Contracts Commons^™

Labor Law - Lmra - Status Of A Walkout Prompted By Health Reasons In The Face Of A No-Strike Clause, Robert E. Hammell S.Ed.

Michigan Law Review

The employer and the union were covered by a contract which contained a no-strike clause. In spite of this agreement, buffers in the employer's plant walked off their jobs when a blower in the buffing room failed to carry away dust and cool the area properly. The trial examiner found that the walkout was a protected concerted activity and not a strike, and that the employer had therefore committed an unfair labor practice by refusing to permit the buffers to return to their jobs when the blower had been repaired. On exceptions taken to these findings, the NLRB reviewed and …

Constitutional Law - State Action - Effect Of State Court Interpretation Of A Contract, Dudley H. Chapman

Michigan Law Review

Mrs. Doris Walker, president of her local union, was discharged by Cutter Laboratories in 1949 because of membership in the Communist Party and falsification of her employment application. The employer acquired knowledge of these facts in 1947, but did not act at that time to avoid charges of persecuting a union officer. The union, pursuant to the collective bargaining agreement, which authorized discharge for "just cause" only, sought and obtained reinstatement from the arbitration board, which action was affirmed by the district court of appeal, but reversed by the California Supreme Court. On certiorari to the United States Supreme Court, …

Master And Servant - Independent Contractor - Inherent Danger Exception, Jerome K. Walsh, Jr. S.Ed.

Michigan Law Review

Defendant was a home-owner whose home was fumigated by an independent contractor. Plaintiff was the administrator of the estate of a water softener service man, who entered the home and was overcome by the cyanide gas used in the operation. It was agreed by the parties that the contractor was negligent in failing to lock all entrances to the home, and in not posting warnings at all entrances. Plaintiffs request to charge the jury that the work was inherently dangerous was refused. The court instructed the jury to determine whether or not the defendant had used due care in selecting …

Corporations - Promotion - Discharge Of Promoter's Liability As Bidder At A Bankruptcy Sale, John Morrow

Michigan Law Review

On October 1, defendant made the high bid at a bankruptcy sale of hotel properties as "Mr. Ash, trustee." Later that same day a certificate of incorporation was executed for a corporation with Ash as treasurer. On October 4 the proper corporate papers were filed with the secretary of state. On October 4 the receivers receipted for the earnest money deposit, the instrument acknowledging, as interpreted by the court, that the receivers would look to the corporation to complete the contract and would not look to Mr. Ash personally. On October 14, the referee confirmed the sale to "Mr. Ash, …

Antitrust - Resale Price Maintenance - Legality Of Fair Trade Contracts Made By Integrated Firm, John A. Ziegler S.Ed.

Michigan Law Review

Defendant-appellee manufactures its own brand-name line of drug products and is also the largest drug wholesaler in the United States. Its manufactured products are sold through appellee's own wholesale division and to independent wholesalers and retailers. In 1951 appellee entered into resale price maintenance contracts with these independent wholesalers, most of whom competed with appellee's wholesale divisions. The Government then brought an action for an injunction under section 4 of the Sherman Act, restraining the further use of resale price contracts by appellee on the ground that these contracts constituted illegal price fixing under section 1 of the act. The …

Restitution - Constructive Trust Relief For Breach Of Oral Contract To Create Trust In Land, Edward A. Manuel S.Ed.

Michigan Law Review

Plaintiff mining company sued to impose a constructive trust on mineral interests purchased by the defendant employee in breach of his oral agreement with the company. The agreement included a promise to hold any property so acquired in trust for the employer at his election. Ruling that this agreement was unenforceable under the Oklahoma statute of frauds, the trial court relied on the defendant's status as an ordinary employee without duties relating to the acquisition of mineral interests or access to confidential information, and gave judgment for the defendant. On appeal, held, affirmed. Without proof of positive fraud or …

Admiralty - Jurisdiction - Quasi -Contractual Remedy, Ross Kipka S.Ed.

Michigan Law Review

Petitioners paid money to respondent for prospective passage to Europe on his passenger vessel held out as a common carrier. When respondent failed to make the voyage or return the passage money, petitioners sued in admiralty for breach of contract. The libel was in the nature of indebitatus assumpsit for moneys had and received and wrongfully withheld by respondent. The district court held this an action based upon the breach of a maritime contract and therefore within the admiralty jurisdiction. The court of appeals reversed, on the ground that the action was in the nature of the common law indebitatus …

The Installment Land Contract As A Junior Security, E. George Rudolph

Michigan Law Review

It is the purpose of this paper to explore the problems of one group whose members are increasingly, and more or less as a matter of necessity, finding themselves in the role of mortgagees, or vendors under installment purchase contracts, although they do not fit the assumed pattern. This group consists of persons who own homes subject to existing mortgages and for one reason or another decide to sell. The existing mortgages may be insured by the Federal Housing Administration or by the Veterans Administration or they may be uninsured mortgages held by building and loan associations or other financial …

Sales - Contributory Negligence - Use As A Defense In Action For Breach Of Implied Warranty, Thomas S. Erickson

Michigan Law Review

Defendant installed an oil burner in plaintiff's apartment building. The burner failed to function properly and exploded two months after installation. There was no evidence that the furnace was repaired subsequent to the explosion. Plaintiff continued to use the furnace for four years until a second explosion caused considerable damage to the building. Upon inspection, the cause of the explosions was found to be a defective system of heating and piping the oil. Plaintiff brought this action for breach of implied warranty to install the furnace in a good and workmanlike manner and recovered consequential damages. On appeal, held, …

Lawson: A Common Lawyer Looks At The Civil Law, F. S. C. Northrop

Michigan Law Review

A Review of A Common Lawyer Looks at the Civil Law. By F. H. Lawson.

Conflict Of Laws--Effect Of Forum's Statute Of Frauds On Foreign Oral Contract To Bequeath Property, David D. Dowd, Jr. S.Ed.

Michigan Law Review

Plaintiff brought an action in New York for specific performance of an oral agreement allegedly made by testator in Florida not to change his will without plaintiff's consent. Defendant's motions for dismissal of the complaint and summary judgment were dismissed. The appellate division on reargument entered orders reversing the lower court. On plaintiff's appeal to the court of appeals, held, affirmed. The New York Personal Property Law, which states that oral contracts to bequeath property are void, is controlling, regardless of whether this section of the statute of frauds is procedural or substantive. If the section is procedural, the …

Labor Law - Lmra - Validity Under Federal Act Of State Right To Work Statute Interpreted To Bar Exclusive Bargaining Rights Clause, Edward W. Powers S.Ed.

Michigan Law Review

Plaintiff employer, operator of a retail food store, refused to sign a contract with a union representing the only two butchers then employed by him on the ground that acceptance of a clause in the contract making the union the exclusive bargaining representative of all butchers in his establishment would violate the state right to work statute. The two butchers went on strike and began picketing the employer's establishment. The employer thereupon hired a non-union butcher and sought to have the picketing enjoined. The state district court denied the injunction. On certiorari to the state supreme court, held, reversed, …

Restitution - Recission - Measure Of Restitution Required Of Rescinding Vendee Of Executed Land Contract, Donald W. Shaffer S.Ed.

Michigan Law Review

Plaintiff vendee sought to rescind an executed contract for the sale of an inn, alleging fraud in the inducement. The lower court granted rescission and ordered repayment to the plaintiff of that part of the purchase price already paid over to defendant- vendor, less $2,500, which was found to be the fair or reasonable rental value for the period of the plaintiff's possession. Both parties appealed, defendant claiming a higher rental figure and plaintiff asserting that no rental should be allowed. Held, the plaintiff should be charged rent measured by the value of the benefits which accrued to him …

Taxation - Federal Income Tax - Damages For Injury To Business As Return Of Capital Or Income, Eric Bergsten S.Ed.

Michigan Law Review

The taxpayers, owners of two movie theatres, recovered $36,000 in a compromise settlement of a Clayton Act suit against the major distributors and exhibitors. The taxpayers claimed that the amount received was a return of capital. The Commissioner claimed the amount received represented the recovery of lost profits. Held, Commissioner upheld. The evidence presented did not warrant a finding that any part of the sum recovered represented a return of capital. Chalmers Cullins, 24 T.C. 322 (1955).

Two-Contract Analysis May Imperil Stock Option Plans, James F. Ward

Michigan Law Review

Stock option plans generally have withstood judicial scrutiny where they have complied with the requirements developed to control the operation of this type of arrangement. It would seem, therefore, that the future of stock options is secure against even the most critical court review-that nothing in the nature of the stock option arrangement would render it vulnerable to a general attack. The writer believes that complacency in this assumption is not now advisable. Recently a view (from a respectable authority) has been introduced unnoticed into this area, and may have gained the acceptance accorded to an unsuspected imposter. This view, …

Contracts - Consideration- Requirement Of Consideration For Modification Of A Contract, David Macdonald

Michigan Law Review

Landlord leased space to tenant in a building which was to be erected. The agreement and subsequent modifications pro- . vided that the landlord should pay the broker's commission and architect's fees, and have the power to cancel the lease prior to a specified time. The litigation arose over another attempted modification in the form of a letter from the tenant in which the tenant promised to indemnify the landlord for the broker's commission and architect's fees if the landlord should cancel the lease as it had the power to do under the agreement. In compliance with the tenant's request, …

Restitution-Unjust Enrichment-Right Of Defaulting Purchaser To Recover Part Payment, Theodore J. St. Antoine S.Ed.

Michigan Law Review

Plaintiff made a prepayment of $59,946.67, or twenty-five percent, on twenty printing presses which it was purchasing for shipment to Russia. Before their delivery a federal regulation was promulgated under which plaintiff was denied an export license. Plaintiff therefore rejected tender of the presses, and defendant vendor sold them to a third party for $18,765 more than the contract price to plaintiff. Plaintiff sued to recover its down payment and the profit resulting from defendant's resale. On appeal from a judgment for defendant, held, reversed and remanded. A defaulting purchaser is entitled to restitution of its payments in excess …

Regulation Of Business - Sherman Act - Patent Pool Agreements Which Restricts Fields Of Use, Martin F. Roston S.Ed.

Michigan Law Review

DeVlieg, the owner of three major patents in the machine tool field, licensed his inventions to several machine tool manufacturers. Subsequently, he and the licensees formed a new corporation, Associated Patents, Inc., a patent holding company, to which he assigned his patents. Each party to the agreement owned an equal share of API. The agreement contained provisions for the granting back to API of any improvement patents acquired by the parties and it also restricted the use of the patents by each party to carefully circumscribed fields of use. Held, a patent pool agreement restricting fields of use is …

Conflict Of Laws - Brokerage Contracts - Out-Of-State Broker Denied Commission Because Of Isolated Acts Within Forum, Richard J. Riordan S.Ed.

Michigan Law Review

Plaintiff was a Massachusetts real estate broker, not licensed to do business in New York. Defendants, who resided in New York, owned real estate in Massachusetts and executed a brokerage contract there with the plaintiff. The real estate was leased to a Massachusetts corporation through plaintiff's efforts. All of plaintiff's services, with the exception of several important conferences in New York, were performed in Massachusetts. On plaintiff's suit for unpaid commissions, held, for defendant. The New York brokerage laws prohibit recovery in a New York court by brokers, unlicensed in New York, who perform any brokerage services within the …

Regulation Of Business - Fair Trade Acts - Availability Of Injunction Against Nonsigner's Inducing Breach Of Fair Trade Agreement, William R. Jentes S.Ed.

Michigan Law Review

Plaintiff manufacturer had extensive agreements with its distributors under the Michigan Fair Trade Act. The circuit court enjoined the defendant, who was not a party to any of these contracts, from inducing the plaintiff's distributors to sell products to the defendant below the agreed fair trade price. On appeal, held, reversed, three justices dissenting. Defendant is privileged to induce the breach of a fair trade agreement which restricts his business opportunities and is contrary to the state's policy against the enforcement of the nonsigner provision of its fair trade law. Argus Cameras, Inc. v. Hall of Distributors, Inc., …

Labor Law - Lmra - Strike Without Compliance With Arbitration Clause Of Collective Agreement As Unprotected Concerted Activity, Hazen V. Hatch S.Ed.

Michigan Law Review

A dispute arose over the working hours and assignment of one of the employer's truck drivers. The employer suggested to the union that they refer the question to an arbitration panel for adjudication. The collective bargaining agreement provided that the panel was to be the exclusive means of settling all such matters, but the agreement did not contain a specific no-strike clause. The union refused to arbitrate and ordered a strike. Subsequently, the employer discharged twenty of the strikers and then refused to reinstate them at the termination of the strike. The union claimed that the strike was a protected …

International Law - United Nations - Administrative Tribunals As Adjudicators Of Disputes Arising Out Of Employment Contracts With International Organizations, Edward W. Powers S.Ed.

Michigan Law Review

A crucial though relatively unpublicized problem arising from the creation of international organizations is that of establishing and maintaining the staff or secretariat needed to perform the administrative functions of these organizations. Such a staff must possess not only the competence and integrity of a national civil service, but also an international loyalty or outlook which includes " ... an awareness . . . of the needs, emotions, and prejudices of the peoples of differently-circumstanced countries ... [and] a capacity for weighing these frequently imponderable elements in a judicial manner· before reaching any decision to which they are relevant."

Contracts - Offer And Acceptance - Effect Of Post Office Regulations On Adams V. Lindsell Doctrine, Norman A. Zilber S.Ed.

Michigan Law Review

Plaintiff, a bidder on a government contract, attempted to withdraw its bid upon discovering that it had made a mistake in its calculations. The revocation arrived at the government's office the same day the acceptance of the bid was mailed. The government's invitation to bid provided that "the successful bidder will receive Notice of Award ... and such Award will thereupon constitute a binding contract ... .'' Upon the government's refusal to recognize the revocation, the plaintiff brought suit to recover losses resulting from performance at the bid price. Held, there was no binding contract. Since the post office …

Insurance - Recovery - Land Contract Purchaser Allowed Recovery On Both Vendee's And Vendor's Policies In Excess Of Loss, Jerome K. Walsh, Jr.

Michigan Law Review

An owner of realty entered into a contract to sell the land to the plaintiff. The vendor then took out fire insurance on his interest in the amount of $6,000 and the plaintiff obtained a policy covering his interest in the sum of $12,000, with a "three-fourths value" clause. Before performance of the contract and transfer of title, a fire occurred which caused $12,000 damage to the property. After the plaintiff paid the full contract price and took title to the property, he demanded and received an assignment of the claim under the vendor's policy. Plaintiff then brought suit on …

Rationale Of Valuation Of Foreign Money Obligations, Charles Evan

Michigan Law Review

What then should a creditor of a foreign money obligation collect where there was a delay in payment? When are damages for depreciation of foreign money recoverable? As of what time and in what currency are they to be computed? How is the value of a foreign money obligation to be measured where no damages may be had? The answers to these and other incidental questions require a thorough analysis of certain features peculiar to the law of money.

It is the purpose of this article to clarify these problems, to sum up the primary principles by which they are …

Contracts - Restraint On Employee's Rights To Enter Competing Business - Partial Enforcement Of Restraint Indivisible By Its Own Terms, William R. Jentes S.Ed.

Michigan Law Review

A provision in defendant's employment contract stated that if he ceased to be employed by plaintiff for any reason, he would not "for a period of ten years thereafter" enter into a competing business. The trial court denied plaintiff's request for injunctive relief against defendant's violation of this restriction. On appeal, held, reversed, one justice dissenting. An employer can obtain partial enforcement for a reasonable time of an employee's agreement not to enter into a competing business, even though the restraint as agreed upon by the parties is unreasonable and is not made divisible by its own terms. Fullerton …

Regulation Of Business - Fair Trade Laws - Application Of The Mcguire Act To Mail Order Sales Emanating In A Non-Fair Trade Jurisdiction, Lawrence W. Sperling S.Ed.

Michigan Law Review

Defendant's store was located in the District of Columbia, a jurisdiction which does not have a statute permitting resale price maintenance. The defendant sent advertising and made mail order sales of plaintiff's product to consumers in Maryland, at prices below the resale price established by the plaintiff in accordance with the Maryland Fair Trade Act. Plaintiff sued to enjoin such advertising and sales on the ground that they were violations of the Maryland statute. On defendant's motion to dismiss, held, overruled without prejudice. On the main point in issue, however, the court ruled that neither the Maryland Fair Trade …

Future Interests - Restraints On Alienation - Option To Repurchase At A Fixed Price, Edward H. Hoenicke S.Ed.

Michigan Law Review

Shortly after his second marriage in 1925, plaintiff deeded a house and two lots to the parents of his first wife. The grantees, along with the plaintiff, had occupied the premises since the first wife's death. The deed contained a provision that "if the second parties do not wish at any time to use the property as a home, the first parties shall have the first privilege to purchase the above described property at any future time at the price stated in this deed, viz., $4,000." In 1952, after the death of both grantees and when the property was worth …

Corporations - Stockholders - Effect Of State Constitutional Provisions On Liabilty To Creditors For Unpaid Subscriptions, Douglas Peck S.Ed.

Michigan Law Review

Basset and Company, an Oklahoma corporation, issued stock to defendant for which defendant never paid. The sum due was carried on the corporate books as "subscriptions receivable." The corporation became bankrupt and the trustee brought suit in the federal district court to recover the amount due on the subscriptions. Held, judgment for the defendant. Under the Oklahoma Constitution, where stock is issued for consideration which is less than par value, the issue is void. The stock certificate cannot serve as a consideration to support the would-be stockholder's promise to pay for the stock, and no liability attaches to the …

Restitution - Election Of Remedies - Action In Quasi-Contract Against Joint Tortfeasor As Barring Fraud Action Against Other Joint Tortfeasors, Douglas Peck S.Ed.

Michigan Law Review

Plaintiff sued for fraud, alleging that defendant engraving companies secretly agreed with an agent of the plaintiff to give the agent a commission in return for which the agent was to contract for engraving work to be done by the defendants for plaintiff at a rate in excess of the fair market price for such work. Upon discovery of the fraud and prior to the commencement of this action, plaintiff had instituted an action in a state court against its agent for money had and received, and had obtained an attachment. Upon defendants' motion to dismiss the fraud action, held …