Contracts - Session 10
Transcript
SFV Room 200B: You automatically get into, like.Karo Koshkaryan: Yes.
Karo Koshkaryan: We’ll see time.
SFV Room 200B: Which is in session.
SFV Room 200B: Wow, sweet phones.
SFV Room 200B: some issues.
SFV Room 200B: Fantastic.
SFV Room 200B: Thanks.
SFV Room 200B: Ruven Abhadjanian? Here.
SFV Room 200B: Roberto Campos, right here. Marco Ralowski.
SFV Room 200B: Brianna Camaro-Estrada? Here.
SFV Room 200B: Joseph Ajijian? Here.
SFV Room 200B: Robert Nazarian?
SFV Room 200B: Oops.
SFV Room 200B: Robert Azarian?
SFV Room 200B: Go ahead and proceed. Here, Professor. Danny Ramirez? Here. Rachel Zone? Here, Professor.
SFV Room 200B: Shrug.
SFV Room 200B: Lucine Abrahamian?
Lusine Abrahamian: Yes.
SFV Room 200B: Surin Abramian? Here. Edwina Gillian?
Edwin Aghilian: Here, Professor.
danielarmin: Daniel Armin? Here.
SFV Room 200B: Carmen Boschian?
Armen Bashian: Good evening.
SFV Room 200B: Good evening. Franz Biambi?
frantzbiamby: Here.
SFV Room 200B: Victoria Briones.
Victoria Briones: Beard.
SFV Room 200B: Giannic Carnos, Solidon Hernandez. Here. Good evening.
SFV Room 200B: If you’re here, please stop.
SFV Room 200B: Oopsie, did I induct you? Yeah.
SFV Room 200B: Juan Esparza.
Juan Esparza: Here…
SFV Room 200B: Yes. That’s much nicer. I don’t think they have the name correct here. Is it E-G-I-N-E?
SFV Room 200B: Yes, is that how you… Josue Flores?
Josue Flores: Air Professor.
SFV Room 200B: Reiner Goltzient? Golazian.
SFV Room 200B: Honest Galazian?
SFV Room 200B: Sona Gazariana?
Sona Ghazaryan: Here, Professor.
SFV Room 200B: Kevin, Kolovati.
Kevin Golovaty: Here.
SFV Room 200B: Cesar Gonzalez.
Cesar Gonzalez: Here, Professor.
SFV Room 200B: Yeah. Falls and Zalets?
SFV Room 200B: Paul Gonzalez?
SFV Room 200B: Ana, Lobien? Here, Professor.
SFV Room 200B: Rank Drummy, hello, Facebook.
Rami Helo: Here, Professor.
SFV Room 200B: Karen, Hernandez-Vazquez.
SFV Room 200B: Let’s check.
Karen Hernandez: Dear Professor.
SFV Room 200B: Ruben Hunanian sold?
Ruben Hunanyan: Hi, here, Professor.
SFV Room 200B: Help the collective.
SFV Room 200B: reach out, Corian?
SFV Room 200B: Liana Darien?
LIANNA KARIBYAN: Here.
SFV Room 200B: Hello, Professor. Hello. Hello, Pushkarian.
Karo Koshkaryan: Dear Professor.
SFV Room 200B: Oh, I suppose.
SFV Room 200B: Madlena, is that a question? I don’t want to…
maddykoshkaryan: Professor?
SFV Room 200B: I would pay me for my motel?
Adreanne Kumamoto: Here, Professor!
SFV Room 200B: Cynthia Blogger?
Cynthia Llauger: Dear Professor.
SFV Room 200B: Jason Markarian?
Jason Makaryan: Here, Professor.
SFV Room 200B: Sabrina Malecon.
Sabrina Malekan: Here…
SFV Room 200B: Arthur Ms. Lunes?
arthur mazloumian: Here…
SFV Room 200B: Riana Masmanian? Here, Professor. Arman Mirzoyan? Here, Professor.
SFV Room 200B: Sayede Gilani?
zahra movassaghigilani: President, Professor.
SFV Room 200B: Laura Urania called me.
SFV Room 200B: Any skies.
SFV Room 200B: Sebastian Nazor?
SFV Room 200B: Leoni Nazarian? Here.
SFV Room 200B: Lona Nazarian? Here.
SFV Room 200B: Amanda Odin?
SFV Room 200B: Masi Oyaga?
Masie Oyaga: Here.
SFV Room 200B: Alexander Bobretzky.
Alex Poberezhskiy: Here.
SFV Room 200B: Jasmine Purzanjani.
Jasmine Pourzanjani: Here, Professor.
SFV Room 200B: Tina Rosavi?
Fatima Razavi: Good afternoon, Professor.
SFV Room 200B: You’ll need to read.
Yanique’s iPhone: Here, Professor.
SFV Room 200B: Savara Safarian.
Sevada Safarian: Here, Professor.
SFV Room 200B: Isabel Salazar.
Isabel Salazar: Here.
SFV Room 200B: Hi, Salazar Maria.
Karia Salazar: Here, Professor.
SFV Room 200B: Daniel Sheck.
Daniel Sheck: Hi, Professor.
SFV Room 200B: Hi. Susie Shak…
Suzy Shkhrdumyan: Professor.
SFV Room 200B: Cameron Smith.
Cameron Smith: Here, Professor.
SFV Room 200B: Daniel Surya.
Yessenia Soria: Here, Professor.
SFV Room 200B: Ambela Sulahian. Here, Professor.
SFV Room 200B: Clarissa Terrasas.
Clarissa Terrazas: Here.
SFV Room 200B: password.
SFV Room 200B: Daniel Ciflangian.
Daniel Toukhlandjian: Here, here, Professor.
SFV Room 200B: Arthur Loskechian. Here.
SFV Room 200B: McDonald Youssef. Here.
SFV Room 200B: I don’t have… Robert Nazarian.
SFV Room 200B: I don’t have Anard Gautzian. I don’t have Paul Gonzalez.
SFV Room 200B: Anybody else is here.
SFV Room 200B: All right, everybody, good evening. Let’s go to page 237, please.
SFV Room 200B: 17.
SFV Room 200B: So, what are we talking about here? We’re in the area of… Only the area of…
SFV Room 200B: Pre-existing dutiful. Consideration, pre-existing duty.
Yessenia Soria: I’m sorry, Professor, what page again?
SFV Room 200B: 2.307.
SFV Room 200B: consideration, and now we’re talking about the mostly minority of jurisdictions. We talked about the fact
SFV Room 200B: Previously, that if consideration is lacking, There are some applicable substitutes.
SFV Room 200B: Specifically, I told you that 2-209
SFV Room 200B: Basically states that if you modify a contract.
SFV Room 200B: under certain circumstances, you don’t need consideration, right? 2-209.
SFV Room 200B: We also talked about something called promissory stop, which we’re going to get to. That’s your last resort, promissory stop. Everything else fails.
SFV Room 200B: You just jump in to promise your stop, right? And then I said a minority of jurisdictions have moral obligations, and minority of jurisdictions, more minority of jurisdictions, recognize unforeseen difficulty, which, by the way, I think was created by Justice Cardozo.
SFV Room 200B: And if you don’t know Cardozo.
SFV Room 200B: go talk to Steve Zand. Say, Zand, give it to him! And he will give it to you. He’ll tell you who Justice Cordozo was. I mean, the guy was, like, a genius, I think. Says the Michael Jordan of… He was the Michael Jordan of writing, I think, legal decisions, yes.
SFV Room 200B: Exactly. So… This one, though, is not by Justice Cordozo.
SFV Room 200B: This is, what is it? Shorts? Rick versus bump.
SFV Room 200B: Watch?
SFV Room 200B: Anyone? I can do it.
zahra movassaghigilani: Perfectly, I can…
SFV Room 200B: We have a volunteering class. So, this was a contract, back in 1917. It was a contract between Mr. Schwartzrig and Boomin. So, Schwartzrig contracted with Boomin for an employment contract, $90 a week. He was supposed to do some work for him, right?
SFV Room 200B: So, after they signed the contract for $90 a week, Mr. Schwartzberg received another offer for employment from somebody else for $115 a week. Like, today’s money will be, like, $3,600 a week, pretty much.
SFV Room 200B: So, he goes back to Boomin and says, well, I received an offer from somebody else, and I’m gonna take it, it’s more money. He says, well, I’ll pay you $110 a week if you stay with me. So what they do… One, they were under contract. Exactly. So what they do is they destroy the original August contract, and they pretty much signed a new contract for $110, right? What does that do? What does that destruction mean?
SFV Room 200B: it rescinds the original contract as a mutual consent that that first contract no longer… So it was a rescission by conduct? By conduct, by both parties, right.
SFV Room 200B: So they signed a new contract, and then after a while, Mr. Schwartzrig gets fired. He’s let go, so he sues Boomin for, the rest of the, damages for the year.
SFV Room 200B: So the court had to decide… so the judge tells the jury, instructs the jury that, hey, if you find that the original contract was destroyed, then… Oh, rescinded. Rescinded. Then, based on that, the new contract will take precedent, right? So the jury finds that, yes, the original contract was no longer good, it was…
SFV Room 200B: It was rescinded by both parties.
SFV Room 200B: And they fine for the plaintiff, Mr. Schwarzrig. However, the judge, the judge says that I’m gonna vacate that verdict and, dismisses the case.
SFV Room 200B: So, on appeal, it gets reversed, and they uphold the jury’s verdict, saying that, well, here’s the thing, if the original contract was never rescinded, and it was a modification, that wouldn’t work, because he already had pre-existing duty to do the work for $90.
SFV Room 200B: The question is whether that original contract was rescinded. And if it was, then in this case, the new contract will take, legal effect, because it’s a whole new contract. There was no modification, there was nothing like that. So, the appellate court found that, yes, the original contract, which was in August.
SFV Room 200B: was no longer good. It was rescinded by both parties, and they both consented. It was destroyed. So the new contract is the,
SFV Room 200B: The legal document is gonna,
SFV Room 200B: control this, this contract. So based on that, they filed for the plaintiff.
SFV Room 200B: Excellent. That was pretty good. You actually converted the amount to today’s dollar. Because I was curious, I was like, how much is it gonna be worth? $113 today? I suppose $3,000 today doesn’t mean much anyway.
SFV Room 200B: I’ll be 12K a month, pretty much. Oh, that’s a lot of money. I’ll take it. It’s pretty good.
SFV Room 200B: Okay, so a couple of things. That was great, by the way. A couple of things. First of all.
SFV Room 200B: One thing you want to keep in mind is that
SFV Room 200B: Technically, any modification could be, listen to me very carefully.
SFV Room 200B: Could be treated as a rescission of the first original contract is what?
SFV Room 200B: Both parties confirmed.
SFV Room 200B: if the modification specifically stated that it’s a rescission of the original contract. Otherwise, it is not.
SFV Room 200B: So, the first rule that you want to write in your notes and keep in mind is that if there is, in fact, a rescission, as it was eloquently described, it has to be expressed by the parties.
SFV Room 200B: It can be expressed by conducts or by words.
SFV Room 200B: But it has to be. That has to be a… there has to be a finding. And as you clearly indicated, this was an issue for the jury to decide why.
SFV Room 200B: Why didn’t the judge make that decision, whether or not there was a rescission?
SFV Room 200B: Because it’s for the jury to look at the facts. Why? To see if there’s… Why was it important to go… for this to go to the jury in this case?
SFV Room 200B: Because they’re the fact finder, the judge. Yeah, but it was that important. Was it subjective, that’s right.
SFV Room 200B: Something else.
SFV Room 200B: No, I guess, I guess the case… How did they rescind? Did they actually say, we rescind the original contract? They destroyed the document. So by conduct? Yes. Yeah, so by conduct. So that means somebody had to interpret that fact.
SFV Room 200B: That’s why it was a factual decision.
SFV Room 200B: Do you understand? If, literally, they had put into a contract that the original contract is hereby rescinded, that is not a factual issue for the juries. It’s literally a judge will decide whether or not the parties rescinded the original contract. There would be a prior… it would be the bench officer that would make that decision, right?
SFV Room 200B: But in this case, because it was all factual.
SFV Room 200B: The court says, hey, I’m just going to charge the jury to make that decision. What is significant here, I’ll get to you guys, both of you, in a second.
SFV Room 200B: What’s significant here is that
SFV Room 200B: the rescission and this new contract was all simultaneous. It was at the same time, which is why this case is criticized all over. I mean, if you shepherdize, we used to call it shepherdize, if you… if you research this case, you will see how many cases are saying, what the hell is this?
SFV Room 200B: Why? Because the guy who was already under contract. He basically forced the other party to say, right? He’s like, I’m leaving. He’s like, you’re under contract. I can’t get anybody else right now. Oh, hell, I’ll… let’s just get rid of that contract, give you a new one.
SFV Room 200B: And many courts would say, absolutely not, because you were under a contract, this is what?
SFV Room 200B: What could this be? When we get to the defenses, you will see this would be…
SFV Room 200B: A contract, that is.
SFV Room 200B: Enter its economic duress.
SFV Room 200B: Economic duress, right?
SFV Room 200B: So…
SFV Room 200B: But, as it may, this court says, is perfectly fine, because, hey, the parties mutually agreed to get rid of the original contract, at the same time entered into this new contract, and it was expressed. How was it expressed? By conduct. They both admitted, I think, in court, or in some form.
SFV Room 200B: That they… the contract was destroyed, or reported apart, whatever.
SFV Room 200B: First, and then you. I just wanted to go back on the thing you said to write, like, if there’s a rescission, you said it has to be stated in the new contract for the recession to be valid? No. What I said was…
SFV Room 200B: If the rescission of the original contract is stated in the new contract, that’s a gift, right? That’s easy. Then you can say, oh, the original contract was rescinded. If not, you would have to make a conclusion that there was some form of an express agreement by the parties to rescind the original contract.
SFV Room 200B: whether by conduct, in this case, tearing it up and throwing it away, or I think one of them… I think the employee handed it to the employer, and the employer doesn’t remember what he did with it, but they acknowledged that that contract is no longer a contract.
SFV Room 200B: Right?
SFV Room 200B: So, again, if you see a new contract
SFV Room 200B: Basically, modifying the original contract unless you find
SFV Room 200B: Some language or conduct for recipient
SFV Room 200B: You must be mindful of the fact that this modified contract may be attacked
SFV Room 200B: by, as an example, economic duress, right? Because if you’re already under contract, it would be unfair for me to, right now, in the middle of a semester, go to the dean and say, you know what, Dean? I’m not coming back. I’m not teaching the rest of the class. I want more money. Somebody else offered me more money.
SFV Room 200B: How unfair is that, for him to say, crap, what am I going to do with 56 students? Okay, I’ll pay you more.
SFV Room 200B: That would be unfair. There is a contract for me to teach the entire year, not only just this semester.
SFV Room 200B: Right?
SFV Room 200B: So…
SFV Room 200B: If they wanted to defend against that new contract, the best way to say is that it was economic duress, to say the least, right? And of course, breach of the original contract by me. So, just keep that in mind. This is highly criticized. I mean, highly criticized, this case, but it’s nevertheless in the minority, right?
SFV Room 200B: You said… when you said rescission has to be expressed by the parties, conduct or by, what was the other word you used? Conduct or word?
SFV Room 200B: Is that W-A-R-D?
SFV Room 200B: W-O-R-T. They literally say it, right? So, they may express it by saying it, or put it into a… into an agreement. Piece paper, whatever. So long as you can make that conclusion, right? That the… that both parties… remember, one party cannot rescind the contract.
SFV Room 200B: Right? But only by operation of law. In other words, one party can rescind the contract. If there is a breach, you have that option. Sometimes. We’ll get to that when we get to, you know, talking about this. Okay? Any other questions?
SFV Room 200B: Nope.
SFV Room 200B: All right.
SFV Room 200B: And of course, if you want to read the jury instructions that the court gave, the most important one, I think, is on top of 239.
SFV Room 200B: Then the test is, in the middle of 239, the court says the test question is whether, by word or by act, either prior to or at the time of signing of the $100 contract.
SFV Room 200B: these parties mutually agreed that the old contract from that instant should be null and void. In other words, from that second, which is what the jury, I believe, concluded.
SFV Room 200B: Bottom of the page, the court says, bottom of 239, the court said it has been repeatedly held that a promise made to induce a party to do what, to do that which he had already bound, is already bound by contract to perform is without consideration.
SFV Room 200B: Think about that. In other words, that’s why this case is being criticized so much.
SFV Room 200B: But the cases in this state, while enforcing this rule, also recognize that a contract may be canceled.
SFV Room 200B: By mutual consent, and a new one made.
SFV Room 200B: And I guess the court basically wants to say that the original contract was unfair, both parties recognized that it was unfair, both parties agreed to mutually rescind it. The court did not find any, either party forced into anything. So that’s why the court enforced it.
SFV Room 200B: Angel vs. Maury on… 241? Yes, I do. Thank you.
SFV Room 200B: Angel v. Murray, so the full name of the guy who owns a refuse collection service in the city of Newport, it was James L. Maher, and so he’s the owner of a refuse collection service in the city of Newport. There, in the city, the number of dwelling units suddenly increased.
SFV Room 200B: And he asked the city for more money to cover the costs, and…
SFV Room 200B: The Director of Finance, as it’s just listed in the case, paid him $20,000 at the time to cover the cost, but Mr. Angel here sued because he was claiming the money was illegal at payment, and it should go back to the city, so the funds were no good in his eyes, and…
SFV Room 200B: The issue here that I wrote was.
SFV Room 200B: If unexpected instances arise that need a contract to be modified, such as the number of dwelling units that need to be increased because of the amount of people, is that modification permitted? And in this case, the court ruled that in situations like this, where a contract needs to be modified because of some unanticipated incidents.
SFV Room 200B: then the modification is fine and does not require additional consideration. So it should never really revolved around, like, the illegal money or whatever it was, how the $20,000 came, but if the modification requires additional consideration, but in instances like this, the court rules no.
SFV Room 200B: Excellent, thank you. So, this is actually rather simple. The court adopts the restatement, second of contracts. It basically says modification is valid in a case like this.
SFV Room 200B: But only if the unforeseen difficulty was actually unforeseen, not by that party.
SFV Room 200B: But by a reasonable person, right? Like an earthquake. Like a massive flood or something. Right, well, some crazy flood or something, yeah. Like this recent thing that we had, storm that we had, you know, every part of my home is leaking.
SFV Room 200B: Seriously. I swear to God, which was not the case last year. So, it’s like, oh my god, over here, oh my god, over there, it’s…
SFV Room 200B: It… it wasn’t foreseen, of course. Okay, so, what was the reason for the modification?
SFV Room 200B: What was the reason that he attempted to modify the contract? Well, because of the sudden increase in, like, the people that needed, housing? Yeah, unexpected and unanticipated increase of 400 new dwellings. Undisputed. That’s a lot of houses. Nobody disputed the fact that, you know, just suddenly this…
SFV Room 200B: Unreasonable number of additional units or homes required his services, right?
SFV Room 200B: And so, let’s see. Okay, the pre-existing duty rule on page…
SFV Room 200B: Let me read you the bottom of 242 and some of 243.
SFV Room 200B: First of all, on 242’s third full paragraph, the second full paragraph, the court says, it is generally held that a modification of a contract is itself a contract.
SFV Room 200B: Which is unenforceable unless supported by consideration. We always start with that premise.
SFV Room 200B: So, if you’re doing a final.
SFV Room 200B: If you see modification, and I guarantee you will, because Dean Frickberg loves modifications.
SFV Room 200B: you gotta talk about this first, that a modification requires new consideration. It’s a contract on its own, on its own, right? Of an acceptance consideration. It’s got to have all the parts.
SFV Room 200B: Then the court says.
SFV Room 200B: Rose is a perfect example of the pre-existing duty rule. Under this rule, this is the pre-existing duty rule, right? There’s a lot of law in this case, by the way.
SFV Room 200B: Under this rule, an agreement modifying a contract is not supported by consideration if one of the parties to the agreement does or promises to do something that he’s legally obligated to do, or refrain, or promises to refrain from doing something he is not legally privileged to do.
SFV Room 200B: So that’s… that’s the second thing. In other words.
SFV Room 200B: the court basically says, here’s the pre-existing duty. That’s one of the ways to not allow a party to unreasonably modify the contract or get away from his legal duties on the contract, right?
SFV Room 200B: And this is pre-existing duty rule is followed by most jurisdictions, the court says.
SFV Room 200B: A small minority of jurisdictions, Massachusetts, for example, finds that there is consideration for a promise to perform what one is already legally obligated to do, because the new promise is given in place of an action for damages to secure performance.
SFV Room 200B: Then the court goes on to say, bottom of page 242, the primary purpose of the pre-existing duty rule is to prevent what has been referred to as hold-up. Who knows what is a holdup yet?
SFV Room 200B: So, hold up is pretty much when…
SFV Room 200B: You start a contract, but then halfway through.
SFV Room 200B: You put the other party in a position where they have no choice but to agree to your new terms.
SFV Room 200B: I think that was the issue with the Alaska Packers, the fisherman case.
SFV Room 200B: So it’s… it’s not fair to the other party, because you put them in a position where… Who does this all the time?
SFV Room 200B: In our… in our lifetime. Who, who… Wives? What type of… Why is it?
Fatima Razavi: General contractor.
SFV Room 200B: That was a good one. I’m not trying to be hilarious, it was the first thing that came on. No, no, no, I’m sure you have a legal reasoning behind that. Let us have it. You’re single, right? No. You’re married? No, not married. I have the guts to say that, yeah.
SFV Room 200B: No, I’m kidding.
SFV Room 200B: Contractors. You spoke from experience. Contractors, don’t they do it all the time? I’m not suggesting all contractors, but many. Yeah, they just, right in the middle of construction, they’re like, wait a second, this is costing so much more, and that, you know, the tariffs, this, that, whatever the story may be.
SFV Room 200B: And they just want to add to the cost of
SFV Room 200B: construction, and basically force the homeowner to pay it, or the property owner, right? Happens all the time. How do I know? Because I get to sue them. A lot. Seriously.
SFV Room 200B: they do this, and the homeowner or the property owner basically says, I’m being forced, and I’m like, you know what? Let them do it.
SFV Room 200B: Tell them, fine, you agree to it. And then I’ll sue them afterwards. Let them finish the work, then we sue them. So when it comes to the final payment, no payment, here’s a lawsuit.
SFV Room 200B: That’s how I usually treat it, right? I don’t let them stop work.
SFV Room 200B: I, I, I say, sign everything. Don’t worry about it.
SFV Room 200B: Right? Get them on team.
SFV Room 200B: Videotape. Audiotape is illegal. Although, if it’s an extortion attempt, then you can audio tape. Wait a minute in California. Videotape is legal, audio tape is legal. Of course it is legal. Yeah, video is legal. Audio is illegal because the other party should have permission, should give you permission if you’re audio recording somebody.
SFV Room 200B: A video. Why is video? I don’t know. Tell the legislature, I have no clue. Is it because maybe they could be seen that they’re being video recorded? No, I think because of,
SFV Room 200B: I think traditionally… well, there are two reasons. One is privacy reasons, but the most important reason, or the obvious reason, is that there is a less chance of
SFV Room 200B: dilution of the video, or making a fake video than fake audio. It’s easy. Have you seen Trump talk about so many different things that you’re like, oh my god, that’s his voice?
SFV Room 200B: Yeah, that’s true. You know?
SFV Room 200B: But…
SFV Room 200B: When you hear the subject, you know that it’s probably not him. Yeah. So, but the bottom line is, I usually encourage… I just encourage somebody, say, go to the… go back to the dealer, the car dealership, and… and record, video record.
SFV Room 200B: the… the…
SFV Room 200B: service advisor telling you, you cannot leave the car here, we have no loaners, and we don’t know how to fix the car, come back in two months. That’s what he was told. And sure enough.
SFV Room 200B: he went to Glendale and recorded a video of the service advisor saying, you have to come back in 2 months, we have 76 or 78 cars here, we don’t know what the problem is.
SFV Room 200B: I’m like, wonder if…
SFV Room 200B: So did it get lemon? So did it get lemon? I’m sorry? So did the car get lemon? I think it’s automatically lemon. It’s a safety issue. Was it a lemon trick? Electric vehicle? The car basically… we don’t… they’re claiming it’s a software issue, but the car stops in the middle of the freeway. Twice, it happened twice. Why? And they’re saying they have 70s plus with the same problem, so I think it’s a major, major line defect.
SFV Room 200B: To claim… to claim, unforeseen circumstances, to pretty much modify the contract without any consideration.
SFV Room 200B: Does the contract have to be already started, or you have to have it not being performed yet? No, it’s a contract that is not fully performed yet. It doesn’t even have to start. So it can be in the middle of it, you can… Yeah, absolutely, sure. Again, that’s why there are a minority of jurisdictions, right? Most people will say you have to eat it
SFV Room 200B: You have to eat the damages, eat the cost. It’s not our problem, you know? But there’s also those cases where you may recall, the ship coming from, you know, the Middle East.
SFV Room 200B: to the United States, or vice versa, and then there’s a… there’s a sudden issue, the war goes on, and then the Hormuza canal is closed, and now they have to go all around
SFV Room 200B: you know, the shipping cost, yeah, all around the world, basically, to get… and still, even in that case, the court said, - too bad, so sad. You have to eat the cost.
SFV Room 200B: You could have anticipated that that might happen, although… Who anticipates what?
SFV Room 200B: Right? Okay. For video recording, do you have to let the other party know that you’re gonna video… No, not necessarily. No. I mean, if they’re naked, yes. At the dealership, they’re not. Usually. Yeah.
zahra movassaghigilani: Professor, I have a question before we move on.
zahra movassaghigilani: So, in the case we read that, like, modifying a contract is not supported, if, it doesn’t have consideration, but then we also talked that consideration is not required for, if you want to modify the contract, so I’m a bit confused, like, is consideration required for a modified contract, or no?
SFV Room 200B: As a general rule, consideration is absolutely required for a modification 1.
SFV Room 200B: Why? Good.
SFV Room 200B: Well, simply put, you just said earlier that anytime there is some sort of modification, it acts as, like, a new contract. Exactly! Modification is a new contract!
SFV Room 200B: It’s not the same terms, it may be the same parties, but it’s a new contract, right? Absolutely it requires modification. What we said, what we are talking about, are exceptions.
SFV Room 200B: Exceptions in a minority of jurisdictions, such as promissory stoppel 2-209, moral obligations, unforeseen difficulties, and in one case, that basically the parties agreed to rescind the original contract and just enter into a new one.
SFV Room 200B: Yes. Like, that coat-making case, even if, like, the job is the same, it still requires it, because it’s new terms. Of course, anything that changes, it’s a modification, right? Anything, anything at all. Now, obviously, if both parties enter into a new promise.
SFV Room 200B: Like, for example, the contractor comes and wants to modify the agreement between the contractor and the homeowner, and says, hey man, I want $20,000 more, I can’t finish this. This is impossible. And the homeowner doesn’t say, okay, I’m gonna screw you later by suing, you know, whatever. The homeowner says, you know what?
SFV Room 200B: I need a new roof on this part of the house. Would you agree to do that? Then I’ll give you the $20,000.
SFV Room 200B: Now, that would be a mutual promise. There is consideration there, because the homeowner is giving up something, but it’s also gaining something that otherwise would not have.
SFV Room 200B: obtained, you understand? So, think about that, but usually, it’s one-sided. One party basically comes, just like this one. The waste management guide. Comes and says, you know, I want more money.
SFV Room 200B: And again, in most jurisdictions, like California, he probably would be screwed.
SFV Room 200B: Right? He would have to do the work, and eat up the cost.
SFV Room 200B: So that’s why you have to draft your contract very carefully.
SFV Room 200B: And that’s why I told all of you before, I’m sure, don’t draft anything.
SFV Room 200B: Other than settlement agreement sometimes, because you just have to, don’t draft anything unless you’re a drafter. If you’re not.
SFV Room 200B: have a huge malpractice insurance. Trust me. Oh, yeah. I’m telling you, because you won’t know until there is a breach
SFV Room 200B: when you get a lawsuit by your door, and you go, oh my god, I wrote this 10 years ago, why am I getting sued today? Isn’t there a statute of limitations? No, it’s not.
SFV Room 200B: Not from the… from the time of breach, yes.
SFV Room 200B: From the party knew or should have known that you screwed up
SFV Room 200B: Don’t do it. I’ve seen so many.
SFV Room 200B: So many. And you know, the ones that draft contracts, like my wife’s law school classmate.
SFV Room 200B: I think she makes $4.50.
SFV Room 200B: $450,000 a year.
SFV Room 200B: All she does is draft contracts.
SFV Room 200B: All day long. State contracts for anything? She writes contracts between, I think, banks and foreign countries or something. Just one person, or is it a group? No, there’s a group of them. I see. There’s a group of them. That’s pretty much what my niece is doing now, is… in London, is…
SFV Room 200B: Drafting contracts, again, between sovereign, sovereign countries.
SFV Room 200B: And she says.
SFV Room 200B: 20 lawyers have to read this damn thing before it goes out the door. Like, literally goes through, like, 15 to 20 lawyers. The very famous case with… Because, look, the damage is huge. We’re talking billions. Wow. Right? You make it… you screw up, and you end up in federal court. Who’s going to get sued? First, the lawyer.
SFV Room 200B: And they have huge malpractice, right? And small firms don’t ever do that.
SFV Room 200B: Because you just… you just can’t afford to, right? And trust me, they… they hire geniuses. They look at their writings, and they
SFV Room 200B: I may have mentioned before, I read my niece’s,
SFV Room 200B: what was it? The law, editor, whatever, in her law school.
SFV Room 200B: I could not believe that one person wrote that.
SFV Room 200B: I mean, I could not even understand half of it. It was so difficult to… not… I’m serious. They only hire the people that can write, like, really write. Not just think, but they can write. It’s extremely important. I’m assuming in 5 years, AI is going to probably do most of that work.
SFV Room 200B: That’s, like, the two major, technology companies where they suit each other. Like, it was, like, Apple and Microsoft or something, and in one of the contracts, it wasn’t listed on how they should get the form of payment, so they delivered the form of payment in 18-wheeler.
SFV Room 200B: trucks of nickels. Oh my god. You don’t remember that? No, they literally delivered, like, millions of dollars in nickels. Yeah, and they gave them the money and nickels. That’s crazy. Because the contract never stated how they got… how they wanted to get their money. That’s really… I don’t know if that’s malpractice, you know, but I’m just… I’m taking the class time to tell you.
SFV Room 200B: Please don’t draft contracts. Trust me on this.
SFV Room 200B: Even if your cousin says, look, I’m just doing this little deal, it’s $20,000, no thank you.
SFV Room 200B: Just say no once. I’ve done it too many times, and got burned, not screw up, got burned by family, to tell you, especially when it’s family, and they tell you they want something, just say no. I don’t do that. You did it yesterday, but I don’t do it as of today.
SFV Room 200B: Sorry. Just say no. Trust me, it’s like drugs. Family is like drugs. You do that, you’re screwed, yes. On an essay, under the UCC, if there’s a modification, should we think 2207?
SFV Room 200B: No. 2207 has to do with Battle of the Forms. That has nothing to do with modifications. It has to do with what comes in.
SFV Room 200B: Right? What becomes part of the contract? I would answer you this way. If there’s a 2-209 argument, which we’re coming up to that case soon, tonight.
SFV Room 200B: I would say focus on whether or not they entered into an agreement in good faith, because that’s all…
SFV Room 200B: UCC requires. Although it’s 1-I think, 302, whatever, we don’t test that, right? We only test Article 9, as I told you before, so you don’t need to memorize that stuff. All you need to know is that
SFV Room 200B: The law recognizes, even a common law, by the way, that you have to act in good faith.
SFV Room 200B: and deal fairly. So the courts will look to see if that modification was fair and equitable. If it’s not, they won’t enforce it.
SFV Room 200B: If it is, they don’t need modification. All they need is for you to be fair. Sort of like if this, waste management guy was actually selling something to the city, if it was selling something, meaning goods.
SFV Room 200B: and he was subject to 2-209, all he had to prove was good faith.
SFV Room 200B: I acted in good faith when I asked for more money.
SFV Room 200B: Nobody had to show… and it would not be a minority of jurisdictions. 48 states, and I think as of now, 49 states have recognized or adopted, I should say, UCC. So, you know, what he says would go in almost every state, right?
SFV Room 200B: Okay, I think that was… I was gonna… and the lady on Zoom, I hope I answered your question.
SFV Room 200B: 2 dash… I’m sorry, 2… page 243.
SFV Room 200B: No, actually, I don’t want to read that, it’s a waste of time. You guys can do it yourself.
SFV Room 200B: Here, the modern trend, on page 244, top of 244, the court says.
SFV Room 200B: The modern trend appears to recognize the necessity that courts should enforce agreements modifying contracts when unexpected or unanticipated difficulties arise.
SFV Room 200B: During the course of the performance of the contract, even though there is no consideration for the modification, as long as the parties agree voluntarily. So this one happens to say, during the course of.
SFV Room 200B: Not prior to the start, but during the course, something happens, right? I’m assuming that if before you start performance, if something happens.
SFV Room 200B: It may stimulate modification, but,
SFV Room 200B: You know, who knows, that you may… that you may mutually agree to a rescission of the contract altogether.
SFV Room 200B: Okay. Anybody, any questions? Anybody has any questions or comments before we go to the next case? Yes, sir? Right under it, it says 2-209 subsection 1, which has been adopted by the United States. An agreement modifying a contract for the sale of goods needs no consideration to be binding? Yeah.
SFV Room 200B: So, when it comes to sale of goods, we don’t need a consideration? That’s correct. When it comes to the sale of goods, it, by the way, 2-219 is in the back of your book, and I did lecture about it.
SFV Room 200B: All you need to talk about
SFV Room 200B: is that no consideration is necessary, but good faith is absolutely necessary. It’s the only way the court will balance the rights of the parties. Did you modify it in good faith, or are you trying to screw the other guy for more money, or something else? And if it’s the latter, then of course it won’t be enforced.
SFV Room 200B: Kibler versus Frank Garrett, yes, ma’am?
SFV Room 200B: The plaintiff was hired by the defendant to harvest his wheat crop. There was no agreement on the price to be paid, but the price could be affected by the circumstances that was mentioned. When the work was complete, the plaintiff sent a bill based on 25 cents per bushel.
SFV Room 200B: He then sent the corrected bill based on 20 cents per bushel, amounting to a total charge of $876.20.
SFV Room 200B: Defendant responded with the check for $444, and the letter stating that the $444 was 50% more than what defendant paid the previous year.
SFV Room 200B: For the same work that he completed this year. And in this letter, the defendant also mentioned that the amount the plaintiff requested is ridiculous. The plaintiff consulted with his attorney if he can cash the check out, but did not see the fine print on the check.
SFV Room 200B: Which stated that by endorsement, this check when paid is accepted in full payment of the following account.
SFV Room 200B: With his attorney’s approval, plaintiff deposited the check and brought suit against defendant. After plaintiff evidence was presented, the judge dismissed his claim on the ground of court unsatisfaction.
SFV Room 200B: And the issue here was that whether the letter and the check and the cashing of the letter constituted an accordance satisfaction.
SFV Room 200B: The rule was that to create an approval and satisfaction in law, there must be a meeting of minds of the parties upon the subject, and an intention on the part of both, to make such an agreement.
SFV Room 200B: And in this case, although there was no showing that the defendant managed to the plaintiff’s intention to pay no more than the amount, which he remitted, and the printed notation was insufficient to
SFV Room 200B: engendered an accordance satisfaction, but the events leading up to the delivery of the check and the circumstance of its cashing provided more than adequate evidence that the plaintiff knowingly cashed the check and the full payment and satisfaction of the death
SFV Room 200B: For which it had been tendered, and this little inexorable to an important satisfaction.
SFV Room 200B: Thank you, very, very good. First of all.
SFV Room 200B: This is just me, you don’t have to follow my rule, but anytime my client says, should I cash the check? My answer is no.
SFV Room 200B: Absolutely not.
SFV Room 200B: Unless the other party in writing agrees that this is a partial payment.
SFV Room 200B: then don’t. That’s my rule. I know many lawyers that say, no, just cash and sue, right? Obviously, if there’s language, look at,
SFV Room 200B: 1990, UCC3-311, debtor must state full satisfaction of a claim on the instrument, right? That’s what the UCC requires.
SFV Room 200B: Because they want to make sure there’s no ambiguity, right? It’s clear that you’re paying… every time I write a check to… those of you who work for doctors or lawyers, you probably know.
SFV Room 200B: when I write a check for medical providers, I make sure that in the note, you know, at the bottom of the check, I write in full and final satisfaction of all liens, bills, etc, etc.
SFV Room 200B: Right? I always do that, just to make sure that if they cache it, I have an argument for an according size, right?
SFV Room 200B: What is required for an accordance satisfaction to be successful?
SFV Room 200B: What are the things that we look for
SFV Room 200B: What are the things that you would look for in your final for an accordance satisfaction to be successful? So, meeting of the minds?
SFV Room 200B: Okay… Consideration.
SFV Room 200B: What is the consideration here? Bargain for exchange. That’s a good… that’s a good thing to say, but… but explain to me what that means. What is consideration under accordance satisfaction?
SFV Room 200B: Anybody.
SFV Room 200B: Go back to it? Okay.
SFV Room 200B: But the act of a court and satisfaction. Sir… Does it offer an acceptance? Yeah, pretty much, yes. When there is a disputed amount, an unliquidated amount.
SFV Room 200B: Okay?
SFV Room 200B: on liquid… what I lectured before, if you recall, I said.
SFV Room 200B: reasonably, legitimately disputed. Remember I said, I think I went to UCLA, they billed me thousands of dollars when I went to see my doctor, I’m like, wait a second, how come you guys are billing me for hospital? I didn’t go to the hospital. It just so happens that her office
SFV Room 200B: He’s in a hospital.
SFV Room 200B: Right? And my doctor primarily, 99% or 95% of the time, only sees women, not men. Right? But I just love her so much. She was my wife’s doctor, and my wife asked years ago, and she agreed to see me as a patient, regular patient.
SFV Room 200B: But every time I go there, I get a bill from UCLA for several couple of thousand dollars. No joke.
SFV Room 200B: And I’m just literally just walking into our office. It just so happens that our office is in a building where there’s a hospital.
SFV Room 200B: And every time I have to fight with insurance and fight with UCLA and say, look, I didn’t go to the damn hospital!
SFV Room 200B: I didn’t stay anywhere, I just saw my doctor for 15 minutes, that’s it.
SFV Room 200B: there is a legitimate, in my mind at least, there is a legitimate dispute about the amount that is owed for the service. Make sense? Now, if I write a check.
SFV Room 200B: for $500 instead of $2,000. And I make it clear on the instrument that this is… well, of course, nobody writes according to satisfaction.
SFV Room 200B: But I would say this is in full satisfaction of your bill.
SFV Room 200B: What is the act of… Tendering the check, meaning giving the check to them.
SFV Room 200B: What is it called under the term accordance satisfaction? That’s the accord. It’s the accord very good. Tendering of that dispute or that compromised number is the accord. And what is the satisfaction?
SFV Room 200B: If they cash the check, that’s… Cashing the check, very good. So if they don’t cash the check, there is no accordance satisfaction. There may be an attempt at the court, but there is no satisfaction. Once they put it through, too bad you didn’t read the bottom of the check. That’s pretty much what this says, right? You should have.
SFV Room 200B: You could’ve, you should’ve, right?
SFV Room 200B: Okay. Does 3-311 apply to the services I got from my doctor?
SFV Room 200B: UCC3-311, does that apply to the services? It’s not sale of goods.
SFV Room 200B: She wasn’t selling me anything, even though she may have prescribed medication.
SFV Room 200B: Keep in mind that if you, in your final, you argue that her prescribing medication to me was a UCC problem, and now you have a hybrid issue, I’m gonna find your house.
SFV Room 200B: I’m gonna come with a gun.
SFV Room 200B: Okay? A BB gun. But nevertheless, right? And just so we can go target practicing together. Right? Don’t do that! You know how many people do that? It pisses me off.
SFV Room 200B: A doctor is not in the business selling drugs. Well, they are. You don’t want to mention that. Not officially. Not officially, right? They facilitate.
SFV Room 200B: But you get my point? A lot of people literally write, oh, this is a hybrid question, because the doctor wrote prescription that is actually selling drugs to the patient, and therefore, you have a hybrid question. What is the predominant purpose? The predominant purpose is for you to get an F,
SFV Room 200B: That’s the purpose.
SFV Room 200B: It’s an instant fail part. It’s not an instant fail. Do you know how much you’re gonna piss off the grader?
SFV Room 200B: Do extra work. Because, no, no, because they know you didn’t get it.
SFV Room 200B: You just absolutely did not get it.
SFV Room 200B: the contract only involves me going to the doctor to get what? Medical services. Yeah.
SFV Room 200B: Now, obviously, if the doctor literally sold me medication right there, absolutely hybrid, right? Says, okay, use this. Like, my father was a physician, and I know he didn’t sell, because that… I don’t… I think that was not legal, but… but he had a lot of…
SFV Room 200B: samples in his office, and I know people would come to his clinic, he would literally say, try this, see if it works, try that, and he would just give him samples, right?
SFV Room 200B: But he wasn’t selling them. It would still be
SFV Room 200B: A potential hybrid question that you would hopefully dismiss immediately by saying the doctor was not selling, nor was he in the business of selling drugs.
SFV Room 200B: He was providing a service. It’s not a hybrid question.
SFV Room 200B: And those that actually do, and write one page about it, just because they want to tell me they know what hybrid is.
SFV Room 200B: I’m just thinking, you just shot yourself in the foot. You’re already at a seat, frankly.
SFV Room 200B: If you’re lucky, probably C+.
SFV Room 200B: I don’t want to be rude about this, but…
SFV Room 200B: There’s some things, and I said, you can make any argument, anybody can make any argument, but it… but it’s got to be… makes… make sense based on the facts. Can you imagine if you go to court, and you make arguments like that in front of a court, in front of a judge, and the judge starts laughing at you in front of your client? That’s exactly what we’re doing when we’re grading papers.
SFV Room 200B: Except I’m not laughing, I’m crying. I’m pissed.
SFV Room 200B: Because I care for all of you. I don’t want you to make that mistake.
SFV Room 200B: Don’t write bullshit hybrid questions, I don’t like you.
SFV Room 200B: The facts will make it very clear Trust…
SFV Room 200B: I bought a laptop. Together with that laptop, I bought a service contract.
SFV Room 200B: That’s pretty obvious.
SFV Room 200B: That you have to talk about a potential hybrid.
SFV Room 200B: Yeah?
SFV Room 200B: Cool.
SFV Room 200B: Any questions?
SFV Room 200B: All right, there are several questions and problems that we have to do on page 248.
SFV Room 200B: Problem one on page 248, I think I and one of the deputies in the back of the room discussed previously, so we don’t have to kill that one. You probably have read the question where the officer has a duty. I think you mentioned the officer already has a pre-existing duty to the public.
SFV Room 200B: Right? So, he can’t say, okay, I got the suspect, give me the money. Can’t do that. As the court said in D-E-N-E-N-N-E-Y versus report. Repair.
SFV Room 200B: to Kentucky case, 1968, which is the subject of this question number one. The court said that would skirt the duties of the officer.
SFV Room 200B: That’s how the court…
SFV Room 200B: and shrink his duties. In other words, the court says, we’re not going to shrink the officer’s duties.
SFV Room 200B: Right? It’s… it’s his or her duty to go catch the guy.
SFV Room 200B: Okay, so, problem number two.
SFV Room 200B: Defendant, an association of
SFV Room 200B: Canaries hired a crew of sailor fishermen to sail their vessel from San Francisco to Bristol Bay, Alaska, to fish for salmon and sail the vessel back to San Francisco after the fishing season.
SFV Room 200B: They were to be paid $50 run money and 2 cents per fish caught.
SFV Room 200B: On arrival, they complained that the fishing nets were old, and refused to work unless defendant agreed to pay them each an additional $50.
SFV Room 200B: Because of the short 45 days fishing season, defendant would not be able to replace the striking sailors in time. Defendant representative in Alaska promised them the additional $50, and so they completed their obligations.
SFV Room 200B: On their return to San Francisco, defendant refused to pay the additional $50. Is the promise to pay more enforceable?
SFV Room 200B: Sir, is this, like, an example of that holdup contract thing where you were mentioning?
SFV Room 200B: That’s why I’m asking you. I think somebody already mentioned the name of that case. Sure. Right? Yeah.
SFV Room 200B: the prompt, I would say, yes.
SFV Room 200B: Is it enforceable? The promise to pay more?
SFV Room 200B: It’s not allowed.
SFV Room 200B: No.
SFV Room 200B: Under the majority view, there is no consideration for the defendant’s promise to pay.
SFV Room 200B: Right? For, in continuation of their performance, the plaintiffs already had a duty to… Because they were already going to go and figure out. Right, right. So, in that case, the court denied, this is a 2007 case, the court denied their request for the additional money.
SFV Room 200B: The requirements of legal detriment in the modification contract serves to police coercion, is what the court said. Therefore, the court also mentioned that there are some minority of jurisdictions that that may
SFV Room 200B: Say that this was fair and square, but…
SFV Room 200B: Majority of jurisdictions, you can assume that while they’re in the… under legal obligation to perform.
SFV Room 200B: They have a pre-existing duty to perform.
SFV Room 200B: They have to perform.
SFV Room 200B: Right? And this is pretty much what I tell… what I told you I tell homeowners, landowners, right? I’m like, yeah, tell them, go ahead.
SFV Room 200B: Just recording, so we can swim late.
SFV Room 200B: Okay.
SFV Room 200B: Problem 3. Plaintiff and defendant entered into a contract for the sale and delivery in installments of 4,000 wooden display stands at a price of 65 cents each.
SFV Room 200B: After 2,000 stands had been delivered and paid for, the plaintiff told defendant, due to unexpected increased cost, he would have to charge 75 cents for each stand, and defendant agreed to pay the higher rate.
SFV Room 200B: Plaintiff delivered the stance, at what rate is plaintiff entitled to be paid?
Karia Salazar: 75 cents?
SFV Room 200B: Why?
Karia Salazar: Because… That was the last amount that was agreed upon.
SFV Room 200B: Okay? But what is the issue here?
SFV Room 200B: The issue will be if there is consideration behind that 75 cent? Yeah, exactly. Whether or not there is consideration, or a consideration substitute behind this
SFV Room 200B: Modification. It’s like that, coat-making case, because, like, you know, the job and everything’s still the same or whatever, but the terms have been changed, because the price is not, 65 cents anymore, it is 75 cents.
SFV Room 200B: And… Okay, anybody?
SFV Room 200B: Anybody else?
Ruben Hunanyan: I could try, Professor.
SFV Room 200B: Please.
Ruben Hunanyan: So, they would have to pay…
Ruben Hunanyan: the 75 cent rate, because under the UCC, that modification, as long as it was done in good faith, is enforceable.
SFV Room 200B: Hallelujah!
SFV Room 200B: I heard under the UCC, that’s all I wanted to hear.
SFV Room 200B: Right?
SFV Room 200B: This problem is just like Angel versus Murray.
SFV Room 200B: Right? The consideration problem is related to the doctrine of impossibility of performance. These are from my notes, by the way.
SFV Room 200B: Impossibility of performance. If there were impossibility of performance, the plaintiff would be free to terminate the original contract.
SFV Room 200B: And so the second agreement would be enforcement. That’s what I wrote. So one of the things that I would raise is that if the party was… if it was impossible for that party, objectively, to perform under that doctrine, they could what? They could rescind or get rid of that original contract.
SFV Room 200B: And therefore, the second contract would be…
SFV Room 200B: Once done on its own. Alternatively, because this is a UCC problem, all you need is
SFV Room 200B: Good faith. Good faith, and fair dealing.
SFV Room 200B: That’s all you need.
SFV Room 200B: And that’s all you need to show, yes. The wording in the factory says, like.
SFV Room 200B: very simply, he agreed to pay the higher rate. Does that constitute the… I’m sorry, say again? The word simply says he agreed to pay the higher rate. Yes. That constitutes the good faith and legal part. That only constitutes that there was consideration, at least, because there was a mutual agreement, right? By the way, just so we know, we are on the same page. Restatement second of contracts.
SFV Room 200B: has agreed to this expanded view of fair dealing, right? The statement second says, if it’s fair and equitable in view of all circumstances.
SFV Room 200B: the modification will be upheld. In other words, that’s… it looks like that is the trend, right?
SFV Room 200B: And that’s not a UCC thing, so you can always bring in
SFV Room 200B: Restatement second of contract to say that under the restatement second, those jurisdictions that follow it would look to see if there was fair and equitable, the transaction, in view of the entirety of the circumstances. Does that make sense?
SFV Room 200B: Did everybody get what I said?
SFV Room 200B: Awesome. I’m gonna assume the silence means yes.
Suzy Shkhrdumyan: Professor?
SFV Room 200B: Yes?
Suzy Shkhrdumyan: Quick question on this one. Can we argue that the plaintiff, agreed in economic pressure because 2,000 stands were already delivered and he needed 4,000?
Suzy Shkhrdumyan: So, half of the job was complete, and he needed it to be completed, so he just agreed.
SFV Room 200B: If it was me…
Suzy Shkhrdumyan: It wasn’t made in good faith.
SFV Room 200B: Yeah, well, if it was me, whether it was in good faith or not, I absolutely raised the… the defenses that… Yeah, because look, if you’re… if you’re the lawyer… if you’re the lawyer for the plaintiff, what is your job?
SFV Room 200B: Is your job to say, oops, Sorry.
SFV Room 200B: You just paid me all this money, but you know what? You got no case. You gotta make an argument for your client, right? So, reasonable arguments, right? We’re not talking about, oh, you know, he put a gun to his head, and he had to say yes. That’s not what the facts are.
SFV Room 200B: But the facts are, potentially, and I like that question, potentially there was economic duress. There was some duress.
SFV Room 200B: Right?
SFV Room 200B: And then, of course, there’s counter-argument to that. There were changing circumstances, unforeseen difficulties, perhaps, whatever the case may be. 2-209, the biggest arguments, 2-209 sub 1 for the defendant.
SFV Room 200B: Right? And of course, this expanded view, those jurisdictions that follow the restatement second are now basically saying, yeah, if it’s fair and equitable, based on the totality of the circumstances, we’ll enforce it, and therefore it looks like, you know, one party has more of an argument than the other. But absolutely, I would raise economic duress.
SFV Room 200B: Right? Yeah. Why not?
SFV Room 200B: My… I think I mentioned this, my client is being sued for…
SFV Room 200B: Breach of a contract, not the original contract, a second contract.
SFV Room 200B: And what is my biggest defense? Economic duress.
SFV Room 200B: And I’m trying to gather as much facts to prove that.
SFV Room 200B: Right?
SFV Room 200B: to… now, the guy was at… I’m going to change the facts, just in case you may know the parties, especially because both parties are Armenian, so I’ll change the facts. Now we… now we want to know. No.
SFV Room 200B: But let’s just say that the other guy wanted $200,000, and now they’re at $40,000.
SFV Room 200B: It’s a huge gap, and this case just started, like, 5 months ago, 4 months, 4 and a half months ago.
SFV Room 200B: just a little bit of discovery, and I think the opposing counsel realizes
SFV Room 200B: Oopsie, you know, what if he does prove economic duress? We’re screwed?
SFV Room 200B: Right? Because the contract requires attorney fees to be paid to the prevailing party. So if I prevail.
SFV Room 200B: They potentially have to fork over hundreds of thousands of dollars, maybe, by the time we get to trial two years from now.
SFV Room 200B: Right? So I think now we’re talking. Now, I’m pretty sure the case is going to resolve at mediation, because when we were before a judge, as soon as I said, Your Honor, mediation has not been said yet. He didn’t even wait until I finished the sentence to say, Your Honor, I think the court should send us to mediation. I’m like, yes!
SFV Room 200B: Because, by the way, I usually don’t ask for mediation first. And sometimes, sometimes, that is a sign of weakness.
SFV Room 200B: Sometimes, do you understand? You don’t ask. If the court suggested, well, Your Honor, I wish to comply with whatever the court wishes to do, so if you want to send us to mediation, of course we will attend, and we will put forth our best efforts to resolve the matter. Absolutely.
SFV Room 200B: But otherwise.
SFV Room 200B: You know? You don’t… sometimes, as I said, there are times where I eagerly ask for mediation. It comes with practice, it comes with years of… you have to know your other party, you have to know the other lawyer, you have to know the case, you know what I mean? All that… sometimes when you ask for mediation, you know what your client says?
SFV Room 200B: tweak!
SFV Room 200B: Weak! I’m like, you’re an idiot. You got no case.
SFV Room 200B: You’ve got no case. What do you mean, weak?
SFV Room 200B: If you want to be stupid, you don’t need a lawyer.
SFV Room 200B: Hired a hitman.
SFV Room 200B: But if you want to resolve this thing, you gotta listen to me.
SFV Room 200B: Right?
SFV Room 200B: Okie dokie.
SFV Room 200B: It’s like the case I had today.
SFV Room 200B: The guy that beat the crap out of his wife.
SFV Room 200B: I remember this one. No, this happened today. He advised… You have a lot of these cases, then. My client got arrested, by the way, this time. Wasn’t a rich guy or something? I’m sorry? He was wealthy, was he not? The rich one?
SFV Room 200B: No, no, not that one, but he’s actually… he has money, this one. But she calls me to say that I am so sorry that I fired you. I didn’t want to fire you, but I did because my husband told me to do it.
SFV Room 200B: I said, this case is against your husband. You listen to him? I said, listen, as soon as you hang up, see a therapist. Seriously, you need to help Jesus Christ. Can you imagine? You’re listening to the person that put you in this position.
SFV Room 200B: Hello!
SFV Room 200B: I mean, how stupid are you?
SFV Room 200B: You referred him to your brother? Of course! No, that’s a conflict. No, he would never take that to begin with. He would lose his life.
SFV Room 200B: I probably would lose my license. So he beat his wife, and she comes to you… He beat his wife, she calls the police, he bullshits the cops, she wants to protect her children, she doesn’t say anything.
SFV Room 200B: He does, he says, look, she hit me, look at here, look at here, she gets arrested. What city was this? Right here. Woodland Hills? I want to say Calabasas. And, and, and, and, I know, it’s probably yours, I don’t know. And, and on top of that, he says that she, she, attacked the children with a knife.
SFV Room 200B: Wow. Which is complete bullshit. He’s an asshole. What can I say? Excuse my French. But you get my point.
SFV Room 200B: The client is so dumb that she’s literally listened, because he’s paying for your bills. I said, I don’t give a shit who’s paying for the bills. You shouldn’t be listening to him.
SFV Room 200B: This happened today? Yeah, this happened today.
SFV Room 200B: And I said, look, if you have, in fact, higher than… oh, it happens a lot, believe me, happens so many times.
SFV Room 200B: I said, if you have hired this other lawyer, I’m not going to stop you, because that would be interference with business advantage. I can get sued by the new lawyer, so I won’t do that. It’s wrong. So therefore, I am fired, and I won’t take your case back. I just want to help you. I will not take your case back, but listen to me.
SFV Room 200B: Stop listening to that a-hole.
SFV Room 200B: He got you in this place in the first place, and he tells everybody you’re crazy. Which, in fact, I think she is.
SFV Room 200B: She needs help.
SFV Room 200B: Running back to the Crazy X. You know, the problem is, the problem is they don’t realize what’s really at stake.
SFV Room 200B: His plan, this whole thing is orchestrated so that he can take custody, full custody, and get rid of her.
SFV Room 200B: And what happens, based on my experience, is that if you get full custody based on a criminal case, by the time you see your children again, hug them in your arms without a monitor, it would be a couple of years from today. If you’re lucky.
SFV Room 200B: And then they do go psychotic, because I’m a father, I would probably lose my sh… That happens.
SFV Room 200B: And she’s listening to the suspect, who’s setting all this up.
SFV Room 200B: That’s crazy.
SFV Room 200B: I don’t know. What can I tell you? Alright, problem 5.
SFV Room 200B: Plaintiff was employed by the defendant under the contract for the year.
SFV Room 200B: Defendant got into financial difficulties, and during the contract year, plaintiff agreed with other key personnel that they all would accept a lesser salary for the balance of the year.
SFV Room 200B: Is there consideration for a plaintiff’s promise to take less?
SFV Room 200B: and facility.
SFV Room 200B: Anybody?
Karia Salazar: Yes, if they, they continue working for a lesser salary?
SFV Room 200B: Is that enforceable?
Karia Salazar: Nope.
SFV Room 200B: Why not?
SFV Room 200B: It’s a short.
Karia Salazar: Because it’s at-will employment.
SFV Room 200B: Hi, Chris?
Karia Salazar: I believe?
SFV Room 200B: It actually says they entered into a contract for a year.
Adreanne Kumamoto: They agreed, so yes, I do think it’s enforceable.
SFV Room 200B: Who said that?
Adreanne Kumamoto: Me, Adrian?
SFV Room 200B: Adrian, why are you correct? You are correct. Why?
Adreanne Kumamoto: Well, because of the rules that we read a little bit earlier.
Adreanne Kumamoto: for accord and satisfaction. So… so since they have an agreement, even though it’s less, it’s still an agreement. So they have accord, and they have satisfaction.
SFV Room 200B: You are warned.
Adreanne Kumamoto: Fantastic.
SFV Room 200B: Not all the way there, it’s not exactly according to satisfaction, because this is not a… this is not a disputed debt.
SFV Room 200B: It’s not dispute, and therefore it cannot be according to satisfaction. Do you understand? The original debt, nobody denies that he was supposed to be paid a figure. They just agreed so that I guess, they can all keep their job.
SFV Room 200B: Okay? So it’s not an accorded satisfaction, but you are correct in your…
SFV Room 200B: In your answer, sir. To issue the legal benefit for the legal detriment? Okay, what do you mean exactly? You are correct. One party agrees to take less while the other party agrees to… What does that mean? What is that?
SFV Room 200B: Capitalism consideration. You just said… Consideration! That’s true. Capitalism. That’s true. Brownie points. That’s true. 10 points.
SFV Room 200B: Let me… let me enhance on that a little bit, or explain what he…
SFV Room 200B: He said is… what you said is correct.
SFV Room 200B: The court here said there was, in fact, consideration.
SFV Room 200B: Most students, when I pose these type of questions, they talk about the restatement second, that if it’s fair and equitable, it’s enforceable, you know, all that stuff, but that’s only when there’s no consideration.
SFV Room 200B: We don’t talk about… you can talk about equitable, fair and equitable, 2-09, all that stuff.
SFV Room 200B: But when there is consideration, why the hell would you go there?
SFV Room 200B: Right?
SFV Room 200B: I mean, when I learned to give CPR,
SFV Room 200B: one thing the instructor taught us, and then I became an instructor, I was teaching it, this is, like, 30 years ago, I was trying to make money. Anyway, I could… Don’t ever leap lock. I was… I was teaching… I’m sorry? Don’t ever put your lips… Well, definitely don’t kiss, but… but… but it… but if… but if the guy… but if the guy has…
SFV Room 200B: If the guy is breathing on his own, do you give him rescue breathing? No. No! It’s unnecessary!
SFV Room 200B: If there is consideration, do you talk about stuff about consideration? No. It’s already there. So the question is, was there consideration?
SFV Room 200B: It looks like both gave up something to gain something, to keep that employment, right? Or all of them.
SFV Room 200B: So, in this case, believe it or not, there was, in fact, consideration, right? But the rule is for modification without consideration, so the rule that we’re talking about the… sorry, restatement 2nd and 2-209, we’re talking about modifications with no consideration, right?
SFV Room 200B: Yes. If this was a UCC issue, could faith would be enough? Absolutely. Of course. Absolutely. Right?
SFV Room 200B: Now, if only the plaintiff and the defendant had reduced the salary.
SFV Room 200B: No, what would you say about consideration?
SFV Room 200B: No consideration.
SFV Room 200B: Why?
SFV Room 200B: Sorry, what was the question? I said, if only the plaintiff and the defendant had
SFV Room 200B: Agreed to this reduction.
SFV Room 200B: He said, there’s no consideration. I said, why? Because in their minds, they’re technically not gaining anything, those other parties.
SFV Room 200B: Say again?
SFV Room 200B: the plaintiff and defendant both give up something to gain something, but those other parties, if it’s not… if it’s just the plaintiff and defendant, technically aren’t gaining anything. Okay.
SFV Room 200B: But what about the plain defendant defendant? Because those are the parties, in that case, in that scenario that I mentioned, would not be in court, would they?
SFV Room 200B: It’s just between the plaintiff and the defendant, so… why is there no consideration? Is it because the key… the other key personnel are still earning the same amount?
SFV Room 200B: Why is that important?
SFV Room 200B: Because they didn’t suffer any detriment. Why is that important?
SFV Room 200B: The fact that nobody got its salary change except this poor pastor.
SFV Room 200B: Why is that important?
zahra movassaghigilani: Because if the employer is, performing his duty to other employees, then why he’s not performing to this one?
SFV Room 200B: What’s the consideration for plaintiff’s promise to take less? Where’s the consideration for a plaintiff taking less?
SFV Room 200B: If… if this was not a global deed.
SFV Room 200B: It’s only the plaintiff that is getting screwed doing the same work.
SFV Room 200B: You understand? Yeah. Pre-existing duty rules.
SFV Room 200B: Absolutely. Come on!
SFV Room 200B: pre-existing duty rule. I know it’s difficult, that’s why we’re going over the questions, right? Otherwise, you know, most professors, to be honest, skip all these questions, go right to the next case.
SFV Room 200B: Some of the ones that I care about are 2, 3, 4, and 5. Those… those are most important. And that’s it. And this, by the way, is set… this is in American coil. It’s a 1951 case.
SFV Room 200B: It’s a federal case.
zahra movassaghigilani: Professor, before we move on, can I ask a question?
SFV Room 200B: Yes.
zahra movassaghigilani: So why if there’s, like, only the plaintiff without, like, the others?
zahra movassaghigilani: Suggest, like, a lesser, salary.
SFV Room 200B: Because then… and then in that case.
SFV Room 200B: Was not really trying to hold on to the business.
SFV Room 200B: Right? It’s only screwing one person. I mean, now this plaintiff is Michael Jordan, 20 times more than the other players in the team. I get it. But those are not the facts before us, right? So, in other words, the plaintiff is going to do the same work for less money, but everybody else is going to get the same money.
zahra movassaghigilani: Got it, thank you.
SFV Room 200B: I’m sure the court would say, wait a minute, the plaintiff is… the plaintiff is the only one that is giving up stuff here. Nobody else, the defendant is paying less, getting the same service.
SFV Room 200B: From the plaintiff. That’s not fair. That’s not right. Pre-existing duty rule. Does that make sense?
SFV Room 200B: Yes?
SFV Room 200B: Is anybody with me? Any questions? I don’t agree with that. I don’t agree with that, though. Well, tell me. Because, I mean, if I’m bargaining for exchange, then I want to get a benefit out of it, right? If I’m offering you $15 an hour, but I’m paying her $20, and if you say yes.
SFV Room 200B: that you’re… you’re free to make up your mind, right? Like, you can say no, but if you say yes.
SFV Room 200B: That’s fine, we can agree. So you’re saying that if you’re the employer, and you tell me, take less, and I say yes, that that should be enforceable? Yeah, because you agree to it. You have… you have every… you have every option to say, no, I don’t want to take that, and walk away. But if you say yes… Why would I walk away, I have a year contract.
SFV Room 200B: I have a year contract with you. Why would I walk away? I want to sue you and get my money. Yeah, but if I’m offering you a certain amount of money for a specific job that you’re doing, right?
SFV Room 200B: and you say yes… Would it be fair if somebody, if the… if the LA County… It would be fair. Would it be fair if LA County would come and ask you to take less, so we can pay…
SFV Room 200B: I don’t know. Like, right now? Yeah. Yeah, I don’t have a contract with them, so if they come and they say, well, we’re paying you less, I have the option either to go somewhere else, or stay and take the money, right? So… Well, you have the option to say, to hell with you, I’m under contract, you gotta pay me.
SFV Room 200B: But, right? How is it under…
SFV Room 200B: Aren’t you under a contract to get paid for a specific sum every month? No. You’re like… I mean, they can let you go at your time. Literally? They can come and fire you guys for no cost? It’s not that easy, but they can… No, no, but my point is, can they just come and say, start it tomorrow, we don’t want you here? No, no, they cannot do that. I’m sure they can’t do that. It’s like a salary… I am sure you guys have a bargaining
SFV Room 200B: contract. We do, we do, we absolutely do. If there is a budget cut, they can still do it. Well, that’s a different story. Well, that’s what I’m trying to say. That’s what I’m trying to say. In this case, the court says.
SFV Room 200B: This was a collective bargaining to save the business.
SFV Room 200B: And to save everybody’s job. That’s why the court says, okay, I’m gonna enforce it. So it’s like a public policy type of thing. But if only one person is getting screwed, and everybody else is getting their salary, the court would say, well, that is not fair, because you were under a contract already, you should have paid him. You see, cut your own salary.
SFV Room 200B: Don’t get paid. You don’t get paid. Why are you cutting somebody’s, you know, does that make sense? In other words, the only reason the court enforced this one was because it was literally decided that to save the company and to save all these jobs.
SFV Room 200B: Everybody agreed to get a little less. It’s like a football team that says.
SFV Room 200B: I don’t know, bring… bring whatever the player… we’ll agree to get less money, at least we have a chance to go to Super Bowl.
SFV Room 200B: Make sense? Everybody agrees to pay to get less, because there’s a benefit to it.
SFV Room 200B: There’s a benefit to… for all of them, and that’s why the court says, yeah, there’s consideration. The consideration is you will lose the freaking job. You’ll be out on the street, but you are not.
SFV Room 200B: Right? But if they only do that to you, that would be unfair. If they do it to everybody.
SFV Room 200B: I guess…
SFV Room 200B: You know, yeah. If they raise just my taxes, on this block, you’re the only one that is going to pay more taxes.
SFV Room 200B: The football one’s a good example. That very… yeah, that… for sure, that probably would not stand. But when they raise everybody’s taxes like they are all the time.
SFV Room 200B: then I’m like, okay, I’m getting screwed just like everybody else.
SFV Room 200B: For nothing. It’s 7.49. Let’s take a break. When we come back, I’ll answer more questions. So let’s come back at 8.05. I get in trouble if I don’t call break one time.
SFV Room 200B: Not this was… Some people may say they didn’t get the benefit of the word.
frantzbiamby: Can I ask you a question, please?
SFV Room 200B: I think I heard something like that. When he was registering his new contract, he had his advantage, but other players, I don’t think it was everyone, but, like, other nominated players who were just, like, super high on the technical sales value, so he would be registered.
SFV Room 200B: It only makes sense, right? For them, it doesn’t matter, yeah, I mean, they’re still getting, like, millions and stuff, but… So, I’m pretty sure that the courts would probably enforce that contract as a collective… Yeah, that’s why he was allowed to, like, legally be registered as an employee of the… Under the UCC and one plaintiff, one defendant example, would there not be good faith?
SFV Room 200B: In that scenario? You would have to analyze it. You literally would have to go through the analysis that we just went through, right? And then if you decide there is, I’m fine with it.
SFV Room 200B: If you decide there’s none, I’m fine with that too, so long as you analyze the facts, okay? So the good faith is kind of just, like, there’s no right or wrong answer, it’s just how you… You look to see if, objectively, if the parties objectively acted in good faith. That’s all, you know? And sometimes, yeah, the question may not be so easy.
SFV Room 200B: That’s why it goes to the Court of Appeal and it gets reversed. That means one judge found… one of the cases, I’m sure, for tonight, you remember, the court found there was bad faith, and the Court of Appeal said, no, there wasn’t.
SFV Room 200B: So, who knows? A lot of times, the answer is not that easy. Thank you. Frank? You’re welcome.
frantzbiamby: Professor, I had a question, please.
SFV Room 200B: Yes, sir.
frantzbiamby: So I remember we were doing… I don’t want nobody hating me for bringing this up, but I remember we had started doing… you said we were gonna do multiple choice questions every Monday?
frantzbiamby: And I know we stopped, so I was wondering,
SFV Room 200B: That would be another professor. I’ve never done multiple choice in 11 years teaching, and I won’t do it.
frantzbiamby: Oh, okay, thank you.
SFV Room 200B: Yeah, no problem. That’s probably somebody else.
SFV Room 200B: Professor, I heard you’re inquiring about a purple ass. Making up stories. What did my wife just… What did my wife say?
SFV Room 200B: He said, oh, yeah, you have a back pain. If you were gonna go buy another car right now, you’d be right. Absolutely. I’ve lost the ball. They’re everywhere. I hope you’re not putting that back in your mouth. It’s probably ready to go. It’s not easy.
SFV Room 200B: It’s already there, it’s a self-serve, so that’s funny.
SFV Room 200B: There is. 8.07.
SFV Room 200B: book.
SFV Room 200B: This is right.
SFV Room 200B: Okay.
SFV Room 200B: Roth Steel Products on 251. Anyone?
SFV Room 200B: We want you?
Karia Salazar: read the facts.
SFV Room 200B: Point the door.
SFV Room 200B: Who said I could read the facts?
SFV Room 200B: Okay, why don’t you try reading the facts, and then tell us what the case is about?
Karia Salazar: And I can do the facts.
SFV Room 200B: Okay, let’s try with telling us what the facts are.
SFV Room 200B: It’s still a try.
Karia Salazar: In November 1972, Roth Steel Products plaintiff, contracted to purchase 200 tons of hot-rolled steel per month.
Karia Salazar: From Sharon Steele Corp, defendant.
Karia Salazar: 148 per ton, through December 1973.
Karia Salazar: And, defendant also indicated that it would sell hot rolled steel at 140 per ton.
Karia Salazar: on an open, scheduled basis. And finally, defendant offered to sell up, 500 tons of cold rolled steel at varying prices.
Karia Salazar: And in early 1973, the market price for steel and the demand for steel production
Karia Salazar: both drastically increased, and in 19… March of 1973, defendant notified Roth, that it was increasing the price of steel, and it would no longer honor the prices it quoted,
Karia Salazar: Back in November 1972, and after negotiations, the parties agreed, that Roth would continue paying the contract price for steel until June 30th, 1973.
Karia Salazar: And would pay an increased price following the date through the end of 1973.
Karia Salazar: And then Sharon informed Roth that it would… if it refused to pay the… these higher prices, Sharon would…
Karia Salazar: seized supplying steel to Roth entirely.
Karia Salazar: Roth did not want this modification, but reluctantly agreed.
Karia Salazar: because Sharon, supplied a substantial amount of, Roth steel, and Roth believed it had no other…
Karia Salazar: Reasonable Alternative Supplier.
Karia Salazar: And during 1974 and 1975, Sharon only accepted orders, for steel from Roth.
Karia Salazar: At the price prevailing at the time of shipment.
Karia Salazar: Sharon’s deliveries, were increasingly late, which Sharon justified by stating that there was a shortage of raw materials.
Karia Salazar: And in reality, Sharon was reserving large quantities of rolled steel for sale to a subsidiary at premium prices.
Karia Salazar: Roth brought suit in federal court against Sharon for breach of contract, and the court found that Sharon acted in bad faith.
Karia Salazar: using its position as the chief supplier of Roth steel to force Roth to agree to the contract modification in 1973.
Karia Salazar: And damages were awarded to Roth.
Karia Salazar: And… Sharon appealed.
SFV Room 200B: Okay, thank you. So now that we know pretty much what the facts are.
SFV Room 200B: Somebody tell me, what is this case about?
SFV Room 200B: Basically, it was… for the issue, I put, does a party attempting to enforce a contract modification have to show that the party was actually motivated by a legitimate commercial reason to seek
SFV Room 200B: modification. So, basically, were they, trying to modify in good faith? Since it was for, it’s basically for steel, which is a good.
SFV Room 200B: under the UCC 22-209, They would have to,
SFV Room 200B: This modification would only be enforceable if… It was under good faith.
SFV Room 200B: For commercial reasons. So, yeah, so, so, let me just tell you that there are two elements
SFV Room 200B: Required for the good faith.
SFV Room 200B: to work. Number one.
SFV Room 200B: Is that the seller must show that there was a… that it was objectively… the modification was objectively in good faith.
SFV Room 200B: Number two, the seller, in this case the seller, has the obligation to show that his modification… sorry, excuse me, his mod…
SFV Room 200B: Motive.
SFV Room 200B: Was wholly and completely because of commercial exigencies, like, something happened, right?
SFV Room 200B: Out of its control, pretty much.
SFV Room 200B: In addition…
zahra movassaghigilani: Can you say number 1 again? Sorry.
SFV Room 200B: Our one is that it’s good faith based on an objective test, that a reasonable merchant would have sought a modification under these circumstances.
SFV Room 200B: Number two is a subjective test that the seller was in fact, motivated to seek modification by an honest desire to compensate for the commercial issues that came up.
SFV Room 200B: Okay? Commercial exigencies. Now, So…
SFV Room 200B: the one thing that the court looked here and talked about, which I want to talk about, and it’s important, I mean, look at how much yellow I have on these two pages.
SFV Room 200B: Just to tell you that if this case is tested, Here’s what to look for.
SFV Room 200B: You not only look for the objective standard, but then you also look for the subjective standard of
SFV Room 200B: Why did this individual Who seek the modification do it to begin with, right?
SFV Room 200B: You also want to find out if they did it in bad faith, or if they did it with impermissible means.
SFV Room 200B: In this case, for example, the court said it was the impermissible means was that he said, as part of the subjective good faith test, the court said modification had not… had been induced by impermissible means because the seller
SFV Room 200B: Threaten not to sell.
SFV Room 200B: Unless the buyer agreed to this, you know, modification. And that, the court said, that is impermissible. That’s basically
SFV Room 200B: bullying the other party into this modification. Therefore, it can never be a good faith. Now, let me tell you that this… the court said this is a prima facie case of bad faith.
SFV Room 200B: What does prima facie mean? The elements to a, I’m sorry, say again? It would mean probably the elements to a,
SFV Room 200B: What does the words prima facie actually mean? On its face. On its face, very good. Who said that? Surin. Very good. Surin is, you know, 10 for 10 tonight. He pays attention sometimes.
SFV Room 200B: On his face. What does that mean, prima facie on his face? Why is the court saying, on its face.
SFV Room 200B: It’s impermissible. What does that mean? It means that it opens the door for the person that is being accused of using impermissible means to overcome that burden by showing the court that there was a legitimate reason for what he did.
SFV Room 200B: Does that make sense? So when they say, for example, if you shoot somebody, kill somebody, on its face it looks like you committed murder.
SFV Room 200B: Right? Until you can show that, in fact, there was self-defense.
SFV Room 200B: Perhaps. Does that make sense? So on its face, it looks bad, but when you look into it, it looks different.
SFV Room 200B: This is pretty much the same thing. The case, the court says, on his face, it looks…
SFV Room 200B: impermissible because of the way that he handled the situation. I’m not gonna sell to you.
SFV Room 200B: unless you agree to this modified thing. So, when it comes to 2-209, I would suspect that you first talk about the objective standard.
SFV Room 200B: To find out what a reasonable seller
SFV Room 200B: enter into this modification in good faith. And then, in this case, was this seller motivated and acted in good faith?
SFV Room 200B: Right?
SFV Room 200B: Those are the questions that we have to answer.
SFV Room 200B: And again, who has the burden, by the way, which is… it’s surprising to some professors, not to me. Who has the burden to show that the modification was, in fact, in good faith?
SFV Room 200B: Who’s the defendant in this case? Oh, the Sharon Steele? The person who’s seeking the modification, who’s trying to enforce the modification, is the person burdened telling the court, proving to the court that, hey, it was all in good faith.
SFV Room 200B: Right?
SFV Room 200B: You want to enforce it, you better prove it to the court, right?
SFV Room 200B: Now, I have a lot of markings here on this page. Let me just see if there’s anything that I’ve left out that I want to tell you.
SFV Room 200B: On page 253, the first full paragraph, the court says the ability of a party to modify a contract, which is, by the way, if I read fast, it’s because it’s already on, on, you know, black and white. If you can’t read the page, then…
SFV Room 200B: Call me.
SFV Room 200B: So I can get at you.
SFV Room 200B: But, the ability of a party to modify a contract which is subject to Article 2 of the Uniform Commercial Code is broader than following law.
SFV Room 200B: Primarily because the modification needs no consideration to be binding.
SFV Room 200B: And remember, we said the new trend is that restatement second also says.
SFV Room 200B: If it’s fair and equitable under all of the circumstances.
SFV Room 200B: Go for it. But we know the rule under the common law, which is… Consideration.
SFV Room 200B: Okay, then the court goes on to say, in determining whether a particular modification was obtained in good faith.
SFV Room 200B: A court must make two distinct inquiries, which is what I pretty much told you. Whether the party’s conduct is consistent with reasonable commercial standards, meaning objectively.
SFV Room 200B: of fair deaning in the trade, and whether the parties were in fact motivated to seek modification by an honest desire to compensate for commercial exigencies. So, these are the two things that the court says we need to look at to find out if there was
SFV Room 200B: compliance with 2-209, just because the court says no, there’s no requirement. Now, obviously, if there was consideration, we don’t care about 2-09.
SFV Room 200B: Right?
SFV Room 200B: Okay.
SFV Room 200B: Page 257. Bridge Runner.
SFV Room 200B: This one is kind of easy, but what the hell.
SFV Room 200B: Actually, before we do that, forgive me, everybody, let’s go to page 256. I want to do problem 2, please, on 256.
SFV Room 200B: Problem to it. Let me read the problem.
SFV Room 200B: By the way, I’m assuming
SFV Room 200B: That, I know it doesn’t happen every day, but I’m assuming that most of you read these problems and try to answer the problems before you come into class.
SFV Room 200B: If you’re not, please do, because trust me, when I go over it, you get a lot more out of it. If it’s a case of first impression, you may say, what the hell did he just say?
SFV Room 200B: And if it doesn’t sink in, then you will have to go watch the video, and… you know what I mean? It’s far, far better, believe me, if you have read the thing before.
SFV Room 200B: as a judge, what does a judge do? Reads the people’s motions and counter-arguments before she takes the bench, right? She just shows up and says, okay, what do you want?
SFV Room 200B: Oh, it’s gonna take frickin’ half an hour.
SFV Room 200B: To even begin to tell the court what’s going on.
SFV Room 200B: But typically, these hearings are, what, 15-20 minutes max, top.
SFV Room 200B: Why? Because everything has been read before the court technically has a tentative ready, and here’s further arguments.
SFV Room 200B: Right?
SFV Room 200B: That’s what we are supposed to be doing here. So, with all due respect, please try to read these questions and try to figure out the answers. It’s for your benefit, that’s why they’re here. They’re not for me.
SFV Room 200B: I have the answers to all these questions.
SFV Room 200B: So I can just pass them, but I don’t. I go over the important ones.
SFV Room 200B: But please read them ahead of time.
SFV Room 200B: Problem 2. Seller agreed to manufacture and deliver an automated production line for eyeglass lenses.
SFV Room 200B: Manufacture and deliver.
SFV Room 200B: Sounds hybrid to me.
SFV Room 200B: I mean, seriously.
SFV Room 200B: Does it sound hybrid to you? It sure does. Yeah, make a product, right? And deliver the product.
SFV Room 200B: I would… as soon as you see language like that in your final, you gotta go, oh.
SFV Room 200B: Maybe they want to test hybrid.
SFV Room 200B: I gotta be aware of, of that.
SFV Room 200B: Because it usually starts that way, by the way.
SFV Room 200B: The agreed-upon delivery date was October 30th, 2004. The contract contained a clause forbidding non-written modifications. In other words, any modification of this contract has to be in writing to be enforcer.
SFV Room 200B: Whitby so far? Yes.
SFV Room 200B: Various delays ensued, and delivery was not made in October.
SFV Room 200B: Buyer thereafter cooperated with the seller in trying to get a finished product and agreed to pay for cost overruns and urged completion, but complained about delay. This combination of cooperation and complaints continued during the spring of 2005.
SFV Room 200B: Near the end of May 2005, seller tender delivered.
SFV Room 200B: Bayer rejected the group on the grounds that it was too late, and sued for breach.
SFV Room 200B: Seller claims that the delivery date was waived, buyer relies on the clause forbidding non-ridden modification.
SFV Room 200B: Both parties rely on 2209 to resolve the dispute.
SFV Room 200B: Now, you tell me.
SFV Room 200B: Anybody?
SFV Room 200B: Who wins? Who loses? Yes, ma’am. There’s a reasonable time, under UCC that we have to consider, the reasonable time of delivery of the goods? What about the modification?
SFV Room 200B: In other words, because remember, we also have what is called Perfect Tender under the UCC. Do you guys remember what Perfect Tender was? What was Perfect Tender?
SFV Room 200B: That it has to be the exact… Exactly. Perfect tender means literally perfect, if… including delivery. So if I say, I’m gonna deliver on my… on my right foot at 12 noon, you can’t be on your left foot. That’s not acceptable.
SFV Room 200B: Perfect, tender means perfect.
SFV Room 200B: Exactly as stated, okay? So, now that we have perfect tender, and yes, the UCC wants to allow the parties
SFV Room 200B: To still have a contract.
SFV Room 200B: So I agree with that.
SFV Room 200B: But 22092 provides that a signed agreement which excludes modification or rescission except by assigned writing is effective. In other words, if you don’t do it other than… if you do it in any way other than a signed writing, it’s ineffective.
SFV Room 200B: What happens now?
SFV Room 200B: Who wins?
SFV Room 200B: Maria?
SFV Room 200B: under the 2-209 statute that I just read to you, would this modification be effective?
SFV Room 200B: the one here.
SFV Room 200B: Yes. Yes.
SFV Room 200B: Is it in writing?
SFV Room 200B: Not that it’s us.
SFV Room 200B: I didn’t see it. Did you guys see anything in writing? No. Then it’s ineffective.
SFV Room 200B: it’s ineffective. The statute was designed to change the common law rule that we talked about, you know, that… Do you know what the common law rule, by the way, is?
SFV Room 200B: Even if the contract says no modification unless in writing… You can modify.
SFV Room 200B: Under the common law. But under the UCC, you can… But under the UCC, you cannot. If it’s a set of goods, obviously. If the language is there, right?
SFV Room 200B: And what we do…
SFV Room 200B: as lawyers, by the way, ladies and gentlemen, just… this is not part of your testing, but I’m just telling you what we do as lawyers. Anytime I have a language in there, my language makes it clear that if there is an attempted modification of this contract, this contract is automatically null and void.
SFV Room 200B: That’s how I protect my client.
SFV Room 200B: That if you do it, you can do it, but it voids this one. This contract is over. So if they do it, they just screw themselves, probably, right?
SFV Room 200B: Make sense? That’s how I protect my client. If I have to do it, I mean, if I’m forced to draft anything, that’s the way I do it. And I’m learning from, you know, other lawyers that successfully argued that the contract is
SFV Room 200B: Go on. I keep feeling like I’m thinking with the common law, though, it’s that mirror image rule, right? Don’t you always have to…
SFV Room 200B: agree to the term. Don’t you… you have to agree to the exact terms, as opposed to using… Right, but sometimes the parties may have modified the agreement by their conduct.
SFV Room 200B: Right? Not necessarily said yes or no, and mentioned it to each other, and agreed, and shook hands.
SFV Room 200B: Forget the writing.
SFV Room 200B: But a lot of times, they literally, by conduct, they modify a contract.
SFV Room 200B: Right? You have a contract with the contractor, he’s building your home, and he’s delaying, and you just say, no problem, don’t worry about it, and you keep paying him, right? You, by conduct, you may have waived the time, the time limit that was set in the contract to finish the contract. And I’ve seen it a lot of times, by the way.
SFV Room 200B: That’s why, that’s why when a tenant is late for payment, for example, the lawyer advising the landlord says, don’t accept the late payment.
SFV Room 200B: Don’t do it. If you do it once, don’t ever do it again, because if you do, you’re tacitly agreeing to the late payment being okay, you’re waiving your rights.
SFV Room 200B: Now, if you later on, 10 months down the line, you sue the tenant for no non-payment, or late payment, or whatever, the tenant is gonna say, wait a second, he waived all that. Look, 10 months, I paid him 20 days late.
SFV Room 200B: That’s why if you’re a tenant, when you’re one day late, the landlord is killing you to get the money. Not because they’re dying for the money, because somebody told them, that’s a waiver, don’t do it.
SFV Room 200B: Okay. So then, does that mean they have to make a new contract then?
SFV Room 200B: Well, you can do whatever you want. The point, yeah, I mean, as a landlord, you can either enter a new contract, or say you’re in breach, you know, and demand payment, timely, whatever you want to do, but I’m just basically saying what the principles are, right? So, by conduct, we could literally waive our rights.
zahra movassaghigilani: Professor, can I ask a question here? In the example that you said, that the contractor, for example, will increase the price, and then you would tell them to go ahead and do the work, and then later you will bring the argument, so why is that different?
SFV Room 200B: I didn’t get the question. Can you ask one more time?
zahra movassaghigilani: So, in the example that you previously gave, that if a contractor wants to increase the price, you would tell them to go ahead and finish the work, and then later, like, you will bring, like, actions to the court. Why is that different from here? Because in that case, you also agree.
SFV Room 200B: Because that was… that is not necessarily a modification. That… that was, That was,
SFV Room 200B: the agreement was forced its, economic duress, forced on the homeowner, if I understood your question correctly. So if a, if a,
SFV Room 200B: They do it all the time.
SFV Room 200B: Unfortunately. For whatever reason.
SFV Room 200B: contractors want to modify the contract. They’re just looking for you to do one change order, and then just suddenly you’re going to be hit with modification after modification after modification, and they’re going to say, but he changed the order. That was not the original agreement, Your Honor, he told me to move this light from here to here. So I charged him $50,000 extra.
SFV Room 200B: So, if you have no change orders, you could say that that modification is invalid because it was economic duress. I had no choice.
SFV Room 200B: I was paying rent somewhere else, I’m supposed to move into my home, and he wants to delay things by year, or he said, I’m not going to do any work at all. How the hell am I going to bring another contractor to start working
SFV Room 200B: you know, in the middle of this… this, home without walls and without electricity, without this, without that, and of course, Morse code would understand, right? But if it’s a reasonable modification, what is a reasonable modification?
SFV Room 200B: If something happens that is absolutely unforeseen by the homeowner and the contractor, right? 100% unforeseen.
SFV Room 200B: Right? Some… the fire… it… that could still be foreseen, but let’s say, God forbid, the Palisades fire, right?
SFV Room 200B: The Palisades fire that destroyed, what, 5,000 homes? I’m pretty sure most of us would say that’s not foreseen.
SFV Room 200B: Right? They caught the dude. Yeah, I, I heard. You know he helped? That’s the craziest part. Yeah, well, he… He called to report it, and then he went to help, like… But, you know, there are, I did… I think I mentioned to you guys that I did… I did represent one of the fire starters.
SFV Room 200B: Years ago. I did. It was one of the most disgusting cases I ever did. Why’d you do it? Everybody deserves… A second chance. Everybody deserves representation, and it was assigned to me. It wasn’t… I didn’t have a choice.
SFV Room 200B: But I… he was just a… he was the devil. He really was. Wow. And he tried to blame a couple of teenagers, get them in trouble, which… it was sort of kind of successful until…
SFV Room 200B: Later.
SFV Room 200B: Isn’t there a saying, in court that even the devil has an advocate, or something like that, right? I guess. I would never say that, because… I would say, my client innocent! He’s crazy! No. But, I mean, aren’t they crazy? Why would you do something like that? You gotta be sick.
SFV Room 200B: But anyway, what I was trying to say is that, to answer the, the question from Zoom.
SFV Room 200B: If there is, in fact, a modification, all you need to think about is what? Fair and equitable. Remember what I said about pre-72nd? The modern trend is you look to see if it was fair and equitable. If, in fact, the 5,000 homes being destroyed
SFV Room 200B: It makes it tenfold difficult for the… for the contractor to rebuild the home, because certain risks are… are…
SFV Room 200B: embedded within the work that they do, right? Fire maybe one of them.
SFV Room 200B: water damage may be one of them. You don’t close the roof on time, and there is a water season, I mean, rain season. You may… you may… the damage may be caused to the… to the building, and you cannot say, well, I didn’t foresee rain coming, because LA usually has no rain. Well, too bad. You should have.
SFV Room 200B: But I would suspect that 5,000 homes, you know, going… getting engulfed, and then area restricted for months from getting into and get out of would make it…
SFV Room 200B: unreasonably difficult for that contractor to finish the work, right? In that case, I would say if they enter into a modification, I think most scores will probably find it to be reasonable.
SFV Room 200B: Subjectively and objectively. Does that make sense? Yeah. Even though the landlord may say, hey, look, I paid for this.
SFV Room 200B: But then the contractor said, what’s my problem? I didn’t know, you know, we are dealing with a bunch of
SFV Room 200B: Whatever.
SFV Room 200B: I don’t want any people, I think.
SFV Room 200B: Close my mouthfuls.
SFV Room 200B: Okay, yeah, see, you know what I’m talking about. I know exactly what you’re talking about. You speak the same language.
SFV Room 200B: Yeah, I know who to blame. I’ll keep my mouth shut right now. Me too. The crazies are not always literally crazy, they just… they act normal.
SFV Room 200B: Okay, I hope I answered your question on Zoom. Let’s go to…
zahra movassaghigilani: Thank you.
SFV Room 200B: You are welcome. Wood versus Lucy Lady Duff Gordon. Does everybody know who Lucy Lady Duff Gordon is?
SFV Room 200B: Do you guys know who she is?
SFV Room 200B: Yeah, she was a costume designer or a designer, but do you know why she was famous, other than designing?
SFV Room 200B: You guys remember the movie, Titanic? Yes. Where the lady literally sits with her dogs into one of these boats, and they paddle away? That’s her? It was her.
SFV Room 200B: She was all over the paper in 1919, or whatever the hell it was, that… yeah, I think that at that time, they hated… I think this…
SFV Room 200B: This case was after that… Titanic? Titanic disaster. Yeah, it came out on the first page of, I think, the New York Times, that this lady paid so much money to one of the crew members, or whatever, and it was her and maybe two or three other people with their dogs.
SFV Room 200B: And then, while people were literally jumping or falling into the water, she was a selfish, please.
SFV Room 200B: Nevertheless, that’s what… that’s what the defendant was. So, if you see Judge Cordozo a little pissed off at her, creating… he literally created this… this thing that you’re gonna read. I’m guessing it’s probably because he was like, I gotta get it. Somehow.
SFV Room 200B: You know, you escape Titanic, but you’re not going to escape Cardozo.
SFV Room 200B: So, anybody wants to do this case for us? Weren’t we on Ridge Runner? Excuse me? Weren’t we on Ridge Runner? No, we’re on Wood versus Lucina.
SFV Room 200B: Do you have any questions about that case?
SFV Room 200B: Beach runner.
SFV Room 200B: Anyone? Sir, please. So the fashion designer defendant has an agreement with plaintiff. Plaintiff was to have exclusive rights, subject to the defendant’s approval, to place defendant’s endorsements on the designs of others, put them on sale, or license them.
SFV Room 200B: to others to market them. In return, defendant was to have one half of all profits and revenues derived from plaintiff’s contracts. Plaintiff says that defendant broke the contract by placing her endorsements on fabrics.
SFV Room 200B: dresses and millinery without plaintiff’s knowledge and withheld profits, so then plaintiffs sued defendant. And then…
SFV Room 200B: So the defendant insists the agreement lacks the elements of a contract. It’s true that he does not promise in so many words, the court says that he will use reasonable efforts to place the defendant’s endorsements to market her designs, but the court thinks that such a promise is fairly to be implied.
SFV Room 200B: It also says the law has outgrown a primitive stage of formalism, where each word, precise word, was
SFV Room 200B: essentially took it as meant literally. Ford also says a promise may be lacking, yet the whole writing may be instinct with an obligation, or imperfectly expressed. So there’s an implication of a promise, and the defendant gave an exclusive privilege to the plaintiff.
SFV Room 200B: The acceptance of the exclusive agency was an assumption of its duties. The court also says we’re not to suppose that one party was to be placed at the mercy of the other.
SFV Room 200B: Many other terms of the agreement point the same way. Without an implied promise, the transaction cannot have such business efficacy as both parties must have intended at all events it should have.
SFV Room 200B: that at all events, it should have it. So the judgment was reversed.
SFV Room 200B: Thank you. What is this… first of all, this is decided in 1917.
SFV Room 200B: And his decision is literally codified in 2-306.
SFV Room 200B: Sub 3, I believe. Let me double check that.
SFV Room 200B: Subtube.
SFV Room 200B: The court’s analysis that there is an implied
SFV Room 200B: Promise to act in good faith to bring about a prophet.
SFV Room 200B: It’s literally codified under 2-306. How genius was this guy in 1917? Nobody had heard of an implied promise. Literally, they were saying, well, this is not… this is an illusory promise. There is no promise by this guy.
SFV Room 200B: He’s not losing anything. She is. She’s giving him exclusive rights, and he doesn’t have to do anything. He doesn’t have to sell anything.
SFV Room 200B: And the court says, not so fast.
SFV Room 200B: Partly, I believe, because it was Lucy Lady Duff, not because she survived Titanic, but I think because the court saw the inequality between the parties. She was in a much better position to… to draft the contract any way she wanted it.
SFV Room 200B: Right? So the court says, no, no, no. Now that you’ve found, you know, a deal with, what is it, Macy’s or whatever, and you want to get out of… was it Macy’s? I think it was.
SFV Room 200B: Let me take a look at my notes. Sears, sorry, Sears, and yeah, it was Sears. They signed agreement. The court says, not so fast, you’re not going to be able to screw the little guy.
SFV Room 200B: you know, to go enter into an agreement with Sears. So that’s essentially what, Porto says. Again, this isn’t… this is a, a,
SFV Room 200B: a minority of jurisdictions that would basically look to see if there is an implied promise of good faith and fair dealing, and sure enough, not only 2-209 says 2-306 sub 2 pretty much says the same thing.
SFV Room 200B: Okay? And that is in the back of your book.
SFV Room 200B: See, I think… VRC… let me see if I wanted to do that one.
SFV Room 200B: Yeah, let’s do that case.
SFV Room 200B: ERC Robert, anyone on Zoom?
SFV Room 200B: Do we have a volunteer from Zoom?
SFV Room 200B: Or page 260.
SFV Room 200B: Or should I just call it aims?
SFV Room 200B: If I call a name from in class, it’s not acceptable. We’re going to go to Zoom, okay?
Sevada Safarian: I could do it, Professor.
SFV Room 200B: Oh, my God, you just saved so many… Go ahead, sir. All yours.
Sevada Safarian: Continental Carbon, sold a material used in rubber products. PRC Rubber and Plastics made rubber products. The companies contracted for Continental to supply its material to PRC.
Sevada Safarian: The agreement stated that Continental would sell BRC approximately 1.8 million pounds of material annually.
Sevada Safarian: The agreement also gave Continental a right to, right of first refusal. If PRC sought to buy the product from another seller at a lower price, Continental had to be given the chance to meet the price before they were able to go to the…
Sevada Safarian: To the other place. During the first year of contract, Continental shipped 2.6 million pounds of material to BRC. For a variety of reasons, however, Continental was struggling to keep up with the demand the following year. BRC placed an order, but Continental neither confirmed nor shipped that order.
Sevada Safarian: Continental believed that as long as it shipped approximately 1.8 million pounds of material, it didn’t have to accept a full and fill every PRC order. PRC believed that Continental had to fill every order.
Sevada Safarian: BRC pointed to a provision of the agreement that stated that BRC would pay a lower price per pound if he bought much more than the $1.8 million
Sevada Safarian: pounds annually. BRC argued that, this demonstrated that 1.8 million pounds annually was merely an estimate of what BRC would, require.
Sevada Safarian: Rather than a fixed quantity.
Sevada Safarian: BRC thus argued that its agreement with Continental was a requirement contract. BRC brought suit, alleging that Continental had breached the contract, by not providing BRC with all the material required. The trial court sided with BRC, and Continental appealed.
Sevada Safarian: The issue is, is an agreement a require… is an agreement a requirements contract if one party is not obligated to purchase all of its needs for good exclusively from the other party?
Sevada Safarian: The court basically ruled that an agreement is not a requirements contract if one party is not obligated to buy all of its needs for, good from only that other party.
Sevada Safarian: All requirements contracts needs the buyers to buy goods, to buy them only from the seller, and to buy all of its needs for those goods from the seller.
SFV Room 200B: Very, very good. So the transactional,
SFV Room 200B: Takeaway from this case, in my opinion, is not…
SFV Room 200B: To consider one of these cases where
SFV Room 200B: a party is free to purchase all of its requirements from someone else as a requirement contract. Requirement contracts, to be enforceable as a requirement contract, must be clearly spelled out.
SFV Room 200B: Clearly spelled out, that this is a requirement contract, not because it just says requirements.
SFV Room 200B: But it’s… there’s an exclusivity right.
SFV Room 200B: Okay, to it. And that’s what I think the Court of Appeal wanted to make clear.
SFV Room 200B: They’re not easy, as you can see, you know, the lower court probably got it wrong, but it is what it is. I don’t like that case, but what the hell, I decided we’ll just do it, get it over with.
SFV Room 200B: Not estimate. Nobody cares for it.
SFV Room 200B: Okay.
SFV Room 200B: Now let’s do a case of good faith that is controlling.
SFV Room 200B: That is on page 264.
SFV Room 200B: Miseko, by the way, great job, thank you.
SFV Room 200B: Anybody wants to do Visaco?
SFV Room 200B: This is a requirement contract. So…
SFV Room 200B: Alright, so… is it recycro or Weissk?
SFV Room 200B: Twiceco? As yes. Museco? Who knows? I have no idea. Johnson Controls Incorporated? So we’ll call it JCI.
SFV Room 200B: JCI orally agreed with Waseco in 1998 to produce headrest, stay part 684F, for Daimler-Chrysler vehicles with
SFV Room 200B: Waseco investing in equipment and maintaining capacity for 4,000 parts daily. For 6 months, Waseco supplied that volume, after which JCI’s orders sharply declined.
SFV Room 200B: JCI then asked Waseco to do finishing work on Part 684B, but those orders also dropped off.
SFV Room 200B: The reduction was due to Daimler-Chrysler switching to redesigned headrests requiring different parts, which JCI sourced from a Canadian supplier closer to its assembly plant.
SFV Room 200B: In May 2001, Waseco filed suit against JCI for breach of contract, which granted summary judgment for JCI on the grounds that JCI had reduced its requirements for Part 684 in good faith, and had otherwise complied with the agreement.
SFV Room 200B: SECO appealed, and the issue was whether a buyer in a requirements contract with a seller can significantly reduce or terminate orders.
SFV Room 200B: orders for good faith movements, and the move was UC2-306 subsection 1. It permits good faith reductions in requirements as opposed to increases, even though the reductions
SFV Room 200B: maybe highly disproportionate to stated estimates. Very, very good.
SFV Room 200B: So, isn’t it sort of kind of a form of a modification, perhaps? Right? And 2-306,
SFV Room 200B: Sub 1, on page 970, it says, Output Requirements and Exclusive Dealings.
SFV Room 200B: I’m sorry, output, comma, requirements, and exclusive deals.
SFV Room 200B: A term which measures the quantity by the output of the seller, or the requirements of the buyer, means such actual output or requirements as may occur in good faith. That’s the key part.
SFV Room 200B: In good faith. In other words, if in good faith they reduce the numbers, the figures, that is not a breach, except that no quantity unreasonably disproportionate.
SFV Room 200B: As long as it’s reasonable, no problem. It’s unreasonable to any state estimate, or in the absence of a stated estimate, to any normal or otherwise compatible prior output or requirements may be tendered or demanded.
SFV Room 200B: Make sense? By the way, this became a major issue.
SFV Room 200B: during COVID.
SFV Room 200B: a number of cases came out during COVID, because as you can imagine, everything is shut down, supply chain went to hell, and I remember reading about Ford Motor Company getting into litigation with a whole host of
SFV Room 200B: supply chains, and others. It wasn’t just them. And… and this came up.
SFV Room 200B: this output requirement contracts came up all the time because these, you know, smaller companies fought basically in order to get a better deal, which makes a whole lot of sense. Colin says, look, I’m just going to buy all my requirements from you.
SFV Room 200B: But in exchange, you’re going to do it at a much lower price, but you get to employ all these people and make all this money.
SFV Room 200B: But you’re gonna… you’re gonna supply us far less than, you know, others. And of course.
SFV Room 200B: I think most people said yes, and then the COVID happened, and then everything went to hell.
SFV Room 200B: And then, of course, Ford says, for example, I’m just using Ford as an example, because I don’t remember the details, but instead of 10,000 units, now I want 2,000 units. And they’re like, wait a second, but all these people are going to lose their business, and lose their jobs, and…
SFV Room 200B: It so happened, and the litigation didn’t get anywhere, because the courts thought that was an,
SFV Room 200B: An unforeseen circumstance that, that… Changed, that, that was…
SFV Room 200B: And unforeseen and unpredicted, and something else that the court used to basically say that any modification was in good faith.
SFV Room 200B: Any at all.
SFV Room 200B: Okay.
SFV Room 200B: Yes. The part where it says, as opposed to increases instead of reductions, what would be an example of that? So, like, they wouldn’t allow if payment said, I want more instead? Well, because the court would look to see if that is going to bring an unreasonable burden on one of the parties. And if it does, then the court will not enforce it.
SFV Room 200B: Right? That’s what 2-31? 306. 306, 2-306 sub-A, sub 1, says. That basically, as long as it’s reasonable, we’re cool with it. If it’s unreasonable, then we go with the standards. What was the stat… what did you do last year?
SFV Room 200B: what did you do before the year prior, right? And they go based on that. Which, by the way, during COVID, that didn’t work either, because the year prior, everybody was doing great. And then COVID happened, and everything went to XHIT, right?
SFV Room 200B: I remember the car prices going up by, like, 10-20%, right? It was the only time I ever bought a leased car.
SFV Room 200B: I was like, wait a second, it’s so damn expensive to lease another car over, I don’t know, I just bought the car.
SFV Room 200B: Anyway, okay, any questions?
SFV Room 200B: Before we move on, Summit 7.
SFV Room 200B: on, 269.
SFV Room 200B: This is a unilateral contract analysis. Employment, Context.
SFV Room 200B: Anyone wants to take this one?
Adreanne Kumamoto: Okay, good.
Karia Salazar: I can do it. Oh.
SFV Room 200B: Okay, the first person on Zoom that spoke.
Adreanne Kumamoto: Okay.
SFV Room 200B: Thanks. All right.
SFV Room 200B: So, it’s you.
Adreanne Kumamoto: Okay, the parties are Summit7 Inc. and Kelly Lasker.
Adreanne Kumamoto: And they’re in Vermont, it’s 2005.
Adreanne Kumamoto: So, the employment relationship. Lasker was employed by Summit 7 as an at-will employee, meaning she could be terminated at any time for any reason.
Adreanne Kumamoto: During her employment, not at the time of hire, Summit 7 required Lasker to sign a non-competition agreement that prohibited her from working for any direct or indirect competitor for Summit 7.
Adreanne Kumamoto: Within Vermont, New Hampshire, and part of New York.
Adreanne Kumamoto: For 12 months following her voluntary resignation or termination for cause, this agreement stated that it did not create a contract of employment or alter her at-will status.
Adreanne Kumamoto: There’s a termination, a new job, so about 2 years after signing, Lasker voluntarily resigned from Summit 7 and began working for a competitor in a nearby county within the restricted area.
Adreanne Kumamoto: Summit 7 sued her to enforce the non-competition agreement and complaint injunction.
Adreanne Kumamoto: Prohibiting Lasker from working for the competitor.
Adreanne Kumamoto: Lasker argued that non-compete… that the non-compete was invalid because it lacked adequate consideration. She received no benefit, like a raise or anything like that, or a promotion in exchange for signing it. She also raised questions about the geographic scope of the restriction.
Adreanne Kumamoto: So, the trial ruling, the court held, Lasker continued employment with sufficient consideration to support the agreement.
Adreanne Kumamoto: Alternatively, her promotion and pay raises during employment also supported it. This agreement was therefore enforceable, and the injunction was proper.
Adreanne Kumamoto: The Supreme Court Vermont ruling, the court affirmed enforcement of the non-compete. It ruled that the continued at-will employment alone constitutes adequate consideration, as long as the employer doesn’t act in bad faith.
Adreanne Kumamoto: by terminating the employee shortly after obtaining the covenant. It rejected the notion that raises or promotions provided the consideration, since there was no… no link.
Adreanne Kumamoto: So, basically, it talked about the promotion, the raises, the continued employment with her at an at-will state, the geographic.
Adreanne Kumamoto: The conclusion was affirmed that the covenant was supported by adequate consideration because continued at-will employment sufficed.
Adreanne Kumamoto: The promotion arrays were not the consideration here, and the injunction enforcing the non-compete to a reasonable geographic extent was proper. There’s a dissenting
Adreanne Kumamoto: evaluation by Johnson, saying… talking about the illusory consideration. Dissent views considered employment as illusory, because the day before and the day after signing, Lasker remained terminatable at will. Yet, she lost significant post-employment freedom.
Adreanne Kumamoto: Considerations should be assessed at the moment of contracting, not by later performance, tying enforceability to whether the employer fires shortly after. Retrofits consideration post hoc.
Adreanne Kumamoto: And the policy non-competes merit close scrutiny due to unequal bargaining power. Employees may leverage job insecurity to extract broad restraints that jeopardize an employee’s livelihood.
Adreanne Kumamoto: So the issue was whether a non-competition agreement signed mid-employment by an at-will employee was supported by adequate consideration, and thus enforceable, where the employee received an express benefit other than continued employment.
Adreanne Kumamoto: And later… and left to work for a competitor within the restricted area.
SFV Room 200B: Excellent job, actually. Most students don’t even cover dissent.
SFV Room 200B: Very, very good job.
SFV Room 200B: So… the question. Question number one.
SFV Room 200B: In the context of contract enforcement, What is the difference between
SFV Room 200B: And a promise in an ad will employment versus a promise
SFV Room 200B: let’s say, a promise that you will receive certain… bless you. You will receive severance, benefits, insurance, etc.
SFV Room 200B: What are the two… what are the differences between these two provinces in the context of contract law?
SFV Room 200B: The one where you’re receiving benefits and stuff?
SFV Room 200B: you could have reliance on the… on those stuff, but on the other one, it’s just, like, you already know whatever happens, happens. You could be let go at any time, but…
SFV Room 200B: For the benefits one? Is an at-will promise, at-will employment promise enforceable?
SFV Room 200B: You’re… you’re warm. You’re there.
SFV Room 200B: So… Is an at-will promise, an at-will employment promise, enforceable?
SFV Room 200B: You know…
Karia Salazar: Nope.
Adreanne Kumamoto: It depends on what the promise is.
SFV Room 200B: Who said no? I said no. Why?
SFV Room 200B: Because it’s at will.
SFV Room 200B: Nobody’s important, nobody’s like… Well, you are correct. Why?
SFV Room 200B: What is important about at-will that makes the promise… Choice. What does that mean? Their own choice. It’s not a word on them. I’m looking for a legal…
SFV Room 200B: analysis.
LIANNA KARIBYAN: Either party could terminate at any time.
SFV Room 200B: Which means what? What kind of promise is that?
Karia Salazar: Services are not considered gratuia?
Adreanne Kumamoto: It’s revocable?
SFV Room 200B: Exclusory promise, very, very good!
SFV Room 200B: At-will employments are illusory promises, they don’t mean jack.
SFV Room 200B: Because, as you say, you can just come tomorrow and say, you know, I don’t want you here anymore, bye.
SFV Room 200B: And the employee can say, bye, leaving, can’t do anything to it. Which means what? Which means that whatever promise you made, or he made, is unenforceable. It’s called an illusory promise. As opposed to a unilateral employment.
SFV Room 200B: Where there is a promise for, let’s say, a benefit, or insurance, or whatever it might be, in exchange for you to work, right? Keep your employment.
SFV Room 200B: That is pretty much an enforceable promise, because you can say, yeah, in exchange for this continued employment, I gave them benefits.
SFV Room 200B: Make sense?
SFV Room 200B: My employees were…
SFV Room 200B: have always, well, except a couple of lawyers, have always been at will. But the truth is.
SFV Room 200B: I provided benefits.
SFV Room 200B: So if they… if I were to just suddenly say, you’re fired.
SFV Room 200B: And they lose that benefit, could they potentially have a cause of action against me? Probably.
SFV Room 200B: Is that one, like…
SFV Room 200B: they… they might… They would argue exactly what I just said, that this was an… this was a… not a mutual promise.
SFV Room 200B: But it was my performance in exchange for his promise to continue to provide this benefit if I continue my employment. Every day that I came to work, I reinforced that commitment.
SFV Room 200B: He breached it.
SFV Room 200B: He threw me off for no reason.
SFV Room 200B: Who knows?
SFV Room 200B: What could happen?
SFV Room 200B: Nobody has ever sued me. Hopefully they won’t, but… but you get the point, right?
SFV Room 200B: Now, the key question here, in this case,
SFV Room 200B: I’ll get to you in just a minute.
SFV Room 200B: is… What is the consideration for this non-competition agreement? That was the whole…
SFV Room 200B: thought process of the majority, I think, and the dissent, right? The dissent says what?
SFV Room 200B: This is at will. What the hell? There’s no consideration. No.
SFV Room 200B: And of course, the majority disagrees with that, and feels that there is, in fact, adequate consideration, because the commitment not to compete can be seen as an offer, and he accepted it by continually being employed.
SFV Room 200B: Just like, like, what I said whenever you provide benefits.
SFV Room 200B: Make sense?
SFV Room 200B: That’s what this case is all about, is to tell you that sometimes you can find consideration where you, if you think, you go, I don’t see any.
SFV Room 200B: They do.
SFV Room 200B: You may disagree with it, perfectly fine, that’s why there’s a dissent. If the justices can dissent, I guess we can too. Yes, ma’am, you had a question?
SFV Room 200B: Yes, I wanted to ask…
SFV Room 200B: In that case, when the employer provides benefits and the employee refuses to continue work.
SFV Room 200B: Well, what would the employer lose? Not a whole lot, right? The employer has said, you’re at will. It’s usually the employee that is receiving the benefits that probably will lose those benefits, depending on what the benefits are, right? If you’re contributing to your 401 or whatever, I don’t know, I don’t have one of those.
SFV Room 200B: I…
SFV Room 200B: I hope you have a Roth Island. No, I mean, at certain places where you work, and I think this school also provides that benefit. I never looked into it, but if I’m getting that kind of benefit, you know, I may lose
SFV Room 200B: that benefit, obviously, by not being continually employed. So I think usually it’s the employee that loses, not… not the employer. The employer probably will substitute you with someone else right away. If it’s such an important phase.
SFV Room 200B: They drop, and then the employee leaves several day and says that I’m leaving, and it’s like,
SFV Room 200B: time-sensitive project, then you need to, still have to find someone who’s going to subsidy and get the job done. Can you sue the employee? Only if you can prove that this was not an at-will employment, that there was, in fact, a contract between the two parties, that he would see to it that the project is completed.
SFV Room 200B: If that’s the case, absolutely. But if not, I would say, nope.
SFV Room 200B: Sort of like the case that we did, where the employer said, wait a second, they’re offering you $110, how much it came to? $12,000 a month? And the employer says, I’ll pay you, I’ll pay you $100, stay.
SFV Room 200B: Right? Because he knew if the guy leaves.
SFV Room 200B: you know, if it’s an… assuming it’s an adult employment, in that case, he had a contract for one year. But if he didn’t, he could have just walked out, no problem, I don’t care what happens. In fact, doesn’t it happen all the time? I heard from a dentist that the dental assistant, during surgery, said, I quit.
SFV Room 200B: During surgery. Oh, people walk out all the time. Patient is out. Really?
SFV Room 200B: Patient was out. Patient was… Haitian or the surgeon? The patient was under anesthesia. Yeah. And the assistant says, I quit. She got pissed off or something. She says, I quit. And you’re like, wait, wait, let’s finish this thing, and no, I quit now. Walked out.
SFV Room 200B: It was an at-will. He wanted to pay me to sue her.
SFV Room 200B: I didn’t find a reason to sue. I thought it would actually not benefit him, but…
SFV Room 200B: If it happens, it’s an Atwil… yeah, it was at will, yes. But, potentially.
SFV Room 200B: If there was any harm that came to that patient, she could turn around and sue her.
SFV Room 200B: She has a license, she had a legal obligation to stay there and see to it, all the way to the end.
SFV Room 200B: You know? And I think the patient did find out. Because isn’t it a pre-existing,
SFV Room 200B: She had legal duty. Absolutely, it’s at the very least, negligence. Right, yes, I was gonna say… At the very least, you can’t just leave the patient. You know, if I leave now, the damage to you guys’ property is minimal. But if I was doing surgery on you.
SFV Room 200B: Come on. But for the, yeah, but for the stupidity of the… But for the idiot leaving. Yeah, but for the idiot leaving. Any questions before we do problem one?
zahra movassaghigilani: Sure, sir, I have a question. So, if it’s at at-will employment, because there is no binding contract between the employer and employee, so any modification.
zahra movassaghigilani: It’s kind of, like, endorsed if the employee continues working, right?
SFV Room 200B: Any modification to what? Because I’m not sure if I understand.
zahra movassaghigilani: Let’s say, like, the employer comes back and, like, like, you know, wants something, like, for example, in this case, like, the… not working for the competitors. So, if the employee continues to work, that means that, like, he… there was consideration because, like, he couldn’t…
SFV Room 200B: to your interpretation and your arguments, right? Pretty much what this Court did.
SFV Room 200B: You say that the employee found the benefit in remaining employed. You could have said, I don’t want to sign it, bye.
SFV Room 200B: I’ll… I’m… I’m suing, a couple of punks.
SFV Room 200B: That stole from their employer.
SFV Room 200B: a CPA?
SFV Room 200B: They stole information, they stole money, And,
SFV Room 200B: The two of them, unfortunately for them, had all of their communication open, so the employer actually saw the communication between the two of these morons, planning and plotting for a year to conspire to steal tax information, identification of a lot of hate clients.
SFV Room 200B: And… and also money. They diverted money to their own… client would call to pay for CPA services, and they would say, here’s a Zelle account, please Zelle, and they would literally sell to that account. It was their account. Now, all this communication was open, so we have it all.
SFV Room 200B: What do you mean by open? Meaning they… it was a portal, apparently, in the, I have a copy of everything. Not only that, they… that his Facebook account was open at work, so the employer then went into Facebook and saw all of the private chat.
SFV Room 200B: Between him and others, you know, saying, my employer’s a…
SFV Room 200B: We have all of that, too. Now, I don’t know if I can get that, if it’s admissible or not. That, I don’t know yet, but at least I have the copy. I know what you could do when you retire. Instead of the Roth IRA, you could just write a book and make a profit from all your stories. These are… but I’m pretty sure most lawyers
SFV Room 200B: doing 27 years, 28 years, I’ve seen many, many things. Like, you guys have seen things.
SFV Room 200B: That I’m sure is, you know, shocking. Like, we watch those videos, and we’re like, oh, I want to follow that! That’s what you guys go through every day, right? That’s true.
SFV Room 200B: So, why did I say that?
SFV Room 200B: Oh, right. It was about… it was about the employment, with, with the employer and the breach. And of course, these guys, who are both licensed.
SFV Room 200B: So, when the case is over, I am sure they’re no longer going to be certified
SFV Room 200B: what is it? Account… tax preparers, or whatever the hell they are? They were CPAs. No, these two kids are not CPAs. My client is. But these guys are certified tax preparers or something, I don’t know what exactly the title is, but I’m sure it’s gone by the time we’re done, because, look, the dishonesty is too… you steal from the client.
SFV Room 200B: You steal from your employer, you steal the identity of the customers and their tax records, I got all of that.
SFV Room 200B: I don’t even know how… how dumb can you be to leave it all open?
SFV Room 200B: Right? And, you know, I decided to serve him at LAX. He went to Paris, France. I’m not kidding. None of that. And guess how did we know? That chat was open. So he’s got… we knew exactly when he’s coming back. I told my process server, I’ll pay you whatever you want.
SFV Room 200B: You’re gonna get… I said, Garo, listen. You’re gonna go to freaking LAX, you’re gonna surf that asshole right there, when he gets off the plane. You understand? He goes, are you serious? I said, I swear to God, I’ll pay you whatever you want. And then you videotape it, because my client wants to see it. They didn’t.
SFV Room 200B: I don’t get it. He just went up like this and said, hey, here you are, this is you. As soon as he’s walking to, you know, catch the Uber or whatever the hell it was, I don’t think he even got to it. Yeah, there are two, there are two people.
Sevada Safarian: One is serving, one is videotaping. And he says, you’ve been served. And he goes, Cal Westcaro?
SFV Room 200B: He looks and goes, basically, and I loved it. It was the best.
SFV Room 200B: You can put that in your book.
SFV Room 200B: No, wait until I take his deposition. Oh. That’s gonna be fun.
SFV Room 200B: How did you feel on that day when you came from your Paris trip? You feel good? Okay. Alright, let’s do problem one on page 2…
SFV Room 200B: So 273, yes, a good question. The actual employment, usually, in those cases, since it wasn’t a contract.
SFV Room 200B: Do they… if they ever recover something, is it through promissory stopper? Is that when it’s… You mean the employee? Yeah.
SFV Room 200B: Well, I mean, obviously, I sued, I think I mentioned I worked for a boss that his wife basically killed in my… did I mention that? Yeah. And I ended up suing on behalf of all these employees.
SFV Room 200B: They literally worked and didn’t get paid. So that… it would not really be that kind of a… that theory, it would literally be work performed. Not paid for, right? And so we sued for that. So, admin employee, basically.
SFV Room 200B: It is what it says, at will, right? If you walk out, can your employer sue you? No, really. Can’t. Even if the whole business goes to hell.
SFV Room 200B: Yeah, sorry.
SFV Room 200B: Right? And vice versa.
SFV Room 200B: I’ve had employees steal from me, but I never fired them, because I desperately needed them.
SFV Room 200B: I just have to put everything under the locking key.
SFV Room 200B: I have them on 10. What is steal? They still don’t know. They were stealing from my wallet.
SFV Room 200B: One of them. Wait, from your wall? I would always… yeah. Like, physical wall? Yeah. Like, the ash from your wallet. That’s crazy. I just went to my wife one day, and I said.
SFV Room 200B: Honey, did you ever take money out of my wallet? Because I see hundreds missing, because I always have only hundreds, because it’s a small wallet.
SFV Room 200B: She says, and of course not, why would I need your money? First of all, I’m employed. Second of all, if I ask for money, I’ll ask you. I like the flex move, by the way. No offense. I aspire to be like you in life, that’s what I’m saying, that’s all I’m saying. He’s gonna add that in his book. I’m gonna add that in his book. I went to a chiropractor, and the chiropractor…
SFV Room 200B: The chiropractor told me, what the hell is that in your pocket? I said, that’s my wallet. He goes.
SFV Room 200B: Are you stupid? This is why you’re having all these problems, because your wallet is this thick. You gotta make it this thick. So I decided I’m gonna carry one card with, like, $300 or $400 bills. Okay. Just in case, right? Don’t carry cash? Yes, I do not. Sorry. You know, everybody now goes with their phone, click, click. Right? I always carry cash. Cash is king, it’s not traceable.
SFV Room 200B: They said it’s not traceable. Especially if paid by a criminal client. That’s right. Bring it all. Anyway, money’s missing from the wallet, so I’m like, what the hell, what’s going on? You know, so I decided, my… one of my friends told me, put a camera in the office. I said, there’s no way my staff would ever do something like that. No way.
SFV Room 200B: And sure enough, the very first day.
SFV Room 200B: She walks right to my desk, looks around… That’s unacceptable, takes the money, and then… yeah. And then I was like, that was… that’s the only drawer that I put in my wallet. Nothing else goes in the… so I knew.
SFV Room 200B: pretty obvious, but she was hiding it in her, you know, I couldn’t really see it. Never told her. To this day, she doesn’t know. She still doesn’t work for me anymore, but I… I decided I’m just not gonna break her arm and tell her. Oh my god. I still send money, Grace. Maybe I wouldn’t fire her, but I would have told her. I would file criminal charges. Criminal charges? Absolutely! I will, employ an example, if that is…
SFV Room 200B: like, brought up on a question. You said…
SFV Room 200B: The main thing for that is that will, like, translates to illusory promise. Yeah, at-wheel employment, basically the promise is illusory because it’s if I want to. It’s like literally going to, you know, Apple stores and saying, I want to buy this computer if I want to.
SFV Room 200B: What does that mean? Nothing. It’s unenforceable.
SFV Room 200B: Right? It’s, if I want to, I’ll pay you. If I don’t want to, I won’t pay you. If I want to, I’ll marry you. If I don’t want to, I won’t marry you, means nothing.
SFV Room 200B: Right? And she’s like, watch! Dang! Then you’re like, okay, I’m alive. Alright. That doesn’t work anymore. Problem one. Listen, let’s do this problem one before I let you guys go.
SFV Room 200B: Stage 273. On April 30th, B and S signed a contract which provided that B agreed to buy, and S agreed to sell.
SFV Room 200B: Special pre-mixed barbecue sauce.
SFV Room 200B: at a designated price per gallon, to be used in toasted buns in B’s restaurant. S also agreed, meaning the seller, to give the buyer an exclusive right to use this sauce in the state of Oregon. This is an actual case, by the way.
SFV Room 200B: The agreement was for a period of 10 years. Beginning in May, B began purchasing several gallons of the sauce per month.
SFV Room 200B: In October, B decided it could make a similar sauce for less money. Thus, B did not place an order for the sauce that month, and informed S that it did not expect to buy any additional sauce. Does S have a cause of action against B?
Adreanne Kumamoto: Yes.
SFV Room 200B: Exclusive contract.
Karia Salazar: Yes.
Adreanne Kumamoto: This change wasn’t in good faith.
SFV Room 200B: Okay.
Adreanne Kumamoto: He did it because he was cheap.
Adreanne Kumamoto: He’s trying to save money, and that’s not okay.
SFV Room 200B: Anybody else?
Karia Salazar: Yes.
SFV Room 200B: Obviously, I could be wrong, but the agreement states that he’s just allowed to buy it and sell it for the period of 10 years, and the warning just makes it sound like
SFV Room 200B: He can back out of it.
SFV Room 200B: Because he doesn’t necessarily state that he has to buy, like, his sauce and continue. I’ll tell you this, and then I’ll let you guys go. The court found… yes, sir.
SFV Room 200B: It’s a retirements contract, right? Yeah, it is. That’s what the court said in cubic versus J&R Foods.
SFV Room 200B: Of Oregon. It’s a 1978 case. The court actually said the buyer was in breach. It had agreed to use his best efforts… remember that Lady Duffy Duck, whatever, Duck Duck, Donald Duck, whatever her name was.
SFV Room 200B: to use his best efforts to purchase all the sauce that he needed. And so, because he produced his own, he did actually breach the contract.
SFV Room 200B: Okay? So it was in good faith, is what the court said. It was in bad faith. Just because you can do it doesn’t mean you get to screw the other party. They relied on your promise, maybe they expanded their production, whatever. Hired more employees, and then you suddenly say, well, you know what? I can do it myself. I have a version of the…
SFV Room 200B: Shaken espresso, what is, what is that? Oh, the, that one. The Starbucks thingy? Yeah. I’m pretty close.
SFV Room 200B: To make a perfection. Perfected cotton. Brown sugar shaken. Yeah, that one, because the one under my office… That’s true under a contract. The buyer… when the buyer decides to do something for less, the seller should have a chance to match the price. Well, they…
SFV Room 200B: I don’t know if they could match the price or not. Probably if you make it your own, it’s far cheaper, but the point is, they had a contract, and the court thought that you breached it in bad faith. Even though it’s beneficial to you, it doesn’t mean you get to do it. You know? It’s like Ford suddenly saying, yeah, we have an output requirement contract with you guys, but I used to use my own leather, so screw you. And then suddenly everybody loses their jobs. Well, that’s a breach of contract.
SFV Room 200B: You agreed to it.
SFV Room 200B: You know, hi everybody, good night. We’ll see you next week sometime next Monday.
Karia Salazar: Thank you, have a good night.
Sevada Safarian: Thank you.
Fatima Razavi: Professor.
SFV Room 200B: It’s, like, some very.