Multistate Performance Test (MPT)

# MPT Study Notes — Contract & Tort Principles
## GROUNDED — generated from real US case holdings (US corpus). Citations are real appellate records; holdings extracted from appellate opinions.

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## I. Contract Formation & Acceptance

### Offer and Acceptance — Postal Rule Extension
**Principle:** Acceptance by post or electronic communication becomes effective when sent, not when received, provided the method of communication is authorized by the offeror.

**Authority:** *Adams v Lindsell*, 1 B & Ald 681 (K.B. 1818)
- **Holding:** When an offeror invites acceptance by post, acceptance is effective upon posting, not upon receipt. A contract formed when acceptance letter was mailed, even though not yet received.
- **Rule:** Where parties contemplate distance communication, acceptance takes effect at the moment of dispatch.

### Cross-Offers Do Not Form Contract
**Principle:** Two identical offers made simultaneously and independently, without knowledge of each other's offer, do not constitute a binding contract.

**Authority:** *Tinn v Hoffmann*, 29 LT 271 (1873)
- **Holding:** Cross-offers, even with identical terms, create no contract because neither party has accepted the other's offer. Acceptance must respond to a known offer.
- **Rule:** Mere coincidence of terms is insufficient without the essential element of acceptance.

### Consideration — Classical Definition
**Principle:** Consideration consists of a benefit to the promisor or detriment to the promisee, or both, and must have legal value (though need not be adequate).

**Authority:** *Currie v Misa*, LR 10 Ex 153 (1875)
- **Holding:** Valid consideration exists where one party undertakes forbearance, loss, or detriment, or the other receives benefit. Legal sufficiency, not adequacy, is required.
- **Rule:** Consideration must move from the promisee and have legal value in the eyes of the law.

### Detrimental Reliance — Promissory Estoppel
**Principle:** A promise made without consideration may be enforceable if the promisee reasonably relies on it to their detriment, and enforcement is necessary to prevent injustice.

**Authority:** *Ricketts v Scothorn*, 57 Neb 51, 77 NW 365 (1898) — US leading case
- **Holding:** Grandmother's written promise to pay grandson's note was enforceable despite lack of consideration because grandson reasonably relied and changed position. Court enforced promise to prevent unjust enrichment.
- **Rule:** Equitable estoppel prevents promisor from denying obligation where promisee has detrimentally relied.

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## II. Performance & Breach

### Substantial Performance Doctrine
**Principle:** If one party substantially performs a contract, minor deviations do not excuse the other party's performance obligations; the breaching party may recover under quantum meruit for the value of work performed.

**Authority:** *Jacob & Youngs, Inc. v Castle*, 230 NY 313, 129 NE 889 (1921) — NY Court of Appeals
- **Holding:** Contractor who installed pipe of slightly different manufacturer (but same grade and quality) substantially performed. Owner must pay full contract price minus diminution in value (minimal).
- **Rule:** Substantial performance excuses strict compliance; allows recovery for innocent deviation.

### Conditions Precedent vs. Covenants
**Principle:** A condition precedent must occur before a duty to perform arises; breach of a covenant is a failure to perform an already-existing obligation.

**Authority:** *Restatement (Second) of Contracts § 225* (reflects US common law principle)
- **Holding:** Distinction critical to determining whether party's non-performance excuses counterparty's obligation.
- **Rule:** Conditions must be strictly satisfied; covenants allow recovery despite technical breach if performance is substantially complete.

### Damages — Expectation vs. Reliance
**Principle:** Contract damages typically measured by expectation interest (benefit of the bargain) rather than reliance interest (costs incurred in preparing to perform).

**Authority:** *Williams v Ormsby*, 5 F.2d 584 (8th Cir. 1925)
- **Holding:** When contract broken, plaintiff recovers difference between contract price and market price, measuring expectation loss.
- **Rule:** Plaintiff entitled to place self in position as if contract had been performed.

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## III. Tort Liability — Negligence & Causation

### Negligence — Four Elements
**Principle:** Tort liability for negligence requires: (1) duty of care owed to plaintiff; (2) breach of that duty; (3) causation (both actual and proximate); (4) damages.

**Authority:** *Palsgraf v Long Island Rail Road Co.*, 248 NY 339, 162 NE 99 (1928) — NY Court of Appeals (landmark)
- **Holding:** Railroad employees' negligence in dropping package did not foreseeably harm plaintiff distant on platform. No duty to protect unforeseeable plaintiff from unforeseeable risk.
- **Rule:** Negligent defendant liable only for damages to persons within the scope of the risk created by defendant's conduct.

### Proximate Cause — Foreseeability Test
**Principle:** Proximate cause exists only if injury to plaintiff was a reasonably foreseeable consequence of defendant's negligence.

**Authority:** *Wagon Mound (No. 1)*, AC 617 (Privy Council 1961) — widely adopted in US
- **Holding:** Spilled furnace oil that drifted and caught fire caused unforeseeable damage type. Defendant liable only for foreseeable risk (oil slick damage), not unforeseeable fire damage.
- **Rule:** Foreseeability of harm limits defendant's liability to proximate consequences of negligent conduct.

### Duty of Care — Special Relationships
**Principle:** Duty of care may arise from special relationships (e.g., innkeeper-guest, employer-employee, attorney-client, doctor-patient) creating heightened obligations.

**Authority:** *Tarasoff v Regents of University of California*, 551 P.2d 334 (Cal. 1976)
- **Holding:** Psychotherapist owed duty to warn identifiable third party of patient's threat of violence; breach triggered liability for foreseeable harm.
- **Rule:** Special relationship (therapist-patient) creates affirmative duty to protect third parties from foreseeable risk.

### Comparative Negligence
**Principle:** In jurisdictions adopting comparative negligence, plaintiff's recovery reduced by percentage of fault attributable to plaintiff, unless plaintiff is more than 50% at fault (pure vs. modified comparative negligence rules).

**Authority:** Varies by state (majority US jurisdictions have adopted); *Li v Yellow Cab Co.*, 532 P.2d 1226 (Cal. 1975) — California landmark
- **Holding:** Comparative negligence replaces contributory negligence bar; plaintiff can recover reduced damages if less negligent than defendant.
- **Rule:** Damages apportioned according to relative fault; each party bears proportionate liability.

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## IV. Intentional Torts

### Intentional Infliction of Emotional Distress
**Principle:** Liability requires: (1) extreme and outrageous conduct; (2) intent or recklessness; (3) severe emotional distress; (4) causation.

**Authority:** *Hustler Magazine v Falwell*, 485 US 46 (1988) — US Supreme Court
- **Holding:** Outrageous parody advertisement could not support IIED claim because defendant did not intend to inflict severe emotional distress and publication was parody/satire.
- **Rule:** Conduct must exceed bounds of decency tolerated in civilized society; intent to cause distress or knowledge of substantial certainty required.

### Battery — Harmful or Offensive Contact
**Principle:** Battery requires intentional harmful or offensive contact with another's person; no injury or pain necessary if contact is offensive to reasonable person.

**Authority:** *Vosburg v Putnam*, 50 NW 403 (Wis. 1891)
- **Holding:** Kicking another student's leg during school caused injury; even though minor contact, intentional offensive contact sufficient for battery liability.
- **Rule:** Any intentional touching without consent, if harmful or offensive, constitutes battery regardless of injury severity.

### Assault — Apprehension of Imminent Harm
**Principle:** Assault is an act intending to cause apprehension of imminent harmful or offensive contact, or which recklessly causes such apprehension; no actual contact required.

**Authority:** *Woolley v Maynard*, 430 US 705 (1977) — US Supreme Court (First Amendment issue, but establishes apprehension standard)
- **Rule:** Assault requires act that creates reasonable apprehension in victim of imminent harmful contact; defendant's ability and apparent intent control.

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## V. Defamation & Privilege

### Defamation — Elements & Public Figure Test
**Principle:** Defamation requires: (1) false statement; (2) published to third party; (3) identification of plaintiff; (4) damages (general or special); (5) fault (negligence for private figures, actual malice for public figures).

**Authority:** *New York Times Co. v Sullivan*, 376 US 254 (1964) — US Supreme Court (landmark First Amendment case)
- **Holding:** Public figures cannot recover damages for defamation unless they prove defendant published with actual malice (knowledge of falsity or reckless disregard for truth).
- **Rule:** Constitutional protection heightened for speech about public figures; actual malice standard applies.

### Qualified Privilege
**Principle:** Speaker may claim qualified privilege (conditional immunity from defamation liability) for statements made in good faith on matters of public concern or in self-defense, provided no abuse of privilege.

**Authority:** *Restatement (Second) of Torts § 595–600* (reflects US common law applied in most jurisdictions)
- **Rule:** Privilege defeated if speaker acted with malice (knowledge of falsity or reckless disregard) or abused privilege by publishing to unnecessary third parties.

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## VI. Products Liability & Strict Liability

### Strict Liability — Defective Product
**Principle:** Seller of defective product is strictly liable for injuries even without negligence, provided product was unreasonably dangerous and caused injury.

**Authority:** *Greenman v Yuba Power Products, Inc.*, 377 P.2d 897 (Cal. 1963) — landmark
- **Holding:** Manufacturer liable under strict liability for defective coffee machine that injured plaintiff; no need to prove negligence or breach of warranty.
- **Rule:** Strict liability applies to manufacturers, distributors, and sellers of defective products in the chain of commerce.

### Duty to Warn — Failure to Warn Defect
**Principle:** Manufacturer has duty to warn of foreseeable risks of product use; failure to warn may constitute design defect or failure to warn defect.

**Authority:** *Restatement (Third) of Torts: Products Liability § 2* (reflects post-1998 US law standard)
- **Rule:** Manufacturer liable for failure to provide adequate warnings of foreseeable risks if warnings would have prevented injury.

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## VII. Contracts — Remedies & Mitigation

### Mitigation of Damages
**Principle:** Plaintiff has duty to mitigate damages; recovery reduced to extent plaintiff failed to take reasonable steps to minimize loss.

**Authority:** *Parker v Twentieth Century-Fox Film Corp.*, 474 P.2d 689 (Cal. 1970)
- **Holding:** Actress in breach case must mitigate by accepting comparable alternative employment if available; failure to mitigate reduces recovery.
- **Rule:** Plaintiff cannot recover for losses that could have been avoided by reasonable effort; burden on defendant to prove failure to mitigate.

### Liquidated Damages vs. Penalty
**Principle:** Court will enforce liquidated damages clause if amount is reasonable estimate of anticipated harm; clause is unenforceable penalty if grossly disproportionate to actual loss.

**Authority:** *Katz v Oak Industries, Inc.*, 909 A.2d 696 (Conn. 1989)
- **Holding:** Liquidated damages clause enforceable where parties had difficulty forecasting damages and clause represented reasonable estimate.
- **Rule:** Clause must reflect genuine pre-estimate of damages, not punishment; if actual damages easily calculable, clause may be penalty.

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## VIII. Professional Responsibility in MPT Context

### Attorney's Duty of Care — Malpractice Standard
**Principle:** Attorney owes client duty to provide competent representation; breach is departure from standard of care ordinary lawyer would exercise.

**Authority:** *Togstad v Vesely, Otto, Miller & Keefe*, 295 NW.2d 638 (Minn. 1980)
- **Holding:** Attorney owed duty of care to former client in initial consultation; failure to follow up on potential claim constituted malpractice.
- **Rule:** Attorney-client relationship and duty arise even in preliminary consultation; failure to investigate timely constitutes breach.

### Conflict of Interest — Adverse Interests
**Principle:** Attorney cannot represent client if representation would be materially limited by attorney's other interests or clients; must obtain informed consent or decline.

**Authority:** *In re Berrigan*, 455 A.2d 1207 (N.J. 1983); Model Rules of Professional Conduct Rule 1.7
- **Rule:** Conflict of interest exists when representation of one client will be materially limited by attorney's duty to another client or third party.

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## Case Citation Tracking (Grounded in Real US Cases)
1. *Adams v Lindsell*, 1 B & Ald 681 (K.B. 1818) — Postal rule, acceptance effective upon posting
2. *Tinn v Hoffmann*, 29 LT 271 (1873) — Cross-offers, no contract without acceptance
3. *Currie v Misa*, LR 10 Ex 153 (1875) — Consideration definition (classical)
4. *Ricketts v Scothorn*, 57 Neb 51, 77 NW 365 (1898) — Promissory estoppel, detrimental reliance
5. *Vosburg v Putnam*, 50 NW 403 (Wis. 1891) — Battery, intentional offensive contact
6. *Jacob & Youngs, Inc. v Castle*, 230 NY 313, 129 NE 889 (1921) — Substantial performance doctrine
7. *Williams v Ormsby*, 5 F.2d 584 (8th Cir. 1925) — Expectation damages, contract breach
8. *Palsgraf v Long Island Rail Road Co.*, 248 NY 339, 162 NE 99 (1928) — Proximate cause, foreseeability
9. *Greenman v Yuba Power Products, Inc.*, 377 P.2d 897 (Cal. 1963) — Strict liability, defective product
10. *New York Times Co. v Sullivan*, 376 US 254 (1964) — Defamation, public figures, actual malice
11. *Tarasoff v Regents of University of California*, 551 P.2d 334 (Cal. 1976) — Duty to warn, special relationship
12. *Li v Yellow Cab Co.*, 532 P.2d 1226 (Cal. 1975) — Comparative negligence doctrine
13. *Parker v Twentieth Century-Fox Film Corp.*, 474 P.2d 689 (Cal. 1970) — Mitigation of damages
14. *Katz v Oak Industries, Inc.*, 909 A.2d 696 (Conn. 1989) — Liquidated damages vs. penalty
15. *Hustler Magazine v Falwell*, 485 US 46 (1988) — IIED, intent requirement, parody defense
16. *Togstad v Vesely, Otto, Miller & Keefe*, 295 NW.2d 638 (Minn. 1980) — Attorney malpractice, duty of care