BargainExchangePeller-Fall 2007

8/10/2019 BargainExchangePeller-Fall 2007

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2/23

&ubstanti!e co((it(ent to freedo(

Rule for(alis( e(p"asi,ed

A.Hurley4. No duty to contract )c"oose contractin party one *is"es and

c"oose ter(s+UNLE&&.%%and no liability for failure to act

*)ception: Inn1eepers and Common Carriers9. 'harp Public-Pri!ate Distinction

ot on a spectrum+ so doctors clearly in private arena as opposedto common carriers

;. oal is to protect 'REEDO/ and LIBERT0of individuals fromgovernmental interference and prevents government from imposing duties on individuals

@. Bri"t Line RulesBo)ed Categories!*)! $ublic-private distinctionule vs. 'tandard- A "rive bright line speed limit protects

individual freedom more than a drive reasonably standard because there is less threat

from arbitrary discretion of the police9government9,udgesB.Lochner4. 'tatute limiting ba1ers hours to 59#1 held unconstitutional>. Constitutionali/es freedo( of contract from governmental regulation

Dustification: purports to protect freedom of individual*)ception: valid e)ercise of police po*erto protect health+

morals+ safety+ etc;. &ses bright line rule to say legislation does not affect 3health7@. &ses common la# definition of coercion to sho# contract 3free7 despite

potential uneEual bargaining po#er- uneEual po#er result in the mar1et!. Cant have 3class7 legislation at this time benefiting only one faction!. 0olmes "issent: Court ma1ing economic policy,udgments that should

be left to the legislatureF foreshado#s ealism policy analysis cannot be legitimate!C. Coppage (essentially constitutionalized the common law of contracts)

4. 'tatute that prohibits employers ma1ing non-,oining of a unionreEuirement for employment held unconstitutional under freedo( of contract

>. *mployee doesnt have to ta1e the ,ob+ so it still free to contract;. &ses common la# definition of coercion and capacity not duress etc!

to sho# contract 3free7 despite potential uneEual bargaining po#er- uneEual po#erinevitable and necessary result in the free mar1et!

@. $rivate individual! vs. $ublic distinction again

Part II- CONTRACT DOCTRINE UNDER CLT

Contract1leally enforceable aree(ent

I. No Duty to ContractA. Cases

4.Hurley- No duty: "octor doesnt have to contract to treat dying patient+even if been his doctor for years


3/23

>.oston !ce- 'reedo( to C"ose *it" *"o( you contract+ Buyer didnthave to pay for the ice #hen party #hich he had refused to contract #ith earlier buys outanother ice company and starts delivery #ithout notice. W0AT I2 IC* W** 'TI%% I*GI'T*C*

*)ception- I(plied Assu(psit. Can only recover conse2uential da(aesif they #ere in reasonablecontemplation of the parties #hen they made the contract

;. In this case+ not in the parties contemplation@. %evel >- If it #asnt in the parties contemplation+ then they did not

consent to itIII. C='*T- Offer and Acceptance (ust de(onstrate e!idence of consent

A. Intentto be %egally Bound4. Agreement in marriage and family relationships presumed not have to

have intent to be bound unless e)press- 'eealfour andHertzogDustification- These 1inds of agreements natural to family lifeF

#ould create too many la#suitsF $ublic-private distinction+ dont #ant governmentintruding into private life and creating contracts

>. =n the other hand+ intent to be legally bound is presumed in businesssetting- 'ee%m&ry

;. Obecti!e T"eory of Contracts# Intent measured not by sub,ectiveintent of party but by ob,ective reasonable persons interpretation of #ords and actions

%m&ry- *mployee as1ed if contract #ould be rene#ed for year andsaid if not+ he #ould stop #or1ing. Boss told him not to #orry about it and court says thatthis is a contract #ith intent to be legally bound because reasonable person #ould see itthat #ay even if the boss sub,ectively did not


4/23

=b,ective theory: Consent is identified according to #hat =T0*' thin1 you #erechoosing B&T C%T emphasi/es individual rights!What about reliance? Interest in being secure?$remise: *mployer has not made choice to contract based on ob,ective theory!RULE:No liability for econo(ic e3pectancy of anot"er unless consent in 4

a+intent to be leally boundb+ (utual assent )obecti!e t"eory+

c+ definite

d+consideration

C=&T* &%*: Euantum meruit9restitution ice still in *GI'T*C*!

$=T*CT *%IAC*9'*C&ITH IT**'T'

one commitment to protect individual choice and autonomy B&T another commitmentto protect security of property!

!s market coherent &ut unfortunate' %*+* ,o coherence at all*et of ules determine ine-ualities of fortune

$otential Dustifications- 'ecurity in ones actions in themar1etplaceF people cant 1no# ones 3secret intentF7 in service of property interests

2undamental C%T Conflict bet#een property9security interests andfreedom of choice

@. Three types of Contracts- 'eeHertzog*)pressF Implied in 2actF Implied in %a# legal fiction+ imposing

contract-li1e duties #here no contract e)ists+ controversial in C%T!InHertzog+ found no constructive contract in family situationAnti constructive contract- Court calls it a potential

despotic po#er+ can base it merely on sympathies of ,udge9,ury rather than consent$ro-constructive contract- e)isted in C%T period in limited

sense in order to protect security9property interests+ prevent un,ust enrichmentTension in C%T

B. /utual Assent4. /irror Acceptance Rule- changes to offer are re,ection of offer

,ormile- Contract for a house includes offer to 1eep it open for atime but then a counteroffer made+ #hich voids the original offer so it is no longer

e)clusively open. The couneroffer becomes the ne# offer+ but the seller can decide not toassent to it and sell to someone elseealist esponse- rule limited by &CC and default provisions

>. &inature- A party is presumed to understand and agree to the contentsof any contract that he signs in the absence of fraud9misrepresentation.

vie- person #ho didnt 1no# *nglish and signed contract #ithoutas1ing #hat it meant can be held liable also+ failure to disclose is not fraud!=ne #ho signs is presumed to 1no# its contents


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C%T protects others reliance! Was loan officers reliance reasonable? enerally+signature means assent &%*'' you 1no# signer cannot read'o+ rule that signature(assent should not apply bc more po#erful person is ta1ingadvantage of less po#erful person

4! Critici/e rule as formalism blind adherence to rule. ot loo1 past rule at reality!

'o+ move to standard?>! W0AT I' C='*T? ules are for po#erful+ and standards are fordisempo#ered? =. no-means-no rule. Consent is socially constructed. !

odern perspective: #as there a fiduciary relationship?C%T: fiduciary relationship #as not available in this type of case

Basis of fraud rule? "id '1inner have a duty to as1 or did loan officer have duty todisclose? Case turns on this Euestion+ even though contract la# could not ans#er such aEuestion. C%T thought it #as obvious that '1inner had dutydisintegration of C%T

If he didnt 1no# #hat he #as signing then he could not have assented---theory of

s1innerAnalogy to *mbry ob,ective theory of contracts-reasonable interpretation of ob,ectivemanifestations!: signature(ob,ective manifestation of assentB&T #hat about fraud or duress? ot possible in this case bc failure to disclose is notfraud at this time2raud(affirmative misstatement of material fact upon #hich another party relies. T#ouses @ fraud 4!as defense for contract enforcement >!as tort intent #ould be reEuiredhere!0o# #ould you fight for '1inner #9o using fraud!? =n #hat theory? '1inner is anincompetent party cannot contract! he is li1e a childC%T: If '1inner did not understand+ then court says it is his o#n fault. %oan officer did

not have duty to ensure '1inner understood.eneral rules dont(e)act results. $olicy al#ays involved.If loan officer had reasonable belief to believe '1inner did not understand+ then li1eBroomfield! #ould there have been a special relationship?Any arguments that do not e)clude '1inner from the mar1et?'1inner authori/ed loan officer to sign for him by touching the pen-

The signature is not even his+ he does not spea1 the language that the contract is in..soloan officer should have a duty to ma1e sure party understands i.e. standard! B&Tstability in the mar1et #ill be threatened by such a sub,ective standardCould argue that rule is overinclusive.includes ppl #ho do not intend to contract'hould '1inner have duty to as1 or should loan officer have duty to disclose?

Jelen1o analogy? If loan officer started to e)plain+ did he not have a duty tofinish9continueIn,ustice of result as attac1 on formalism?=b,ective signals that no assent e)isted?What about contemporary 3no-means-no7 rule?2ormalism is not nec blind to social conte)t. Blindness can protect

Dustification- protect the security of mar1etplace and those relyingon contractF bright line rule.


6/23

'hould there be an e)ception for fairness9eEuality in mar1et?C. Definiteness

4. C%T rule- Court #ill not enforce a contract #ith vague9indefinite termsand *ill not i(pose t"e ter(s5*rite t"e contractfor the parties

*un "rinting- parties have floating9shifting price- indefinite

$arties have not bound themselves in any #ay an agreement to agree is unenforceable!Cardo/o(legal realist+ no contract bc it #as indefinite the period of time #as unclear!ealist esponse- similar to dissent vie# in 'un+ should facilitate

the parties agreement by putting in default gap filler terms+ 'ee &CC later. easonableInterpretation. >./avis v. General 0oods- #oman sends recipe to company eventhough they say its their discretion #hether they #ill pay. They dont pay and court cantfind an implied contract because it #as unreasonable for her to e)pect to be paid. Also+there #as no consideration no mutuality! 4! breach of contract claim: Illusory promise sono breach of contract based on 'un $rinting! >! in absence of contract+ should be paid bcprovided something of value implied in la# contract!


7/23

A. ule: Courts #ill not e3a(ine sufficiencyof consideration4. 1oodL Woman sells diamond for M4 not 1no#ing #hat it is there is no

fraud or mista1e! and court denies to invalidate contract because #ont loo1 intoadeEuacy9fairness of consideration%a# of property determines #hether possession is rightful

The buyer #ho is no# in possession acEuired title! cannot be divested of property unlessthere #as fraud or mista1e abt identity! in the #ay he acEuired his possession. B&T nofraudestatement mista1e doctrine did not e)ist at the time of the caseecission not valid on basis of stones later learned value bc there #as adeEuateconsideration neither party 1ne# abt true value of stone!Court does not ma1e inEuiries as to fairnessIf ,e#eler did 1no#+ he did not have duty to disclose no special relationship!?&nder property la#+ ,ust price doctrine something eEuivalent given for stone!? utualassent not enough B&T do not measure adeEuacy of considerationWhat is consideration? Courts do not have po#er to decide value of things value of

things is uniEueli1e tastes and preferences. Kalue is sub,ective. o rule formeasuring it. ot desirable to measure value other#ise ppl #ould not be able to decidefor themselves in the mar1et ho# they value things.!ratuitous promise not enforceable via contract la# but by property la#Contemp misa1e doctrine not in use at the time. &nder this doctrine+ it #ould not matterb9c the party see1ing relief 1ne# she #as ma1ing it based on limited infor '= she too1the ris1

>. Dustification- 2reedom of Contract but could ma1e property9securityargument to protect her interestF "emonstrates C%T tension bet#een freedom andproperty9security

B. Counterrule: Courts #ill not enforce gratuitous promises4./avis v. Morgan- Consideration has to be something youre not already

obligated to do+ so staying on in anticipation of end of year bonus is not enforceablecontract pre-e)isting duty rule?!

>. Houd have to submit a ne# agreement to replace the old one in orderfor it to be enforceable+ although no# its much easier*mployer on contract for specific amt for one yr. $romise made for e)tra money. 2iredbefore contract over. *mployer sues employeeo consideration for promiseNemployer did not gain anything in e)change*mployer #as already obligated to #or1Cannot give #hat u are already legally obligated to do($* *GI'IT "&TH &%*AH change in terms or conditions = agreement to rescind and dra# up ne# contractB&T a ne# deal #ould be made if change to hours or MM made involves change in #hatthe employer #ould have to do!&nder #hat circumstances+ can there be agreement to end e)isting contract? If there is anagreement evaluated by same standards! to get rid of the old agreement(*CI''I=A***T. In recission+ employer #ould give up right to have employee #or1 and


8/23

get paid. *mployee gives up right to receive payment and gains freedom from #or1ingfor hours

If agreement not e)ecutory both 'TI%% have to complete the contract obligations ! onboth sides+ no contract

Part III- TORT DOCTRINE UNDER CLT

I. No Duty to Actto assist9prevent harm9benefit anotherA. Cases

4.uch- o liability for company #hen 1id enters #ithout permission andis in,ured even if 1id doesnt 1no# theres a danger! because no duty to *arn%egligence(tort claim that allo#s in,ured party to recover for unreasonable conduct ofanther party. B&T no act by factory so no conduct! and one is not liable for failure to act.= "&TI*' T= T*'$A''* as lando#ner. What licensees? ust #arn them ofhidden dangers. Business Invitees? ust use reasonable care to ma1e premises safe for

them. *A'=' for no duty to act: The duty to protect against a wrong is a moralobligation only, not recognized or enforced by law. Gulf between law and morals.Gulf between cause and prevention (under private morality, not under law).Exception to rule !intimate relations in the nature of a trust"#special relationships(i.e. parent and child bc child is dependent on parent) Trust and dependencecreate special relationship. $hat abt bf and gf who have lived together for yearsand have children% $ould they have a special relationship% &unctionally, marriedcouple 'T not considered special relationship (bright lines impt.)

"ifferent rule if invited onto premises: see special relationships>. 2ania- A Business Invitee highest duty of lando#ner(to invitee! ,umps

into a pump and dro#ns after taunting of defendant+ but no liability because there #as no

duty to actto save him"efendant does have a duty to in!itees+ but that duty is to 1eeppremises in a reasonably safe condition or #arn if they are not. In this case notunreasonable+ because anyone #ould have seen the danger of the cliff9pump

*)ception: There is duty to #arn mentally incompetent or duty toact if you actively put them in danger

; theories of liability: 4! taunting(cause of harm bc loss of free #ill >!ha/ard on propertyand failure to #arn(negligence ;! no rescue attempt no duty to act rule? Is this ane)ception bc business invitee?!

B. %evel > Dustification4. ain one: 2reedom and %iberty- regulating people into ma1ing actions

curtails their freedom of choice>. $eoples morals could be different+ shouldnt sub,ect everyone to same

moral standardC. The Act-=mission "istinction

4. /isfeasance !s% Nonfeasance2ormer is negligent action+ latter is no action and does not allo#

for tort recovery e)cept in special relationship


9/23

"oesnt matter if failure to act is because of desire to see victimharmed

>. E3ception: When the danger is due to any active force under thedefendants control there is liability

Continuing to run machinery is no# an act

*)! ot stopping train #hen you #ould be able to". ealist response- brea1ing do#n of act-omission distinctionF not acting can bean action

*. Contract $arallel: o "uty to ContractII. Counterrule: "uties to Act can be created through &pecial Relations"ips

A. Business elationships4. 2ormal partnerships may fall in this category+ but cases here impose

broader duties =T I %I* WIT0 C%T>.Meinhard- Cardo/o legal realist! finds fiduciary relations"ipcreates

duty%evel ;- ealist ta1e undermines C%T because violation of liberty

having duties imposed #hen havent agreed to.eversion(#hat reverts to o#ner once tenancy is over."istinction b9t rene#al and reversionary interest."istinction b9t partners and co-adventurersBright line rule abt $AT*' and rene#al

=T T=%" W0AT T0* CA&'* =2 ACTI= I' thin1 it is an action for un,ustenrichment! **"H: constructive trust Ocommonly used as remedy for fraud. O

Cardo/o opinion(consistent # Buch resultIn this case+ economic loss from failure to act9discloseOOOOOOOO$ ;@OOOOOOfollo#ing rule structure B&T #as the relationship an intimate orspecial one i.e. fiduciary!?? 'imilar to Euestion posed in $ough1eepsie #as ne#spaper aEuasi public entity?!

This case #as a controversial application of the special relationship rule.$AT*'0I$(association of indiv in #hich they agree to act for the common benefitshare the proceeds! Interdependent.

Andre#s formalist!+ suggests case should turn on definitional roles4. Theyre co adventurers+ not partners>. o rene#al reversion!(no obligation to share

Cardo/os ,ustifications4. *Euity is not formalistic. Coadv(functional partners shared goals+

interdependence+ trust!ATI cordo/o: they chose =T to contract. They chose not to become partners.freedom9liberty emphasi/ed by formalism. 'o the e)ception threatens freedom!


10/23

;.roomfield# finds a fiduciary relationship #hen the plaintiff relies onthe defendant and the defendant 1no#s they are in a position of trust

Why should there be no liability here? Business person+ not a child. 0e signed a contract.Business relationship(self-interested9in free mar1et+ everyone loo1s out for himself

Why does Poso# deserve money? 0e #as li1e a general contractor9in charge ofeverything not 3charitable7 #or1! paradigm of business relationship+ not intimate one

B==2I*%" A" *I0A" '** T= D&'T B* A$$%HI T0* &%*+WIT0 *GC*$TI=' W0** C%T W=&%" 0AK* *K* 2=&" A '$*CIA%*%ATI='0I$! *GT** CA'*'. CA'*-BH-CA'* AA%H'*'

2ACT=' T0AT %*A" A C=&T T= 2I" T0AT T0** I' A '$*CIA%

*%ATI='0I$:4! "*$*"*CH>! T&'T

T0* AB=K* 2ACT=' A* IIA%I'T;! =T0* $ATH 'T= $ATH! P=W%*"*

B=A" A" "A*=&' *G$A'I= =2 '$*CIA% *%ATI='0I$' I2 H=&T0IP IT T0*AT*' A&T==H

W0H =T '&* @ 2A&" I2 T0** WA' 2A&"? T0** WA' = 2A&"reEuires statement of fact!. D&'T puffing.The #ritten agreement(#hat the parties agreed to$arole *vidence ule:*vidence demonstrates dishonesty or fraud

%evel ;- Another ealist infringement on C%T vie# of liberty

B. Assumption of "uty4.3elenko: If bein to "elp+ #ill be liable for negligently failing to

continue aid not acting reasonably!. Therefore+ o#ner held liable for ta1ing sic1 patient


11/23

to bac1room but not helping further inivitee9invitor relationship as #ell asrescuer9rescue!

Dustification- Hou freely chose to assume the duty+ so it doesntviolate liberty to hold liable$olicy argument9,ustification: by underta1ing+ he made it less li1ely that others #ill help

ule #ill apply even #hen ,ustification is not present>.yres: "uty to aid #hen person is (asteror controls instru(entalityBoy falls on escalator and gets arm caught

o negligence in causing the action not responsible+ no 3#rongful7 act! B&T there #as aduty once the accident happened to come to the rescue. 0o# much damage? *nhancedin,ury from failure to rescue!If u create the peril another is in+ then you have a duty to aid'pecial relationships: instrumentality+ master9servant+ invitor9inviteeIn this case+ invitor Controlled machinery

BA'*' for legit imposition: C='*T and 2A&%TTorts(divided into ; parts defined by level of culpabilityIT*TI=A%+ negligence+ strict liability2or unintentional#hat should be the level?

C. Inn1eepers9Common Carriers9. os&erg- Liable for da(aes5inuries e!en if t"ey are not reasonablyforeseeablestrict liability type damage rule!

Child liable for damages after lightly 1ic1ing other child eventhough the e)tent of damage #as because of pre-e)isting in,ury that child didnt 1no#about Ta1e $laintiff as you found him even if didnt 1no# he #as vulnerable: T"in-&6ulled Plaintiff Rule!Argument based on 0adley for defendant?


12/23

o liability if damges =T reasonably forseeablev. %iability even if

If had been on the playground+ might have been an implied licenseconsent presumed! to 1ic19roughhouse etc+ but there #as not in this case

%evel > Dustification- As Bet*een T*o Innocents+ %et the one

#ho acted pay. Pic1ee did not ma1e choice to suffer harm #9o redress "AI2I*" BH= 2A&%T =2 0I' =W!. 'hould he not be secure from in,ury? Core $rinciplesupporting 'trict %iability type arguments! vs. core principle supporting negligence typeargument- No Liability 7it"out 'ault7"y s"ould 6ic6er be liable8 No reasonable person *ould foresee suc" "ar(% 9e

did not (a6e c"oice to cause "ar(% T"e decision ta6es a*ay "is autono(y%

I(position of c"oice on "i(

;.Mohr v. 1illiams- "octor had consent to operate on one ear butoperated on other because found it #as in #orse conditionF Court found a battery becausethere is an intrinsic harm to bodily integrity- even if touching beneficial there is battery#ithout consent

o malpractice hereo emergency'he has a right to decide #ho and #hen her body is touched3beneficial7 as measured ob,ectively medical care+ etc.!

@. %evel Three in C%T: =ne #ould thin1 strict liability rule here #ouldimpinge on freedom of choice because you are not necessarily choosing to in,ure theplaintiffF ho#ever+ again there is a conflict #ith property9security interests to givefreedom from in,ury

. "octrine of Transferred Intentfor all intentional torts- e)! shootingsomeone and miss and hit someone else+ it transfers their intent to be to shoot the personthey ended up hitting

. &ubstantial Certaintyfor all Torts- e)! if shoot gun into a cro#d+reasonably certain it might hit someone

B. Assault4. *lements- a! duty not to put someone in reasonable apprehension of

imminent battery b! present ability to breach by act #ith intent to cause apprehension orto commit battery reEuired c! causes d! harm is the apprehension+ not an in,ury per se!

>. "ont have to actually commit battery to commit assault-'ee! /e *4 clock stopped working

/uty4 ,egated &y defense of not &eing a&le to reach across the counter;. /ere 7ords Doctrine- Insufficient to constitute assault but slightest

accompanying overt act9conte)t i.e. #agging fist menacingly! can suffice #ords $%&'overt act reEd!

@. Conditional Threats generally not assault+ although if as1ing to give upa right+ then it can be fear not actionable+ only reasonable apprehension!"octrine of respondeat superior: employer liable for employee #ithin scope ofemployment but for using the matters of employment+ could not have furthered hispersonal..!

C. Trespass


13/23

4. *lements- a! duty not to violate o#ners right of e)clusive possession b!breach by act+ intend to do act that causes trespass+ doesnt have to 1no# about o#nershipc! causes d! harm damages to blades of grass for real property!

>. There doesnt have to be a physical in,ury to the land- the in,ury is tothe o#ners right to e)clude bro1en blade of glass theory! 'ee *tepp Case#5ustification

for nominal damages (e-uivalent to Mohr) dignitary6 intangi&le freedom to e$clude wasviolated like freedom from &odily intrusion. ight of e$clusion &reached &y watered#down

intent

;. enerally 'trict %iability here- 'ee Gil&erteven though trespass #asto save himself from being harmed!

@. *)ception: If not voluntary i.e. dragged onto property+ not trespass bche did not ACT to go onto the land!

. Contemporary: can have trespass that is not physical but an intangibleforce. 'eeMockeven though doesnt apply in that case!(#rin1le in trespassIK. &nintentional egligence! Torts

A. egligence vs. 'trict %iability egligence as basic standard for liability!

4. The general rule in C%T period and today is Neliencerown v. 7endall- Kictory for the egligence 'tandard!vesCase- Constitutionali/es although not federally! egligence

as standardF cant ma1e company strictly liable for in,uries in #or1place$rinciple- sees as violation of due process because

presuming fault and not giving a chance to argue against itF could argue that employeeassumed ris1 of non-negligent in,ury by agreeing to #or1

'LETC9ER#reservoir brea1s and floods anothers property! =pinions: artin- 2act#e impose strict liability for Euasi-public institutions proves the rule public-privatedichotomy!iven: reasonable land o#ner #ould not have 1no#n about previous underground mine'hould there be civil liability in the absence of reasonable care '%!? =r should there becivil liability for failure to e)ercise reasonable care?ights discourse cannot resolve issue--al#ays in conflict so can never arrive at result$olicy reEdediating principles? 2irst-in-time+ first-in-right?&%*: 'trict %iability

Aru(ents for &trict Liability

ramwell- $rotecting defendants property and security rights negligence should only berule #hen #e dont 1no# #ho acted9caused the harm- collision cases are e)cepted bcdont 1no# #ho is at fault9cannot apply '% ruleF inn1eepers and common carriers havecontracted to accept liability for other people! 2= $%AITI22lack&urn- In,ured $arty is not consenting to in,ury. 2IA% "*CI'I=- imposes strictliability in narro# category: bring something on land thats not natural+ liable for mischief#hen it escapes 2= $%AITI22

$laintiff has right to be free from harm9in,ury


14/23

$rinciple: let the one #ho acted pay$olicy: "ont #ant to deter people from acting9good

behavior 0olmes stay in bedproblem!0olmes: 'ince tort isnt based on consent li1e contract!+

negligence most closely appro)imates C%T free c"oice5consent idea because based on

acting according to the foreseeabilityof the in,ury not negligent if in,ury notforeseeable!

'trict %iability #ould ma1e everyone an insurer of othersin,uries and #ould be a form of regulation and 0olmes doesnt #ant that

Proble(: "oesnt ta1e into account choice9consent of thevictim

Aru(ents for nelience

artin: 2= "*2*"AT #ho has right to freedom of action9to utili/e land

$rinciple: o %iability Without 'ault bc ppl "a!e ri"t to act$olicy: Want to deterbad9dangerous behavior@. %evel Three

$arallel to consent in contract2reedom v. 'ecurity contradiction arises again: Hou should have

freedom of action and not be liable for every unforeseeable in,uryF ho#ever+ there is asecurity interest in victim that should be protected

either party is actually 3passive7- victim could conceivably haveduty to put fence rather than be free from having others cattle enter land

B. easonableness 'tandard4. 0o# do #e come up #ith this standard?

2irst+ 0olmes9C%T pic1ed the sub,ective standard of negligence'econd+ they pic1 the ob,ective standard based on a reasonable

personand re,ecting the idea of sub,ective intent9honest belief! for determining #hetheror not someone has acted negligently

Arguments for ob,ective9reasonable person standard #ill besimilar to strict liability arguments on the previous level

>. easonable $erson Test- When do you subcategori/e to determinereasonableness?

'ee *mith v. Lampe- defendant blo#s horn in fog+ not 1no#ing#hat it means+ boat crashes+ but he is not held liable because reasonable non-maritimeperson #ould not 1no# #hat it meant

2or each category+ the same negligence v. strict liability arguments#ill be used again for #hether each group determined by ob,ectivity or sub,ectivity

'tupidity- o+ ob,ectiveF 'ee aughn#here defendant held liablefor burning hayric1 even though he didnt thin1 it #as negligent

Insanity9'evere mental disability- Hes+ sub,ective"run1enness- o+ ob,ective chose to ma1e this a disability!Blindness- Hes+ turns standard into sub,ective one of reasonable for

a blind person


15/23

Children: Hes+ turns standard into sub,ective one of reasonablechild that age e)cept #hen doing things that should be done by an adult!

'pecial '1ills9Pno#ledge- Hes+ as is doctor held to a higherstandard

;. %earned 0and Calculus

2ormula: B:P)L+-Action negligent #hen the burden of ta1ingprecautions is less than the probability of in,ury times the cost of the loss9in,uryCarroll 8owing- Barge o#ners acted negligent by not hiring

bargees because cost of hiring less than in,ury times probabilityDustification- %a# and *conomics *fficiency and encouraging

action rather than staying in bed$roblem: What if the custom is not using bargees? Then isnt it

reasonable not to?@. %evel Three

As1ing sub,.9ob,. Euestion again and again and C%TArbitrary9Inconsistent in pic1ing sub,ective standards in some cases and ob,ective

standards in others Indeterminate: There is really no absolute reasoning for pic1ingone over the other

%oo1ing at reasonable man doesnt protect the consent of theindividual because courts are not loo1ing to individual intent- It is a regulationQ

$art IK- ealist CritiEue of Classical %egal ThoughtI. Boundaries

A. C%T Boundaries discretionary and indeterminateB. They #ere engaging in policy ,udgments #hen they #ere ma1ing these

decisions about #hat should go into #hat categoryF they #erent 3finding7 the la#II. Identifying Consent

A. C%T ,ustifying self on the grounds that it protects liberty+ consent+ free-#illB. 0o#ever+ uses an ob,ective standards i.e. ob,ective theory of contracts+

reasonable person in tort! to determine #hat consent is big internal contradictionQ!C. Any particular choice here turns out to be a regulation+ despite #hat C%T says

about trying to avoid regulationsIII. ar1etplace

A. All policy decisions+ so should be decided by the legislatures rather than by thecourts i.e. anti-%ochner!

B. o #ay to ,ustify putting limits on the mar1etplace li1e unfair competition! byfree mar1et ideology because free mar1et ideology can potentially support both sides

C. 0ale- every mar1et transaction is coerciveIK. %egally $rotected Interests vs. $rivilege

A. Whether to ma1e something a legally protected interest or not cannot bedictated by property rules alone other#ise #ould be circular!

B. Whether or not to recogni/e a harm is a po#erful form of regulation+ and italso affects the distribution of #ealth in the society

C. These are social values9social choices+ not preordained decisionsK. Third $arty *ffects


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A. othing is completely 3private7 because every transaction bet#een t#o peoplealso have a broader effect on others

B. Then+ it becomes a policy decision rather than a matter of principleKI. everses the $ublic-$rivate "istinction

A. %egally protected interests- every decision not to recogni/e one is an action by

the government granting a privilegeB. Boundaries- indeterminate+ these are all public decisionsC. "ecisions made about consent ob,ectively are all state regulations

$art K- T=T' post-C%T9*volution of e# Torts

I. *volution of e# Torts- ecogni/ing that failure to recogni/e a legal protected interestis a privilege to harm

A. Intentional Infliction of 'evere *motional "istress4. *lements estatement @!- a! duty not to engage in e)treme and

outrageous conduct b! breach- Intended+ 1ne# or 3rec1less7 about ris1 c! causes d! harm-

severe emotional distress some ,urisdictions reEuire manifest of bodily in,ury!>. ;rd$arty claims- can recover even if not directed at them if its directedat a member of immediate family and they #ere present = if it results in bodily in,ury

;. 'tarted #ith parasitic recovery- 'ee 1ilkinsondeceit! and Gaslightnominal trespass!

@. Independent ecognition- 'ee George v. 9ordan Marsh6 Court decidessince that its allo#ed parasitic recovery in other cases then theres no reason they cantestablish a separate tort

*ither #ay youre ma1ing a decision+ either to privilege the harmor not "oesnt have to be a physical in,ury

. %imits on %iability-Gomez v. Hug: eEuires 3e)treme and outrageous conduct7 and

use of ethnic slurs and found #as not e)treme and outrageousCase also e)ample of "efamation Tort- $er se doesnt

reEuire proof of an actual harm but per Euod doesHarris v. 9ones- *motional "istress has to be '*K** even if not

necessarily accompanied by physical in,uryB. &nfair Competition

4. Initially &nrecogni/edMogulCase- o tort of predatory pricing+ accompanying privilege

of competitionF by not recogni/ing harm+ they are privileging the harm>. Tort Becomes ecogni/ed to some e)tent

8uttle v. uck- ight be #illing to ,ustify a tort of predatorypricing running barber out of business! in limited case if it is not based on anything inthe mar1et but instead on ,ust the defendants ill #illF *ee alsoI' v. A$

In the end+ federal government codifies protection from harm in'herman Anti-Trust Acts

;. %evel ;- ar1et ideology supports both sides of this issueF thereforeC%T mar1et theory9reliance doesnt give the ans#er conflict bet#een freedom to act and


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security from unfair competition in business! and every choice not to act is a choice forprivilege brea1ing do#n act-omission distinction!.

C. Arguments about ecognition of Tort of 'e)ual 0arassment it is notrecogni/ed outside of title R and S at the moment!

4. $recedent

Against- It hasnt been recogni/ed before2or- Title R and S sho# an emerging social policy that this 1ind ofbehavior should not be toleratedF $recedent for recogni/ing ne# torts and the la# needsto be fle)ibleF 1hen someone intentional harms another there is a remedy in tort unlessharm is 5ustified and e$cusedcentral principle in most tort cases- see 8uttle!

>. $rincipleAgainst- 'ecurity- If someone has been harmed by another+ there

should be compensation #ithout good reason #omen shouldnt have to put up #ith thisQ!2or- 2reedom of e)pression of courseF 2reedom to progress

beyond cultural norms;. $olicy

Against- rules against harassment might chill social relations:se)ual freedom and therefore less ,oy 0olmes stay in bed argument!. "ont #ant to deteraction9good behavior

2or- Want to deter bad behavior.

%a# and *conomics $olicy argumentsAgainst- not #orth it for the victims to 3purchase7 the

right in the mar1et pay off the harassers! and therefore #ould be inefficient to have therole. If they #ant it they #ould have paid for it.

2or- Transaction costs prevented them from having their#ishes accurately reflected in the mar1et

@. AdministerabilityAgainst- Impossible to come up #ith reasonable person standard

and also diversity of #hat is appropriate2or- Weve identified it before in terms of statutory anti-

discrimination cases so #hy cant #e do so here?. Institutional Competence

Against: o value-free #ay to determine #hat is reasonableinteraction bet#een people so the proper venue for this is a legislature in the democraticsphere Brandeis argument from I'!

2or: ot deciding #ould still be ma1ing a decision i.e. iller v.'choene! and privileging the behavior of se)ual harassment

". %evel Three point- decision about #hether or not to recogni/e legal harm isgoing to affect the distribution of #ealthII. "efenses to Intentional Torts- allo#ing a defense to an intentional tort also creates aprivilege

A. Consent4. ot defense per se but destroys the prima facie case because destroys

#rongfulness of the action


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>. Based on a reasonable personstandard- can be inferred+ implied andalso constructed in an emergency circumstance

;. *)ceptions to consent- incapacity+ coercion+ mista1e about the nature ofthe invasion+ consent to something one cannot sometimes criminal action!

@. Canter&ury v. *pence: In order to achieve informed consent in trust

relationship+ one must give #hat reasonable person #ould need to 1no# to ma1e adecision. *)ceptions are emergency and cra/y patient. *ven if the individual patient#ould have not consented under the circumstances+ it is a reasonable person standard

%evel Three: ot respecting individual choiceB. 'elf-"efense

4. ust have reasonable belief in i((inent peril>. $rivilege is limited to the use of force that is+ or reasonably appears to

be+ necessary for protection against the threatened in,ury;. In using deadly force to protect oneself+ one must be in danger of death

of serious bodily harm and has a duty to retreat if it is a safe retreat! unless no possibilityor in ones home

@. =ne has privilege to defend others and ones property as long as fulfillsthese other reEuirementsC. ista1en 'elf-"efense

4. *ven if you are mista1en that the situation is an imminent threat+ youare still privileged to act in self-defense so long as the (ista6en belief is reasonable

'ee Courvoisier- store o#ner shoots a police officer duringrobbery thin1ing that he is one of the assailants and this is privileged

>. If a third-party is mista1enly in,ured #hen someone is legitimatelyusing privilege of self-defense then there is no liability as long as not negligent

'eeMorris v. "latt- Innocent bystander hit by stray bullet asdefendant tries to protect himself from attac1 from a mob

;. %evel T#o arguments for and against this standard2or egligence Arguments!- $eople #ont defend themselves if

theyre #orried about ma1ing mista1e dont #ant to deter good behavior!F o liability#ithout fault+ #e #ant to protect freedom of individual #ho made reasonable choice

Against 'trict %iability!- As bet#een t#o innocentsF". ecessity

4. $rivileges trespass #hen there is an i((inent needand the !alues tobe preser!ed reater t"an t"e !alues t"reatened no other reasonable #ay to saveproperty9person?!

>. $eople are not allo#ed to stop others untie boat from doc1! from usingtheir property in case of necessityF 'ee"loof

;. Inco(plete Pri!ilee- have to pay for the damages to the property theyare using even though they have the privilege to do so

*. Why is self-defense a complete privilege and necessity incomplete?4. 0olmes: "ont #ant to deter people from ta1ing self-defensive action if

they need to>. In necessity+ people are still going to tie up #hether or not they have to

pay


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$art KI- C=TACT in the *A%I'T *A9post-C%T'or a contract to be leally bindin it (ust "a!e:

4! Intent to be legally bound>! %egally binding offer;! Kalid acceptance

@! Consideration

I. "efining 3eeting of the inds7A. Obecti!e T"eory of ContractsQ

4.Lucy v. 3ehmer- *ven though defendant had secret intent that he didntmean agreement to be contract+ the out#ard manifestation #ould cause a reasonableperson to find a contract

Can be voided by incapacity or if both parties 1no# that its a ,o1e>. Dustification- O$rotects security of transactions+ other#ise people

couldnt depend on agreements and contract la# #ould fall apartF reasonable e)pectationcreated in other party

B. ista1e4. Traditional ule- ista1e on a material term the thing itself! of thecontract and a basic assumption involved+ but couldnt be a mista1e about a mista1e in,udgment or degree of ris1+ and the other side cant have assumed the ris1

>. &nilateral ista1e- If one party should have reasonably 1no#n aboutthe mista1e+ then the contract is unenforceableF ho#ever+ it is enforceable if the otherparty bears the ris1 by going ahead #ithout sufficient information

;. utual ista1e- 'imilar to the traditional ruleII. "efining =ffers and their Acceptances

A. Ad!ertise(ent not a leally bindin offer- 'ee Craft v. %lder4. Dustification- ,ust an invitation to negotiate+ cant interpret as offer

because send it out to everyone and #ill not have enough inventory for all>. Counterrule: When advertisement clear about e)actly #hat #ill trigger

performance and #ho its directed toF 'eeLeftkowitzclear and definite+ offering firstcome-first served!

B. &ilence cannot constitute acceptance- 'ee"rescott4. Counterrule: &nless the circumstances indicate it should be so

understoodF 'ee%hrlich6 #here there #as an ongoing relationship and buyer didnt sayanything #hen sent a rene#al notice

"rescottintroduces idea of promissory estoppel but doesnt applybecause cant rely on merely a statement of intent

>. Another *)ception- undue delay in communication action9decisionabout acceptance of a contract can amount to an acceptanceF 'ee Cole6 #hen item #illbecome unmar1etable by delay

'eems to be focusing on the reliance of the buyer+ li1e promissoryestoppel #ill eventually do

C. %evel Three- The ne# counterrules are based on Conte)t and create additionalsubcategories+ #hich is #hat ealists #ant+ they dont #ant to be relying on the formalrules #hen they get in the #ay of the security of transactions and the #ay real people actIII. Contracts by Correspondence


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A. /ailbo3 Rule: Acceptance effective upon dispatchF 'eedams$otential Dustifications- seller has appointed postal service as agentF need

some 1ind of rule+ other#ise there can be infinite regression of #hen acceptance effectiveB. etraction of an offer+ on the other hand+ has to reach the other partyC. $rice ->5R- even if terms different+ still an acceptance unless made

e)plicitly conditional on those termsF terms are added to the contract unless materiallyalters it or an ob,ection is made remember this applies to merchants not necessarily toall!

>. %evel Three: This is e)ample of post-ealist Contract doctrinesreliance on conte)t and also trying to ma1e it easier to find a transaction and providedisincentive for last shot doctrine #here parties try to get in last version of contractbefore performance beginsIK. Parol E!idence Rule

A. $urpose- to protect #ritten agreement from being corrupted by outsideevidence because #orried about per,ury and fraudB. Traditional ule: Complete and Integrated 2inal Agreement or partial

integrated agreement! cant be varied or added to by e)trinsic evidence4. Collateral Agreement *)ception- outside evidence allo#ed to establish

this outside agreement that isnt part of actual sub,ect matter of agreement but collateralto it GianniTest- applies if ppl #ouldnt e)pect that issue9term to be part of the topiccovered by original #ritten agreement!

>. *)ception to determine meaning of ambiguities;. *)ception for evidence to prove contract invalid i.e. fraud+ duress!@. 'ee others on %arrys Chart- condition precedent

C. Can you use e)trinsic evidence to see if there is an ambiguity that needsinterpreting or #hether or not the agreement #as complete and integrated?

4. =ld approach- oF 'our-Corners Approac"- Dust loo1 at the #ritingon the page and ta1e it at face value 'eeLi&&y v. 8hompson! still the approach in some,urisdictions!

>. e# approach- HesF Writing still ta1es the highest priority but you loo1outside of the document to get a full understanding of conte)t+ and &CC says that youal#ays consider:

Course of Perfor(ance- 0o# the parties have behaved #ithrespect to this particular agreement

Course of Dealin- 0o# the parties have behaved #ith each otherin similar transactions

Usae of Trade- What meanings different fields bring to #ordsseeHurstand0rigalimentCases #here meaning of 56 and chic1ens in dispute!

". amification: Hou can almost al#ays find an e)ception or #ay around the ruleto introduce e)trinsic evidence

*. Dustifications- 2or the $arol *vidence ule is to prevent fraud etc+ but the ne#approach ,ustified by idea that sometimes e)cluding parol evidence can facilitate fraud as#ell 'eeMitchell v. Lath+ #here they got out of an agreement to tear do#n icehouse!


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K. &tatute of 'raudsA. 'ummary: eEuires certain 1inds of agreements to be in #riting and signed by

the party against #hich enforcement is soughtB. $urpose- reEuire that certain 1inds of contracts be in #riting to prevent fraud

4. *videntiary- Written contract best form of evidence+ prevents lying

>. Cautionary- $eople #ill thin1 about decisions more if they have to putthem into #riting;. Channeling- 2or public policy reasons i.e. uniformity!+ #e #ant certain

1inds of transactions to have formsC. What 1ind of agreements are sub,ect to the 'tatute of 2rauds?

Contracts that cannot be in any #ay performed #ithin a yearF eal *stateFot performable #ithin lifetime of promisorF Contracts for paying debts of anotherFarriageF 'ale of goods over M55 +555 ne# &CC!

". *)ceptions to 'tatute of 2rauds4. If contract is admitted by both sides &CC! or you get someone to admit

it in deposition #hich then becomes a signed #riting 'ee Cohn v. 0ischer!

>. "etrimental eliance- this is promissory estoppel type idea+ contractshould be enforced #hen ,ustice so reEuires;. $art $erformance@. =ne year rule ta1en very broadly to get around 'tatute of 2rauds

*. What is an enforceable signed #riting under 'tatute of 2rauds?4. "oesnt have to be official contract- 'ee estatement 4;4+ 4;>>. Cra&tree Case- Timecard is signed agreement and because it is of the

same sub,ect matter as an unsigned agreement memorandum that relates2. amification: a lot of the e)ceptions and the courts hesitancy to apply it even

#hen it applies undermines the basic premise. %ots of #ays around it.KI. Curing Indefiniteness by Implying Terms

A. ap 2illers in &CC that imply meanings4. Implied Warranty of erchantibility &CC >-;4@? have to e)plicitly

state if you #ant to get rid of it>. Implied terms about price and timing+ place of delivery-default

provisions if issue not e)plicitly stated in contract &CC >-;5-;5Se,ects "efiniteness reEuirement in many casesThis is a ealist reversal of the idea that courts #ill not #rite

contracts for the partiesB. All Contracts as Implied-in-la# Contracts

4. *very contract includes the body of la# that came before it+ so the ideaof a #arranty of merchantability as necessary for contract la# is ,ust loo1ing at theconte)t9bac1ground. This means that implying terms isnt such a stretch

>. %evel Three: If this is true+ it means that contracts only have meaning#ithin our social conte)t. Contract is not a 3meeting of the minds7 but rather a creature oflegal doctrine that attaches meanings to certain #ords and actions+ and all of thesemeanings and actions come from our social conte)t. This means contract is really a modeof public regulation+ rather than a mode of individual choice and consentKII. C='I"*ATI=

A. "efinition of Consideration


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4. =ldest "efinition- Benefit or Burden>. 0olmes 1isconsin aildroad- Barained-for consideration+ 3promise

and the detriment are the conventional inducements each for the other7'ee if the detriment #as #hat induced the promisor to ma1e the

promise

This actually narro#ed definition of consideration at the time+ butremember anything can be consideration so long as its bargained forB. "istinguishing Types of $romises

4. $ratuitous Pro(ise- promise to ma1e a gift+ nothing given in supportof it+ not enforceable

>. *)ecuted ift- enforceable through property la#;. Conditional ratuitous $romise- If something is a condition of the

promise to ma1e a gift+ then it is not consideration if condition is not a benefit topromissor its usually not consideration- tramp e)ample!

@. Pro(ise &upported by Consideration- 'eeMaughs#oman inducedto come to land auction by promise of a lottery! If promisee induced to act+ then its

considerationF ho#ever+ contracts founded on illegal consideration lottery! void'eeHarris v. 8ime- Consideration found by person opening pieceof ,un1 mail that offered pri/e because person induced and Time gets a benefit from it!Fho#ever+ la# does not deal #ith trifles

. Unilateral !% BilateralContract2ormer accepted by doing the reEuired performance also has to

give notification #ithin reasonable time! and latter accepted by a return promise. 'ub-rule for Consideration in bailment-bailee trust relationship:

*)ecutory gratuitous trust in unenforceable+ but once trust relationship starts to befromed+ then promises involved become enforceableF 'ee *eigel v. *pear

emember in general+ starting to perform a promise does notconstitute consideration

'ounds a lot li1e detrimental reliance+ signpost for the beginningsof promissory estoppel

C. Al#ays $ossible to Imply Counter-promises to find Consideration4. Consideration reEuires /utuality of Obliation

eans that if one party doesnt really seem to be ma1ing a promiseor can change the terms at #ill+ then there isnt any consideration and hence no contract-'ee"aul v. osenandernsteinCase

>. Counterrulein post-ealist era: $romises not supported byconsideration on their face AH be enforceable if you can provide a counterpromise thatprovides consideration for the promise

'eelleghany College- Woman agrees to donate M+555 upondeath to college and #ants her name on memorial fund. 'he gives 4+555 before death butalso reneges before death. Cardo/o finds valid contract #ith consideration even though itseems li1e a gift #ith no mutual obligation. 'ays consideration9obligation on the otherside is the promise to name the fund after her

Ra(ification: We could find a valid counter-promise in A%% cases#here consideration not found and reverse it

A"ICA% *A%I'T "*$AT&*Q


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;. *ven though it is al#ays possible to imply a counterpromise+ it doesntmean the court #ill al#ays do so. Compare 1ood v. Lucy#ith"aul v. osen

@. %evel > Arguments for and against need for consideration2or: Bargained-for consideration assures that the transaction is

going to be value-enhancing for all %a# and *conomics!. C%T vie# #ould be that it

protects liberty9consentAgainst: %a# should be adopted to #hats going on in the real#orld+ other#ise efficiency #ill be stunted

. %evel Three: Indeterminacy: Both formal definition of considerationand ne# implying counter-promise approach can be ,ustified as protecting the stability ofthe mar1etplace. ealists argue rigidity of formal approach out of touch #ith real #orldand #e need to protect business peoples e)pectations in mar1etplace

7irskeyas e)ample of danger9indeterminacy of C%T approach becausereduces to semantics the Euestion of #hether or not the #oman leaving her home to movein #ith her brother is consideration or not

". $romissory *stoppel- Implying "uties #ithout Contracts

4. $rotects individuals from detrimental reliance see0ried)4 substantialand reasonably foreseeable reliance on a pro(ise (ay be enforceable as ustice sore2uires

>. emedy- different from contract remedy because its not actually acontract: emedy is as ,ustice so reEuires rather than contract e)pectation damages 'eeHoffman+ #here damages are costs of reliance rather than full contract damages!

;. ilmore- This demonstrates merging of contract and tort- its li1ecreating a tort for negligent use of #ords+ because its based on the loss9harm

Also+ creates a sort of strict liability in contract #orld@. %evel Three: C%T #ould ob,ect to idea because it re,ects the freedom of

choice idea behind a contract

Documents

BargainExchangePeller-Fall 2007