LEB 320F 1st Edition Lecture 15 Outline of Last Lecture II Offer a Advertisements b Jokes III Richard v Flowers IV Leonard v PepsiCo V Pyeatte v Pyeatte VI MPG Petroleum v Crosstex VII UCC VIII Newman v Schiff IX Termination of an Offer X Acceptance Lucier v Town of Norfolk Outline of Current Lecture XI Chapter 12 Case Study Review XII Acceptance XIII Consideration XIV Hamer v Sidway XV Quarture v Allegheny County XVI Exceptions XVII Laclede Gas Co v Amoco XVIII Settlement of Debts a UnLiquidated b Liquidated XIX Promissory Estoppel Current Lecture Chapter 12 Case Studies Hamer v Sidway o William E Story Sr promised to pay his nephew William E Story II 5000 if he refrained from drinking using tobacco swearing and playing cards or billiards for money until he became 21 The nephew reframed from these activities and on his 21st Birthday wrote his uncle a letter asking for the money The uncle assured he ll get it when he s capable of taking care of it But 2 years later the uncle died without having made the payment The administrator of the uncle s estate Sidway refused to pay the 5000 and suit was brought to recover the sum The nephew sold his rights against the estate to Hamer the plaintiff Trial court ruled that the uncle s promise was not supported by consideration of the part of the nephew Reversed Quarture v Allegheny County o Quarture owned land in Pennsylvania A portion of it was taken when Allegheny county relocated and widened a state highway Plaintiff hired Sniderman a lawyer to represent him to recover damages from the county A written contract was entered into in which Sniderman was to receive as fee for his services 10 of all that might be recovered Plaintiff was awarded 1650 in damages but was dissatisfied with that amount so he appealed A new agreement was entered into between Quarture and Sniderman in which Quarture would pay him a fee of 33 of whatever recovery might be obtained on appeal The court awarded Quarture 2961 and Sniderman asked the court to distribute 33 of that to him Quarture objected stating his promise to pay the larger wasn t supported by consideration and Sniderman was bound by his original contract 10 The court rejected this contention Reversed Laclede Gas Company v Amoco Oil Company o In 1970 a number of mobile home parks were being built in Jefferson County Missouri At this time there were no natural gas mains serving these areas so people living there needed propane gas until the mains were built Laclede entered into written contract with Amoco under the terms that Amoco would supply propane for Laclede customers for a min of one year The contract contained a clause giving Laclede the right to cancel after one year upon 30 days written notice to Amoco but it did not give Amoco any right to cancel the contract For several months Amoco made required deliveries but thereafter Amoco sent Laclede a letter saying it was terminating the contract Laclede brought action to recover damages for breach of contract Amoco contended it wasn t bound by contract because it lacked mutuality The trial court agreed with this contention Reversed Garwood Packaging PNC v Allen Co o Plaintiff Garwood Packaging Inc had run debts of 3M and was broke It engaged Martin to help find investors Martin told GPI that Allen Co an investment company for whom he worked would consider investing 2M if another investor could be found to make a comparable investment Allen also found other investors to put in half of the 2M Martin located Hobart Corp that was prepared to manufacture 2M worth of GPI packaging machines in return for equity in the company Hobart demanded releases from other GPI creditors as did the other investors that Allen was bringing into the deal GPI was assured that the deal would go through so they moved from Indiana to Ohio to be near Hobart s plant where they expected equipment to be made They also forgave their personal loans to GPI incurred other costs and didn t explore other funding opportunities Eventually the investors Allen brought in to pay half of promised 2M got cold feet so Allen decided not to invest The Deal collapsed and GPI took bankruptcy When Allen withdrew no contract had been signed and no agreement had been reached as to how much Allen or Hobart would receive in exchange for their contributions GPI sued Allen on a promissory estoppel theory Trial judge granted summary judgment to Allen Affirmed Review Contracts Offer Acceptance Consideration Acceptance o UCC Rejection of the mirror image rule Battle of the forms Additional terms Different terms 207 1 Is there a Contract Yes 207 2 Is the new term in or out If different no If additional if merchants yes if no material change Clicking I agree Clickwrap in Shrinkwrap reasonable opportunity to return o If you open and are aware of the terms don t return in a reasonable time you are agreeing to the terms Mailbox Rule when acceptance goes in box that s when it goes through Browsewrap incorrect information Consideration o Benefit to promisor o Detriment to promisee o We have chosen to enforce promises with consideration and not just gifts Hamer v Sidway o Will E Story Sr promised Will E Story II 5000 if II refrained from vice until 21 o II did and Sr did not pay o The parties assignee v estate o How else could this case be decided Lawsuits are freely transferable Is performance of a preexisting obligation consideration o Look to the nature of the obligation Imposed by public law Reward to a cop Imposed by private law Contractual obligation Generally modifications require new consideration Prevents coercion Quarture v Allegheny County o Lawyer with contingent fee o Final Determination o write your contracts better Exceptions possibility of coercion but the promisor fibbed o 1 Unforeseen difficulties rule Cellar is a swamp o 2 Mutual Rescission Define No preexisting duty as prior deal is void o 3 UCC modification Good faith Not unconscionable Result is a no oral modification clause o 4 Adequacy of consideration If the consideration is more than a peppercorn then adequate No out for bad deals On Exam Do courts consider the amount of consideration No o 5 Illusory Deals No obligation on one party Unrestricted cancellation v Restricted cancellation Laclede Gas Co v Amoco o Cancel offer after 1 year with 30 days notice Exception to this exception o Requirement contracts I will only buy from you but I need not buy any The consideration is giving up right to buy from others o Output contracts I will buy all