Posted on

Commonwealth v. Mochan, 177 Pa. Super. 454 (1955)

Case Name: Commonwealth v. Mochan
Citation: 177 Pa. Super. 454 (1955)

Facts: Mochan was indicted for making numerous harassing phone calls to a woman. He was convicted of a misdemeanor under common law because his act was not a criminal offense under any Pennsylvania statute.

Issue: Whether the court can convict a defendant under common law when his actions did not constitute a criminal offense under state statute.

Defendant’s argument: nulla poena sine lege – no punishment without law. The defendant argues that he cannot be convicted of an action that is not illegal.

State’s argument: The state’s common law is sufficiently broad to allow a court to act and declares that “whatever openly outrages decency and is injurious to public morals is a misdemeanor at common law.” The defendant’s actions fit this criterion; therefore, the court can charge and convict him of a misdemeanor.

Court’s reasoning: The question is whether the alleged crimes could have been prosecuted and punished under common law. Because the controlling principles are broad, “[a]ny act is indictable at common law which from its nature scandalously affects the morals or health of the community…”

Holding: The charges correctly identified the offense as a common law misdemeanor.

Dissent: This allows the courts to supersede the legislature’s power. Although common law is part of the state’s law, our country has had 200 years of the legislative branch determining which actions require punishment. This is a slippery slope as “there is nothing to prevent our invasion of the legislative field except our own self restraint.”

Posted on

Alaska Democratic Party v. Rice – 934 P.2d 1313 (1997)

Case Name: Alaska Democratic Party v. Rice
Citation: 934 P.2d 1313 (1997)
Plaintiff/Appellee: Kathleen Rice
Defendant/Appellant: Greg Wakefield and Alaska Democratic Party

Issue: Whether the doctrine of promissory estoppel can be invoked to enforce an oral contract that falls within the Statute of Frauds.

Key Facts: Ms. Rice contended that Mr. Wakefield (the chair-elect of the Alaska Democratic Party) offered her a two-year position as executive director of the party. Because of this offer she quit her current employment and moved from Maryland to Alaska.
No written contract was entered into between Rice and the defendants.
Rice brought two claims: (1) promissory estoppel and (2) misrepresentation

Procedural Posture: The jury awarded a total of $30,422 ($28,864 on her promissory estoppel claim and $1,558 on her misrepresentation claim)

Reasoning: “The purpose of the Statute of Frauds is to prevent fraud by requiring that certain categories of contracts be reduced to writing. However, it is not intended as an escape route for persons seeking to avoid obligations undertaken by or imposed upon them.”

Judgment: The court affirmed the claims but reduced the recovery to $28,864 – the amount that represents only lost wages and benefits.

Posted on

Princess Cruises, Inc. v. General Electric Co. – 143 F.3d 828 (4th Cir. 1998)

Case Name: Princess Cruises, Inc. v. General Electric Co.
Citation: 143 F.3d 828 (4th Cir. 1998)
Plaintiff/Appellee: Princess Cruises, Inc.
Defendant/Appellant: General Electric Co.

Issue: Whether the district court erred in applying the UCC to the contract and whether the jury erred in their award by not observing GE’s final price quotation.

Key Facts: The plaintiff submitted a purchase order (intended to be an offer) to the defendant to perform routine inspection services and repairs on one of its cruise ships. The defendant faxed back its own Fixed Price Quotation which had other terms and disclaimed any liability for consequential damages, lost profits, or lost revenue.
During the inspection, the defendant recommended that the ship be taken ashore for cleaning and balancing. During the cleaning the rotor became unbalanced, which the defendant attempted to correct. The imbalance caused further damage to the ship forcing additional repairs and the cancellation of two tend-day cruises. The plaintiff paid the defendant the full amount of the contract ($231,925).

Procedural History: A jury found GE liable for breach of contract and awarded the plaintiff $4.5 million in damages. Appealing, GE contends that the district court erred in denying its motion for judgment which required the court to vacate the jury’s award of incidental and consequential damages. GE argues that the district court erred because it applied UCC principles, rather than common-law, to a contract primarily for services.

Holding: The contract should not have been evaluated under the UCC because it was a contract for services and the jury should have only considered GE’s Final Price Quotation which restricted damages to the contract price and eliminated liability for incidental or consequential damages, lost profits, or revenue.

Reasoning: First, whether a particular transaction is governed by the UCC, rather than common or statutory law, hinges on whether the contract primarily concerns the furnishing of goods or the rendering of services. Princess’s actual purchase description requests a GE “service engineer” to perform service functions (the contract included incidental parts that were expensive).
Second, the jury should have only considered GE’s Final Price Quotation as the contract. The first purchase order submitted by Princess was rejected by a counteroffer (GE’s first price quotation) which in turn, was revoked and replaced by another offer (GE’s Final Price Quotation. Also, because Princess failed to discuss the conflicting terms of the two contracts, their inaction gave GE every reason to believe that Princess assented to the terms set forth in their final price quotation.

Restatement 19 – “The manifestation of assent may be made wholly or partly by written or spoken words or by other acts or by failure to act.” Under the Restatement, a counter-offer destroys the offer.  The fact that the parties performed evidence that there was an acceptance. The phone call giving GE permission to proceed and that Princess brought their ship in to be repaired. Therefore, Princess intended to accept the last counter-offer by GE. This is called the last-shot rule. Whatever is left on the table is the contract. The only one that really matters is the last contract on the table. If the parties perform, then there is an acceptance.

Judgment: The circuit court reversed the district court’s decision and granted GE’s motion for judgment as a matter of law and remanded to modify the judgment according to common-law and the opinion of the court.

Why it was important to determine whether common law or the UCC applied: Common law only gives us two options in contract formation: Offer and Acceptance or Counteroffer. The UCC gives us a third option: acceptance with additional terms.

Posted on

Exceptions to the Statute of Frauds

As stated in the post on whether a contract is subject to the statute of frauds, when the statute of frauds is asserted as a defense against the enforcement of an alleged contract, one should ask the following questions:

1. Is the contract subject to the statute of frauds?

2. If it is subject, is the statute of frauds satisfied?

3. If it is not satisfied, do the factors invoke one of the exceptions to the statute of frauds?

If the answer to the first question is “yes” and the second question is “no,” then you need to look to see if one of the exceptions to the statute of frauds applies. Below is a list of the exceptions to the statute of frauds under common law and the UCC:

COMMON LAW EXCEPTIONS

  1. Part Performance (Restatement section 129). If it is established that the party seeking enforcement, in reasonable reliance on the contract and on the continuing assent of the party against whom enforcement is sought, has so changed his position that injustice can be avoided only by specific enforcement. This exception is very similar to promissory estoppel and only applies in situations where a transfer of interest in land exists and with specific performance. This exception also has no application in an action at law for money damages.
  2. Full Performance (Restatement section 130. As soon as any one party fully performs under the contract, then the SOF does not apply. This exception only applies to contracts that cannot be completed within one year
  3. Promissory Estoppel – Although this is not really an exception, promissory estoppel can be used anytime. A minority of jurisdictions bar promissory estoppel actions through the statute of frauds because they see it as an impermissible way to circumvent the statute of frauds.

 

UCC EXCEPTIONS

  1. Part Performance – Note: In an installment contract you need to show acceptance at every installment to show part performance.  Also if there is a partial payment figure out what the parties intended.
  2. Admissions Exception – If the party against whom enforcement is sought makes an under oath admission of facts that in the court’s view establish that such a contract was indeed made
  3. Special Manufacture Exception – If goods are specially manufactured for the buyer and “not suitable for sale to others in the ordinary course of  the seller’s business (e.g. making mugs for ACME, Inc. that has their logo and slogan.)
  4. Merchant Confirmation Exception – Here you will need something in writing that is signed but does not need to be signed by the person against whom enforcement is sought. It only needs to be signed by any party to the contract. However, the following must be present:
  1. Both parties must be merchants under the UCC
  2. The writing (confirmatory letter) has to be sent to and received by the party to whom enforcement is sought
  3. The party has ten days to objection. The objection has to be in writing .
    1. NOTE: You want to be careful that you are not creating a writing that satisfies the statute of frauds
    2. In order to do so, the objection should explicitly state or object to the terms
Posted on

When is a contract subject to the Statute of Frauds?

When the statute of frauds is asserted as a defense against the enforcement of an alleged contract, one should ask the following questions:

1. Is the contract subject to the statute of frauds?

2. If it is subject, is the statute of frauds satisfied?

3. If it is not satisfied, do the factors invoke one of the exceptions to the statute of frauds?

Below is the analysis that should be conducted under the UCC and Common Law to answer this first question, “Is the contract subject to the statute of frauds?”

The UCC presents the easier test as to whether a contract is subject to the statute of frauds. Under the UCC, the only thing we care about is whether the contract is for $500 or more.

Under common law we don’t care about the dollar amount of the contract. Restatement (Second) 110 states that “[t]he following classes of contracts are subject to the Statute of Frauds, forbidding enforcement unless there is a written memorandum or applicable exception:

  1. A contract of an executor or administrator to answer for a duty of his decedent (the executor-administrator provision)
  2. A contract to answer for the duty of another (the suretyship provision)
  3. A contract made upon consideration of marriage (the marriage provision);
  4. A contract for the sale of an interest in land (includes leases) (the land contract provision);
  5. A contract that is not to be performed within one year from the making thereof (the one-year provision)”

The majority of these classes are self-explanatory but a few notes on the fifth class, the one-year provision. This class requires a contract not to be performed within one year from the date the contract is made to be in writing. The standard view is that a contract is not subject to the statutory provision if it is possible to be performed within a year, even if the prospect of such performance is remote or unlikely. Therefore, the question you should ask is, “At the time of the formation, could it have been completed within a year?” If the answer is “yes,” no matter how remote or unlikely it is, then most courts will deem that the contract fits this class and is not subject to the statute of frauds. Something to remember is that many courts are looking for reasons to exclude things from the statute of frauds.