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Brief Fact Summary. Alaska Northern Development, Inc. (Plaintiff) appeals from a judgment in favor of Alyeska Pipeline Service Co. (Defendant) in a contract formation and interpretation dispute.

Synopsis of Rule of Law. Parol evidence restricts external evidence that contradicts the integrated terms of a written contract.

Facts. David Reed (Reed), a shareholder of Plaintiff, initiated discussions with Defendant regarding the purchase of surplus parts. A letter of intent was prepared by Reed, in which Plaintiff proposed to purchase Defendant’s entire inventory of Caterpillar parts. The place for purchase price was left blank. Defendant responded with its own letter, also leaving the purchase price blank, but added that the sale was subject to the final approval of the owner committee. The price was subsequently decided upon. The owner’s committee rejected the agreement. Plaintiff contends that it was said that the owner’s committee’s approval was necessary for the price term only, and not the entire contract. Plaintiff filed a complaint alleging that there was a contract between Plaintiff and Defendant, which Defendant breached. Defendant moved for summary judgment and the superior court granted summary judgment in favor of Defendant on the punitive damages count. The court initially denied Defendant’s
Motion for Summary Judgment, however, the court reviewed the case and announced that it would reverse its earlier holding and grant Defendant’s motion. The court applied the parol evidence rule to the letter and therefore no extrinsic evidence could be presented to the jury.

Issue. Whether the writing was integrated, and if so whether the evidence of a prior or contemporaneous agreement contradicts or is inconsistent with the integrated portion?

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Brief Fact Summary. Luther Williams, Jr., Inc. (Plaintiff) sought to recover $670.00 as liquidated damages under a contract on Johnson’s (Defendant) home. Plaintiff’s objections to the introduction of evidence concerning a parol agreement were overruled and a verdict was returned for the Defendant. Plaintiff appeals.

Synopsis of Rule of Law. The parol evidence rule does not bar testimony of an oral agreement as a condition precedent to a final written contract.

Facts. Plaintiff and Defendant entered into a written agreement to sell and buy real property. Defendant was unable to obtain financing and Plaintiff claimed that the Defendant breached their contract. Defendant testified that they thought the contract was merely an estimate, and that they told Plaintiff the improvements would depend on financing and that they would not become obligated until their procured funds. Plaintiff objected to the introduction of evidence concerning a parol agreement regarding financing. The objections were overruled and the jury returned a verdict for the Defendant. Plaintiff appeals.

Issue. Whether the admission of testimony regarding the oral condition precedent violated the parol evidence rule?

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Brief Fact Summary. The Mitchells (Plaintiffs) brought an action against the Laths (Defendants) to enforce an oral agreement to remove an icehouse from property purchased from the Defendants. Defendants appealed from judgment granted in favor of Plaintiffs.

Synopsis of Rule of Law. An oral agreement is not collateral to the written agreement if its subject is closely related to the subject of the written agreement.

Facts. Defendants owned a farm, which they wished to sell. Across the road they had they had an icehouse, which they might remove. Plaintiffs looked over the land to purchase and found the icehouse objectionable. The Defendants orally promised in consideration of the purchase of their farm by the Plaintiffs to remove the said icehouse. Relying on that promise Plaintiffs made a written contract to buy the property and after receiving the deed they entered into possession and spent considerable amounts of money improving the property. Defendants have not fulfilled their promise as to the icehouse and did not intend to do so.

Issue. Whether the parties’ oral agreement may be enforced?

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Brief Fact Summary. Plaintiff Washington State Hop Producers, Inc. brought an action against Defendant Goschie Farms, Inc. to enforce the contract. Plaintiff appeals from a judgment of the Court of Appeals, which affirmed the trial court’s decision to grant summary judgment to Defendant.

Synopsis of Rule of Law. A contract may be rescinded under the doctrine of “frustration of purpose” by determining that the principal purpose of the party to enter into the contract was frustrated without fault of either of the contracting parties.

Facts. From 1965 until 1985, the United States Department of Agriculture (USDA) required hop growers to obtain Federal allotments in order to market their hops; this was called a hop base. Hop base became a scarce, expensive commodity and a secondary market developed for trading. Plaintiff was organized in 1979 to acquire, lease and sell federal hop base. Since the system restricted entry, the USDA considered making various efforts to change it, but by June 1985 substantial changes in the marketing order were not expected. On May 31, 1985, Plaintiff mailed invitations to bid on two pools of hop base for sale. On June 21, 1985, Plaintiff mailed notices of award to bids in the $0.5 to $0.76 range, including Defendant and other respondents. On June 27, 1985, the USDA terminated the marketing order effective December 31, 1985. Defendant refused to perform on the contract. Plaintiff was able to sell 50% of one of the pools for price of $0.7 per pound compared with earlier successful bids
of $0.6 per pound. Plaintiff brought an action to enforce the contracts. The trial court granted summary judgment to the Defendant. The Court of Appeals affirmed and Plaintiff appealed.

Issue. Whether Defendant is entitled to relief under the doctrine of frustration of purpose?

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Brief Fact Summary. The Supreme Court of the United States hears the case to consider whether the Government may assert four special defenses to Respondents’ claims for breach: the canon of construction that surrenders of sovereign authority must appear in mistaken terms; the rule that an agent’s authority to make such surrenders must be delegated in express terms; the doctrine that a government may not contract to surrender certain reserved powers; and the principle that a government’s sovereign acts do not give rise to a claim for breach of contract.

Synopsis of Rule of Law. The unmistakability doctrine, which states that all government contracts under sovereign power will remain intact unless surrendered in unmistakable terms, does not shield the government from liability under contracts established with private parties.

Facts. This case is regarding the impact of FIRREA’s tightened capital requirements on three thrift institutions created by way of supervisory mergers. Glendale Federal Bank, Winstar corporation, and The Statesman Group (Respondents) acquired thrifts in 1981, 1984, and 1998, respectively. After the passage of FIRREA, federal regulators seized the Winstar and Statesman thrifts for failure to meet the new capital requirements. Respondents filed suit seeking money damages on both contractual and constitutional grounds on the grounds that the Bank Board and FSLIC promised them that the supervisory good will created in their merger transactions could be counted toward regulatory capital requirements. The court granted summary judgment on the contractual claims, finding that the government breached its contractual obligations to permit respondents to count supervisory goodwill and capital creditors toward their regulatory capital requirements. The Federal Circuit reversed, finding that the
parties did not allocate to the government the risk of a subsequent change in the regulatory capital requirements, but the full court reversed the panel decision and affirmed the Court of Federal Claims ruling. The Court took the case to consider the extent to which special rules govern enforcement of the governmental contracts at issue here.

Issue. Whether in the enforceability of contracts between the Government and participants in a regulated industry, they are given particular regulatory treatment in exchange for their assumption for liabilities that threatened to produce claims against the Government as insurer?

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Brief Fact Summary. Kaiser-Francis Oil Co. (Plaintiff) sought to enforce the provisions of two similar gas purchase contracts against Producer’s Gas Co. (Defendant). Defendant appeals from judgment of the district court granting summary judgment of the issue of liability in favor of the Plaintiff.

Synopsis of Rule of Law. A force majeure event does not include a decline in demand or an inability to sell gas at or above the contract price.

Facts. In a contract between Plaintiff and Defendant, Defendant was required to pay for certain quantities from wells in which Plaintiff had an interest. When the resale price of gas decreased, the Defendant did not pay the Plaintiff because he was paying the Plaintiff’s co-owners at reduced prices. Defendant also declined to pay Plaintiff for the small amount of gas taken. The district court granted summary judgment on the issue of liability in favor of Plaintiff. The parties then stipulated to the appropriate damages, interest, and attorney’s fees. Defendant argues on appeal that the force majeure provision in the contract extends to a partial lack of demand caused by market forces; the gas to be supplied by Plaintiff failed to meet the quality specification of the contract; Defendant was not purchasing gas from Plaintiff but rather from Plaintiff’s co-owner; and any take-or-pay payments required under the contract violate ceiling prices set by the Natural Gas Policy Act.

Issue. Whether the Defendant is liable under the contract?

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Brief Fact Summary. Canadian Industrial Alcohol Co. (Plaintiff) sued Dunbar Molasses Co. (Defendant) for breach of an executory contract of purchase and sale. Defendant appeals from a judgment for the Plaintiff.

Synopsis of Rule of Law. Failure of a seller’s supplies does not amount to impossibility.

Facts. Plaintiff contracted with the Defendant to purchase approximately 1,500,000 wine gallons of molasses. Defendant’s supplier decided not to produce a sufficient amount of molasses and did not deliver to the Plaintiff the full amount of molasses, which were provided for in the contract. Plaintiff brought this action to recover damages. Defendant contends that the duty to deliver was conditioned upon the production by the National Sugar Refinery of molasses sufficient in quantity to fulfill Plaintiff’s order.

Issue. Whether the continuance of special circumstances appears from the terms of the contract to have been an assumption in the minds of the contracting parties conditioning their belief in a continued obligation?

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Brief Fact Summary. Timothy Dills and the Neecon Corporation (Plaintiff) sued the Town of Enfield (Defendant) to recover a $100,000.00 deposit Plaintiff had paid the agency under an option and contract for sale. Plaintiff appealed from a judgment for the Defendant.

Synopsis of Rule of Law. The occurrence of a foreseeable event, contemplated by the parties time at the time of the contract, does not render the promised performance impractical and thereby excused.

Facts. Plaintiff sued Defendant to recover the deposit he paid to Defendant under the option and contract for the sale of land. Plaintiff, at the time of the making of the contract, paid a $100,000.00 deposit toward the contract price of $985,900.00. The trial court rendered judgment for the Defendant and Plaintiff appealed. The Neecon Corporation (Plaintiff), owned by Dills, was to perform the necessary work. Plaintiff was unable to obtain financing and so he failed to submit construction plans. Thereafter both parties tried to invoke the contract’s termination clause. Plaintiff terminated the contract based on his inability to obtain the financing within the time specified by the contract. The trial court held that unless there was impracticability in preparing and submitting the construction plans rather than for obtaining financing there was no basis for excuse.

Issue. Whether the doctrine of commercial impracticability excuses a developer from submitting construction plans when he discovers that necessary financing had become available?