12 Additional Cases 12 Additional Cases

From Previous Curricula

12.1 Patel v. American Board of Psychiatry & Neurology, Inc. 12.1 Patel v. American Board of Psychiatry & Neurology, Inc.

Dilipkumar C. PATEL, M.D., Plaintiff-Appellant, v. AMERICAN BOARD OF PSYCHIATRY AND NEUROLOGY, INC., Defendant-Appellee.

No. 92-1163.

United States Court of Appeals, Seventh Circuit.

Argued Aug. 5, 1992.

Decided Sept. 23, 1992.

*1313Mary Reitmeyer (argued), Richard M. Guerard, Pittsburgh, Pa., for plaintiff-appellant.

David J. Armstrong, Steven B. Larchuk, Dickie, McCamey & Chilcote, Pittsburgh, Pa., Ronald Betman, Roibin J. Ryan (argued), James W. Rankin, Kirkland & Ellis, Chicago, Ill., for defendant-appellee.

Before POSNER and KANNE, Circuit Judges, and ESCHBACH, Senior Circuit Judge.

POSNER, Circuit Judge.

To be board-certified by the American Board of Psychiatry and Neurology, a physician must have a year of internship after graduation from medical school and three years of residency, also postgraduate. At the time relevant to this case, the Board allowed the internship to be done abroad. Dr. Patel wrote the Board requesting credit for his Indian internship and attaching to the letter documents showing that it had been completed by May 1979 and that he had not received his medical degree until, December. Nevertheless the Board wrote him back that his Indian internship would satisfy the internship requirement for certification by the Board. He later obtained a residency in the United States, in the third year of which he wrote the Board for confirmation that his Indian internship indeed qualified. The Board replied in the negative, so Patel was compelled, after completing his three years of residency, to do a year of internship, after which the Board certified him.

He brought this diversity suit against the Board, charging breach of contract and promissory estoppel, and seeking damages presumably based on the earnings he lost as a result of the postponement of his certification. The judge granted the Board summary judgment on the contract count but allowed the promissory estoppel count to go to trial. After a bench trial, the judge gave judgment for the Board on the ground that Patel’s reliance on the Board’s *1314initial letter had been unreasonable. Patel appeals only from the summary judgment on the contract count.

The judge held that any contract to waive the requirement of a post-graduate internship was unenforceable because not supported by consideration. He was right. An enforceable contract, in Anglo-American common law, is an exchange. American Law Institute, Restatement (Second) of Contracts § 17 (1979); 1 E. Allan Farnsworth, Farnsworth on Contracts §§ 2.2-2.4 (1990). There was no exchange here. Patel’s lawyer is misled by the (legal) dictionary definition of consideration as benefit to the promisor (the Board) or detriment to the promisee (Patel), 3 Samuel Williston, A Treatise on the Law of Contracts § 7:5, at pp. 54-55 (4th ed., Richard A. Lord ed. 1992) (for criticism of the definition, see 1 Arthur C. Corbin, Contracts §§ 121-124 (1963)), as if Patel could have made the Board’s assurance that he had satisfied the internship requirement binding by beating his head against the wall. He incurred a detriment in the sense of a cost by (as he argues) submitting documentation in support of his application for credit for his Indian internship. But the detriment was not part of a bargain. It's not as if the Board had told Patel that if he sat for some exam or gave up his Indian citizenship the Board would credit his pregraduation internship. Unbargained detriments are relevant not to contract but to estoppel.

Patel does not strengthen his case by arguing that the Board’s letter stating that his Indian internship would be credited was the offer of a unilateral contract that he accepted by completing a three-year post-graduate residency in the United States. The only difference between a bilateral and a unilateral contract is that in the second the offeror waives formal acceptance; it is enough that the offeree performs as specified in the offer; performance and acceptance merge. But the performance must satisfy the requirement of consideration, since there is nothing else (i.e., the offeree’s promise — he makes no promise) that might do so. The performance could confer a palpable benefit on the offeror — as where the offer is of a reward for returning the offeror’s lost Siamese cat. Or it could impose a detriment on the offeree, as where the specified performance is to refrain from smoking. It is true that in every contract case, if we are right that contract is the domain of exchange, the promisee’s detriment must really be a form of benefit — it is something the offeror wants and is willing to pay for. 3 Williston, supra, § 7:5, at p. 61. But sometimes the element of benefit is so oblique that it seems more natural to focus on the burden placed on the offeree, as in the smoking case. It might be better to speak of direct and indirect benefit, to make clear that the offeree is obligated at the least to do something that the offeror wants him to do even if the requested performance will not confer a palpable, an obvious benefit on the offeror.

But in the case at hand, when the contract is recast as a unilateral contract something altogether fundamental in such a contract is seen to be missing: requested performance. 1 Farnsworth, supra, § 2.9, at p. 61. When the Board told Dr. Patel that his Indian internship satisfied the Board’s requirement of an internship, it didn’t ask him to do anything, or for that matter to refrain from anything. Id. It told him that he didn’t have to do (or for that matter not do) anything. It may have misled him, but a misleading statement is not ipso facto the offer of a unilateral contract.

Affirmed.

12.2 Hill v. Gateway 2000, Inc. 12.2 Hill v. Gateway 2000, Inc.

105 F.3d 1147 (1997)

Rich HILL and Enza Hill, on behalf of a class of persons similarly situated, Plaintiffs-Appellees,
v.
GATEWAY 2000, INC., and David Prais, Defendants-Appellants.

No. 96-3294.

United States Court of Appeals, Seventh Circuit.

Argued December 10, 1996.
Decided January 6, 1997.
Rehearing and Suggestion for Rehearing Denied February 3, 1997.

[1148] Daniel A. Edelman (argued), Cathleen M. Combs, James O. Latturner, Charles E. Petit, Edelman & Combs, Chicago, IL, for Plaintiffs-Appellees.

Terry M. Grimm, Thomas J. Wiegand, Winston & Strawn, Robert M. Rader (argued), Winston & Strawn, Washington, DC, for Defendants-Appellants.

Before CUMMINGS, WOOD, Jr., and EASTERBROOK, Circuit Judges.

Rehearing and Suggestion for Rehearing En Banc Denied February 3, 1997.

EASTERBROOK, Circuit Judge.

A customer picks up the phone, orders a computer, and gives a credit card number. Presently a box arrives, containing the computer and a list of terms, said to govern unless the customer returns the computer within 30 days. Are these terms effective as the parties' contract, or is the contract term-free because the order-taker did not read any terms over the phone and elicit the customer's assent?

One of the terms in the box containing a Gateway 2000 system was an arbitration clause. Rich and Enza Hill, the customers, kept the computer more than 30 days before complaining about its components and performance. They filed suit in federal court arguing, among other things, that the product's shortcomings make Gateway a racketeer (mail and wire fraud are said to be the predicate offenses), leading to treble damages under RICO for the Hills and a class of all other purchasers. Gateway asked the district court to enforce the arbitration clause; the judge refused, writing that "[t]he present record is insufficient to support a finding of a valid arbitration agreement between the parties or that the plaintiffs were given adequate notice of the arbitration clause." Gateway took an immediate appeal, as is its right. 9 U.S.C. § 16(a)(1)(A).

The Hills say that the arbitration clause did not stand out: they concede noticing the statement of terms but deny reading it closely enough to discover the agreement to arbitrate, and they ask us to conclude that they therefore may go to court. Yet an agreement to arbitrate must be enforced "save upon such grounds as exist at law or in equity for the revocation of any contract." 9 U.S.C. § 2. Doctor's Associates, Inc. v. Casarotto, ___ U.S. ___, 116 S.Ct. 1652, 134 L.Ed.2d 902 (1996), holds that this provision of the Federal Arbitration Act is inconsistent with any requirement that an arbitration clause be prominent. A contract need not be read to be effective; people who accept take the risk that the unread terms may in retrospect prove unwelcome. Carr v. CIGNA Securities, Inc., 95 F.3d 544, 547 (7th Cir.1996); Chicago Pacific Corp. v. Canada Life Assurance Co., 850 F.2d 334 (7th Cir.1988). Terms inside Gateway's box stand or fall together. If they constitute the parties' contract because the Hills had an opportunity to return the computer after reading them, then all must be enforced.

ProCD, Inc. v. Zeidenberg, 86 F.3d 1447 (7th Cir.1996), holds that terms inside a box of software bind consumers who use the software after an opportunity to read the terms and to reject them by returning the product. Likewise, Carnival Cruise Lines, Inc. v. Shute, 499 U.S. 585, 111 S.Ct. 1522, 113 L.Ed.2d 622 (1991), enforces a forum-selection clause that was included among three pages of terms attached to a cruise ship ticket. ProCD and Carnival Cruise Lines exemplify the many commercial transactions in which people pay for products with terms to follow; ProCD discusses others. 86 F.3d at 1451-52. The district court concluded in ProCD that the contract is formed when the consumer pays for the software; as a result, the court held, only terms known to the consumer at that moment are part of the contract, and provisos inside the box do not count. Although this is one way a contract [1149] could be formed, it is not the only way: "A vendor, as master of the offer, may invite acceptance by conduct, and may propose limitations on the kind of conduct that constitutes acceptance. A buyer may accept by performing the acts the vendor proposes to treat as acceptance." Id. at 1452. Gateway shipped computers with the same sort of accept-or-return offer ProCD made to users of its software. ProCD relied on the Uniform Commercial Code rather than any peculiarities of Wisconsin law; both Illinois and South Dakota, the two states whose law might govern relations between Gateway and the Hills, have adopted the UCC; neither side has pointed us to any atypical doctrines in those states that might be pertinent; ProCD therefore applies to this dispute.

Plaintiffs ask us to limit ProCD to software, but where's the sense in that? ProCD is about the law of contract, not the law of software. Payment preceding the revelation of full terms is common for air transportation, insurance, and many other endeavors. Practical considerations support allowing vendors to enclose the full legal terms with their products. Cashiers cannot be expected to read legal documents to customers before ringing up sales. If the staff at the other end of the phone for direct-sales operations such as Gateway's had to read the four-page statement of terms before taking the buyer's credit card number, the droning voice would anesthetize rather than enlighten many potential buyers. Others would hang up in a rage over the waste of their time. And oral recitation would not avoid customers' assertions (whether true or feigned) that the clerk did not read term X to them, or that they did not remember or understand it. Writing provides benefits for both sides of commercial transactions. Customers as a group are better off when vendors skip costly and ineffectual steps such as telephonic recitation, and use instead a simple approve-or-return device. Competent adults are bound by such documents, read or unread. For what little it is worth, we add that the box from Gateway was crammed with software. The computer came with an operating system, without which it was useful only as a boat anchor. See Digital Equipment Corp. v. Uniq Digital Technologies, Inc., 73 F.3d 756, 761 (7th Cir. 1996). Gateway also included many application programs. So the Hills' effort to limit ProCD to software would not avail them factually, even if it were sound legally — which it is not.

For their second sally, the Hills contend that ProCD should be limited to executory contracts (to licenses in particular), and therefore does not apply because both parties' performance of this contract was complete when the box arrived at their home. This is legally and factually wrong: legally because the question at hand concerns the formation of the contract rather than its performance, and factually because both contracts were incompletely performed. ProCD did not depend on the fact that the seller characterized the transaction as a license rather than as a contract; we treated it as a contract for the sale of goods and reserved the question whether for other purposes a "license" characterization might be preferable. 86 F.3d at 1450. All debates about characterization to one side, the transaction in ProCD was no more executory than the one here: Zeidenberg paid for the software and walked out of the store with a box under his arm, so if arrival of the box with the product ends the time for revelation of contractual terms, then the time ended in ProCD before Zeidenberg opened the box. But of course ProCD had not completed performance with delivery of the box, and neither had Gateway. One element of the transaction was the warranty, which obliges sellers to fix defects in their products. The Hills have invoked Gateway's warranty and are not satisfied with its response, so they are not well positioned to say that Gateway's obligations were fulfilled when the motor carrier unloaded the box. What is more, both ProCD and Gateway promised to help customers to use their products. Long-term service and information obligations are common in the computer business, on both hardware and software sides. Gateway offers "lifetime service" and has a round-the-clock telephone hotline to fulfil this promise. Some vendors spend more money helping customers use their products than on developing and manufacturing them. The document in Gateway's box includes promises of [1150] future performance that some consumers value highly; these promises bind Gateway just as the arbitration clause binds the Hills.

Next the Hills insist that ProCD is irrelevant because Zeidenberg was a "merchant" and they are not. Section 2-207(2) of the UCC, the infamous battle-of-the-forms section, states that "additional terms [following acceptance of an offer] are to be construed as proposals for addition to a contract. Between merchants such terms become part of the contract unless ...". Plaintiffs tell us that ProCD came out as it did only because Zeidenberg was a "merchant" and the terms inside ProCD's box were not excluded by the "unless" clause. This argument pays scant attention to the opinion in ProCD, which concluded that, when there is only one form, "sec. 2-207 is irrelevant." 86 F.3d at 1452. The question in ProCD was not whether terms were added to a contract after its formation, but how and when the contract was formed — in particular, whether a vendor may propose that a contract of sale be formed, not in the store (or over the phone) with the payment of money or a general "send me the product," but after the customer has had a chance to inspect both the item and the terms. ProCD answers "yes," for merchants and consumers alike. Yet again, for what little it is worth we observe that the Hills misunderstand the setting of ProCD. A "merchant" under the UCC "means a person who deals in goods of the kind or otherwise by his occupation holds himself out as having knowledge or skill peculiar to the practices or goods involved in the transaction", § 2-104(1). Zeidenberg bought the product at a retail store, an uncommon place for merchants to acquire inventory. His corporation put ProCD's database on the Internet for anyone to browse, which led to the litigation but did not make Zeidenberg a software merchant.

At oral, argument the Hills propounded still another distinction: the box containing ProCD's software displayed a notice that additional terms were within, while the box containing Gateway's computer did not. The difference is functional, not legal. Consumers browsing the aisles of a store can look at the box, and if they are unwilling to deal with the prospect of additional terms can leave the box alone, avoiding the transactions costs of returning the package after reviewing its contents. Gateway's box, by contrast, is just a shipping carton; it is not on display anywhere. Its function is to protect the product during transit, and the information on its sides is for the use of handlers

("Fragile!" This Side Up!" ♲↑☂)

rather than would-be purchasers.

Perhaps the Hills would have had a better argument if they were first alerted to the bundling of hardware and legal-ware after opening the box and wanted to return the computer in order to avoid disagreeable terms, but were dissuaded by the expense of shipping. What the remedy would be in such a case — could it exceed the shipping charges? — is an interesting question, but one that need not detain us because the Hills knew before they ordered the computer that the carton would include some important terms, and they did not seek to discover these in advance. Gateway's ads state that their products come with limited warranties and lifetime support. How limited was the warranty — 30 days, with service contingent on shipping the computer back, or five years, with free onsite service? What sort of support was offered? Shoppers have three principal ways to discover these things. First, they can ask the vendor to send a copy before deciding whether to buy. The Magnuson-Moss Warranty Act requires firms to distribute their warranty terms on request, 15 U.S.C. § 2302(b)(1)(A); the Hills do not contend that Gateway would have refused to enclose the remaining terms too. Concealment would be bad for business, scaring some customers away and leading to excess returns from others. Second, shoppers can consult public sources (computer magazines, the Web sites of vendors) that may contain this information. Third, they may inspect the documents after the product's delivery. Like Zeidenberg, the Hills took the third option. By keeping the computer beyond 30 days, the Hills accepted Gateway's offer, including the arbitration clause.

The Hills' remaining arguments, including a contention that the arbitration [1151] clause is unenforceable as part of a scheme to defraud, do not require more than a citation to Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395, 87 S.Ct. 1801, 18 L.Ed.2d 1270 (1967). Whatever may be said pro and con about the cost and efficacy of arbitration (which the Hills disparage) is for Congress and the contracting parties to consider. Claims based on RICO are no less arbitrable than those founded on the contract or the law of torts. Shearson/American Express, Inc. v. McMahon, 482 U.S. 220, 238-42, 107 S.Ct. 2332, 2343-46, 96 L.Ed.2d 185 (1987). The decision of the district court is vacated, and this case is remanded with instructions to compel the Hills to submit their dispute to arbitration.

12.3 Ever-Tite Roofing Corp. v. Green 12.3 Ever-Tite Roofing Corp. v. Green

EVER-TITE ROOFING CORPORATION, Plaintiff-Appellant, v. G. T. GREEN et ux., Defendants-Appellees.

No. 8381.

Court of Appeal of Louisiana. Second Circuit.

Nov. 2, 1955.

Rehearing Denied Nov. 29, 1955.

*450Comegys & Harrison, Shreveport, for appellant.

A. Eugene Frazier, Minden, for appellee.

AYRES, Judge.

This is an action for damages allegedly sustained by plaintiff as the result of the breach by the defendants of a written contract for the re-roofing of defendants’ residence. Defendants denied that their written proposal or offer was ever accepted by plaintiff in the manner stipulated therein for its acceptance, and hence contended no contract was ever entered into. The trial court sustained defendants’ defense and rejected plaintiff’s demands and dismissed its suit at its costs. From the judgment thus rendered and signed, plaintiff appealed.

Defendants executed and signed an instrument June 10, 1953, for the purpose of obtaining the services of plaintiff in re-roofing their residence situated in Webster Parish, Louisiana. The document set out in detail the work to be done and the price therefor to be paid in monthly installments. This instrument was likewise signed by plaintiff’s sale representative, who, however, was without authority to accept the contract for and on behalf of the plaintiff. This alleged contract contained these provisions :

“This agreement shall become binding only upon written acceptance hereof, by the principal or authorized officer of the Contractor, or upon commencing performance of the work. This contract is Not Subject to Cancellation. It is understood and agreed that this contract is payable at office of Ever-Tite Roofing Corporation, 5203 Telephone, Houston, Texas. It is understood and agreed that this Contract provides for attorney’s fees and in no case less than ten per cent attorney’s fees in the event same is placed in the hands of an attorney for collect*451ing- or collected through any court, and further provides for accelerated maturity for failure to pay any installment of principal or interest thereon when due.
“This written agreement is the only and entire contract covering the subject matter hereof and no other representations have been made unto Owner except these herein contained. No guarantee on repair work, partial roof jobs, or paint jobs.” (Emphasis supplied.)

Inasmuch as this work was to be performed entirely on credit, it was necessary for plaintiff to obtain credit reports and approval from the lending institution which was to finance said contract. With this procedure defendants were more or less familiar and knew their credit' rating would have to be checked and a report made. On receipt of the proposed contract in plaintiff’s office on the day following its execution, plaintiff requested a credit report, which was made after investigation and which was received in due course and submitted by plaintiff to the lending agency. Additional information was requested by this institution, which was likewise in due course transmitted to the institution, which then gave its approval.

The day immediately following this approval, which was either June 18 or 19, 1953, plaintiff engaged its workmen and two trucks, loaded the trucks with the necessary roofing materials and proceeded from Shreveport to defendants’ residence for the purpose of doing the work and performing the services allegedly contracted for the defendants. Upon their arrival at defendants’ residence, the workmen found others in the performance of the work which plaintiff had contracted to do. Defendants notified plaintiff’s workmen that the work had been contracted to other parties two days before and forbade them to do the work.

Formal acceptance of the contract was not made under the signature and approval of an agent of plaintiff. It was, however, the intention of plaintiff to accept the contract by commencing the work, which was one of the ways provided for in the instrument for its acceptance, as will be shown by reference to the extract from the contract quoted hereinabove. Prior to this time, however, defendants had determined on a course of abrogating the agreement and engaged other workmen without notice thereof to plaintiff.

The basis of the judgment appealed was that defendants had timely notified plaintiff before “commencing performance of work”. The trial court held that notice to plaintiff’s workmen upon their arrival with the materials that defendants did not desire them to commence the actual work was sufficient and timely to signify their intention to withdraw from the contract. With this conclusion we find ourselves unable to agree.

Defendants’ attempt to justify their delay in thus notifying plaintiff for the reason they did not know where or how to contact plaintiff is without merit. The contract itself, a copy of which was left with them,- conspicuously displayed plaintiff’s name, address and telephone number. Be that as it may, defendants at no time, from June 10, 1953, until plaintiff’s workmen arrived for the purpose of commencing the work, notified or'attempted to notify plaintiff of their intention to abrogate, terminate or cancel the contract.

Defendants evidently knew this work was to . be processed through plaintiff’s Shreveport office. The record discloses no unreasonable delay on plaintiff’s part in receiving, processing or accepting the contract or in commencing the work contracted to be done. No time limit was specified in the contract within which it was to be accepted or within which the work was to be begun. It was nevertheless understood between the parties that some delay would ensue before the acceptance of the contract and the commencement of the work, due to the necessity of compliance with the requirements relative to financing the job *452through a lending agency. The evidence as referred to hereinabove shows that plaintiff proceeded with due diligence.

The general rule of law is that an offer proposed may be withdrawn before its acceptance and that no obligation is incurred thereby. This is, however, not without exceptions. For instance, Restatement of the Law of Contracts stated:

“(1) The power to create a contract by acceptance of an offer terminates at the time specified in the offer, or, if no time is specified, at the end of a reasonable time.
“What is a reasonable time is a question of fact depending on the nature of the contract proposed, the usages of business and other circumstances of the case which the offeree at the time of his acceptance either knows or has reason to know.”

These principles are recognized in the Civil Code. LSA-C.C. Art. 1800 provides that an offer is incomplete as a contract until its acceptance and that before its acceptance the offer may be withdrawn. However, this general rule is modified by the provisions of LSA-C.C. Arts. 1801, 1802, 1804 and 1809, which read as follows:

“Art. 1801. The party proposing shall be presumed to continue in the intention, which his proposal expressed, if, on receiving the unqualified assent of him to whom the proposition is made, he do not signify the change of his intention.
“Art. 1802. He is bound by his proposition, and the signification of his dissent will be of no avail, if the -proposition he made in terms, which evince a design to give the other party the right of concluding the contract by his assent; mid if that assent he given within such time as the situation of the parties and the nature of the contract shall prove that it was the intention of the proposer to allow. * * *
“Art. 1804. The acceptance needs (need) not be made by the same act, or in point of time, immediately after the proposition; if made at any time before the person who offers or promises has changed his mind, or may reasonably be presumed to have done so, it is sufficient. * * *
“Art. 1809. The obligation of a contract not being complete, until the acceptance, or in cases where it is implied by law, until the circumstances, which raise such implication, are known to the party proposing; he may therefore revoke his offer or proposition before such acceptance, but not without allowing such reasonable time as from the terms of his offer he has given, or from the circumstances of the case he may be supposed to have intended to give to the party, to communicate his determination.” (Emphasis supplied.)

Therefore, since the contract did not specify the time within which it was to be accepted or within which the work was to have been commenced, a reasonable time must be allowed therefor in accordance with the facts and circumstances and the evident intention of the parties. A reasonable time is contemplated where no time is expressed. What is a reasonable time depends more or less upon the circumstances surrounding each particular case. The delays to process defendants’ application were not unusual. The contract was accepted by plaintiff by the commencement of the performance of the work contracted to be done. This commencment began with the loading of the trucks with the necessary materials in Shreveport and transporting such materials and the workmen to defendants’ residence. Actual commencement or performance of the work therefore began before any notice of dissent by defendants was given plaintiff. The proposition and its acceptance thus became a completed contract.

By their aforesaid acts defendants breached the contract. They employed *453others to do the work contracted to be done by plaintiff and forbade plaintiff’s workmen to engage upon that undertaking. By this breach defendants are legally bound to respond to plaintiff in damages. LSA-C.C. Art. 1930 provides:

“The obligations of contract (contracts) extending to whatsoever is incident to such contracts, the party who violates them, is liable, as one of the incidents of his obligations, to the payment of the damages, which the other party has sustained by his default.”

The same authority in Art. 1934 provides the measure of damages for the breach of a contract. This article, in part, states:

“Where the object of the contract is anything but the payment of money, the damages due to the creditor for its breach are the amount of the loss he has sustained, and the profit of which he has been deprived, * * *

Plaintiff expended the sum of $85.37 in loading the trucks in Shreveport with materials and in transporting them to the site of defendants’ residence in Webster Parish and in unloading them on their return, and for wages for the workmen for the time consumed. Plaintiff’s Shreveport manager testified that the expected profit on this job was $226. None of this evidence is controverted or contradicted in any manner.

True, as plaintiff alleges, the contract provides for attorney’s fees where an attorney is employed to collect under the contract, but this is not ah action on the contract or to collect under the contract but is an action for damages for a breach of the contract. The contract in that respect is silent with reference to attorney’s fees. In the absence of an agreement for the payment of attorney’s fees or of some law authorizing the same, such fees are not allowed.

For the reasons assigned, the judgment appealed is annulled, avoided, reversed and set aside and there is now judgment in favor of plaintiff, Ever-Tite Roofing Corporation, against the defendants, G. T. Green and Mrs. Jessie Fay Green, for the full sum of $311.37, with 5 per cent per annum interest thereon from judicial demand until paid, and for all costs.

Reversed and rendered.

12.4 Davis v. Jacoby 12.4 Davis v. Jacoby

[S. F. No. 14879.

In Bank.

July 30, 1934.]

FRANK M. DAVIS et al., Appellants, v. OLIN D. JACOBY et al., as Executors, etc., Respondents.

*371Walter H. Linforth, Wm. M. Cannon and John L. McVey for Appellants.

Marshall Rutherford, Fitzgerald, Abbott & Beardsley, Calkins, Hagar, Hall & Linforth, Goudge, Robinson & Hughes, Chapman, Trefethen, Richards & Chapman and Cormac & Bolles for Respondents.

*372THE COURT.

Plaintiffs appeal from a judgment refusing to grant specific performance of an alleged contract to make a will. The facts are not in dispute and are as follows:

The plaintiff Caro M. Davis was the niece of Blanche Whitehead who was married to Rupert Whitehead. Prior to her marriage in 1913 to her coplaintiff Prank M. Davis, Caro lived for a considerable time at the home of the Whiteheads, in Piedmont, California. The Whiteheads were childless and extremely fond of Caro. The record is replete with uncontradicted testimony of the close and loving .relationship that existed between Caro and her aunt and uncle. During the period that Caro lived with the Whiteheads she was treated as and often referred to by the Whiteheads as their daughter. In 1913, when Caro was married to Prank Davis the marriage was arranged at the Whitehead home and a reception held there. After the marriage Mr. and Mrs. Davis went to Mr. Davis’ home in Canada, where they have resided ever since. During the period 1913 to 1931 Caro made many visits to the Whiteheads, several of them being of long duration. The Whiteheads visited Mr. and Mrs. Davis in Canada on several occasions. After the marriage and continuing down to 1931 the closest and most friendly relationship at all times existed between these two families. They corresponded frequently, the record being replete with letters showing the loving relationship.

By the year 1930 Mrs. Whitehead had become seriously ill. She had suffered several strokes and her mind was failing. Early in 1931 Mr. Whitehead had her removed to a private hospital. The doctors in attendance had informed him that she might die at any time or she might linger for many months. Mr. Whitehead had suffered severe financial reverses. He had had several sieges of sickness and was in poor health. The record shows that during the early part of 1931 he was desperately in need of assistance with his wife, and in his business affairs, and that he did not trust his friends in Piedmont. On March 18, 1931, he wrote to Mrs. Davis telling her of Mrs. Whitehead’s condition and added that Mrs. Whitehead was very wistful. “Today I endeavored to find out what she wanted. I finally -asked her if she wanted to see you. She burst out crying and we had great difficulty in getting her to stop. *373Evidently, that is what is on her mind. It is a very difficult matter to decide. If you come it will mean that you will have to leave again, and then things may be serious. I am going to see the doctor, and get his candid opinion and will then write you again. . . . Since writing the above, I have seen the doctor, and he thinks it will help considerably if you come.” Shortly thereafter, Mr. Whitehead wrote to Caro Davis further explaining the physical condition of Mrs. Whitehead and himself. On March 24, 1931, Mr. Davis, at the request of his wife, telegraphed to Mr. Whitehead as follows: “Tour letter received. Sorry to hear Blanche not so well. Hope you are feeling better yourself. If you wish Caro' to go to you can arrange for her to leave in about two weeks. Please wire me if you think it advisable for her to go.” On March 30, 1931, Mr. Whitehead wrote a long letter to Mr. Davis, in which he explained in detail the condition of Mrs. Whitehead’s health and also referred to his own health. He pointed out that he had lost a considerable portion of his cash assets but still owned considerable realty, that he needed someone to help him with his wife and some friend he could trust to help him with his business affairs and suggested that perhaps Mr. Davis might come to California. He then pointed out that all his property was community property; that under his will all the property was to go to Mrs. Whitehead; that he believed that under Mrs. Whitehead’s will practically everything was to go to Caro. Mr. Whitehead again wrote to Mr. Davis under date of April 9, 1931, pointing out how badly he needed someone he could trust to assist him, and giving it as his belief that if properly handled he could still save about $150,000. He then stated: “Having you [Mr. DavisJ here to depend on and to help. me regain my mind and courage would be’ a big thing. ’ ’ Three days later, on April 12, 1931, Mr. Whitehead again wrote, addressing his letter to “Dear Frank and Caro”, and in this letter made the definite offer, which offer it is claimed was accepted and is the basis of this action. In this letter he first pointed out that Blanche, his wife, was in a private hospital and that “she cannot last much longer . . . my affairs are not as bad as I supposed at first. Cutting everything down I figure 150,000 can be saved from the wreck.” He then enumerated the values placed upon his various properties and then *374continued “my trouble was caused by my friends “taking advantage of my illness and my position to skin me

“Now if Frank could come out here and be with me, and look after my affairs, we could easily save the balance I mentioned, provided I dont get into another panic and do some more foolish things.

“The next attack will be my end, I am 65 and my health has been bad for years, so, the Drs. dont give me much longer to live. So if you can come, Caro will inherit everything and you will make our lives happier and see Blanche is provided for to the end

“My eyesight has gone back on me, I cant read only for a few lines at a time. I am at the house alone with Stanley [the chauffeur] who does everything for me and is a fine fellow. Now, what I want is some one who will take charge of my affairs and see I dont lose any more. Frank can do it, if he will and cut out the booze.

“Will you let me hear from you as soon as possible, I know it will be a sacrifice but times are still bad and likely to be, so by settling down you can help me and Blanche and gain in the end. If I had you here my mind would get better and my courage return, and we could work things out.”

This letter was received by Mr. Davis at his office in Windsor, Canada, about 9:30 A. M. April 14, 1931. After reading the letter to Mrs. Davis over the telephone, and after getting her belief that they must go to California, Mr. Davis immediately wrote Mr. Whitehead a letter, which, after reading it to his wife, he sent by air mail. This letter was lost, but there is no doubt that it was sent by Davis and received by Whitehead, in fact the trial court expressly so found. Mr. Davis testified in substance as to the contents of this letter. After acknowledging receipt of the letter of April 12, 1931, Mr. Davis unequivocally stated that he and Mrs. Davis accepted the proposition of Mr. Whitehead and both would leave Windsor to go to him on April 25th. This letter of acceptance also contained the information that the reason they could not leave prior to April 25th was that Mr. Davis had to appear in court on April 22d as one of the executors of his mother’s estate. The testimony is uncontradicted and ample to support the trial court’s finding that this letter was sent *375by Davis and received by Whitehead. In fact under date of April 15, 1931, Mr. Whitehead again wrote to Mr. Davis and stated “Your letter by air mail received this a. m. Now, I am wondering if I have put you to unnecessary trouble and expense, if you are making any money dont leave it, as things are bad here. ... You know your business and I dont and I am half crazy in the bargain, but I dont want to hurt you or Caro

“Then on the other hand if I could get some one to trust and keep me straight I can save a good deal, about what I told you in my former letter.”

This letter was received by Mr. Davis on April 17, 1931, and the same day Mr. Davis telegraphed to Mr. Whitehead “Cheer up—we will soon be there, we will wire you from the train.”

Between April 14, 1931, the date the letter of acceptance was sent by Mr. Davis, and April 22d, Mr. Davis was engaged in closing out his business affairs, and Mrs. Davis in closing up their home and in making other arrangements to leave. On April 22, 1931, Mr. Whitehead committed suicide. Mr. and Mrs. Davis were immediately notified and they at once came to California. From almost the moment of her arrival Mrs. Davis devoted herself to the care and comfort of her aunt, and gave her aunt constant attention and care until Mrs. Whitehead’s death on May 30, 1931. On this point the trial court found: “from the time of their arrival in Piedmont, Caro M. Davis administered in every way to the comforts of Blanche Whitehead and saw that she was cared for and provided for down to the time of the death of Blanche Whitehead on May 30, 1931; during said time Caro M. Davis nursed Blanche Whitehead, cared for her and administered to her wants as a natural daughter would have done toward and for her mother”.

This finding is supported by uncontradicted evidence and in fact is conceded by respondents to be correct. In fact the record shows that after their arrival in California Mr. and Mrs. Davis fully performed their side of the agreement.

After the death of Mrs. Whitehéad, for the first time it was discovered that the information contained in Mr. Whitehead ’s letter of March 30, 1931, in reference to the contents of his and Mrs. Whitehead’s wills was incorrect. By a duly witnessed will dated February 28, 1931, Mr. White*376head, after making several specific bequests, had bequeathed all of the balance of his estate to his wife for life, and upon her death to respondents Geoff Doubble and Rupert Ross Whitehead, his nephews. Neither appellant was mentioned in his will. It was also discovered that Mrs. Whitehead by a will dated December 17, 1927, had devised all of her estate to her husband. The evidence is clear and uncontradicted that the relationship existing between Whitehead and his two nephews, respondents herein, was not nearly as close and confidential as that existing between Whitehead and appellants.

After the discovery of the manner in which the property had been devised was made, this action was commenced upon the theory that Rupert Whitehead had assumed a contractual obligation to make a will whereby “Caro Davis would inherit everything”; that he had failed to do so; that plaintiffs had fully performed their part of the contract; that damages being insufficient, quasi specific performance should be granted in order to remedy the alleged wrong, upon the equitable principle that equity regards that done which ought to have been done. The requested relief is that the beneficiaries under the will of Rupert Whitehead, respondents herein, be declared to be involuntary trustees for plaintiffs of Whitehead’s estate.

It should also be added that the evidence shows that as a result of Frank Davis leaving his business in Canada he forfeited not only all insurance business he might have written if he had remained, but also forfeited all renewal commissions earned on past business.. According to his testimony this loss was over $8,000.

The trial court found that the relationship between Mr. and Mrs. Davis and the Whiteheads was substantially as above recounted and that the other facts above stated were true; that prior to April 12, 1931, Rupert Whitehead had suffered business reverses and was depressed in mind and ill in body; that his wife was very ill; that because of his mental condition he “was unable to properly care for or look after his property or affairs ’ ’; that on April 12, 1931, Rupert Whitehead in writing made an offer to plaintiffs that, if within a reasonable time thereafter plaintiffs would leave and abandon their said home in Windsor, and if Frank M. Davis would abandon or dispose of his said *377business, and if both the plaintiffs would come to Piedmont in the said county of Alameda where Rupert "Whitehead then resided and thereafter reside at said place and be with or near him, and, if Prank M. Davis would thereupon and thereafter look after the business and affairs of said Rupert Whitehead until his condition improved to such an extent as to permit him so to do, and if the plaintiffs would look after and administer to the comforts of Blanche Whitehead and see that she was properly cared for until the time of her death, that, in consideration thereof, Caro M. Davis would inherit everything that Rupert Whitehead possessed at the time of his death and that by last will and testament Rupert Whitehead would devise and bequeath to Caro M. Davis all property and estate owned by him at the time of his death, other than the property constituting the community interest of Blanche Whitehead; thatshortiy prior to April 12, 1931, Rupert Whitehead informed plaintiffs of the supposed terms of his will and the will of Mrs. Whitehead. The court then finds that the offer of April 12th was not accepted. As already stated, the court found that plaintiffs sent a letter to Rupert Whitehead on April 14th purporting to accept the offer of April 12th, and also found that this letter was received by the Whiteheads, but finds that in fact such letter was not a legal acceptance. The court also found that the offer of April 12th was “fair and just and reasonable, and the consideration therefor, namely, the performance by plaintiffs of the terms and conditions thereof, if the same had been performed, would have been an adequate consideration for said offer and for the agreement that would have resulted from such performance; said offer was not, and said agreement would not have been, either harsh or oppressive or unjust to the heirs at law, or devisees, or legatees, of Rupert Whitehead, or to each or any of them, or otherwise”.

The court also found that plaintiffs did not know that the statements made by Whitehead in reference to the wills were not correct until after Mrs. Whitehead’s death, that after plaintiffs arrived in Piedmont they cared for Mrs. Whitehead until her death and “Blanche Whitehead was greatly comforted by the presence, companionship and association of Caro M. Davis, and by her administering to her wants”.

*378The theory of the trial court and of respondents on this appeal is that the letter of April 12th was- an offer to contract, but that such offer could only be accepted by performance and could not be accepted by a promise to perform, and that said offer was revoked by the death of Mr. Whitehead before performance. In other words, it is contended that the offer was an offer to enter into a unilateral contract, and that the purported acceptance of April 14th was of no legal effect.

The distinction between unilateral and bilateral contracts is well settled in the law. It is well stated in section 12 of the American Institute’s Restatement of the Law of Contracts as follows:

“A unilateral contract is one in which no promisor receives a promise as consideration for his promise. A bilateral contract is one in which there are mutual promises between two parties to the contract; each party being both a promisor and a promisee.”

This definition is in accord with the law of California. (Christman v. Southern Cal. Edison Co., 83 Cal. App. 249 [256 Pac. 618].)

In the ease of unilateral contracts no notice of acceptance by performance is required. Section 1584 of the Civil Code provides, “Performance of the conditions of a proposal, ... is an acceptance of the proposal.” (See Cuthill v. Peabody, 19 Cal. App. 304 [125 Pac. 926]; Los Angeles Traction Co. v. Wilshire, 135 Cal. 654 [67 Pac. 1086].)

Although the legal distinction between unilateral and bilateral contracts is thus well settled, the difficulty in any particular case is to determine whether the particular offer is one to enter into a bilateral or unilateral contract. Some cases are quite clear cut. Thus an offer to sell which is accepted is clearly a bilateral contract, while an offer of a reward is a clear-cut offer of a unilateral contract which cannot be accepted by a promise to perform, but only by performance. (Berthiaume v. Doe, 22 Cal. App. 78 [133 Pac. 515].) Between these two' extremes is a vague field where the particular contract may be unilateral or bilateral depending upon the intent of the offerer and the facts and circumstances of each case. The offer to contract involved in this case falls within this *379category. By the provisions of the Restatement of the Law of Contracts it is expressly provided that there is a presumption that the offer is to enter into a bilateral contract. Section 31 provides:

“In case of doubt it is presumed that an offer invites the formation of a bilateral contract by an acceptance amounting in effect to a promise by the offeree to perform what the offer requests, rather than the formation of one or more unilateral contracts by actual performance on the part of the offeree.”

Professor Williston in his Treatise on Contracts, volume 1, section 60, also takes the position that a presumption in favor of bilateral contracts exists.

In the comment following section 31 of the Restatement the reason for such presumption is stated as follows:

“It is not always easy to determine whether an offerer requests an act or a promise to do the act. As a bilateral contract immediately and fully protects both parties, the interpretation is favored that a bilateral contract is proposed.”

While the California cases have never expressly held that a presumption in favor of bilateral contracts exists, the cases clearly indicate a tendency to treat offers as offers of bilateral rather than of unilateral contracts. (Roth v. Moeller, 185 Cal. 415 [197 Pac. 62]; Boehm v. Spreckels, 183 Cal. 239 [191 Pac. 5]; see, also, Wood v. Lucy, Lady Duff-Gordon, 222 N. Y. 88 [118 N. E. 214].)

Keeping these principles in mind we are of the opinion that the offer of April 12th was an offer to enter into a bilateral as distinguished from a unilateral contract. Respondents argue that Mr. Whitehead had the right as offerer to designate his offer as either unilateral or bilateral. That is undoubtedly the law. It is then argued that from all the facts and circumstances it must be implied that what Whitehead wanted was performance and not a mere promise to perform. We think this is a non sequitur, in fact the surrounding circumstances lead to just the opposite conclusion. These parties were not dealing at arm’s length. Not only were they related, but a very close and intimate friendship existed between them. The record indisputably demonstrates that Mr. Whitehead had confidence in Mr. and Mrs. Davis, in fact that he had lost all confidence in *380everyone else. The record amply shows that by an accumulation of occurrences Mr. Whitehead had become desperate, and that what he wanted was the promise of appellants that he could look to them for assistance. He knew from his past relationship with appellants that if they gave their promise to perform he could rely upon them. The correspondence between them indicates how desperately he desired this assurance. Under these circumstances he wrote his offer of April 12th, above quoted, in which he stated, after disclosing his desperate mental and phjosical condition, and after setting forth the terms of his offer: “Will you let me hear from you as soon as possible—I know it will be a sacrifice but times are still bad and likely to be, so by settling down you can help me and Blanche and gain in the end.” By thus specifically requesting an immediate reply Whitehead expressly indicated the nature of the acceptance desired by him—namely, appellants’ promise that they would come to California and do the things requested by him. This promise was immediately sent by appellants upon receipt of the offer, and was received by Whitehead. It is elementary that when an offer has indicated the mode and means of acceptance, an acceptance in accordance with that mode or means is binding on the offerer.

Another factor which indicates that Whitehead must have contemplated a bilateral rather than a unilateral contract, is that the contract required Mr. and Mrs. Davis to perform services until the death of both Mr. and Mrs. Whitehead. It is obvious that if Mr. Whitehead died first some of these services were to be performed after his death, so that he would have to rely on the promise of appellants to perform these services. It is also of some evidentiary force that Whitehead received the letter of acceptance and acquiesced in that means of acceptance.

Shaw v. King, 63 Cal. App. 18 [218 Pac. 50], relied on by respondents is clearly not in point. In that case there was no written acceptance, nor was there an acceptance by partial or total performance.

For the foregoing reasons we are of the opinion that the offer of April 12, 1931, was an offer to enter into a bilateral contract which was accepted by the letter of April 14, 1931. Subsequently appellants fully performed *381their part of the contract. Under such circumstances it is well settled that damages are insufficient and specific performance will be granted. (Wolf v. Donahue, 206 Cal. 213 [273 Pac. 547].) Since the consideration has been fully rendered by appellants the question as to mutuality of remedy becomes of no importance. (6 Cal. Jur., sec. 140.)

Respondents also contend the complaint definitely binds appellants to the theory of a unilateral contract. This contention is without merit. The complaint expressly alleges the parties entered into a contract. It is true that the complaint also alleged that the contract became effective by performance. However, this is an action in equity. Respondents were not misiva. No objection was made to the testimony offered to show the acceptance of April 14th. A fair reading of the record clearly indicates the case was tried by the parties ojL the theory that the sole question was whether there was a contract—unilateral or bilateral.

For the foregoing reasons the judgment appealed from is reversed.

Rehearing denied.

12.5 Midwest Energy, Inc. v. Orion Food Systems, Inc. 12.5 Midwest Energy, Inc. v. Orion Food Systems, Inc.

MIDWEST ENERGY, INC., Plaintiff/Appellant, v. ORION FOOD SYSTEMS, INC. and Ted Ries, Defendants/Respondents.

No. ED 75323.

Missouri Court of Appeals, Eastern District, Division Five.

Jan. 25, 2000.

Motion for Rehearing and/or Transfer to Supreme Court Denied March 7, 2000.

Application for Transfer Denied April 25, 2000.

*156John L. Oliver, Cape Girardeau, for appellant.

Terry A. Bond, Leonard D. Vines, Clayton, for respondents.

CHARLES B. BLACKMAR, Sr. Judge.

The trial court granted summary judgment on all three counts of the plaintiffs petition and entered final judgment for both defendants. On this appeal we accept as true the facts appropriately established by the plaintiff in the manner prescribed by Rule 74.04 and afford the plaintiff all reasonable inferences from the facts adduced, disregarding defendants’ contrary proffers except to the extent they are un-contradicted and unequivocal. ITT Commercial Finance Corp. v. Mid-America Marine Supply Corp., 854 S.W.2d 371, 382 (Mo. banc 1993). We state the facts from the plaintiffs point of view, without any intimation that court or jury has to find any of these facts.

The plaintiff Midwest, a Missouri corporation, operates a chain of service station convenience stores in Southeast Missouri. The defendant Orion, a South Dakota corporation, has developed recipes and equipment for several fast food systems for which it issues franchises to local outlets. Defendant Ted Ries at material times was the district sales manager for Orion in the area in which Midwest has facilities.

In early 1996 Midwest undertook the construction of a substantial building in Fruitland, Missouri, designed for the operation of a service station and convenience store and estimated to cost $800,000. Its president and sole stockholder, Laura Younghouse, inquired into the possibility of a franchise for some of Orion’s product lines. On March 27, 1996, Ries visited Younghouse and delivered to her an offering circular required by the Federal Trade Commission accompanied by a specimen franchise agreement in which the blank spaces were not filled in. The circular contained a caution about taking any further action until Midwest had been notified in writing that its application had been approved. Younghouse receipted for these documents and read them.

Ries advised Younghouse he had to check with other Orion franchisees in the area to determine whether they had any contractual protection from nearby competition. He checked particularly with Rhodes Oil, which had Orion franchises at several nearby locations. On April 13, 1996 Ries again visited with Younghouse, advising her that Rhodes and other franchisees interposed no obstacle and that “we can go forward with the franchise.” Younghouse had already filled out and delivered a franchise application on behalf of Midwest for the new location. Midwest’s building contractor was present at this conference and discussed the proposed construction with Ries and Younghouse.

*157During the next several months Orion provided drawings and specifications setting forth its requirements for the area in which its franchised products would be prepared and dispensed. Ries was in touch with both the general contractor and the electrician. He pointed out the need to enlarge the convenience store area to 800 square feet to meet Orion’s special requirements. This was a larger area than Younghouse had originally planned. The final store layout and design was provided by Orion to Midwest on July 2, 1996.

Ries reported his contacts with Midwest to his immediate supervisor, Keith Watts, who told him to “go ahead” at the Midwest location. Orion prepared orders for the equipment necessary to prepare and serve the franchised products.

Under date of September 4, 1996 Midwest received from Orion an unsigned franchise agreement specifying an opening date of November 8, 1996. On September 13, Ries called to advise Younghouse he would call on September 18, 1996 to “pick up the franchise agreement.”1 He did not appear on that date and did not respond to Younghouse’s persistent attempts to get in touch with him. There is evidence that his superiors instructed him to “make himself scarce” while they reevaluated the franchise situation.

On September 30,1996 Younghouse executed the franchise agreement on behalf of Midwest and mailed it to Orion. In the meantime a representative of Rhodes, Midwest’s potential competitor, had called Orion to report that he had seen a notice of Midwest’s opening date of November 8 for the new facility and was not pleased at the thought of competition. Orion’s executives decided not to issue the franchise to Midwest, and one Schendel, an analyst, was instructed to write a letter to Midwest conveying this decision. For some reason the letter was not mailed until October 11, 1996. On October 1, however, Watts called Younghouse to advise her Orion was “withdrawing the franchise offer.”2

The foregoing is an abbreviated summary of the bare facts that might be found. The record provided on summary judgment is voluminous, and other facts will be stated in the discussion of each of the several counts.

Midwest’s petition declares in three counts as follows: (I) Breach of contract by Orion in failing to grant a franchise to Midwest; (II) Promissory estoppel against Orion in accordance with the provisions of Section 90 of the Restatement (2d) of Contracts; and (III) Fraud and deceit against Ries for willfully misstating the extent of his authority. We affirm the judgment on Count I, but find error in the entry of summary judgment on Counts II and III, and so remand this portion of the case for further proceedings.

Count I - Breach of Contract

Count I declares on the five-year franchise agreement submitted to Midwest on September 4, 1996 as a contract between Midwest and Orion. The contract, however, is not signed by Orion. It cannot be performed within one year of its stated effective date of November 8, 1996. This contract is clearly unenforceable under section 432.010 RSMo 1994, known as the “Statute of Frauds,”3 and nothing short of Orion’s signature can make it into an enforceable contract. See Mayer v. King Cola Mid-America, Inc., 660 S.W.2d 746, 749 (Mo.App.1983) and cases cited therein.

*158Our cases clearly hold that a contract otherwise unenforceable because of the Statute of Frauds cannot be made into a fully enforceable contract through any doctrine of promissory estoppel. Mayer, 660 S.W.2d at 749; Geisinger v. A & B Farms, Inc., 820 S.W.2d 96, 98-100 (Mo.App.1991) (recognizing that there might be some room for remedies based on promissory estoppel as discussed in the portion of this opinion dealing with Count II). Full enforcement of the contract would defeat the purpose of the Statute of Frauds.

Because the Statute of Frauds suffices to dispose of Count I, there is no need to consider the extensive discussion about which officers and agents of Orion had authority to sign franchise agreements. Wherever the authority lay, the agreement was never signed by Orion.

The parties clearly contemplated a written contract, and so neither was bound by the proposed franchise agreement until an authorized representative of each had affixed a signature.

There was no error in granting summary judgment on Count I.

Count II - Promissory Estoppel

Count II seeks to state a claim under Section 90, Restatement (2d) of Contracts which reads in pertinent part as follows:

Section 90. Promise Reasonably Inducing Action or Forbearance
(1) A promise which the promisor should reasonably expect to induce action or forbearance on the part of the promisee or a third person and which does induce such action or forbearance is binding if injustice can be avoided only by enforcement of the promise. The remedy granted for breach may be limited as justice requires.

Promissory estoppel has been part of the law of Missouri for many years, and our courts have cited Section 90 of both the First and Second Restatements of Contracts. See In re Jamison’s Estate, 202 S.W.2d 879, 886 (Mo.1947). The doctrine is closely related to equitable estop-pel, and there are statements in the cases that it is an equitable remedy. Resnik v. Blue Cross and Blue Shield of Missouri, 912 S.W.2d 567, 572-78 (Mo.App.1995); Zipper v. Health Midwest, 978 S.W.2d 398, 411 (Mo.App.1998). We have found no case, however, which rules the issue of availability of trial by jury in an action at law. There is language suggesting the doctrine should only be applied “in extreme cases to avoid unjust results.” Mayer, 660 S.W.2d at 749. This is a standard somewhat difficult of application, and may influence the decision as to whether trial by jury is available. Inasmuch as the issue of trial by jury has not been briefed to us, we forego ruling the point pending further proceedings. We do observe that the question of whether the remedy is necessary seems inappropriate for decision on summary judgment, if the elements of promissory estoppel are arguably present.

Numerous cases, involving widely different fact situations, have considered the requirements for recovery under Section 90. In some the opinions seem overexpan-sive, seeking to lay down rules which are broader than required for the resolution of the immediate problem. We seek to apply the governing principle of the Restatement. We take note of several recent cases which have allowed recovery based on Section 90. See Delmo, Inc. v. Maxima Elec. Sales, Inc., 878 S.W.2d 499 (Mo.App.1994); Response Oncology v. Blue Cross & Blue Shield, 941 S.W.2d 771 (Mo.App.1997). See also Mahoney v. Delaware McDonald’s Corp., 770 F.2d 123 (8 th Cir. 1985); Bower v. AT & T Technologies, Inc., 852 F.2d 361 (8 th Cir.1988) (both applying Missouri law).

We have found no case discussing the method of jury instruction in Section 90 cases, and there are no MAI patterns. Nor do we find discussion of the appropriate form for findings of fact. There is some variation in the manner of stating *159essential elements, but, as Judge Shrum observed in Delmo, all pertinent opinions list the elements as: (1) A promise; (2) foreseeability of reliance; (3) reliance; and (4) injustice absent enforcement. 878 S.W.2d at 504. For a more elaborate statement of essential elements, see Resnik, 912 S.W.2d at 572-3.

The sense of the cases, and especially the recent cases, is that a plaintiff who can point to evidence which, if believed, would permit a judge or jury to find each of these elements, is entitled to go to trial without prior judicial determination as to whether the case is “extreme.” All cases agree the essence of the plaintiffs case is justifiable reliance causing damage. Under Section 90 recoveries have been permitted which might not have been allowed under traditional contract doctrine.4 We proceed therefore to determine whether Midwest has demonstrated that there is a genuine issue of fact as to each one of the essential elements as defined in the cases. If there is, then the motion for summary judgment on Count II was improvidently granted. If there is no genuine issue as to the existence of any one of these elements, then summary judgment is appropriate. We conclude that Midwest’s proffer is sufficient to establish fact questions as to all four essential elements.

We consider initially the scope of the authority of Ted Ries. Orion has argued strenuously that Ries had no authority to bind Orion to any kind of an agreement, and that any action predicated on a promise by him must fail. Almost all of the argument, however, has been directed to the question of his authority to sign franchise agreements. From the statements in the record a jury could find that Ries had the duty of promoting new franchises for his employer’s product and of working with prospective franchisees to do what was necessary in order to ready new franchises for opening.

In this connection Ries paid several visits to the Fruitland premises. He checked with other Orion-franchised locations in the vicinity and reported to Younghouse there was no conflict. He met with the general contractor and with the electrical contractor. Orion provided plans and drawings for the area in which the franchised products were proposed to be prepared, containing its requirements, and Ries discussed these with Younghouse. Orion’s specifications required modification of the initial plans, and Midwest modified its plans accordingly, at some expense. Ries assisted Midwest in planning for an opening date of November 8,1996.

Ries was the only representative of Orion who visited face-to-face with Young-house. He made regular reports to his superiors in the company and consulted with specialists within the company on matters such as design and construction. The trier of fact could find that the management of Orion was well-informed about Ries’s activities and that he had authority to do exactly what he did. It could also be found that, up to a point, Orion wanted an active franchise in Fruitland and wanted Ries to take the steps he did to make sure the franchise would be ready to operate by the November 8 date. We now consider whether the transactions between Ries, on behalf of Orion, are sufficient to provide a basis for the relief Midwest seeks.

(1) Promise

The record shows several promissory statements made by Ries. On April 13, 1996, Ries called on Younghouse and told her he had received clearance from other franchisees and that “[we can] go forward with the franchise.” He repeated his as*160surances that all was in order, providing floor plans, lists of required equipment, and, on July 2, 1996, a definitive layout. On September 4, 1996 Orion mailed to Younghouse a franchise agreement providing for an opening date of November 8, 1996. This document was not signed by anyone purporting to act on behalf of Orion, but Ries advised Younghouse he would appear on September 18 to pick up the franchise agreement. Younghouse understood that Ries proposed to sign on behalf of Orion. From the facts just stated the trier of fact could find Ries promised Midwest that a franchise conforming to the specimen provided to Midwest in March would be issued as soon as Midwest was ready to operate, and that Midwest could make preparations based on those assurances.

We have held the Statute of Frauds precludes recovery of damages for failure to grant Midwest a five-year franchise. This holding does not necessarily preclude an action on the theory of promissory estoppel. The last sentence of Section 90(1) provides “The remedy granted for breach may be limited as justice requires.” Damages are measured by the reliance and should be limited to those naturally flowing from the reliance. Mahoney v. Delaware McDonald’s Corp., 770 F.2d 123 (8 th Cir.1985). Thus, there are cases holding that partial relief may be accorded in cases in which the Statute of Frauds stands as a barrier to complete enforcement. See Geisinger v. A & B Farms, Inc., 820 S.W.2d 96, 98-9 (Mo.App.1991) (citing Feinberg v. Pfeiffer Co., 322 S.W.2d 163,168 (Mo.App.1959) and Katz v. Danny Dare, Inc., 610 S.W.2d 121, 126 (Mo.App.1980)); see also Chesus v. Watts, 967 S.W.2d 97, 110 (Mo.App.1998). Mahoney points out the difference between the full contractual enforcement of a promise which cannot be performed within one year, and provision of a remedy for inducing reliance on a promise, limited by the extent of the reliance. See Section 90, Restatement (2d) of Contracts, Illustration 8. The promises shown by the proffers are sufficient to establish the first element of promissory estoppel.

(2) Foreseeable Reliance

The trier of fact could certainly find that, between April 13 and September 4, Orion and Midwest wanted to do business with each other. Ries was Orion’s authorized liaison with Midwest in order to further preparation for undertaking the franchise. He had every reason to believe Midwest would hasten to comply with his directions, for fear that the tender of the franchise would be withdrawn. To the extent that his requests, on behalf of Orion, required expenditure or forbearance, he could confidently expect these would be forthcoming. Whatever authority Ries had with regard to executing franchise documents, he could surely forestall the granting of a franchise by expressing his disapproval.

(3) Reliance in Fact

The record shows, at the very least, that Midwest relied on Ries’s promises by making changes in its plans for the fast food area and by forbearing attempts to interest other possible franchisors in its new facility. These, in and of themselves, are sufficient to demonstrate reliance and, when the reliance proved to be unjustified, damages. There may be other provable damages. There is no briefing of the issue, and argument did not focus on the quantitative scope of recovery. This trier of fact may be totally unimpressed with Midwest’s evidence of damages, but enough has been shown to raise a factual issue.

Orion asserts emphatically that Midwest had no right to rely on anything Ries said as being binding on Orion. It is not necessary to show, however, that Ries had authority to determine that a franchise should be granted. As has been said earlier, it could be found that he had the authority to transmit Orion’s instructions and requirements so as to assist Midwest *161in putting itself in a position to commence operations under an Orion franchise. He could also confirm Orion’s continued interest in Midwest as a franchisee and advise Midwest as to further necessary steps.

Orion also points to the cautionary language in the offering circular required by the Federal Trade Commission and in the specimen franchise agreement delivered with the circular on the occasion of Ries’s first visit. These documents confirm the franchise agreement as the sole agreement between the parties, strongly suggest that Midwest avail itself of legal counsel in examining the documents, and expressly warn Midwest that it should not take any other action in anticipation of receiving the franchise unless and until it should have an executed franchise agreement in hand. The promises on which Midwest relies to invoke Section 90, however, came after these documents were delivered, at a time when Orion was encouraging Midwest to make active preparation to undertake the franchise. Under Section 90 Orion is not necessarily free to encourage reliance by promises made in the expectation of reliance, simply by reason of a prior written warning that its promises mean nothing until both parties have signed a franchise agreement. The situation is analogous to one in which a contract provides it may be modified only by an instrument in writing, but the parties later agree to an oral modification. Fritts v. Cloud Oak Flooring Co., 478 S.W.2d 8 (Mo.App.1972). The examples to Section 90 show, moreover, that the plaintiff is not necessarily required to exercise perfect diligence.

Orion also argues that Younghouse, shown to be experienced in business, did not act reasonably in relying on oral promises. Whether her reliance was reasonable or not is a question of fact.

(4) Injustice Absent Enforcement

This element is not cast with precision. Numerous writings on Section 90 make it clear it is designed to protect the reliance interest. Damages are measured by the degree of reliance. When the other elements of a Section 90 claim are present, the “injustice” element is not appropriate for determination in a summary judgment proceeding. The parties will have to work with the trial court in determining the appropriate manner of submission.

We again caution that our somewhat detailed expostulation of the facts governing Count II represents only our conception of the permissible findings the trier of fact might make. We do not suggest in any respect that the fact-finder should make any particular finding, or that any particular conclusion is preferable. The record is voluminous, and we simply say we perceive genuine issues of material fact on each of the essential elements of an action under Section 90 sufficient to withstand a motion for summary judgment.

Count III - Fraud and Deceit against Ries

Count III seeks actual and punitive damages on account of Ries’s alleged misrepresentation of his authority to act for Orion regarding the grant of a franchise to Midwest. Since Count II is predicated on Ries’s authority to do as he did, Count III is necessarily alternative to Count II. Our rules, however, permit alternative pleadings. Rule 55.10.

An action for fraud and deceit has numerous elements, repeated in the case-law so often we need not state them farther. See Clark v. Olson, 726 S.W.2d 718, 719 (Mo. banc 1987). There is also a tort of “negligent misrepresentation” with fewer and different elements. Jim Lynch Cadillac, Inc. v. Nissan Motor Acceptance Corp., 896 S.W.2d 704, 707 (Mo.App.1995). A pleading based on fraud and deceit would ordinarily permit a submission on negligent misrepresentation. See id.

Inasmuch as Orion has spoken so strongly on the subject of Ries’s lack of authority, we do not believe we should *162deprive Midwest of the opportunity for an alternate submission, if Orion’s position as to Ries’s lack of authority prevails at the trial. All parties should understand that, if Midwest should recover on Count II, it would not be proper to enter an additional judgment on Count III.

The judgment for Orion on Count I is affirmed. The judgments on Counts II and III are reversed, and the case is remanded for appropriate proceedings consistent with this opinion.

MARY RHODES RUSSELL, C.J., concurs.

LAWRENCE G. CRAHAN, J., concurs in part and dissents in part in separate opinion.

LAWRENCE G. CRAHAN, Judge,

concurring in part and dissenting in part.

I concur in the disposition of the breach of contract claim. I would affirm the judgment on the remaining counts as well.

As Orion correctly points out in its brief, Midwest’s response to the motion for summary judgment did not comply with Rule 74.01. Midwest did admit or deny each of the material facts set forth in separate numbered paragraphs in Orion’s motion but failed to “set out each additional material fact that remains in dispute” and failed to “support each factual statement asserted in the response with specific references to where each such fact appears in the pleadings, discovery or affidavits” as required by Rule 74.01(c)(2). Although Midwest did attach excerpts from various depositions, it did not state in its response what facts it contends these materials establish. Thus, the facts stated in Orion’s motion and properly supported by affidavits and exhibits must be deemed admitted for the purpose of the motion for summary judgment. Weiss v. Rojanasathit, 975 S.W.2d 113, 120 (Mo.1998). Even considering the materials attached to Midwest’s response, however, there is little, if any, dispute about the material facts.

Midwest’s president and sole shareowner is Laura Younghouse (“Younghouse”), who has been in the service station business for 17 years. For the first 13 years she worked for Rose City Oil Company, which like Midwest operated service stations with convenience stores. In 1993, she went into the same business herself. By July of 1998, Midwest owned service station/convenience stores in seven towns in southeast Missouri.

In 1996, Younghouse, on behalf of Midwest, decided to build and operate a combination convenience store/service station in Fruitland, Missouri. Younghouse left a voice mail message for Orion’s district sales manager Ries and he went to see her on March 27, 1996. Younghouse expressed interest in obtaining a franchise for three of Orion’s franchised products which Midwest would offer in the Fruit-land store: Hot Stuff Pizza, Smash Hit Subs and Cinnamon Street Bakery. During their meeting, Ries provided Young-house with Orion’s Uniform Franchise Offering Circular (UFOC), a document containing extensive disclosures required by federal law. 16 C.F.R. Sec. 436.1 et seq. Younghouse testified that, following the meeting, she did read this entire document. The UFOC provided to Young-house at the meeting included the following very specific caveats:

To protect you, we’ve required your franchisor to give you this informa-tion_ Study it carefully_ Read all of your contract carefully. Buying a franchise is a complicated investment. Take your time to decide. If possible, show your contract and this information to an advisor like a lawyer or an accountant. ...
Federal Trade Commission
Washington, D.C. 20580
The UFOC further provided:
You should also refrain from taking any other action making any commitments in regard to an ORION franchise *163until and unless you are notified in writing by ORION that your application for a franchise has been approved and that an ORION franchise has been issued in your name.
CAUTION
ANY FACT, INFORMATION, PROMISE, ASSURANCE, REPRESENTATION OR CIRCUMSTANCE COMMUNICATED TO YOU THAT IS NOT CONTAINED IN THE ATTACHED AGREEMENT OR THIS OFFERING CIRCULAR IS UNAUTHORIZED BY ORION AND SHOULD NOT BE RELIED UPON BY YOU IN DECIDING WHETHER TO PURCHASE AN ORION FRANCHISE.

The UFOC also contained a specimen copy of Orion’s standard franchise agreement, with none of the blank lines filled in. The specimen franchise agreement included the following provisions:

13.1 Interpretation. This Agreement, plus your application, are the entire and final agreement between you and us. You have not received or relied upon any representation, understanding, agreement or assurance not set forth herein and in our UFOC....
13.2 Governing Law ... This Agreement may be waived, modified or varied only by a writing signed by the parties. ... No custom, practice or course of dealing constitutes a waiver of any provision of this Agreement....
13.6 Review. You have reviewed this Agreement, our UFOC and other relevant information before entering into this Agreement with legal counsel or a professional business advisor of your choosing.

Younghouse admitted reading the UFOC in its entirety, including the express caution that she should refrain from taking any other action or making any commitments until notified in writing by Orion that the application for a franchise had been approved.

Following the March 27th meeting with Younghouse, Ries conferred with Paul Dirnberger of Rhodes Oil, one of Orion’s largest franchisees in the area, and determined that the grant of a franchise to Midwest would not interfere with Rhodes’ protected territories. Ries passed on the information he received from Dirnberger to Keith Watts, Orion’s regional sales manager, who told him to go ahead and proceed with the Fruitland location for Midwest.

On April 13, 1996, Ries and Younghouse met again. Ries told Younghouse that the grant of a franchise to Midwest would not violate any contractual agreements between Orion and Rhodes Oil. At that point, Younghouse “gathered” that Ries must have authority to approve franchises because he had gone to Rhodes Oil himself and obtained “clearance.” Younghouse also concluded that Ries had authority to approve the franchise because he told her at the April 13 th meeting that “We can proceed with the franchise.” According to Younghouse, she thought this created an oral contract for a franchise. Thereafter, Younghouse and Ries spoke on the telephone from time to time and Ries sent design layouts prepared by Orion for Midwest’s use.

Ries and Younghouse met for a third time on August 26, 1996. Younghouse advised Ries that Midwest had decided not to carry the Cinnamon Street Bakery Products and to focus instead on pizza and subs. At this meeting, Ries again provided Younghouse with Orion’s UFOC and standard franchise agreement.

On September 4,1996, Midwest received from Orion an unsigned franchise agreement for Midwest to execute if it still wanted to become an Orion franchisee. The agreement specified an opening date for the franchise of November 8, 1996, which was the target date selected by Younghouse. Younghouse and Ries spoke by telephone on September 13, 1996. Ac*164cording to Younghouse, Ries told her he would stop by the proposed location so he and Younghouse could sign the franchise agreement.

During this time period, Midwest apparently began airing radio ads announcing the imminent opening of the Orion franchise at Midwest’s new Fruitland store. An official of Rhodes Oil called William Langstan, one of Orion’s district managers of operation, and expressed concern. Langstan passed this information to Orion’s corporate headquarters. One of Orion’s officers then told Ries that he should not go through with his planned meeting with Younghouse on September 18 th because Orion was “evaluating the situation.” Ries did not appear at Midwest’s location on September 18 th. On September 19 th, Tom Kasper, Orion’s vice president of sales, decided not to grant or enter into a franchise agreement with Midwest. At the time that decision was made, Orion had not received from Midwest a signed franchise agreement, a signed equipment quote, a final layout and design drawing, a certificate of insurance nor, so far as can be determined from the record, any money. In sum, Midwest had made none of the commitments that would be required of a franchisee.

On September 30, 1996, Younghouse, having heard nothing from Ries or Orion, executed the franchise agreement and mailed it to Orion. The next day, Keith Watts, Orion’s regional sales manager, called Younghouse and told her Orion would not be granting Midwest a franchise. Orion confirmed this in a letter dated October 11,1996.

After learning Orion would not grant a franchise, Midwest made arrangements to become a licensee of Pecadilly Pizza and Subs, using much the same concepts as would have been used with Orion. Midwest began offering Pecadilly products on January 7, 1997, selling similar pizza and sandwiches to those it would have offered if it had obtained an Orion franchise.

The recognized elements of promissory estoppel in Missouri are: (1) a promise, (2) on which the party relies to his detriment; (3) in a way the promisor expected or should have expected; and (4) resulting in injustice which only enforcement of the promise can cure. Response Oncology, Inc. v. Blue Cross and Blue Shield of Missouri, 941 S.W.2d 771, 778 (Mo.App.1997). On the record before the court on summary judgment, there is no genuine issue of material fact that Midwest cannot establish any of these elements.

Ries’ statement to Younghouse in April that ‘We can proceed with the franchise” was not a promise that a franchise has been or would be granted. It was a truthful statement of Orion’s intent to work with Midwest to process its application, provide Midwest with the necessary information and, upon completion of that process, and assuming both parties were satisfied that the other was prepared to do what the franchise agreement would require it to do, to enter into a written franchise agreement. Although Young-house claims to have interpreted Ries’ statement to constitute an oral contract, such interpretation is unreasonable as a matter of law and inconsistent with her own actions. If Younghouse truly believed she had an oral contract in April, she would not have felt free to drop the Cinnamon Street Bakery products unilaterally in August. Younghouse does not claim that Ries ever told her she could dispense with a written agreement or any of the other requirements and still have a franchise.

The cases further establish that a party seeking to enforce a “promise” under the doctrine of promissory estoppel must show that his or her reliance was reasonable. Delmo, Inc. v. Maxima Elec. Sales, Inc., 878 S.W.2d 499, 505 (Mo.App.1994)(citing Otten v. Otten, 632 S.W.2d 45, 49 (Mo.App.1982)). As a matter of law, Younghouse’s alleged reliance on Ries’ alleged oral promise was unreasonable because she concedes that she was specifically apprised in writing, twice, that she should refrain *165from taking any action or making any commitments until and unless she was notified in writing by Orion that the application for a franchise had been approved and an Orion franchise had been issued in her name. I can find nothing in Ries’ conduct or statements that could conceivably be construed as waiving that requirement. To take action in reliance on Ries’ oral statement of intent to proceed with the franchise, having been previously and repeatedly apprised of Orion’s explicit admonition to refrain from such reliance is, as a matter of law, unreasonable.

Nor does the record reflect any actual reliance in the form of any material change of position by Midwest. Contrary to the suggestion by Midwest that it built a building 800 sq. ft. larger than it would have in anticipation of obtaining the franchise, Ms. Younghouse conceded that Midwest probably would not have constructed a smaller building if she had known she would not be awarded an Orion franchise. Indeed, the space that would have been used for the Orion products proved readily adaptable to a competitor’s similar products. Although it is true that if Midwest had been apprised sooner that Orion wasn’t going through with the deal it could have pursued other alternatives, this is true of any business relationship that remains unconsummated for whatever reason. Such failure to pursue alternatives cannot properly be characterized as “reliance” on the hoped for relationship; it is a well recognized risk of pursuing business opportunities that may not come to fruition.

Based on the very same language in the UFOC set forth above, Midwest likewise cannot establish that Orion should reasonably have expected reliance by Midwest prior to obtaining a signed agreement. Orion was entitled to assume that Midwest would heed its explicit and unambiguous warning. Even attributing Ries’ knowledge to Orion, there was nothing to indicate any material change in Midwest’s position in rebanee on any alleged promise of a franchise.

Finally, there is no evidence that there is any injustice to Midwest that can be avoided only by enforcement of the alleged promise.1 Although they were to be featured, Orion’s products would have been but a few of hundreds, if not thousands, offered at Midwest’s convenience store. Having failed to obtain an Orion franchise, Midwest promptly obtained a substitute from a competing firm. Ironically, if Midwest had heeded Orion’s admonition and not jumped the gun with its radio advertising, it very likely would have secured the Orion franchise it sought. Rhodes Oil had no contractual right to prevent a new franchise in Fruitland and but for Midwest’s premature advertising probably wouldn’t have voiced any objections before an agreement had been signed. All of the evidence before the trial court indicates that Orion had every intention of awarding Midwest a franchise if Rhodes Oil had not objected.

Application of the doctrine of promissory estoppel is to be used with caution, sparingly and only in extreme cases to avoid unjust results. Meinhold v. Huang, 687 S.W.2d 596, 599 (Mo.App.1985). This is not an extreme case. This is a garden variety business negotiation that didn’t pan out, at least in part because Midwest disregarded Orion’s explicit instructions not to do anything until the deal was consummated in writing. I find no injustice warranting application of the doctrine of promissory estoppel. If Midwest’s claim is allowed, should Orion have a counterclaim for whatever it expended in drawing plans for the display of Cinnamon Street Bakery products? I would hope not, but the question illustrates the absence of mutuality that underscores the need to apply the doctrine sparingly.

*166It is also appropriate to note that the manner in which franchises are offered is heavily regulated. 16 C.F.R. Sec. 436.1 et seq. These rules require extensive disclosures that would have afforded Midwest ample protection if it had heeded the information provided. As required by the regulations, Midwest was provided with the names of Orion’s officers, who could readily have cleared up any confusion Young-house may have had about Ries’ authority. If Midwest felt it necessary to materially change its position to accommodate the planned franchise, it could have insisted Orion expedite negotiation of a signed agreement. Midwest was specifically advised to consult with legal counsel but failed to do so. Given the substantial protections already enacted into law, it seems to me unreasonable to stretch a disfavored doctrine in an effort to protect those who ignore the many protections they already have. I would affirm summary judgment on the promissory estoppel count.

I would also affirm the judgment in favor of Ries on Midwest’s fraudulent misrepresentation claim. All of the evidence provided to the trial court on summary judgment establishes that Ries’ statement to Younghouse in April that “We can proceed with the franchise” was a truthful representation of Orion’s present intent. Thus, it was not actionable. See Trotter’s Corp. v. Ringleader Restaurants, Inc., 929 S.W.2d 935, 940 (Mo.App.1996).

For the foregoing reasons, I would affirm the judgment in its entirety.

12.6 Gibson v. City of Cranston 12.6 Gibson v. City of Cranston

Diane GIBSON, Plaintiff, Appellant, v. CITY OF CRANSTON, et al., Defendants, Appellees.

No. 94-1375.

United States Court of Appeals, First Circuit.

Heard Sept. 7, 1994.

Decided Oct. 3, 1994.

*733Lauren E. Jones, with whom Jones Associates, Providence, RI, Daniel V. McKinnon, and McKinnon & Harwood, Pawtucket, RI, were on brief, for appellant.

William F. Holt, Asst. City Sol., Cranston, RI, for appellees.

Before SELYA, Circuit Judge, ALDRICH, Senior Circuit Judge, and BOUDIN, Circuit Judge.

SELYA, Circuit Judge.

This appeal arises out of Dr. Diane Gibson’s short and stormy stay as superintendent of schools in Cranston, Rhode Island. It stands as a vivid illustration that some of life’s most instructive lessons are learned in the classroom of adversity. After educating ourselves about the facts of the case, the applicable law, and the proceedings below, we conclude that the district court correctly refused to give the plaintiffs case a passing grade.

I. BACKGROUND

Because the trial court took this case from the jury and terminated it by means of an instructed verdict, we summarize the facts adduced below in the light most congenial to appellant’s claims.

In early 1989, while serving as Assistant Superintendent of Schools in Waterloo, Iowa, plaintiff-appellant Diane Gibson applied for a job as school superintendent in Cranston. The school committee (the Committee) interviewed her twice (once publicly and once privately) and eventually offered her the post. On August 21, 1989, she met in Rhode Island with members of the Committee concerning her employment contract (the Contract). The parties signed it the next day.

The Contract contained 11 sections, counting the preamble, spread over eight pages. It specified a term that ran from October-1, 1989 to June 30, 1992. The Contract contained various clauses related to professional growth, compensation, contract renewal, salary adjustments, termination for cause, and resignation. It also provided for such miscellaneous items as certification, annual medical examinations, and disability protection. Article III described the superintendent’s duties, stating that she

shall be the chief administrator and agent of the Cranston schools and have charge of the administration of the schools under the direction of the Committee. In this capacity she shall implement, among other things, all policies approved by the Committee, provide for efficient administration of the system and provide for the performance evaluation of all administrators, teachers, and quality of the education provided.

The same article stated that the parties’ “respective rights and responsibilities ... shall be as specified in Chapter 2 of Title 16 of the [Rhode Island General Laws].”

Article VI of the Contract has particular pertinence in this litigation. By its terms, the article obligated the Committee to assess in writing the Superintendent’s overall performance at least annually. The format and procedure for the evaluation were to be decided upon by the parties no later than 60 days after the Contract’s effective date. Once an evaluation emerged, the Committee and the Superintendent were to meet for discussion of it; specifically, the Contract indicated that a meeting dedicated to this purpose would be held between February 15 and March 15 of each contract year. The evaluation was to be used in determining “if the Superintendents’s Contract is renewed/not renewed.” To this end, Article VI also contained a non-exclusive list of factors to be considered in the evaluation process and required that the end product describe in reasonable detail “specific instances of strengths and commendations as well as spe-*734eifíe instances of any unsatisfactory performance.”

At the end of the first 60 days of her reign, Dr. Gibson had not heard from the Committee regarding the evaluation process. She brought the matter to the attention of Stephen Dambruch, the Committee’s chairman. Dambruch suggested that appellant develop and disseminate a proposed evaluation form. On December 4, 1989, appellant complied. On March 1, 1990, Dambruch notified the Committee that an evaluation was due between February 15 and March 15 of each year. Five of the nine Committee members responded on the form appellant had prepared. Two other members wrote letters commenting upon appellant’s performance. Two Committee members kept their own counsel. In any event, the Committee never composed a unified performance evaluation.

This lollygagging took place during a period of considerable turmoil. In January 1990 the Committee voted to restructure the public schools, only to reverse itself two months later.1 Spurred in part by this dramatic about-face, appellant requested that the Committee provide her with a written statement of its goals. Although a meeting was held to discuss this request, the Committee never complied with it.

In March 1990 appellant became aware that the school system had improperly paid health benefits on behalf of former employees. She brought this matter to the Committee’s attention. Dambruch and his colleagues commissioned an ad hoe committee (the AHC) to mull the problem. The AHC sought to exclude appellant from its deliberations. To compound this contretemps, an assistant city solicitor wrote to Dambruch on June 8, 1990 suggesting that the AHC might be illegally infringing on the Superintendent’s administrative prerogatives and might lack the legal authority necessary to arrange for an audit of the school system’s records. Eventually, the Committee retained a certified public accountant. Although the accountant completed a study of the situation, the Committee never provided appellant either with the accountant’s report or with any feedback regarding the accountant’s recommendations.

Cranston held a municipal election in November of 1990. The electoral results significantly affected the Committee’s composition. A member suggested that appellant’s evaluation be completed before the newly elected members took office. The Committee scheduled a special meeting for this purpose, but appellant resigned before the meeting could be held. In her letter of resignation, dated December 28, 1990, appellant accused the Committee of violating the Contract by not providing a proper evaluation and statement of goals, and by infringing on the scope of her autonomy as superintendent.

All was serene for well over a year. On June 10, 1992, however, appellant, then a citizen and resident of North Carolina, sued for breach of contract in a Rhode Island state court. She claimed that the City of Cranston, acting through the Committee, disregarded duties owed under the contract, and she sought damages including the balance of her salary and benefits for the period from January 1, 1991 through June 30, 1992.2 Noting the existence of diversity jurisdiction, 28 U.S.C. § 1332 (1988), Cranston removed the case to federal district court, see 28 U.S.C. § 1441 (1988).

In due course, Chief Judge Lagueux empaneled a jury and trial commenced. At the close of the appellant’s case, Cranston moved for a judgment as a matter of law.3 The district judge assumed arguendo that Cran-ston had not fulfilled its contractual commit*735ments, but ruled that, even so, the evidence did not permit a rational jury to find a breach of sufficient materiality as to allow appellant to cease performance and recover damages for the balance of the unexpired term. This appeal followed.4

II. STANDARD OF REVIEW

When confronted with a motion for judgment as a matter of law, whether at the end of a plaintiffs case or at the close of all the evidence, a trial court must scrutinize the proof and the inferences reasonably to be drawn therefrom in the light most amiable to the nonmovant. See Rolon-Alvarado v. Municipality of San Juan, 1 F.3d 74, 76 (1st Cir.1993); Wagenmann v. Adams, 829 F.2d 196, 200 (1st Cir.1987). In the process, the court may not consider the credibility of witnesses, resolve conflicts in testimony, or evaluate the weight of evidence. See Wagenmann, 829 F.2d at 200. A judgment as a matter of law may be granted only if the evidence, viewed from the perspective most favorable to the nonmovant, is so one-sided that the movant is plainly entitled to judgment, for reasonable minds could not differ as to the outcome. See Rolon-Alvarado, 1 F.3d at 77.

Because granting a judgment as a matter of law depends upon the legal sufficiency of the evidence, appellate review is plenary. See Jordan-Milton Mach., Inc. v. F/V Teresa Marie, II, 978 F.2d 32, 34 (1st Cir.1992). It is incumbent upon the court of appeals to apply precisely the same criteria that constrain the trial court. See Rolon-Alvarado, 1 F.3d at 77. Moreover, the standard of review affords no place for any deference to the district court’s view anent state-law questions. See Salve Regina Coll. v. Russell, 499 U.S. 225, 238, 111 S.Ct. 1217, 1224-25, 113 L.Ed.2d 190 (1991).

III. ANALYSIS

The substantive law of Rhode Island governs in this diversity case. Under Rhode Island law, a contracting party may cease performance and seek damages if the other contracting party commits a breach that is “material,” see, e.g., Philip Carey Mfg. Co. v. General Prods. Co., 89 R.1.136, 151 A.2d 487, 493 (1959), or that “goes to the essence of the contract,” Aiello Constr., Inc. v. Nationwide Tractor Trailer Training & Placement Corp., 122 R.I. 861, 413 A.2d 85, 87 (1980). Some courts and commentators have cast the standard in terms of a “total” breach as opposed to a “partial” breach, with only the former justifying termination of a contract. See, e.g., Lovink v. Guilford Mills, Inc., 878 F.2d 584, 586-87 (2d Cir.1989); Arthur L. Corbin, Corbin on Contracts § 946, at 809 (1951). Because we believe these terms constitute various ways of saying the same thing, we will use them interchangeably.5

Appellant invites us to rule that materiality is always a question of fact, thereby eliminating the possibility of a directed verdict where, as here, the issue is disputed. We decline the invitation. While the state supreme court has indicated that, in this context, materiality “is- essentially a factual *736question,” and that its resolution ordinarily “requires consideration of all the pertinent evidence and the conduct and relationship of the parties,” Dunne Leases Cars & Trucks, Inc. v. Kenworth Truck Co., 466 A.2d 1153, 1160 (R.I.1983), the first part of this statement is a generalization, and, like most generalizations, it admits of exceptions. Though questions of materiality are usually to be determined by the trier of fact, in this ease the jury, the rule is not universal. As is true of virtually any factual question, if the materiality question in a given case admits of only one reasonable answer (because the evidence on the point is either undisputed or sufficiently lopsided), then the court must intervene and address what is ordinarily a factual question as a question of law.

The task of delineating which particular breaches may justify an injured party ceasing performance and bringing an action for damages is demanding, but the case law affords some insights. In Aiello, for example, the plaintiff, a contractor, sued a property owner for nonpayment of installments due under a construction contract. The Rhode Island Supreme Court upheld a finding that the defendant’s failure to pay installments as they came due went to the essence of the contract and, therefore, excused further performance by the plaintiff. See Aiello, 413 A.2d at 87. In Dunne, the court upheld a finding that a dealer committed a material breach of its franchise agreement with a truck manufacturer by failing to honor its promise to separate its leasing activities from its dealership operation. See. Dunne, 466 A.2d at 1159. In its opinion, the court emphasized the presence of evidence that the leasing activities adversely impacted the truck dealership in the areas of parking, cleanliness, parts sales, and service. See id. at 1158. On this basis, the court concluded that the dealer’s breach might be deemed material even though the dealer regularly achieved its sales quota under the franchise agreement.6 See id. at 1159.

Despite the insights that can be gleaned from these cases, the Rhode Island courts thus far have not precisely defined what constitutes a material breach. Nonetheless, we believe that the proper analysis is informed by certain commentaries and decisions from outside Rhode Island. See Michelin Tires (Canada), Ltd. v. First Nat’l Bank, 666 F.2d 673, 682 (1st Cir.1981) (“In the absence of a definitive ruling by the highest state court, a federal court may consider analogous decisions, considered dicta, scholarly works, and any other reliable data tending convincingly to show how the highest court in the state would decide the issue at hand, taking into account the broad policies and trends so evinced.”) (citation and internal quotation marks omitted). The Restatement is an especially helpful source of guidance because Rhode Island courts frequently turn to the Restatement to fill gaps in state law. See, e.g., Bibby’s Refrig., Heating & Air Cond. Inc. v. Salisbury, 603 A.2d 726, 729 (1992); Durapin, Inc. v. American Prods., Inc., 559 A2d 1051, 1059 (1989). The Restatement lists five factors that may be considered in determining whether a breach is material.7 Other commentators have espoused slightly different sets of relevant factors for use in determining materiality, such as the extent to which the contract has been performed at the time of the breach, the willfulness vel *737non of the breach, and the degree of seriousness attributable to the breach, expressed in quantitative terms. See 2 E. Allan Farnsworth, Farnsworth On Contracts § 8.16, at 442 (1990); J. Calamari & J. Perillo, Contracts 408-09 (2d ed. 1977). We believe that when the occasion arises, the Rhode Island Supreme Court will adopt some variant of these tests to determine the materiality of a breach of contract.8 In our view, the test will concentrate on factors such as those listed in the Restatement, with special emphasis, in the employment context, on the extent to which the alleged breach interferes with the duties and benefits flowing from the contract in its entirety. We need not dice matters too finely, however, for appellant’s proof can meet neither the Restatement standard nor any reasonable variant of it. We explain briefly.

While a material breach of an employment contract need not completely frustrate the entire purpose of the contract, it must be so important that it makes continued performance by the plaintiff virtually pointless, see Lovink, 878 F.2d at 587. Thus, if Cranston refused to pay appellant, or, conversely, if appellant completely withheld her services for no valid reason, the ensuing breach would reach the essence of the Contract.

But that is not what transpired here. We think it is readily apparent that, under the stringent standard that obtains, the Committee’s alleged breaches of the Contract are, as a matter of law, not material. The superintendent’s job encompasses a complex and varied set of responsibilities. Under a provision of the Rhode Island General Laws, which is incorporated into the Contract by explicit reference, the post includes a vast array of administrative, supervisory, managerial, and policymaking functions. See R.I.Gen.Laws § 16-2-11 (1988), reprinted in the appendix. This elaborate compendium of responsibilities, complemented by the multifarious provisions of the Contract itself, put appellant’s grievances into proper perspective. And so viewed, we are unable to see how a reasonable jury could find that the Committee’s conduct involved matters of sufficient significance to constitute a material breach.

Appellant’s flagship claim pirouettes around the Committee’s failure to provide her with a unified evaluation. Given the admitted feedback that appellant received from a majority of the individual Committee members, we cannot discern how the failure to reduce the feedback to a unified evaluation or the other shortcomings in the evaluation process could be deemed a material breach. Without the evaluation, appellant was still able to carry out virtually all of her responsibilities. She still received the overwhelming majority of the benefits to which the Contract entitled her. Her mere testimony that without the evaluation provision she would not have signed the employment agreement cannot make this otherwise unremarkable provision into one that “goes to the essence of the contract.” Salo Landscape & Constr. Co. v. Liberty Elec. Co., 119 R.I. 269, 376 A.2d 1379, 1382 (1977). The determination of materiality, like other aspects of contract interpretation, must be based largely on a standard of objective reasonableness rather than purely subjective belief. Cf. John F. Davis Co. v. Shepard Co., 71 R.I. 499, 47 A.2d 635, 637 (1946) (noting that the “true question” in determining the intention of the parties is “not what intention existed in the minds of the parties, but what intention is expressed by the language used”) (internal quotation marks omitted); Pahlavi v. Palandjian, 809 F.2d 938, 945 (1st Cir.1987) (commenting that “contracting parties are bound by objective manifestations and expressions, not subjective expectations”). In other words, a party cannot transmogrify a provision that, from an objective standpoint, has only marginal significance into one of central salience by the simple expedient of saying in retrospect that she believed it to be very important.

Here, notwithstanding plaintiff’s post hoc rationalization, the Committee’s failure to provide a unified evaluation seems much *738more a matter of form than of substance. It did not in any way shrink plaintiff’s major duties or deprive her of the principal benefits of her contractual bargain. Nothing about the failure betokens bad faith or an unfair course of conduct. And the sockdolager is that, at the time Dr. Gibson resigned, there was a high likelihood that the Committee would soon cure its breach by providing an evaluation; a special meeting for this purpose was scheduled to occur less than one week after she precipitously resigned.

Appellant’s fallback position is that the Committee never furnished her with a written statement of goals. But appellant had ample contact with the Committee and its members to get a sense of the school system’s objectives. Thus, as with the first alleged breach, this failure did not interfere significantly with either her duties or her benefits under the Contract. Consequently, it could not be deemed a material breach.

Finally, appellant alleges that the Committee infringed upon her administrative responsibilities. She offers two incidents to illustrate her contention: a Committee member’s action in sending a questionnaire directly to the faculty, see supra note 1, and the AHC’s attempt to exclude her from its deliberations. Given the minor nature of these supposed infractions and their subsequent resolution, no reasonable jury could find that they constitute a material breach.

IV. CONCLUSION

We need go no further. Considering all the evidence in the light most hospitable to plaintiff, no reasonable jury could find that the Committee’s alleged breaches of the Contract gutted it. Consequently, the court below did not err in granting judgment as a matter of law.

Affirmed.

APPENDIX

16-2-11. General powers and duties of superintendent. — (a) The superintendent of schools employed in accordance with the provisions of this chapter shall, under the direction of the school committee, have the care and supervision of the public schools and shall be the chief administrative agent of the school committee. The superintendent shall have such duties as are defined in this section and elsewhere in this title and other such duties as may be determined by the school committee from time to time, and shall perform such other duties as may be vested in him or her by law. In addition to the care and supervision of public schools and the appointment of employees of the district it shall be the duty of the superintendent:

(1) To implement policies established by the school committee.

(2) To recommend educational plans, policies and programs to meet the needs of the district.

(3) To recommend policies governing curriculum, courses of instruction, textbooks and transportation of students.

(4) To comply with provisions of federal and. state law and local charter provisions and ordinances.

(5) To have administrative responsibility for the school system.

(6) To oversee the care, control, and management of school facilities and equipment.

(7) To appoint all school department personnel with the consent of the school committee.

(8) To administer the personnel function of the school department consistent with personnel standards, policies, and the table of organization established by the school committee.

(9) To provide for the evaluation of department personnel.

(10) To prepare a school budget for consideration by the school committee.

(11) To authorize purchases consistent with the adopted school budget, policies and directives of the school committee, and applicable municipal policies, ordinances, and charter provisions.

(12) To be responsible for keeping the records of the school system.

(13) To report to the school committee on a regular basis the financial condition of the school system.

*739(14) To be responsible for discipline in the school system.

(15) To evaluate all schools within the school system and to report to the school committee the conformity with regulations of the board of regents and the policies, programs, and directives of the school committee.

(16) To report to the school committee on the operation of the school system, including an annual report on the district’s progress.

(17) Nothing in this section shall be deemed to limit or otherwise interfere with the rights of teachers and other school employees to collectively bargain pursuant to chapters 9.3 and 9.4 of title 28, or to allow any school superintendent to abrogate any agreement reached by collective bargaining.

(b) If at any time during the fiscal year the superintendent of schools determines, or is notified by the town chief charter officer or treasurer, that the estimated school expenses may exceed all revenue appropriated by the state or town or otherwise for public schools in the town, the superintendent of schools shall recommend to the school committee and shall in order to provide for continuous regular public school operations consistent with the requirements of § 16-2-2 without regard to financial conditions subsequently report to the town treasurer and chief charter officer what action will be taken to prevent an excess of expenditures, encumbrances, and accruals over revenues for public schools in the town.