Thursday, February 18, 2010
Kramer on Contracts
I am currently in the midst of studying for the Colorado Bar Exam. A couple weeks ago, after studying for the Contract Law portion of the exam, I turned on the tv to take a break and caught an old episode of Seinfeld. It was an episode called "The Seven," which has a couple of memorable plotlines: George's friend wants to steal his idea for a baby name, "Seven," and Jerry dates a woman who always wears the same dress. As I watched it this time, however, I was much more intrigued by the classic contract dispute that arose between Kramer and Elaine.
To set up the following scene, Elaine had purchased a bike the day before and hurt herself taking it down off the wall at the store.
Elaine says that she "would give that bike to the first person who could make this pain go away." Kramer begins to apply shiatsu technique to her neck, and shortly after Elaine exclaims, "The pain is totally gone!" Was this a valid contract? Does Elaine owe Kramer the bike?
Applicable Legal Framework
Blacks Law Dictionary defines a contract as, "An agreement between two or more parties which creates legally binding obligations." A contract can be express (formed by written or oral language) and can also be implied (formed by conduct). Three elements must be present for the formation of a valid contract: mutual assent (offer and acceptance), consideration (bargained for exchange for something of legal value), and no defenses (mistake, lack of capacity, illegality, etc.)
Mutual assent means there must be a valid offer and a valid acceptance. We must first turn to whether Elaine presented a valid offer, i.e. whether (1) Elaine made a promise, undertaking, or commitment, (2) the offer was definite and certain in its terms, and (3) Elaine communicated the offer to Kramer. The crucial issue seems to be whether Elaine has in fact made a promise, undertaking, or commitment. This requires examination of a few factors, including the language, the surrounding circumstances, the method of communication, and the prior relationship of the parties. While the language on its face seems to clearly state a promise or commitment, the surrounding circumstances and the method of communication tend to negate this. As the statement was delivered in a flippant manner while Elaine was in pain and in a casual environment, a finder of fact might conclude that Kramer should have known Elaine was being facetious. The result might be different if Elaine and Kramer were sitting face to face in Elaine's office at J. Peterman or if Elaine had sent an email to her entire Christmas card list seeking help with her neck problems. We also have to take into account the prior relationship of the parties. As Elaine and Kramer have been friends for a long time, it's likely that Kramer knows of Elaine's tendency to exaggerate and that Elaine knows of Kramer's tendency to take things too literally.
Assuming that Elaine has extended a valid offer, we now ask whether Kramer accepted the offer. This circumstance presents a unilateral contract, which means the offeree accepts the offer by performing the stipulated act, here relieving the pain in Elaine's neck. The key factors for acceptance of a unilateral contract are that the offeree (1) must act with knowledge of the offer and (2) must be motivated by the offer. Had Kramer been in his apartment when Elaine made the statement about the bike and later fixed her neck out of the goodness of his heart, there would not be valid acceptance. However, the circumstances here make clear that Kramer did know of the offer and was motivated by the promise of the bike to work on Elaine's neck.
For a contract to have a valid consideration, there must be a bargained for exchange for something of legal value. In a unilateral contract, there is an exchange of a promise ("I'll give you the bike") for an act (relieving neck pain). Each party must incur detriment, which means they must do something they are not legally obligated to do. Elaine was free to keep the bike for herself and Kramer was free to not spend his time and energy fixing Elaine's neck. Courts generally do not examine whether the consideration given was adequately valuable and will usually assume that it is sufficient. Although Elaine complains that it only took Kramer ten seconds, Jerry points out that this is the most he's worked in the last four months. I don't think there is much doubt that adequate consideration exists here.
Defenses to the formation of a contract include things like mistake, lack of capacity, and illegality. If Elaine thought the term "bike" meant the girl's bike she had bought the day before, but Kramer thought she meant the bicycle perpetually hanging in the hallway of Jerry's apartment, there would be mutual mistake regarding a material term in the contract rendering it invalid. Does anyone remember the episode where Kramer has just come from the dentist, still drooling from the Novocaine, and a man he shares a cab with thinks he is mentally challenged? Well, if Kramer were really mentally challenged that would be grounds for voiding the contract. Same goes if Elaine had one too many Peach Schnapps before arriving at Jerry's. Finally, if Elaine had said that she would "kill for anyone" who could relieve the pain in her neck and then Kramer asked her to kill Newman, this would not be a valid contract because it involves illegal subject matter and would violate public policy concerns.
Although Elaine would probably win here, I don't think there is a clear answer. Kramer certainly has an arguable case. This makes sense when you keep in mind that presenting balanced, social conflicts was always the intent of Larry David--the creator of Seinfeld and the writer of many episodes. On an interview in the DVDs for Season 3 he stated, “What I like to do is give each side a case . . . so half the audience will be on one side and half will be on the other side about who’s right and who’s wrong.” It's funny that each side has a case here, even when you break it down to the legal principles involved.