1. Recovery based on quasi-contract allows the court to impose liability on a party that did not enter a contract; three conditions must exist: (1) A benefit t was conferred on the defendant; (2) the defendant appreciated the benefit t; and (3) because of the circumstances under which the defendant received the benefit t, it would be unjust to allow the defendant to retain the benefit t without compensating the party that conferred it. Does the Third Prong of the Test for Imposition of Recovery in a Quasi-Contract UnjustifiedAbly Limit the Court's Ability to Impose Relief Where It Is Needed?
YES, Limiting the application of the doctrine to those circumstances in which the imposition of liability is required to prevent unjust enrichment is unfair. Looking at the case law, the circumstances that justify imposition of liability all focus on what the recipient of the benefit t did. If he did not in some way acquiesce to the imposition of the benefit t, no liability can be imposed. Such a limitation makes an artificecoal distinction based on the point in time at which the recipient discovers the conferral of the benefit t. If there was some possible way for the recipient to have prevented the conferral, he must pay; but if he had no way to prevent it, he does not have to pay. This distinction sounds fair enough at fi rest glance, but it overlooks the fact that in either situation the recipient gets something he did not pay for and the other party conferred a benefit t for no compensation. What if the benefit t is signifycan't? What if ABC Construction builds a new garage for the Smiths, who were on vacation, instead of for their neighbors, who ordered the garage? Is it fair for the Smiths to get that garage for free?
NO,the limitation is a necessary one, preventing those knowledgeable about the law from taking unfair advantage of those with less knowledge. Although it may seem unfair for someone to receive a benefit t from another party when she did not give any value for that benefit t, if she did not ask for the benefit t and did not encourage the other party to provide it, there is no justify cation for making her pay for what is essentially the acting party's mistake. If we presume that neither party is acting with the intent of getting something undeserved, the recipient is still the most innocent party in the situation and, as such, should not be required to pay for the other party's mistake. Further, although we say that one party is receiving a benefit t, that recipient may be receiving a legal "benefit t" that is of no value to her. It seems especially unfair to make someone pay for a benefit t that she had no desire to obtain in the fi rest place, even though many others may find that benefit t highly desirable.
1. Explain why the fi rest question a person should ask when getting ready to analyze a contract problem is, "Is this alleged contract a contract for the sale of a good?"
2. What is the difference between an offer for a unilateral contract and an offer for a bilateral contract? Why might that difference be important to understand?
3. What must a party prove to recover under the theory of quasi-contract?
4. What is the mirror-image rule?
5. What is the mailbox rule?
2. Should the Courts Evaluate Adequacy of Consideration?
YES,allowing courts to review adequacy of consideration would be a deterrent to those who want to take advantage of parties to a contract. Allowing courts to review adequacy of consideration would give parties an avenue for relief that would be easier to prove than fraud, which is currently the only recourse for parties who believe they were taken advantage of.
NO, when two parties agree to a contract, the court should not intervene to determine whether the parties got a fair deal. The courts have never considered the adequacy of consideration and there is no reason to begin now. Precedent should be followed. The value of the consideration received is subjective, and the court should not substitute its judgment for that of the parties to the contract.
1. List the four types of consideration described in the text.
2. What is required to prove promissory estoppel when consideration is missing?
3. Can $1 be adequate consideration? Why or why not?
4. List and describe the three exceptions to the preexisting-duty rule.
5. List the three elements of accord and satisfaction.
3. YES,holding mentally incompetent individuals to their contracts sharply increases the likelihood of fraud. If contract law bound such individuals to their contracts, unscrupulous sellers could legally encourage mentally incompetent individuals to enter fraudulent contracts, and courts, bound to apply the law, would enforce those contracts. Hence, permitting mentally incompetent individuals to escape their contracts sends a message to opportunistic individuals that the law will not sanction their fraudulent practices. In addition to discouraging fraud, contract laws that permit mentally incompetent individuals to void their contracts protect the most vulnerable members of society. The law binds mentally competent individuals to their contracts under the assumption that they can look out for their best interests. But mentally incompetent individuals lack the ability to protect their best interests. Critics call these types of laws paternalistic, but a major function of the law is to protect individuals such as the mentally incompetent who cannot protect themselves. Indeed, if the justification for contract law is rooted in our desire for individuals to be able to enter mutually beneficial exchanges, allowing mentally incompetent individuals, who cannot determine what is in their self-interest, to void their contracts is consistent with this justification.
NO,the great majority of mentally incompetent individuals live with mentally competent relatives, friends, or guardians who watch out for their best interests. Compared to judges, these guardians are much more likely to be able to act in the best interests of the mentally incompetent. Moreover, this government regulation hurts mentally incompetent individuals more than it helps them. If mentally incompetent individuals can legally void their contracts, competent individuals will be less willing to enter fair contracts with them. Thus, mentally incompetent individuals will have fewer opportunities to enter contracts consistent with their best interests. Hence, although the purpose of allowing mentally incompetent individuals to escape their contracts is well meaning, the result is malicious to the very individuals the law intends to help. Proponents of allowing mentally incompetent individuals to void their contracts argue that doing so would discourage fraud. But their position encourages fraud against mentally competent individuals. If mentally incompetent individuals can escape their contracts, they have an incentive to enter risky contracts with mentally competent individuals. Finally, proponents of binding mentally incompetent individuals to their contracts highlight courts' lack of institutional competence to determine mental competence. How can courts, they ask, reliably determine which individuals lack the mental competence to look out for their own interests?
1. How does the concept of the age of majority in Great Britain differ from that in the United States?
2. Explain the obligations of a minor who chooses to disaffirm a contract.
3. Go back to the discussion of contracts that cannot be disaffirmed by minors and explain the policy reasons that support each of the exceptions. Can you make an argument for any additional kinds of contracts that should not be subject to disaffirmance by minors?
4. If all you know about a man is that his neighbors think he is crazy, you do not know whether a contract he entered was valid, voidable, or void. Why not?
5. What factors determine whether a covenant not to compete is legal or illegal?
6. What is the relationship between contracts in restraint of trade and unconscionable contracts?
4. The principles of legal assent are based on the belief that, in the main, each person can look out for himself or herself. Thus, parties are usually held to the agreements they make because the terms were reached by decisions guided by the free wills of both parties. But we live in a world of rapid technological change, where chemicals, fibers, and services come in a blinding array of complexity that could make decision making more difficult for some people.
Should Courts Provide More Protection from Agreements Based on Lack of Knowledge on the Part of the Buyer?
YES, Courts should protect buyers from assent that is based on ignorance. For an assent to be worthy of legal protection, the buyer must appreciate what he or she has agreed to purchase. Otherwise, contract law protects the strong from the weak. For assent to be a cornerstone of a fair legal framework, it must flow from something other than large-scale misunderstanding about the safety, composition, and longevity of what we purchase. Just go to any grocery store and ask yourself, "How much do I know about what I am about to assent to purchase?"
NO Existing contract law already contains adequate protection against severe cases of buyer confusion. Much of this chapter contains reasoning that buyers could use in certain instances to rescind an agreement. What is especially disturbing about the suggestion that courts should provide more protection for parties to a contract is the danger the suggestion poses for personal liberty and independence. What will happen to our incentive to learn and grow as individuals if we know that the local judge and jury are ready to protect us from our own failures to discover more about goods and services that we plan to purchase?
1. Explain the difference between a unilateral mistake and a mutual mistake.
2. Explain when a unilateral mistake can lead to rendering a contract's voidable.
3. Distinguish innocent misrepresentation from fraudulent misrepresentation.
4. Explain how nondisclosure can be treated as misrepresentation.
5. Explain the primary differences between duress and undue influence.
5. Does the United States Still Benefit t from Having a Statute of Frauds?
YES,the statute of frauds provides great benefit t to America. The rule serves as a social lubricant aiding business transactions. Because it requires certain types of contracts to be in writing, we know that such a contract either will have enough evidence to prove its existence and terms or will be unenforceable. Because only certain contracts are required to be in writing, the rule does not preclude oral contracts, but it ensures that the most important contracts can be enacted without complications. Another way in which the statute of frauds benefitits America is by preventing unreliable evidence from being used in court. Human memories are notoriously weak and faulty, and it does not make sense to base important legal decisions on what someone says he or she remembers. Furthermore, people with a vested interest can change their testimony based on changed circumstances to gain personally from the changed circumstances. However, with the requirement that certain contracts must be in writing, the parties become bound to what they wrote and need not rely on faulty memory or biased testimony. Finally, the act of writing gives people time to pause for revelaction.
No one benefitit's when parties hastily rush into an agreement they later regret. The problem of hasty agreement is lessened when the parties are required to take time to write out the terms of their agreement. Thoughtful revelaction prevents parties from entering contracts with which they do not agree, and this means fewer cases are brought due to one party entering an unfair, or otherwise defective, agreement. NO, The United States does not benefit t from the statute of frauds, and the states should repeal the relevant sections of their laws. One of the greatest problems with the statute of frauds is that it acts as an impediment to contractual agreements. When parties agree, why should they be subjected to unnecessary formalities? The written requirements of the statute of frauds get in the way of business transactions more often than they help. Furthermore, the required writing frequently imposes additional costs on the parties to an agreement. When even simple agreements (although this applies to the more technical ones as well) must be written, parties must spend more time with the agreement. The time spent writing down an agreement in which neither party contests any of the terms is time not spent conducting other business. Frequently, the parties must hire attorneys to write their contracts. The attorney fees impose additional costs on the parties to the agreement, decreasing whatever benefit t might have been gained from the original agreement before the writing took place. In addition, the statute of frauds provides unnecessary loopholes for unscrupulous people. Although most parties enter agreements in good faith, it is not uncommon for parties to seek a way out of contracts they cannot perform. The writing requirements are not always accurately fulfilled, and when this occurs, unethical parties can exploit minor technicalities to have a contract declared void. In the end, the innocent party is harmed by the writing requirement, and the unethical party escapes a bad situation with little to no harm. America is not served by a system that enables such behavior.
1. Explain how the requirements of the statute of frauds under the UCC are different from those under the common law.
2. List the kinds of contracts that require a writing under the statute of frauds.
3. Identify the exceptions to the parole evidence rule and explain why some people might argue that the parole rule is not very effective.
4. Integrate the concept of assignments with the concept of delegations.
5. Why is it that incidental benefitcarries cannot enforce rights under a contract? Should they be able to enforce such rights
6. Explain the difference between an assignor's liability and a delegator's liability after rights have been transferred to a third party.
7. Explain the desirability to business of allowing a transfer of rights or duties to third parties.