages.
  • Marek v. McHardyIssue: If a party repudiates anobligation in advance of the termfor its performance, must the otherparty continue to perform? (Inother words, does the doctrine ofanticipatory repudiation exist inLouisiana?)
  • Marek v. McHardyLa Cc § 2016. Dissolution without noticeto performWhen a delayed performance would nolonger be of value to the obligee or when itis evident that the obligor will not perform,the obligee may regard the contract asdissolved without any notice to the obligor.
  • Marek v. McHardyBest arg. for ∆:Allowing a party to terminate acontract prior to its breach by the otherparty deprives that other party of thepower to retract the repudiation. Thecontract in question has not really beenbreached.
  • Marek v. McHardyBest arg. for ∆:A party must be allowed to withholdperformance, since the other has statedthat it will not perform;
  • Marek v. McHardyBest arg. for ∆:secondly, such a party must have thepower to terminate the contract and tosue for damages in order to safeguardits rights, inasmuch as retraction is onlya possibility
  • Marek v. McHardyin France Π could not sue prior to theexpiration of the two months remainingof the period in question.
  • Universal Resources vPanhandle Eastern Pipe LineUNITED STATES COURT OF APPEALSFOR THE FIFTH CIRCUIT813 F.2d 77 March 31, 1987
  • Universal ResourcesDefendant buyer refused to pay fordeficiencies in gas purchases, butcontended that its analysis of plaintiffsellers ability to supply makeup gas wasreasonable cause for insecurity,
  • Universal Resourcesand that plaintiffs refusal to supplyadequate assurances in accordance withTex. Bus. & Com. Code Ann. § 2.609excused defendants performance.
  • Universal ResourcesIssue: Does there have to be objective factadduced as a condition of the right torequire assurance?
  • Universal ResourcesAnswer:Yes.
  • Universal ResourcesThe court held that defendant buyer hadnot produced any evidence capable ofproving reasonable grounds for insecurity,because
  • Universal Resourcesthere was no objective manifestationof plaintiffs inability to supply makeup gas,and defendants subjective conclusion thatplaintiff could not supply the gas could notprovide reasonable grounds for insecurity.
  • Zabriskie Chevrolet v Smith  99 N.J. Super. 441 (1968) Superior Court of New Jersey
  • Zabriskie Chevrolet  Plaintiff dealer sued defendant buyer to recover the purchase price of a vehicle and the buyer counterclaimed for the return of his deposit and incidental damages.
  • Zabriskie Chevrolet  The dealer sold an automobile to the buyer. Within a short distance after leaving the showroom the vehicle became inoperable because of mechanical failure.
  • Zabriskie Chevrolet  The buyer notified the dealer that he cancelled the sale and simultaneously stopped payment on the check he had tendered in payment.
  • Zabriskie Chevrolet  The dealer sued on the check and the purchase order for the balance of the purchase price plus incidental damages, and the buyer counterclaimed for the return of his deposit and incidental damages.
  • Zabriskie Chevrolet  The court rendered judgment for the buyer on both the action and counterclaim, pursuant to N.J. Stat. Ann. § 12A:2-711(1).
  • Zabriskie Chevrolet  The sales contract contained in the purchase order form did not effectively disclaim or exclude the implied warranties of merchantability or fitness.
  • Zabriskie Chevrolet  Defendant sought to purchase a new car. He assumed [**202] what every new car buyer has a right [***16] to assume and, indeed, has been led to assume by the high powered advertising techniques of the auto industry --
  • Zabriskie Chevrolet  that his new car, with the exception of very minor adjustments, would be mechanically new and factory-furnished, operate perfectly, and be free of substantial defects.
  • Zabriskie Chevrolet  The "cure" intended under the cited section of the Code does not, in the courts opinion, contemplate the tender of a new vehicle with a substituted transmission,
  • Zabriskie Chevrolet  not from the factory and of unknown lineage from another vehicle in plaintiffs possession.
  • Zabriskie Chevrolet  It was not the intention of the Legislature that the right to "cure" is a limitless one to be controlled only by the will of the seller.
  • Zabriskie Chevrolet  For a majority of people the purchase of a new car is a major investment, rationalized by the peace of mind that flows from its dependability and safety.
  • Zabriskie Chevrolet  Once their faith is shaken, the vehicle loses not only its real value in their eyes, but becomes an instrument whose integrity is substantially impaired and whose operation is fraught with apprehension.
  • Zabriskie Chevrolet  The attempted cure in the present case was ineffective.
  • Dons Marine, Inc. v.Haldeman  Court of Civil Appeals of Texas, Thirteenth District, Corpus Christi  557 S.W.2d 826 October 27, 1977
  • Dons Marine, Inc. v.Haldeman  Π sold boat to Δ.  Π sues to collect payment.  Δ counterclaims for advance.  Ct finds for Δ.
  • Dons Marine, Inc. v.Haldeman  Π seller contended that the trial court erred in not holding that appellee had accepted the boat in question thereby consummating the contract of sale.
  • Dons Marine, Inc. v.Haldeman  Π seller contended that the trial court erred in not holding that appellee had accepted the boat in question thereby consummating the contract of sale.
  • Dons Marine, Inc. v.Haldeman  Boat was defective.  Δ kept (did not reject) boat for over 30 days.
  • Dons Marine, Inc. v.Haldeman  Π repeatedly told Δ during this period that the defects would be cured.
  • Dons Marine, Inc. v.Haldeman  Defects were not cured.
  • Dons Marine, Inc. v.Haldeman  § 2.608. Revocation of Acceptance  May revoke acceptance  If accepted on the reasonable assumption that its non-conformity would be cured and it has not been seasonably cured
  • Dons Marine, Inc. v.Haldeman  UCC § 2.608.  CISG § 48 & 49
  • Dons Marine, Inc. v.Haldeman  Ct found that there had been no attempts at cure.
  • Dons Marine, Inc. v.Haldeman  Ct found that there had been no attempts at cure.
  • Chapter 17
  • Wasserman’s Inc. v.Township of Middletown  New Jersey: Supreme Court (1994)  137 N.J. 238; 645 A.2d 100
  • Wasserman’s Inc. ‘Pursuant to a public advertisement for bids, plaintiff Wasserman’s Inc. (Wasserman’s) and defendant, Township of Middletown (the Township of Middletown), entered into a commercial lease for a tract of municipally owned property.
  • Wasserman’s Inc. The agreement contained a clause providing that if the Township cancelled the lease, it would pay the lessee, Wasserman’s, a pro-rata reimbursement for any improvement costs and damages of twenty-five percent of the lessee’s average gross receipts for one year.
  • Wasserman’s Inc. In 1989, the Township cancelled the lease and sold the property, but refused to pay the agreed damages
  • Wasserman’s Inc. On cross-motions for summary judgment, the Law Division held that the lease and the cancellation clause were enforceable.
  • Wasserman’s Inc. It subsequently required the Township to pay damages in the amount of $346,058.44 plus interest. The Appellate Division affirmed.’
  • Wasserman’s Inc. Issue: Is a purported liquidated damages provision calling for the payment of a percentage of the gross receipts a penalty clause and therefore invalid (void and unenforceable)?
  • Wasserman’s Inc. Issue: Is a purported liquidated damages provision calling for the payment of a percentage of the gross receipts a penalty clause and therefore invalid (void and unenforceable)?
  • Lake River Corp. v.Carborundum Co. United States: Court of Appeals, 7th Circuit (1985)  769 F.2d 1284  Posner, Circuit Judge.  Restatement 2d § 356; PECL § 9.509; Quebec Cc § 1622; Fr Cc § 1152; Lt Cc § 6.258
  • Lake River  Δ Carborundum agreed to order a certain amount; if Δ did not do so, it would pay up to that amount in penalty..
  • Lake River  About half the agreed amount was ordered. Thus Δ purportedly owed П Lake River 241,000 USD.
  • Lake River Corp.  П demanded payment and Δ refused on the grounds that the clause constituted a penalty
  • Lake River Corp.  The court found that the provision was indeed a penalty.
  • Lake River Corp.  The seller would always be paying more than the amount of damages.
  • Lake River Corp.  The reason for these results is that most of the costs to Lake River of performing the contract are saved if the contract is broken, and this saving is not reflected in the damage formula.
  • Lake River Corp.  As a result, at whatever point in the life of the contract a breach occurs, the damage formula gives Lake River more than its lost profits from the breach— dramatically more if the breach occurs at the beginning of the contract; tapering off at the end, it is true.
  • Stankevicius v Chadakevicius  Lithuania: Supreme Court (2000)  Civ. byla Nr. 3K-7-23/ 2000  Lt Cc §§ 6.98 – 6.100;  Cc of the LTSR §§ 222 – 224 (1964);  La Cc §2623, 2624;  PECL § 9:509
  • Stankevicius v Chadakevicius  Lithuania: Supreme Court (2000)  Civ. byla Nr. 3K-7-23/ 2000
  • Stankevicius v Chadakevicius  The parties entered into an ‘earnest money’ agreement regarding the sale of the right to harvest lumber upon land owned by the Δ.
  • Stankevicius v Chadakevicius  П paid 8000 Lt to Δ (in 2000 this was the equivalent of 2000 USD), and the balance was to be paid at a later date. The agreement contemplated the formation of a purchase-sale agreement.
  • Stankevicius v Chadakevicius  Subsequently, Δ refused to form the principal contract.
  • Stankevicius v Chadakevicius  П sued for 16,000 Lt, which is double the amount of the funds paid-in by the П, under the theory that this was earnest money..
  • Stankevicius v Chadakevicius  The trial court treated the 8000 Lt as an advance. The appellate court reversed. Δ landowner appealed
  • Stankevicius v Chadakevicius  Issue: Can an advance payment be characterized as earnest money when there principal (ultimate) contract has not yet been formed?
  • Stankevicius v Chadakevicius  LT ct said it can’t.
  • Stankevicius v Chadakevicius  All Western countries say the opposite.
  • Stankevicius v Chadakevicius  Concept of setoff:  Simply put, if the principal contract is entered into for price X, the party under the payment obligation simply needs to setoff the amount paid-in.
  • Stankevicius v Chadakevicius  Concept of setoff:  Simply put, if the principal contract is entered into for price X, the party under the payment obligation simply needs to setoff the amount paid-in.
  • Stankevicius v Chadakevicius  Secondly, the earnest paid-in is merely an advance, but one required by the first (prelim) agreement. In regard to the second it will automatically be setoff upon the obligation having arisen. (Same w/every advance.)
  • Stankevicius v Chadakevicius  Under La Cc §§ 2623-24, it is clear that earnest money provisions can appear in preliminary agreements.
  • Roščin v. Persovskis  Lithuania: Supreme Court (2003) Casebook 402  Lt Cc § 6.73;  La Cc §2623, 2624;  PECL § 9:509;  UCC § 2-718 (2), (3)
  • Roščin v. Persovskis  П Roščin sues under a preliminary agreement under which he had agreed to purchase an apartment for 100,000 Lt.
  • Roščin v. Persovskis  The contract stated that if Δ defaulted, Δ would pay a 20 % penalty, and if the seller defaulted, he would pay a 20 % penalty..
  • Roščin v. Persovskis  Issue: Is a penalty provision in a preliminary agreement in reality an earnest money provision and therefore invalid?
  • Roščin v. Persovskis  Holding: No.
  • Roščin v. Persovskis  Holding: No.
  • Roščin v. Persovskis  The court finds that as a matter of law a reduction cannot exceed that which would have been recoverable as moratory damages in the form of interest.
  • Roščin v. Persovskis  It then awards the П 3000 Lt (instead of 10,000 Lt), but it is not clear on what evidence, if any, this is based upon.
  • Laurents v. LouisianaMobile Homes, Inc.  Louisiana: Court of Appeal, 3rd Circuit (1997) Casebook 412  La Cc § 2624; Lt Cc § 6.309.2; Rf Cc § 380.3; Quebec Cc § 1786
  • Laurents v. LouisianaMobile Homes, Inc. Πs (a married couple) ordered a mobile home from Δ. Π paid a deposit.
  • Laurents v. LouisianaMobile Homes, Inc. Δ materially breached the contract by delivering a mobile home which was not according to specifications and by refusing to fix it.
  • Laurents v. LouisianaMobile Homes, Inc. Π terminated the contract and sued to recover damages and the deposit (as if it were a mere advance payment).
  • Laurents v. LouisianaMobile Homes, Inc. Π terminated the contract and sued to recover damages and the deposit (as if it were a mere advance payment).
  • Laurents v. LouisianaMobile Homes, Inc.  Issue: What is the character of the “deposit”: a mere advance, liquidated damages, a penalty, or was it earnest money?  Decision: Earnest money.
  • Laurents v. LouisianaMobile Homes, Inc.  the things that the prepayment in question could possibly be characterized as.
  • Laurents v. LouisianaMobile Homes, Inc.  They are  1) a mere advance payment  2) liquidated damages  3) a penalty  4) earnest money.
  • Laurents v. LouisianaMobile Homes, Inc.  In some jurisdictions an advance made for a purchase is presumed to be earnest money.
  • Laurents v. LouisianaMobile Homes, Inc.  In some jurisdictions an advance made for a purchase is presumed to be earnest money.
  • Laurents v. LouisianaMobile Homes, Inc.  Courts generally will recognize a ten percent sum of prepayment as a reasonable estimate and will, accordingly, give effect to the provision. Casebook 381.
  • Laurents v. LouisianaMobile Homes, Inc.  The PECL endorses twenty percent.[1] [1] PECL § 9.509 cmt. a, illustration 2.
  • Oral Agreements//Form
  • Everett Lee Hundley v.United States of America  Brazil: Superior Court of Justice (1995) Casebook 510  Brazil Code of Civil Procedure § 402;  Fr Cc § 1341;  Quebec 2863;  Lt Cc §§ 1.71, 1.93.6.1
  • Hundley v USA Facts: П entered into an oral contract to build ten homes for Δ. The price was over ten minimum wages;
  • Hundley v USA therefore the contract should have been in simple written form (that is, it does not have to be solemnified nor registered).
  • Hundley v USA The trial court disallowed oral testimony.
  • Hundley v USA But there was some supporting written evidence..
  • Hundley v USA Issue: When the law requires a contract to be in simple written form, but it is an oral contract only, is oral testimony barred for the purpose of proving the contract or its parts?.
  • Hundley v USA Holding: No. Testimonial evidence may be accepted if initial written evidence is available.
  • Hundley v USA It is not necessary that the entire agreement be proven by the initial written evidence;
  • Hundley v USA it is sufficient that there be initial written evidence of the fact of the oral agreement. Then oral testimony is admissible to prove the agreement’s terms.
  • Hundley v USA Lithuania Under Lt Cc § 1.93.6.1, witness testimony is admissible to prove a contract if there is the beginning of written proof. The result should be exactly the same as in the Brazilian court.
  • Hundley v USA France Art 1341: Commercial matter: C can be proven BY ANY MEANS
  • Burkandt v. CompanyLaigebu  Lithuania: Supreme Court Civ. byla Nr. 3K-3-802 (1999) Casebook 511  LTSR Cc § 58;  Quebec Cc § 2860;  Fr Cc § 1348;  PECL § 2.101;  Restatement 2d § 137
  • Burkandt v. CompanyLaigebu  Cc of the Lithuanian Soviet Socialist Republic (1964, as amended)  § 58 Invalidity of the Convention when it is not in the Statutorily Required Form  A convention is invalid when it is not in the form required by law only if this is imperatively set forth by the statute.  A convention which is not in writing when required by law acts to deny the parties the right, in the event of a dispute, to rely upon oral testimony to confirm the convention, and in certain cases provided by law renders the convention invalid
  • Burkandt v. CompanyLaigebu • In 1994 П, a physical person, loaned Δ 50,000 Lt. Δ paid interest until October, 1995.
  • Burkandt v. CompanyLaigebu • Subsequently it stopped making interest payments and refused to return the money.
  • Burkandt v. CompanyLaigebu • П does not have the loan contract in the original (that is, it only has an unspecified variety of a copy, perhaps a fax).
  • Burkandt v. CompanyLaigebu • П placed these documents into evidence: bookkeeping documents (the Δ company’s cash book, cash disbursement orders, tax returns for 1994 and 1995, a document filed with the government stating its transactions with non-residents).
  • Burkandt v. CompanyLaigebu • The court of appeals dismissed the claim as unproven
  • Burkandt v. CompanyLaigebu • the statute requires a written agreement, which does not exist. The other documentary proof is to be rejected because it does not ‘unconditionally’ prove the fact that the contract existed because the evidence is ‘arguable’
  • Burkandt v. CompanyLaigebu • Issue: Can a contract be proven by documentary evidence other than an original of the contract?
  • Burkandt v. CompanyLaigebu • Yes.
  • Burkandt v. CompanyLaigebu • Lastly, the court fails to note that § 58 is inapplicable, inasmuch as the agreement was not oral at all. It was a written agreement!
  • Burkandt v. CompanyLaigebu • The only problem is that the П did not have the original.
  • Burkandt v. CompanyLaigebu • Therefore the real question should have been, is a copy admissible as proof, or even, will a copy be considered the same as the original? This is the position of the French
  • Burkandt v. CompanyLaigebu  United States  § 137 Loss or Destruction of a Memorandum  The loss or destruction of a memorandum does not deprive it of effect under the Statute.
  • Burkandt v. CompanyLaigebu  Quebec Cc § 2860. A juridical act set forth in a writing or the content of a writing shall be proved by the production of the original or a copy which legally replaces it.
  • Burkandt v. CompanyLaigebu  Quebec Cc § 2860. -  However, where a party acting in good faith and with dispatch is unable to produce the original of a writing or a copy which legally replaces it, proof may be made by any other means.
  • UAB Iniciatyva v.Simukonis  Lietuvos Aukščiausiasis Teismas  Civ. byla nr.3K-3-792/1999
  • UAB Iniciatyva v.Simukonis  UAB Iniciatyva pasirase 1996 birz 18 d. suderinimo protokola su J Šimukoniu del jam priklausancio Versekos restorano pardavimo. Kaina: 100,000 lt.
  • UAB Iniciatyva v.Simukonis  Kai UAB ,,Iniciatyva” sumokės visą restorano kainą, bus apiforminta pirkimo - pardavimo sutartis.
  • UAB Iniciatyva v.Simukonis  98 000 Lt. pervede.  2000 Lt ieškovas nepervedė, kadangi šią sumą numatė panaudoti pirkimo - pardavimo sutarties įforminimui.
  • UAB Iniciatyva v.Simukonis  Kontr argumentas: tai tik preliminarine sutartis.
  • UAB Iniciatyva v.Simukonis  Senojo civilinio kodekso 58 str. 5d. yra identiška dabartinio CK §1.93.4 punktui: Jeigu viena iš šalių visiškai ar dalinai įvykdė sandorį, kuriam būtinas notaro patviritnimas,
  • UAB Iniciatyva v.Simukonis  o antroji šalis vengia sandorį notariškai įforminti, tai teismas įvykžiusios sandorį šalies reikalavimu turi teisę pripažinti sandorį galiojančiu.
  • UAB Iniciatyva v.Simukonis  Šiuo atveju sandorio po to notariškai patvirtinti nebereikia.
  • Express L and Intent
  • Mitchell v. Lath  New York: Court of Appeals (1928) Casebook 520  Restatement 2d §§ 209-218; Ca Cc § 1625;  PECL § 2:105; Unidroit § 2.17; Quebec Cc §§ 2863-64; Fr Cc § 1341; Lt Cc § 1.72
  • Mitchell v. Lath  П Mitchell purchased land from Δ Lath.
  • Mitchell v. Lath  П seeks to introduce evidence that it was also agreed that Δ would remove an ice house which he maintained on neighboring property which П had found objectionable.
  • Mitchell v. Lath  The ice house was not mentioned in the written agreement.
  • Mitchell v. Lath  The ice house was not mentioned in the written agreement.
  • Mitchell v. Lath  Was the agreement fully integrated?
  • Mitchell v. Lath  Yes. Therefore evidence regarding the ice house is barred.
  • Mitchell v. Lath  Ct was of opinion that the provision regarding the ice house would have been something which naturally would have been included in the agreement.
  • Mitchell v. Lath  Dissent was of the opposite opinion.
  • Mitchell v. Lath  The question of integration (merger) seeks to answer these questions:
  • Mitchell v. Lath  What should the effect of a written contract be?  Should it be presumed to be complete?  Should it bar evidence of supplementary promises which were made orally or in other communications?
  • Mitchell v. Lath  This court in effect decided that the contract would be treated as if there were a merger clause in it.
  • Cers v Schmitz  Supreme Ct of Minnesota  2002
  • Cers v Schmitz  Appellant Peter Cers hired respondent Roger Schmitz, a videographer, to travel to Latvia with him to obtain footage for a documentary video.
  • Cers v Schmitz  Cers sues Schmitz.  Contract was in writing, but no merger/integration clause.  Cers alleged Schmitz breached oral agreements:
  • Cers v Schmitz  Ca. that [Schmitz] would produce recordings that met broadcast quality standards;  b. that [Schmitz] would produce usable broadcast results on the first take;  c. that [Schmitz] was responsible for all technical aspects of the camera operation
  • Cers v Schmitz  Δ argues evidence barred by parol evidence rule
  • Cers v Schmitz  Δ argues evidence barred by parol evidence rule
  • Cers v Schmitz  Ct: No 4 Corners rule. Must look at facts.
  • Cers v Schmitz  Written contract dealt only with financial terms  No merger clause  No contradiction  Negotiations concerned oral
  • Cers v Schmitz  Therefore contract ‘incomplete’ and therefore oral terms admissible.
  • Bjornstadv. Northern States Power Co., 263 N.W. 289Service agreement between electriccompany and rural consumer whichcontained no provision for payment ofconsumer investment in connecting linebuilt by him and transferred to companyheld incomplete entitling consumer to showby oral evidence collateral agreement as toprice to be paid by company for serviceline and time when such payment was tobe made.
  • HML Corp. v. General Foods Corp., 365 F.2d 77, 150 UWhere parties entered into contract for supplycontaining explicit statement that it incorporatedentire agreement of parties and that norepresentations or statements had been made bydefendant buyer to plaintiff seller in any waychanging provisions of agreement, agreementwas complete in itself and could not be altered byattempted showing of representation thatdefendant would exert additional effort topromote product.
  • Crockett & Myers, Ltd. v. Napier, Fitzgerald & Kirby, LLP.Under Nevada law, parol evidence rule barredclaim for breach of alleged oral referral feeagreement between attorneys and theirrespective business entities, although partieswritten retainer agreement did not contain anintegration clause, where written retaineragreement was valid, complete, andunambiguous, written retainer agreementcovered same terms as alleged oral agreement,and fraud in procuring written retainer agreementwas neither pled nor proven.
  • International Paper Co. v. Standard Industries, In.Where contract for straightening of creekwas not fully integrated in that it wasuncertain as to what plans, specificationsand drawings were applicable to work to beperformed under contract, parol evidencewould be competent to prove fullcontractual intent of parties in theirreference to performance in completeaccordance with the plans and/or drawingsand specifications of the engineer.
  • Chapter 19
  • Chapter 19 Modification
  • Angel v. Murray  Case # 105  Rhode Island: Supreme Court (1974)  113 R.I. 482, 322 A.2d 630  CISG § 29;  Lt Cc § 6.223  Restatement 2d § 89;  UCC § 2-209;
  • Angel v. Murray  Restatement 2d § 89 Modification of Executory Contract  A promise modifying a duty under a contract not fully performed on either side is binding
  • Angel v. Murray  Restatement 2d § 89 Modification of Executory Contract  (a) if the modification is fair and equitable in view of circumstances not anticipated by the parties when the contract was made;
  • Angel v. Murray П is a taxpayer who brought a suit against Murray (an official of the city of Newport), the city, and against Maher (Δs). Maher had contracted with the city to provide refuse collection. The contract had a five year term, commencing on July 1, 1964.
  • Angel v. Murray In 1967 Maher requested the city pay an additional 10,000 USD because the contract price had been predicated on a projected increase per year of 20-25 new housing units, but in fact 400 new units had been added.
  • Angel v. Murray The city council agreed to pay him the 10,000 USD for that year, and again, after another request, agreed to pay him the same amount extra the next year.
  • Angel v. Murray П contended the additional payments were illegal. The trial court entered a judgement for П ordering Δ Maher to pay back the money;
  • Angel v. Murray apparently, the court found that Δ Maher had a pre-existing duty to collect the all refuse within the city bounds. Δ appeals.
  • Angel v. Murray Issue: Is a modification of a contract not fully executed by either party in view of circumstances not anticipated by the parties when the contract was made enforceable?
  • Angel v. Murray Holding: Yes.
  • Angel v. Murray § 89D(a) of the American Law Institute’s Restatement Second of the Law of Contracts … provides: “A promise modifying a duty under a contract not fully performed on either side is binding
  • Angel v. Murray (a) if the modification is fair and equitable in view of circumstances not anticipated by the parties when the contract was made… .”
  • Angel v. Murray (Best arg. for П (Angel): No consideration supports the modification, because Δ Maher had a pre-existing duty to perform as promised.
  • Angel v. Murray  Continental Law  A modification will be held to be enforceable if in good faith.  Viz., Lt Cc § 6.223, which states that a contract can be modified by (mere) agreement.
  • Wisconsin Knife Worksv. National MetalCrafters  United States: Court of Appeals, 7th Circuit (1986)  Casebook 561  UCC § 2-209; CISG § 29; PECL § 2:106; Lt Cc § 6.183; Rf Cc § 452.1
  • Wisconsin Knife Works  Buyer Wisconsin Knife Works terminated a contract for 281,000 spade bit blanks that National Metal Crafters were to deliver.  The purchase orders contained a ‘no oral modification’ clause.
  • Wisconsin Knife Works National Metal Crafters missed the deadlines for delivery, which were in October and November, 1981. Buyer Wisconsin Knife Works did not declare a breach, cancel the contract nor seek damages for late delivery.
  • Wisconsin Knife Works It continued to accept production until Jan. 1983 when it notified the seller (National Metal Crafters) that the contract was terminated. At that point only 144,000 of more than 281,000 spade bit blanks had been delivered.
  • Wisconsin Knife Works Buyer sued for damages. Δ seller (National Metal Crafters) argued that the dates in the purchase orders were not firm dates.
  • Wisconsin Knife Works The parties are ‘merchants’ as defined by the UCC.
  • Wisconsin Knife Works • The contract contained a no-oral modification clause, • and there had been no written modification.
  • Wisconsin Knife Works  Issue: Can a party to a contract containing a ‘no oral modification clause’ waive its right to rely on the clause? Must there be reliance for the attempted modification ‘to operate’ as a waiver?
  • Wisconsin Knife Works Holding: Yes. There must however be reliance (which is not in the statute).
  • Wisconsin Knife Works Holding: Yes. There must however be reliance (which is not in the statute).
  • Wisconsin Knife Works  CISG, PECL, Lithuania  The CISG and Lithuania have the same result as the court finds in the instant case.
  • Wisconsin Knife Works  The CISG and Lithuanian law both require reliance
  • Wisconsin Knife Works  The PECL is nearly the same, but the PECL provides that the no-oral modification clause merely raises a presumption that oral modification is ineffective; this is different from the CISG and the Lithuanian code. The practical result may be the same, inasmuch as the real issue is whether the contract was integrated.
  • Brunswick Corp. v.Levin  Pennsylvania: Supreme Court (1971) Casebook 573  Restatement 2d §§ 279, 281;  UCC § 3-311;  Quebec Cc §1661;  Lt Cc § 6.141.2
  • Brunswick Corp. v.Levin  In Dec., 1961, Brunswick, a vendor of laboratory equipment, entered into an instalment sales contract with Community Laboratories, Inc. for over 10,000 USD.
  • Brunswick Corp. v.Levin  In Mar., 1962, Community leased a store from Key Enterprises for a term of three years with monthly rental payments. Levin was the president of Key Enterprises and a minority shareholder of Community.
  • Brunswick Corp. v.Levin  In Sep. 1962, the landlord (Key Enterprises) seized (pursuant to a warrant) goods of the lessee, including the equipment that had been delivered from Brunswick. A subsidiary of Key Enterprises purchased the equipment at auction for 1400 USD, which was paid to Key Enterprises.
  • Brunswick Corp. v.Levin  Brunswick sued and a jury found that the seizure and auction (the distraint) was illegal because at the time Community had not owed rent, because the jury believed that the written lease had been orally modified to put off payments until profitability was reached. Brunswick obtained a judgement against Key Enterprises for nearly 10,000 USD.
  • Brunswick Corp. v.Levin  While the above judgement was on appeal, Brunswick sent Community a bill for an instalment payment of 271.17 USD.
  • Brunswick Corp. v.Levin  Levin (!) ‘seized the opportunity’ by sending a check for that sum and writing on it, ‘“In full settlement of all claims and litigation against Community Laboratories, Inc., Key Enterprises, Inc., and Benjamin Levin.” A cover letter stated the same. The check was cashed.
  • Brunswick Corp. v.Levin  Key Enterprises then petitioned the court to strike the judgement because of alleged accord and satisfaction. The court denied the motion, from which Key Enterprises took this appeal.
  • Brunswick Corp. v.Levin  Issue: Does a payment made in the absence of a real dispute (as to the amount of the debt) satisfy a debt?  Holding: No.
  • Brunswick Corp. v.Levin  Quebec Cc § 1661.  Lt Cc § 6.141.2  Novation is not presumed; it is effected only where the intention to effect it is evident.
  • Frank v Motwani Supreme Court of Louisiana 1987
  • Frank v MotwaniΠ sellers sued Δ buyers.Agreement to purchase real estate had to be, and was, in writing.
  • Frank v MotwaniAgreement contained ‘liquidated damages’ clause in amount of 50k in event purchaser does not close.
  • Frank v MotwaniΔ claims parties agreed to rescind verbally at closing.
  • Frank v MotwaniΠ argues that if agreement must be in simple written form, so must agreement to rescind be.
  • Frank v MotwaniHolding:No.
  • Frank v MotwaniCt:There is no reason why a party to a contract that has to be in writing should not be able to offer evidence that the parties verbally agreed to cancel the contract.
  • Frank v MotwaniCt:Clearly, the burden of proof will be on the party asserting that it was cancelled.
  • Frank v MotwaniCt:Although this may very well be a difficult burden to meet in the face of a signed written contract, the party claiming cancellation should be allowed to present evidence to prove that the contract was verbally cancelled.
  • Frank v MotwaniLT Cc § 6.192.4.The modification must be in the same form that the underlying contract is required to have been in, unless otherwise provided by law or agreement.
  • Interpretation
  • Steuart v. McChesney  Pennsylvania: Supreme Court  444 A.2d 659 (1982)  Casebook 529  Restatement § 202.3 (a);  PECL §§ 5:101, 5:102;  Lt Cc § 6.193;  La Cc § 2046;  Rf Cc § 431
  • Steuart v. McChesney Restatement 2d § 202.3 Unless a different intention is manifested, (a) where language has a generally prevailing meaning, it is interpreted in accordance with that meaning.
  • Steuart v. McChesney The Steuarts (П) granted a right of first refusal to the McChesneys (Δ) in regard to certain real estate. The agreement provided that the price would be the ‘market value of the premises according to the assessment rolls as maintained by the county.’
  • Steuart v. McChesney Nine years later, П was received two offers for the property, for 30,000 and for 35,000 USD. П notified Δ, and Δ tendered 7820 USD, the assessed value of the property.
  • Steuart v. McChesney The tender was refused, and П initiated the suit. Δ counterclaimed for specific performance.
  • Steuart v. McChesney The trial court, “after hearing testimony, held that the formula of twice the assessed value was intended to serve as ‘a mutual protective minimum price for the premises rather than to be the controlling price without regard to a market third-party offer.’”
  • Steuart v. McChesney Issue: When the words of an agreement are clear and unambiguous, is the intent is to be discovered only from the express language of the agreement?
  • Steuart v. McChesney Issue: When the words of an agreement are clear and unambiguous, is the intent is to be discovered only from the express language of the agreement? Holding: Yes.
  • Steuart v. McChesney ‘[T]he plain meaning approach enhances the extent to which contracts may be relied upon by contributing to the security of belief that the final expression of consensus ad idem will not later be construed to import a meaning other than that clearly expressed.’
  • Steuart v. McChesney Comment: The right of first refusal in this case is a curious one. Ordinarily, a right of first refusal would operate so as to give the holder of the right the option to buy at the same price as that of the third party who has made the offer to the seller.
  • Steuart v. McChesney Russia Russia follows the four corner rule. The same result would be reached as in the present case.
  • Steuart v. McChesney France France will not allow a provision to be de- natured by the judge, but evidence as to an understanding not in accordance with the written contract as such is admissible.
  • Industrial Roofing v. J.C.Dellinger Memorial Trust  Louisiana:  Court of Appeal, 2nd Circuit (1999) Casebook 534  La Cc § 2046; Restatement 2d §§ 204, 206; PECL §§ 5:101, 5:102; Lt Cc § 6.193; Rf Cc § 431
  • Industrial Roofing  Restatement 2d  § 204 Unless a different intention is manifested,  (a) where language has a generally prevailing meaning, it is interpreted in accordance with that meaning
  • Industrial Roofing  §206. Interpretation Against The Draftsman  In choosing among the reasonable meanings of a promise or agreement or a term thereof, that meaning is generally preferred which operates against the party who supplies the words or from whom a writing otherwise proceeds.
  • Industrial Roofing  §206. Interpretation Against The Draftsman  In choosing among the reasonable meanings of a promise or agreement or a term thereof, that meaning is generally preferred which operates against the party who supplies the words or from whom a writing otherwise proceeds.
  • Industrial Roofing  П= Industrial sued for balance due on a construction contract. Δ counterclaimed..
  • Industrial Roofing  According to Δ, ‘hog valleys’ on the roof should have been replaced with copper. The contract stated that the then extant (old) hog valleys (no mention of copper) were to be removed.
  • Industrial Roofing  This was in the base part of the agreement. The additonal part of the agreement stated that copper valleys were to be installed.
  • Industrial Roofing  Copper valleys are not copper hog valleys: coper valleys go under the roof at its seams. Copper hog valleys are like open gutters running along the roof’s edge.
  • Industrial Roofing  Δ argued that it understood the term ‘hog valleys’ to include copper hog valleys.
  • Industrial Roofing  Issue: Is a contract ambiguous when it states that something is to be replaced but does not specify with what?
  • Industrial Roofing  Holding:  Yes.  Therefore the court can go beyond the four corners to ascertain the intent of the parties.
  • Industrial Roofing  2d Q: What term should be supplied?
  • Industrial Roofing  The П in essence argued that in the absence of an express provision that the standards of the trade should be applied. But the court found that the agreement must be interpreted as requiring copper hog valleys because contracts are interpreted against the party drafting them
  • Berwick and Smith Co. v.Salem Press  Berwick and Smith Co. v. Salem Press  Massachusetts: Supreme Judicial Court (1954) Casebook 540  Restatement 2d § 202 (b); Unidroit Principles § 4.3(e); PECL § 5.102 (e)
  • Berwick and Smith П agreed to bind a two-volume work for Δ Salem Press. ‘The price was quoted as “5,000 copies at .561 10,000 copies at . 538.” П bound the books and invoiced at .561.
  • Berwick and Smith Δ contended it should have been billed at the lesser rate. П sought to prove that the meaning of the word ‘copy’ is controlled by trade usage (as meaning ‘set’).
  • Berwick and Smith Δ did not in fact understand this special meaning. When Δ refused to pay, П brought an action for damages.
  • Berwick and SmithThe jury trial resulted in a verdict for П, from which Δ appeals, alleging error in submitting the question of whether there was a trade useage binding upon the parties to the jury, inasmuch as Δ had no actual knowledge of it.
  • Berwick and SmithIssue: In order for trade useage to be binding upon the parties, must both of the parties have actual knowledge of it?
  • Berwick and SmithIssue: In order for trade useage to be binding upon the parties, must both of the parties have actual knowledge of it?Holding: No.
  • Berwick and Smith Q: Why is this not a mistake? A: Because knowledge is imputed to Δ as a matter of law.
  • Pacific Gas v. ThomasDrayage Co. California: Supreme Court 69 Cal. 2d 33 (1968) Casebook 543  UCC § 1-205; Unidroit Principles § 4.1; PECL § 5:101.1; La Cc § 2046; Ee L. on Obligations § 29; Rf Cc § 431; Lt Cc 6.103.1
  • Pacific Gas “Defendant appeals from a judgment for plaintiff in an action for damages for injury to property under an indemnity clause of a contract. In 1960 defendant entered into a contract with plaintiff to furnish the labor and equipment necessary to remove and replace the upper metal cover of plaintiff’s steam turbine.
  • Pacific Gas Defendant agreed to perform the work ‘at [its] own risk and expense’ and to ‘indemnify’ plaintiff ‘against all loss, damage, expense and liability resulting from… injury to property, arising out of or in any way connected with the performance of this contract.’”
  • Pacific Gas During the course of the work the steam turbine was damaged to the amount of approximately 25,000 USD. П sued to recover this amount.
  • Pacific Gas Δ contends, however, that the indemnity provision was to cover only loss to П caused by having to pay claims of third parties.
  • Pacific Gas The loss in question, having been sustained by П and not by a third party, would have been covered under the plain meaning of the clause.
  • Pacific Gas Δ sought to prove this special meaning by producing evidence of П’s admissions, of П’s conduct in relation to other contracts with Δ, and by ‘other proof.’
  • Pacific Gas Issue: Should extrinsic evidence be admissible to prove the indemnity clause was intended to reimburse plaintiff (PG & E) only against loss through having to pay claims of third parties or also against loss caused by its own injury?
  • Pacific Gas  Holding: Yes.  The plain meaning rule would require that the court first determine, on the basis of its own linguistic education and experience, what the meaning of the contract is. But words do not have fixed meanings outside of circumstances and purposes.
  • Pacific Gas  ‘The fact that the terms of an instrument appear clear to a judge does not preclude the possibility that the parties chose the language of the instrument to express different terms.’  Case 101 Steuart v. McChesney  Steuarts (П) granted a right of first refusal to the McChesneys (Δ) in regard to certain real estate. The agreement provided that the price would be the ‘market value of the premises according to the assessment rolls as maintained by the county.’
  • Demoiselle Monge v. Veuve MinartMonge worked in Minarts brothel asa chamber-maid. Monge claims shedid not know of the fact that it was abrothel at the time of the formationof contract. Monge is owed thebalance of her salary—apparentlyshe was paid only part of what shewas supposed to have been paid.
  • PECL § 4:118: Exclusion orrestriction of remedies(1) Remedies for fraud, threats andexcessive benefit or unfairadvantage-taking, and the right toavoid an unfair term which has notbeen individually negotiated, cannotbe excluded or restricted.
  • Wickham & Burton Coal Co. v. Farmers’ LumberCo. Iowa Supreme CourtIn August of 1916, Π seller agreed to sell to Δ-buyer “as much coal as buyer would wish topurchase” at a fixed price. Apparently becauseof the world war, coal prices rose, with the resultbeing that the contract became less attractive tothe Π-seller. Δ made two purchases under thecontract, and then Π refused to sell any morecoal for the price fixed in the contract. The Δpurchased coal at the market price andcounterclaimed for the difference.
  • Feld v. Henry S. Levy & Sons, Inc.Δ operates a bakery business. In 1968the parties entered into a written contractunder which Δ undertook to supply the Πwith Δs entire production (output) ofbread crumbs (a product which takessome steps to manufacture, notconsisting merely of crumbs that mayflake off of other bread products). Thecontract could be terminated by sixmonths advance notice.
  • Feld v. Henry S. Levy & Sons, Inc.Δ did supply several tons of breadcrumbs to Π, then it stopped doingso because it was "uneconomical."Δ stated that it would resumesupplying Π if the price were raisedfrom 6 cents a pound to 7 cents. Δdismantled the oven used for theprocess and halted production ofbread crumbs.
  • Feld v. Henry S. Levy & Sons, Inc.Δ contends it did not breach thecontract since the contract onlyrequired it to sell its breadcrumbs toΠ, but since it was not making them,it was under not duty to deliverthem. It is not proven on the recordthat the breaking off of manufacturewas done in good faith.
  • Feld v. Henry S. Levy & Sons, Inc.Δ did supply several tons of bread crumbs to Π,then it stopped doing so because it was"uneconomical." Δ stated that it would resumesupplying Π if the price were raised from 6 centsa pound to 7 cents. Δ dismantled the oven usedfor the process and halted production of breadcrumbs. Δ contends it did not breach thecontract since the contract only required it to sellits breadcrumbs to Π, but since it was notmaking them, it was under not duty to deliverthem. It is not proven on the record that thebreaking off of manufacture was done in goodfaith.
  • Case 16 Société Muroiterie Fraissev. MiconMicon/Δ invited Π/Societe Muroiterie Fraisse tonegotiate concerning a possible order and Π byinvitation visited the site of an apartment buildingbeing constructed. Π had previously installedmirrors in a model apartment in that building. Πmade an offer concerning installation of mirrorsin the entire building. Other similar companiesalso made offers. Micon/Δ did not advise Π thatit had received offers for a lesser (thereforemore attractive) price one of which it accepted.
  • Case 17 Gerteis v. Société Viller-Lourmat Π began negotiations April 1966 with Δ. Δ is thesole distributor in France of machines used tomanufacture cement pipes made in Nashua,Iowa by Hydrotile Co. Robert Gerteis traveled tothe USA (presumably to Iowa) to observe theoperation these machines from May 13 to 23,1966. Π requested further information regardingthe machines in writing, the Δ did not respond.The manufacturer sent an estimate to Π which Δdid not forward to Π on June 4, 1966. On June16 Δ sold a Hydrotile machine to a competitor ofΠ, undertaking not to sell another machine in theeast of France (presumably the area that Π doesbusiness in) for 24 months. Π sued for damages.
  • Case 17 Gerteis v. Société Viller-Lourmat Π began negotiations April 1966 with Δ. Δ is thesole distributor in France of machines used tomanufacture cement pipes made in Nashua,Iowa by Hydrotile Co. Robert Gerteis traveled tothe USA (presumably to Iowa) to observe theoperation these machines from May 13 to 23,1966. Π requested further information regardingthe machines in writing, the Δ did not respond.The manufacturer sent an estimate to Π which Δdid not forward to Π on June 4, 1966. On June16 Δ sold a Hydrotile machine to a competitor ofΠ, undertaking not to sell another machine in theeast of France (presumably the area that Π doesbusiness in) for 24 months. Π sued for damages.
  • Case 18 Ysiem Corp. v.Commercial Net Lease Realty Π wanted Δ to develop land Πowned so that OfficeMax, alarge retail firm, would open astore on the premises, leasingthe building from Δ who wouldlease the land from Π.
  • Case 18 Ysiem Corp. v. CommercialNet Lease RealtyOn March 26, 1998, Commercial Netand Ysiem signed a letter of intentspecifying the lease term, annualground rent, and other contemplatedprovisions including a statement thatthe effective date of the ground leasewould be the date that OfficeMaxopened its doors or six months afterthe start of construction, whichevercame later.
  • Case 18 Ysiem Corp.Π and Δ then negotiated in relation to the leasebetween them. Δ-ComNet sent Π-Ysiem asigned copy of a contract containing aconventioal term: that the lease comes into effectat a certain date, which was left blank, and whichfurther stated that if OfficeMax did not sign asublease, lessee (ComNet) could render thelease null. The lease also stated that it would beeffective only upon being signed and delivered.Π signed and returned this lease, but Δ merelyretained all four copies without executing them.OfficeMax did not sign a sublease because theprice was too high. Π would not lower the rent. Δlessened its margin.
  • Case 63 Scott v. Moragues Lumber Co.Defendant undertook to lease a shipto plaintiff if defendant acquired it.Defendant did acquire the ship butleased it to another party. Plaintiffsues for damages.
  • Case 86 Laurents v. Louisiana Mobile HomesΠs (a married couple) ordered a mobile homefrom Δ. Π paid a deposit. Δ materially breachedthe contract by delivering a mobile home whichwas not according to specifications and byrefusing to fix it. Π terminated the contract andsued to recover damages and the deposit (as if itwere a mere advance payment).A clause in the contract specified that if thepurchaser (Π) terminated the contract, the seller(Δ) would keep the deposit as ‘consequentialdamages.’
  • Case 86 Laurents v. Louisiana Mobile HomesA clause in the contract specified that if thepurchaser (Π) terminated the contract, the seller(Δ) would keep the deposit as ‘consequentialdamages.’At the time of the formation of the contract, Louisiana lawoperated to create a presumption that such an advance isindeed earnest money.
  • Case 82 Lake River Corp. v. Carborundum Co.Δ Carborundum agreed to order a certainamount; if Δ did not do so, it would pay upto that amount in penalty. About half theagreed amount was ordered. Thus Δpurportedly owed П Lake River 241,000USD. П demanded payment and Δ refusedon the grounds that the clause constituteda penalty.
  • Case 84 Stankevičius v. ChadakavičiusThe parties entered into an‘earnest money’ agreementregarding the sale of the right toharvest lumber upon land ownedby the Δ. П paid 8000 Lt to Δ (in2000 this was the equivalent of2000 USD), and the balance wasto be paid at a later date.
  • Case 84 Stankevičius v. ChadakavičiusThe agreement contemplated theformation of a purchase-saleagreement. Subsequently, Δ refusedto form the principal contract. П suedfor 16,000 Lt, which is double theamount of the funds paid-in by the П,under the theory that this was earnestmoney. The trial court treated the8000 Lt as an advance. The appellatecourt reversed. Δ landowner appealed.
  • Case 100 Mitchell v. LathП Mitchell purchased land from ΔLath.П seeks to introduce evidence that itwas also agreed that Δ would removean ice house which he maintained onneighboring property which П hadfound objectionable.
  • Case 100 Mitchell v. LathIs the ‘agreement’ to get rid of the icehouse a collateral agreement?That is, is the contract completelyintegrated?
  • Case 101 Steuart v. McChesneySteuarts (П) granted a right offirst refusal to the McChesneys(Δ) in regard to certain realestate. The agreementprovided that the price wouldbe the ‘market value of thepremises according to theassessment rolls as maintainedby the county.’
  • Case 101 Steuart v. McChesneyNine years later, П was receivedtwo offers for the property, for30,000 and for 35,000 USD. Пnotified Δ, and Δ tendered 7820USD, the assessed value of theproperty. The tender was refused,and П initiated the suit. Δcounterclaimed for specificperformance.
  • Case 101 Steuart v. McChesneyThe trial court, “after hearingtestimony, held that the formula oftwice the assessed value wasintended to serve as ‘a mutualprotective minimum price for thepremises rather than to be thecontrolling price without regard toa market third-party offer.’”
  • Case 102 Industrial Roofing v. J.C. Dellinger MemorialTrustП= Industrial sued for balance due ona construction contract. Δcounterclaimed. According to Δ, ‘hogvalleys’ on the roof should have beenreplaced with copper. The contractstated that the then extant (old) hogvalleys (no mention of copper) were tobe removed. This was in the base partof the agreement.
  • Case 102 Industrial Roofing v. J.C. Dellinger MemorialTrustThe additional part of the agreement statedthat copper valleys were to be installed.Copper valleys are not copper hog valleys:copper valleys go under the roof at itsseams. Copper hog valleys are like opengutters running along the roof’s edge. Δargued that it understood the term ‘hogvalleys’ to include copper hog valleys. Пdrafted the contract. It was not specifiedwith what the hog valleys were to bereplaced. The building was historic.
  • Case 103 Berwick and Smith Co. v. Salem PressFacts: П agreed to bind a two-volume work for Δ Salem Press.‘The price was quoted as “5,000copies at .561 10,000 copies at .538.” П bound the books andinvoiced at .561. Δ contended itshould have been billed at thelesser rate, because it (Δ) did notunderstand the trade useage thateach volume is considered a copy.
  • Case 104 Pacific Gas v. Thomas Drayage Co.“Defendant appeals from a judgment for plaintiffin an action for damages for injury to propertyunder an indemnity clause of a contract. In 1960defendant entered into a contract with plaintiff tofurnish the labor and equipment necessary toremove and replace the upper metal cover ofplaintiff’s steam turbine. Defendant agreed toperform the work ‘at [its] own risk and expense’and to ‘indemnify’ plaintiff ‘against all loss,damage, expense and liability resulting from…injury to property, arising out of or in any wayconnected with the performance of this contract.’”
  • Case 104 Pacific Gas v. Thomas Drayage Co.During the course of the work the steam turbinewas damaged to the amount of approximately25,000 USD. П sued to recover this amount.Δ contends, however, that the indemnityprovision was to cover only loss to П caused byhaving to pay claims of third parties. The loss inquestion, having been sustained by П and not bya third party, would have been covered under theplain meaning of the clause. Δ sought to provethis special meaning by producing evidence ofП’s admissions, of П’s conduct in relation to othercontracts with Δ, and by ‘other proof.’
  • Case 108 Procurator v. Sverida, Inc.Textile School of Alytus held property inquasi-trust from the government. With theknowledge and consent of somegovernment officials, the Schoolgratuitously transferred the property, anapartment, to a third party. This transferwas effected not in accordance withprivatization statutes. The third party, UABSverida, a closed corporation, transferred itto one Stankevicius, a citizen, from whomthe government (the Π) now seeks tovindicate it. Stankevicius purchased theproperty in good faith and for value.
  • Case 109 Suburban Motors v. State FarmΔ State Farm appeals from a summaryjudgment declaring П, Suburban Motors,has valid title to an automobile. State Farmcontends its title, obtained directly from thelawful owner whom it insured and fromwhom the vehicle was stolen, is superior tothe claim of Suburban Motors, a bona fidepurchaser for value under a ‘chain of title’traceable to the thief. State Farm insuredan automobile against theft. It was stolen;State Farm paid the owner the insurance,and the owner transferred title to theautomobile to State Farm.
  • Case 109 Suburban Motors v. State FarmThe automobile’s VIN numberswere changed and eventually itwas registered with theCalifornia Department of MotorVehicles. It was acquired bySuburban Motors and leased toan innocent third party.
  • The California Highway Patrol discovered itwas stolen, and the lessee voluntarilyturned it over to them, who turned it over(transferred possession to) State Farm.Suburban Motors sued. On a motion forsummary judgement, the court found forSuburban Motors.
  • Case 110 Zhuravliova v. St. PetersburgCustomsП Zhuravliova sued Δ St. PetersburgCustoms Office for return of herautomobile. П in 1996 purchased a1994 Mitsubishi-Pajero automobile. Itwas sold to her by one D.S. Piskunovand had been listed in the StateAutomobile Inspection’s register asprovided by law.
  • Case 110 Zhuravliova v. St. PetersburgCustomsIn February, 1998, the car was seizedfor the violation of customs rules: ithad been imported to Russia in 1994by one E.V. Buldakov but did notlawfully pass customs.
  • Case 110 Zhuravliova v. St. PetersburgCustomsП’s court action to invalidate thedecree pursuant to which theautomobile had been seized wasunsuccessful. In July, 1998, П sued todeclare her a bona fide purchaser andto return the property to her. The trialcourt found for П, but the appellatecourt reversed the judgement. Thisappeal followed.