Brown v Kendall

Dispute

A defendant, attempting to break up a fight between his dog and the plaintiff’s, swung a stick behind him and struck the plaintiff in the eye. The jury found for the plaintiff after the trial judge’s instructions that the defendant would be liable if his actions were unnecessary and he had not exercised “extraordinary” care.

Questions of law

What is the basis of action for negligence in tort law? How did negligence arise from intentional torts? Shall a defendant be liable if his intention was not unlawful and the injury was unavoidable?

Conclusions

The court explored the concept of “ordinary care” as a common binder of negligence. An “inevitable accident” is an accident which could not have been avoided by the exercise of ordinary care necessary to the context. The judge found that if the act of hitting the plaintiff was unintentional and was done in pursuit of a lawful act, then the defendant would not be liable unless he had not met a standard of ordinary care.

J. McIntyre Machinery, Ltd. v Nicastro

Dispute

Plaintiff Robert Nicastro sustained injury in New Jersey while using machinery manufactured by J. McIntyre Machinery, a British company. The machinery had been sold into via a scrap recycling vendor operating independent of J. McIntyre. The NJ Supreme Court held that jurisdiction was proper; J. McIntyre appealed to SCOTUS.

Questions of law

Where is the line between the “stream of commerce” argument (see Asahi and World Wide Volkswagen) and the requirement of purposeful availment established in Hanson?

Do a defendant’s actions or a defendant’s expectations control whether purposeful availment has been met?

Conclusion

The court overturned the New Jersey court finding, with Justice Kennedy writing for the majority opinion. The court stated that while the stream of commerce argument may provide sufficient contacts within a forum, it does not itself “amend the general rule” of personal jurisdiction. It states, “The principal inquiry in cases of this sort is whether the defendant’s activities manifest an intention to submit to the power of a sovereign.” It was not enough, the court said, that the defendant might have predicted its goods would reach a forum state.

A defendant’s actions, not expectations, control. It is also stated explicitly that these provisions apply to domestic producers. The defendant did not engage in conduct purposefully directed at New Jersey, despite agreeing that its products would end up within the United States generally and promoting distribution generally within the United States.

“None of our precedents find that a single isolated sale, even if accompanied by the kind of sales effort indicated here, is sufficient.”

Plowman v Indian Refining Co

Dispute

Several plaintiff employees of a company brought suit against the company on the basis of a promise that they would be paid a salary for life, consisting of one half of their former salary at retirement. The only condition for receiving continued pay was to come and pick up a check. The arrangement, though without reference to duration, was made on paper as of the date of their retirement, and proceeded for some years before being unilaterally terminated. The general manager denied promising an unlimited duration, though all employees said otherwise.

Rules of law

To be contractually enforceable, a promise must be supported by consideration. The consideration must be an immediate or future benefit; past or executed consideration cannot be bargained for and is self-contradictory. A mere condition for acceptance of a gift does not constitute consideration.

Conclusion

Even on the interpretation of the facts most favorable to the plaintiffs, there was no valid consideration for the promise and therefore there was no contract. The court held “appreciation of past services or pleasure afforded the employer thereby is not a sufficient consideration.”

Dougherty v Salt

Dispute

At a young age, the plaintiff had been given a promissory note for $3,000.00 by his aunt, who wished to help take care of him. At her death, the plaintiff sued her estate for the funds. The jury said that there was consideration and the trial judge set aside the verdict and dismissed. The appellate court reversed on the basis that the note was sufficient evidence of consideration.

Rules of law

To be contractually enforceable, a promise must be supported by a bargained-for consideration that is sought by the promisor in exchange for the promise.

Arguments

The estate argued that there was no consideration and therefore no contract. The nephew claimed the note and accompanying recitations provided evidence of consideration. The estate argued that mere recitation does not produce consideration.

Conclusion

The court held that there was no contract and entered a judgment accordingly. The mere recitation of consideration does not alter the requirement for a bargained-for consideration, and the aunt in this case was merely conferring a bounty, not paying for anything of value.

Burger King Corp. v Rudzewicz

Dispute

Burger King brought suit against John Rudzewicz, a franchisee of the brand, under federal diversity jurisdiction for breach of contract. The suit was brought in a federal court in Florida, where Burger King’s corporate headquarters rested, but Rudzewicz and the franchise location were in Michigan. Rudzewicz challenged jurisdiction, and the district court applied Florida’s long-arm statute to permit. Rudzewicz appealed to the Federal Court of Appeals, which reversed on the fairness doctrine. Appealed to SCOTUS.

Questions of law

What is the appropriate doctrine for determining jurisdiction and the validity of long-arm statutes concerning the fulfillment of contractual obligations within a state? Does “fair warning” apply?

Conclusion

The court stated that the Due Process Clause could not be “wielded as a territorial shield” to “avoid interstate obligations that have been voluntarily assumed.” It stated that the minimum contacts and purposeful availment of a non-consenting party must be the result of action by that party.

Purposeful establishment of minimum contacts was described as a first step, after which the “fair play and substantial justice” test would be applied. It found broadly that holding Rudzewicz accountable in Florida did not offend the sense of fair play and substantial justice, as Rudzewicz had purposefully entered into a long-term contractual relationship with the Florida Burger King corporate office.

SCOTUS reversed the appellate decision but stated it shared the appellate court’s concern about talismanic jurisdictional formulas.

Pennsy Supply, Inc. v American Ash Recycling Corp. of Pennsylvania

Dispute

Pennsy, a subcontractor, was made aware that American Ash, a recycling company, offered Treated Ash Aggregate (AggRite) at no cost for use in paving work. After obtaining and using 11,000 tones of AggRite, Pennsy learned that the material developed extensive defects, and was ordered to replace it under a separate contract. Pennsy sued American Ash to recover the costs of removal and disposal of AggRite, which was hazardous waste. Dismissed by trial court, appealed.

Rules of law

In the formation of a contract, a detriment to a promisor must induce the promise, and the promise to the promisee must induce the detriment. Consideration must not be incidental, but bargained for as the exchange for the promise.

If the occurence of a named condition would benefit the promisor, the occurrence was requested as consideration.

Arguments

American Ash argued that there was no contract because there was no consideration and they had offered the AggRite freely, with no exchange or bargain from Pennsy. They argued that the AggRite was merely a conditional gift.

Pennsy argued that the disposal of the hazardous waste was a benefit to American Ash and a detriment to them, and that American Ash was offering the product on the basis of that benefit.

Conclusion

The court concluded that American Ash was induced to offer the product at no cost by the advantage of not having to dispose of it, and therefore valid consideration existed. The court further concluded that although the avoidance of disposal costs was not discussed by the parties, this was not a requirement of the bargain theory of consideration; the promise and consideration merely needed to have a reciprocal nature.

Hamer v Sidway

Dispute

A nephew and his uncle reached an agreement under which the nephew promised to abstain from the use of alcohol, tobacco, profanity, and gambling until reaching the age of 21, and under which the uncle promised to pay him the sum of $5,000.00. Following the nephew’s 21st birthday, the two exchanged letters in which the uncle affirmed the promise and stated he would hold the $5,000.00 at interest on behalf of the nephew. At the uncle’s death, the nephew sued the estate for recovery. Judgment for the plaintiff, reversed on appeal.

Rules of law

To be valid, a contract must include mutual agreement and consideration.

Consideration can be anything of value to the promisee or anything of detriment to the promisor.

“In general a waiver of any legal right at the request of another party is a sufficient consideration for a promise.”

Arguments

The executor argued that because the promise of abstaining from various vices held no detriment to the plaintiff, and was in fact a benefit to him, the requirement of consideration was not met.

The plaintiff argued that merely abstaining from something he had a legal right to do, at the request of the deceased, had been valid and sufficient consideration, and that the deceased had in fact satisfied the contract when he held the funds in trust for the plaintiff.

Conclusion

The court found for the plaintiff and pointed to numerous cases in which a promise of performing any act or abstaining from any legal right constituted valid consideration for the purposes of the formation of a contract, including specific cases in which the overall benefit to the promisor by abstinence from undesirable behavior was judged immaterial.

Quake Construction, Inc. v American Airlines, Inc.

Dispute

Quake Construction and American Airlines reached an agreement regarding a construction project, formalized by a letter of intent which referenced a further written form contract. The letter of intent clearly awarded the contract but reserved a right of cancellation. Before the written form contract was completed, American Airlines attempted to terminate the relationship. Quake sued for damages on breach. The lower court dismissed, stating that there was no contract, and Quake appealed. The appellate court found the letter of intent ambiguous and remanded, and American Airlines appealed to the Supreme Court of IL.

Rules of law

Letters of intent may be enforceable, but only if the parties intend them to be contractually binding.

If the terms of an alleged contract are ambiguous or unclear, parol evidence is admissible to determine intent.

Determining whether two parties intend to reduce their agreement to writing, i.e., be contractually bound, depends on whether the written agreement has few or many details, whether it involves small or large amounts of money, and other factors.

Arguments

Quake argued that the letter of intent clearly stated that American Airlines had chosen to award the contract to them and constituted an acceptance of the offer which arose from their prior negotiations. It argued that ambiguities in the letter were mere formalities, that no material elements of the contract remained to be negotiated, and that the reservation of cancellation right was ineffectual.

American Airlines argued that the reservation of cancellation right was binding and rendered the letter of intent non-contractual. It also argued that there was no intent to be bound because of the references to a further contract.

Conclusion

The supreme court affirmed the appellate decision, finding that the combination of clear intent to be bound with apparent reservations of cancellation right rendered the language ambiguous. Thus, it was necessary to introduce parol evidence to resolve the ambiguity as to the parties’ intent, and so the original dismissal was improper.

Vincent v Lake Erie Transportation Co.

Fact pattern and procedural history

Prior to a heavy storm, defendant Lake Erie Transportation Company had its steamship Reynolds moored to a dock owned by plaintiff Vincent for the unloading of cargo. The wind became strong, and no tug was available to tow the Reynolds to another dock. Rather than casting off, defendant kept the lines secure to the dock, adding more to keep the steamship secure in the face of the increasing storm, and as a result the dock was damaged by repeated impacts with the Reynolds. Plaintiff sued for damages.

Questions of law

Does the doctrine of necessity preclude recovery for damages caused by an act arising out of necessity?

Finding

The court held that although the act of maintaining the mooring was not negligent and was justified by necessity, the plaintiff could still reasonably be called to pay the cost of damages brought on by the act. The necessity of the actions did mean it could not be held liable for any injury resulting to the property of others.

“Theologians hold that a starving man may, without moral guilt, take what is necessary to sustain life but it could hardly be said that the obligation would not be upon such person to pay the value of the property so taken when he became able to do so.”

Ploof v Putnam

Fact pattern and procedural history

During a heavy storm, Ploof and his family moored their sloop to a dock owned by Putnam. Putnam’s employee unmoored the sloop, causing it and its contents to be destroyed by the storm and causing bodily harm to Ploof and his family. Plaintiffs Ploof brought actions for trespass and negligent infliction of harm against Putnam.

Questions of law

What does the doctrine of necessity permit? Can an action be brought against an individual who resists torts protected by necessity?

Finding

The court held that the “doctrine of necessity applies with special force to the preservation of human life” and accordingly the case disclosed a necessity for mooring the sloop at the dock. Necessity was not only in force with respect to mooring, but to mooring at the most immediate point, the dock.