Contract Doctrine, Theory & Practice Volume 3, 2012a

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Imagine that a seller (S) signs a contract with a buyer (B) to deliver 10,000 widgets for $1/each (to be used in boiler factory). Before S makes any deliveries, a foreign consortium (FC) offers to pay $2/each for as many widgets as S can produce and deliver within one month. S directs all of its production for 30 days to serving FC. Suppose that S can produce 7,000 widgets in that time. The delay in delivery will cause B to lose $1,000 in profits (e.g., B can’t run boiler production at full capacity). First, try to account for the potential gains and losses in this situation. Then ask yourself what Posner argues that S should do and why? Now consider whether there are any opportunities for the parties to renegotiate their bargain once a new opportunity arises? How would you expect those negotiations to proceed? If the parties expect that the default damage rule (e.g., one-half or twenty-times compensatory damages) will frustrate their objectives, what would you advise them to do before signing a contract? 1.3.3 Hypo of Dan and Lynn on the River (inspired by a hypo from an early edition of the Scott & Leslie, <strong>Contract</strong> Law & <strong>Theory</strong> casebook) Dan sits on his porch overlooking a scenic river. Lynn runs a factory upstream from Dan's house. Lynn wants to dump waste in the river that is non-toxic but causes a terrible smell that dissipates only after passing Dan’s house. (1) Suppose first that the law gives Dan the legal right to prevent the dumping. (Perhaps it calls the dumping a nuisance.) (a) If Lynn values dumping more than Dan values pleasant smelling air, what will the parties do? (b) If Dan values sweet air more than Lynn values dumping, what will happen now? (2) Next, change the assignment of legal rights so that Lynn has the right to dump. 66
(a) If Lynn values dumping more than Dan values pleasant smelling air, what will happen? (b) If Dan values sweet air more than Lynn values dumping, what will the parties do now? How does the assignment of the legal right to dump (or prevent dumping) affect the distribution of wealth between Dan and Lynn? 1.3.4 Problem: Signing Bonus for First-Year Associates Suppose that newly enacted legislation declares the following: All legal employers must pay starting first-year associates a signing bonus of $100,000 unless otherwise specified in a written contract of employment. What do you expect to happen after the effective date of the legislation? Does the enactment of this legislation make first-year associates better off? Now suppose that the legislation mandates payment of the bonus and prohibits parties from contracting around the bonus requirement. What do you expect to happen in the market for the services of first-year associates? Can you imagine any strategies firms might adopt to diminish the effect of the new law on their labor costs? 2 Specific Performance As we saw in Lucy v. Zehmer, one way to ensure that the promisee (Lucy) receives precisely what he wanted from the contract is to order the promisors (the Zehmers) to perform by conveying title to the Ferguson farm. Although courts routinely order “specific performance” of real estate sales contracts, they also grant specific performance in appropriate circumstances to remedy the breach of a contract for the sale of goods. Let’s begin by reading the relevant section of the UCC. § 2-716. Buyer’s Right to Specific Performance or Replevin (1) Specific performance may be decreed where the goods are unique or in other proper circumstances. 67
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Contract Doctrine, Theory & Practic
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and accurate information in this bo
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Table of Contents VI. IDENTIFYING A
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5.1.1 Discussion of Lake River v. C
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pervade the entire field of law. Co
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meaning. Courts frustrate this goal
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question before us is whether their
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these precise provisions? It could
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to her. It is evident that here was
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principal transaction as to be part
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conveyance, does not, I think, show
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The trial court properly refused to
Page 26 and 27: appear incomplete on its face has b
Page 28 and 29: certainly have been included in the
Page 30 and 31: CONTRACTS (3d ed. 1960) § 412, pp.
Page 32 and 33: ule, did not allow the bankrupt by
Page 34 and 35: [26] The contract of sale and purch
Page 36 and 37: every case which is pertinent here
Page 38 and 39: credibility of the evidence.” (It
Page 40 and 41: parties were attorneys “we wanted
Page 42 and 43: would permit the property to be acq
Page 44 and 45: This agreement constitutes the enti
Page 46 and 47: (3) Where the parties reduce an agr
Page 48 and 49: (2) An agreement is not completely
Page 50 and 51: The reference in § 2-202 to usage
Page 52 and 53: Hunt Foods & Industries v. Doliner
Page 54 and 55: negate a term of the writing. A ter
Page 56 and 57: Id. at 152. Rather we believe “in
Page 58 and 59: VII. Remedies for Breach If the par
Page 60 and 61: (a) the loss in the value to him of
Page 62 and 63: (2) Where the seller fails to deliv
Page 64 and 65: Oliver Wendell Holmes affirmed the
Page 66 and 67: contract, if we give the plaintiff
Page 68 and 69: defendant (“publisher”) exclusi
Page 70 and 71: WILLISTON, CONTRACTS (3d ed.), § 1
Page 72 and 73: [11] In our view, the analogy by th
Page 74 and 75: contracts but only to require each
Page 78 and 79: (2) The decree for specific perform
Page 80 and 81: jet for $4.6 million. Janas accepte
Page 82 and 83: existed. The company argues that th
Page 84 and 85: [19] The Virginia Code § 8.2-716 p
Page 86 and 87: [1] This is an appeal from a decree
Page 88 and 89: package”—decals, a special pain
Page 90 and 91: accurately reflect the market and t
Page 92 and 93: not been received in full. Williams
Page 94 and 95: “The Statute of Frauds would be u
Page 96 and 97: y the trial court, the location and
Page 98 and 99: (3) The buyer has a right of replev
Page 100 and 101: Martin because he was unable to cle
Page 102 and 103: tobacco company was not structured
Page 104 and 105: equal satisfaction, and thus may su
Page 106 and 107: performances is sometimes difficult
Page 108 and 109: that the obligee bear all future ad
Page 110 and 111: ook on modern drama. We consider he
Page 112 and 113: [6] "There are certain establishing
Page 114 and 115: probability, have occurred; and the
Page 116 and 117: uninterrupted service is particular
Page 118 and 119: ecovery for lost profits. Although
Page 120 and 121: 3.3 Principal Case - Drews Company
Page 122 and 123: that compensation, then, “is the
Page 124 and 125: and mitigating sub-doctrines to the
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can be logically and rationally dra
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Our research fails to reveal any ju
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How about the risk of business fail
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amount of loss that he could have a
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instances the appropriate course ma
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court of the county. The clerk rece
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[7] On December 1, 1924, the newly
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not authorized by the board of comm
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doubt which may have existed in tha
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557; note, 19 A.L.R. 39, and cases
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An officer de facto is one whose ac
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circumstances. When, therefore, the
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The legal right of either party to
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Luten Bridge Company have any alter
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however, that if we fail to agree .
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failure to seek other available emp
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well as an actress, and was to be p
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simply to remain idle during the ba
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[23] I believe that the approach ta
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etween Neuman and Fox which culmina
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I consider the ultimate issue: whet
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various industrial operations. Havi
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the omission trivial, and that the
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[10] In the case before us, plainti
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[3] Briefly stated, the facts are a
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[12] It may be observed that Groves
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contracts that “…in cases where
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the breach of an obligation” than
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7f Lessee further agrees to leave n
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court will give the contract effect
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[49] I therefore respectfully disse
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The Court: The objection will be su
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objected to similar evidence offere
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Halley, V. C. J., and Welch, Daviso
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performance—has been consistently
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Is there any way to reconcile our d
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either of proving that loss has occ
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which is reasonable in the light of
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Carbo from the East to serve its cu
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help remedy for one who has done wo
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especially when we consider that th
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N.E.2d 863, 869 (Ill. App. 1978). T
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percent of the contractually agreed
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method by which it proposes to take
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contract price of $241,000 minus th
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Pennsylvania corporation; and Halte
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and completely connected with the T
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C and H was in fact able to find ot
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concurrent defaults. If we were to
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1284, 1290 (7th Cir.1985) (per Posn
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mating obligations because the tug
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Instead, courts have considered the
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Can you develop an argument that wo
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i Corbin suggests that, even in sit
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xiii Viz., proof of a collateral ag
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Interpreting this section, U.C.C. C
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xxxiii The values of the doctrine o
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In addition to uncertainty, courts
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Contract Doctrine, Theory & Practice Volume 3, 2012a

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