Cornell Law - Contracts Outline (Summers, Fall 2002)

Cornell Law - Contracts Outline (Summers, Fall 2002) -...

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Contracts Fall 2002 Summers Introduction A. Punitive damages are not available in actions for breach of K if no tort was pleaded or proved. (White v. Benkowski ) B. Law-making role of lawyers a. Cavers: Lawyers are the architect and builder of human relationships. Breach of duty=damages a. Fuller: Natural architect for the framework of future dealings; regulation of parties actions; framework of collaboration so lawsuits will not arise b. Austin: Law made by officials, “sovereign legislatures” C. Why exchanges occur a. Disparity in values attached = exchange b. Rationality of exchangers; judged by their own right c. Freedom of transaction (absolute principle) = efficiency (Bastiat) d. Individuals can be more efficient than governments (p. 7, Bastiat) D. Function of a contract a. Clear terms = avoidance of dispute b. Negotiation ahead of time = capitalization on advantages, bargaining power…importance of timing c. Damages for breach of contract are compensation for loss, not punitive damages punishing the wrongdoer as in tort E. Types of agreements a. Non-commercial (Ben v. White) b. Commercial c. Form agreements (99% of all transactions) i. Be careful—can not fit relationship and/or lack a complete legal framework for the relationship (p. 28) d. Social resources that facilitate agreements and performance—p. 29 i. Specialization of labor ii. Bargain General Theories of Obligation A. Intro a. U.C.C. §1-106: The remedies provided by this Act shall be liberally administered to the end that the aggrieved party may be put in as good a position as if the other party had fully performed b. Avoid “contract-no contract” dichotomy (Sullivan , Fuller) – the damages in a breach of K should vary with the theory of obligation/nature of the transaction c. Loss expectancy v. reliance (Sullivan v. O’Connor ) i. Loss Expectancy – difference between promise and result (perfect hand and post-op hand); Fee; P&S only additional) ii. Reliance – difference between hand before op and post-op [return P to original position]; fee; possibly all iii. In Dr./Patient situation, reliance damages may be preferred (i.e. not commercial setting; difficulty in valuing promised result; defensive medicine). d. Significance of theory of obligation and the primary duties (duty to perform) associated with them not solely based on remedial duties 1. Normative significance—p. 44 (justifying reasons, claims of right, ground for criticizing, standards for evaluating) 2. For each theory, prima facie applicability and the justifying rationales B. Agreement with Consideration —leading theory e. Bargained for Exchange = consideration i. Subjective values of item exchanged not a factor for valid consideration (Hardesty v. Smith --invention). Purchaser best judge of value to him (Ct. does not want to fix); each party “gets a something”; freedom of
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This note was uploaded on 02/12/2008 for the course LAW 5041 taught by Professor Summers during the Fall '07 term at Cornell University (Engineering School).

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Cornell Law - Contracts Outline (Summers, Fall 2002) -...

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