Torts: Invasion of Privacy Torts

Another one of those "gee, why didn't we learn this in law school" sort of napkins:

1. Intrusion upon seculsion: 1) intentional; 2) intrusion, physical or otherwise; 3) upon solitude, seculsion or private affairs; 4) highly offensive to a reasonable person.

2. Appropriation of Name or Likeness: 1) appropriation of name or likeness of another; 2) for commercial advantage.

3. Publicity of private facts: 1) publication; 2) highly offensive to a reasonable person; 3) not a legitimate concern to the public. Truth is no defense. Newsworthiness is a defense.

4. False Light: 1) publicity; 2) places another in a false light; 3) highly offensive to a reasonable person.

Remedies: proof of special damages not required. injunctions available.

Defenses:

• Absolute privilege: judicial proceedings, legislative proceedings, communications (publication) only between husband and wife, equal time broadcasts.
• Conditional privilege: statements in the defendant's interest, statements in interest of third persons (these are generally statements made in response to a request, e.g. job/credit recs), statements in the public interest.
• consent.
  

Torts: Nuances and Tricky Tricks

Trespass to Land

• There are two types: intentional and reckless/negligent.
  
• Intentional trespass requires intent to enter and entry. Mistake re ownership/privilege is no defense, even if reasonable mistake. Nominal damages are available.
• Negligent/reckless trespass is actionable only if there is damage.
• Non-negligent accidental entries are not actionable.
  
• To be actionable, trespass by aircraft must be in the immediate reaches above the property and substantially interfere with use of land.
• Standing: actual possession or right to possession is needed. Lessee or adverse possessor can sue.
• Apparently, you should assume intentional trespass is intended on the MBE, unless it's not.

Privilege (Private Necessity)

• A defender of property acts at his own peril in using force against someone who is actually privileged to intrude.
• Similarly, those who intrude upon property without a privilege must suffer the consequences of their mistake.

Nuisance

• Courts can grant monetary damages and an injunction to prevent the continuation of the nuisance.

Tortious Battery

• Contact is only offensive if it offends a reasonable sense of personal dignity. The contact must be unwarranted by the social usages prevalent at the time and place where the touching occurs.
• If a bunch of guys who don't know each other start beating up on one guy, they may be found to be acting in concert, subjecting each to vicarious liability for the torts of the others.
  

Negligence

• If the actor does an act, and subsequently realizes or should realize that it has created an unreasonable risk of physical harm to another, he is under a duty of reasonable care to prevent the risk from taking effect.
• One confronted with an emergency must act reasonably under the circumstances.
• A rescuer must act reasonably under the circumstances and may be liable for negligence during the rescue. (Sometimes this liability is relieved by Good Samaritan statutes.)
  

Strict Liability

• misuse of the product is no defense if such misuse is reasonably foreseeable.
• assumption of the risk IS a defense.

IIED/NIED

• IIED requires: 1) extreme/outrageous conduct; 2) resulting severe emotional distress; 3) intent OR RECKLESSNESS.
  
• Third person liability if: 1) immediate family member present at the time; OR 2) any person present at the time when the distress results in bodily harm to the 3rd party.
  
• Lessened requirement of "outrageous" conduct for common carriers and innkeepers -- insulting or highly offensive behavior enough. Merely insulting conduct is not enough for others.
  
• NIED requires bodily harm resulting from the distress, except for negligent news of death of family member or treatment of a corpse.
• Third-party recovery for NIED requires: personally within the zone of danger AND bodily harm results from the distress.

False Imprisonment/Arrest

• An arrest under a warrant is privileged if the person arrested is the one named in the warrant, or reasonably believed to be the one named, or has knowingly caused the officer to believe him to be the one named.
• An arrest without a warrant is privileged for a police officer if 1) felony being committed or about to be committed in his presence; 2) misdemeanor constituting breach of the peace in his presence; 3) officer reasonably believes arrestee to be a felon even if no felony has been committed.
• An arrest without a warrant is privileged for a private citizen if 1) felony being committed or about to be committed in his presence; 2) misdemeanor constituting breach of the peace in his presence; 3) felony has in fact been committed and reasonably believes the person arrested committed it.
• Private citizen takes the risk that no felony was committed. His reasonable mistake as to whether there was a felony will destroy the privilege. Private citizen does not take a risk re misapprehension. His reasonable mistake re identity of the felon will not destroy his privilege.

Tricky, Tricky: Con Law-PMBR Red Book 61-110

I'm having a much happier day doing Con Law PMBR questions than I was doing Contracts...

Q75. Note that the supremacy clause can NEVER make a law valid. It can only make a law invalid, so answer B is wrong. D is correct only because all the other answers are wrong.

Q78. The right to be a candidate is a fundamental interest. Federal gov't will get involved (i.e. it's not a Guaranty Clause non-justiciable political question).

Q83. The answer explanation doesn't really say why D is wrong, but here's my guess. The 5th Amendment doesn't grant a power of eminent domain (that's a police power) but rather it limits the power by restricting it to public related uses and with adequate compensation, so A is a better answer.

Q85. The answer is D because the actor who passed the amendment was the people themselves, so it's not a police power action of the city, but rather a reservation of power by the people themselves.

Q91. Voluntary prayer recitals during the school day inside the school building should be held to be Establishment Clause violations for the purposes of the multi-state. Seems odd to me because there's lots of facts here to show that this is more like a "meet me by the flag-pole" case than an organized football prayer case, but oh well.

Q92. See Roemer v. Board of Public Works of Maryland (1976). No excessive entanglement because no more interference than the normal audit and accreditation process.

Q98. See Terry v. Adams (1953). Primary election procedures that are racially discriminatory qualify as state action because they are closely supervised by the state and effect right to vote/be elected. Violatory of the 14th/15th Amendments.

Q103. Discrimination against the poor may violate equal protection but not because the poor are a suspect class, rather because the right affected is a fundamental right. I think that's why B is more betterer than A.

Q107. A tricky standing question: who is hurt most directly by the tax? The purchaser of the cigarettes. The appropriation was a nonseverable provision of the law, so if the purchaser invalidates the appropriation, he invalidates the whole law = redress of his injury.

Con Law-Free Speech Nuances

In general:

1. content regulation: triggers strict scrutiny
2. time, place, manner regulation: middle-tier three part test -- 1) important gov't interest, 2) narrowly tailored, 3) alternative channels of communication left open

Commercial Speech:
If subject of the advertising/speech is lawful and ad is not misleading/deceptive, evaluate under the Central Hudson test: substantial governmental interest directly served/advanced and reasonable "fit" between ends and means (narrowly tailored).

Vice advertising: apply Central Hudson. Must be narrowly tailored - complete ban is overreaching.

Time, Place, Manner Regulations:

1. Public Forums:
1. subject matter AND viewpoint neutral
2. narrowly tailored to serve significant gov't interest
3. leave open alt. means of communication.

BUT
2. Non-public forums (including city buses and public schools):

1. viewpoint neutral (subject matter distinctions are ok)
   
2. reasonably related to legitimate interest.

Facial Attacks on speech regulations:

1. overbroad: includes protected and unprotected speech within its scope
2. vagueness
3. prior restraint
4. unfettered discretion

Con Law-Privileges & Immunities

4th Amendment Privileges and ImmunitiesThis clause prevents economic discrimination by one state against citizens or residents of another state unless substantial government justification exists.

Taxes can't be levied by states against income of nonresidents if residents are exempt.

Commercial license fees cannot discriminate against nonresidents.
Recreational license fees CAN discriminate against nonresidents because they are not "economic interest."

Durational residency requirements for dispensing government benefits are subject to strict scrutiny (but reasonable residency requirements for divorce and in-state tuition are ok).

Amendment 14 privileges & immunities is generally a wrong answer, but it was used by the Court in 1999 to strike down a state waiting period for welfare benefits: interference with right to travel freely from state to state which is a right of national citizenship.

Con Law-Equal Protection Nuances

Intermediate scrutiny applies to gender cases only where the challenged law is intended to classify on the basis of sex. Similarly, strict scrutiny applies in race cases only where there is facial discrimination, discriminatory application, or discriminatory purpose. If the law merely has a discriminatory effect, no burden shift.

Age discrimination is reviewed under rational basis.

Right to Vote/Candidacy:
Strict scrutiny will apply to: wealth restrictions, residency restrictions, party affiliation restrictions, racial classifications.

Rational basis scrutiny applies to: min/max age limits on officials, prohibition on officeholders running for another office, reasonable filing fees, signature requirements.

Alienage classifications trigger strict scrutiny except: 1) adult illegal aliens can be discriminated against by a state under rational basis review, and 2) Congress can use alienage as a classification with rational scrutiny under its plenary power over immigration.

Con Law-11th Amendment

The 11th Amendment prohibits the citizens of one state from suing their own state or another state in federal court without the state's consent.

Subdivisions (cities, towns, counties) do not have immunity under the 11th Amendment.

State officials may be sued for abusing their power in enforcing an unconstitutional state statute.

The 11th Amendment does not bar suits brought by one state against another or suits brought by the federal government against a state.

Congress cannot authorize suits under its Article 1 Section 8 powers but CAN authorize suits under its enforcement powers in the post-Civil War Amendments to remedy past discrimination.

11th Amendment bars suits for damages but generally not injunctions.

State also cannot be sued in state court without its consent. State employees alleging age discrimination under federal law cannot sued their state employer because Congress cannot waive 11th Amendment immunity using its Article 1 powers.

Con Law-Justiciability and Absention

Standing is the FIRST issue to analyze in every con law essay fact pattern.

Standing is a constitutional requirement. Congress cannot confer standing by statute where no case or controversy exists.

2 requirements:
1. injury-in-fact (can be economic, aesthetic, or environmental)
2. redressability a.k.a. causation: relief sought must eliminate the harm alleged.

Specialized standing issues:
1. taxpayer standing: federal taxpayers don't have standing except to challenge establishment under the Spending Clause (won't work under the Property Clause).
2. Third party standing:
1. special relationship (seller of beer could bring suit on behalf of males under 21, doctor can challenge abortion law);
2. third party cannot bring suit on his own behalf;
3. associations may assert claims of members if (a) members would otherwise have standing to sue in their own right, (b) interest asserted is germane to association's purpose, (c) neither the claim asserted nor the relief requested would require participation by the individual members in the lawsuit.

When looking for justiciability:
Ripeness - genuine immediate threat of harm
Advisory Opinions - prohibited in federal courts
Mootness - actual controversy must exist at all stages of review unless there is an injury capable of repetition yet evading review (e.g. abortion cases because baby is born by end of review).
Political Questions - the impeachment process, the amendment ratification process, president's power to unilaterally terminate a treaty, foreign affairs, guaranty clause issues. BUT NOT, reapportionment and gerrymandering.
Standing

Abstention:
2 types:
1. Younger Abstention: prohibits federal court review where there are pending state criminal proceedings.
2. Pullman Abstention: federal court won't proceed where there is an unsettled issue of state law. State may resolve the issue of state law so as to avoid the need for constitutional review.

Adequate and independent state grounds will preclude supreme court review.

Tricky, Tricky: Contracts-PMBR Red Book 151-200

Here we go:

Q153. Still not sure about the "condition" language. Would love to read what BarBri has to say about this, just for another perspective on the language. A condition ought to modify a promise, not just be the promise. So I'm confused. Are there two meanings to the word "condition" in play here?

Q157. In an employment K, prospective inability to perform due to illness discharges the employee and makes it reasonable for the employer to hire someone else. But then the answer choice says that the employee may be liable for compensatory damages equal to the difference between the value of the promised performance and the substituted performance. So I'm not sure: is the employee discharged or not? I think under Maine law he would be discharged and NOT L for damages... Not sure what to do with this.

Q160. If one side has fully performed, the doctrine of anticipatory breach does not apply. Instead, the statement of an intention not to pay for performance has no legal effect. Hence the answer to the next question: no action for breach lies until the date for payment has arrived without payment being tendered.

Q162. Ugh. Another shifty, confusing use of terms of art. Seems like what's being described is a partially executed bilateral contract. Only creative definitions of a unilateral deal make it that after Feb. 15. Why, oh why, do these questions keep re-defining terms of art?

Q166. an installment contract is "one which requires or authorizes the delivery of goods in separate lots to be separately accepted, even though the contract contains a clause that each each delivery is a separate contract or its equivalent."

Q167. The bill of lading error would not be construed as a substantial nonconformity impairing the value of the whole contract. It's not delivery of nonconforming goods, so they can't be rejected. Obviously if you can't reject the shipment, you also can't cancel the whole installment K.

Q171. There must be a bona fide dispute in order for the pre-existing duty rule not to apply to void the accord for want of consideration.

Q173. I didn't take negotiable instruments, but it looks to me like 3-311 requires that partial payment of a disputed claim discharges the claim only if "the instrument or an accompanying written communication contained a conspicuous statement to the effect that the instrument was tendered as full satisfaction of the claim." There's no conspicuous statement here, so why is the debt discharged?

Q176. If the promisor indicates that he "doesn't think he can do it," there's no repudiation.

Q179. Read the answer choice carefully and get the parties straight. I had them confused when I read answer choice C and misunderstood it.

Q180. If you contract to begin payments "if the hotel is profitable" and the hotel is never profitable, you still must pay the amount due within a reasonable time because you impliedly promised that the hotel would be profitable in a reasonable time.

Q181. "Where it is clear that no loss at all has actually occurred, a provision fixing a substantial sum as damages is unenforceable."

Q183. Obligation to pay the subcontractor is not dependent on the contractor being paid, even if the payment term says the subcontractor is to be paid after the contractor is paid.

Q190. What an annoying question: either the UCC applies or it doesn't. If it does (and it does), the Knox's telegram was a 2-207 acceptance. If, somehow, Knox's telegram was a counteroffer, it becomes a rejection and a new offer. The original offer is dead. Now, Knox's telegram controls the terms of the deal and Warner's acceptance of the goods without objection to the price term in the telegram forms a contract on Knox's terms. I disagree with the analysis in the PMBR answer. Ugh. Why can't I seem to get on the same page with the damn examiners here?

Q193. Don't forget the 87(2) spin on promissory estoppel-- creates an option contract, preventing revocation.

Q196. Only the power of acceptance is terminated by death. If there is a K, it is enforceable against the estate.

Contracts-Accord & Satisfaction

An accord is an agreement to accept performance different from the one owed. Satisfaction = performance of the accord. Note that an accord does NOT extinguish the underlying obligation and if the accord is not satisfied, the obligee can sue on either the accord or the underlying obligation.

A compromise agreement, on the other hand, extinguishes the old contract and substitutes the new agreement in its place.

Contracts-Novation

Here's a tricky twist on third-party liability under contracts:

Where an obligor has delegated his duties to a third-party and informed the obligee of the delegation, the obligor remains liable for performance. If the obligee agrees to release the obligor and substitute the delegate as party to the contract, a novation has occurred and the obligor is not liable.

Contracts-Notes from the Sample Essays

How to write about quantum meruit:
A party may recover in quantum meruit if there would otherwise be unjust enrichment.
Is there any unjust enrichment here? Evaluate by looking at the value of what was received, not the services rendered but rather the value of what was bestowed on the recipient.
What will the recovery be? Not for the cost of materials and labor expended by the plaintiff, but for the market value of the benefit retained by the defendant.

How to write about excusal by impossibility/impracticability:
I need to read more about this when my Maine BarBri book finally comes. I'm getting all confused by the PMBR treatment of this issue (confusion which I think arises because the MBE will take a very old-school approach, whereas Maine might follow more closely the Rest. 2d?). Here's what the "correct" answer for Maine says:
If a person is hired for a contract based on specialized or unique skills, and cannot complete the contract due to death or incapacity, the contract performance is excused. If not a specialized person, the incapacitated person can arrange for substitute performance and delegate his duties under the contract without breach.
I would also write about foreseeability and "occurrence of an event the non-occurrence of which was a basic assumption on which the contract was made." And was the risk allocated by the K?

Writing about summary judgment:
Whenever the call of the question asks about a summary judgment determination, start with that. Is there a genuine issue of material fact? Then apply the law to the facts, looking for genuine issues of material facts. When assessing the likelihood of s/j, list the possible GIMFs and analyze.

Notes about the statute of frauds:
It's easy to over-look the 1-year rule on statute of frauds questions. A town can't "operate and maintain" a sewer system without it taking more than a year to complete the contract.
Also: remember that part performance by the defendant is accepted as an evidentiary substitute for the missing memorandum of essential terms if the performance points to the terms of the oral contract. Part performance by the plaintiff may also be weighed by the court to prove the existence of the contract.

Mistake:
Talk about mistake even if it appears to be unilateral and not a valid defense to the contract. In mutual mistake scenarios, the issues are: timing of discovery (was K still executory) and gravity of the mistake (minor v. heart of the deal).

Tricky, Trick: Contracts-PMBR Red Book 101-150

Ok, PMBR is officially demoralizing. I just did my fourth set of contracts questions (counting the 50 we did in the PMBR class), and, after studying contracts for two days straight and diligently reading and studying all the answers for 150 of these stupid multiple choice questions, I just received the same score on the last fifty that I got on the first fifty (the one I took cold, with no studying at all). Ugh. I have a feeling this summer is going to make me feel like crap.

Now, whining complete. On with the investigation as to why my scores declined after all this studying:

Q103. Failure to pay rent is a partial, non-material breach. Interference with performance from the other party is a material breach, so answer A is better.

Q104. Because Overalls was required to refrain from interfering with the sale, his only hope of recovering is to show that he did not interfere, i.e. that his negative comments had no effect.

Q112. Remedy for repudiation of contract for specially manufactured goods before completion: costs reasonably incurred plus incidental damages (or lost profits).

Q115. Courts can fill in a "reasonable price" at time of delivery in a UCC contract, even if the price term was never there in the first place. This provision does not only apply when a price term fails. It applies if price was never stated.

Q117. Bad question (or at least bad PMBR answer). The answer choice given says that performance by both parties is excused due to supervening illegality. But the export of aluminum sheeting is not illegal under the facts. The problem is that White Owl doesn't want the sheeting because it won't be able to export its cigars the U.S. The value of the aluminum to White Owl is thus so diminished as to frustrate the purpose of the contract. If there's excuse here, it's in answer B -- frustration of purpose. It's weird and more than a little annoying that PMBR is really touchy about certain distinctions and then in other questions, the answer analysis skips the nuance entirely.

Q118. Answer choice D is a straight up correct statement of law. Answer choice C is also a correct statement of law, but one which is less directly relevant to the fact pattern? That's the only explanation I can figure for why D is better than C.

Q119. A liquidated claim = one where the amount is not in dispute. An unliquidated claim = one where the amount is in dispute. Payment of a partial unliquidated claim "in full satisfaction" and subsequent cashing of the payment = accord and satisfaction.

Q120. I have no idea what this answer explanation means. None. I'm not convinced my answer choice was right, but I have no idea why it was wrong. Moving on.

Q125. Bad answer again? Huh. What's going on? A condition subsequent is a condition which, if triggered, terminates the obligations of one of the parties (or both) to the contract. Ahmet's promise here was the obligation, and not a condition at all. It was to be performed subsequent to Stabler's obligation (to hire a contractor), but that's about the order of obligations, not about conditions. I'm really hoping that the actual MBE writers aren't going to get mixed up like this. Or am I the one confused?

Q130. Here's what I'm thinking: no excuse for impracticability (which is what answer D says, not impossibility which is what the answer choice explanation refers to) because the custom of the industry would allocate the risk of loss of the tools on the builder. The cost of completing the project is thus not grossly disproportionate so as to render it impracticable because builders are expected to either have tools or insure them for their risk of loss.

Q132. If the contract is not yet in existence, a purported assignment is a promise to assign and power to enforce the promise... in equity. Not sure what to do because it does appear to be enforceable in equity. Is the issue that the guy died and you can't proceed in equity against his executors? Not sure.

Q134. creditors have a better claim for sure. why? because the assignment is unenforceable. again, not sure of effect of equitable trust here.

Q135. Geez. I know I sound like jerk, but how on earth is there any daylight between answers B and C? Again, the answer choice does not explain why C is righter than B and I can't guess. Ok, I'll guess anyway. I guess the theory is that C states the rule, B would be an exception to the rule and the fact that it doesn't apply is less central to the facts than the general rule. An aleatory contract is either a contract for insurance or for an annuity (anything else?).

Q136. A two-year 50 mile radius non-compete doesn't seem obviously unreasonable to me. It might be on the edge, but yikes... I sure hope the MBE doesn't actually split this fine a hair.

Q138. Answers C and D are both right. Answer D is apparently "righter." Not sure why. They're both straight up correct and relevant answers.

Q139. If contract says that risk of loss falls on P, P can't recover his nonrefundable payment as a plaintiff. (No issue of mitigation when D is the one who would have had to mitigate.)

Q140. Payment of installment payments would be construed as condition precedent to continued attendance at the class being paid for. That makes sense.

Q141. Promisor may retract his repudiation up to the time the promisee has elected to sue or rescind or excuse the contract.

Q146. With 2-207 fact patterns look for material alteration arising from request for delayed shipment of perishable goods.

I found more than the usual number of odd/off questions in this set. I count at least 7 above for which I understood all the law and did a close enough reading of the facts and can't figure out for the life of me why PMBR says the correct answer is right. If you add those 7 to my score, at least I'm not getting worse. I really do hope that the actual MBE is a lot more well thought-out than some of these PMBR answers.

Tricky, Tricky: Contracts-PMBR Red Book 50-100

Tricks and twists from the second 50 contracts practice questions (I'm working backward from 100):

Q98. Get the parties straight when you're looking for consideration. Ashburn did deliver some performance to Craig, but it was legally required by a pre-existing duty, so not operative as consideration.

Q95. In parol evidence questions, be mindful of the call of the question's statement of the purpose for which the evidence is being used. Here the question says the evidence is being used to show a separate, prior oral agreement. It's not being introduced to clear up ambiguity as to the meaning of "production fee clause" so answers A & B are wrong. Answer C is wrong because it states the law but doesn't apply it to the facts.

Q93. With long calls and fact patterns, don't forget to go back to the original fact pattern and look for clues. Here, the contract itself required modifications be in writing. Apparently, the sof under the ucc is unclear re applicability to modifications. (look this up?)

Q88. Damages for personal injuries arising under a contract must be of a type foreseeable when the parties entered the agreement and will run only to parties and intended beneficiaries (and assignees?).

Q82. Temporary impracticability of performance on a personal service contract due to health will suspend contractual duties but not discharge them.

Q76. If the fact pattern asks you to assume away any violation of public policy, obey. Promisee's main purpose = key to finding 3rd party intended beneficiary.

Q73. A divisible contract is one in which the parties have divided their respective performances into separate units, so that performance of an installment on one side entitles such party to the other's performance of that installment. Employment contracts are divisible contracts.

Q65. Most states require the promise to pay a contractual debt barred by the statute of limitations to be in a signed writing. New consideration is NOT required.

Q58-59. I got hung up on restitution issues. But here's the key: if the subject matter was goods, and they have been damaged or depreciated, the restitution obligation extends no further than returning them "as now." Hence the answer to Q58 is nothing because the ratification of the contract by the new adult was conditional on a condition precedent that his finances improve (and they did not). He would need to (theoretically) return the damaged car (which is worth nothing). If his finances change, his ratification is effective and he would need to pay 10K.

Q56-57. The recital of receipt of consideration questions in the PMBR materials are baffling me. There's nothing in the outline on this and the answers to the questions on the topic skip over this issue entirely. Here's what I can glean: theoretically, you need to actually pay the $1 for it to be valid consideration. BUT, evidence that the $1 was not paid is not admissible under the parol evidence rule; and, even if plaintiff admits that the nominal consideration did not pass, defendant will still not prevail because he was under a duty of good faith and fair dealing not to revoke the option without demanding payment of the consideration for the option. Yikes, this is wacky. Combine this with the result in Q42 and I'm feeling a bit more comfortable that my 1L notes are correct when they say: written recital of receipt of consideration for the option is sufficient to support the enforceability of the option.

Q53. Bad question? The answer given to this question contradicts answer given on the PMBR contracts lecture CD. The esteemed professor on the tapes says, if only one element of the promise constitutes legal detriment, that's sufficient consideration to support enforcement of the whole deal. Here, Marty promised not to smoke marijuana AND not to drink beer on weeknights. Marty had no legal privilege to smoke weed, but he did have a privilege to drink beer unless he was some sort of wunderkind who went to law school before his 21st birthday. His promise not to drink beer is sufficient legal detriment to support the whole deal. The answer explanation only mentions marijuana and ignores the beer forbearance. What's up? Am I wrong here?

Contracts-Effect of Breach on the Aggrieved Party

Common law: duty to mitigate (but no obligation by employee to take different type of work, lower pay, or relocate in order to mitigate; burden on employer to show employee had available mitigate options).

UCC:
Cover-- in event breach goes to whole contract, buyer may "cover" by obtaining the goods from a substitute seller and recover difference between contract price and cost of cover contract as consequential damages.

Loss of bargain-- failure to cover does not preclude loss of bargain remedy but buyer's loss is limited to such as could not have been obviated by cover. Buyer will have to prove this amount.

Resale contract-- when breach is by the buyer, seller has a duty to resell the goods in the marketplace to fix his consequential damages as the different between resale and contract prices.

Perfect tender, rejection and cure under the UCC:
1. buyer has duty of prompt inspection
2. if inspection reveals any non-conformity of goods or tender, buyer may accept whole, reject whole, or accept any commercial unit and reject the balance.
3. if buyer accepts, he retains a claim for damages for any difference between the market value of the goods accepted and the contract price for conforming goods.
4. if buyer rejects, he must give seasonable and specific notice to the seller.
5. if time remains for seller's performance, buyer must cooperate with seller in any cure effort. seller must give seasonable notice of intent to cure.
6. Merchant buyer must seek and follow reasonable instructions re disposing of non-conforming goods. If no instructions, buyer may store them, ship them back, or re-sell them for the seller's account (retaining a reasonable fee for expenses, not to exceed 10% of resale price). If goods are perishable, merchant buyer MUST try to sell them for seller's account.

Revocation of Acceptance for Accepted Goods:
1. where non-conformity escaped detection despite reasonable inspection and revocation occurs 1) within reasonable time after discovery (or should have discovered) and 2) before change in condition of goods not caused by the undetected defects.
2. buyer accepted in reliance on seller's express assurance of cure and seller fails to cure within a seasonable time.
Revoking buyer must preserve economic value, mitigate loss, and cooperate with cure effort if revocation is due to undiscovered defect.

Consequential damages for a repudiated contract under the UCC are fixed when the buyer learns of seller's intent not to perform, rather than at performance date.

Contracts-Excusable Non-Performance

Objective Impossibility
No person on earth could perform due to unforeseen and unforeseeable factors arising after formation. (Subjectively and objectively impossible; subjectively and objectively unforeseeable.)

Impracticability
1. Unexpected contingency subsequent to K.
2. risk not allocated by K or custom of marketplace
3. consequence of contingency=cost of performance grossly (objectively) commercially unreasonable.

UCC Version of Impracticability
Where there is casualty to identified goods without fault (including negligence) of either party, contract is avoided entirely (both parties discharged) OR, at election of buyer, where loss is partial, buyer can accept goods "as is" with due allowance from the contract price.
Where casualty is not to goods, but to mode of delivery or payment, commercially acceptable substitute, where available, must be tendered and accepted.

Frustration of purpose
Subsequent, unforeseen and unforeseeable circumstance renders value of other party's performance totally or nearly totally destroyed.

Contracts-Third-Party Issues: Delegation

Two ways to delegate:
1. give permission for another party to perform obligor/delegor's duties under the contract. This gives rise to no assumption of duty by the delegate and delegate cannot be liable for breach.

2. form contract with delegate supported by consideration. This gives rise to an assumption of legal duty to perform under the contract. Delegate and delegor are liable to obligee for subsequent breach -- at election of obligee. Under this theory, obligee is an intended third-party beneficiary of the delegation contract and has immunity from setoffs but not counterclaims.

Contract terms prohibiting or restraining delegation will be enforced.

Under UCC, delegation is reasonable grounds for insecurity. Obligee can seek adequate assurances.

Contract duties of personal character cannot be delegated.

If delegation is effective, obligee must cooperate in delegate's attempt to perform.

Contracts-Third-Party Issues: Assignments

Present Assignment: intent, present subject matter (future rights in future contracts potentially assignable in equity), no writing required, partial assignments are ok.

Presumption of free assignability. Clauses prohibiting assignment of "the contract" interpreted to restrict only delegation of duties. Clauses prohibiting/restricting assignment: not effective to prevent innocent assignee for value from asserting claim against obligor. Obligor has claim against assignor for breach of covenant not to assign. If there is a condition subsequent, terminating the contract upon attempted assignment, illicit assignment is void. Assignee has claim against assignor under implied warranty contained in every assignment for consideration.

Implied Warranty: The assignor warrants his right and power to assign and will do nothing to interfere with assignee's quiet enjoyment.

Exceptions to free assignability:
K's not freely assignable if
1. materially vary the contract duties of the obligor (personal services contracts, requirement/output k's)
2. alter the risk (insurance k's, progress payments used to finance continued construction)

Revocation:
Oral gratuitous assignments can be revoked by notice or act of subsequent, conflicting assignment. (exception: estoppel if detrimental reliance by assignee).
Delivered writing evidencing gratuitous assignment=completed gift=irrevocable.

Priority Among Conflicting Assignees
oral gratuitous assignee: no priority
irrevocable gratuitous assignee: lowest priority
multiple assignees for value: first in time/first to give notice to obligor or get judgment against him or performance/novation from him.

Breach by Obligor
Assignee stands in shoes of obligee/assignor. (Except for negotiable instruments.)
Counterclaims AND setoffs are viable against assignee: setoffs only if they had accrued before effective date of the assignment (which is date assignee gives notice of his status to obligor).

Contracts-Classifying Defenses

Defective Formation:
1. ambiguity
2. mistake
3. want of consideration (pre-existing duty, past consideration, illusory promise) (real)

Capacity:
1. minors (K is not void but voidable; common law age=21; misrepresentation of age is irrelevant; restitution generally required upon disaffirmance; necessaries; ratification by new adults words/deeds).
2. mental infirmity or disability - voidable.
3. ultra vires contracts of corporate entities: extremely limited. If corporation contracts beyond limits of statutory law, void. If corp contracts beyond limits of articles of incorporation, contract is effective unless other party was aware of the contract being ultra vires the articles.

Policy Objections:
1. illegality:
a. timing:
i. illegal at time of offer: bargain is void (real).
ii. illegal while offer is outstanding: offer is revoked by operation of law
iii. illegal subsequent to formation, prior to performance: both parties excused by impossibility.
b. UCC: if means or manner of payment fails because of gov't regulation, seller may withdraw unless buyer can provide commercially equivalent and legal substitute means of payment.
c. nature of the illegality:
i. malum in se: court will afford no remedy or assistance.
ii. malum prohibitum: quasi-contract relief available (market value of goods/services provided) unless: in pari delicto and not member of class to be protected by the prohibition.
2. Substantive unconscionability:
a. stipulated remedies that are punative rather than compensatory in nature.
b. attempts to limit award of consequential damages (strong presumption under ucc)
c. attempted disclaimer of implied warranties of merchantability and fitness for purpose (ucc allows disclaimer but many states do not).
CAN BE BLUE PENCILED OUT.
3. Offensive to public policy:
a. over-broad non-competes.
b. encouragement or promotion of tortious interference with non-contracting party
c. contingent fees for obtaining passage of special legislation, etc.
CAN BE BLUE PENCILED.

Deceptive or Coercive Formulation Tactics:
1. Fraud:
a. fraud in the factum-- victim doesn't even know a contract is in contemplation. (real)
b. fraud in the inducement-- victim is induced to contract by lies or deliberate half-truths.
c. fraud in the execution-- oral contract reduced to an unfaithful writing by other party. (self-protect by reading documents before you sign them? split in the courts).
2. Duress:
a. physical duress
b. economic duress: only when victim can prove illicit act by the aggressor which created the desperate situation or actively intermeddled in it to make it worse. (charging a lot for gas in the desert, not econ. duress; emptying tank and then charging a lot for gas in the desert, yes econ. duress).
3. Undue Influence:
a. "overly-persuasive" tactics
4. Procedural Unconscionability:
a. grotesque imbalance of bargaining strength or sophistication AND oppressive terms.
b. oppression: grossly out of line with market expectations
c. adhesion contracts are not per se unconscionable but may be found unconscionable if oppressive or containing uncommon and not clearly disclosed terms.

Form of the Bargain:
1. Statute of Frauds
2. Parol Evidence

Contracts-Third-Party Issues: Beneficiaries

This post should really be called: all the stuff none of us ever learned in law school but the bar examiners find amusing to test on...

Third-Party Beneficiaries

Big rule: intended beneficiaries have rights; incidental beneficiaries don't.

Intended beneficiary is (1) designated by name or legal description in the contract, (2) promised performance is to be bestowed upon beneficiary directly, (3) promisee consciously intends to have benefit run to the beneficiary.

Vesting of rights by intended beneficiary means that traders cannot modify or rescind the deal.

How rights vest:
1. intended beneficiary learns of K and changes position in detrimental reliance;
2. intended beneficiary commences a cause of action against promisor;
3. intended beneficiary expresses consent to receive performance in response to a request for such consent from either trader.

Primary cause of action for breach lies in intended beneficiary. Promisee has secondary cause if beneficiary fails to commence or loses other than on the merits.

Defenses: same as the ones promisor has against promisee under the K. Promisee's potential defenses to his liability to beneficiary cannot be raised.

Counterclaims under the contract can reduce or extinguish liability (but not make the beneficiary liable to the promisor). Setoffs may not be raised (i.e. other debts owed by the promisee to the promisor, other than under this contract, do not count against the beneficiary).

Contracts-Parol Evidence Rule

If there is a written agreement,

negotiations, understandings, agreements reached prior to or contemporaneous with the written agreement are

ALWAYS admissible to show that the K was subject to an oral condition precedent
ALWAYS admissible to EXPLAIN
INADMISSIBLE to contradict if the written K is integrated with respect to that term
INADMISSIBLE to supplement if the written K is a complete integration of the bargain.

Exception: the evidence shows a collateral agreement -- a whole separate stand-alone agreement.

Contracts-Statute of Frauds

Questions to Ask:
1. Is the K within the statute of frauds (sof)?
2. Is the sof satisfied?
3. Can we make an end run around the sof?

1. topics covered by the sof: My Legs
Marriage
Year (unless there is any way to perform within one year -- look for death of someone to theoretically terminate obligations within the year)

Land (not lease of less than one year, agreement with real estate agent to act as agent also must be in writing)
Executor
Guaranty/surety (except the main purpose rule: main purpose in making the surety promise was to further own economic advantage)
Sale of goods for more than $500
UCC quirks--K's enforceable without a writing:
1. seller has tendered goods and buyer accepted them.
2. buyer submitted payment and seller retained payment and promised to ship
3. seller has made substantial beginning in manufacturing or obtaining custom or unique goods for which no ready market exists.
4. K between merchants: written confirmation of terms sent by one party and received by the other satisfies the sof, unless written notice of objection within 10 days.

plus, promise to make a will or testamentary devise or bequest of property.

2. satisfaction of sof:
written memorandum of essential terms . . . signed by the defendant who is asserting the sof.

letterhead and rubber stamp=signature

essential terms: parties, subject matter, price.

3. end runs

promissory estoppel if promisor should have expected promisee to rely and promisee did rely and justice requires enforcement of the promise.

part performance is accepted by equity as an evidentiary substitute for the missing memorandum of essential terms.

restitution in quasi-contract: claim is for market/reasonable value of plaintiff's performance, not for loss of expectation created by the unenforceable promise.

Contracts-Modification, Mistake, Ambiguity

Mid-term Modifications:

Under the common law: pre-existing duty rule, exceptions: 1. unforeseen circumstances, 2. mutual modification of duties (both parties change their obligations).

Under the UCC: no consideration required, exception: 1. bad faith. BUT, watch out: statute of frauds can still apply to modifications if sales contract is for more than $500 and modification is oral.

Mistake:

Unilateral Mistake:
1. Mechanical Miscalculations: these can be a defense to formation IF AND ONLY IF the other party knew or reasonably should have known of the error (i.e. the other party jumped on the deal because it was "too good to be true.") (subjective and objective test)
2. Errors in business judgement: these are never a defense to formation.

Mutual Mistake:
Defense to enforcement if it goes to the heart of the bargain and is discovered while the bargain is still executory.

Mistake of third party:
is treated like mechanical miscalculation--K is not formed if offeree jumped on a bargain that was "too good to be true." (subjective and objective test).

Ambiguity:
Ambiguity must infect essential term and fault must lie with neither party.

Contracts-Offer & Acceptance: Multi-state Nuances

Some things I learned from PMBR on contracts:

The mailbox rule for acceptances doesn't apply if the language of the offer tells you to accept by "notifying me by Friday." If you deposit an acceptance in the mail on Wednesday, and I revoke the offer on Thursday, before I receive your acceptance, my revocation is effective. Only "notifying me" was an acceptable means of acceptance. Mailbox rule doesn't apply.

An offer manifestly made to too many offerees (2 tickets offered to three different people) is not an offer unless there's a first come, first serve provision.

Power of acceptance destroyed by:
--revocation (at any time before acceptance)
--lapse (if offer has time-stamp or reasonable time; rule of thumb is that offer made in conversation lapses at end of conversation)
--rejection/counter-offer (but "mere inquiry" isn't a counter-offer)
--death/incapacity (of either party before the K is formed)

BUT remember that offers are easily revived by the offeror.

The general rule is that silence cannot be construed as acceptance with 2 execeptions:
1. prior dealings make silence a reasonable acceptance.
2. if you knowingly take the benefits in silence, then you have accepted (e.g. watch them put the pool in your backyard).

Under the UCC, non-conforming shipment is interpreted as acceptance and simultaneous breach. Exception: if the seller promptly notifies that shipment is not acceptance but accommodation only.

Under UCC, you can accept by: promise to ship, ship, or ship non-conforming goods.

If there are identical cross offers, there is no meeting of the minds and no contract.

Indirect revocation: offeree acquires reliable information that is inconsistent with the offer's continued validity.

Unilateral contracts (where only performance is an acceptable acceptance):
--right to revoke is extinguished with beginning of performance
--acceptance comes only with complete performance
--mere preparations don't constitute acceptance or destroy the right to revoke

Question/contradiction: on page 18 of the PMBR contracts outline, the rule states that in an offer for a unilateral contract, "an offeree who commences performance is not bound to complete it." Yet on question 19, the answer choice reads: "As a general rule, where the offeree begins performance contemplated, he thereby impliedly promises to complete it." Seems like a contradiction to me. Any thoughts?

Welcome to My Cocktail Napkins Blog!

Huh? Cocktail napkins? What are you talking about, LB? Well, here I plan to scribble notes about the various subjects I'm studying each day as I prepare for the Maine and Mass Bar Exams. It won't be full outlines because I see no point in writing down the basics that I already know. It will be about nuances and tricky points and figuring out ways that I want to sort them out in my own head. So what does that have to do with cocktail napkins? Not that much really, but it's the metaphor that I came up with last night when I conceived of posting my bar study notes on Blogger. You see, I was studying contracts yesterday, and there are a couple of early cases that we studied in which contracts are formed (or not) on the back of cocktail napkins. Also, because I plan to have the notes be a little random and incomplete, I thought the scribblings on the back of cocktail napkins was a good metaphor. Plus, silly, you get cocktail napkins where? At the bar, of course!

Why post the notes on-line? I don't know exactly. It just seems like it might be helpful to feel like I have some sort of audience, even if no one's really reading this thing! I learn best by explaining things to other people (I used to be a high school teacher and will always remain one at heart, I suppose). I thought about doing an audio or video podcast so that I could "teach" my way through the material, but that seemed like way too much production work and not nearly enough studying. This is the next best thing.

To remain efficient, this blog will have no pictures and won't be cleverly edited. The posts will be longer than is generally acceptable for blog posts.

A disclaimer: I do not hold anything here to be a correct statement of law or a good way of looking at any particular subject matter. My understandings may be irretrievably flawed. If you are reading this blog, you rely on my explanations at your peril. However, I invite you to point out my errors any time you see them in the comments.