Sample Contracts Exam

[fbartela]

There may be a problem with the detrimental reliance.  If you look at the facts there are two problems with the argument.  The first is that the guy was paralyzed and blind, which essentially won't allow him to seek many forms of alternative employment and it is therefore arguable that it wasn't his reliance that prevented him from seeking alternative employment but his handicap.  Second, if you argue that his reliance is evidenced by dependence on the money received, then once he starts to write the book, presumably to gain a profit, that could negate any reliance.  However, if you make the argument, the reliance has to be reasonably expected and the remedy can only be granted to prevent injustice.  So once the book is started and his reliance ends then you can argue that since the company stopped paying after his reliance was diminished there is no breach on that concept.

[bw34]

Couldn't you argue that the theory of restitution applies?  The company received a 'material benefit' and was unjustly enriched.  I don't have anything in front of me at the moment do this may be wrong...

[PharmD]

Let me know if I'm way off... First post from a First Year

Consideration
The consideration for the monthly check was S's forbearance from seeking damages/compensation at the time of the accident. So S suffers legal detriment in exchange for the check, which you would reasonably expect him to have reliance on, etc..
I think the whole "wheeling" him in is to throw you off("red herring"?) so you think this is the consideration for the check. It's not b/c he gets check independent of appearances.

At the time of the accident, S could have sued for unjust enrichment or sought alternative avenues of compensation that may or may not be available 10 years later.

SOF
I'm not sure this k falls w/i SOF because it would be possible to perform this within a year. The payment period is month-to-month, and conditional to the company being profitable. The way it is worded, one could interpret that once the company is not profitable, they are discharged from their duty to pay. This event could theoretically occur the following month. I thought that in order for a k to fall w/i SOF, it must be impossible to complete in a year. But you could always argue it all.

Material Benefit Rule
I would be cautious about using this as the top arguement, because sec.(86) isn't universally accepted (And for good reason). One problem with sec.86 is that a promise has to first be made, then it can be enforced. So basically, ungrateful people who don't acknowledge a benefit are not obligated to anything, where considerate people that want to return the favor get penalized. I would just try to find an alternative before going this route.

I'm not really sure how these other facts play in, Gotta think about it..

[PharmD]

Ummmm guys?

This hypo was on a contracts exam that I took today.  Except it was a high-powered speedboat tester.  I mean... to the T.  Unbelievable.  Right down to following procedure after the cockpit caught fire.

Button, I owe you a drink.  And PharmD, whoever you are, I totally used your forbearance argument.

Suddenly, my hours on LSD seem totally worthwhile.

Reez, no problem. I'm glad that it worked out for you. I'm certain you'll get points for finding a way to use law principles in lieu of a fabricated, reactionary, anecdotal, moral consideration doctrine. I personally think its satisfying when you get to validate the time-tested tools instead settling for a somewhat officious (pun intended) consideration doctrine. I just got done w/ my contracts and I was more prepared that I felt I was. Glad its over for a little while.

Holla

[3-Elle]

Ummmm guys?

This hypo was on a contracts exam that I took today.  Except it was a high-powered speedboat tester.  I mean... to the T.  Unbelievable.  Right down to following procedure after the cockpit caught fire.

Button, I owe you a drink.  And PharmD, whoever you are, I totally used your forbearance argument.

Suddenly, my hours on LSD seem totally worthwhile.

This was definitely our exam. I am sooo depressed that I didn't see this thread before the test.

[Slumdog Lovebutton]

Ummmm guys?

This hypo was on a contracts exam that I took today.  Except it was a high-powered speedboat tester.  I mean... to the T.  Unbelievable.  Right down to following procedure after the cockpit caught fire.

Button, I owe you a drink.  And PharmD, whoever you are, I totally used your forbearance argument.

Suddenly, my hours on LSD seem totally worthwhile.

LOL.  I'm holding you to that.

[Slumdog Lovebutton]

LOL.  I'm holding you to that.

congrats, you're 2/3 there! 

Thanks!  I can hardly believe it....

[DirkDiggler]

Lovebutton & PharmD:
Good stuff.

My answer included the following discussion:
Pre-existing duty to avoid collateral damage (depending on court's interpretation of term "best efforts"; court could use unconscionability if they dislike an employee's obligation to potentially harm oneself)
Likely no consideration (discussed past performance and material benefit; also, subsequent speaking engagements not equaling bargained for detriment)
Likely unenforceable through PE (no reliance)
Promised payments are conditioned on continued profitability (company could assert that the book deal threatens profitability)

I purposely avoided SOF discussion because my contracts professor never covered it in class or assigned reading on it. I'm familiar enough to raise the issue in an essay, based on coverage in my contracts hornbook and property course.

So, my question: should I raise SOF issues on the real exam, even though the prof never covered it?

[,.,.,.;.,.,.]

The company will argue that, because there was no bargained for exchange or consideration, they could cancel the payments at any time.  Analogizing this case to Pitts v. McGraw, they will argue that giving monthly payments to a former employee was a mere gratuity.

In rebuttal, the employee will argue that there was consideration in the form of past consideration.  He conferred a direct material benefit on the company, by saving their plane, and becoming irreparably wounded in the process.  (Webb v. McGowin)  If the court buys this argument, they will order the company to continue payments, pursuant to Restatment 86, insofar as it "avoids injustice."

The company will dwell on that language.  Would it avoid injustice to stop paying payments to an ungrateful former pilot?  Restatement 86 was designed to avoid injustice in the sense of imposing an undue financial burden on the pilot, and he will be fine without the payments.  Moreover, he should have expected their termination, because of the profitable language.  He did not expect the payments to continue indefinitely, therefore, perhaps, no injustice.

Even without past consideration or bargained-for exchange, employee can prevail on a promissory estoppel claim.  (Restatement 90)  The company should have known that he would reasonably rely on these payments, and he did rely on them because he stopped working.

Again, the company can use the "profitable" language to argue that he shouldn't have reasonably relied on the payments, but they appeared to be profitable at the time, and they sent the checks, "like clockwork," for 20 years.  The closest case on point is Ricketts, in which the grandfather sent the checks to his granddaughter for many years, and the court enjoined the estate from continually sending them.  A weak argument for the company is that Ricketts applies solely to promissory estoppel in familial gifts, rather than commercial ones like these.