Contracts Law Case Briefs

Contracts Case Briefs
Student’s Name
Institution
Course Number and Name
Instructor’s Name
Date
Contracts Case Briefs
Ray v. William G. Eurice & Bros., Inc.
TOPIC: Objective Theory of Contracts
CASE: Ray v. William G. Eurice & Bros., Inc., 201 Md. 115, 93 A.2d 272 (1952)
FACTS: The appellant resolved to build a house on a lot he owns on Dance Mill Road in Baltimore County. Therefore, he negotiated with several builders, including the defendant, who was recommended to him by friends. In this respect, he requested an estimate from the defendant to gauge whether the project in mind was within his financial range (Knapp et al.,2019). The plaintiff sought the services of an architect to draw a plan and make a draft of specifications to get a final bid from the defendant. During subsequent discussions, the defendant made some changes to the specifications, which consisted of seven pages. Later on, the defendant submitted an unsigned proposal of three pages which disagreed with many of the items in the seven-page specifications. This prompted the plaintiff to request his lawyer to draw a contract. In the signed contract, the builder committed to building a house strictly adhering to five-page memorandum specifications. Subsequently, the plaintiff secured a mortgage loan in readiness for the project. However, before the construction could begin, the defendant sought a conference with the plaintiff and declared that the house could not be built following the specifications. He termed them as strange to him. The defendant claimed that no specifications were attached to the five-page contract, while the appellants countered by arguing that even though they were not attached, they had been thoroughly discussed. They argued that the defendant had acted in breach of the contract.
HISTORY: The plaintiff filed for action against the defendant for a breach of contract. The suit was dismissed, and the plaintiff appealed.
ISSUE: Were mistakes committed when signing the contract?
RULING: Yes. The contract was entered perfunctorily and hurriedly. The two parties did not take their time to have a common understanding of the specifics contained in the contract. The lower court’s decision was reversed.
RATIONALE: After carefully listening to the submissions of the two parties, Judge Gontrum concluded that they had a differing understanding of the contract, leading them to commit a unilateral mistake. Despite the error, they were bound to the contract by law.
RULE: The judge referred to the law on absent fraud, duress, or mutual mistake, which has it that a person with the capacity to understand is bound by their signature if they read and sign a written document.
Normile v. Miller
TOPIC: Offer and Acceptance
CASE: Supreme Court of North Carolina 313 N.C. 98, 326 S.E.2d 11 (1985)
FACTS: The defendant listed property in Charlotte, North Carolina, for sale with a local real estate agent called Gladys Hawkins on August 4, 1980. The same day, a real estate broker showed the property to the plaintiff after he expressed interest in the same. Later on, the broker assisted the plaintiff in preparing a written offer to buy the property. The written offer contained blanks into which terms suitable to the buyer's offer could be filled. One of the blanks was on time, and the plaintiff specified that the offer must be accepted by 5:00 p.m. on August 5. Later, the defendant received the offer from Hawkins and made several changes in terms before sending it back to the plaintiff (Knapp et al., 2019). One of the changes in the counteroffer was a requirement of the earnest money deposit. The plaintiff neither accepted nor rejected the offer but decided to wait for a while to make a decision. When the meeting was over, the broker was under the impression that the plaintiff had rejected the offer then. Armed with that misplaced impression, the broker visited the home of plaintiff Segal, who made an offer with terms very similar to the defendant's counteroffer. Segal's offer was promptly accepted without any alterations, and Normile was informed that the counteroffer had been revoked. However, before 5: 00 P.M. on August 5, Normile initialed the defendant’s counteroffer and submitted it with the deposit money. Normile and Segal filed separate actions seeking specific performance, which were consolidated.
HISTORY: The plaintiff filed for specific performance against the defendant, which was granted by the trial court, prompting the defendant to appeal. The appeal court affirmed the trial court's decision, and the defendant moved to the Supreme Court.
ISSUE: Did the defendant accept the plaintiff’s offer before the expiry of the time limit?
Was there a legal contract between the plaintiff and defendant to buy the property?
RULING: No. There was no legal contract because the defendant changed the initial offer in several aspects, especially the payment terms. The counteroffer, in essence, was a rejection of the original offer. The Supreme Court affirmed the court of appeal’s decision.
RATIONALE: The defendant failed to unconditionally accept the terms included in the original offer but instead qualified acceptance with their different terms. This was an implicit way of saying that she would only accept the offer on the condition that the news terms were adhered to. The judge may have felt that the plaintiff’s reason to initial the counteroffer was only to set a basis for a lawsuit.
RULE: Expression rules in contract law and problems of offer and acceptance states that “an acceptance must be unequivocal and unqualified in order for a contract to be performed.”
Dougherty v. Salt
TOPIC: Consideration
CASE: New York Court of Appeals 227 N.Y. 200, 125 N.E. 94 (1919)
FACTS: The plaintiff, a boy of eight years old, received a promissory note of $3,000 from her aunt. The money would be payable to the boy at the death of his aunt or before. The note, given in the presence of the boy's guardian, was written on a form with the words "value received." The aunt felt compelled to take care of the boy because she regarded him as a nice child. When she handed the note to the boy she said, "You have always done for me, and I have signed this note for you. Now, do not lose it. Some day it will be valuable” (Knapp et al., 2019). Upon the boy’s aunt's death, he sought to recover the note.
HISTORY: The Jury had initially ruled in favor of the defendant. The judge, however, dismissed their verdict in favor of the plaintiff, prompting the defendant to appeal.
ISSUE: Was the note sufficient evidence for consideration?
RULING: No. The promissory note was given out of the aunt's volition as a gift to the boy, and according to the law, a note thus given, is not made for the value received. The dismissal was reversed, and the jury's verdict was reinstated.
RATIONALE: The appellate judges argued that the aunt, in offering the note, was conferring a gift and not for any other purpose. According to them, nothing can be regarded as consideration if both parties do not regard it as such. Therefore, the formula of the printed blank was a mistaken assumption.
RULE: Nothing operates consideration that is not regarded so by both parties.
Brown Machine, Inc. v. Hercules, Inc.
TOPIC: Qualified Acceptances; U.C.C. 2-207
CASE: Missouri Court of Appeals 770 S.W.2d 416 (1989)
FACTS: In early 1976, the plaintiff sold the defendant a trim press, a piece of equipment used to manufacture cool whip bowls. Negotiations for sale began in October 1975 when Hercules requested for a quote. The plaintiff provided the original proposal for the trim press, which comprised sixteen paragraphs describing the item (Knapp et al., 2019). One of the provisions of the proposal was an indemnity proposal which held the plaintiff harmless from demands or actions that may arise out of or connected in any way to the equipment. Upon receiving the proposal, the defendant prepared a purchase order but disagreed with the payment term requiring a twenty percent discount. In response, the plaintiff asserted that the deposit could not be put aside. The plaintiff received a purchase order in January 1976 that expressly limited acceptance to the terms included therein; however, it did not entail an indemnity provision. The plaintiff was sent two copies of the order, one was for them to keep, and the other marked acknowledgment was to be returned. Instead of returning acknowledgment, the plaintiff sent an order acknowledgment. The order acknowledgment required notification within seven days if the defendant did not find the specifications agreeable. In their response in February 1976, the defendant agreed with all specifications but requested, yet again, that 'Standard-regular forward trim' be replaced with 'Reverse Trim .'The defendant never paid the deposit but paid the agreed-upon purchase price following the reception of the equipment.
Later, an employee of the defendant sustained injuries when operating the trim press and sued the plaintiff.
HISTORY: The plaintiff had demanded that the defendant defend the injured employee, but the defendant declined, thereby forcing the former to settle the lawsuit. Later on, the plaintiff filed an action against the defendant for indemnification, which was granted, forcing the defendant to appeal.
ISSUE: Did the plaintiff’s acknowledgment containing the indemnity provision amount to a counteroffer or an acceptance of the defendant’s offer with extra or different terms?
RULING: No. According to the judge, a response to an offer is regarded as a valid acceptance of the offer despite containing extra or different terms unless the acceptance is explicitly made conditional. The trial court’s verdict was reversed.
RATIONALE: An acceptance cannot be converted to a counter offer unless its conditional nature is clearly expressed (Knapp et al., 2019). The expression must adequately notify the offeror that the offeree does not wish to continue with the transaction unless the extra or different terms are part of the contract. In this case, indemnification was an additional term that was not included in the contract because it would have contradicted acceptance.
RULE: Acceptance is expressly made conditional on the offeror’s assent to the additional or different terms.
Henningsen v. Bloomfield Motors, Inc.
TOPIC: Use of Standardized Forms
CASE: New Jersey Supreme Court, 32 N.J. 358, 161 A.2d 69 (N.J. 1960).
FACTS: The plaintiff bought a Plymouth automobile manufactured by Chrysler Corporation from the defendant on May 7, 1955. The automobile was a gift to the plaintiff’s wife (Harris, n.d.). The contract was a one-page form containing several paragraphs at the front and back. On the back was a clause that supposedly limited the breach of warranty for the replacement of faulty parts to within 90 days or 4,000 miles, whichever came first. According to the plaintiff, the font used on the back of the form was not clear, and in any case, he did not read all the paragraphs. The car developed mechanical problems ten days after delivery which caused it to veer and collide with a wall. The vehicle was extensively damaged, and the defendant refused to accept liability, claiming that the warranty expressly referred to faulty parts only.
HISTORY: The plaintiff filed a suit seeking damages which was granted by the trial court, prompting the defendant to appeal.
ISSUE; Can purchasers claim damages caused by faulty parts under the implied warranty?
RULING: Yes. Buyers can recover damages caused by faulty parts under the implied warranty. Further, dealers cannot limit the warranty to faulty parts only since that would be unjust to the buyers and a violation of fair dealing and public policy. The trial court’s decision was upheld.
RATIONALE: The warranty signed by the plaintiff will stand even though he did not read it entirely. This is because the language used was too complicated, and the defendant did not make any effort to elaborate on the contents. As such, the court felt that the disclaimer was unclear, poorly articulated, and, therefore, unfair as it tended to conceal vital information.
RULE: Implied Warranty of Merchantability guarantees that goods will function according to the buyer's expectations.
Drennan v. Star Paving Co.
TOPIC: Reliance
CASE: California Supreme Court 51 Cal. 2d 409, 333 P.2d 757 (1958).
FACTS: The plaintiff, a licensed general contracto...