Contents xxxi xxxv Preface Acknowledgments I Enforcing Private Agreements 1 1 Introduction to Contract Law A.Studying Contract Law 1. The Structure of This Book 2. The Three Dimensions of Law 3.The Restatement and the Uniform Commercial Code 4. How to Brief Cases for This Class B.The Nature and History of Contract Shaheen v. Knight Restatement (Second) of Contracts Historical Background: From Status to Contract Sir Henry Maine, Ancient Law Historical Background: The Rise of Assumpsit E. Allan Farnsworth, Contracts C. The Boundaries of Contract Jordan v. Knafel Relational Background Lawrence A. Cunningham, Contracts in the Real World: Stories of Popular Contracts and Why They Matter 3 3 3 5 6 9 11 11 14 15 15 16 16 22 23 29 29 xi CCAD_FM.indd 11 11/11/20 6:41 PM Contents xii 2 Damages for Breach of Contract A.Why Study Remedies First? B.The Three Damage Interests Legal Background: Introduction to Damage Interests E. Allan Farnsworth, Expectation, Reliance, and Restitution Interests Hawkins v. McGee McGee v. United States Fidelity & Guaranty Co. Relational Background: Before and After the Lawsuit Jorie Roberts, Hawkins Case: A Hair-Raising Experience Restatement (Second) of Contracts Nurse v. Barns Differentiating Damage Interests: A Problem Sullivan v. O’Connor J. O. Hooker & Sons v. Roberts Cabinet Co. Sales Contracts: The Uniform Commercial Code KGM Harvesting Co. v. Fresh Network Sales Contracts: The Uniform Commercial Code C.Three Limitations on Damages 1. Remoteness or Foreseeability of Harm Hadley v. Baxendale Historical Background: Putting Hadley in Context Richard Danzig, Hadley v. Baxendale: A Study in the Industrialization of the Law Hector Martinez and Co. v. Southern Pacific Transportation Co. Restatement (Second) of Contracts Morrow v. First National Bank of Hot Springs 2. Certainty of Harm Chicago Coliseum Club v. Dempsey Relational and Historical Background: Why Didn’t Dempsey Fight Wills? The Role of Race Winston Cigarette Machine Co. v. Wells-Whitehead Tobacco Co. Restatement (Second) of Contracts Anglia Television Ltd. v. Reed Security Stove & Manufacturing Co. v. American Railway Express Co. Economics Background: The Subjectivity of Valuation Ludwig von Mises, Human Action CCAD_FM.indd 12 33 33 33 34 34 35 38 40 40 43 43 43 44 50 57 58 67 69 69 69 73 73 81 85 85 88 88 94 99 101 102 104 109 109 11/11/20 6:41 PM Contents xiii 3. Avoidability of Harm Rockingham County v. Luten Bridge Co. Relational Background: Why Did the County Change Its Mind? Why Did the Company Keep Building? Barak Richman, Jordi Weinstock & Jason Mehta, A Bridge, a Tax Revolt, and the Struggle to Industrialize: The Story and Legacy of Rockingham County v. Luten Bridge Co. Shirley MacLaine Parker v. Twentieth Century-Fox Film Corp. Relational Background: A Feminist Interpretation of Parker Mary Joe Frug, Shirley MacLaine and the Mitigation of Damages Rule: Re-Uniting Language and Experience in Legal Doctrine Relational Background: The Rise and Fall of the Bloomer Girl Project Victor P. Goldberg, Framing Contract Law: An Economic Perspective Restatement (Second) of Contracts Neri v. Retail Marine Corp. Sales Contracts: The Uniform Commercial Code D.Contracting Around the Default Rules of Damages 1.Express Limitations on Consequential and Incidental Damages Sales Contracts: The Uniform Commercial Code 2. Liquidated Damages vs. Penalty Clauses Kemble v. Farren Wassenaar v. Towne Hotel Restatement (Second) of Contracts Lake River Corp. v. Carborundum Co. 110 110 114 114 121 128 128 130 130 133 133 137 139 139 140 140 142 144 152 152 3 Other Remedies and Causes of Action A.Specific Performance and Injunctions Legal Background: Introduction to Equitable Remedies Dan B. Dobbs, Introduction to Equity and Equitable Remedies 1. Contracts for Land Loveless v. Diehl CCAD_FM.indd 13 155 155 155 155 159 160 11/11/20 6:41 PM Contents xiv 2. Contracts for Goods Cumbest v. Harris Scholl v. Hartzell Sedmak v. Charlie’s Chevrolet, Inc. Sales Contracts: The Uniform Commercial Code 3. Contracts for Personal Services The Case of Mary Clark, A Woman of Colour Relational Background: The Nature of Mary Clark’s “Voluntary” Indenture Sandra Boyd Williams, The Indiana Supreme Court and the Struggle Against Slavery Lumley v. Wagner Relational Background: In the End Everyone Except the Lawyers Were Losers Stephen Waddams, Dimensions of Private Law Ford v. Jermon Duff v. Russell Historical and Relational Background: Sex and Specific Performance Lea S. VanderVelde, The Gendered Origins of the Lumley Doctrine: Binding Men’s Consciences and Women’s Fidelity Dallas Cowboys Football Club v. Harris Constitutional Background: The Thirteenth Amendment and Contractual Freedom Bailey v. State of Alabama B.Restitution — Damage Interest and Cause of Action 1. Restitution for Breach of Contract Bush v. Canfield Attorney General v. Blake Snepp v. United States Restatement (Second) of Contracts 2. Restitution to the Party in Breach Britton v. Turner Vines v. Orchard Hills, Inc. Restatement (Second) of Contracts 3. Restitution and “Quasi-Contract” Cotnam v. Wisdom Martin v. Little, Brown and Co. Al-Ibrahim v. Edde Pelletier v. Johnson C.Tortious Interference with Contract Lumley v. Gye Historical and Relational Background: The Impact of Lumley v. Gye on Johanna Wagner CCAD_FM.indd 14 165 165 168 170 174 174 175 177 177 179 183 183 186 187 189 189 196 201 201 208 208 208 214 221 222 223 223 227 231 232 232 235 238 242 245 246 247 11/11/20 6:41 PM xv Contents Lea S. VanderVelde, The Gendered Origins of the Lumley Doctrine: Binding Men’s Consciencses and Women’s Fidelity Restatement (Second) of Torts Texaco v. Pennzoil Procedural Background: The Most Expensive Legal Mistake in the History of the World Thomas Petzinger, Jr., Oil and Honor: The Texaco-Pennzoil Wars 247 248 249 257 257 II Mutual Assent 261 4 Reaching an Agreement A.The Objective Theory of Assent Embry v. Hargadine, McKittrick Dry Goods Co. The Objective Theory of Assent: A Problem Lucy v. Zehmer Relational Background: The Politics and Economics of Lucy v. Zehmer Barak Richman & Dennis Schmelzer, When Money Grew on Trees: Lucy v. Zehmer and Contracting in a Boom Market Restatement (Second) of Contracts B.What Is an Offer? 1. Preliminary Negotiations Nebraska Seed Co. v. Harsh Lefkowitz v. Great Minneapolis Surplus Store, Inc. Leonard v. PepsiCo Restatement (Second) of Contracts Sales Contracts: The Uniform Commercial Code 2. Written Memorial Contemplated Empro Manufacturing Co. v. Ball-Co Manufacturing, Inc. Restatement (Second) of Contracts Arnold Palmer Golf Co. v. Fuqua Industries, Inc. CCAD_FM.indd 15 263 263 264 268 269 277 277 282 283 284 284 286 289 292 293 295 295 298 299 11/11/20 6:41 PM Contents xvi Memorandum of Intent for the Acquisition of 25% of the Stock of Arnold Palmer Golf Company in Exchange for Certain Assets of Fuqua Industries, Inc. Copeland v. Baskin Robbins U.S.A. 3. Revoking an Offer Dickinson v. Dodds Restatement (Second) of Contracts Legal Background: The Emergence of “Firm Offers” Sales Contracts: The Uniform Commercial Code C.What Is an Acceptance? 1.Acceptance That Varies Terms — The Mirror Image Rule Ardente v. Horan Restatement (Second) of Contracts 2.Acceptance by Correspondence — The Mailbox Rule Restatement (Second) of Contracts 3.Acceptance by Performance or “Unilateral” Contracts? Carlill v. Carbolic Smoke Ball Co. Relational Background: The Smoke Ball and Nineteenth-Century Patent Medicine A. W. B. Simpson, Quackery and Contract Law: The Case of the Carbolic Smoke Ball Restatement (Second) of Contracts White v. Corlies & Tifft Poetic Background: Llewellyn’s Verse Restatement (Second) of Contracts Petterson v. Pattberg Relational Background: Additional Information About Petterson v. Pattberg Samuel Blinkoff, Note Restatement (Second) of Contracts 4. Acceptance by Silence Hobbs v. Massasoit Whip Co. Restatement (Second) of Contracts D.E-Commerce and Mutual Assent Nguyen v. Barnes & Noble Inc. Empirical Evidence on the Use of Online Contracting Florencia Marotta-Wurgler, Some Realities of Online Contracting CCAD_FM.indd 16 305 309 316 316 321 323 323 323 323 324 327 327 329 330 331 334 334 344 345 347 348 349 353 353 354 355 355 356 356 357 364 364 11/11/20 6:41 PM xvii Contents 5 Discerning the Agreement A. Interpreting the Meaning of the Terms 1. Ambiguous Terms Raffles v. Wichelhaus Relational Background: What “to arrive ex Peerless” Really Meant Grant Gilmore, The Death of Contract A. W. B. Simpson, Contracts for Cotton to Arrive: The Case of the Two Ships Peerless Oswald v. Allen Restatement (Second) of Contracts Sales Contracts: The Uniform Commercial Code 2. Vague Terms Weinberg v. Edelstein Frigaliment Importing Co. v. B.N.S. International Sales Corp. B.Filling Gaps in the Terms 1. Agreements to Agree Sun Printing & Publishing Ass’n v. Remington Paper & Power Co. Restatement (Second) of Contracts 2. Illusory Promises New York Central Iron Works Co. v. United States Radiator Co. Eastern Air Lines, Inc. v. Gulf Oil Corp. Wood v. Lucy, Lady Duff-Gordon Biographical Background: Who Was Lucy, Lady Duff-Gordon? Meredith Etherington-Smith & Jeremy Pilcher, The “It” Girls Stephen Cox, Mysteries of the Titanic Biographical and Relational Background: Who Was Otis Wood and Why Did He Omit a “Best Efforts” Clause? Victor Goldberg, Framing Contract Law: An Economic Perspective Sales Contracts: The Uniform Commercial Code C. Identifying the Terms of the Agreement 1. Form Contracts or “Contracts of Adhesion” Carnival Cruise Lines v. Shute Compagno v. Commodore Cruise Line, Ltd. CCAD_FM.indd 17 371 371 372 372 373 374 377 383 384 386 387 388 392 397 398 398 404 405 405 406 410 411 411 415 417 417 420 421 421 421 426 11/11/20 6:41 PM Contents xviii Caspi v. Microsoft Network Restatement (Second) of Contracts 2. Which Terms Were Agreed To? Step-Saver Data Systems, Inc. v. Wyse Technology Sales Contracts: The Uniform Commercial Code Union Carbide Corp. v. Oscar Mayer Foods Corp. 3. Terms That Follow Later ProCD v. Zeidenberg Hill v. Gateway 2000 Klocek v. Gateway 430 431 433 433 444 447 450 450 456 460 6 Written Manifestations of Assent A. Interpreting a Writing — The Parol Evidence Rule Thompson v. Libbey Masterson v. Sine Restatement (Second) of Contracts Carter Baron Drilling v. Badger Oil Corp. Sales Contracts: The Uniform Commercial Code Pacific Gas and Electric Co. v. G. W. Thomas Drayage & Rigging Co. Trident Center v. Connecticut General Life Insurance Co. Comparative Law Background: The Parol Evidence Rule Under the United Nations Convention on Contracts for the International Sale of Goods Daniel D. Barnhizer, CISG as an Alternative System of Default Rules Governing the Sale of Goods B.Requiring a Writing — The Statute of Frauds Restatement (Second) of Contracts 1. The Statute and Its Exceptions Boone v. Coe Restatement (Second) of Contracts C.R. Klewin, Inc. v. Flagship Properties, Inc. Restatement (Second) of Contracts Riley v. Capital Airlines, Inc. CCAD_FM.indd 18 465 465 466 467 471 472 479 480 483 489 489 493 493 494 494 497 498 503 504 11/11/20 6:41 PM xix Contents Sales Contracts: The Uniform Commercial Code Restatement (Second) of Contracts 2. Satisfying the Requirement of a Writing Schwedes v. Romain Restatement (Second) of Contracts Ethical Background: The Role of the Lawyer in Schwedes American Bar Association Model Rules of Professional Conduct (2002) 507 508 509 509 513 514 515 7 Multiparty Transactions A.Transferring Rights or Duties to Third Parties Legal Background: Introduction to Assignment and Delegation E. Allan Farnsworth, Contracts 1. Assignment of Contractual Rights Kelly Health Care v. The Prudential Insurance Co. of America Restatement (Second) of Contracts In re Nance Restatement (Second) of Contracts 2. Delegation of Contractual Duties Sally Beauty Co. v. Nexxus Products Co. Sales Contracts: The Uniform Commercial Code B.Third-Party Beneficiaries of a Contract 1. The Birth of the Third-Party Beneficiary Rule Lawrence v. Fox Relational Background Anthony Jon Waters, The Property in the Promise: A Study of the Third Party Beneficiary Rule 2. Intended Beneficiaries Seaver v. Ransom Restatement (Second) of Contracts 3.Distinguishing Intended from Incidental Beneficiaries Sisters of St. Joseph of Peace, Health, and Hospital Services v. Russell Restatement (Second) of Contracts CCAD_FM.indd 19 519 519 519 519 521 522 524 525 532 533 533 538 539 539 539 544 545 554 554 557 558 558 564 11/11/20 6:41 PM Contents xx III Enforceability 565 8 Principles of Enforceability 567 A.Six Core Principles of Enforceability 1. Party-Based Principles 2. Standards-Based Principles 3. Process Principles 4. Integrating the Core Principles of Enforceability B.Applying the Principles of Enforceability to a Case Michelle Marvin v. Lee Marvin Frances Morone v. Frank Morone Sari Posner v. Victor Posner 568 568 573 578 583 586 587 594 595 9 The Doctrine CCAD_FM.indd 20 Consideration 597 A.The Historical Origins of the Doctrine Historical Background: The Origins of the Doctrine of Consideration A. W. B. Simpson, The Doctrine of Consideration — Introduction B.The Bargain Theory of Consideration Economics Background: Bargains and the Division of Labor Adam Smith, Lectures on Jurisprudence Adam Smith, The Wealth of Nations 1. Distinguishing Bargains from Gratuitous Promises Johnson v. Otterbein University Hamer v. Sidway Relational Background: Other Dealings Between Willie and His Uncle Hamer v. Sidway (N.Y. Supreme Court) 597 of 597 597 600 601 601 601 602 602 604 609 609 11/11/20 6:41 PM CCAD_FM.indd 21 Contents xxi Kirksey v. Kirksey Relational Background: “Dear Sister Antillico” William R. Casto & Val D. Ricks, “Dear Sister Antillico…”: The Story of Kirksey v. Kirksey Dahl v. HEM Pharmaceuticals Corp. Restatement (Second) of Contracts 2. Past Consideration Moore v. Elmer 3. Moral Consideration Mills v. Wyman Relational Background: Levi Lives! Geoffrey R. Watson, In the Tribunal of Conscience: Mills v. Wyman Reconsidered Boothe v. Fitzpatrick Webb v. McGowin Webb v. McGowin (Ala. Supreme Court) Relational Background: Was a Promise Made? Richard Danzig & Geoffrey R. Watson, The Capability Problem in Contracts Restatement (Second) of Contracts C.Contract Modification and the Preexisting Duty Rule Harris v. Watson Stilk v. Myrick Alaska Packers’ Ass’n v. Domenico Relational Background: Were the Fishing Nets Really Rotten? Debora L. Threedy, A Fish Story: Alaska Packers’ Association v. Domenico Brian Construction and Development Co. v. Brighenti Restatement (Second) of Contracts Sales Contracts: The Uniform Commercial Code United States v. Stump Home Specialties Manufacturing D.Adequacy of Consideration Economics Background: Subjectivity and the Inequality of Exchange Ludwig von Mises, Human Action Newman & Snell’s State Bank v. Hunter Restatement (Second) of Contracts Dyer v. National By-Products, Inc. 612 613 613 618 619 621 622 623 623 627 627 632 634 638 639 639 641 641 642 642 644 647 647 652 656 656 657 658 659 659 660 661 662 11/11/20 6:41 PM Contents xxii 10 The Intention Bound to Be Legally Comparative Law Background: The English Law of Contract Intention to Create Legal Relations A.Using Formalities to Manifest an Intention to Be Legally Bound 1. The Seal Aller v. Aller Statutory Background: New Jersey Changes Its Mind Wagner v. Lectrox Corp. Restatement (Second) of Contracts Sales Contracts: The Uniform Commercial Code 2. Nominal Consideration Schnell v. Nell Statutory Background: Documents Under Seal in Indiana Lon L. Fuller, Basic Contract Law Restatement (Second) of Contracts 3. Recitals Smith v. Wheeler Jolles v. Wittenberg Restatement (Second) of Contracts 4. Written Expression of Intention to Be Legally Bound Legislative Background: The Rationale for the Uniform Written Obligations Act Handbook of the National Conference of Commissioners on Uniform State Laws & Proceedings of the Thirty-Fifth Annual Meeting Thomas v. First National Bank of Scranton Kay v. Kay Federal Deposit Insurance Corp. v. Barness First Federal Savings and Loan Ass’n of Pittston v. Reggie B. Lack of Intention to Be Legally Bound Ferrera v. A. C. Nielsen Evenson v. Colorado Farm Bureau Mutual Insurance Co. Eiland v. Wolf CCAD_FM.indd 22 667 668 668 670 672 674 677 678 679 679 679 680 682 682 683 684 685 686 686 687 688 688 696 697 698 699 700 700 702 704 11/11/20 6:41 PM xxiii Contents 11 The Doctrine Estoppel of Promissory Historical Background: Early Alternatives to the Doctrine of Consideration A. W. B. Simpson, The Doctrine of Consideration — Introduction A.The Development of Promissory Estoppel as a Substitute for Consideration 1. Family Promises Ricketts v. Scothorn Historical Background: The Doctrine of Equitable Estoppel John Norton Pomeroy, Essential Elements Constituting the Estoppel Discussion of the Tentative Draft of Contracts, Restatement No. 2 2. Promises to Convey Land Greiner v. Greiner Restatement (Second) of Contracts 3. Promises of a Pension Feinberg v. Pfeiffer Co. Pitts v. McGraw-Edison Co. 4. Construction Bids James Baird Co. v. Gimbel Bros., Inc. Relational Background: More About the “Mistake” Lon L. Fuller, Basic Contract Law Drennan v. Star Paving Co. Restatement (Second) of Contracts 5. Charitable Subscriptions Allegheny College v. National Chautauqua County Bank of Jamestown B.Promissory Estoppel as an Alternative to Breach of Contract Goodman v. Dicker Hoffman v. Red Owl Stores, Inc. Relational Background: What Was the Promise in Red Owl Stores? William C. Whitford & Stewart Macaulay, Hoffman v. Red Owl Stores: The Rest of the Story CCAD_FM.indd 23 707 707 707 708 709 709 712 712 713 714 714 717 717 717 723 728 728 731 731 731 735 735 736 740 742 744 753 754 11/11/20 6:41 PM Contents xxiv Restatement (Second) of Contracts Restatement (Second) of Torts (1977) Doctrinal Background: The Tort of Promissory Misrepresentation Randy E. Barnett & Mary E. Becker, Beyond Reliance: Promissory Estoppel, Contract Formalities, and Misrepresentations Theoretical Background: The Death of Contract? Grant Gilmore, The Death of Contract E. Allan Farnsworth, Developments in Contract Law During the 1980s: The Top Ten Empirical Background: Promissory Estoppel in the Nineties Robert A. Hillman, Questioning the “New Consensus” on Promissory Estoppel: An Empirical and Theoretical Study C.Establishing the “Elements” of Promissory Estoppel 1. Promise Blatt v. University of Southern California Spooner v. Reserve Life Insurance Co. Ypsilanti v. General Motors Ypsilanti v. General Motors (Mich. Appeals Court) Relational Background: Settlement of the Case James Bennet, G.M. Settles Suit over Plant Closing 2. Reasonable Reliance Alden v. Vernon Presley 3. Injustice of Nonenforcement Cohen v. Cowles Media Co. (Minn. Supreme Court) Cohen v. Cowles Media Co. (U.S. Supreme Court) Cohen v. Cowles Media Co. (Minn. Supreme Court) Empirical Background: The Elements of Promissory Estoppel Robert A. Hillman, Questioning the “New Consensus” on Promissory Estoppel: An Empirical and Theoretical Study Sidney W. DeLong, The New Requirement of Enforcement Reliance in Commercial Promissory Estoppel: Section 90 as Catch-22 D.A Hypothetical Alternative to Restatement §90 Restatement (Third) of Contracts CCAD_FM.indd 24 762 763 763 764 767 767 770 771 771 772 773 773 776 780 788 793 793 793 794 797 797 802 803 805 805 807 813 814 11/11/20 6:41 PM xxv Contents IV Performance and Breach 815 12 Performance 817 A.The Implied Duty of Good Faith Performance Goldberg 168-05 Corp. v. Levy Mutual Life Insurance Co. of New York v. Tailored Woman Stop & Shop, Inc. v. Ganem Food Fair Stores, Inc. v. Blumberg The Original Great American Chocolate Chip Cookie Co. v. River Valley Cookies, Ltd. Restatement (Second) of Contracts Sales Contracts: The Uniform Commercial Code B. Implied and Express Warranties 1.Implied Warranties of Merchantability and Fitness for a Particular Purpose Vlases v. Montgomery Ward & Company Sales Contracts: The Uniform Commercial Code 2. Express Warranties Royal Business Machines, Inc. v. Lorraine Corp. Sales Contracts: The Uniform Commercial Code CBS, Inc. v. Ziff-Davis Publishing Co. 3. Express Disclaimers of Warranty Schneider v. Miller Pelc v. Simmons Sales Contracts: The Uniform Commercial Code Morris v. Mack’s Used Cars 817 819 820 826 830 831 832 832 833 833 834 837 838 839 843 844 852 852 856 856 857 13 Conditions A.The Effect of a Condition Inman v. Clyde Hall Drilling Co. Understanding the Effects of Conditions: A Problem CCAD_FM.indd 25 859 860 860 864 11/11/20 6:41 PM Contents xxvi B.What Events Are Conditions? 1. Is the Event a Condition, a Promise, or Both? Howard v. Federal Crop Insurance Corp. Restatement (Second) of Contracts 2. Is the Event a Condition, a Promise, or Neither? Chirichella v. Erwin C.Avoiding Conditions 1. Waiver and Estoppel Clark v. West Restatement (Second) of Contracts Sales Contracts: The Uniform Commercial Code 2. Excuse to Prevent Forfeiture J.N.A. Realty Corp. v. Cross Bay Chelsea, Inc. Restatement (Second) of Contracts 865 865 865 869 869 869 871 872 872 875 875 876 876 881 14 Breach A.Fault and Breach of Contract Cohen v. Clark B.Constructive Conditions Kingston v. Preston Morton v. Lamb Jacob & Youngs v. Kent Jacob & Youngs v. Kent (Motion for Reargument) Relational Background: Why All the Fuss About Reading Pipe? Richard Danzig, The Capability Problem in Contract Law C.Prospective Nonperformance 1. Anticipatory Repudiation Albert Hochster v. Edgar De La Tour Harrell v. Sea Colony, Inc. Sales Contracts: The Uniform Commercial Code 2. Adequate Assurances of Performance Scott v. Crown Sales Contracts: The Uniform Commercial Code 3. Material Breach B & B Equipment Co. v. Bowen Lane Enterprises, Inc. v. L. B. Foster Co. Did Shawn Kemp Materially Breach? A Problem 4. The Perfect Tender Rule: Cure and Rescission Ramirez v. Autosport Sales Contracts: The Uniform Commercial Code CCAD_FM.indd 26 883 883 884 890 891 893 895 900 900 900 903 903 903 906 912 912 913 916 917 919 922 929 930 930 936 11/11/20 6:41 PM xxvii Contents D.Cost of Completion vs. Diminution in Value: The Expectation Interest Revisited Groves v. John Wunder Co. Peevyhouse v. Garland Coal Mining Co. Restatement (Second) of Contracts Relational and Legal Background: Is Peevyhouse a Lesson in Lawyering or Corruption? Judith L. Maute, Peevyhouse v. Garland Coal Co. Revisited: The Ballad of Willie and Lucille 940 941 946 952 953 953 V Defenses to Contractual Obligation 961 15 Lack of Contractual Capacity A.Introduction — Rebutting the Prima Facie Case of Contract Theoretical Background: Legal Rules as Presumptions Richard A. Epstein, Pleadings and Presumptions B.Deficiencies in Contractual Capacity 1. Incompetence Ortelere v. Teachers’ Retirement Board of New York Restatement (Second) of Contracts 2. Infancy Webster Street Partnership, Ltd. v. Sheridan Halbman v. Lemke Zelnick v. Adams Historical Background: The Extension of Childhood Hillary Rodham, Children’s Rights: A Legal Perspective Brooke Shields v. Gross Restatement (Second) of Contracts CCAD_FM.indd 27 963 963 964 964 969 970 970 978 979 979 984 985 985 985 986 991 11/11/20 6:41 PM Contents xxviii 16 Assent Improperly Obtained and Assent to Improper Terms A.Misrepresentation Halpert v. Rosenthal Restatement (Second) of Contracts Byers v. Federal Land Co. Vokes v. Arthur Murray, Inc. Restatement (Second) of Contracts B.Duress Hackley v. Headley Austin Instrument v. Loral Corp. United States v. Progressive Enterprises Restatement (Second) of Contracts C.Undue Influence Odorizzi v. Bloomfield School District Relational Background: Donald Odorizzi’s Story Restatement (Second) of Contracts D.Unconscionability Williams v. Walker-Thomas Furniture Co. Sales Contracts: The Uniform Commercial Code Restatement (Second) of Contracts In re RealNetworks Discover Bank v. Superior Court Gatton v. T-Mobile USA, Inc. E.Enforceability of Arbitration Clauses in Form Contracts AT&T Mobility v. Concepcion Samaniego v. Empire Today, LLC Commercial Background: Contracting Around Government Courts and State-Created Contract Law Lisa Bernstein, Opting Out of the Legal System: Extralegal Contractual Relations in the Diamond Industry F.Public Policy Hanford v. Connecticut Fair Ass’n, Inc. A.Z. v. B.Z. Legal Background: Freedom of Contract Printing and Numerical Registering Co. v. Sampson Restatement (Second) of Contracts CCAD_FM.indd 28 993 993 994 999 1000 1003 1007 1008 1009 1013 1018 1020 1021 1021 1028 1033 1034 1035 1039 1040 1042 1044 1051 1060 1061 1068 1073 1074 1080 1081 1084 1092 1092 1093 11/11/20 6:41 PM xxix Contents 17 Failure of a Basic Assumption A.Mistakes of Present Existing Facts 1. Mutual Mistake Sherwood v. Walker Nester v. Michigan Land & Iron Co. Wood v. Boynton Lenawee County Board of Health v. Messerly Restatement (Second) of Contracts 2. Unilateral Mistake and the Duty to Disclose Tyra v. Cheney Drennan v. Star Paving Co. Restatement (Second) of Contracts Laidlaw v. Organ Restatement (Second) of Contracts The Baseball Card Case: A Problem 3. Mistake and “Smart Contracts” B2C2 Ltd v. Quoine Pte Ltd UK Jurisdiction Taskforce, Legal Statement on Cryptoassets and Smart Contracts B.Changed Circumstances 1. Impossibility and Impracticability Paradine v. Jane Historical Background: The “Alien” Prince Rupert Historical Background: One View of How and Why Paradine v. Jane Became a Leading Case Grant Gilmore, The Death of Contract Taylor v. Caldwell Restatement (Second) of Contracts Sales Contracts: The Uniform Commercial Code CNA & American Casualty v. Arlyn Phoenix Transatlantic Financing Corp. v. United States Sales Contracts: The Uniform Commercial Code 2. Frustration of Purposes Krell v. Henry Historical Background: The Ailing King E. Allan Farnsworth & William F. Young, Contracts Legal Background: Should the Loss “Lie Where It Fell”? Lloyd v. Murphy Restatement (Second) of Contracts C.Allocation of Risk in Long-Term Contracts Aluminum Company of America v. Essex Group, Inc. CCAD_FM.indd 29 1095 1097 1097 1097 1105 1108 1112 1118 1120 1121 1123 1123 1124 1127 1128 1128 1129 1135 1141 1142 1142 1143 1143 1143 1146 1150 1150 1151 1153 1157 1158 1158 1162 1162 1162 1164 1168 1169 1172 11/11/20 6:41 PM Contents xxx Procedural Background: The Aftermath of the ALCOA Decision Northern Indiana Public Service Co. v. Carbon County Coal Co. Empirical Background: Survey of Corporate Counsel Russell J. Weintraub, A Survey of Contract Practice and Policy Table of Judges Table of Cases Table of Statutes Index CCAD_FM.indd 30 1181 1182 1189 1189 1197 1201 1213 1219 11/11/20 6:41 PM