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Contracts: The Legal Duty Rule

There’s an important rule in contract law and that’s the legal duty rule. The legal duty rule says that a promise to perform what is already a legal duty isn’t consideration. For example, in Slattery v. Wells Fargo Armored Service Corp. an armored car was robbed. The plaintiff was a polygraph operator and discovered that a man he was testing for a matter unrelated to the robbery was the guilty party. He tried to recover the reward, but the court said that since he was working for the Sheriff’s Department at the time, he had a duty to report his findings.

An important case that illustrates the legal duty rule with contracts is Lingenfelder v. Wainwright Brewery. Here, an architect (the plaintiff was the plaintiff’s executor) was supposed to design a brewery for the defendant, but stopped work when another company was awarded a freezer contract that he wanted for his own company. The defendant offered to pay him commission in exchange for his continued work and the architect agreed. Wainwright, however, didn’t pay and the plaintiff sued. The court held that the architect was already under contract to design and build the brewery so Wainwright’s promise to pay for what he was already supposed to do was not consideration.  

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January 30, 2007 Posted by | Contracts | Leave a comment

Contracts: Mutuality

An important part of a contract is mutuality, that is, both parties must be bound or neither is. This principle doesn’t apply to unilateral contracts where only one party is bound or to cases where both parties make promises but one party isn’t bound (such as fraud). It does, however, apply to bilateral contracts. An example of mutuality is seen in Scott v. Moragues Lumber Co. Here, Scott told the lumber company that if he bought a ship, he’d ship their lumber. This created an express condition. Neither party was bound until the condition was fulfilled. Indeed, Scott did buy a ship, but he chartered it to someone else. The lumber company was understandably upset. The court held that Scott was bound to the contract as soon as he bought the ship.

This is pretty straight-forward, but what about illusory promises? An illusory promise has the form of a promise, but not the substance of one. We have an example of such a promise in Wickham & Burton Coal. v. Farmers Lumber. The coal company agreed to fill any orders from the lumber company at a certain price. The lumber company, however, didn’t actually promise to buy any coal. The court held that the contract wasn’t mutual because the quantity to be delivered (even if it’s none) is conditioned entirely on the buyer. Because Farmers Lumber could have decided not to purchase coal, they weren’t bound. So if both aren’t bound, neither are. For more on illusory promises, check out section 77 of the Restatement Second on Contracts.

January 30, 2007 Posted by | Contracts | 2 Comments

Constitutional Law: Judicial Review

We spent some time talking about judicial review, though I think we’ll get into it more later. Most people probably heard about the big case in this area at some point during high school: Marbury v. Madison. There had been elections and the Federalists were dealt serious losses. Before leaving office, the lame-duck Congress passed the “Midnight Judges Act” which added new judgeships and they confirmed new judges (all of whom were Federalists). Because the confirmations had been done so late, many commissions hadn’t gone out, and Madison wasn’t about to send them. Marbury, one of those confirmed judges, brought a mandamus action to compel Madison to deliver the commissions. There were several issues in this opinion:

1. Does Marbury have a right to the commission?

2. Does Marbury have a remedy to obtain the commission?

3. Can a writ of mandamus be enforced against the executive branch?

4. Does the Supreme Court have the power to issue the writ?

4a. Is § 12 of the Judiciary Act (which allowed the court to issue such writs) a valid exercise of congressional power?

4b. Is the court empowered to make this determination?

The court answered in the affirmative to the first three questions, thus placating the Federalists. The court said, however, that Congress didn’t have the power to enlarge the original jurisdiction of the Supreme Court because that wasn’t one of the enumerated powers so the Judiciary Act was unconstitutional. The Court further said that it had the power to review the constitutionality of Congress’s grant.

We now have the question of whether judicial review means judicial supremacy or judicial finality. Before Marbury, judicial review went on and in a way that showed judicial supremacy (in that the Court invalidated legislative actions. Judicial review was a response to legislative abuse (as was bicameralism). Some argue that the majority should rule and the courts are counter-majoritarian. While this is true, there are other examples of counter-majoritarianism: the filibuster, equal voting power for the States in the Senante, and one state/one vote when presidential elections are thrown to the House to name a few. Judicial review plays an important part in our system of government by preventing abuses by those we elect.

January 30, 2007 Posted by | Constitutional Law | Leave a comment