Contract Law Key Cases & Principles Exam |
Promises, Performance, Modifications &
Exceptions|Latest Update Complete Exam
Questions with Verified A+ Graded Answers
Alaska Packers' Association v. Domenico
Fishermen, already under contract, refused to work in Alaska unless their wages were
increased; employer agreed but later refused to pay the increase.
Takeaway from Alaska Packers' Association v. Domenico
Opportunistic renegotiation and economic duress—a promise to pay more for the same pre-
existing duty is voidable when obtained by improper threat and lack of reasonable alternative.
Omni Group v. Seattle-First National Bank
Land sale contract made buyer's duty conditional on engineer's 'satisfaction'; seller argued
buyer's promise was illusory.
Takeaway from Omni Group v. Seattle-First National Bank
In a condition of satisfaction with no workable objective standard, the law applies a subjective
satisfaction test constrained by an implied duty of good faith rather than treating the promise as
illusory.
Angel v. Murray
Garbage contractor asked city for more money after an unexpected, substantial increase in the
number of houses; city granted an increase.
Takeaway from Angel v. Murray
A one-sided, good-faith modification in response to unanticipated circumstances can be
enforceable without new consideration under Restatement § 89, unlike Alaska Packers where
duress was present.
Joseph Martin Delicatessen v. Schumacher
Lease renewal clause said future rent was 'to be agreed upon'; tenant asked court to enforce
renewal.
Takeaway from Joseph Martin Delicatessen v. Schumacher
1|Page
,A bare 'agreement to agree' on an essential term (rent) without a standard or mechanism is too
indefinite and unenforceable.
MGM v. Roy Schneider
Actor and studio negotiated for a sequel; key terms remained open; dispute whether a binding
contract existed.
Takeaway from MGM v. Roy Schneider
As a relational contract example, the court shows willingness to fill gaps where intent to be
bound is clear, but illustrates the limits of enforcement when key terms are left open.
Dickinson v. Dodds
Seller signed writing to keep an offer to sell land open until Friday but sold to someone else;
offeree heard of the sale and then tried to accept.
Takeaway from Dickinson v. Dodds
Under old common law, an offer purporting to be 'irrevocable' is still revocable absent
consideration; reliable notice of sale amounts to effective revocation, so there was no meeting
of the minds.
James Baird v. Gimbel Brothers
Subcontractor mistakenly submitted a very low bid; general contractor relied on it;
subcontractor revoked before acceptance.
Takeaway from James Baird v. Gimbel Brothers
When a contract could have been formed but was not, the subcontractor's offer is freely
revocable; promissory estoppel does not make the offer irrevocable without mutual assent.
Lenawee County Board of Health v. Messerly
Buyers purchased property later condemned because of a sewage problem unknown to either
party; deed contained 'as is' clause.
Takeaway from Lenawee County Board of Health v. Messerly
In mutual mistake, courts focus on risk allocation; here an 'as-is' clause allocated the risk of
mistake to the buyers, so rescission was denied.
Specht v. Netscape
Users downloaded software; the arbitration clause was buried below the 'Download' button
where users would not see it.
2|Page
, Takeaway from Specht v. Netscape
There is a duty to read only when terms are reasonably accessible; clickwrap (clear notice) is
generally enforceable, but browse-wrap hidden terms are not part of the contract.
Wood v. Lucy, Lady Duff-Gordon
Fashion personality gave exclusive marketing rights to an agent; contract didn't explicitly say
agent had to promote the brand.
Takeaway from Wood v. Lucy, Lady Duff-Gordon
Courts imply a duty of best efforts, creating mutuality; an implicit obligation to use best efforts
is sufficient consideration and cures apparent illusoriness.
Carlill v. Carbolic Smoke Ball Co.
Company advertised a reward for anyone who used its product as directed and still got
influenza; Carlill did and claimed the reward.
Takeaway from Carlill v. Carbolic Smoke Ball Co.
A serious advertisement can be a sincere unilateral offer; acceptance is by performance, and no
separate notice of acceptance is required where performance itself is the notice.
Corinthian Pharmaceutical v. Lederle Labs
Buyer tried to lock in a low vaccine price just before a price increase; seller shipped a few vials
saying they were an 'accommodation' and refused the rest.
Takeaway from Corinthian Pharmaceutical v. Lederle Labs
Under UCC 2-206(1)(b), shipment of nonconforming goods with seasonable notice that they are
'only an accommodation' is not an acceptance, but a counteroffer.
Jacob & Youngs v. Kent
Contractor installed pipe of a brand different from that specified but of identical quality; owner
refused final payment.
Takeaway from Jacob & Youngs v. Kent
For service contracts, substantial performance is enough; measure of damages is diminution in
value rather than cost of completion when full replacement would cause economic waste.
Sherwood v. Walker
3|Page
Promises, Performance, Modifications &
Exceptions|Latest Update Complete Exam
Questions with Verified A+ Graded Answers
Alaska Packers' Association v. Domenico
Fishermen, already under contract, refused to work in Alaska unless their wages were
increased; employer agreed but later refused to pay the increase.
Takeaway from Alaska Packers' Association v. Domenico
Opportunistic renegotiation and economic duress—a promise to pay more for the same pre-
existing duty is voidable when obtained by improper threat and lack of reasonable alternative.
Omni Group v. Seattle-First National Bank
Land sale contract made buyer's duty conditional on engineer's 'satisfaction'; seller argued
buyer's promise was illusory.
Takeaway from Omni Group v. Seattle-First National Bank
In a condition of satisfaction with no workable objective standard, the law applies a subjective
satisfaction test constrained by an implied duty of good faith rather than treating the promise as
illusory.
Angel v. Murray
Garbage contractor asked city for more money after an unexpected, substantial increase in the
number of houses; city granted an increase.
Takeaway from Angel v. Murray
A one-sided, good-faith modification in response to unanticipated circumstances can be
enforceable without new consideration under Restatement § 89, unlike Alaska Packers where
duress was present.
Joseph Martin Delicatessen v. Schumacher
Lease renewal clause said future rent was 'to be agreed upon'; tenant asked court to enforce
renewal.
Takeaway from Joseph Martin Delicatessen v. Schumacher
1|Page
,A bare 'agreement to agree' on an essential term (rent) without a standard or mechanism is too
indefinite and unenforceable.
MGM v. Roy Schneider
Actor and studio negotiated for a sequel; key terms remained open; dispute whether a binding
contract existed.
Takeaway from MGM v. Roy Schneider
As a relational contract example, the court shows willingness to fill gaps where intent to be
bound is clear, but illustrates the limits of enforcement when key terms are left open.
Dickinson v. Dodds
Seller signed writing to keep an offer to sell land open until Friday but sold to someone else;
offeree heard of the sale and then tried to accept.
Takeaway from Dickinson v. Dodds
Under old common law, an offer purporting to be 'irrevocable' is still revocable absent
consideration; reliable notice of sale amounts to effective revocation, so there was no meeting
of the minds.
James Baird v. Gimbel Brothers
Subcontractor mistakenly submitted a very low bid; general contractor relied on it;
subcontractor revoked before acceptance.
Takeaway from James Baird v. Gimbel Brothers
When a contract could have been formed but was not, the subcontractor's offer is freely
revocable; promissory estoppel does not make the offer irrevocable without mutual assent.
Lenawee County Board of Health v. Messerly
Buyers purchased property later condemned because of a sewage problem unknown to either
party; deed contained 'as is' clause.
Takeaway from Lenawee County Board of Health v. Messerly
In mutual mistake, courts focus on risk allocation; here an 'as-is' clause allocated the risk of
mistake to the buyers, so rescission was denied.
Specht v. Netscape
Users downloaded software; the arbitration clause was buried below the 'Download' button
where users would not see it.
2|Page
, Takeaway from Specht v. Netscape
There is a duty to read only when terms are reasonably accessible; clickwrap (clear notice) is
generally enforceable, but browse-wrap hidden terms are not part of the contract.
Wood v. Lucy, Lady Duff-Gordon
Fashion personality gave exclusive marketing rights to an agent; contract didn't explicitly say
agent had to promote the brand.
Takeaway from Wood v. Lucy, Lady Duff-Gordon
Courts imply a duty of best efforts, creating mutuality; an implicit obligation to use best efforts
is sufficient consideration and cures apparent illusoriness.
Carlill v. Carbolic Smoke Ball Co.
Company advertised a reward for anyone who used its product as directed and still got
influenza; Carlill did and claimed the reward.
Takeaway from Carlill v. Carbolic Smoke Ball Co.
A serious advertisement can be a sincere unilateral offer; acceptance is by performance, and no
separate notice of acceptance is required where performance itself is the notice.
Corinthian Pharmaceutical v. Lederle Labs
Buyer tried to lock in a low vaccine price just before a price increase; seller shipped a few vials
saying they were an 'accommodation' and refused the rest.
Takeaway from Corinthian Pharmaceutical v. Lederle Labs
Under UCC 2-206(1)(b), shipment of nonconforming goods with seasonable notice that they are
'only an accommodation' is not an acceptance, but a counteroffer.
Jacob & Youngs v. Kent
Contractor installed pipe of a brand different from that specified but of identical quality; owner
refused final payment.
Takeaway from Jacob & Youngs v. Kent
For service contracts, substantial performance is enough; measure of damages is diminution in
value rather than cost of completion when full replacement would cause economic waste.
Sherwood v. Walker
3|Page
