Law Commons^™

Contracts-Duration Of Indefinite Employment Contracts That Specify Period Of Pay, Paul E. Anderson S.Ed.

Michigan Law Review

Normally a contract which does not express a time for performance is treated as enforceable. The courts interpret it to require that performance be completed within a reasonable time, basing their conclusion on a presumption of the intention of the parties. However, in the area of employment contracts, an exception to the reasonable time rule has developed. An indefinite contract for services is generally held to be terminable at will. The questions that come to mind are two: What is" the basis for the unique treatment of employment contracts? What are the manifestations of intent that will defeat application of …

Insurance-Liability Of Insurer For Judgment In Excess Of Policy Limits, Clinton R. Ashford S.Ed.

Michigan Law Review

A liability insurer has issued a policy, reserving the sole right to effect a settlement, and refuses to settle, within the limits of the policy, a claim against the insured. A judgment in excess of the policy limit is then recovered against the insured. These circumstances present the question whether the insurer may be liable to the insured for the amount of the judgment in excess of the policy limit.

This comment will be limited to consideration of cases involving only the above facts, and no attempt will be made to consider the liability of the insurer for failing to …

Quasi-Contracts-Landlord And Tenant-Recovery For Overpayment Of Rent In Violation Of Statute, William P. Sutter

Michigan Law Review

Plaintiff occupied a dwelling house from 1928 to 1945, paying $35 per month rent until September, 1941. In that month, defendant, his landlord, increased the rent to $75, which plaintiff paid until September, 1945. The property was registered with the Office of Price Administration at a maximum rental of $35, and this fact was known to plaintiff. Plaintiff's suit to recover the overpayment of $40 per month was dismissed. On appeal, held, affirmed. No statute specifically authorized restitution, and the illegality of the contract precludes restitution in absence of statute. Jones v. Chennault, (Mich. 1948) 35 N.W. (2d) …

Constitutional Law--Commerce Clause--Is Organized Baseball Interstate Commerce, Charles Hansen

Michigan Law Review

Plaintiff contracted to play baseball for defendant ball club. The agreement contained the usual "reserve" clause whereby the player agreed not to perform for a team other than defendant unless assigned or released. By terms of the contract, broad disciplinary power over the contracting parties was accorded the commissioner of baseball, and when plaintiff breached the reserve clause, an exercise of that power resulted in his being barred from Organized Baseball for a period of five years. Suit was brought against the organizations comprising Organized Baseball under the Sherman Act, for damages caused by the consequent deprivation of plaintiff's means …

Contracts - Municipal Corporations - Revocability Of Offer Submitted Under Statutory Competitive Bidding, Richard H. Conn

Michigan Law Review

In accordance with statutory provisions, the city commissioners of Atlantic City advertised for bids for certain public improvements. Plaintiff submitted a sealed bid accompanied by a deposit of $5,000, as required by the advertisement, to guarantee execution of the contract if it were the successful bidder. When the bids were opened, plaintiff was the lowest bidder by a considerable margin. Investigation disclosed that an appreciable error had been made in the calculation of its bid, however, and before any official action had been taken, plaintiff advised the city commission of the mistake and withdrew the bid. Nevertheless, the contract was …

Specific Performance-Marketable Title To Realty-Compelling Vendor To Purchase Outstanding Interest, Robert Dilts

Michigan Law Review

Plaintiffs sued for specific performance of a contract for the sale of real estate. Their attorney had concluded that the abstract furnished by defendant indicated a possible outstanding undivided one-half interest in the property. Refusing to accept a conveyance unless the alleged defect was eliminated or protection offered against an attack on the title, plaintiffs sought a decree requiring defendant to clear title and convey according to the contract. There was no showing that defendant could obtain a conveyance of the alleged outstanding interest. Held, specific performance denied. Bartos v. Czerwinski, 323 Mich. 87, 34 N.W. (2d) 566 …

Insurance-Effect Of Incontestable Clause In Suit For Reformation Of Policy, N. S. Peterman S. Ed.

Michigan Law Review

For over twenty years, defendant insurer accepted premiums on a life insurance policy issued to plaintiff. Defendant then discovered that a clerical error had been made in the original policy, as a result of which plaintiff's premium payments were approximately one-half the premiums defendant normally received for the type of policy actually issued. Defendant asked for reformation of the policy on the ground of mistake, and the trial court granted the relief sought. On appeal, held, reversed. The action was barred by the incontestable clause. Richardson v. Travelers Insurance Co., (App. 9th, 1948) 171 F. (2d) 699.

Coming Into Equity With Clean Hands, Zechariah Chafee, Jr.

Michigan Law Review

The most amusing maxim of equity is "He who comes into Equity must come with clean hands." It has given rise ,to many interesting cases and poor jokes. The maxim has been regarded as an especially significant manifestation of the ethical attitude of equity as contrasted with the common law. Pomeroy, for instance, argues that the principle involved in this maxim is "merely the expression of one of the elementary and fundamental conceptions of equity jurisprudence." Pomeroy's theory is that chancery has power to force a defendant to comply with the dictates of conscience as to matters outside the strict …

Specific Performance-Scarcity As Justification For Specific Performance Of Contract For Purchase Of New Car, Richard H. Conn

Michigan Law Review

In two recent cases, prospective purchasers entered into written contracts with local automobile distributors for the purchase of new cars. Because of the scarcity of new cars, the prospective purchasers' names were put on waiting lists establishing a priority for delivery as new cars were received by the distributors. In both cases the distributors refused without excuse to perform when cars became available for delivery. The prospective purchasers sought specific performance on the basis that the current scarcity of new cars and the difficulty of obtaining them elsewhere for cash alone made the legal damage remedy inadequate. Held, (a) …

Quasi-Contracts -- Taxation -- Rescission Of Gift For Failure To Achieve Donor's Purpose Of Minimizing Federal Income Taxes, N. S. Peterman S. Ed.

Michigan Law Review

In 1937, plaintiff made a gift of stock in a closed corporation to his wife, the defendant. For two years defendant received cash dividends on the stock transferred to her and paid income taxes thereon. Late in 1938 the corporation was dissolved; the assets were distributed to the shareholders, and a partnership was formed. Defendant continued to report the income received by her from the partnership. In 1946, the Tax Court sustained the contention of the commissioner of internal revenue that the entire income from this partnership was taxable to plaintiff under the doctrine of Commissioner v. Tower. Plaintiff …

Contracts-Impossibility-Effect Of Crop Failure On Middleman's Contract, John C. Walker

Michigan Law Review

Defendant, a produce dealer, offered to sell to plaintiff a specified quantity of Texas "New Crop U.S. 1 blackeye peas." When the original offer was made on June 13, 1947, plaintiff asked how defendant could be sure the peas would be ''No. 1.'' Defendant replied that because the locality of Dilley, Texas, had been unusually dry, the pea crop would be sold as dry ''blackeyes;" defendant also stated that he had already made a contract to purchase 7,000 bags of these "blackeyes" from a certain canning company. On June 16 the contract for 800 bags of peas was consummated, delivery …

Contracts-Duty To Mitigate Damages Upon Anticipatory Breach Of Forward Contract Of Sale, William F. Snyder

Michigan Law Review

The theory of our law in regard to damages for breach of contract has been to give the innocent party as nearly as possible what he would have received had the contract been performed. To this end, our courts have worked out a rough formula which has been described by Professor Grismore as follows:

" ... The promisee is, in general, entitled to recover the economic equivalent of the performance promised, at the time and place fixed in the contract, plus any losses incurred or gains prevented through not receiving it, less any savings that have resulted to the promisee …