PicJur

The Contracts Poster Set

admin — Sat, 22 Jan 2011 23:17:10 +0000

Use our unique flow chart system to make Contracts easier to understand, and easier to remember. This set of two full-color 27″ x 39″ posters shows you both the big picture and the black letter details of contract law.

Learning Contracts visually saves you time and increases your understanding making the followings things readily apparent:

1) the relationships between rules,
2) the relative importance of rules, and
3) the sequence of legal analysis.

The Contracts Poster Set is only available through our affiliate, Legal Books Distributing.

Major topics covered:

I. Formation

A. Promise/ Offer and Acceptance

1. Offer and Acceptance

a. Offer

i. Bilateral Contracts

ii. Unilateral Contracts

b. Acceptance

c. Termination of the Offer Before Acceptance

i. Mailbox Rule

ii. Irrevocable Offers

B. Consideration

II. Interpretation

A. Contract Language

1. Reasonable Expectations Doctrine

2. Interpretive Tools

a. Noscitur as Sociis

b. Expressio Unius Exclusio Alterius

c. Ejusdem Generis

B. Context

C. Parol Evidence Rule

III. Construction

A. Contra Preferentum

B. Good Faith and Fair Dealing

C. Warranties

IV. Promissory Estoppel

V. Restitution/ Unjust Enrichment

VI. Breach of Contract

A. Partial Breach

B. Material Breach

C. Total Breach

D. Reasonable Grounds for Insecurity

E. Anticipatory Repudiation

F. Conditions

VII. Defenses

A. Other Party’s Misconduct

1. Undue Influence

2. Duress

3. Unconscionability

4. Misrepresentation

5. Nondisclosure

B. Mistake

1. Unilateral

2. Mutual

C. Incapacity

1. Minority

2. Mental Incapacity

C. Frustration and Impracticability

D. Public Policy

E. Statute of Frauds

1. Uniform Commercial Code

2. Common Law Provisions

Hello World!

admin — Thu, 20 Jan 2011 03:11:21 +0000

Welcome to the official PicJur Blog.

The Erie Doctrine

picjur — Fri, 03 Dec 2010 06:59:56 +0000

When a federal court is exercising diversity jurisdiction, it must apply the substantive law of the state in which it sits. Erie Railroad v. Thomkins, clarifying the Rules of Decision Act (28 U.S.C. §1652). A state statute setting forth a cause of action is a clear example of state substantive law. Less obvious examples of substantive law include statutes of limitation, rules for tolling statutes of limitations, and choice of law rules. After Erie, federal courts exercising diversity jurisdiction must apply all judge-made state law, as well as state statutes.

However, while the court applies state substantive law, it must apply federal procedural law. So the short answer to Erie problems is “apply state substantive law and federal procedural law.” These problems get complicated simply because the difference between “substantive” and “procedural” is not always clear.

An effective way to work through a problem is to break it down into two phases. First, determine if the state and federal laws conflict. Second, analyze the federal law to determine whether it should be applied instead of the state law.

A. Determine if there is a conflict.

The first question to ask is whether the state and federal laws actually conflict.

1. No conflict

a. Only one system has an applicable rule.

Apply the rule. If there is a state rule on point but no federal rule, use the state rule, and vice versa.

b. The state and federal rules agree.

Either the language of the two rules is exactly the same, or they have the same meaning.

c. Direct conflict can be avoided by interpreting the federal rule narrowly.

The Supreme Court has only sometimes construed federal law narrowly to avoid conflict. If you have a quick and reasonable argument that the law can be construed narrowly, include it in your essay. However, you should then go on to the conflict analysis.

2. The state and federal rules conflict.

B. Look to the source of the federal law to determine how to resolve the conflict

1. The U.S. Constitution

If the source of the federal law is the Constitution, or a judicial interpretation of the Constitution, the federal law governs.

2. Acts of Congress

a. Acts of Congress generally

If the source of the federal law is an act of Congress (i.e., a federal statute), the federal law governs. This includes judicial interpretations of federal statutes.

Unless

i. the federal law is unconstitutional because it violates a constitutional right, or

ii. the federal law is not “arguably procedural.”

b. Rules Enabling Act

The Rules Enabling Act gives the Supreme Court “the power to prescribe general rules of practice and procedure and rules of evidence for cases in the United States district courts (including proceedings before magistrate judges thereof) and courts of appeals.” 28 U.S.C. 2072(a).

Rules promulgated by the Supreme Court pursuant to the R.E.A. include the Federal Rules of Civil Procedure, Federal Rules of Evidence, Federal Rules of Criminal Procedure, and Federal Rules of Appellate Procedure.

The federal Rule governs, including judicial interpretations of the Rule.

Unless

1. The Rule violates the Rules Enabling Act because it enlarges, restricts, or modifies a “substantive right.” 28 U.S.C. 2072(b).

2. The Rule violates the Contstitution.

Hanna v. Plumer.

The Hanna Court emphasized that either one of these scenarios is extremely unlikely. To succeed, a party would essentially have to show that the Supreme Court and Congress were wrong.

3. Judge-made rules

Where the federal rule is judge made, and not an interpretation of the Constitution, an Act of Congress, or a federal Rule, pick the appropriate test:

a. In most cases, use the “twin aims” approach from Hanna v. Plumer.

Use the federal rule if:

i. Applying the federal rule will not result in the inequitable administration of laws.

Will there be a substantial difference in the litigation if the federal rule is applied?

and

ii. Applying the federal rule will not encourage forum shopping.

A substantial difference between the state and federal laws may lead to forum shopping.

b. If the federal rule involves “an essential characteristic of the federal court system,” use the “balancing” approach from Byrd v. Blue Ridge Electric Cooperative, Inc.

Balance the factors to determine whether to use state or federal law:

i. The relationship between the state procedural rule and the substantive state right.

If the state procedural rule is “bound up with” the underlying state right, this factor strongly supports using the state rule.

ii. The interests of the federal judicial system.

If applying the state rule would alter or disrupt an “essential characteristic” of the federal judicial system, this factor strongly supports using the federal rule. “Essential characteristics” particularly include the distribution of trial functions between the judge, jury, and appellate court.

iii. Likelihood that following the federal rule will affect the outcome.

If the outcome will be significantly different if the federal rule is used, the factor favors using state law.

This can be seen as a different articulation of the “twin aims” approach from Hanna: a substantial difference in outcomes amounts to an “inequitable administration of the laws.” Such an inequitable administration is what causes litigants to forum shop. This makes sense when you consider that the factor comes from Guaranty Trust Co. v. York, the predecessor of Hanna and Byrd.

Civil Procedure Update: Card 9

picjur — Thu, 25 Nov 2010 05:36:49 +0000

Civil Procedure Update: Card 23

picjur — Thu, 25 Nov 2010 05:35:42 +0000

Visual Search Results from Fastcase

picjur — Wed, 24 Nov 2010 17:36:53 +0000

Finally, a legal database that provides visual search results. We’re awed by the way that Fastcase makes the importance and relevance of cases immediately obvious.

Not only that, they actually charge a reasonable, all-you-can-eat fee for access, from $65-$95 a month. They also offer a free trial, and significantly reduced rates for students. Check them out at fastcase.com.

Finally, get thee to the iPhone App Store for Fastcase’s free app, which provides access to cases and statutes on the go.

Remedies for Breach of Contract

picjur — Tue, 23 Nov 2010 20:16:24 +0000

A. Compensatory Damages

The Plaintiff (non-breaching party) is put in the position he/she/it would be in if promise had been performed.

1. Expectation Damages

Expectation damages are designed to give the Plaintiff (non-breaching party) the “benefit of the bargain.” This means compensating the Plaintiff so that he is placed in the position he would have been in if the breaching party had performed.

a. General Damages

The Plaintiff (non-breaching party) will be compensated for damages that result from a given type of breach, without regard to the Plaintiff’s particular circumstances. This generally means the Plaintiff will be compensated for the difference between the contract price and the price of obtaining a substitute performance (in some cases, this may be the difference between the contract price and the market price).

b. Consequential Damages

Consequential damages are available in addition to expectation damages when:

i. the Plaintiff has additional losses as a result of his or her particular circumstances

ii. that a reasonable person would have foreseen as a result of breach

iii. at the time the parties entered the contract.

The Plaintiff has the burden of proving consequential damages. Look for situations where, at the time the contract is formed, the Plaintiff tells the Defendant of particular additional damages that will result from the breach.

2. Reliance Damages

If the Plaintiff cannot show with sufficient certainty what his expectation damages would be, he may recover reliance damages.

Reliance damages place the Plaintiff in the position he would have been in if the contract had never been formed. Usually, this means the Plaintiff can recover the cost of his performance.

B. Duty to Mitigate Damages

The non-breaching party (i.e., the Plaintiff), has a duty to mitigate damages. This means that the Plaintiff must make reasonable efforts to cut her losses by avoiding additional expenditures (usually by stopping performance), or by obtaining substitute performance. There will be no recovery for damages that a party could have avoided.

A party is allowed to recover the expenses of mitigation.

1. Manufacturing

If the Plaintiff (non-breaching party) is a manufacturer, the general rule is that she should stop work after the other party’s breach. However, if the manufacturer can sell the manufactured goods to a third party, she should mitigate damages by finishing the goods and selling them.

2. Construction

The non-breaching contractor should stop work on the project. She has no duty to find another construction job.

3. Employment

If the employer breaches, the employee is under a duty to mitigate damages by seeking similar employment at the same rank in the same locale.

4. Sale of Goods

a. If the buyer is in breach, the seller may resell the goods in a commercially reasonable manner. The seller may recover the difference between the contract price and the sale price. U.C.C. 2-706. The seller gets no recovery if he resells for more than the contract price.

If the seller does not resell, he may recover the difference between the contract and the market price.

b. If the seller is in breach, the buyer has the right to purchase substitute goods at a reasonable price. The buyer can recover the difference between the contract price and the cost of substitution (“cover”). UCC 2-712.

If the buyer does not purchase substitute goods, he can recover the difference between the contract price and the market price of the goods. The buyer may not recover consequential damages that could have been avoided by purchasing the substitute goods.

C. Liquidated Damages

A liquidated damage provision provides that the breaching party will give the non-breaching party a specific amount of money in the event of breach. Such a provision is enforceable when:

1. actual damages were difficult to determine when the contract was formed, and

2. the amount of liquidated damages was a reasonable forecast of the actual damages.

D. Nominal Damages

The court may aware the Plaintiff a token amount if the she proves the Defendant breached, but is unable to prove damage.

E. Punitive Damages

Punitive damages are generally not available. There are two major exceptions.

1. The breaching party’s conduct is such the the Plaintiff also has a cause of action in tort.

2. The breaching party is an insurer who acts in bad faith when refusing to pay a claim, either to the insured, or to a third party who has a claim against the insured.

F. Specific Performance

The court orders the breaching party to perform. This remedy is only available when the subject matter of the contract is rare or unique.

1. Specific performance is available for real estate contracts.

2. Specific performance is available for unique goods such as works of art.

3. Specific performance may be available if the subject matter of the contract is sufficiently rare.

4. Specific performance is not available if the contract is for rare or unique services (i.e., an actor or musician). However, the court may enjoin the breaching party from performing for another for the duration of the contract.

5. Specific performance is not available if the seller has sold the item to another bona fide purchaser.

Judgment as a Matter of Law

picjur — Sun, 21 Nov 2010 23:52:03 +0000

A. Judgment as a Matter of Law: Rule 50(a)

The motion formerly known as “motion for a directed verdict.” Some state courts still call it that.

1. The moving party must specify:

a. the judgment sought, and

b. the facts and law on which it is entitled to the judgment.

2. Standard: there must be no legally sufficient evidentiary basis for a reasonable jury to find for the nonmoving party on the given issue.

a. The court must view all the evidence, and all inferences from the evidence, in the light most favorable to the party opposing JMOL.

b. The court may not “weigh” the evidence. Specifically this means that

i. the court may not evaluate the credibility of witnesses, and

ii. the court may not decide whether one party’s version of the facts is more credible than the other’s.

3. If the moving party has the burden of proof (usually this means the Plaintiff), its evidence must be so strong and compelling that the jury could only find in its favor.

4. If the moving party does not have the burden of proof (usually this is the Defendant), it needs to show that the opposing party has no substantial evidence that would allow a jury to find in its favor.

5. Timing

A motion for JMOL may be made at any time before the case is submitted to the jury. However, the party opposing the motion must have been fully heard on the issue, so the motion can only be made after the opposing party has had an opportunity to present evidence.

But note that in order to preserve the right to a Renewed JMOL (also known as a Judgment Notwithstanding the Verdict, see below), the moving party must present the motion for JMOL at the close of all evidence.

B. Renewed Judgement as a Matter of Law: Rule 50(b)

The motion formerly known as “motion for Judgment Notwithstanding the Verdict (JNOV).” This is the same thing as a JMOL (see above for the standard), except the timing.

A RJMOL/JNOV is presented after the jury reaches a verdict. It is essentially the judge’s conclusion that the jury reached a verdict that no reasonable person could have reached (i.e., the jury verdict grossly contradicts the evidence).

Why the “renewed” requirement? The Supreme court found that the old JNOV violated the 7th Amendment right to jury trial. Slocum v. New York Life Insurance, 228 U.S. 364. Later, in Baltimore & Carolina Line v. Redman, 295 U.S. 654, the Court held that a JNOV was permissible if the motion for JMOL had been made before the case was given to the jury. The idea is that the judge ruling on a JNOV is actually making a delayed ruling on a JMOL.

Timing: The RJMOL/JNOV must be presented within 28 days of entry of judgment.

Federal Class Actions

picjur — Fri, 19 Nov 2010 00:00:58 +0000

A. Prerequisites: Rule 23(a).

All four requirements must be met.

1. The class is so numerous that joinder of all members is impracticable.

2. There are questions of law or fact common to the class.

3. The claims or defenses of the representative parties are typical of the claims or defenses of the class.

4. The representative parties will fairly and adequately protect the interests of the class.

B. Grounds: Rule 23(b).

In addition to meeting the prerequisites, the action must be based on one of the following grounds:

1. Problems created by separate actions:

a. Inconsistent judgments would require inconsistent conduct by the party opposing the class.

b. Judgments regarding some members of the class would impair the rights of other members of the class.

2. Injunction or declaratory relief is appropriate with regard to the class as a whole.

3. Common questions, fairness, and efficiency:

a. Common questions of law or fact predominate over any questions affecting only individual members.

b. A class action is the fairest and most efficient way to settle the controversy.

c. Factors to be considered include:

i. The interests of class members in individually controlling prosecution or defense in separate actions.

ii. The extent and nature of litigation already commenced by or against class members.

iii. Whether it is desirable to concentrate the claims in the particular forum.

iv. The difficulties likely to be encountered in the management of the class action.

C. Jurisdiction

1. Federal Question Jurisdiction: 28 U.S.C. 1331.

Jurisdiction is proper if the claims “arise under” federal law.

2. “Diversity” Jurisdiction 28 U.S.C. 1332 (d)(2)

a. There are at least 100 members in the class. 28 U.S.C. 1332 (d)(5)(B)

b. The amount in controversy is over $5,000,000.

The claims of all individual class members shall be aggregated to determine whether amount in controversy is over $5m. 28 U.S.C. 1332 (d)(6).

c. Minimal diversity- the requirement is met under any of the following circumstances:

i. Any plaintiff is a citizen of a different state than any defendant.

ii. Any plaintiff is a foreign state or a citizen of a foreign state, and any defendant is a U.S. citizen

iii. Any plaintiff is a citizen of a U.S. state and any defendant is a foreign state or a citizen of a foreign state.

d. 28 U.S.C. 1332 (d)(3) The court may decline jurisdiction if:

i. Between 1/3 and 2/3 of all plaintiffs are citizens of the state in which the action was originally filed, and

ii. The primary defendants are citizens of the state in which the action was originally filed.

iii. The court must consider whether:

A. Whether the claims asserted involve matters of national or interstate interest.

B. Whether the claims asserted will be governed by the state in which the action was originally filed, or by laws of other states.

C. Whether the class action has been pleaded in a manner to avoid federal jurisdiction.

D. Whether the action was brought in a forum with a distinct nexus with the class members, the alleged harm, or the defendants.

E. Whether the number of class members from the state where the action was originally filed is substantially larger than the number of class members from any other state, and whether members of the proposed class are citizens of a substantial number of states.

F. Whether similar claims have been filed on behalf of the same persons within the 3 years preceding the filing of the action.

e. 28 U.S.C. 1332 (d)(4)

This is sometimes called the “local controversy exception.” The court must decline jurisdiction if:

i. 2/3 or more of all plaintiffs are citizens of the state in which the action was originally filed, and

ii. At least one defendant is a defendant whose alleged conduct forms a significant basis for claims asserted, and from whom significant relief is sought, and

iii. The principal injuries were incurred within the state where the action was originally filed.

iv. No other class actions have been filed asserting the same or similar claims against any of the defendants during the preceding 3 years.

Products Liability Part 1: Overview

picjur — Tue, 16 Nov 2010 02:19:02 +0000

Most courts hold manufacturers and suppliers of defective products strictly liable for injuries caused by the defect. Note that anyone in the chain of distribution may be held liable, as long as they are commercial suppliers of the product. Those who occasionally sell products (i.e., selling a used car) will not be held strictly liable.

The elements of a cause of action are:

A) a defective product;

B) that the defect is the actual cause of the plaintiff’s injury;

C) that the defect is the proximate cause of the injury; and

D) that the plaintiff suffered injury. Note that the injury must be greater than the loss of the product itself. If the plaintiff is only seeking compensation for the loss or failure of the product, he or she should seek to recover through a warranty theory.

E) Defenses to products liability are:

1) Assumption of risk,

2) comparative fault, and

3) misuse.

Some courts consider an allegation of misuse as an attack on the plaintiff’s prima facie case (see Part 4) .