Alaska Packers' Association v. Domenico - Case Brief Summary

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Alaska Packers Association v.

Domenico Case Brief Summary


Alaska Packers Association v. Domenico, 117 F. 99 (9th. Cir. 1902). Facts Alaska Packers Association (D) hired Domenico (P) for the salmon season and agreed to pay $50 dollars plus 2 cents for each salmon caught. After arriving at the location and beginning to work the workers demanded $100. Due to the remote location and brief duration of the salmon season, the company representative was compelled to agree to the terms. At the end of the salmon season Alaska Packers refused to pay more than the wage under the original contract. Domenico brought suit to recover the additional $50. He testified that the nets were defective, impairing his ability to maximize payment based on the number of salmon caught. The court found however that the evidence did not support Domenicos claim regarding the nets and entered judgment for Alaska Packers. Domenico appealed. Issues 1. Is a promise to pay more for doing what the other party had already contracted to do enforceable? 2. Is a contract modification enforceable without new consideration? Holding and Rule 1. No. A promise to pay more for doing what the other party had already contracted to do is not enforceable. 2. No. A contract modification is not enforceable without new consideration. Preexisting Duty 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 is legally obligated to do or refrains or promises to refrain from doing something he is not legally privileged to do. A party cannot demand additional compensation for what he has already obligated himself to do. The real question is a question of law. Domenico agreed in writing to render services to the plaintiff for a stated compensation. Domenico demanded extra pay in remote waters where the fishing season is very short and where it would be impossible to find other workers. Consent by the defendant under such circumstances is not valid consideration. A party to a contract who refuses to perform, and coerces a promise from the other party to pay additional compensation for doing that which he is legally bound to do, takes an unjustifiable advantage of the necessities of the other party. It undermines the institution of contract to allow a contract party to use the threat of breach to get the contract modified in his favor not because anything has happened to require

modification in the mutual interest of the parties but simply because the other party unless he knuckles under to the threat will incur costs for which he will have no adequate legal remedy. The court discredited the libels because they didnt find it reasonable that the defendant would not provide them with serviceable nets. It was for his own good so there wasnt enough supporting evidence that he would do otherwise because it would hurt his interest. (profit seeking defendant) Exceptions: supported by new consideration on both sides even if very minimal and slight. Unseen foreseen circumstances. It is binding if fair and equitable in view of circumstances not anticipated by the parties when the contract was made: like the mining example and the med school unexpected safety concerns costs. Relliances- on a promised modification Mutual release- mutual recession Disposition Judgment reversed. See Stilk v. Myrick for a contracts case brief in which the court held that a promise to give crewmen a share of the pay of two deserters was invalid for lack of new consideration. 3 sentence IRACWhether when the appellants superintendent at Pyramid Harbor was authorized to make the alleged contract of May 22d, and that he executed it on behalf of the appellant was it supported by a sufficient consideration? The party who refuses to perform , and thereby coerces a promise from the other party to the contract to pay him an increased compensation for doing that which he is legally bound to do, takes an unjustifiable advantage of the necessities of the other party. When a party merely does what he has already obligated himself to do, he cannot demand an additional compensation therefore; and although by taking advantage of the necessities of his adversary, he obtains a promise for more the law will regard it as nudum pactum, and will not lend its process to aid in the wrong.

Kelsey-Hayes Co. v. Galtaco Redlaw Castings Corp.


Citation. 749 F. Supp. 794,1990 U.S. Dist.14 U.C.C. Rep. Serv. 2d (Callaghan) 469 Brief Fact Summary. This case involves a requirements contract where the supplier threatened to stop production if the buyer did not agree to pay a higher price for the product. Synopsis of Rule of Law. A contract is voidable if made under economic duress. Facts. The Plaintiff, Kelsey-Hayes (Plaintiff), entered into a requirements contract for the purchase of castings, with the Defendant, Galtaco Redlaw Castings Corp. (Defendant). The contract was for a threeyear term and it included fixed price terms. The Defendant then began to suffer financial difficulties and made an offer to its customers that it would keep operating in exchange for a price increase of thirty percent. The Plaintiff was not able to find an alternative source of casings so it accepted Defendants offer, although it protested that this offer amounted to a breach of contract. Defendants other customers did find alternate supplies of castings. Therefore, Defendant offered Plaintiff an additional thirty percent increase in exchange for its remaining in operation solely for Plaintiffs benefit. Again, Plaintiff felt it had no choice but to accept, as it still had not found a reasonable alternate source for castings. Plaintiff also feared that if it did not accept, it w ould cause its major client, Ford Motor Co., to stop production and destroy Plaintiffs business reputation. Plaintiff sued for breach of contract, asking for a declaratory judgment releasing it from paying the increased prices. Defendant moved for summary judgment, contending that the price modification invalidated the previous contract. Issue. Must a person be subjected to an unlawful act such as threat of a tort or crime in order to make a claim of duress? Held. No. Motion for summary judgment denied. Declaratory judgment granted in favor of Plaintiff. Michigan courts recognize the doctrine of economic duress and Defendants offer to Plaintiff amounted to economic duress. Economic duress can exist even in the absence of criminal or tortuous activity, so long as assent is induced by an improper threat and the victim is left with no reasonable alternative. Discussion. The court looked to Michigan law to define economic duress. In the instant case, it seemed clear that Plaintiff was left with no reasonable alternative and had no choice, but to assent to Defendants offer. Although Plaintiff assented, it also vigorously complained that it viewed Defendants offer to be a breach of contract, giving Defendant notice that Plaintiff did not freely enter into the modification. The court noted that it would have been inadequate for Plaintiff to accept the breach and then sue for damages, as Plaintiff would have then been forced to stop production and risk damaging its business reputation. Finally, the court examined the UCC and found that its language supported the economic duress doctrine.

UCC 2-209(1) Modification needs no consideration to be binding. IRAC- Whether Plaintiff has presented enough evidence to allow a reasonable finder of the facts to conclude the 1989 agreements were executed under duress. Under Michigan law, entering a superseding inconsistent agreement covering the same subject matter rescinds an earlier contract and operates as a waiver of any claim for breach of the earlier contract not expressly reserved. A subsequent contract or modification is invalid and therefore does not supersede an earlier contract when the subsequent contract was entered into under duress. New rule- a contract is voidable if a partys manifestation of assent is induced by an improper threat by another party that leaves the victim no reasonable alternative. (Restatement 2 of k, 175 (1) economic duress can exist in the absence of an illegal threat.

Brookside Farms v. Mama Rizzoss, Inc


Citation. 873 F. Supp. 1029,1995 U.S. Dist.28 U.C.C. Rep. Serv. 2d (Callaghan) 1110 Brief Fact Summary. This case involves a requirements contract for the shipment and purchase of basil, which was subsequently modified by oral agreement. Synopsis of Rule of Law. The Statute of Frauds (SOF) will not bar an oral contract modification where one party reasonably relied upon the modification and where the oral agreement did not materially alter the terms of the original agreement. Facts. The Plaintiff, Brookside Farms (Plaintiff), entered into a requirements contract with the Defendant, Mama Rizzos Inc (Defendant). Under the terms of the contract, the Defendant agreed to buy a minimum amount of basil from the Plaintiff for a one-year period. The contract contained two price terms, depending on the season. The contract also contained a clause prohibiting oral modifications. After the contract was executed, the Defendant orally requested that the Plaintiff remove the stems from basil leaves. The Plaintiff agreed to this additional duty in exchange for an additional $.50 per pound. The Defendant promised he would make a note of this agreement on the original contract. Shortly after, the Defendant discontinued its order for basil leaves for approximately a two-month period. When the Defendant resumed its purchases, the parties agreed to a higher price per pound and two price modifications were made to the contract. The Plaintiff then issued 21-purchase orders and submitted payment for 8 such orders. Unfortunately, the check was denied for insufficient funds. The Plaintiff then sued the Defendant for breach of contract claiming that the Defendant refused to accept the minimum of basil it agreed to under the terms of the requirements contract and that it is liable for payment for the remaining purchase orders. The Defendant argues that the Plaintiff breached the contract by raising prices in violation of the clause prohibiting oral modifications.

Issue. Can a requirements contract for the sale of goods that prohibits oral modifications be validly modified by an oral agreement? Held. Yes. The Plaintiffs Motion for Summary Judgment is granted with respect to claims that the Defendant breached contract. The Defendants Motion for Summary Judgment is denied. This Court found that while the SOF bars oral agreements that materially modify a written contract, oral changes that do not materially alter the contract are not barred. This Court also found that where an oral modification would be binding in the absence of the SOF, the oral modification is binding when specific goods have been received and accepted.

Discussion. The court first examined the Texas SOF and its exceptions and reasoned that the SOF does not bar oral modifications that do not materially change the terms of a written agreement. The court also looked to the fact that the Defendant promised to reduce the oral modification to writing by noting it on the original contract. This notation constituted a valid writing under the SOF; thus, the SOF was satisfied. Also, as the Plaintiff relied upon the Defendants promise to make this writing, the oral modification was also valid by estoppel. The court also looked to the Uniform Commercial Code (UCC), which codifies the duty of good faith and fair dealings in commercial transactions and requires merchants to observe reasonable commercial stan

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