Chapter 5 Contract Law and the Uniform Commercial Code

• Library: Pet Law & Custody: Establishing a Worthy & Equitable Jurisprudence for the Evolving Family (ABA) (2017 Ed.)

Chapter 5 Contract Law and the Uniform Commercial Code

"The assumption that animals are without rights and the illusion that our treatment of them has no moral significance is a positively outrageous example of Western crudity and barbarity. Universal compassion is the only guarantee of morality."

—Schopenhauer

In this chapter, we will discuss many of the finer points of how contract law and the Uniform Commercial Code (UCC),¹ as well as state business laws and equitable maxims, impact companion animal commercial transactions. We will begin with some basic concepts. Significant case law will also be reviewed.

CONTRACT CONCEPTS

In order for a contract to occur, there is the requisite offer and acceptance with consideration, which could include a promise for a promise. Contracts cannot involve minor parties; they do not actually form if one of the parties lacks the capacity to enter into the contract or if the contract was formed under duress or the signor was subject to undue influence. Other applicable concepts include mutual mistake, fraud and misrepresentation, unconscionability, supervening illegality, and frustration of purpose.

Statute of Frauds

There is an expectation that contracts will be entered into with an implied covenant of good faith and represent a fair deal.² When contracts are not in writing, they are more vulnerable to attack, such as under the statute of frauds. Advancing part performance as a formation argument may be effective. In Andersen v. Koss,³ the court addressed the effort of a Skye Terrier breeder to regain possession of a dog. After the other party paid the dog's transit costs and sent the breeder $500, the breeder sought to force a co-ownership agreement upon the buyer in possession, asserting that their oral contract was subject to the statute of frauds. The purchaser prevailed as the court emphasized the part performance aspect of this transaction.

Another important case where the court explored the contours of part performance was Scruggs v. Caba.⁴ When a woman asserted co-ownership of a Poodle, the court found that she failed to meet her burden of proof to establish part performance.

Contracts that are subject to the statute of frauds in family law include prenuptial and marital agreements. Another type of contract that could be subject to the statute of frauds is one where a party offers to pay the bill of another, such as a legal bill.⁵

Equitable Principles

It is well known that the laws of 49 of our 50 states stem from English common law. Equitable principles pertinent to contractual legal disputes have jurisprudential roots traceable to the rule of Henry VII in England, who reigned from 1485 to 1509. The judicial powers of chancellors were recognized when Sir Thomas More was a chancellor under Henry VIII. By the 17th century, English jurist John Selden said, "Equity is a roguish thing. For law we have a measure, know what to trust to; equity is according to the conscience of him that is chancellor, and as that is larger or narrower, so is equity."⁶ Equitable principles impact how fair-minded people perceive a dispute should be resolved;⁷ they may be applied by the court in contract disputes.

Equitable principles reflect, if not advance, the ideas of laches, waiver, equitable trust, unjust enrichment, judicial estoppel, unconscionability, res judicata, license estoppel, promissory estoppel, equitable estoppel (also known as estoppel in pais), changed conditions or frustration of purpose doctrine, not slumbering on rights, not sitting on the breach, and estoppel by acquiescence and silence. Quantum meruit for services rendered is a type of unjust enrichment claim.⁸ One who seeks equity must do equity, and equity will not assist a volunteer. Equitable remedies may not be applicable when there is a bona fide purchaser. Equity will not suffer a wrong to be without a remedy. Perhaps as a reflection of these equitable ideas, courts emphasize contract flexibility and elasticity.

One who comes into the court of equity must come with clean hands. The law will prevail when equities are equal. Equity will not compel an imperfect gift and will not allow a statute to be used as a cloak for fraud. The first in order shall prevail unless equities are equal. Make it your habit to collect equitable maxims.

Whether we are conscious of the application of these equitable principles in the current day, they permeate our beliefs about fairness and justice and, to a certain degree, form the spine of the rule of law, to the extent that it has a moral center. When applying equitable doctrines, it is possible to get a bit tangled in their applications. For example, courts differ as to whether there can be an equitable defense to a common law claim, or when the equitable defense can only be paired with an equitable claim. Equitable arguments have a moral or public policy component in that unconscionability is abhorred. When the court has the power to exercise discretion, equitable principles may affect that exercise.

REPLEVIN ACTIONS

Equitable relief may be obtained in pet ownership disputes through replevin actions⁹ that result in temporary or permanent injunctions that can be preventative, as in a cat cannot be removed from New Jersey, or mandatory, as in a dog should be delivered by high noon. The latter is an example of a specific performance action used to regain possession of a unique good, or in this case, a companion animal. In some states, replevin actions must be independent from other claims. Other states allow multiple causes of action, including a replevin action.

When specific performance is sought in a replevin action, determine if the claimant is bringing more claims than allowed. Determine also whether the action is based upon an equitable principle rather than a statutory claim. In the common law court of equity, you must enter with clean hands.

Case Law with Equitable Aspects

In the small claims case of Nuijens v. Novy,¹⁰ the court found that because the seller was not a merchant under the UCC, the buyer, who had neither produced a licensed veterinary certificate nor returned the dog in a timely manner, was not entitled to relief for a very sick dog.

In stark contrast, and employing equitable principles, the court in Maguire v. Mohrmann,¹¹ upon the sale of a sick English Springer Spaniel puppy with hidden health problems to the buyer, determined that the buyer had "substantially," if not exactly, complied with similar applicable laws. The buyer was awarded the purchase price of the dog, together with veterinary costs for the dead dog.

Another case where the court utilized equitable principles was Appell v. Rodriguez.¹² There, the court, upon rendering a decision representing substantial justice when a buyer purchased a sick Great Dane puppy, decided to overlook the buyer's tardiness for getting a veterinary opinion in this action subject to the Uniform Commercial Code.

CONTRACT PRACTICE POINTERS

The following practice pointers can be utilized to help you think about contracts and what evidence to gather. Construct the claim following an in-depth inquiry, as this thorough investigation can result in gathering evidence that could be outcome determinative. Find out what contracts a client has with others and how the contracts were prepared. If applicable, find out who drafted the contract and obtain copies of every contract the client has signed or might be impacted by.¹³ Gather communications that address, and may constitute, contractual terms, including through social media, text messages, e-mails, faxes, and snail mail.

Contracts that might apply to your case could involve co-owners, breeders, fosters, rescues, trainers, instructors, dog walkers, veterinarians, pet sitters, and boarding facilities. Analyze how each contract relates to the topic of indicia of ownership or represents third-party rights that might impact ownership or a pet custody dispute, including with regard to a conditional sale or breeding rights. Consider the likelihood of a third-party intervener making a tortious interference of contract rights claim, too.

Never assume that just because the parties have a written contract, the contract was properly drafted, was properly executed, is enforceable, or passes title. Determine if there are contractual limitations or conditions on leasing or assigning rights to the animal. A rescue group or breeder may require that the animal be returned or relinquished if the adopter can no longer care for the animal, or if a spay or neuter requirement is violated. If contractual violations have occurred, analyze the range of remedies. Pay attention to details, including which party's name is listed on the contract, whether the animal is correctly identified, and whether the registration numbers are accurate. Analyze any warranties, representations, waivers, or problems that occurred during the formation of the contract. See if the contract contains "no modification unless in writing" or merger language. Learn if there are exceptions to the merger doctrine. Look at your state's case law.

Determine whether all signatories to the contract were at the age of majority at the time of execution and if all necessary parties were signatories, including a co-owning spouse. If someone involved claims to have power of attorney or is acting as an agent, verify that the individual has proper authority. Make sure that the companion animal is not owned by one party's business.

Identify all applicable state laws, including under the UCC, particularly sections 2, 2A, and 9, as well as other applicable state laws, the Restatement (Second) of Contracts, and local laws. For example, the UCC might be one of several state laws impacting the sale of sick animals. Consumer or general business laws and lemon laws¹⁴ may impact the sale and establish remedies, too. Lemon laws in the applicable state typically expire between 10 and 14 days after pet acquisition. Remedies may not be exclusive. Equitable...