SOUTH-WESTERN LEGAL STUDIES IN BUSINESS CASE UPDATES—CONTRACTS
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SOUTH-WESTERN LEGAL STUDIES IN BUSINESS CASE UPDATES—CONTRACTS
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Title
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Summary
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Airlines May Limit Liability by Contract
Briefed Case |
Court upheld the limited liability for lost baggage included in the contract for flying. Passengers have the option to buy insurance to cover costly items they are shipping. If they do not, and the items are lost, the airline liability is limited to the stated amount. (Updated May 2008) |
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Lost Profits, Not Lost Revenue, Are Proper Measure of Damage for Breach
Briefed Case |
The Alabama high court held that in case of breach of contract, the trial court is to estimate the profits lost by the party that suffered the breach as the measure of damages, not the total revenues lost due to breach. (Updated April 2008) |
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Firm Breached Contract, but Not Liable in Tort for Wrongful Death Claim
Briefed Case |
Appeals court held that a mistake by a home alarm company was a breach of contract, but that the company could not be sued in tort for a death that was alleged to have result from the failure to respond properly to an alarm call. (Updated March 2008) |
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Iowa Adopts Implied Warranty of Workmanlike Construction Doctrine
Briefed Case |
Iowa high court held that the state would adopt the doctrine of implied warranty of workmanlike construction so that the buyer of a home with a hidden defect could have a cause of action against the builder once the defect became known. (Updated February 2008) |
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Arbitration Clause in a Contract of Adhesion Unenforceable Due to Unconscionability
Briefed Case |
Appeals court held that a mandatory arbitration clause in a cell phone contract was unenforceable due to unconscionability under California law. The contract was one of adhesion, consumers had no bargaining power, and the loss of money is relatively small. The dispute goes to trial, not to arbitration. (Updated January 2008) |
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Contract Financing Terms Do Not Violate State Law Regarding Health Clubs
Briefed Case |
Appeals court held that the financing over 36 months of a health club membership did not violate a state statute prohibiting a requirement that a club member pay fees for more than a month beyond membership term. The member chose the option of financing rather than paying up front. (Updated December 2007) |
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No Breach of Contract When Race Only Has One-Third Normal Competitors
Briefed Case |
Appeals court held that the fans attending a Formula One race did not have a breach of contract suit, or suit based on promissory estoppel, when a race was held with only one-third the normal number of cars due to unexpected tire problems that forced two-third of the cars not to race. (Updated November 2007) |
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Oral Agreement of Five Year Duration Unenforceable Due to Statute of Frauds
Briefed Case |
Appeals court held that a contract involving the sale of a newspaper, that supposedly had an oral side agreement allowing the seller of the newspaper the right to buy it back in five years, was not enforceable under the statute of frauds. (Updated November 2007) |
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Trial Court Read too Much into Contract
Briefed Case |
Appeals court held that when a party agreed to remove any libelous material from a website in exchange for an agreement not to sue for libel, the issue is if the site still contained any libelous material, not if it contained any reference to the party claiming to be libeled. (Updated May 2007) |
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Punitive Damages Allowed if Tort of Fraud Shown Beyond Breach of Contract
Briefed Case |
California high court held that in a case where a contract was breached, and damages were awarded for the breach, since the plaintiff also showed fraud, which is a tort, by the defendant, there could be punitive damages in addition to the compensatory damages for breach. (Updated May 2007) |
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One Accepts All Terms of a Contract Agreed to, Whether Read or Not
Briefed Case |
Appeals court held that a shipper, who did not read the terms and conditions of the insurance policy offered by UPS for lost shipments, cannot use that failure to read the contract offered on the web as an excuse to evade terms of the contract. (Updated February 2007) |
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Exculpatory Clause at Snow Resort Held to Violate Public Policy
Briefed Case |
Connecticut high court held that a clear and well-drafted exculpatory clause signed by patrons at a snow resort violated public policy. The law disfavors blanket exceptions from negligence when the public has a right to expect a safe operation. (Updated August 2006) |
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Economic Loss Rule Prevents Claims in Tort
Briefed Case |
Appeals court held where a defect in a product caused damage only to the product itself, the claim must be based on contract law for the economic loss to the product itself. There could be no claim in tort as no injury to persons or other property occurred. (Updated July 2006) |
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Unlicensed Employment Agency Cannot Enforce Employment Placement Contracts
Briefed Case |
North Dakota high court held that because an employment agency had let its license with the state expire, which it was required to have to operate in that capacity, it could not enforce its contracts with persons it helped place in employment. (Updated May 2006) |
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Email Describing Terms of Agreement Can Satisfy Statute of Frauds
Briefed Case |
Appeals court held that oral discussions that
were summarized in an email could satisfy the statute of frauds requirement
that key terms of an agreement must be in writing to be enforceable. If
plaintiff can show at trial that such was the case, then there was an enforceable
contract. (Updated June 2005) |
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Appraisal Clause in Contract Not the Same
as Arbitration Clause
Briefed Case |
Appeals court held that a contract that calls
for an appraisal to be made of the value of an asset in case of dispute
is not the same as an arbitration clause. The appraisal value is incorporated
into the terms of the contract; the appraiser does not dictate the legal
outcome of the contract dispute. (Updated June 2005) |
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Addicted Gambler Cannot Sue Casino for Breach
of Request to Keep Him Out
Briefed Case |
Appeals court held that a casino that was asked
by a compulsive gambler not to admit him, but which it did, could not be
sued by the gambler in tort or for breach of contract. The casino never
agreed to ban him from the premises and had no obligation to do so. (Updated March 2005) |
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Employee's Noncompetition Agreement May
Not Be Assigned without Consent
Briefed Case |
Nevada high court held that a noncompetition
covenant in an employment contract could not be assigned to another company
without permission of the employee. (Updated December 2004) |
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Variable Payment Term Does Not Make Contract
Unenforceable
Briefed Case |
Appeals court held that a contract between a
boxer and a boxing promoter, who would pay the boxer variable rates depending
on the kind of fight he was in, was not unenforceable for indefiniteness. (Updated November 2004) |
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Home Inspector's Contract Limiting Liability
Stricken as Unconscionable
Briefed Case |
Appeals court held that a home inspector’s
contract that limited liability to a trivial sum, regardless of the basis
of liability, was a contract of adhesion that was unconscionable and could
not be enforced. (Updated March 2004) |
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Two Decades Later, Indemnity Clause in Contract
Still Applies
Briefed Case |
Appeals court held that a general indemnity
clause in a contract, which covered all legal matters arising from performance
of the contract, applied when there was litigation more than 20 years later
that related to the contract work done. (Updated October 2003) |
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Misrepresentation During Negotiations Provides
Grounds for Rescission
Briefed Case |
Appeals court held that where a party engaged
in misrepresentation to induce formation of a contract, the other party
has the right to request rescission. While there may not be damages at law
in such an equity suit, there may be a request for restitution. (Updated July 2003) |
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Promissory Estoppel Provide Grounds for
Breach of Contract and Infringement Action
Briefed Case |
The Georgia appeals court affirmed a jury verdict
for the purchase price of a business, and the value of profits earned by
use of a well-known trade name, when a buyer failed to pay the seller of
the business the sum promised in an oral agreement to transfer business
ownership. (Updated July 2003) |
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Low Bidder for City Contract Has Promissory
Estoppel Claim for Improper Rejection
Briefed Case |
Kansas high court held that when a responsible
bidder properly responds to a call for bids on a public works project and
is the low bidder, but the bid is rejected for reasons not disclosed in
the bid request documents, the bidder has a claim in promissory estoppel
to recover bid preparation costs. (Updated June 2003) |
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Sales Practice May Not Be Breach of Contract
But Deceptive Sales Practice
Briefed Case |
Florida appeals court held that a real estate
developer might have engaged in deceptive sales practices in violation of
state law, even though the developer’s sales agreements did not form
valid contracts that could provide the basis for breach of contract suit. (Updated June 2003) |
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Contract May Not Be Cancelled Due to Later
Dispute Over Meaning of Key Term
Briefed Case |
Appeals court held that a contract
that called for payments based on the number of impressions or hits on an
advertisement could be subject to various interpretations, but the contract
left the method of count to the seller, who followed one industry standard.
The buyer could not later complain and cancel the contract. (Updated April 2003) |
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Bargained For "Time Is of Essence" Clause
Will Be Enforced
Briefed Case |
Appeals court held that when the
parties to a contract bargain for a specific time deadline to be met in
fulfilling the creation of a contract, the deadline is a condition subsequent
that must be met for the contract to be enforceable. Missing the deadline
releases parties from the contract. (Updated March 2003) |
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Employee Had Reason to Rely on Statements
of Supervisor in Forming Employment Contract
Briefed Case |
Appeals court held that while the
paperwork for a position of employment was never completed, a person hired
by a supervisor, who worked for seven months, had reason to believe that
a contract had been formed and so could sue the employer for fraud despite
the formalities of the contract not being completed. (Updated March 2003) |
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Covenant Not to Compete Could Not Be Assigned
to New Business Owner
Briefed Case |
Pennsylvania high court held that
while an employment agreement that contained a covenant not to compete was
valid, since the contract lacked an assignment clause the employer/business
could not assign the agreement to the buyer of the business. (Updated February 2003) |
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Parties with Unclean Hands Cannot Get Help
from Courts
Briefed Case |
Michigan high court held that a
party who hoped to gain from a rigged auction could not bring a case against
the auctioneer who failed to rig the auction as planned. Because the parties
have unclean hands, they may not come to the court for help. (Updated December 2002) |
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Statute of Frauds Bars Claim of Creation
of Contract Obligation
Briefed Case |
Appeals court held that an employment
agency that did not have a signed contract with an employer, but recommended
various potential employees to the employer, did not have a claim for a
commission when one person who had been recommended was later hired, as
other recommendations had been involved. (Updated November 2002) |
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Reformation of Contracts Should Only Concern
Insignificant Matters
Briefed Case |
Appeals court held that a covenant
not to compete was unreasonable and could not be reformed by the trial court.
Since it was unreasonable, it would not be enforced. (Updated July 2002) |
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Illegality Defense Not Available if Action
Not Clearly Illegal
Briefed Case |
Appeals court affirmed a breach
of contract judgment and rejected a defense that the contract required the
breaching party to violate federal regulations. Since the party never attempted
to follow the regulatory procedure involved, it could not know if the action
required in the contract was proper or not. (Updated July 2002) |
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Exculpatory Clause in Commercial Contract
Enforced to Limit Liability
Briefed Case |
Appeals court held that in a commercial
contract where an exculpatory clause clearly limited the liability of one
party to a maximum of $1,000, the clause will be enforced and the liability
limited to the agreed upon sum. (Updated April 2002) |
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If No Condition Precedent Exists, It Is
Irrelevant to Execution of a Contract
Briefed Case |
Appeals court held that a condition
precedent, which one party to a contract contended existed, was not shown
to have been part of a contract. Therefore it was irrelevant to the terms
of the contract, and could not be relied upon as a defense in a suit for
breach of contract. (Updated April 2002) |
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Unjust Enrichment Suit May Proceed Even
If Contract Is Illegal
Briefed Case |
Appeals court held that even if
a contract is illegal and unenforceable, a suit for unjust enrichment related
to the business dealings that occurred may proceed. It would be inequitable
for one party to be enriched by the property of another party, even though
there may be no breach of contract action. (Updated April 2002) |
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When Clear, Contract Terms Determine Outcome,
Not Industry Custom
Briefed Case |
Appeals court held that it was improper
for a trial court to reform a contract on the grounds of mutual mistake.
One party to the contract denied there was a mistake, the terms of the contract
were unambiguous, and the fact that the terms differed from industry custom
was not relevant. (Updated April 2002) |
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Illegal Act Done to Complete a Contract
Does Not Make Contract Illegal
Briefed Case |
Appeals court held that when a party
to a contract committed an illegal act as a part of fulfilling his bargain,
the contract was not illegal. The contract did not call for an illegal act;
that was the decision of one of the parties after a valid contract had been
formed. (Updated March 2002) |
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Bilateral Contract Exists Once Mutual Promises
Are Exchanged
Briefed Case |
Appeals court held that a bilateral
contract was executed as soon as both parties to the agreement, which was
an exchange of mutual obligations, signed the agreement. Since the contract
existed, all of its terms took effect immediately. (Updated March 2002) |
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No Written Contract Evidenced from Minutes
of Board Meeting
Briefed Case |
Appeals court held that the minutes
of a board of directors meeting, in which the board voted to do business
with another company, did not meet the standards of proving that a contract
came into existence. If there was a contract, it was oral, not written,
making it subject to a different statute of limitation than if it has been
written. (Updated March 2002) |
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Contract Fails for Lack of Mutual Obligation
in Arbitration Agreement
Briefed Case |
Arkansas high court held that a
loan agreement failed because the arbitration clause required the borrower
to go to arbitration but allowed the lender to go to court. This lack of
mutual obligation imposed liability on one party but not the other, so the
contract fails. (Updated February 2002) |
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Negotiations Do Not Form a Contract Absent
a Meeting of the Minds
Briefed Case |
Appeals court affirmed that no contract
was created, and therefore no damages were due, in a dispute where one party
asserted that a verbal agreement had been reached but the other party asserted
that there were only negotiations and no meeting of the minds. Since major
terms were not settled, there could be no contract. (Updated February 2002) |
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Breach of Warranty Exists Where Seller's
Claim of Land Attributes Unfounded
Briefed Case |
Appeals court held that when a seller
clearly promised that some land being sold could support building of a certain
weight, when in fact it could not and the building suffered damage, the
seller committed a breach of warranty. (Updated December 1, 2001) |
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Relief for Unilateral Mistake in Contract
Allowed Only in Certain Instances
Briefed Case |
Appeals court refused to allow a
divorce agreement to be changed after both parties testified in court that
they agreed to the terms of the agreement. The unilateral mistake was not
one that the other party knew about, nor was it so large as to be unconscionable,
so the agreement stands. (Updated December 1, 2001) |
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One Dollar Consideration Usually Irrelevant
Briefed Case |
Appeals court held that a contract
was valid despite the failure of one party to pay one dollar in consideration
that was mentioned in the contract. All other terms of the contract were
clear and proper; the nominal consideration is generally irrelevant to the
purpose of the contract. (Updated December 1, 2001) |
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Contract Terms Being Clear, Court Will Rely
on Those Terms, Not Other Theories to Allow Recovery
Briefed Case |
Appeals court held that in a contract
dispute where the terms of the contract are clear, the court will use those
terms to settle a dispute, and not rely on conflicting oral testimony or
other theories of recovery, such as promissory estoppel. (Updated November 1, 2001) |
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Absent Contract Term to the Contrary, Manufacturer
Can Terminate Distributors at Will
Briefed Case |
Appeals court reversed a jury verdict
in favor of a product distributor who was terminated for not meeting new
sales quotas that were much higher than previous sales quotas. Since the
contract did not specify how termination could occur, either party had the
right to end the relationship with reasonable notice, which had been provided
here. (Updated September 1, 2001) |
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Disappointed Party to Failed Contract Has
No Basis for Suit
Briefed Case |
Appeals court affirmed the dismissal
of a suit brought by a French oil company against an American oil company
for a failed effort to buy oil production rights in Nigeria. The contract
was rescinded by the parties, so there could be no breach, and the claim
of fraud fails completely given the sophisticated nature of the transaction
and parties to the deal. (Updated August 1, 2001) |
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Contract Clause Mandating Arbitration of Disputes
Must Be Clear and Unambiguous
Briefed Case |
Appeals court affirmed the right
of a party to a contract in dispute to litigate rather than arbitrate. The
contract stated that when mediation failed parties could either litigate
or arbitrate. Hence, the right to litigate had not been eliminated in the
contract. (Updated August 1, 2001) |
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Engagement Ring Is Gift in Contemplation of Marriage;
Must Be Returned if No Marriage
Briefed Case |
Appeals court held that an engagement
ring is a conditional gift that becomes final only if the marriage occurs.
If the engagement is broken, regardless of who may be at fault, the condition
needed for the gift to be final does not occur, so the ring is the property
of the donor. (Updated June 1, 2001) |
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Clearly Written Contract Cannot Be Contradicted by
Parol Evidence
Briefed Case |
Georgia high court dismissed a suit
brought by parties to a contract who contended that they were made promises
prior to signing the contract that were not fulfilled. Since the contract
stated that all terms of the agreement were in the writing, oral testimony
to the contrary could not be allowed. (Updated June 1, 2001) |
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Ear-Biting During Boxing Championship Violates No Obligation to Viewers Briefed Case |
Appeals court upheld the dismissal
of a suit brought by spectators of a Mike Tyson boxing fight in which Tyson
was disqualified for biting his opponent's ear. The viewers were not in
privity with Tyson or the fight promoters, so had no cause of action. Disqualification
is a possible outcome of any fight. (Updated March 1, 2001) |
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Promises of Free Lifetime Health Care for Military
Veterans Is a Contact
Briefed Case |
Persons who joined the military and
served for at least 20 years were promised free, lifetime medical care.
Congress later changed that, moving the veterans into Medicare, which is
not free. The appeals court held that the government breached an implied
contract. The veterans had the right to rely upon the express representations
of the government when they joined. (Updated March 1, 2001) |
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Preliminary Agreement with Unsettled Terms Did Not
Form Binding Contract
Briefed Case |
Court dismissed a breach of oral
contract claim. The parties reached a tentative oral agreement but never
signed a contract. The claim of breach of contract fails because there was
only preliminary negotiations that specifically was to result in a final,
written contract. (Updated January 1, 2001) |
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Contractor Liable for Damages for Not Understanding
Contract Specifications
Briefed Case |
Appeals court held that a contractor
was liable for the additional costs incurred by the government because they
had to find an alternative, higher cost, supplier when, prior to delivery
it was discovered that the contractor did not understand the specifications
of the contract and was going to supply inferior goods. (Updated December 1, 2000) |
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Economic Loss Rule Prevents Tort Action in Pure Contract
Matter
Briefed Case |
Colorado high court upheld a judgment
for a contractor who was found not to have breached a contract with a city.
Because the issue in the case was breach of contract and the monetary damages
from the alleged breach, there could be no suit in tort for negligence.
Such a suit is prohibited by the economic loss rule. (Updated November 1, 2000) |
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Unjust Enrichment Depends on Circumstances of Each
Situation
Briefed Case |
Colorado appeals court reversed a
judgment for unjust enrichment. A contractor had done significant building
improvements for a lessee who failed to pay for improvements because they
were evicted for failure to pay rent. Building owner received a benefit
from the contractor, but the circumstances do not require building owner
to pay the contractor. (Updated October 1, 2000) |
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Low Bidder Denied a Government Contract May Sue
on Promissory Estoppel Theory
Briefed Case |
California high court held that a
low bidder for a government contract, who was improperly denied the contract,
may sue on the basis of promissory estoppel to recover bid preparation costs,
but not lost profits. (Updated September 1, 2000) |
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Exculpatory Clause in Contract Relieves Exercise
Club of Liability for Injury to Member
Briefed Case |
Appeals court upheld dismissal of
a suit brought by a member of a fitness club who suffered a shoulder injury
while being evaluated for fitness by club personnel. An exculpatory clause
in the membership contract did not violate any of the conditions that invalidate
such clauses. (Updated September 1, 2000) |
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Breach of Contract Principles Apply to Federal Government
Briefed Case |
The Supreme Court held that the
federal government should be treated like other parties in commercial litigation.
The government breached its promise to some oil companies, by adding new
regulatory requirements to an oil exploration contract. The new requirements
repudiated the contract and required the government to pay back the oil
exploration fees collected. (Updated August 1, 2000) |
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Statute of Frauds Does Not Apply to Commission Promised
to Real Estate Broker for Unbuilt Home
Briefed Case |
A builder made an oral promise to
a real estate broker to pay a commission for a custom home that was to be
built for a client. The commission was not paid. The Virginia high court
held that the statute of frauds did not apply, so the commission had to
be paid, because an unbuilt home is not yet real estate. (Updated June 1, 2000) |
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Main Contractor Not Liable for Injury to Third Party
Due to Independent Contractor's Acts
Briefed Case |
Texas high court held that the primary
contractor for the sale and installation of a commercial freezer was not
liable to a worker injured when a part of the freezer fell on him due to
improper installation by a subcontractor hired by the primary contractor.
The contractor's duty was to the buyer; it is not liable to others for problems
caused by an independent contractor. (Updated June 1, 2000) |
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Additional Payment if Work Not Completed on Time
Is Not Penalty Clause
Briefed Case |
Appeals court held that a contract
that called for an additional payment of $10,000 per acre in a land deal
if a road was not completed by a specific date did not constitute an unenforceable
penalty clause, but a bargained-for term of the contract. (Updated May 1, 2000) |
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No Emotional Distress Damages for Breach of Contract
in Home Construction
Briefed Case |
California high court reversed a
verdict of $150,000 emotional distress damages for homeowners whose home
was constructed with numerous major defects. While there was negligence
and breach of contract, for which damages could be recovered, there was
no tort. (Updated April 1, 2000) |
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Reference in Second Contract to First Contract May
Make First Contract Enforceable
Briefed Case |
For more than four years, a buyer
failed to pay for cows that they purchased. The parties then signed a new
agreement stating that the amount due was still owed at a new interest rate.
The New Hampshire high court held that the second agreement may have been
sufficient to keep the first agreement enforceable and thereby kept the
statute of limitations running. (Updated April 1, 2000) |
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Negotiations Cannot Force Party to Be Bound by Contract
Briefed Case |
Appeals court held that no contract
was formed when one party responded to a letter from another party by stating
that it agreed to the terms of the proposal, when the proposal stated that
critical terms had to be resolved before a contract could be formed. (Updated November 1, 1999) |
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Oral Modification to Employment Contract Cannot
Be Enforced
Briefed Case |
Appeals court upheld the dismissal
of a suit by fired employee who claimed he was due more compensation because
his superior had made oral promises to him of additional compensation outside
of his written employment contract, which stated that there could be no
oral modifications. (Updated September 1, 1999) |
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Home Builder Provides Implied Warranty to Subsequent
Buyers of Home
Briefed Case |
Rhode Island high court held that
privity of contract is not needed between the subsequent buyers of a home
and the builder, as a builder knows that homes are often resold. An implied
warranty of good workmanship for latent defects applies for ten years after
completion of a home. (Updated September 1, 1999) |
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Court Looks to Unambiguous Meaning of Contract Terms
Briefed Case |
Appeals court affirmed district court
decision in favor of party that insisted on strict reading of terms of contract.
When terms are unambiguous, the court will not interpret a contract in a
way that leads to unreasonable results. (Updated May 1, 1999) |
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Self-Dealing Allows Contract Termination
Briefed Case |
In a case involving self-dealing,
Appeals court held that a contract could be terminated without observing
the thirty-day notice and potential for cure that was allowed in the contract.
Breach of the duty of honesty violates the basis of the contract, there
is no need to observe the thirty-day termination notice. (Updated April 1, 1999) |
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Guru Finds Inner Peace; Disciples Find Fraud
Briefed Case |
Former disciples of yoga guru allowed
to proceed in fraud and misrepresentation action when, after years of low-paid
labor and celibacy, they claim to have discovered that he was taking huge
sums of money and enjoying sex. (Updated November 17, 1998) |
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Pay or Play Jury Tells Liz
Briefed Case |
Appeals court reinstated jury verdict
in favor of Cicely Tyson for her brief appearance in a failed Broadway show
backed by Elizabeth Taylor. Jury could find that a sequence of contracts
constituted one contract enforceable for full payment under industry rule
of pay or play. (Updated November 17, 1998) |
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Statute of Frauds Not Applied When Debt of Other
Taken Over for Valuable Consideration
Briefed Case |
Company sued, claiming other party
broke oral agreement to allow it to assume a debt owed by third party, if
the second party would allow it to assume valuable business licenses previously
held by third party. Appeals court held that, in Texas, statute of frauds
did not apply in such instances. (Updated October 19, 1998) |
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Teamwork in Bid Preparation Created Right to Restitution
Briefed Case |
Two firms worked together to prepare
complex bid for buyer. One firm dropped the other before getting the bid.
The dumped firm, while not having a firm contract, had a teaming agreement
that allows recovery of restitution damages. (Updated October 19, 1998) |
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Zsa Zsa Pays for Breaking Promise to Appear in
Fantasy "Movie"
Briefed Case |
Appeals court upheld liability of
Zsa Zsa Gabor for breach of contract when she cancelled promised appearance
to make short "movies" with paying clients. Damages were amended
to cover only direct expenses incurred by promoter. (Updated October 19, 1998) |
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Fine Print Defeats Liability Release Clause in
Contract
Briefed Case |
Texas high court held that a release
form, in minuscule typeface, failed to shift risk to motorcyclist killed
in amateur race. Release did not provide adequate notice by using larger
or contrasting type. (Updated October 5, 1998) |
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Lease Is a Sale When No Residual Value Payments
Due
Briefed Case |
A five-year lease that resulted
in complete ownership of machinery at the end of the five years, with no
further payment due, was a sale contract, not a lease. (Updated October 5, 1998) |
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Equitable Remedy May Be Extension of Non-Competition
Agreement
Briefed Case |
In case of first impression for
Michigan, appeals court held that the extension of a noncompetition agreement,
in the case of two companies, may be an equitable remedy that best resolves
a violation of the agreement. (Updated May 29, 1998) |
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Third Party Mentioned in Contract Must Arbitrate
Dispute Related to Contract
Briefed Case |
Two contracting parties stipulated
that they would give a third party some free goods for bringing them together.
When they quit giving the third party the goods, he sued for breach of contract.
Court held that the third party must arbitrate complaint as the contract
required, even though he did not sign the agreement. (Updated 4-6-98) |
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OSHA Regulations Not Standard of Care Owed by Independent
Contractor
Briefed Case |
Plumber's carelessness resulted
in a fire that severely damaged a restaurant. Owners could not claim that
negligent performance constituted a breach of express or implied warranty,
nor could they use Michigan OSHA regulations as evidence of the standard
of care to which an independent contractor should be held. (Updated 3-11-98) |
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No Holds Barred in Champerty in Massachusetts
Briefed Case |
The Massachusetts high court struck
down the old common law rule against champerty, the selling of an interest
in a lawsuit. The court held that it is the duty of judges to watch over
the fairness of payment arrangements in the financing of litigation. (Updated 1-16-97) |
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Threats of No Future Business Not Duress
Briefed Case |
AT&T's threat not to do business
in the future with a company that accused it of breach of contract held
not to constitute a suit for duress, even if there was a breach of the current
contract. (Updated 12-29-97) |
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Ten Year Statute of Limitations Applies to Breach
of Contract for Nonpayment
Briefed Case |
Missouri has a five-year and a ten-year
statute of limitation that apply to contract disputes. The Missouri Supreme
Court, clarifying 150 years of confusion, holds that the ten-year statute
applies to contract disputes regarding payment of money. (Updated 11-14-97) |
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