Contracts Commons^™

Labor Law-Collective Bargaining Agreements-Sham Exception To The Parol Evidence Rule In Welfare Trust Fund Agreement, John M. Price

Michigan Law Review

Defendant, shortly after commencing a small-scale strip-mining operation, signed a standard United Mine Workers collective bargaining agreement. He claimed that before signing he informed the union representative that he could not pay the union wage scale, or the specified royalty payments to the plaintiffs, trustees of the union welfare and retirement fund, and that he signed only after being assured that the agreement was a mere formality. Defendant did not pay union wages, and sent monthly checks to the plaintiffs only in amounts he felt he could afford. Plaintiffs brought suit on the written agreement for payment of the royalties …

Restitution--Quasi-Contract--Non-Conformance With State Building Contractors Licensing Statute As Basis For Denial Of Restitution, Stefan Tucker

Michigan Law Review

Defendants, owners of an apartment building containing stores and living units, contracted with plaintiff to replace the roof of the building. Pursuant to the contract plaintiff replaced the roof, and when defendants refused to pay for the work done, plaintiff sued in the alternative for damages on the contract or for restitution on an implied contract. Defendants moved for dismissal at pre-trial, contending that plaintiff was a residential alteration contractor and as such was required by state statute to have a license in order to bring an action for the collection of compensation. On appeal from pre-trial orders dismissing the …

A General Theory For Measuring Seller's Damages For Total Breach Of Contract, Robert J. Harris

Michigan Law Review

This article is concerned with the legal rules which should govern the process of valuing what plaintiff saved by exercising his power to stop further performance upon notice of defendant's serious breach. Where plaintiff is a "buyer" (whether he buys land, services, personality, or the temporary use of some kind of property), and he was to pay the price in dollars, few difficulties arise in valuing his saved performance. But if he was a "seller" of any of those commodities, valuation is hard. Thus our inquiry is chiefly concerned with cases in which plaintiff is a "seller," not a "buyer."

Taxation-Federal Income Tax-Strike Insurance Agreements, Robert A. Butler S.Ed.

Michigan Law Review

Contracts indemnifying persons or corporations for losses and damage resulting from an interruption of business due to strikes have existed at least since the beginning of this century. The Mutual Security Company of Connecticut, for example, wrote such a policy for the Buffalo Forge on April 9, 1906. In more recent times, strike insurance agreements have been instituted in major industries, and their impact on collective bargaining has been the subject of some controversy. The purpose of this comment is to consider the federal income tax questions which arise from such arrangements. Specifically, attention is directed to the deductibility of …

Concurrent Causation In Insurance Contracts, William Conant Brewer Jr.

Michigan Law Review

A great deal of work and thought has been devoted to concurrent causation problems in the field of torts. Less attention has been paid to the insurance cases, and no serious effort has been made to formulate the separate rules applicable to them. It is the thesis of this article that concurrent causation problems which arise under an insurance contract must be handled somewhat differently from those which arise in connection with tort litigation, and that the tendency to borrow rules of law from the larger tort field and apply them to the smaller volume of insurance cases can only …

Federal Antitrust Laws - Exclusive Dealing - Standards Of Illegality Under Section 3 Of The Clayton Act, Judd L. Bacon S. Ed.

Michigan Law Review

In a recent treatment of exclusive dealing arrangements, Tampa Elec. Co. v. Nashville Coal Co., the Supreme Court enunciates with some care the standards to be applied in judging the legality of requirements contracts under section 3 of the Clayton Act. This comment analyzes the merits and the impact of this needed clarification of a controversial area of antitrust law.

Exclusive marketing arrangements manifest themselves in various forms, and it is not uncommon to find more than one variety in a given contract. This inquiry, however, will be restricted largely to full requirements contracts, obligating a buyer to purchase …

Contacts - Subrogation - Partial Subrogation Of A Cause Of Action For Personal Injuries, Jerome M. Salle

Michigan Law Review

Plaintiff, an incorporated home for the aged, provided all essential medical care to one of its residents under the provisions of a life-care contract between it and the resident. On the basis of a contract clause which purported to subrogate plaintiff to the right of the resident to recover medical expenses caused by the negligence of third parties, plaintiff brought an action to recover certain medical expenses incurred from the party who was allegedly responsible for the injuries and death of the resident. The trial court sustained a demurrer to the complaint for failure to state a cause of action …

Past Practice And The Administration Of Collective Bargaining Agreements, Richard Mittenthal

Michigan Law Review

In a recent United States Supreme Court decision, Mr. Justice Douglas, speaking for the majority, stated that "the labor arbitrator's source of law is not confined to the express provisions of the contract, as the industrial common law-the practices of the industry and the shop-is equally a part of the collective bargaining agreement although not expressed in it." When compared to actual management-union experiences in contract administration, this dictum seems unduly broad. It may be premature as well, for no coherent "rationale of grievance arbitration" has yet been developed. If such a rationale is to be achieved, far more work …

No-Strike Clauses In The Federal Courts, Frank H. Stewart

Michigan Law Review

One consideration will support several promises. A promisor may extract more than one promise in return for his single undertaking to do - or not to do. It depends upon his bargaining power. His single undertaking may be so valuable that several promises are necessary to induce him to act, or not to act. He is privileged to hold out for the best deal. The law does not examine his motives or reduce his demands. And from this arises the common- law principle that one consideration may support several promises.

Conflict Of Laws-Law Applicable In Federal Courts-Federal Law Applied To Contractual Relations Of Admiralty Lawyer, Robert E. Thorne S.Ed.

Michigan Law Review

Plaintiff attorney was retained by a Spanish seaman to prosecute personal injury claims under the Jones Act and the general maritime law. Defendant shipping company induced the seaman to fire his lawyer and to recover instead under his Spanish employment contract. Plaintiff sued the shipping company in tort for interference with contractual relations. In a federal diversity suit, held, for plaintiff. Federal common law should be applied to determine the validity of the contract and the claim of tortious interference with it. Greenberg v. Panama Transp. Co., 185 F. Supp. 320 (D. Mass. 1960).

Sales - Privity - Disclaimer Of Implied Warranty, Richard W. Odgers

Michigan Law Review

Husband purchased a new automobile from a dealer. The contract of sale contained on its reverse side an express warranty from the manufacturer to the "original purchaser" providing for the replacement of any parts which were returned to the manufacturer and were in its judgment defective. The warranty was " ... expressly in lieu of all other warranties expressed or implied .... " The dealer warranty was substantially identical to that extended by the manufacturer; both adhered to the form prescribed by the Automobile Manufacturer's Association. Shortly after the delivery of the automobile, wife was injured in a collision caused …

Labor Law - Arbitration - Restriction Of Judicial Intervention Into The Arbitration Process, James J. White

Michigan Law Review

Respondent company laid off a number of employees as a result of its decision to contract out maintenance work formerly done in the company shop. After the grievance procedure failed to resolve petitioner union's claim that this violated the contract provision against lockouts, and the company refused the union's request for arbitration, the union sought specific performance of the promise to arbitrate contained in the collective bargaining contract. In dismissing the plea, the district court found that contracting out work was solely a function of management and therefore not arbitrable because the contract specifically excluded from arbitration "matters which are …

Sales - Implied Warranty - Privity Of Contract As A Prerequisite To Recovery From Manufacturer, John L. Peschel S. Ed.

Michigan Law Review

Plaintiff sustained injuries in the course of his employment when a defective abrasive wheel, while being used in its intended manner, exploded in his face. The abrasive wheel was purchased by plaintiff's employer directly from the manufacturer. Plaintiff sought recovery from the manufacturer on two grounds: negligence in the manufacture of the abrasive wheel and breach of implied warranty for fitness of purpose. The negligence issue was submitted to the jury, which returned a verdict adverse to the plaintiff. The manufacturer's demurrer to the cause of action based upon implied warranty was sustained by the trial court. On appeal from …

Contracts-Frustration Of Purpose, T. Ward Chapman S.Ed.

Michigan Law Review

The purpose of this comment is to discuss the doctrine in terms of its treatment by American courts. Attention will be given to the limitations which the courts have placed upon the doctrine, the degree to which they accept the doctrine thus limited, the rationales urged for the doctrine's acceptance or rejection, and the forms in which relief is given in frustration situations.

Real Property - Liens - Husband's Contract For Improvements On Land Owned Jointly With Wife, Judd L. Bacon S.Ed.

Michigan Law Review

A husband alone contracted for the construction of a house on property owned jointly with his wife. The wife inspected the progress of the work, took part in directing it, and later occupied the house. In an equity proceeding by the contractor to establish and enforce a mechanic's and materialman's lien on the premises for the balance due under the contract, the trial court rendered a decree for the contractor. On appeal, held, reversed. Since there was no showing that the husband contracted as an agent of the wife, and the evidence does not support a finding that she …

Conflict Of Laws - Release In A Tort Action - Effect Of Lex Loci Delicti And Contractus, Stanley A. Williams

Michigan Law Review

Plaintiff, defendant, and a third party were involved in a three-car collision in Virginia. Plaintiff settled an action against the third party's estate by executing a release, entered into in New York, in which plaintiff reserved any claims which he might have against the defendant. He then sued defendant, a resident of Pennsylvania, in a federal district court in Pennsylvania. The lower court, applying Virginia law to determine the effect of a release of one joint tortfeasor, dismissed plaintiff's action. On appeal, held, affirmed. The law of the place of the tort governs the effect of a release, not …

Stockholder Votes Motivated By Adverse Interest: The Attack And The Defense, Earl Sneed

Michigan Law Review

It is the purpose of this article to study stockholder votes motivated by adverse interest from the standpoint of the attack and the defense. First, the remedies available to the complaining minority are examined. Then follows a study of the indicia of adverse interest in specific shareholder actions. Knowledge of the nature and import of these indicia should enable the careful lawyer to avoid or defeat the charge that unconscionable adverse interest vitiated the result of a stockholder vote.

Labor Law - Arbitration - Determination Of The Question Of Arbitrability Under Section 301(A) Of Labor-Manabement Relations Act, Cecil R. Mellin

Michigan Law Review

Plaintiff- union brought an action under section 301 (a) of the Labor-Management Relations Act to compel arbitration of a grievance over the subcontracting of work by defendant-employer. The collective bargaining agreement provided that questions as to the proper interpretation or application of any of the provisions of the agreement would be submitted to arbitration and that all matters involving exclusively managerial functions were excluded from arbitration. The trial court held the grievance not arbitrable. On appeal, held, reversed. An implied covenant of good faith and fair dealings and the fact that some private arbitrators have held that the conventional …

Taxation - Federal Income Tax - Contract Right Income To Cash Method Taxpayer Who Refused Cash Offer, Eldon Olson

Michigan Law Review

During 1951 petitioner, a cash method taxpayer, executed a mineral lease. As part of the consideration petitioner was to receive an unconditional bonus or advance royalty of fixed amount. The lessee was ready, able and willing to pay the entire amount on execution, but at petitioner's request the contract provided for a small payment on execution with one-half the balance due on January 5th of each of the next two years. About one month before each due date the contract rights were discounted at a bank of which petitioner was a director. The lessee remained ready, able and willing to …

Wills - Contract To Devise - Rights Of Subsequent Spouse With Notice Of Prior Contract At Time Of Marriage, Glenn O. Fuller

Michigan Law Review

Decedent and his first wife executed reciprocal wills pursuant to a contract appearing on the face of the instruments. Each gave the other a life estate, with remainders to substantially identical beneficiaries. After his first wife's death, decedent remarried and in an antenuptial contract agreed to bequeath a sum of money to his second wife in lieu of all her claims against his estate. The second wife had actual notice of the prior agreement at the time of their marriage. Decedent then executed a new will which expressly revoked all prior wills, confirmed the terms of the antenuptial contract, and …

Mental Illness And The Law Of Contracts, Robert M. Brucken S.Ed., David L. Genger S.Ed., Denis T. Rice S.Ed., Mark Shaevsky S.Ed., William R. Slye S.Ed., Robert P. Volpe S.Ed.

Michigan Law Review

The traditional and most important problem relative to mental illness and the contract is the situation created when mental illness exists at the time of agreement (the problem of contractual capacity). One principal result of mental illness at this time may be the avoidance of the contract by the mentally ill person. Since case law in this area is extensive, the major portion of the study is concerned with this problem (parts II, III and IV) and the effects of such incapacity throughout the remaining course of the contract. Mental illness occurring after agreement and at the time of performance …

The Law Of The Collective Agreement, Charles O. Gregory

Michigan Law Review

The Wagner Act contained no law governing collective agreements. Congress left their enforcement to the state and federal courts under the miserable body of common-law rules. Under various theories the courts worried about consideration, mutuality of obligation, duress and public policy aspects as if they were dealing with conventional contracts.

Contracts - Statute Of Frauds - Effect On Oral Exclusive Distributorship Agreement For Indefinite Duration, Robert Segar

Michigan Law Review

In 1935 plaintiff brewery made an oral agreement of no definite duration by which defendant and his father, as partners, were given the exclusive right to distribute its beer. Defendant, changing from one partnership to another, complied with various wishes of the plaintiff such as furnishing warehousing, purchasing uniform amounts of beer throughout the year although seasonal demands varied, dissolving the second partnership in 1950, discontinuing distribution of a rival beer in 1954, and hiring a sales promotion man in June 1954; the latter three actions taken on plaintiff's assurance that he would continue defendant's distributorship. In July 1954 plaintiff, …

Marine Insurance And The Substantive Admiralty Law A Comment On The Wilburn Boat Company Case, Brunson Macchesney

Michigan Law Review

At the invitation of the editors, Professor MacChesney undertook to write this article especially for the memorial issue as a tribute to Professor Durfee, his former teacher.

Administrative Law - Procedure - Primary Jurisdiction To Determine Illegality Of Contract Under Shipping Act, Stephen B. Flood

Michigan Law Review

Plaintiff, an independent shipper, sought review of a Federal Maritime Board order approving under section 15 of the Shipping Act an association's dual-rate contract system found to be "a necessary competitive measure to offset the effect of non-conference competition." The court pf appeals set aside the Board's order on grounds that the system was prohibited by section 14 Third of the same act. On certiorari to the United States Supreme Court, held, affirmed, three justices dissenting. A dual-rate contract system found by the FMB to be designed to meet outside competition is a "resort to other discriminatory or unfair …

Labor Law - Arbitration - Power Of Arbitrator To Enjoin Union From Continuing Slowdown, Lawrence M. Kelly

Michigan Law Review

An arbitrator, acting under a collective bargaining agreement which called for a "speedy arbitration" procedure, issued an award enjoining the unions from continuing a slowdown in violation of that clause of the agreement forbidding strikes, lockouts, and slowdowns. A Supreme Court order granted the employers' motion to confirm the award and overruled the unions' cross motion to vacate. The unions claimed that the arbitrator, in issuing the injunction, had exceeded the powers granted him under the agreement and had acted contrary to section 876a of the Civil Practice Act (the New York Anti-Injunction Act). The Appellate Division affirmed the order …

Labor Law - Hot Cargo Clauses No Defense To Secondary Boycotts, Joel D. Tauber S.Ed.

Michigan Law Review

In August 1954 the Sand Door & Plywood Company sold a general contractor, through a millwork contractor, certain non-union-made Paine Lumber Company doors. The union notified its members at the construction site that the doors should not be hung because of the "hot cargo" · clause in their union contract. After negotiations between Sand Door and the union failed, Sand Door filed charges alleging secondary boycott action by the union in violation of section 8(b)(4)(A) of ·the amended National Labor Relations Act. A Board order was issued and enforced by the court of appeals. On certiorari to the United States …

Sales - Credit Sales - Application Of Usury Statute, Jerome S. Traum S.Ed.

Michigan Law Review

Plaintiff bought a tractor from defendant's agent for $2950 and received a trade-in allowance of $1180, leaving an unpaid balance of $1770. Defendant's agent agreed to arrange for a loan from defendant for the balance of the purchase price, without stating a time price for the tractor different from the cash price previously discussed. The loan was made, and plaintiff signed a note and chattel mortgage in the amount of $2161.84, payable in two annual installments. The $391.84 excess over the balance due exceeded the maximum legal rate of interest allowed by Nebraska's Installment Loan Act. Plaintiff later sued in …

Restitution - Availabilty As An Alternative Remedy Where Plaintiff Has Fully Performed A Contract To Provide Goods Or Services, Jerome K. Walsh Jr.

Michigan Law Review

It is hornbook law that restitution is sometimes available as an alternative remedy to a party who has suffered a breach of contract after having conferred a benefit on the defaulting party. It is equally clear, however, that in many cases where a benefit has been conferred, the plaintiff may not elect to sue for the value of his performance but is left to his action for damages on the contract. The cases which are concerned with one or the other of the above rules constitute a large portion of the area of the law called Restitution, and no attempt …

The Legal Nature Of Collective Bargaining Agreements, Archibald Cox

Michigan Law Review

One reflecting upon the legal nature of a collective bargaining agreement can hardly avoid beginning with the thought that the institution has flourished outside of the courts and administrative agencies and often in the face of legal interference. The law had fallen into disrepute in the world of labor relations because it failed to meet the needs of men. Collective bargaining agreements were negotiated and administered without regard to conventional legal sanctions. Grievance procedures and arbitration evolved into an intricate and highly organized, private judicature. Many experienced and perceptive observers argued that the conventional sanctions for commercial contracts should not …