Contracts *24 BCL 501 • 4 credits+ Fall Semester 2011 Sections 1, 2, 4, and 6 Mondays & Tuesdays 10:40am-12:05pm, Thursdays 1:30-2:25pm, Room 118 Professor Emily Houh Email: emily.houh@gmail.com Tel: 513-556-0108 Office: 420 COURSE DESCRIPTION & OVERVIEW Contracts, like all of your first-year courses, is one of the most important classes you will take in law school. It covers the law of exchange transactions – which is to say, in very simplistic terms, it covers just about everything for which you pay money, as well as some things for which you don’t. While a significant part of this course covers how contracts and other private agreements are formed, much of it is concerned with determining the obligations created by the many agreements people and businesses enter into, when and how those obligations are to be performed, and what should (and does) happen when those obligations are not performed. Additionally, and importantly, the study of contract law is also the study of the theory and history of American law and jurisprudence. In other words, this course is not only about learning contract doctrines, rules, and cases, but is also about learning to understand, appreciate, and critique contract law within the larger context of the American legal system and American society more generally. STUDENT LEARNING OBJECTIVES General goals. In part, this course aims to equip you to: 1. find and identify legal rules, standards, and doctrines in court opinions, statutes, and other legal texts; 2. distinguish and analogize, in connection with (potential) legal disputes and problems, different facts and the legal rules and standards that apply to them; 3. using 1 and 2 above, efficiently and accurately identify relevant issues in various types of contractual disputes and fact patterns, whether encountered in the course materials, in the classroom, on the bar exam, and/or in practice; 4. learn and understand the theoretical and policy implications of various legal rules, standards, and doctrines in both abstract and applied terms; 5. construct thorough and effective legal arguments from various perspectives through your mastery of 1 through 4 above; and 6. coherently and persuasively articulate thorough and effective legal analyses through your mastery of all of the above. Contracts Fall 2011 Prof. Houh Course Introduction & Syllabus Page 1 of 11 STUDENT LEARNING OBJECTIVES, CONTINUED Specific performance goals. If you do the work required of you, you’ll be able by the end of the term to find, learn, analyze, and apply contract law when you are presented with new, unique, and sometimes baffling legal questions. More specifically, you should be able to: 1. find, read, interpret, and use various and interrelated contract rules, standards, and doctrines, using as your primary and secondary sources legal opinions (cases) and statutes (e.g., the Uniform Commercial Code), as well as other legal texts such as the Restatement (Second) of Contracts; 2. understand how and why contract law has developed and changed as it has, and why different jurisdictions sometimes have adopted varying approaches to and positions on particular rules, standards, and doctrines; 3. appreciate the legal theory/ies and policy goals underlying and informing the different approaches and positions mentioned in 2 above; 4. apply the various rules, doctrines, and norms to different fact situations and problems, and justify and anticipate different outcomes and conclusions as part of your legal analysis; and 5. achieve a level of comfort with doing all of the above on your feet and in front of your peers when you are called on. Published in The New Yorker, February 8, 1999 by Bruce Eric Kaplan Contracts Fall 2011 Prof. Houh Course Introduction & Syllabus Page 2 of 11 REQUIRED TEXTS RECOMMENDED TEXTS You must purchase the following two texts, new or used. Also, you MUST bring EACH of these texts—including the Rulebook—to EVERY class session. E. Allan Farnsworth, Contracts (4th ed. 2004) (Aspen Student Treatise Series) (“Farnsworth”). This is a staple; throughout my teaching career, I have found it to be indispensible. If you decide not to buy this treatise and find yourself in need of assistance as you prepare for class, I strongly suggest that you take a look at this in the library, where I have placed a copy on reserve. There are, of course, many other contracts study guides and hornbooks that might work well for you, but Farnsworth is my favorite. 1. Charles L. Knapp, Nathan M. Crystal, and Harry G. Prince, Problems in Contract Law: Cases and Materials (6th ed. 2007) (“casebook” or “KCP6”); and 2. Charles L. Knapp, Nathan M. Crystal, and Harry G. Prince, Rules of Contract Law (2009-10 or 2010-11, or 2011-12 statutory supplement) (“Rulebook” of “statutory supplement”). NOTE that a new edition of the Rulebook is published every year. You may use any edition from the past three years. However, do NOT use anything older than the 2009-2010 edition. You MUST bring the Rulebook with you to every class. Do NOT use substitutions or online editions, either for inclass or out-of-class use. E. Allan Farnsworth 1928-2005 A word about commercial outlines and casebriefs While I don’t prohibit the use of commercial outlines and casebriefs, I strongly discourage it. Students who rely too heavily on commercial outlines and briefs often gain only a superficial understanding of cases and doctrines and often have a difficult time synthesizing material in preparation for the final exam. Using commercial outlines and casebriefs as a substitute for the hard work of careful reading and analysis of cases and text simply won’t get you to where you’ll want to be, either day-to-day or at the end of the semester. So, use these types of materials sparingly, and at your own risk. Contracts Fall 2011 Prof. Houh Course Introduction & Syllabus Page 3 of 11 doctrine, theory, and policy, and many of the questions I ask in class will be based on them. CLASS EXPECTATIONS AND GRADING On class preparation: “Professor Houh requires us to prepare in too much detail for class.” Read (don’t skim!) all assigned provisions of the Restatement and UCC, both of which can be found in the Rulebook, when they are assigned. If you have difficulty with the provisions, try diagramming or flowcharting them – you’ll be surprised at how well this works. Also, note that with respect to the UCC, we will focus on Revised Article 1 and (unamended) Article 2. Get into a study group that actually studies, and then be accountable for your work. If you come across assigned material that simply makes no sense to you, go first to Farnsworth (or other hornbooks and/or treatises) and try to figure it out. This will serve two purposes: (1) you’ll often find concrete examples in treatises and hornbooks that will be quite helpful; and (2) you’ll learn how to use treatises and hornbooks, which are important legal research resources more generally. If at that point you still are having difficulties, come to my office hours or make an appointment. I’m always happy to chat with students about various subjects, lawrelated or not, but if you want to talk to me about some rule or case you don’t understand, I will expect that you already will have made a good faith effort to figure things out on your own and/or in your study group. “Sometimes too much time is spent on discussing policy and theory in class.” The above quotes paraphrase comments that have appeared somewhat regularly in my course evaluations over the years. Although meant as complaints, these comments actually assure me that I am doing my job as a law teacher, because when it comes to the law, details mean everything. Moreover, when facts are complicated and compelling on both sides, policy and/or theory often will prevail. At the end of the day, a good lawyer is one who is detail-oriented and wellprepared; and an exceptional lawyer is one who is both of these things and who understands how her analyses and arguments are informed by and will impact the “bigger picture” of the law (context + history + theory + policy). Because I want you all to be exceptional lawyers someday, I have high expectations when it comes to class preparation. Here are a few suggestions for what you should do, at a minimum, to prepare for my classes: Read and brief the assigned cases thoroughly and carefully. Read (don’t skim!) the assigned notes following the cases, and read (don’t skim!) the assigned casebook comments. These materials usually contain invaluable information about Go to the next page. Contracts Fall 2011 Prof. Houh Course Introduction & Syllabus Page 4 of 11 CLASS EXPECTATIONS AND GRADING, CONTINUED On Grading and Assessment: The majority of your grade will be based on a four-hour final exam. I also will consider excellent class participation, preparation, and attendance, which may result in raising the final grades as much as 1/3 of a letter grade (e.g., from a B to a B+). Similarly, poor attendance, preparation, or class participation will lower final grades. Note in particular that excessive absences may result in a failing grade for this course. Class participation, including attendance: You are expected to attend every class session. If you must miss a class, please inform me ahead of time and obtain notes from your classmates. I will check attendance using the clickers that you purchased at the beginning of the term. I use the Socratic method and cold-call on students, for a couple of reasons. First, as mentioned on page 4, the key to good lawyering is to be thoroughly prepared. I find that cold-calling in combination with Socratic colloquy most effectively motivate the largest number of students to prepare adequately for class. Second, talking in class (and on the fly) is good practice for what you’ll have to do in actual practice, whether before a judge, mediator, with a partner or client, or simply when brainstorming a problem with your peers. Substantively, when preparing for class, keep in mind the student learning objectives set forth on pages 1 and 2 of this document. And of course, follow my suggestions on page 4. Finally, note that on occasion, I will use the clickers during class to assess your understanding of the assignments and concepts contained therein. Final exam: The final exam will consist of some combination of multiple choice and essay questions and will be graded anonymously. I will discuss the final exam in greater detail as the end of the semester draws closer. At first when you’re called on, you might feel like you’re being forced to speak in a Colonel Sanders suit before a bunch of strangers… …but after a little toughening up… … you’ll be WINNING! Contracts Fall 2011 Prof. Houh Course Introduction & Syllabus Page 5 of 11 CLASS EXPECTATIONS AND GRADING, CONTINUED Miscellaneous classroom management issues: Laptops: While in class, please refrain from emailing, IM-ing, shopping, playing games, watching videos, and engaging in all the other forms of distraction offered by your laptop, smart phone, iPad, tablet, and/or other electronic devices. Also, I strongly discourage “scribing” as a form of note-taking. Though I realize laptops make transcription of lectures and discussion very easy, I think you’ll learn more from listening to class discussion, trying to follow along as best you can, and using your own developing judgment in taking notes about what is important (and correct!). Keep in mind also that learning how to take discerning notes now will serve you well in your second and third years of law school. Academic dishonesty: At the risk of stating the obvious, the College of Law Honor Code applies to this course. Please be sure to read the entire Honor Code, which can be found here: http://www.law.uc.edu/current-students/resources/honor-council-and-honor-code. ASSIGNMENT FOR FIRST DAY OF CLASS – MONDAY, AUGUST 22 – 10:30AM, ROOM 118: 1. Read carefully this Course Introduction & Syllabus. 2. Read “An Introduction to the Study of Contract Law” – pp. 1-17 in the casebook (KCP6), but skip problem 1-1 on pp. 4-5. 3. Read “Mutual Assent: Objective Theory of Contract” in the casebook (KCP6) – pp. 21-33. Be prepared to discuss in class the Ray v. William G. Eurice & Bros. case and the notes following it. 4. Register online for the Westlaw TWEN course I have created for this class, titled “Contracts (Fall 2011).” The password for the course, which you will need to register, is: youts. If you do not know how to use TWEN, please consult with one of the reference librarians. You must register on TWEN for this class before our first session on Monday, August 22, 2011. You can access TWEN at http://lawschool.westlaw.com/twen/. 5. Create a one-page document (using whichever word-processing program you choose) that contains: a. your full name and the name you prefer to be called; b. your undergraduate school and background (major/minor; past career(s)); and c. a one-sentence description of the last contract you entered into. Then, using the TWEN “Assignment Drop Box,” submit the above by 9am on Tuesday, August 23, 2011, to the “Day 1 Assignment” in the Drop Box. Contracts Fall 2011 Prof. Houh Course Introduction & Syllabus Page 6 of 11 SCHEDULE OF ASSIGNMENTS All assignments appearing below, unless otherwise indicated, refer to the 6th edition (2007) of the Knapp, Crystal, and Prince casebook. Do not use prior editions of the casebook! Relevant provisions of the UCC and the Restatement can be found in the Rulebook. Please be advised that I may change, add, or drop topics/assignments as warranted via email, TWEN, and/or in-class announcements. Session Topic and assignment 1 / M 8.22 Course Introduction and Syllabus • See page 6 of this document and “Assignment for First Day of Class” 2 / T 8.23 Ch. 2 – Mutual Assent: Offer and Acceptance in Bilateral Ks • Lonergan v. Scolnick • Izadi v. Machoado (Gus) Ford, Inc. • Normile v. Miller 33-51 3/ Th 8.25 Ch. 2 – Mutual Assent: Offer and Acceptance in Unilateral Ks • Petterson v. Pattberg • Cook v. Coldwell Banker/Frank Laiben Realty Co. • Comment: Remedies for Breach of Contract 51-63 4/ M 8.29 Ch. 2 – Mutual Assent: Other Methods of Reaching Mutual Assent • Harlow & Jones, Inc. v. Advance Steel Co. • Comment: Introduction to the CISG Ch. 2 – Consideration: Defining Consideration • Hamer v. Sidway • Comment: History of Consideration • Pensy Supply, Inc. v. American Ash Recycling Corp. of PA 63-70 5/ T 8.30 6/ Th 9.1 M 9.5 Pages in KCP6 Ch. 2 – Consideration: Defining Consideration, continued • See above. Ch. 2 – Consideration: Applying the Consideration Doctrine • Dougherty v. Salt • Comment: The Lawyer’s Role in Counseling for Legal Effect • Batsakis v. Demotsis • Plowman v. Indian Refining Co. • Comment: The Power of Agents to Bind Their Principals Ch. 2 – Consideration: Applying the Consideration Doctrine, continued • See above. Ch. 2 – Issues in Applying Mutual Assent: Effect of Pre-Acceptance Reliance • James Baird Co. v. Gimbel Bros., Inc. • Drennan v. Star Paving Co. 71-87 87-107 108-19 LABOR DAY – NO CLASS Contracts Fall 2011 Prof. Houh Course Introduction & Syllabus Page 7 of 11 7/ T 9.6 Ch. 2 – Issues in Applying Mutual Assent: Effect of Pre-Acceptance Reliance, continued • See above, and • Comment: Contract Law and Business Practice • Berryman v. Kmoch Ch. 2 – Issues in Applying Mutual Assent: Irrevocability by Statute: The “Firm Offer” (UCC § 2-205) • Problem 2-2 – detailed instructions to be given in class 8/ Th. 9.8 In-class review of Problem 2-2 9/ M 9.12 Ch. 2 – Issues in Applying Mutual Assent: Qualified Acceptance: The “Battle of the Forms” • Princess Cruises, Inc. v. General Electric Co. (common law principles) • Brown Machine, Inc. v. Hercules, Inc. (UCC § 2-207) • Comment: Battle of the Forms under Revised Article 2 119-22 122-28 138-41 143-63 165-67 10/ T 9.13 Ch. 2 – Issues in Applying Mutual Assent: Agreement to Agree • Walker v. Keith • Quake Construction, Inc. v. American Airlines, Inc. • Comment: The Pennzoil/Texaco Case 167-90 11/ Th 9.15 Ch. 2 – Issues in Applying Mutual Assent: Electronic Contracting • Brower v. Gateway 2000, Inc. 193-204 12/ M 9.19 Ch. 3 – Promissory Estoppel (“PE”): Promises Within the Family • Kirksey v. Kirksey • Greiner v. Greiner • Wright v. Newman Ch. 3 – PE: Charitable Subscriptions • King v. Trustees of Boston University 215-28 Ch. 3 – PE: Promises in a Commercial Context • Katz v. Danny Dare, Inc. Ch. 3 – Liability for Benefit Received: Restitution • Credit Bureau Enterprises, Inc. v. Pelo • Commerce Partnership 8098 Ltd. Partnership v. Equity Contracting 237-44 Ch. 3 – Liability for Benefit Received: Restitution, continued • Watts v. Watts Ch. 3 – Liability for Benefit Received: Promissory Restitution • Mills v. Wyman • Webb v. McGowin 273-86 13/ T 9.20 14/ Th 9.22 15/ M 9.26 228-36 253-73 286-99 Ch. 3 – Catch-up and/or review problems (TBD) Contracts Fall 2011 Prof. Houh Course Introduction & Syllabus Page 8 of 11 16/ T 9.27 Ch. 4 – Statute of Frauds: Scope and Application • Crabtree v. Elizabeth Arden Sales Corp. • Comment: The Historical Development of Law and Equity • Alaskan Democratic Party v. Rice 303-14, 32232 17/ Th 9.29 Ch. 5 – Principles of Interpretation • Joyner v. Adams • Frigaliment Importing Co. v. BNS International Sales Corp. 349-70 18/ M 10.3 Ch. 5 – Parol Evidence Rule (“PER”) • Thompson v. Libby • Taylor v. State Farm Mutual Auto Insurance Co. (compare with Thompson v. Libby, above) 382-410 19/ T 10.4 Ch. 6 – The Rationale for Implied K Terms • Wood v. Lucy, Lady Duff-Gordon • Leibel v. Raynor Manufacturing Co. Ch. 6 – Implied Obligation of Good Faith • Seidenberg v. Summit Bank • Locke v. Warner Bros., Inc. 437-48 20/ Th 10.6 Ch. 6 – The Rationale for Implied K Terms, continued • See above. Week of 10.10 21/ M 10.17 FALL BREAK – NO CLASS 448-62, 470-80, Ch. 6 – Implied Warranties • Bayliner Marine Corp. v. Crow • Caceci v. Di Canio Construction Corp. Ch. 7 – K Avoidance: Minority and Mental Incapacity • Pbm. 7-1 (if there’s time) • Dodson v. Shrader 497-515 22/ T 10.18 Ch. 7 – K Avoidance: Duress and Undue Influence • Totem Marine Tug & Barge, Inc. v. Alyeska Pipeline • Odorizzi v. Bloomfield School District 537-56 23/ Th 10.20 Catch-up and/or review problems (TBD) 24/ M 10.24 Ch. 7 – K Avoidance: Misrepresentation and Nondisclosure • Syester v. Banta • Hill v. Jones • Comment: Lawyers’ Professional Ethics • Park 100 Investors, Inc. v. Kartes 517-26 556-84 Contracts Fall 2011 Prof. Houh Course Introduction & Syllabus Page 9 of 11 25/ T 10.25 Ch. 7 – Finish Misrepresentation and Nondisclosure • See above. Ch. 7 – K Avoidance: Unconscionability • Williams v. Walker-Thomas Furniture Co. • Comment: Consumer Protection Legislation • Higgins v. Superior Court • Comment: Commercial, Employment and Consumer Arbitration 584-610 625-32 26/ Th 10.27 Ch. 7 – K Avoidance: Public Policy • Valley Medical Specialists v. Farber (skip pbm. 7-2 on pp. 632-33) • R.R. v. M.H. & another 632-58 27/ M 10.31 Ch. 8 – Excused Nonperformance: Mistake • Lenawee County Board of Health v. Messerly • Wil-Fred’s, Inc. v. Metropolitan Sanitary District 663-84 28/ T 11.1 Ch. 8 – Excused Nonperformance: Impossibility, Impracticability, and Frustration • Karl Wendt Farm Equipment v. International Harvester Ch. 8 – K Modification • Pbm. 8-3 (if there’s time) • Alaskan Packers’ Association v. Domenico 684-701 713-23 29/ Th 11.3 Ch. 9 – Third Party Beneficiaries • Vogan v. Hayes Appraisal Associates, Inc. • Zigas v. Superior Court 741-62 30/ M 11.7 Ch. 9 – Assignment and Delegation • Herzog v. Irace • Sally Beauty v. Nexxus Products Co 762-81 31/ T 11.8 Ch. 10 – Express Conditions • Oppenheimer & Co. v. Oppenheim, Appel, Dixon & Co. Ch. 10 – Nonperformance: Material Breach • Jacob & Youngs, Inc. v. Kent • Comment: The Doctrine of Constructive Conditions 783-96 32/ Th. 11.10 Catch-up and/or review problems (TBD) 33/ M 11.14 Ch. 10 – Nonperformance: Material Breach, continued • Sackett v. Spindler Ch. 10 – Nonperformance: Anticipatory Repudiation • Truman L. Flatt & Sons Co. v. Schupf 806-17 817-24 824-33 Contracts Fall 2011 Prof. Houh Course Introduction & Syllabus Page 10 of 11 34/ T 11.15 Ch. 11 – Computing Expectation Damages • Roesch v. Bray • Handicapped Children’s Education Board v. Lukaszewski • American Standard, Inc. v. Schectman 35/ Th. 11.17 Ch. 11 – Finish Computing Expectation Damages • See above. Ch. 11 – Restrictions on Expectation Damages: Foreseeability and Certainty • Hadley v. Baxendale • Florafax International, Inc. v. GTE Market Resources, Inc. 36/ M 11.21 Ch. 11 – Finish Restrictions on Expectation Damages: Foreseeability and Certainty • See above. Ch. 11 – Restrictions on Expectation Damages: Mitigation • Rockingham County v. Luten Bridge Co. • Havill v. Woodstock Soapstone Co., Inc. 37/ T 11.22 Catch-up or review problems (TBD) Th 11.24 NO CLASS – HAPPY THANKSGIVING! 38/ M 11.28 Ch. 11 – Nonrecoverable Damages • Zapata Hermanos Sucesores, S.A. v. Hearthside • Erlich v. Menezes Ch. 12 – Reliance Damages • Wartzman v. Hightower Productions, Ltd. 39/ T 11.29 40/ Th 12.1 41/ M 12.5 845-68 868-86 886-904 911-32 965-74 Ch. 12 – Reliance Damages, continued • Walser v. Toyota Motor Sales, U.S.A., Inc. Ch. 12 – Restitutionary Damages • U.S. ex rel. Coastal Steel Erectors, Inc. v. Algernon Blair, Inc. • Lancellotti v. Thomas Ch. 12 – Specific Performance • City Stores Co. v. Ammerman Ch. 12 – Agreed Remedies • Westhaven Associates, Ltd. V. C.C. of Madison, Inc. 975-83 983-95 1008-21 1031-44 Catch-up and/or review Contracts Fall 2011 Prof. Houh Course Introduction & Syllabus Page 11 of 11