[Contract 2] 1. POEL v. BRUNSWICK-BALKE-COLLENDER CO.~

[Juyoung]

[ Contract 2. Case 1-21 ]

1. POEL v. BRUNSWICK-BALKE-COLLENDER CO.  New York Court of Appeals 216 N.Y. 310, 110 N.E. 619 (1915)

1. Facts

Plaintiffs are general partners of Poel & Arnold (a limited partnership), and the defendant is a corporation organized under New York law. Plaintiffs sued to recover damages for breach of an executory contract. Plaintiffs claimed an oral offer was made by the defendant on April 2, 1910, and accepted in writing on April 4, 1910. Plaintiffs argued the contract was evidenced by letters exchanged between April 2, 1910, and January 7, 1911. A dispute arose over whether a valid contract existed and whether the writings satisfied the statute of frauds. Key correspondences include letters dated April 2, April 4, April 6, 1910, and January 7, 1911.

2. Issues

Whether the correspondences between the parties constituted a binding contract and whether the writings met the statute of frauds requirements.

3. Rule

* New York law (General Obligations Law § 5-701): for a contract to be valid, there must be a written memorandum that includes all essential terms of the completed contract and is signed by the party to be charged.

* General contract law principles: an offer must be unequivocally accepted for a contract to exist. A counteroffer constitutes a rejection of the original offer. This rule is rooted in common law principles of contract formation.

4. Application

 Plaintiffs' letter(Letter of April 4) with an enclosed proposed contract was an offer. Defendant’s response(Letter of April 6) was a counteroffer, requiring acknowledgment and guarantee of delivery. Defendant’s counteroffer specified conditions, notably requiring acknowledgment, which was not met by plaintiffs. Defendant's January 7 Letter denied authority of Rogers, reinforcing the absence of a contract. The writings did not collectively constitute a complete and binding contract as they failed to show mutual assent to the same terms. Plaintiffs did not accept the counteroffer, thus no contract was formed. The writings did not sufficiently evidence a complete contract.

5. Conclusion

Reversed and a new trial granted, costs to abide the event.

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원고 입장에서 계약위반을 입증하기위해서 무엇이 필요한가.

Rogers – 원고피고가 매매계약을 체결했는데 계약대로 위반하지 않아서 .

자격이 없는자(법적지위 없는자)가 계약함. – 계약의 성립이 안됨.

소송당사자 입장에서

계약은 합의를 하면 성립이 됨 .

원고가 1.offer/ 2.acceptance/-있으면 합의로 계약 성립함.  3.Consideration.

Offer는 언제 있었는가.

Offer는 writing으로 . 편지를 주고 받아서 이중에 내가 offer를 한다고 하는 편지는 몇월몇일건가.

Seller. Buyer.

2.42 달러 offer

다른 offer가 있나 ?  4월 6일

Offer가 있었는데 상대방이 offer에 조건을 달아서 보낸다~ 이것은 변형된 것임.

변형된 것은 reject로 봄 .OK는 조건을 달면 안됨.

조건을 달아서 보낸다는 것은 reject되어서 counteroffer 가 됨.

Counteroffer를 accept해야함. 이것에 대한 accept없음.

계약성립 없었음. 부동산 매매계약이나 결혼은 문서로 하여야 효력이 있다.

이 사건은 그렇게 해서 판단이 마무리됨. 최종적인 계약서만 문서로 되어 있으면 됨.

$500이상이면 문서로 계약해야 함. 문서로 되지 않아서 enforce할 수 없음.

2. TEACHERS INSURANCE & ANNUITY ASSOCIATION OF AMERICA v. BUTLER  United States District Court 626 F.Supp. 1229 (S.D.N.Y. 1986), appeal dismissed, 816 F.2d 670 (2d Cir. 1987)

EDWARD WEINFELD, District Judge.

1.    Facts

One City Centre Associates (OCCA) and its partners, including David Butler, sought financing from Teachers Insurance and Annuity Association of America (Teachers) to construct an office building. They agreed on a $20,000,000 loan for 35 years at a fixed interest rate of 14.25 percent per annum, with a kicker provision and a prohibition on prepayment for the first 17 years. As interest rates dropped to 12 percent without kicker provisions, the Butler group attempted to renegotiate the terms and sought alternative financing. Four days before closing, the Butler group refused to sign the deed of trust, objecting to a provision preventing acceleration of the loan's maturity date by defaulting. Teachers sued for breach of contract for failing to negotiate in good faith, while the Butler group counterclaimed that the acceleration provision was not part of the commitment letter and that Teachers breached the contract by insisting on its inclusion. The court found in favor of Teachers, awarding them damages for the Butler group's failure to negotiate in good faith.

2. Issues

Whether the defendants, One City Centre Associates ("OCCA") and its general partners, breached their contract with the plaintiff, Teachers Insurance and Annuity Association of America ("Teachers"), by failing to negotiate in good faith regarding the inclusion of the Default Prepayment Fee Language in the closing documents.

3.Rule

New York law implies a duty of fair dealing and good faith in every contract, requiring parties to perform their obligations honestly and negotiate in good faith.

(Filner v. Shapiro, 633 F.2d 139 (2d Cir.1980), Contemporary Mission, Inc. v. Famous Music Corp., 557 F.2d 918 (2d Cir.1977), Rowe v. Great Atlantic & Pacific Tea Co., 46 N.Y.2d 62, 412 N.Y.S.2d 827, 385 N.E.2d 566 (1978))

4. Application

Teachers argued that the Commitment Letter constituted a binding agreement, obligating both parties to perform their respective duties. The Default Prepayment Fee Language was customary and necessary to protect Teachers from the financial risk associated with early repayment through default. Teachers demonstrated good faith by offering various concessions and alternatives to address the defendants' concerns, which were repeatedly refused. OCCA and its general partners claimed that the Default Prepayment Fee Language was not part of the initial agreement and was introduced unilaterally by Teachers. Defendants sought to renegotiate or exclude this provision, asserting that it was unfair and not agreed upon initially. They argued that their attempts to find alternative financing were legitimate business decisions prompted by changing economic conditions. The Court found that the defendants acted in bad faith by not objecting to the Default Prepayment Fee Language until the last minute and by failing to negotiate in good faith. The Court noted that the defendants’ actions were driven by a desire to evade their contractual obligations due to falling interest rates, not by any substantive issue with the provision itself. The Court determined that Teachers had acted in good faith and that the Default Prepayment Fee Language was a reasonable and standard protective measure.

5. Conclusion

The Court concluded that OCCA and its general partners breached their duty to negotiate in good faith and thereby breached the contract with Teachers. As a result, the Court awarded damages to Teachers in the amount of $3,005,390.

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긴 케이스는 단순화 시키기. 원고는 왜 피고에게 소송제기? 2천만 달러. 1년이자. 285만불.

Closing date. 기말고사와 바시험에는 원고 피고 주장 입장 다 언급해야. 

계약방식에 rule? Justice, Good faith가지고 해야함.

신의 성실의 원칙 good faith

BUTLER- intention?

손해배상은 contract가 이행되었다면 얼마에 이익을 볼것인가 기준으로 계산.

계약 이행되면 날짜 계산해야 함.

5390달러.

3382979 달러.

3. WOOD v. LUCY, LADY DUFF-GORDON  New York Court of Appeals 222 N.Y. 88, 118 N.E. 214 (1917) CARDOZO, J.

1. Facts

Wood (plaintiff) entered into a contract with Lady Duff-Gordon (defendant) for the exclusive rights to her endorsements and designs, with profits shared equally. Wood agreed to maintain records and secure necessary patents, copyrights, and trademarks. Lady Duff-Gordon later breached the contract by endorsing another company's designs. Wood sued for breach of contract, but Lady Duff-Gordon claimed the contract lacked consideration. The trial court denied Lady Duff-Gordon's motion for demurrer, but the appellate division reversed this decision. Wood then appealed to the New York Court of Appeals.

2. Issues

Whether the agreement between the plaintiff and the defendant constitutes a binding contract, despite the absence of an explicit promise by the plaintiff to use reasonable efforts to market the defendant's designs and endorsements.

3. Rule

*McCall Co. v. Wright, 133 App. Div. 62 : A promise may be lacking, and yet the whole writing may be "instinct with an obligation," imperfectly expressed. If that is so, there is a contract.

4. Application

The plaintiff asserts that he kept his part of the contract, but the defendant breached it by placing her endorsements on products without his knowledge and withholding the profits.

The defendant argues that the agreement lacks the essential elements of a contract because the plaintiff did not explicitly bind himself to any obligations. The court reversed the judgment of the Appellate Division and affirmed the order of the Special Term, with costs in the Appellate Division and in this court. The court found that the agreement constituted a binding contract because it was "instinct with an obligation" for the plaintiff to use reasonable efforts to market the defendant's endorsements and designs. This conclusion was supported by several factors: the exclusive nature of the plaintiff's agency, the implied assumption of duties by accepting the exclusive agency, the agreement's recitals indicating that the plaintiff's business organization would be used for placing endorsements, the defendant's compensation being contingent on the plaintiff's efforts (implying a promise to make those efforts), and the plaintiff's promise to account for profits and protect the defendant's rights through patents and copyrights, which further reinforced the existence of such duties.

 5. Conclusion

The judgment of the Appellate Division should be reversed, and the order of the Special Term affirmed, with costs in the Appellate Division and in this court. (The court concluded that the agreement between the plaintiff and the defendant constituted a valid and binding contract, even without an explicit promise from the plaintiff, as the overall context and the terms implied a commitment to use reasonable efforts to fulfill the contract's purpose.)

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계약위반- 계약 있었나. 계약 있었다면 어떤 내용 위반했는지.

계약과 관련된 정황증거를 봤을 때 그런 약속한 것으로 implied되었다. 그것을 알게 된 것을 알기 위해서

 인용한 케이스들 : 하나의 약속은 빠질 수 있는데, 전체 writing을 통해서 볼 완전하게  표현된다.

Lucy의무 – 독점권을 wood에게 줘야 하는 의무.

계약을 위반한 것을 약속을 위반한 것이고 약속은 duty이다.

독점계약위반.

Parel evidence 구두증거배제법칙 (술 취한 상태에서 사인한 것 효력 없음)

제3자가 Lucy에게 계약위반이나 사기로 소송 제기할 수도 있음.

A가 B,C 둘다 이중 매매하는 사기- 계약위반에 해당 (이행할 수 없기 때문에)

4. THOMPSON v. ST.REGIS PAPER CO.  Supreme Court of Washington, En Banc 102 Wash. 2d 219, 685 P.2d 1081 (1984) BRACHTENBACH, J.

1. Facts

Kenneth L. Thompson was employed by St. Regis Paper Company and was terminated from his position. Thompson argues that his termination was wrongful and that there was an implied contract allowing termination only for just cause. The implied contract was allegedly based on St. Regis Paper Company's internal policies and procedures. Thompson was terminated after implementing proper accounting procedures in compliance with the Foreign Corrupt Practices Act of 1977.St. Regis Paper Company contends that Thompson was an at-will employee, meaning they could terminate him without specific cause.

2. Issues

Whether Kenneth L. Thompson's termination from St. Regis Paper Company was wrongful due to an implied contract that allowed termination only for just cause, as opposed to the company's assertion that he was an at-will employee who could be terminated without cause

3. Rule

* Roberts v. ARCO,n88 Wn.2d 887, 894, 568 P.2d 764 (1977) : An employment contract indefinite as to duration, is terminable at will by either the employee or employer. But such a contract is terminable by the employer only for cause if (1) there is an expressed or implied agreement to that effect or (2) the employee gives consideration in addition to the contemplated service

* Toussaint v. Blue Cross & Blue Shield : An employee and employer can contractually obligate themselves concerning provisions found in an employee policy manual and thereby contractually modify the terminable at will relationship.

4. Application

The plaintiff argues that the defendant (St. Regis Paper Company) wrongfully terminated his employment, asserting that there was an implied contract based on the defendant's policies and procedures which stated that he could only be terminated for just cause. The defendant contends that the plaintiff's employment was at-will, meaning they were not obligated to provide a specific reason for the termination. The court denied the defendant's motion for summary judgment and allowed the case to proceed to trial. Implied Contract Possibility: There is a potential implied contract based on the defendant's policies and procedures suggesting the plaintiff could only be terminated for just cause. There is a possibility that the defendant did not adhere to its policies and procedures requiring fair and just termination processes. Considering the plaintiff was terminated after implementing proper accounting procedures in compliance with the Foreign Corrupt Practices Act (1977), the termination might violate public policy.

5. Conclusion

The trial court order granting St. Regis' pretrial motion for summary judgment is reversed. We remand for further action consistent with this opinion.

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Tompson이 부당해고 당함.

어떤 법적근거로 부당해고인가?

누군가의 발을 밟았다고 해고함.

해고에 다른 이유가 있나?

Cause냐 이유 없이 해고인가?

Terminate at will ?

당사자가 맺은 계약 어떻게 파악?

양당사자에게 고용관계 있는 것을 다투지 않는 이유. 실질적인 고용관계성립한 것.

근거 없이 해고했다는 주장은 어디에서 나옴?

양당사자 사이에 express한 agreement

매뉴얼과 핸드북이 들어갔나? X

1심판사의 fact 옳다.

Express한 contract 포함여부 - 1심판사 포함 안된다.

일하고 급여 받고 이런 부분들 포함.

아무 때나 terminate가능.

그러나.. 예외 이야기~

Written document없음. 아무 때나 terminate 가능.

modified근거가 무엇인가?

modify안하면 어떻게 되나- chapter1으로 끝남.

Modify 어떻게 할 것인지 논하고 있음.

2심에서 modify가능? 1심에서 modify가능?

Chapter4,3에서 어떻게 바꾸는가?

Bad faith – 해당 부당해고는 많은 fact찾아내야해서 행정적으로 너무 많은 시간 소모됨.

manual나와있는대로 하면 수월함.  핸드북과 매뉴얼대로 하는 것을 선택함.

그러면 계약의 내용으로 포함되는가? 어떤 요구조건이 있는가?

Therefore specific situations에 대해서 ,, and employee 다른 직장을 찾지 않을 것이다 라는 약속 . 이행강제 됨. 이러한 내용을 계약의 내용을 포함시키기 위해서 expectation의무는 written promise와 일치.

Public policy(모든 현행법, justice) 위반– 연방법위반, 

USC – 미국연방법. United states code.

Securities Exchange Act - 증권거래법.

직원은 public policy지켰는데 , 그것 때문에 회사가 기분 나빠서 해고하면 회사가 public policy어겼다.

Common law가 중요. 사건 적용하면서 그 주 법을 봄.

Supplement.

핸드북 혹은 매뉴얼이 포함되도록 modify가능.

cause있어야만 terminate되는 계약 아닌 것에 동의. Fact finding.

1,2 충족X,

Terminable for cause가 아니라고 판단한 이유는?

직원이 근로자로서 일하는 내용중 추가로 약속한 것은 아님.

Terminable at will .

5. HILL v. JONES  Arizona Court of Appeals 151 Ariz. 81, 725 P.2d 1115 (1986), review denied (Oct. 1, 1986) MEYERSON, Judge.

1. Facts

Warren G. Hill and Gloria R. Hill (buyers) purchased a residence from Ora G. Jones and Barbara R. Jones (sellers) for $72,000 in 1982. Buyers noticed a "ripple" in the wood floor and asked if it was termite damage, to which Mrs. Jones replied it was water damage. A termite inspection report indicated no visible evidence of infestation, but buyers later discovered termite damage after moving in. Sellers had prior knowledge of termite infestation and treatments dating back to 1963 but did not disclose this information to buyers. Buyers found a pamphlet and learned from a neighbor about the past termite issues after moving in. The trial court dismissed buyers' misrepresentation claim and granted summary judgment for sellers on the concealment claim.

2. Issues

Whether the seller of a residence must disclose to the buyer facts pertaining to past termite infestation that materially affect the value of the property is the central question in this case.

3. Rule

Restatement (Second) of Contracts § 161[duty to disclose] : The seller of residential property must disclose material facts that affect the value of the property, which are not readily observable and are not known to the buyer.

Lufty v. R.D. Roper & Sons Motor Co., 57 Ariz. 495, 115 P.2d 161 (1941): Integration clauses cannot shield parties from liability for fraud.

Restatement (Second) of Contracts § 161 (1981): Disclosure requirements for preventing misrepresentation.

Restatement (Second) of Torts § 551 (1977): Duty to disclose material facts.

Johnson v. Davis, 480 So.2d 625 (Fla. 1985): Seller's duty to disclose known material defects not observable by the buyer.

Lingsch v. Savage, 213 Cal. App.2d 729, 29 Cal. Rptr. 201 (1963): Duty to disclose material facts known to the seller but not accessible to the buyer.

  4. Application

The buyers argued that the sellers misrepresented the condition of the property by failing to disclose past termite infestations and existing termite damage, which materially affected the property's value. The sellers argued they had no duty to disclose the past termite infestation and that the buyers should have relied on the termite inspection report. They contended the buyers were on notice and had ample opportunity to inspect the property. The court found the integration clause in the purchase agreement did not shield the sellers from liability for fraudulent misrepresentation. The clause could not prevent buyers from proving fraud. The court held that sellers have a duty to disclose known material facts that affect the property's value and are not readily observable by the buyer. This aligns with the principle of promoting honesty and fair dealing in transactions. The court determined that the existence of termite damage and past infestation are material facts that should have been disclosed. Termite damage could significantly affect the structural soundness and value of the property. The court concluded that a jury could find that the sellers' nondisclosure induced the buyers to proceed with the purchase. Buyers' reliance on the termite inspection report did not absolve sellers from their duty to disclose material facts. The court stated that the issue of buyers' diligence in discovering the termite problem should be a factual determination for the jury.

5. Conclusion

Reversed and remanded. (The seller of a residence must disclose to the buyer facts pertaining to past termite infestation that materially affect the value of the property.)

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1000달러소송제기는 의미 없다.

Fact finding 다시해서 seller이기면 돈 계산.

Duty to disclose – 합의된 약속.

Express or implied된 것에 있는가, express에 없음. 법원이 의무 줍니까?

Restatement – 법: secondary

부동산가치에 대해 공개.

중요한 사실 고지하지 않으면 (침수사실) 중고차 산 경우 계약 취소가능?? 아주 저렴했음.

말할 의무 있을 때 침묵하면 사기.

Material 하지 않다 ? 법원은 material한 fact보여줌.

6. DERICO v. DUNCAN  Supreme Court of Alabama 410 So. 2d (1982)

                            JONES, Justice.

1. Facts

Defendant Thomas R. Duncan, operating as Federal Building Service, entered into an agreement with plaintiff Mattie Derico to repair her home and place siding for a total cash price of $6,381. Additionally, Duncan agreed to satisfy an outstanding bond for title contract on Derico's home to obtain a first mortgage. The total amount, including interest, became $27,439.20. Duncan failed to obtain a license as required by § 5-19-22(a) of the Consumer Finance Code, which mandates obtaining a license for engaging in the business of making consumer loans. Plaintiff filed a suit because defendant failed to obtain a license to engage in the business of making consumer loans and this violates the Mini-Code. The district court found defendant’s failure was not willful, plaintiff appealed.

2. Issues

Whether Duncan's failure to obtain the required license affects the validity of the loan contract between him and Derico, particularly considering it was not willful.

3. Rule

* "Consumer Finance" (known as the Mini-Code § 5-19-22(a), "(a) No creditor shall engage in the business of making consumer loans ... without first having obtained a license for each location from the administrator;..."

* "(a) A creditor who ... willfully engages in the business of making loans in violation of subsection (a) of section 5-19-22 is guilty of a misdemeanor and, upon conviction, will be sentenced to pay a fine not exceeding $500.00 or to imprisonment not exceeding one year, or both."

* If the conditions of the statute were made for the benefit of the public, and not for the raising of revenue only, an agreement is void that does not comply with the statutory conditions." Bowdoin v. Alabama Chemical Co., 201 Ala. 582, 583, 79 So. 4 (1918)

4. Application

The plaintiff argues that the defendant's failure to obtain a license in violation of consumer finance laws renders a portion of the contract, specifically the loan, void. The defendant's failure to obtain a license is considered a violation of provisions intended to protect consumers, providing legal grounds for voiding the contract. While acknowledging the lack of a license, the defendant contends that their actions were not willful and therefore do not warrant specific sanctions for legal violations. The defendant asserts the validity of the contract, suggesting that the court should consider it inappropriate to void the contract as a subsequent measure to the violation of consumer finance laws.

The court bases its decision on past precedents and provisions of consumer finance laws. Consumer finance laws exist to protect customers, and the defendant's actions violating these provisions justify voiding a portion of the contract in the interest of public welfare. The defendant's intent is immaterial to the determination. The purpose of consumer finance laws is to safeguard consumers, and to achieve this, the court may void portions of contracts that contravene these laws. Thus, the violation of consumer finance laws results in the nullification of a portion of the contract, serving as a legal consequence for non-compliance with regulations aimed at consumer protection.

 5. Conclusion

The loan portion of Derico's debt is void due to Duncan's failure to obtain the required license, although the interest charges on the voided loan cannot be added to the construction debt to avoid usurious charges. (Duncan's failure to obtain the required license affects the validity of the loan contract between him and Derico, even though it was not willful.)

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계약의 무효를 주장하는 소송.  

이자 무효, 손해배상 청구 문제는 아님.

Derico bond 발행 및 추가 돈 빌림 (왜 빌림? 

Bond for title contract  . / outstanding  순위가 높은.

벌금만 물면 되지 계약까지 무효가 되어야 하는가?

code위반은 계약 무효인가?

어떤 코드 위반 경우가 public policy인가?

License 획득해야 하는데 위반하면 무효?

첫번째 문단의 마지막 문장. 돈 내는 것이 목적 달성한다.

Federal rule이면 연방으로감.

Consumer financial law

7. WIL-FRED’S INC. v. METROPOLITAN SANITARY DISTRICT  Illinois Appellate Court 57 Ill.App. 3d 16, 372 N.E. 2d 946 (1978) Mr. JUSTICE PERLIN delivered the opinion of the court:

1. Facts

The Metropolitan Sanitary District of Greater Chicago invited bids for rehabilitation work at a water plant, requiring the replacement of clay pipes with plastic ones. Wil-Fred’s, Inc. submitted the lowest bid, accompanied by a $100,000 bid deposit, based on a subcontractor bid by Ciaglo Excavating Company. After winning the bid, Wil-Fred discovered that Ciaglo had made a $150,000 mistake in its cost calculations due to a misunderstanding about the construction equipment's impact on the plastic pipes. Wil-Fred attempted to withdraw its bid and requested the return of its bid deposit two days after submission, before the contract was awarded. The District refused to allow the withdrawal or return the bid deposit. Wil-Fred filed a suit, provided evidence of the mistake and potential financial harm, and the trial court granted rescission and ordered the return of the deposit. The District appealed to the Illinois Appellate Court.

2. Issues

Whether Wil-Fred's Inc. (plaintiff) can obtain rescission of its contract with the Metropolitan Sanitary District of Greater Chicago (defendant) due to a unilateral mistake in the subcontractor's bid, which led to an error in Wil-Fred's bid.

3. Rule

* Restatement of the Law of Contracts § 503 (1932): As a general rule, it is often said that relief will not be granted if but one party to a contract has made a mistake.

* Professor Williston in his treatise on contracts indicates that unilateral mistake may afford ground for rescission where there is a material mistake and such mistake is so palpable that the party not in error will be put on notice of its existence. 13 Williston on Contracts § 1578 (3d ed. Jaeger 1970).

* Winkelman v. Erwin (1929), 333 Ill. 636, 640, 165 N.E. 205, 207 : 2 In Illinois the conditions generally required for rescission are: that the mistake related to a material feature of the contract; that it occurred notwithstanding the exercise of reasonable care; that it is of such grave consequence that enforcement of the contract would be unconscionable; and that the other party can be placed in statu quo.

4. Application

 The plaintiff argued that a substantial mistake was made, which would result in significant harm to the company if the contract were enforced, thus necessitating rescission. The defendant argued that the plaintiff's mistake resulted from a lack of due care and that rescission of the contract was not justified. The court found that the plaintiff's mistake met the criteria for rescission based on Illinois law, as established in People ex rel. Department of Public Works & Buildings v. South East National Bank. The material mistake, constituting approximately 17% of the bid amount, was substantial. The plaintiff exercised reasonable care by relying on a reliable subcontractor, Ciaglo Excavating. The mistake's grave consequences included a potential loss of $100,000 and a significant reduction in bonding capacity. The Sanitary District could be restored to its original position as it had not relied on the bid. The court noted that the Sanitary District should have recognized the mistake due to the significant bid discrepancy, aligning with Santucci Construction Co. v. County of Cook. Equity required rescission to avoid unjust enrichment, leading the court to affirm the trial court's decision.

5. Conclusion

Affirmed. The court approved Wil-Fred's, Inc.'s (plaintiff) request for contract rescission against the Metropolitan Sanitary District of Greater Chicago (defendant) due to a unilateral mistake, stemming from a subcontractor's bid error, in Wil-Fred's bid.

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Non performance 에 대한 mistake 정당화와 관련 case

Mistake 는 justify되는가 큰 rule

Mini rule(sub issue) 쓰면서 곧바로 apply하는 방법을 케이스에서 배우기.

입찰권고 법적성격- proposal인지 offer인가.

->proposal. 법적효력 없음.

Offer은 입찰 신청자가 냄.

rescission 청구했다.

인간행위강제는 못함(바이올린 강제로 남은기간 켜라..등)

계약성립 되었다.

한쪽의 실수를 상대방이 알게된경우 unfair함.

계약 맺을 때 숫자 잘못적은 것은 봐준다.

실수 안한 당사자가 상대방의 실수 알고 있음을 notice해야.

실수중대하고 rule apply- deposit 돌려주라고 결정한 이유는?

Liquidated damage 10만불 이상 손해.

-상대방이 정당화없이 rescind했을때.

Material mistake- 손해배상 의무 안 생김.

Material breach인 이유는? 882600달러

(15만불 손해 보고 할리가 없다는 것을 입증해야. bankrupt되는 것을 입증해야. )

 사인은 신중히 하면서 숫자 실수의 경우 봐준다.

Rescind 은 계약 성립 후에 하는 것.

8. INTERNATIONAL MINERALS & CHEMICAL CORP. v. LLANO, INC.  United States Court of Appeals 770 F.2d 879 (10th 1985), cert, denied, 475 U.S. 1015 (1986) Before BARRETT, DOYLE and McKAY, Circuit Judges.

1. Facts

International Minerals and Chemical Corporation (IMC) operated a potash mine in New Mexico and contracted with Llano, Inc. to purchase natural gas for its operations. The contract included "take or pay" provisions, obligating IMC to either take a minimum amount of gas daily or pay for the shortfall. IMC's plant emitted significant air pollution, leading the New Mexico Environmental Improvement Board (EIB) to implement regulations limiting emissions. IMC explored various methods to comply with these regulations and ultimately adopted a new process that significantly reduced its natural gas consumption. IMC claimed it was excused from the "take or pay" obligation due to the regulatory changes and invoked force majeure and adjustment provisions in the contract. The district court ruled against IMC, but on appeal, the Tenth Circuit held that IMC's inability to meet the gas purchase requirements due to regulatory compliance triggered the adjustment provision, excusing IMC from paying for the unpurchased gas.

2. Issues

Whether IMC's reduced natural gas consumption due to regulatory compliance with emissions limits triggers the contract's adjustment provision, excusing IMC from its "take or pay" obligation.

3. Rule

* Mineral Park Land Co. v. Howard, 172 Cal. 289, 156 P. 458, 460 (1916) "a thing is impracticable when it can only be done at an excessive and unreasonable cost".

* N.M.Stat.Ann § 55-2-615 (1978) : Performance will be excused when made impracticable by having to comply with a supervening governmental regulation.

4. Application

IMC argues that its compliance with federal emissions regulations constitutes a circumstance beyond its control, invoking the contract's adjustment provision and excusing it from the "take or pay" obligation. CPL contends that the contract's adjustment provision does not apply because the emissions regulations were foreseeable and within IMC's control when the contract was executed. The court ruled in favor of CPL, finding that the emissions regulations were foreseeable at the time the contract was executed. The court noted that IMC's reduced gas consumption due to regulatory compliance was a predictable event and thus did not qualify as a circumstance beyond its control. The court emphasized that the contract explicitly required IMC to "take or pay" regardless of regulatory changes unless an extraordinary event beyond control occurred. The court determined that the regulatory changes did not constitute such an extraordinary event since they were part of a foreseeable regulatory environment. Consequently, the court concluded that IMC failed to demonstrate that the adjustment provision was applicable under the circumstances. Therefore, the court held that IMC remained obligated to fulfill its "take or pay" commitments under the contract.

5. Conclusion

Reversed and remanded.

*Feedback

계약의 목적물 – gas.

Supply 제품을 계속 공급.

Gas – take or pay contract주로 씀.

IMC(buyer)의 이행의무는 무엇인가? Supply agreement :

상황생기면 70%조정가능.. margin notice 등

현실적으로 어떤 의무 위반했는가?

70프로까지 minimum requirement낮춰줌.

Minimum obligation을 지키지 않음.

UCC나온 규정이 seller에게만 적용된다 왜?

Impossibility, impracticability- 왜 seller만?

 계약성립 이후 사정변경 생김

Impossibility -물리적으로 불가능.

Impracticability- 페인트 칠하는데 1000만원 계약함. 상황이 어려워짐.

Injustice생김. 물리적으로는 가능.

Unconscionability – 보험계약. 일방에게 불리하게 되어있음.

Bargaining power이용해서(보험사에 유리하게 되어있음)

법원이 판사가 결정함.

이 사건에서 unconscionable 따지지 않음. 계약당시 한쪽에게 불리한데

싸인하면 어쩔 수 없다고 봄.

1심에서 15,16조 적용 안되는 이유는?

Absolute impossibility규정, 

IMC 조건상황이 Absolute impossibility 하지 않다. Why?

규정이 있더라도 구입은 가능.

Absolute impossibility / impracticability

UCC  restatement

508조 : 계약이 무효. 계약성립 이후 18개월.

개정작업 참여하면서 18개월.

IMC "force majeure clause으로 보호 못받음.

16조로 보호받을 수 있나? O

Minimum requirement조정할 수 있다.

UCC항소법원에 적용되나.

계약서 가장 효력있음. 계약서 조항만으로 사건해결할 수 없을떄 강행법규로.

Impracticability로 해석됨.

9. ALASKA PACKERS’ ASSN. v. DOMENICO  United States Court of Appeals 117 F. 99 (9th Cir. 1902)

1. Facts

In March 1900, Alaska Packers' Association (APA) contracted sailors to work for $50 and two cents per salmon. The following month, similar contracts were made with other sailors for $60 and two cents per salmon. Upon arriving in Alaska, the sailors demanded $100 to resume work, and an APA representative agreed, despite claiming no authority to alter contracts. After returning to San Francisco, APA paid only the original contract amounts of $50 or $60. The sailors sued APA to recover the higher pay, alleging faulty fishing nets were provided. The trial court found no faulty nets but ruled in favor of the sailors, prompting APA to appeal.

2. Issues

Whether the new contract agreed to by the Alaska Packers' Association (APA) to pay the sailors $100 instead of the originally agreed upon $50 or $60 is legally enforceable.

3. Rule

 King v. Railway Co., 61 Minn. 482, 63 N.W. 1105 : "No astute reasoning can change the plain fact that the party who refuses to perform, and thereby coerces a promise from the other party to the contract to pay him an increased compensation for doing that which he is legally bound to do, takes an unjustifiable advantage of the necessities of the other party. Surely it would be a travesty on justice to hold that the party so making the promise for extra pay was estopped from asserting that the promise was without consideration. A party cannot lay the foundation of an estoppel by his own wrong, where the promise is simply a repetition of a subsisting legal promise. There can be no consideration for the promise of the other party, and there is no warrant for inferring that the parties have voluntarily rescinded or modified their contract. The promise cannot be legally enforced, although the other party has completed his contract in reliance upon it."

4. Application

The sailors argued that they were justified in demanding higher wages because the fishing nets provided by APA were defective. APA denied that the nets were defective and contended that the new contract was without consideration, as it merely repeated the sailors' existing obligations. The court reversed the trial court's decision and ruled in favor of APA. The court reasoned that the new contract for higher wages was not enforceable because it lacked new consideration, applying the principle from King v. Railway Co., 61 Minn. 482. In this case, the sailors were already legally bound to perform the same services under their original contracts. The court held that the sailors took advantage of APA's urgent need for their services by demanding higher pay. Consent to such demands under coercive circumstances, without additional consideration, is invalid. The superintendent’s agreement to the new contract did not constitute a voluntary waiver of the original terms. Therefore, the sailors’ demand for increased wages was not legally supported.

5. Conclusion

The appellate court reversed the lower court's decision and directed the lower court to enter judgment for APA, holding that the sailors were not entitled to the additional wages as the new contract lacked sufficient consideration.

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임금 올려달라고 요구.

권한 없는 자가 수정해서 싸인 했는데

그것은 consideration이 없는것이다.

원고의 주장

Offer, acceptance, consideration( 돈을 주고, 일을 해주는 것) -> 계약 있음.

modify할때도 consideration필요하다.

임금 올려주는 만큼 더 일한다는 것이 없음.

consideration없다.

우리나라 계약은 consideration요소아님.

10. SACKETT v. SPINDLER  248 Cal. App. 2d 220  MOLINARI, P.J.

1. Facts

Spindler agreed to sell stock to Sackett, who would pay in installments, with the final payment due by August 15. Sackett paid the first installment on time but missed subsequent payments. Sackett's final payment check was returned for insufficient funds, and he assured Spindler on September 12 that he would make the payment. Spindler's attorney set a new deadline of September 22 for Sackett to pay, which Sackett missed. An extension to September 29 was granted, but Sackett again failed to perform. On October 5, Spindler's attorney informed Sackett that Spindler would no longer sell the stock due to Sackett's failure to pay. The trial court ruled in Spindler's favor for breach of contract, and Sackett appealed the decision.

2. Issues

Whether repudiation of a contract is justified when the other party has materially breached the contract

3. Rule

* Whether a breach of contract is total or partial depends upon its materiality. (Rest., Contracts, § 317, p. 471.) In determining the materiality of a failure to fully perform a promise the following factors are to be considered: (1) The extent to which the injured party will obtain the substantial benefit which he could have reasonably anticipated; (2) the extent to which the injured party may be adequately compensated in damages for lack of complete performance; (3) the extent to which the party failing to perform has already partly performed or made preparations for performance; (4) the greater or less hardship on the party failing to perform in terminating the contract; (5) the wilful, negligent, or innocent behavior of the party failing to perform; and (6) the greater or less uncertainty that the party failing to perform will perform the remainder of the contract. (Rest., Contracts, § 275, pp. 402-403.)

* A breach being defined as an unjustified or unexcused failure to perform all or any part of what is promised in a contract. (Rest., Contracts, §§ 312, 314, pp. 462, 465.)

4. Application

The plaintiff argued that he had tendered over half of the promised payment, and his duty was unintentionally discharged by the defendant’s rescission and repudiation of the purchase agreement due to his reclamation of the stock certificates. The plaintiff claimed that the breach of contract was caused by the defendant’s actions, necessitating an assessment of whether the breach was material. The court referred to Restatement of Contracts § 275 to eval‎uate the total breach considerations and determined that the plaintiff’s repeated nonperformance was willful and grossly negligent. Consequently, the plaintiff’s nonperformance was deemed a total breach, and the uncertainty of future performance indicated that the defendant was not required to endure such uncertainty. Similar to Coughlin v. Blair, the defendant was not obligated to await the plaintiff’s convenience, and the repudiation was justified. Thus, the court found the defendant’s repudiation of the contract lawful and concluded that the plaintiff’s nonperformance justified the defendant’s actions.

5. Conclusion

The judgment is affirmed. Repudiation of a contract is justified when the other party has materially breached the contract. A material breach significantly undermines the contract's value and purpose, giving the non-breaching party the right to terminate the contract and seek remedies.

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SACKETT  본인이 계약 이행하지 않았는데 소제기.

계약내용을 분할

계약당사자가 상대방이 material breach했을 때 cancel가능.

 한 번만 신용카드 대금 미납했을 때 신용카드

취소 안됨. 계속 연체 하고,, 이것이 material인지 심사부터.

11. HARRELL v. SEA COLONY, INC  Maryland Court of Appeals 35 Md. App. 300, 370 A.2d 119 (1977)

MELVIN, J., delivered the opinion of the Court.

1. Facts

Harrell entered into a contract with Sea Colony to buy a condominium, paying a deposit and providing a promissory note for the balance. Sea Colony asked Harrell in April to choose an attorney's office for the closing, but Harrell did not respond. In May, Harrell requested to assign or cancel the contract but was initially told he could not, though he later received a cancellation request form in July. Harrell returned the form with a statement making cancellation contingent on receiving his deposit back. In August, Sea Colony sold the unit to another party and informed Harrell they accepted his cancellation but would keep his deposit, sending back his promissory note and the altered cancellation form. Harrell filed suit in November for anticipatory breach, claiming Sea Colony and Freeman had repudiated the contract. The trial court ruled Harrell had unilaterally canceled the contract, awarding relief to Sea Colony and Freeman. Harrell appealed to the Court of Special Appeals of Maryland.

2. Issues

Whether Sea Colony, Inc. breached the contract or if there was a mutual rescission of the contract between Harrell and Sea Colony, Inc.

3. Rule

In 6 Corbin, Contracts, § 973: "In order to constitute an anticipatory breach of contract, there must be a definite and unequivocal manifestation of intention on the part of the repudiator that he will not render the promised performance when the time fixed for it in the contract arrives. Doubtful and indefinite statements that the performance may or may not take place and statements that, under certain circumstances that in fact do not yet exist, the performance will not take place, will not be held to create an immediate right of action. A mere request for a change in the terms or a request for cancellation of the contract is not in itself enough to constitute a repudiation."

4. Application

Plaintiff (Harrell) claimed Sea Colony repudiated the contract by selling the condominium to another buyer, seeking damages for anticipatory breach. Defendant (Sea Colony) argued that Harrell unilaterally canceled the contract and that they were justified in retaining the deposit and selling the unit to a third party. The trial court initially ruled that Harrell unilaterally canceled the contract, allowing Sea Colony to retain the deposit and resell the unit. The Court of Special Appeals found the evidence insufficient to support the trial court’s conclusion that Harrell breached the contract. Harrell's actions, including not responding to settlement location letters and requesting contract assignment or cancellation, did not amount to a definite and unequivocal refusal to perform. Sea Colony's actions in accepting the cancellation request and reselling the unit were interpreted as a unilateral attempt to convert Harrell’s request into an anticipatory breach. The trial court did not adequately address whether Sea Colony's actions constituted a breach or if a mutual rescission occurred. The Court of Special Appeals vacated the judgment regarding Sea Colony and remanded the case for further proceedings to determine if there was a breach by Sea Colony or a mutual rescission.

 5. Conclusion

Judgment for Carl M. Freeman Associates, Inc. was affirmed. Judgment for Sea Colony, Inc. was vacated and the case was remanded to determine the proper context of Sea Colony’s actions, focusing on whether there was a breach or mutual rescission. Sea Colony, Inc. was ordered to pay the costs.

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이행하지 않겠다는 명백한 의지 표시는 계약이행 의지 없다고 보고

Cancel 기회 줌. 공평한 계약관계를 위해서.

계약위반한자 손해배상해야.

위반하지 않은 자는 위반한 자에게  material 위반이면 cancel 가능 혹은 손해배상 요구가능.

Minor breach는 cancel은 안되고 손해배상청구 가능.

원상회복 + damage

12. KEMP v. GANNETT  Illinois Court of Appeals 50 Ill. App. 3d 429, 365 N.E.2d 1112 (1977)

1. Facts

William Kemp is a contractor who built the single-family home in question, and Gannett is a realtor. Kemp agreed with Gannett to relist the home if it remained unsold after 90 days, with the condition that Gannett would purchase it himself if not sold within that period. Additionally, Gannett agreed to cover mortgage payments during the subsequent 90-day listing. However, Gannett did not purchase the home, and despite Kemp's efforts, the house was eventually sold for less than the contracted price.

2. Issues

Whether the market value on the date of the breach was unavailable or not, the resale price can serve as a substitute in the calculation of appropriate damages for the failure to sell a house.

3. Rule

* 92 C.J.S. Vendor and Purchaser § 537(c)(1) (1955) and Dickson v. Turner (1909), 149 Ill. App. 394: The general principle is that the plaintiff's damages consist of the difference between the contract price and the market price at the time of the breach

* Mahoney v. Tingley (1974), 10 Wash. App. 814, 520 P.2d 628, and Warner v. Wilkey (Mass. App. 1974), 307 N.E.2d 847 : The purpose of damages is to restore the plaintiff to the position they would have been in if the contract had been fulfilled, as affirmed in Anderson v. Long Grove Country Club Estates (1969), 111 Ill. App.2d 127, 249 N.E.2d 393.

4. Application

Kemp asserts that Gannett breached the contract and seeks damages, arguing that the amount of damages awarded should be higher. Gannett argues that the calculation of damages was incorrect and that certain evidence was improperly admitted. The trial court found that the resale price obtained by Kemp after diligent efforts represented the fair market value, supporting the principle that resale price can indicate market value at the time of the breach. The court determined that Kemp should be reimbursed for various expenses incurred during the period from the expiration of the listing agreement to the resale, including real estate taxes, resale-related expenses, and mortgage payments with interest. Recognizing that the purpose of damages is to restore the plaintiff to the position they would have been in if the contract had been performed, the court concluded that interest costs and taxes accrued during the breach period should be compensated. While the court rejected the claim for realtor's commission, it allowed recovery for utility costs incurred to maintain the property for viewing. The court rejected the defendant's argument regarding the admissibility of certain evidence, affirming the admission of letters from plaintiff's attorneys as relevant to Kemp's intent.

5. Conclusion

The judgment in favor of the plaintiff is affirmed, but the case is remanded for the recomputation of damages.

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Damage 계산:

80,000불 집값 다른 사람에게 7만불(sale price)에 팜.

시세 (market price) : 78,000불

Utility : 3000불

Tax: 1500불.

Attorney fee: 3000불 and cost : 1000불.

총 손해배상액: 16500불 vs 18500불

원고측 contract price- sale price

피고측 contract price – market price. (원칙)

13. HADLEY v. BAXENDALE  Court of Exchequer 156 Eng. Rep. 145 (1854)

1. Fact

Hadley operated a corn mill in Gloucester, where a broken crank shaft halted all operations. To get a new shaft, Hadley needed to ship the old one to Joyce & Co. in Greenwich. Hadley hired Pickford & Co., owned by Baxendale, for the shipping and was promised next-day delivery. Hadley delivered the shaft to Pickford before noon as required and paid in full. Pickford negligently delayed the shipment, causing the new shaft to arrive several days late, keeping the mill closed. Hadley sued Baxendale for damages, including lost profits; the jury awarded these damages, but Baxendale appealed.

2. Issues

Whether the plaintiffs could recover lost profits resulting from the defendants' delay in delivering the broken shaft.

3. Rule

* The general rule is that plaintiff's damages are the difference between the contract price and the market price on the date of the breach. (92 C.J.S. Vendor and Purchaser § 537(c)(1) (1955)

* Resale price, if within a reasonable time and at the highest price obtainable after breach, is evidence of market value on the day of the breach. (Mahoney v. Tingley (1974))

* The purpose of damages is to put the party into the position he would have been had the contract to buy been performed. (Anderson v. Long Grove Country Club Estates (1969))

4. Application

Hadley claimed damages for lost profits due to the delayed delivery of the crank shaft caused by Pickford & Co.'s negligence. Baxendale argued that they should not be liable for lost profits as they were not aware of the specific circumstances causing the loss. The court applied the general rule that the plaintiff's damages are the difference between the contract price and the market price on the date of the breach (92 C.J.S. Vendor and Purchaser § 537(c)(1) (1955)). The resale price, if made within a reasonable time and at the highest price obtainable after the breach, serves as evidence of the market value on the day of the breach (Mahoney v. Tingley (1974)). This ensures that the resale price accurately reflects the market conditions at the time of the breach. The purpose of awarding damages is to put the injured party in the position they would have been in had the contract been performed as agreed (Anderson v. Long Grove Country Club Estates (1969)). This principle aims to ensure fairness and compensation for losses directly resulting from the breach. Based on these principles, the court reasoned that Hadley was entitled to damages reflecting the difference between the contract price and the market price on the breach date. This compensation aimed to restore Hadley to the financial position they would have occupied if the shipping contract had been fulfilled without negligent delay.

5. Conclusion

Reversed and remanded. (The plaintiffs could not recover lost profits resulting from the defendants' delay in delivering the broken shaft, as the defendants were not made aware of the special circumstances that would result in such losses.)

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매매계약 이뤄짐.

계약위반으로 손해배상 청구한 사건.

계약 성립되었는지 먼저 확인 .

Delivery 업체와 운송계약체결됨. 몇월 몇일 몇시까지 운송하기로 하는 등 구체적으로 규정해야. 계약위반은 인정하나 액수가 많다~

하급심에서 어떻게 됨? 251파운드로 계산. 새로운 재판이 있어야 한다~

웬만하면 배심원의 결정을 뒤집지 않음.

14. ROCKINGHAM COUNTY v. LUTEN BRIDGE CO.  United States Court of Appeals 35 F.2d 301 (4th Cir. 1929) PARKER, Circuit Judge.

1. Facts

On January 7, 1924, Rockingham County (defendant) hired Luten Bridge Co. (plaintiff) to construct a bridge. The decision was made with three commissioners in favor and two opposed. After the contract was formed, a commissioner who supported the project resigned and was replaced by a commissioner who opposed it. On February 21, 1924, the commissioners passed a resolution declaring the bridge contract unenforceable and informed Luten of their decision. The County directed Luten to stop construction, warning that any further work would be at Luten's own risk and expense. Despite this, Luten continued and completed the bridge, having already performed approximately $1,900 worth of work at the time of the notice. Luten sued the County for the contract price, the trial court ruled in favor of Luten, and the County appealed.

2. Issues

Whether a non-breaching party has a duty to mitigate damages stemming from the other party’s breach.

3. Rule

* The rule is well settled that the governing board of a county can act only as a body and when in legal session as such. 7 R. C. L. 941; 15 C. J. 460.

* In Duke v. Markham, which is, of course, the well-settled rule in the case of private corporations, viz. that such officials can exercise their powers as members of the governing board only at a meeting regularly held.

* "It is well-established law that, in the absence of express statutory enactment, the authority to accept the resignation of a public officer rests with the power to appoint a successor to fill the vacancy. The right to accept a resignation is said to be incidental to the power of appointment. 1 Dillon on Municipal Corporations (3d Ed.) § 224

* Williston on Contracts, vol. 3, p. 2347 : "There is a line of cases running back to 1845 which holds that, after an absolute repudiation or refusal to perform by one party to a contract, the other party cannot continue to perform and recover damages based on full performance. This rule is only a particular application of the general rule of damages that a plaintiff cannot hold a defendant liable for damages which need not have been incurred; or, as it is often stated, the plaintiff must, so far as he can without loss to himself, mitigate the damages caused by the defendant's wrongful act.

* Novelty Advertising Co. v. Farmers' Mut. Tobacco Warehouse Co., 186 N. C. 197, 119 S. E. 196, 198:

"While a contract is executory a party has the power to stop performance on the other side by an explicit direction to that effect, subjecting himself to such damages as will compensate the other party for being stopped in the performance on his part at that stage in the execution of the contract. The party thus forbidden cannot afterwards go on, and thereby increase the damages, and then recover such damages from the other party. The legal right of either party to violate, abandon, or renounce his contract, on the usual terms of compensation to the other for the damages which the law recognizes and allows, subject to the jurisdiction of equity to decree specific performance in proper cases, is universally recognized and acted upon."

4. Application

The plaintiff argued that they are entitled to damages for the full performance despite the defendant’s unlawful rescission of the contract. The defendant claimed that they cannot be held responsible for the work done after the plaintiff received the notice of rescission, as the plaintiff continued the work even after the notification. The court ruled that the defendant did not have the right to unilaterally rescind the contract. However, the court also found that the plaintiff is not permitted to continue the work and increase the damages after receiving the notice of rescission. This decision is based on the principle that even if the defendant does not have the right to rescind the contract, the plaintiff must make efforts to mitigate the damages. The plaintiff is entitled only to the damages incurred up to the point of receiving the breach notice. After receiving the notice, the plaintiff has a duty to avoid increasing the damages. In other words, the plaintiff does not have the right to ignore the defendant’s notice of rescission and continue the work. This aligns with the general principle of contract law that damages should be minimized. In this case, since the defendant decided not to proceed with the road construction, building a bridge in the middle of the forest was deemed pointless. Therefore, the plaintiff is not allowed to continue such a futile project and increase the damages to the defendant. The plaintiff cannot recover damages for work done after receiving the notice of rescission, as the plaintiff failed to fulfill the duty to minimize damages.

5. Conclusion

Reversed. (A non-breaching party typically has a duty to mitigate damages stemming from the other party’s breach. This duty arises from the principle of mitigation of damages, which is a fundamental concept in contract law.)

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건축 계약 맺음.

노동력 + 원자재.

Material + profit

부당해고 Bad faith – mental suffering 인정 소극적.

Natural result : a "natural result" is an outcome that naturally flows from an act or condition, typically without the influence of an independent, unforeseen cause.

 계약을 더 이상 이행하지 않겠다 – material breach.

Breach - useful인지 useless인지 파악 해야 하는가.

       -notice 이후 실비 인정 안함. cancel무시하고 지었기 때문에.

      - notice이후 괜찮게 만들었다면 실비 인정? 다리 유용성 있다면 damage안생겼다면 실비 인정.  Quantum Meruit

15. BUNNETT v. SWALLWOOD  Supreme Court of Colorado, En Banc 793 P.2d 157 (1990) Justice MULLARKEY delivered the Opinion of the Court.

1. Facts

Bunnett and Smallwood co-founded Bunnett/Smallwood & Co., Inc., a company engaged in buying and selling fertilizer, feed supplements, and hay. However, in 1984, Smallwood resigned from the company and started another business. Bunnett sued Smallwood, alleging that Smallwood obtained certain materials by misrepresentation while still an officer of Bunnett/Smallwood. The two agreed to settle their disputes by Smallwood transferring his company stock to Bunnett to end the "hassle." Subsequently, Bunnett filed two more lawsuits against Smallwood, despite their previous agreement. Although Smallwood successfully defended himself in court, he was not awarded attorney fees or litigation costs.

2. Issues

Whether Smallwood, as the defendant in the lawsuit, should be entitled to reimbursement for attorney fees and litigation costs incurred as a result of Bunnett filing a series of lawsuits despite Smallwood transferring his stock to Bunnett to resolve their disputes.

3. Rule

* Alyeska Pipeline Serv. Co. v. Wilderness Soc'y, 421 U.S. 240, 247, 95 S.Ct. 1612, 1616-17, 44 L.Ed.2d 141 (1975): In the absence of a statute or private contract to the contrary, attorney fees and costs generally are not recoverable by the prevailing party in a breach of contract case. (Attorney fees and litigation costs can only be reimbursed if there is a contractual, statutory, or regulatory authority for such reimbursement; otherwise, it is inappropriate to award attorney fees to a non-contracting party.)

* Rocky Mountain Ass'n of Credit Mgmt. v. Hessler Mfg. Co., 37 Colo. App. 551, 553 P.2d 840 (1976).:  a release is an agreement to which general contractual rules of interpretation and construction apply.

4. Application

The plaintiff argued that attorney fees should be recognized as damages, despite the lawsuit being barred due to a no-sue agreement. However, the court ruled that attorney fees are not recognized as damages in cases of contractual breach, and that precedent allowing attorney fees and costs for breaching an out-of-court agreement is not recognized without separate contractual, statutory, or regulatory authority. The plaintiff contended that attorney fees should be recognized as damages, but the court rejected this, ruling that damages should not be recognized as litigation expenses. Ultimately, the court concluded that attorney fees and costs cannot be recognized as damages when the lawsuit is dismissed on the grounds that it was initiated due to a breach of the settlement agreement by the defendant.

 5. Conclusion

The judgment of the court of appeals is reversed on this issue, with directions to remand to the trial court for dismissal of the counterclaim in accord with this opinion.

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변호사 비용을 어떻게 할 것인가?

Attorney fee -X(rule)

이 케이스에서 fact를 봐야 하는 이유는? 예외적으로 attorney fee지급

예외적으로 attorney fee지급: 

계약서상 들어있거나, rule statute나와있거나, attorney fee가 subject matter인경우, bad faith인경우

16. WARTZMAN v. HIGHTOWER PRODUCTIONS LTD.  Court of Special Appeals of Maryland 53 Md. App. 656, 456 A.2d 82 (1983)

GETTY, J., delivered the opinion of the Court.

1. Facts

Hightower Productions hired attorney Wartzman to set up a corporation for a venture to break the Guinness World Record for sitting atop a flagpole. Wartzman failed to properly structure the corporation, leading to non-compliance with securities laws. Hightower incurred expenses due to Wartzman's negligence and sought damages in court, which were awarded by a jury. The law firm appealed the decision, contesting the damages. Hightower filed a cross appeal, seeking prejudgment interest.

2. Issues

Whether Judge Robert L. Karwacki correctly allowed a jury to consider "reliance damages" claimed by Hightower Productions LTD. (the appellees) and whether prejudgment interest should have been considered.

3. Rule

Restatement of Contracts, Sec. 333 :  "where anticipated profits are too speculative to be determined, monies spent in part performance, in preparation for or in reliance on the contract are recoverable."

4. Application

Hightower argued that it was appropriate for the jury to consider "reliance damages" based on Judge Robert L. Karwacki's decision, while asserting that prejudgment interest should not have been considered. The law firm contended that they were not responsible for ensuring the success of Hightower's project and therefore should not be obligated to pay reliance damages. The court accepted Hightower's argument, ruling that the law firm's negligence contributed to the project's failure and thus they should compensate for reliance damages. Accordingly, it was appropriate to allow the jury to consider reliance damages. Prejudgment interest was deemed unnecessary for consideration by the jury as it was considered an uncertain loss that couldn't be calculated in advance.

 5. Conclusion

Affirmed. (The court's judgment deemed it appropriate for the jury to consider "reliance damages," while prejudgment interest should not have been considered.)

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Memorandum – fact, issue, rule, apply 고객에게 제출.

프로젝터 25만불 필요하나 주식 투자자 모집에 관한

조언을 제대로 하지 않아 손해배상액을 청구하는 소송.

Damage: actual damage + reliance damage=profit(정의와 산정방법 중요)

Reliance damage"는 "신뢰 손해". 신뢰 손해는 계약 당사자가 계약을 신뢰하여 지출한 비용이나 입은 손해를 보상받기 위해 청구하는 손해입니다. 이는 주로 계약이 이행되지 않았을 때 발생합니다.

계약위반없이 손해배상 없다.

Expenditure(프로젝트 하면서 들어간 비용)

17. UNITED STATES EX REL. COASTAL STELL ERECTORS, INC. v. ALGERNON BLAIR, INC.  United States Court of Appeals 479 F.2d 638 (4th Cir. 1973)

CRAVEN, Circuit Judge:

1. Facts

Subcontractor Coastal Steel Erectors, Inc. (Coastal) sued Algernon Blair (Blair) under the Miller Act for unpaid crane rental fees. Blair had contracted with Coastal for steel erection and equipment supply for a naval hospital project. Blair refused to pay for the crane rental, leading Coastal to stop work. Blair then hired another subcontractor to complete the job. The court denied Coastal's claim, stating Coastal would have incurred more losses if it had finished the project, and Coastal appealed the decision.

2. Issues

Whether a subcontractor, who justifiably ceases work under a contract due to the prime contractor's breach, may recover in quantum meruit the value of labor and equipment already furnished pursuant to the contract, irrespective of whether they would have been entitled to recover in a suit on the contract.

3. Rule

* United States for Use of Susi Contracting Co. v. Zara Contracting Co., 146 F.2d 606 (2d Cir. 1944) "For it is an accepted principle of contract law, often applied in the case of construction contracts, that the promisee upon breach has the option to forego any suit on the contract and claim only the reasonable value of his performance." (146 F.2d at 610)

*Restatement of Contracts § 347 (1932) "The measure of recovery for quantum meruit is the reasonable value of the performance."

* Scaduto v. Orlando, 381 F.2d 587, 595 (2d Cir. 1967) : "The impact of quantum meruit is to allow a promisee to recover the value of services he gave to the defendant irrespective of whether he would have lost money on the contract and been unable to recover in a suit on the contract."

4. Application

The plaintiff, Coastal Steel Erectors, Inc., argued that Blair's failure to pay crane rental fees was a material breach of contract, entitling them to recover the value of labor and equipment provided under quantum meruit. The defendant, Algernon Blair, Inc., claimed they were not obligated to pay for the crane rental and that Coastal was not entitled to additional payment since they did not complete the contract. The court agreed with Coastal that Blair's refusal to pay constituted a material breach of contract. The district court denied recovery to Coastal, stating they would have incurred greater losses had they completed the contract. The appellate court determined that Coastal could recover the reasonable value of the labor and equipment provided under quantum meruit. The court cited United States for Use of Susi Contracting Co. v. Zara Contracting Co., emphasizing that a subcontractor can claim the reasonable value of their performance upon breach. Thus, the appellate court reversed and remanded the case, instructing the district court to determine the reasonable value of Coastal's services and deduct any payments already made.

5. Conclusion

Reversed and remanded with instructions.

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Natural damage

Incidental

Consequential

Expectation.

Material breach

 계약을 깰정도로 약속 어겼으니 용서하거나 안해주거나.

  용서해주면 cancel안함. 손해배상은 해도되고 안해도 되고.

  용서안하면 cancel하고 손해배상하기(damage청구).

계약금액 10만불. 이미 지급받은 금액 3만불. 못받은 금액 7만불.

Profit  -인 경우 인정하지 않음. 37000불투자비용

+/- 40000불.

Profit이 -인 경우 Quantum Meruit 합당한 보수" 또는 "합당한 가치에 들어가서

이윤생기지 않는 경우라도 인정해줄 수 있음.

18. CITY STORES CO. v. AMMERMAN  United States District Court 266 F. Supp. 766 (D.D.C. 1967), aff’d, 394 F.2d 950 (D.C. 1968)

1. Facts

Ammerman intended to build a shopping center, Tyson's Corner, on land not zoned for such use. City Stores, during negotiations for a lease at another location, was asked by Ammerman to assist in obtaining zoning approval by providing a letter of intent to become a tenant. City Stores provided the letter in exchange for Ammerman's promise to lease them a major store site on equal terms with other major department stores. Ammerman secured the rezoning but refused to lease the site to City Stores, instead negotiating with Sears for the final store site. Ammerman argued that leasing to Sears would be more profitable. City Stores sued in the U.S. District Court for the District of Columbia, seeking specific performance of the agreement.

2. Issues

Whether there is a valid and sufficiently definite contract between City Stores Company and the defendants regarding the lease of a major store site in the Tyson's Corner shopping center.

3. Rule

* "A court of equity has jurisdiction to enforce specific performance of a contract by a defendant to do defined work upon his own property, in the performance of which the plaintiff has a material interest, and which is not capable of adequate compensation in damages..." - Morris v. Ballard, 56 App. D.C. 383, 16 F.2d 175, 49 A.L.R. 1461

* "Assuming the prior contract, defendant's obligations under it had been fixed at the moment plaintiff performed the services requested. The contract could not be modified later by a writing which was unsupported by new consideration, in view of plaintiff's full performance." - Murray v. Lichtman, 119 U.S. App. D.C. 250, 339 F.2d 749 (1964)

* "The mere fact that a contract, definite in material respects, contains some terms which are subject to further negotiation between plaintiff and defendant will not bar a decree for specific performance, if in the court's discretion specific performance should be granted." - Morris v. Ballard, 56 App. D.C. 383, 16 F.2d 175, 49 A.L.R. 1461)

* "There is no universal rule that courts of equity never will enforce a contract which requires some building to be done. They have enforced such contracts from the earliest days to the present time." - Jones v. Parker, 163 Mass. 564, 40 N.E. 1044 (1895)

 4. Application

The plaintiff contends that the defendant's promise constitutes an option contract, while the defendant argues that the agreement lacks enforceability due to its indefinite nature. By performing the service requested by the plaintiff, the defendant became bound by a unilateral contract. Despite specific conditions or unresolved matters, the contract remains valid and not overly ambiguous. In this case, the principle of unilateral contract applies, thereby providing the plaintiff with a lease option from the defendant. The plaintiff, by performing the service, incurred contractual obligations with the defendant. The defendant retaining an obligation to perform for the plaintiff indicates the formation of a unilateral contract. Specific performance is deemed the appropriate remedy to ensure certain outcomes in this case. Even if fulfilling this contract poses difficulties for the defendant, such hardships do not justify contract refusal.

5. Conclusion

Judgment for the Plaintiff. (There is a valid and sufficiently definite contract between City Stores Company and the defendants regarding the lease of a major store site in the Tyson's Corner shopping center.)

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토론 – 순발력 + 지식

Ammerman은 배신한 행위에 대한 법적 근거 있나?

Option contract? : 자신이 구속되는 약속을 한 것. 90일내 변심 X

 Offer은 언제든지 revoke 가능.

Ammerman 은 Option contract 아니다고 주장.

 조건성취를 전제로 한 약속.

계약에 Material fact빠지면 효력 없음.

Option contract아니다라고 하면 binding 되지 않음.

City Stores Co. 는 Acceptance 했나? Offer만 있었고 acceptance가 없음. 그래도 한쪽만의 약속만으로도 계약 성립되는 것 – option contract가능.

Offer에 material fact가 있는가?

Consideration 있음.

Option contract 인정됨.

Breach of contract – 이 사건은 damage 청구안하고 계약취소라는 강제이행을 청구함.

Majority case (rule), minority rule 구별하기. Specific performance에 인간의 구체적인 행위를 요구하는 것은 안됨(피아노 연주 등)

19. COLONIAL AT LYNNFIELD, INC. v. SLOAN  United States Court of Appeals 870 F.2d 761 (1st Cir. 1989) COFFIN, Circuit Judge.

1. Facts

Colonial at Lynnfield, Inc. (Colonial) agreed to sell a 49 percent interest in its Hilton Inn to Colonial Associates (Associates) for $3,375,000, with a $200,000 liquidated damages clause for buyer default. The closing date was set for June 1, 1981, but Associates requested an extension on May 29 due to financing issues, which Colonial refused, leading to a breach. In September 1981, Colonial sold a 50 percent interest to Lincoln National Development Corporation for $3.7 million, with a contingency for a 49 percent sale at $3,626,000 if the mortgage holder disapproved. Colonial sued for the $200,000 liquidated damages from Associates. The district court ruled in favor of Colonial. Associates appealed the decision.

2. Issues

Whether Hooters' employment practices violated federal and state wage laws by failing to pay employees for off-the-clock work and failing to distribute tips properly.

3. Rule

* Security Safety Corp. v. Kuznicki, 350 Mass. 157, 158, 213 N.E.2d 866, 867 (1966): The amount of liquidated damages specified in a contract must be reasonably related to the anticipated or actual loss caused by the breach.

* Lynch, 20 Mass.App. at 627, 481 N.E.2d at 1386: A provision setting an unreasonably large liquidated damages amount is unenforceable on public policy grounds as a penalty.

* Massachusetts law clearly envisions a retrospective appraisal of a liquidated damages provision in certain circumstances. If the actual damages turn out to be "easily ascertainable," a court must consider whether the stipulated sum is "unreasonably and grossly disproportionate to the real damages from a breach," A-Z Servicenter, Inc., 334 Mass. at 675, 138 N.E.2d at 268; Lynch, 20 Mass.App. at 627, 481 N.E.2d at 1386; Security Safety Corp., 350 Mass. at 158, 213 N.E.2d at 867; Warner, 2 Mass.App. at 799, 307 N.E.2d at 849.[6] If so, the liquidated damages provision will be deemed unenforceable as a penalty, and "the court will award the aggrieved party no more than his actual damages." A-Z Servicenter, 334 Mass. at 675, 138 N.E.2d at 268

4. Application

The plaintiff argued that the liquidated damages clause specified in the contract was valid, while the defendant contended that the clause was excessively disproportionate to the actual damages and thus constituted a penalty. The court found that the amount of liquidated damages specified in a contract must be reasonably related to the anticipated or actual loss caused by the breach(Security Safety Corp. v. Kuznicki). A provision setting an unreasonably large liquidated damages amount is unenforceable on public policy grounds as a penalty(Lynch). Massachusetts law clearly envisions a retrospective appraisal of a liquidated damages provision in certain circumstances. If the actual damages turn out to be easily ascertainable, a court must consider whether the stipulated sum is unreasonably and grossly disproportionate to the real damages from a breach【A-Z Servicenter, Inc.; Lynch; Security Safety Corp.; Warner】. If the liquidated damages are unreasonably and grossly disproportionate to the actual damages, the provision will be deemed unenforceable as a penalty. In such cases, the court will award the aggrieved party no more than their actual damages(A-Z Servicenter, Inc.).

 5. Conclusion

The court concluded that the liquidated damages clause was unenforceable as it was excessively disproportionate to the actual damages and constituted a penalty.

*Feedback

Offer, acceptance 있음.

Breach of contract damage ?

원고가 제3자에게 호텔 지분 팔았다면

계약위반 성립되나?

Notice 12월 19일까지 하기로 했는데 12월 17일 제3자에게 판 경우

손해배상청구 했음. 20만불.

25만1000불

Liquidated Damages : punishment 성격 없음.

20. GUY v. LIEDERBACH

1.    Facts

Edward J. Kent hired Harry J. Liederbach to draft a will, naming Frances E. Guy as the beneficiary of the residuary estate and executrix. Liederbach negligently asked Guy to witness the will, which invalidated her inheritance under New Jersey law, causing her to lose $45,000 worth of property. After Kent's death, Guy was appointed as executrix but was barred from inheriting because she was a subscribing witness. Guy sued Liederbach for negligence, but the Common Pleas Court dismissed the suit, citing the lack of an attorney-client relationship. The Superior Court reversed this decision, applying the California rule from Lucas v. Hamm, allowing negligence claims even without a direct attorney-client relationship. Liederbach argued that the absence of an attorney-client relationship barred any malpractice action.

2.    Issues

Whether the police officers' failure to announce their presence before forcibly entering the plaintiff's residence violated the plaintiff's Fourth Amendment rights.

3. Rule

* Restatement (Second) of Contracts § 302 (1979) states: § 302. Intended and Incidental Beneficiaries

(1) Unless otherwise agreed between promisor and promisee, a beneficiary of a promise is an intended beneficiary if recognition of a right to performance in the beneficiary is appropriate to effectuate the intention of the parties and either

(a) the performance of the promise will satisfy an obligation of the promisee to pay money to the beneficiary; or (b) the circumstances indicate that the promisee intends to give the beneficiary the benefit of the promised performance.

(2) An incidental beneficiary is a beneficiary who is not an intended beneficiary.

* Lawall v. Groman, supra, relying on the principle that one who undertakes to perform a service for another, even without reward, is bound to exercise reasonable care and can be held responsible for misfeasance, though not for nonfeasance, stated that a third party could bring suit against an attorney in a negligence action if the attorney knew that the third party "was relying on him in his professional capacity."

4. Application

The plaintiff asserts that the defendant failed to provide the goods as stipulated in the contract, thus demanding damages for breach of contract. The defendant contends that the plaintiff breached the contract conditions, therefore arguing that he is not obligated to fulfill the contract.

The court reviewed the terms of the contract and determined that the defendant is obligated to provide the goods. The conditions stipulated in the contract are clear, and the defendant's argument lacks sufficient grounds to deny them. The defendant's claim that the plaintiff breached the contract lacks specific evidence.

It can be confirmed that all of the plaintiff's obligations under the contract were fulfilled. The defendant breached the contract by failing to provide the goods as agreed. Therefore, the plaintiff is entitled to damages for the breach of contract. The court ruled that the defendant must pay monetary compensation to the plaintiff.

5. Conclusion

The order of Superior Court is affirmed in part and reversed in part, and this case is remanded to the Court of Common Pleas of Bucks County for further proceedings in accordance with this opinion.

*Feedback

계약위반에 대해서 소송제기 할 수 있는자.: 계약당사자

예외는 제3자가 가능.

이 사건에서 제3자(Guy)가 breach of contract가능?

Client 는 이 사건에서 이미 사망함.

(Torts는 제3자 아니어도 소송제기 가능. )

계약에 의해 제3자 계약수익자도 소송제기가능.

Restatement second 302

21. HERZOG v. IRACE  Maine Supreme Court 594 A.2d 1106 (Me. 1991)

BRODY, Justice.

1. Facts

Gary G. Jones, represented by Irace, assigned settlement proceeds to Dr. Herzog for medical treatment. Irace distributed the settlement funds to other creditors despite this assignment, leading to Herzog's lawsuit. Irace contended that Jones retained control and enforcing the assignment would breach ethical obligations. The district and appellate courts ruled in favor of Herzog. Irace appealed to the Supreme Judicial Court of Maine.

2. Issues

Whether future proceeds from pending litigation can be validly assigned to a third party

3. Rule

* In Maine, the transfer of a future right to proceeds from pending litigation has been recognized as a valid and enforceable equitable assignment. McLellan v. Walker, 26 Me. 114, 117-18 (1896).

*An assignment is an act or manifestation by the owner of a right (the assignor) indicating his intent to transfer that right to another person (the assignee). See Shiro v. Drew, 174 F.Supp. 495, 497 (D.Me.1959).

* Under the Maine Bar Rules, an attorney generally may not place a lien on a client's file for a third party. M.Bar R. 3.7(c). The Bar Rules further require that an attorney "promptly pay or deliver to the client, as requested by the client, the funds, securities, or other properties in the possession of the lawyer which the client is entitled to receive." M.Bar R. 3.6(f)(2)(iv).

4. Application

Dr. John P. Herzog, the plaintiff, prevailed in a lawsuit against Anthony Irace and Donald Lowry, the defendants, for breach of an assignment of personal injury settlement proceeds, with the Superior Court affirming the District Court's judgment. The defendants contended that the assignment was invalid and unenforceable, arguing that its enforcement would impede their ethical obligations to their client.

The court first acknowledged the legal principle that the transfer of a future right to proceeds from pending litigation is valid and enforceable under Maine law, citing McLellan v. Walker (1896). Additionally, the court defined an assignment as an act or manifestation by the owner of a right indicating the intent to transfer that right to another person, referencing Shiro v. Drew (1959). Moreover, under the Maine Bar Rules, attorneys are generally prohibited from placing liens on a client's file for third parties, and are required to promptly pay or deliver funds to the client as requested, as per M.Bar R. 3.7(c) and M.Bar R. 3.6(f)(2)(iv). Considering these legal principles, the court affirmed that the assignment could be enforced against the attorneys, emphasizing that it did not cause undue prejudice to other creditors and did not violate ethical obligations. Thus, the court upheld the lower court's decision.

5. Conclusion

Judgment affirmed. (Future proceeds from pending litigation can be validly assigned to a third party under Maine law.)

*Feedback

채권양도

약속 있는 당사자가 아닌 변호사가 소제기 가능?

patient 와 doctor가 맺은 계약이 양도계약.

변호사에게 받을 돈을 의사에게 주겠다~

변호사가 이 사실을 모르면? 채권양도 효력 없음(변호사가 모르면)

이 사안에서는 변호사가 알았음.

Lawyer가 patient에게 돈을 지불하면 doctor가 lawyer에게 소제기.

Original creditor (patient) 위한 것이 아니라 의사 위한 것이라는

변호사가 notice받은 후 법적으로 patient에게 줄 수 없음. 

lawyer의사에게 다시 지불 후 patient에게 다시 받아야 함.