Contract Law Case Chart
| Case | Facts | Holding |
| O’Callaghan v. Waller & Beckwith Realty Co. (IL SC 1958) | P injured by LL’s negligence under a lease which exculpated the LL from liability for negligence. | A lease clause exculpating a LL from liability for his own negligence should be upheld & is not void against public policy. BUT most states now hold exculpating clauses for residential leases unenforceable. |
| Graham v. Scissor-Tail. (1990) | Arbitration clause apptd AFM as arbitrator. P was concert promoter. | K of adhesion containing arbitration clause fell w/in reasonable expectations of P since he was subject to thous of same. BUT it was uncon b/c it would be biased in favor of union member artist. |
| Henningsen v. Bloomfield Motors, Inc. (NJ SC 1960) | P injured by steering failure in new car purchased form D under a K in which dealer disclaims all implied warranties of merchantability. | At attempt by an auto dealer to disclaim an otherwise implied warranty of merchantability is void against public policy. Disclaimer was insufficient to indicate to RP that he was giving up personal inury claims if car had defect, unequal bargaining positions. |
| Carnival Cruise Lines, Inc. v. Shute (US SC 1991) | P injured on Ds ship. Forum selection clause on back of tix. | A forum selection clause in a commercial passage K is permissible if it’s fundamentally fair. |
| Williams v. Walker-Thomas Furniture Co. (US Ct of App DC 1965) | P sold to D furniture w/a cross-collateral clause & subsequent to Ds default, sought to replevy all goods previously purchased by D | The defense of Unconscionability to action on a K is judicially recognized. CL rule of caveat emptor modified by 2-302, unequal bargaining position here where P exploited D in uncon K provision. |
| Jones v. Star Credit Corp.
(NY SC 1969) |
P bought freezer (worth $300) for
$900. Ps pd $619.98 already.
|
2-302 permits a ct to reform a K on the basis of excessive price. Factors incl: price to value ratio, financial resources of buyer, knowledge of seller concerning buyer’s situation, relative bargaining position of the parties. |
| Armendariz v. Foundation
Health Psychcare Services (CA SC 2000) |
P signed employment app which incl arbitration clause compelling arbitration for wrongful termination. | An adhesive K that incl an arbitration clause requiring adhering party, but not the other, to arbitrate all claims arising out of the same transaction is uncon. K limiting damages of amt of backpay compounds the uncon of agmt. |
| Klein v. PepsiCo, Inc.
(US Ct of App 4th Cir 1988) |
P wanted to buy D’s jet. | 2-716 allows nonbreaching buyer to seek SP if goods are unique. BUT
No Specific Performance when money damages are adequate. Substitute goods can be purchased to satisfy the original K. |
| Laclede Gas v. Amoco Oil
(US Ct of App 8th Cir 1975) |
After D breached a long-term propane supply K, P sought specific performance of K. | Specific Performance is available as a remedy for breach of a K involving personal property (ie. long-term supply K where supply is unique). |
| Northern DE Industrial Development v. E.W. Bliss
(Del 1968) |
P wanted SP of a contract that would have req’d hiring 300 wkrs to complete a second shift. | Cts unlikely to order SP where supervision of performance would be impractical. Money damages for losses caused by delay could be determined. Rare to award SP for personal services K. |
| Walgreen Co. v. Sara Creek Property Co. | Walgreen had lease that prevented LL from leasing space in mall to another pharmacy. LL gonna lease to Phar-Mor. | Ct issued injunction instead of awarding damages to (1) shift burden of determining true cost of Ds conduct from ct to parties. Avoid costly supervision by ct. (2) prices/costs more accurately determined by mkt than by gov’t. |
| Vitex Manufacturing
v. Caribtex |
P was to process wool for D. P reopened factory but D never sent wool to be processed. | In a claim for lost profits, overhead should be treated as part of the gross profits & recoverable as damages, & should not be considered as part of the seller’s (processor’s) costs. Overhead should not be treated as a cost saved in computing an award for breach of K b/c it remains constant. |
| Laredo Hides v. H&H Meat Products | D refused to continue delivering hides under its K with P, P purchased them from other sources & sued to recover the price difference | When a seller wrongfully repudiates a K or fails to make delivery of the goods, the buyer may “cover” by obtaining such goods elsewhere & sue the seller for the difference b/w the costs of cover & the K price plus + incidental or consequential damages. |
| R.E. Davis Chemical v.
Diasonics. (US Ct of App 7th Cir 1987) |
D claimed it lost a “volume sale” when P breached a K of sale. | An aggrieved seller may recover, after resale, lost profits from the original sale if he can show that the subsequent sale would have occurred absent the breach and would have been profitable. |
| US v. Algernon Blair
(US Ct of App 4th Cir 1973) |
P sues to recover in quantum meruit the value of the labor/materials it furnished up to the pt at which it justifiably ceased work. | A promise is allowed to recover in quantum meruit the value of services he gave to a D who breached their K irrespective of whether he would have lost money had the K been fully performed and would thus be precluded from recovering in a suit on the K. |
| Rockingham County v.
Luten Bridge (US Cir Ct of App 1929) |
P was to build a bridge. D unjustifiably told P to stop wk under K, but P refused and spent more $ to complete bridge. | After an absolute repudiation or refusal to perform by one party to a K, the other party can’t continue to perform and recover damages based on full performance. The nonbreaching party is not permitted to recover damages which he could have avoided by reasonable efforts. |
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