The role of fault in contract law: Unconscionability, unexpected circumstances, interpretation, mistake, and nonperformance

Michigan Law Review

Volumn 107, Issue 8, 2009, Pages 1413-1430

  Eisenberg, Melvin Aron ^a,b  

^a UNIVERSITY OF CALIFORNIA   (United States)

^b Columbia Law School ^*  (United States)

Author keywords

[No Author keywords available]

Indexed keywords

EID: 66749125797     PISSN: 00262234     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Article

References (64)

1. RESTATEMENT (SECOND) OF CONTRACTS ch. 11, introductory note (1981).
2. 3 E. ALLAN FARNSWORTH, FARNSWORTH ON CONTRACTS § 128, at 195-196 (3d ed. 2004).
3. For convenience, hereinafter I will use the term, "contract" to include contract terms.
4. See, e.g., Campbell Soup Co. v. Wentz, 172 F.2d 80 (3d Cir. 1948);
5. McClure v. Raben, 33 N.E. 275 (Ind. 1893);
6. Richey v. Richey, 179 N.W. 830 (Iowa 1920);
7. Balt. Humane Impartial Soc'y v. Pierce, 60 A. 277 (Md. 1905);
8. Mersereau v. Simon, 8 N.Y.S.2d 534 (N.Y. App. Div. 1938).
9. See, e.g., Loeb v. Wilson, 61 Cal. Rptr. 377 (Ct. App. 1967);
10. Schlegel v. Moorhead, 553 P.2d 1009 (Mont. 1976);
11. McKinnon v. Benedict, 157 N.W.2d 665 (Wis. 1968).
12. See UNIF. CONSUMER CREDIT CODE § 5108 (1974);
13. UNIF. RESIDENTIAL LANDLORD AND TENANT ACT § 1303(a)(1) (1974);
14. UNIF. CONSUMER SALES PRACTICES ACT § 4 (1971).
15. RESTATEMENT (SECOND) OF CONTRACTS § 208 (1981).
16. RESTATEMENT (SECOND) OF PROP.: LANDLORD & TENANT §5.6 (1977).
17. See, e.g., Williams v. Walker-Thomas Furniture Co., 350 F.2d 445, 449 (D.C. Cir. 1965) (relying in part on analogy to the 1962 version of § 2-302).
18. See Melvin Aran Eisenberg, The Bargain Principle and Its Limits, 95 HARV. L. REV. 741 (1982).
19. Arthur Allen Leff, Unconscionability and the Code-Emperor's New Clause, 115 U. PA. L. REV. 485, 487 (1967).
20. Arthur Allen Leff, Unconscionability and the Code-Emperor's New Clause, 115 U. PA. L. REV. 485, 487 Id.
21. See, e.g., EDWIN G. DOLAN, BASIC MICROECONOMICS 160 (1983). For ease of exposition, I will use the term "price" to include all the terms offered by a seller.
22. Bürgerliches Gesetzbuch [BGB] [Civil Code] Aug. 18, 1896, as amended, § 138(2) (F.R.G.) (emphasis added), translation available at http://www.gesetze-im-internet.de/ englisch-bgb/index.html; accord Schweizerisches Obligationenrecht [OR] [Code of Obligations] Mar. 30, 1911, as amended, art. 21(1) (Switz.).
23. Principles of European Contract Law art. 4:109(1) (1998) (emphasis added); accord UNIDROIT Principles of Int'l Commercial Contracts art. 3.10(1) (2004).
24. RESTATEMENT (SECOND) OF CONTRACTS § 261 (1981) (emphasis added); see also id. § 266(1) (existing impracticability);
25. id. § 265 (discharge by supervening frustration).
26. Id. § 272(2).
27. The hospital is alternatively named in the four decisions as "a chronic diseases hospital in Boston" and the "Chronic Disease Hospital and Nurses' Home."
28. 105 N.E.2d 476 (Mass. 1952).
29. 133 N.E.2d 484 (Mass. 1956).
30. Id. at 485.
31. See, e.g., RESTATEMENT (SECOND) OF CONTRACTS § 377.
32. Ahern, 133 N.E.2d at 486.
33. Id. (emphasis added).
34. Id.
35. 141 N.E.2d 715 (Mass. 1957).
36. Id. at 716.
37. 155 N.E.2d 437 (Mass. 1959).
38. Id. at 439.
39. Id.
40. Id.
41. Id. at 440-441 (citations omitted).
42. RESTATEMENT (SECOND) OF CONTRACTS § 201(2)(b) (1981).
43. See 2 H & C 906, 159 Eng. Rep. 375 (Ex. 1864).
44. 159 Eng. Rep. 375 Id. at 375.
45. The facts are as stated in the buyer's answer, to which the seller demurred. 159 Eng. Rep. 375 Id.
46. 159 Eng. Rep. 375, Id. at 376.
47. RESTATEMENT (SECOND) OF CONTRACTS § 20(1).
48. A.W. Brian Simpson, Contracts for Cotton to Arrive: The Case of the Two Ships Peerless, 11 CARDOZO L. REV. 287, 295 (1989).
49. A.W. Brian Simpson, Contracts for Cotton to Arrive: The Case of the Two Ships Peerless, 11 CARDOZO L. REV. 287, 295 (1989) Id.
50. RESTATEMENT (SECOND) OF CONTRACTS § 201(1).
51. Id. § 201(2).
52. Part IV draws on arguments I previously made in Melvin A. Eisenberg, Mistake in Contract Law, 91 CAL. L. REV. 1573 (2003).
53. Mkt. St. Assocs. Ltd. P'ship v. Frey, 941 F.2d 588, 594 (7th Cir. 1991).
54. See, e.g., United States v. Braunstein, 75 F. Supp. 137, 139 (S.D.N.Y. 1947);
55. Speckel v. Perkins, 364 N.W.2d 890 (Minn. Ct. App. 1985);
56. see also 1 SAMUEL WILLISTON & GEORGE J. THOMPSON, A TREATISE ON THE LAW OF CONTRACTS § 94, at 297 (rev. ed. 1936).
57. Anthony T. Kronman, Mistake, Disclosure, Information, and the Law of Contracts, 7 J. LEGAL STUD. 1,5(1978).
58. See, e.g., RESTATEMENT (SECOND) OF CONTRACTS § 153(a) (1981).
59. See, e.g., Glover v. Metro. Life Ins. Co., 664 F.2d 1101, 1105 (8th Cir. 1981) ("In all the circumstances, it would be unjust, in our view, for [an unknowing mistaken payee] to keep the money. This result disappoints an expectation on her part that she had every reason to believe, at one time, to be legitimate, but to decide otherwise would be intolerably unfair to [the mistaken payor].").
60. See Donovan v. RRL Corp., 27 P.3d 702 (Cal. 2001).
61. McMaster Univ. v. Wilchar Constr. Ltd., [1971] 3 O.R. 801, 811 (Can.);
62. see also Stepps Invs. Ltd. v. Sec. Capital Corp., [1976] 14 O.R.2d 259, 271 (Can.).
63. Thomas M. Scanlon, Promises and Practices, 19 PHIL. & PUB. AFF. 199, 214 (1990).
64. Barry Nicholas, Fault and Breach of Contract, in GOOD FAITH AND FAULT IN CONTRACT LAW 337, 345 (Jack Beatson & Daniel Friedmann, eds., 1995).