CONTRACTS I BFall 2004

Hofstra University School of Law

Syllabus

Who:Professor: Matthew BodieOffice: Room 108 (located in library)Phone: 463-6162e-mail: lawmtb@hofstra.edu

Office Hours: Monday 3:00 – 4:00 p.m.Thursday 1:20 – 2:00 p.m.or by appointment

Secretary: Jennifer HartmannRoom 221463-5878lawjah@hofstra.edu

What:Texts: Murphy, Spiedel & Ayres, STUDIES IN CONTRACT LAW (6th Ed. 2003)

Burton & Eisenberg, CONTRACT LAW: SELECTED SOURCE MATERIALS (2004)

Suggestions for additional reading:Chirelstein, Concepts and Case Analysis in the Law of Contracts (4th ed. 2001)Fried, Contract as Promise: A Theory of Contractual Obligation (1981)Gilmore, The Death of Contract (1974)Holmes, The Common Law, lectures VII - IX (1881)Posner, Economic Analysis of Law, chapters 1, 2, 4 (6th ed. 2002)

When & Where:Class Times: Monday, 1:10 p.m. to 3:00 p.m.

Thursday, 12:10 p.m. to 1:00 p.m.

Class Room: Room 238

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How:Grading: Your grade will be based on your class participation, the mid-term exam, and the

final exam. The breakdown is as follows:

Final exam: 60%Mid-term exam: 30%Class participation: 10%

Midterm and Final: The midterm and final will be conducted anonymously, in keeping with law school regulations. The midterm will be an essay question; the final will be multiple-choice, short-answer, and essay questions.

Class participation and attendance: Your class participation and attendance grades will be based on three factors:

(1) Special Guest Appearance : Each of you has been given an hour of class time during which you make a “special guest appearance.” You and two other of your classmates will sit as panelists to lead the class in discussion of the material covered. You should be prepared to discuss the material covered extensively, including setting forth the facts for cases.

(2) Class Participation : When you are not making a special guest appearance, you will still have opportunities to participate in the class discussion. Your voluntary participation, as well as your participation when called on, will be considered in your grade as well.

(3) Attendance : Your overall attendance record will also be considered in your grade.

Class Web Page:The class webpage is located on the Hofstra Blackboard system. Please take time to log in and make sure that you can access the page.

Class Outline:Each panel of Special Guests will be responsible for posting a short outline of the material covered in their session. All members of the panel should work on this as a group. When the outline is complete, please e-mail it to me and I will post it on the Blackboard site.

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COURSE OVERVIEW:

Page numbers refers to Murphy, Speidel, & Ayres, except for those indicated by [B&E #], which denote page numbers in the Burton & Eisenberg sourcebook. Please remember to read the commentary along with the Restatement and UCC provisions.

I. THE RELATIONSHIP BETWEEN CONTRACT AND PROMISE: CONTRACT AS PROMISE

Introduction 1-12

Restatement (Second) of Contracts, §§ 1-5 [B&E 269-270].

Uniform Commercial Code (UCC) §§ 1-201(b)(3) & (b)(12) & 2-106(1) [B&E 12, 13, & 32-34].

What Is a Promise? 12

Bailey v. West (1969) 12-18

Bolin Farms v. American Cotton Shippers Association (1974) 18-21

Theories of Contractual Liability

Comment: Professor Barnett’s Assessment of Current Theories of Contractual Obligation 21-35

II. THE RELATIONSHIP BETWEEN CONTRACT AND PROMISE: CONTRACT AS MORE THAN A PROMISE

Bargain Contract: Promise Plus Consideration

Comment: An Historical and Definitional Note 36-39

Bargained For and Given In Exchange

Kirksey v. Kirksey (1845) 39-40

Hamer v. Sidway (1891) 40-43

Bogigian v. Bogigian (1990) 47-51

Problem: The Case of the Lessee’s Well 51

Restatement §§ 17, 71, 75 [B&E 273, 289, 292-293]

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UCC §§ 2-102, 2-105, 2-209(1) [B&E 30, 32-34, 43-44]

Mixed Motives and Nominal Consideration

Comment: Mixed Motives, Nominal Consideration, and the Relevance of Form 54-60

UCC § 2-203 [B&E 39]

Moral Obligation: Promise Plus Antecedent Benefit 109

review Bailey v. West (1969) 12-18

Restitution and the Scope of Quasi-Contract 109-112

Moral Obligation 112-114

Manwill v. Oyler (1961) 117-121

Webb v. McGowin (1935) 121-124

Harrington v. Taylor (1945) 124-125

Restatement § 86 [B&E 297-298 ]

Comment: Restatement (Second) § 86 and the Future of "Moral Obligation" 125-126

Problem: The Case of the Brokerage Renewal 150-151

Problem: The Case of the Kindly Neighbor 151

Promissory Estoppel: Promise Plus Unbargained-For Reliance

Comment: The Evolution of Promissory Estoppel 128-130

Ricketts v. Scothorn (1898) 130-133

Siegel v. Spear & Co. (1923) Handout

Allegheny College v. National Chautauqua County Bank of Jamestown (1927) 134-141

Feinberg v. Pfeiffer Co. (1959) & Notes 1-2 141-146

Grouse v. Group Health Plan, Inc. (1981) 147-152

All-Tech Telecom, Inc. v. Amway Corporation 157-161

Restatement § 90 [B&E 300-301]

III. CONTRACT AS A LEGAL RELATIONSHIP: AN INTRODUCTION TO REMEDIES

Basic Policies 191-193

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Measuring and Compensating Loss Resulting from a Breach

Sullivan v. O’Connor (1973) 193-200

Restatement §§ 347, 349, 351 [B&E 373-374, 375, 376-377]

Curtice Brothers Co. v. Catts (1907) 200-203

Restatement §§ 357, 358, 359 [B&E 378-379]

Comment on Calabresi & Melamed’s Cathedral 203-204

Comment on Coase 204-205

Comment: Restitution as a Remedy for Breach of Contract 205-206

Hadley v. Baxendale (1854) 206-210

UCC §§ 2-703; 2-710; 2-711; 2-712; 2-715; 2-716 [B&E 97-98, 103-105, 106-108]

Problem: The Case of the Recalcitrant Manufacturer 210

Promissory Estoppel Revisited

Comment: Promissory Estoppel and the Choice of Remedies 161-163

Cyberchron Corp. v. Calldata Systems Development, Inc. (1995) Handout

Mental Anguish and Punitive Damages

Bohac v. Department of Agriculture (2001) 211-216

Problem: The Case of the Distressed Newlyweds 216

Acquista v. New York Life Insurance Co. (2001) 216-221

Boise Dodge, Inc. v. Clark (1969) 221-225

Restatement §§ 353, 355 [B&E 377, 378]

IV. CONTRACT FORMATION

STATUTE OF FRAUDS

General Scope and Effect 165-169

The “One Year” Clause 169

North Shore Bottling Co. v. C. Schmidt & Sons, Inc. (1968) 169-172

Problem: The Case of Jane Fonda’s Attorney 172-173

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Restatement § 130 [B&E 308]

Contracts for the Sale of Goods 173-175

Problems: Application of UCC 2-201 176

UCC § 2-201 [B&E 35-37]

Interests in Realty 176

Compliance with the Statute 176

Crabtree v. Elizabeth Arden Sales Corp. (1953) 177-182

Problem: The Case of the Unanswered Purchase Order

Comment: Electronic “Writings” and the Statute of Frauds 182-183

Effect of Noncompliance 183-184

DF Activities Corp. v. Brown (1988) 184-188

Comment: The Statute of Frauds and Estoppel 188-190

Restatement §§ 139, 140 [B&E 310-311]

Problem: The Case of the Lake Wobegon Lot Purchase 190

WHEN IS A CONTRACT FORMED?

The Agreement Process: Manifestation of Mutual Assent 230-231

Ascertainment of Assent: The “Objective” Test 231

Embry v. Hargadine, McKittrick Dry Goods Co. (1907) 231-233

Lucy v. Zehmer (1954) 233-240

Restatement §§ 18, 21, 22 [B&E 273, 274]

Problem: The Case of the Hole-In-One 240-241 

Offer: Creation of Power of Acceptance

Lonergan v. Scolnick (1954) 245-249

Lefkowitz v. Great Minneapolis Surplus Store (1957) 249-252

Restatement §§ 24, 26, 30, 32, 33 [B&E 275, 277-278] 

Problem: The Case of the Statute of Liberty Commemorative Coins 252-253

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Problem: The Case of the “His and Hers” Mercedes 253

Leonard v. Pepsico., Inc. (2000) 253-264

Problem: When is a Price Solicitation an Offer? 264-267

Restatement § 28 [B&E 276] 

UCC § 2-204 [B&E 39]

Southworth v. Oliver (1978) 267-272

Bretz v. Portland General Electric Co. (1999) 272-276

Equitable Life Assurance Society of the United States v. First National Bank (1999) 276-284

Acceptance: Exercise of Power of Acceptance

Acceptance by a Promise 

La Salle National Bank v. Vega (1988) 284-286

Hendricks v. Behee (1990) 286-288

Ever-Tite Roofing Corp. v. Green (1955) 288-291

Corinthian Pharmaceutical Systems, Inc. v. Lederle Laboratories (1989) 291-295

UCC § 2-206 [B&E 40-41]

Problem: The Case of the Laser Sale 296

Acceptance by Performance

Carlill v. Carbolic Smoke Ball Co. (1893) 296-302

Glover v. Jewish War Veterans of United States (1949) 302-305

Industrial America, Inc. v. Fulton Industries, Inc. (1971) 305-309

Problem: The Case of the Little League Sponsors 309

Restatement §§ 36, 41, 50, 51, 53, 54, 62, 63 [B&E 279, 280-281, 283-284, 285-287] 

Comment: Acceptance by Performance Under Restatement (Second) 309-311

Acceptance by Conduct or Silence

Russell v. Texas Co. (1956) 311-315

Ammons v. Wilson & Co. (1936) 316-319

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Restatement §§ 57, 58, 69 [B&E 284, 288]

Comment: The Role of Conduct in UCC Article 2 319-320

Mailbox Rule

Adams v. Lindsell (1818) 320-324

Restatement § 63, 64, 65, 66, 67, 68 [B&E 286-288]

Problem: Acceptance of Resignation by Mail 324 

Nature and Effect of Counter-Offer 

Minneapolis & St. Louis Railway Co. v. Columbus Rolling-Mill Co. (1886) 325-329

Leonard Pevar Company v. Evans Products Co. (1981) 329-336

Textile Unlimited, Inc. v. A . . BMH and Company, Inc. (2001) 336-340

UCC § 2-207 [B&E 41-43]

Restatement §§ 39, 59, 61 [B&E 279-280, 284-285] 

Comment: Arbitration Terms and the Battle of the Forms 340-342

Comment: Revised Section 2-207: Some History 342

Hill v. Gateway 2000 (1997) 342-345

Klocek v. Gateway (2000) 345-347

Problems: Standard Terms in Contract Formation; “Shrink Wrap” Licenses 348

Assent in Electronic Commerce 349

Specht v. Netscape Communications Corporation (2002) 349-360

Termination of Offer: Destruction of Power of Acceptance 360

Hendricks v. Behee (1990)  review

Dickinson v. Dodds (1876) 360-366

Restatement §§ 37, 38, 40, 42, 43, 46 [B&E 279, 280, 281, 282] 

Problem: The Case of the Rejection, Revocation and Acceptance Race 366

Problem: The Case of the Dead Guarantor 366-370

Irrevocable Offer: Option Contracts 348

Humble Oil & Refining Co. v. Westside Investment Corp. (1968) 370-375

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Problem: Effect of First Refusal 375-376

Problem: Creation of Reliance Options 376

Petterson v. Pattberg (1928) handout

Marchiondo v. Scheck (1967) 376-380

Problem: The Case of Professor Fuzzy's Well 361

James Baird Co. v. Gimbel Brothers, Inc. (1933) 381-383

Drennan v. Star Paving Co. (1958) 383-389

SKB Industries, Inc. v. Insite (2001) 389-391

Problem: The Case of the Bid-Shopping Contractor 391

Restatement §§ 45, 87 [B&E 281-282, 298-299]

UCC § 2-205 [B&E 40]

Insufficient Agreement: Indefinite, Incomplete and Deferred Terms 391-392

Defective Formulation and Expression of Agreement 393

Raffles v. Wichelhaus (1864) 393-396

Konic International Servs. v. Spokane Computer Servs. Inc. (1985) 396-400

Restatement §§ 20, 33, 151-155 [B&E 274, 278, 313-315] 

Indefinite Agreements

Varney v. Ditmars (1916) 400-405

Lefkowitz v. Great Minneapolis Surplus Store (1957) review

Notes 405-407

UCC § 2-204 [B&E 39]

Incomplete and Deferred Agreement

Metro-Goldwyn-Mayer, Inc. v. Scheider (1976) 407-408

Joseph Martin, Jr., Delicatessen, Inc. v. Schumacher (1981) 408-413

Oglebay Norton Company v. Armco, Inc. (1990) 413-423

Comment: Open Terms Other than Price 423-425

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Comment: How Should the Law Set "Default" Rules? 425-427

Empro Manufacturing Co., Inc. v. Ball Co. Manufacturing Inc. (1989) 427-431

UCC §§ 2-305, 2-311 [B&E 48-49, 52-53]

Problem: The Case of the Don King/"Buster" Douglas Legal Bout 431-432

Comment: Texaco, Pennzoil and Outposts of Contract Law 432-434

Remedies Where Agreement Incomplete or Indefinite 434-435

Hoffman v. Red Owl Stores, Inc. (1965) 435-443

Copeland v. Baskin Robbins U.S.A. (2002) 443-449

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