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Ray v. William G. Eurice & Bros, Inc., 93 A. 2d 272 (1952)

Case Name: Ray v. William G. Eurice & Bros, Inc.
Plaintiff: Calvin T. Ray and Katherine S. J. Ray
Defendant: William G. Eurice & Bros, Inc.
Citation: Maryland Court of Appeals; 201 Md. 115, 93 A. 2d 272 (1952)

 

Key Facts: Ray selected William G. Eurice & Bros, Inc. as the builder of a new home on a vacant lot owned by the plaintiff. Multiple meetings occurred between the plaintiff and the defendant in which they reviewed and edited the plans to build the home. A contract was submitted by the defendant to the plaintiff; however, the plaintiff did not accept this contract and had his attorney create a new contract. This new contract was submitted to the defendant and was signed by the defendant in the presence of the plaintiff. Copies of the new contract were also signed by the defendant at the bank which was providing the loan to the plaintiff for the home. Once construction was to begin on the home, the defendant claimed to have never seen the plaintiff’s contract and would not proceed in building the house with the specifications in the current contract.

Procedural History: The plaintiff brought an action against the defendant, in the Circuit Court for Baltimore County, for a complete breach of a written contract to build a house. The Circuit Court ruled in favor of the defendant and the plaintiffs appealed.

Issue: Whether a breach of contract exists if one party did not intend to agree to the contract yet signed the contract and had ample opportunity and ability to understand the contract.

Holding: The Maryland Court of Appeals found that the defendant did breach the written contract.

Reasoning: The Court believed that Eurice had the capacity to understand the written contract because of his experience in building homes. Ray was not a home builder but had extreme attention to detail due to his background as an aeronautical engineer. Therefore, there was no type of fraud or duress or unfair bargaining power. Furthermore, no mutual mistake can be proven for although Eurice may not have intended to agree to the specifications, his signature (on multiple copies of the same contract) shows that he had ample opportunity to read and understand what he was agreeing to.

Judgment: The court awarded the plaintiff the cost in excess of the contract price that would be incurred by the owner in have the home built; the sum o f$5,993.40.

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Harlow & Jones, Inc. v. Advance Steel Co., 424 F. Supp. 770 (E.D. Mich. 1976)

Case Name: Harlow & Jones, Inc. v. Advance Steel Co.
Plaintiff: Harlow & Jones, Inc.
Defendant: Advance Steel Co.
Citation: 424 F. Supp. 770 (E.D. Mich. 1976)

Issue: Under the UCC, did the defendant breach a contract when he refused the last of three deliveries because he believed it was being delivered late?

Key Facts: Defendant had several telephone conversations with William VanAs, a broker for the plaintiff. During these conversations, VanAs informed the defendant about the availability of 5000 metric tons of steel that could be shipped during September-October, 1974 and defendant informed VanAs that he was interested in purchasing 1000 tons of this shipment. VanAs recorded the terms of this transaction on a worksheet and relayed the information to the plaintiff. In July, 1974, the plaintiff mailed the defendant a sales form confirming the sale of 1000 metric tons which shipment from Europe during Sept-Oct, 1974. The plaintiff then ordered the 1000 tons of steel from Europe. The defendant did not sign or return the plaintiff’s sales form but prepared and mailed his own purchase order form (which contained the same quantities, shipping dates, and minor specification changes. This was never signed and returned by plaintiff. The steel came from Europe in three separate shipments. The first two shipments were received and paid by Advance. The last shipment arrived in late November which the defendant rejected because of “late delivery.”

Procedural History: None because the case is in the District Court (trial court) and is not on appeal.

Holding: The defendant did breach the contract by rejecting the last shipment. The terms of the oral agreement were to ship the steel by October and under UCC 2-504 the defendant could only reject the shipment if there was a “material delay.” Because steel takes an average of one month to ship from Europe; although the steel was shipped late, it did arrive by late November so there was no material delay.

Reasoning: The plaintiff and defendant were arguing that they were abiding by what they thought was a written contract. Plaintiff argued for his sales form and defendant for his purchase order form. The court decided that the sales form and purchase order form were merely confirmations of an order because the actual agreement took place through the several telephone conversations. According to the UCC, this means that the “contract” was an integration of the two forms and is made up of the terms that the two parties agree on.

Notes:

  • Do not need specific oral or written offer and acceptance if you have clear conduct that shows the parties entered into an arrangement (i.e. Advance was accepting shipments, even one that came after October 31st)
  • Also true under the Restatement even if you can’t point to the exact offer and acceptance by the parties. The difference is how the court would fill in “gaps.”

 

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Cook v. Coldwell Banker, Frank Laiben Realty Co., 967 S.W.2d 654 (1998)

Case Name: Cook v. Coldwell Banker/Frank Laiben Realty Co.
Plaintiff/Appellee: Mary Ellen Cook
Defendant/Appellant: Coldwell Banker/Frank Laiben Realty Co.
Citation: 967 S.W.2d 654 (1998); Missouri Court of Appeals


Issue: Under unilateral contract theory, did the defendant breach a contract when he revoked an offer that was already substantially performed on by the plaintiff?

Key Facts: At a meeting in March 1991, the defendant announced a bonus program with three levels of payouts, the first of which would be paid out immediately while the second two would be paid out at the end of the year. The year of the program would be January 1, 1991 to December 31, 1991. At the end of April, 1991, plaintiff met the first level and received her first bonus in September, 1991. In September, 1991 plaintiff surpassed had met the highest level of commissions and was told at a meeting in that month that the bonuses would not be paid out until March of the following year. Plaintiff was also told that she would have to be employed with the defendant in March to receive the bonus. Plaintiff accepts another job in January, 1992 and sought payment of her bonus in March, 1992.

Procedural History: In December, 1992 the plaintiff filed an action against defendant for breach of a bonus contract and sought damages. The jury found in favor of the plaintiff and awarded her damages in the amount of $24,748.89. The defendant appealed.

Holding: The plaintiff showed evidence that the defendant offered to pay a bonus at the end of 1991 if she would continue to work for it. The plaintiff stayed through 1991 with an intent to accept the offer. In addition, she sold and listed enough property to qualify for all three bonus levels. The defendant knew of the plaintiff’s performance but only paid the first bonus. Therefore, the defendant breached a unilateral contract.

Reasoning: This contract was determined to be unilateral because performance was based on the wish of the parties. In a unilateral contract, when a promise performs, the contract is enforceable to the extent performed.

Judgment: The Missouri Court of Appeals affirmed the trial court’s judgment and the awarded damages.

The meeting in September represented a revocation of the initial offer.

The Restatement approach (modern rule) the offeree has to show substantial performance. The court should have said substantially begun performance. Instead of just doing nothing or preparing to perform.

Under the modern rule, the offeree has still not made a promise if he decides to back out of the contract after performing half of it.

Tender of performance – the statement of intent and the present ability to perform. Once a tender of performance has been made, the offeror can no longer evoke the offer.