INTRO TO CONTRACTS: PARTICULARLY CONTRACT REMEDIES
Contract: agreement between two people
Predominant theory of obligation that legal duties arise from a valid agreement with
consideration
ESSENTIALS TO CONTRACT:
 Parties competent to contract, a proper subject manner, consideration,
mutuality of agreement, ad mutuality of obligation
Sullivan v O’Connor (nose job case): P told D would perform 2 surgeries to
enhance nose. Ended up being 3 surgeries and her nose was damaged beyond
repair. 2 causes of action: 1) negligence, 2) breach of contract. TL CT: favor of P
$13,500 in damages including P&S. CT APP: TL CT error in remedy- permitting
more than out of pocket expenses (defendants fee & hospital expenses). Should have
only received compensatory damages (standard of damages for breach of contract),
cant receive P&S from the operations under compensatory. SC- TL CT affirmed.
Allowed more than OOP expenses, don’t have to decide between expectancy and
reliance in this case. Decides P&S allowed for breach of contract.
TYPES OF DAMAGES Restitution- make up for expenses lost; any benefit conferred upon the D
by the P
 Compensatory/expectancy- put P in the position would be in if the
contract had been performed. Whatever she would have had if promise
had been fully performed
o Better in a business context. Becomes weaker form commercial to
noncommercial fields
 Reliance- measure the difference in the value of the outcome and what
was there prior to the contract/ the position the P would have been in if
no contract had ever been made
 Nominal: trivial sum
o In situations of breach of contract where no proven actual
damages (pecuniary: money)- can recover nominal damages
 Punitive: awarded as punishment and example to others for malicious,
evil, or particularly fraudulent acts
o Cannot be awarded for breach of contract alone. Must have been
malicious, etc. don’t have to award them- left to discretion of jury
White v. Benkowski (water well case): P seeks compensatory damages for losses
sustained and punitive damages for D cutting off water supply to P for 10 years
$3/Month. P&D had contract that D would supply water to P. D- motion to dismiss
complaint demanding punitive damages. D: deny cutting water off, P paid late some
months. Told P they were using too much- turning water off to make point.
Dclaimed well became inadequate. P awarded $2000. New trial- P awarded $1. SC-
there was credible evidence which showed inconvenience and actual injury, jury’s
finding as to compensatory damages should be reinstated- $10 actual damages.
Embry v Hargadine, Mckittrick Dry Goods Co. : issue over whether employer
agreed to oral contract to keep employee for another year. P tells D that he will leave
if he isn’t given another year. D doesn’t nec accept. Issue if it was reasonable for P to
believe they entered into a contract. TR CT- instructed on employeers intent. CT
APP: employeers intent not important- if you believe employees story- there was a
contract. If a reasonable person would view words as an acceptance.
Lucy v Zehmer (drunken land contract): breach of contract. Contract written on
bar napkin for sale of land. D affirmative defense- parties were drunk at the time. TR
CT: no contract. APP: contract. Talked for 40 minutes, contract was written twice at
the buyer’s request. D- this was a joke. CT- no joke, even if it was, a reasonable
person wouldn’t think it was a joke. Seeking special performance.
CONSIDERATION
Consideration: an exchange. something sought by the promisor, given by the
promisee, in exchange for the promise. In order to find consideration there
must be a performance or a return promise which has been BARGAINED for by
the parties. Something of value given by both parties to a contract that induces
them to enter into the agreement to exchange mutual performances
Hardesty v Smith (crap invention case): sellerrights to invention buyer.
Buyer promissory note seller. Assigned to Hardesty . Common law ruleL
assignee stands in the shoes of assigner. Assignee sues for breach of contract to pay
money from promissory note. Buyer defense- lamp invention is worthless. TR CTbuyer wins. APP- reverses. Consideration here even though worthless- promises to
pay a certain amount for the rights to invention.
 Affirmative defense: Fraud- if he knew the invention was worthless
Doughtery v Salt (Aunt Tillie case): aunt promises to give nephew money. a
promise which is not based on exchange is a gift & past acts are not sufficient for a
promise no consideration/given nothing in return.
Past consideration- not given in exchange for promise- no consideration
FULLER- elements in the doctrine of consideration:
1) Evidentiary function
 make sure there is evidence of a contract or promise
2) Cautionary function
 Acts as a check against inconsiderate action- so people don’t get
into promises without actually thinking about them.
3) Channeling function

just because there is a recital of consideration doesn’t necessarily mean that
there is consideration or that he court is going to support that recital
Maughs v Porter (car lottery case): P responded to D’s advertisement for an
action and lottery for a new Ford. P’s name was chosen. D refused to pay for car. D: P
failed to show sufficient consideration and came from a lottery which is illegal
therefore this is unenforceable. Ct- consideration was sufficient but is unenforceable
as a lottery. $3 given to auctioneer is not consideration- mere pretense. Attending
event was enough consideration- sought by the promisor in exchange for the
promise given by the promisee.
TRAMP HYPO: walking to the department store is a condition, not
consideration- promisor isn’t receiving anything. CONDITIONAL GIFT PROMISE
Hamer v Sidway (uncle no smoking case): uncle promises to get nephew $5000
if he doesn’t smoke, drink, swear, etc until he turns 21. Keeps the promise- uncle
dies w/o giving any part of the $5000 or interest.