Paper instructions:
Read the knowledge first and follow it to answer the

case question. total 6 cases thank you
NATURE OF CONTRACTS:

A contract is a legally enforceable agreement. The

modern contract action can be traced back to the

dawn of British common law. The law acknowledged

that remedy was due for injuries resulting from the

defendant’s failure to perform a professional duty. Early

actions were taken in “assumpsit” for nonfeasance

(failure to perform a promise). In assumpsit actions,

however, judges refused to order specific performance

(doing what was promised) if they thought that

consideration was inadequate. (Consideration is what is

given up in exchange for the other party’s promise.)

The standard was “equivalent value.” This made the

enforceability of contracts uncertain because judges

could invalidate agreements that had been voluntarily

created by the parties simply because those bargains

seemed unfair to them.
By 1850, American courts accepted the notion that

contracts should be based exclusively on the reciprocal

promises of the parties rather than on a subjective

notion of fairness. A promise, in turn, is simply a

statement of intent to be bound. Therefore, intent

became the underlying principle of contracts. Intent is

the conscious desire to produce a consequence. The

state of mind of the contracting parties, therefore,

became the deciding factor in determining whether or

not a contract existed.
In order to establish an enforceable contract, the

following elements must be present:
1.There must be an agreement, which usually

consists of matching promises (offer and acceptance).
2.The parties must be competent; i.e., capable of

formulating intent.
3.There must be genuine assent; i.e., voluntary

compliance.
4.There must be consideration although the specific

magnitude is left to the parties.
5.The promises must be lawful in their performance;

i.e., can’t be crimes or torts.
6.The contract must be in writing in certain limited

circumstances. (Needless to say, many oral and even

implied contracts are enforceable. The promises

constitute the contract, not the document.)
Typical contracts include insurance policies,

mortgages and purchases via credit cards.
Most principles of contract law exist in court

decisions (common law) although states have passed

statutes affecting certain types of contracts, notably

those involving employment and insurance.

CASE QUIZ:
A, Mr. Lacy and Mr. Zimmerman were talking in a

restaurant. After a couple of drinks, Lacy asked

Zimmerman if he had sold the Ferguson farm.

Zimmerman replied that he hadn’t and didn’t want to.

Lacy offered to buy the farm for $50,000. After some

bantering back and forth, Zimmerman wrote on the

back of a pad, “I agree to sell the Ferguson place to

W.O. Lacy for $50,000 cash.” Lacy said, “All right,

get your wife to sign it.” Zimmerman subsequently

went to his wife who was sitting in the restaurant and

said, “Do you want to put your name on this?” She

said, “No.” But then Zimmerman said, in an undertone,

“It is nothing but a joke.” She signed it. At that time,

Zimmerman wasn’t too drunk to make a valid contract.

The Zimmerman’s refused to convey title and Lacy

sued for specific performance.
1.What is meant by the term “specific performance”?
2.What defense would the Zimmermans use?
3.What legal reasoning would be followed in

determining whether or not a contract actually existed

(whether there had been an offer and an acceptance)?
4.Who should win?
B, Grayson singed a roofing contract with Clay Tile,

as agent for Sure-Seal Roofing Company, to have a

new roof put on his house. The agreement stated that

the contract was subject to Sure-Seal’s approval and

that the agreement would become binding upon written

notice of acceptance or commencement of work. Nine

days later, Clay Tile loaded up his truck and drove to

Grayson’s house only to find someone else was already

doing the job. Sure-Seal wishes to sue for damages.
1.In the context of this case, what is meant by the

term “damages”?
2.What is meant by the term “revoke an offer”?
3.Was Grayson’s offer to Sure-Seal revoked before

it was accepted?
4.Specifically, what is the evidence showing that

acceptance did or did not occur?
5.Who should win?
C,Please read Carter v. Matthews (find the case

online..)
1. Fraud is an intentional act of deception. There is

no evidence, however, that Matthews said anything at

all about the propensity of the land to flood or not to

flood nor is there any evidence that he knew it might be

prone to frequent flooding. Upon what legal logic

could Carter have based her allegation (charge) of

fraud? (That is, what could have been the legal basis

for her argument?)
2. Matthews cross-appealed arguing that restitution

and rescission were improper remedies for “mutual

mistake.” Our text, however, confirms that they are

proper remedies. Upon what legal logic could he have

based his claim?

CONSIDERATION:
Consideration is that which is bargained for and

given in exchange for another’s promise. It must be

“legally sufficient,” meaning that it must be either a

detriment to the promisee or a benefit to the promisor.

Benefit in the legal sense means the receipt by the

promisor of some legal right that the person had not

previously been entitled to. Legal detriment is the taking

on of a legal obligation or the doing of something or

giving up of a legal right by the promisee.
A court will not concern itself with the terms of a

contract as long as the parties have capacity and there

has been genuine assent to the terms. Whether there

has been a fair exchange, is for the parties to decide.

D,Workers agreed to work aboard a canning ship

during the salmon canning season. The contract, signed

by each worker, was to last for the length of time it

took to sail from San Francisco, California, to Pyramid

Harbor, Alaska, and back. Each worker was to

receive a stated compensation. They arrived in Alaska

at the height of the fishing and canning season.

Knowing that every day’s delay would be financially

disastrous and that it would be impossible to find

workers to replace them, the workers refused to work

unless they were given substantial wage increases. The

owner of the canning ship acceded to their demand

(i.e., he accepted their offer and agreed to pay the

higher wage). When the ship returned to San

Francisco, the owner paid them in accordance with the

original agreement. The workers now bring suit to

recover the additional amounts due under the second

agreement.
1. Please cite two defenses that the ship’s owner

could adopt.
2. Would the court enforce the second agreement?

Why or why not?

CAPACITY:
Capacity refers to each party’s ability to make

promises. It hinges specifically on the ability to

formulate intent (conscious desire to bring about

consequences). Needless to say, people who are

unable to appraise the consequences of a decision

aren’t legally able to formulate intent. Their contracts

are voidable; i.e., not automatically void but avoidable

by the impaired party at his/her election.
Those under 18 years of age are defined as lacking

capacity based on their presumed immaturity and lack

of experience. However, minors can be held for the fair

value of necessities such as food, lodging, education or

medical services. As a general rule, minors must return

whatever consideration was given to them but, even if it

has been destroyed, may nevertheless disaffirm and

recover the consideration they gave. This effectively

discourages adults from marketing aggressively to

minors.
Generally, minors who lie about their age in order to

secure a contract can, nevertheless, disaffirm.

However, minors are liable for their torts and can be

sued for fraud in such situations.
Contracts made by those who are intoxicated or

temporarily insane are also voidable. The standard

employed by the courts is whether a reasonable person

would have known that the plaintiff was impaired.
ILLEGALITY and PUBLIC POLICY:
The courts will generally not permit a person to sue

for performance of an illegal contract; i.e., one in which

the performance itself is criminal, tortious or a violation

of public policy. The court will simply “leave the parties

where it finds them.” Generally, if one party has

performed, that party cannot recover property

transferred to the other. There are certain limited

exceptions to that rule, however.

E, R.D. Simpson owned Bavarian Motors, an

automobile dealership in Ft. Worth, Texas. One day

Lee Lewis discussed purchasing a BMW M-1 from

Simpson for $125,000. Simpson suggested a double-

or-nothing coin flip. If Simpson won the coin-flip,

Lewis would have to pay him $250,000 for the car; if

Lewis won the flip, he would get the car for free! The

coin was flipped and Lewis won. Simpson said, “It’s

yours.” He handed Lewis the keys and title. Lewis

drove away in the BMW. Simpson subsequently sued

to recover the car.
1. Who should win and why?
2. How would the case have turned out if Simpson

had refused to turn over the keys and title after Lewis

had won the coin-flip? Who would get the car?