Pareto superiority

Luten Bridge v. Rockingham County

Mitigating Damages:

When a party breaches a contract the other party has the obligation to mitigate damages (ex: not continuing to build a bridge the breaching party asked them to stop building)

When the court orders a party to do as they promised in the contract

This is rarely done because courts feel this is an extreme measure which limits autonomy

More likely to issue an injunction prohibiting the breaching party from taking alternative actions, this is in order to make the original contract the best option

Instead of awarding damages for the cost of "non-performance" the ocurt awarded costs for "damages to the land"

Worth of land if it was fixed - worth of land as it is = damages

Party can only recover damages if:

-They are foreseeable

-They arise out of the "natural order of things"

New businesses do not get their loss of profits, as there is no way to tell if they would have made a profit. This rule is no longer followed very strictly.

1. Restitution

2. Reliance

3. Expectation

You relied on the contract being fulfilled and so you are now in a worse position. The breaching side should compensate you for these expenses.

Two types of Reliance Interest:

Essential and Incidental

If the offer hasn't been accepted when the offeror dies, the offer dies with the offeror

If the offer has been accepted before the offeror dies, the contract has already been made

In order for a contract to be enforceable, each party must be giving the other party something in return.

There must either be a benefit to one party or a detriment to the other

A promise without consideration

A promise to keep the original offer open for a certain period of time. These require consideration, usually through the form of incrimental payments or performance

Relying on a promise to your detriment

   -Like reliance interest for a promise instead of a  contract

Courts usually uphold these to protect the person who was relying.

Promise for performance

Only way to accept is to perform

When a person starts performing on a unilateral contract, the implied option contract comes into play in order to keep the offer open until they have finished performing.

Partial performance of the unilateral contract triggers the implied option contract.

When must a contract be written down in order for it to be enforceable?

Usually applies to real property and high $$$

Statute of Frauds Requires

2 Things in a Written Contract

1. Must be written (memo and email ok)

2. Must be signed (business card, letterhead ok)

1. Cautionary

2. Evidentiary

3. Channeling

Intended Beneficiary: Allowed to enforce contract in court

Implied Beneficiary: Not allowed to enforce contracts in court

Unless otherwise contracted, the delegator remains  liable under the contract, not the delegatee

Example: Contractor hires subcontractor to perform a job for a contract. Contractor is liable for contract, not subcontractor

Transferring Entire Contract:

Assignment of Rights & Delegation of Duties

Illegal contracts will not be enforced by the courts

Mere knowledge of the illegal activity is not enough, must be participating in the illegal activity.

You cannot make a change to one side of the contract without making a change to the other side,  because the new promise lacks consideration

This rule is weakening

Stating something that is false

Different than fraud, fraud requires an intent to mislead

aka... Form Contracts

Rarely negotiated

Rarely read

Usually imbalance in bargaining power

Lack of meaningful choice and unreasonably favorable terms

If one term is unconscionable but the contract as a whole is not, the court will eliminate the one term.

Only honors what is written down in a contract

Previous oral promises or agreements are not enforceable because if they were important they would be in the written contract