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SOUTH-WESTERN LEGAL STUDIES IN BUSINESS CASE UPDATES—CONTRACTS
SW Legal's Case Updates is a SW Legal Studies service to provide briefs of the latest state and federal court cases. Review the summaries and, for cases of interest, select the case brief. If you cannot find a case of interest,return to Topic Index .
Title
Summary
Unlicensed Builder Cannot Enter into Valid Construction Contracts
Briefed Case
Appeals court held that an unlicensed home builder cannot sue for breach of contract because it was against state law for him to try to enter into a construction contract for more than $10,000 when he did not have a home builder license.
(Updated October 2010)
Debt Guarantee Must Comply with Statute of Frauds to Be Enforceable
Briefed Case
Appeals court held that a personal guarantee of a debt was not enforceable because it did not comply with the statute of frauds. The alleged guarantee was a separate sheet of paper and did not identify all key parties to the debt or the sum involved. It could not be corrected by parol evidence.
(Updated August 2010)
Unilateral Contract Became Enforceable When Performed
Briefed Case
Texas high court held that a promise by an employee to employees that they would be cut in on profits when the business was sold in the future, if they remained with the company, was a unilateral promise that was performed upon by the employees who remained with the company until it was sold.
(Updated March 2010)
Beneficiary of Improperly Assigned Contract Must Pay For Value of Goods Received
Briefed Case
Appeals court held that while the assignment of a contract was improper, since the new subcontractor provided the goods requested, the party that received the benefit of the goods would pay for the value received under the theory of quantum meruit.
(Updated March 2010)
Claim against Government Managers for Bid Rigging Dismissed
Briefed Case
Appeals court held that government managers who controlled a contract bidding process had qualified immunity against a suit for bid rigging. Plaintiff was not able to establish that the managers violated a clearly established legal principle.
(Updated February 2010)
Implied Contract Exists Once Original Contract Expired and Parties Continued to Deal
Briefed Case
Appeals court held that upon the expiration of a contract between a city and a company that supplied water services, the company could not deny that an implied contract now governed the relationship since it continued to provide services for financial benefit.
(Updated January 2010)
Paying Someone Not to Work Does Not Breach Employment Contract
Briefed Case
Appeals court held that CBS Evening News anchor Dan Rather had no cause of action against CBS for taking him off the news program. CBS paid him the amount due under the contract and was under no obligation to have him appear on air, so there is no basis for any suit.
(Updated November 2009)
Promissory Estoppel Applied to Promise to Give Land to a Daughter for Building a House
Briefed Case
Maine high court held that promissory estoppel would apply to a promise made by parents to their daughter that they would give her some of their land if she built a house on their property. The fact that she built the house is evidence that she expected to receive a deed to the land.
(Updated September 2009)
Breach of Contract Not Basis for Negligence Action
Briefed Case
Nevada high court held that if a design professional breached its duty to a contractor by providing improper construction advice, the economic loss rule under negligence did not apply. Tort is not a remedy. Breach of contract is the remedy and the loss measures that apply in such instances.
(Updated June 2009)
Geological Problem in Mining Not Sufficient to Invoke Force Majeure Clause
Briefed Case
Appeals court held that a mining company breached its contract to supply coal to a utility when it quit delivery due to a geological problem that caused problems in mining. The mining company did not properly inform the utility of the nature of the problem, forcing it to pay a higher price for new supplies.
(Updated February 2008)
Lost Profits Proper Damages for Violation of Non-Compete Agreement
Briefed Case
Utah high court held that if a non-compete agreement is violated, the proper measure of damages is lost profits, not the remedy of restitution or unjust enrichment.
(Updated February 2008)
Failure of Condition Precedent Means No Contract Existed
Briefed Case
Montana high court held that due to the failure of a condition precedent, no contract was formed. Because the contract was not formed, the arbitration clause in the contract could not be enforced.
(Updated December 2008)
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)
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)
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)
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)
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)
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)
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)
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)
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)
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)
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)
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)
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)
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)
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)
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)
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)
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)
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)
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)
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)
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)
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)
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)
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)
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)
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)
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)
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)
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)
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)
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)
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)
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)
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)
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)
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)
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)
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)
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)
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)
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)
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)
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)
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)
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)
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)
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)
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)
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)
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)
Mike Tyson's 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)
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)
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)
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)
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)
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)
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)
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)
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)
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)
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)
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)
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)
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)
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)
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)
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)
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)
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)
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)
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)
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)
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)
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)
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)
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)
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)
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)
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)
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)
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)
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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