Contracts

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Contracts
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• Contract a promise, or a set of promises, for
  the breach of which the law gives a remedy, or
  the performance of which the law in some way
  recognizes a duty.

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CONTRACT ELEMENTS

• Agreement (offer and acceptance)
• Consideration
• Capacity of Parties to Contract
• Legal Subject Matter
• Proper Form ( writing requirement)

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Contract Analysis

• Formation of K - 1st step(s)
• Agreement (offer acceptance) and
• Consideration

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Contract Analysis

• Enforcement of K - 2nd step(s)
• Capacity of Parties
• Legal Subject Matter
• Impossibility
• Proper Form (Statute of Frauds)

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Classification of Contracts

• 1) Sale of Goods (U.C.C.)
• 2) Service
• 3) Sale of Land or of an Interest in Land

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Contract Terminology

• Bilateral vs. Unilateral Contracts
• So Classified based on whether 1 or both parties
  have made a promise
• Bilateral Both parties promise
• Unilateral 1 party promises (other party
  accepts by performance)

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Express vs Implied Contracts

• Express Ks Where the terms are spelled out
  parties are consciously making a contract
• Implied in Fact Ks Where the surrounding facts
  circumstances indicate a K has been reached.

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• Implied in Law (Quasi) Ks Where no K exists but
  1 party may be unjustly enriched due to goods or
  services provided by another, the law will imply
  a K for the reasonable value of the subject goods
  or services

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VOID, VOIDABLE, UNENFORCEABLE KS

• Void An agreement lacking a required element a
  nullity which cannot be enforced by either party
• Voidable A contract which may be avoided or
  enforced at the option of at least 1 of the
  parties
• Unenforceable A contract where a rule of law
  bars it from being enforced (sloppy synonym for
  voidable)

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Executed, Executory, Partially Executed Ks

• Executed A K is executed when all parties have
  fully performed duties under contract.
• Executory A K is executory until one party has
  performed duties under contract.
• Partially Executed If one party has fully
  performed duties under K.

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• Offer an offer is a proposal made by words or
  behavior to enter into an agreement, which
  proposal if accepted becomes a contract.

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Elements of an Offer

• Must be communicated
• Must manifest a present intent to contract
  (objective standard) and
• must be definite as to necessary terms

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Duration of an Offer

• An offer continues until it
• a) Lapses or expires
• b) Becomes illegal or impossible
• c) Is revoked
• d) is rejected or
• e) is accepted (effective when mailed -Mailbox
  Rule)

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Acceptance Elements

• Unconditional (mirror image)
• Reasonably clear unambiguous
• Legally communicated

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Timing Exercise (OfferAcceptance)

• 3/1 A receives offer from B
• 3/2 A mails acceptance to B
• 3/3 B mails revocation to A
• 3/4 A receives revocation from B
• 3/5 B receives acceptance from A
• Was there a valid acceptance?
• What if on 3/2 B mails revocation and on 3/3
  A mails acceptance?

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Misc. Agreement Issues

• Mirror Image
• Timing
• Jests
• Negotiations
• Counter offers,
• Advertisements
• Auctions

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Consideration Elements

• 1)an agreed upon exchange
• 2) Each party must receive something that he/she
  was not already entitled to in exchange for a
  promise or performance and
• 3) What is received must have been bargained for.

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Related Concepts

• Adequacy of Consideration
• Illusory Promises
• Past Consideration
• Pre-existing Legal Duty

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Enforceability Issues

• Capacity Minors Incapacitated
• Legal Subject Matter
• Impossibility
• Proper Form - See Statute of Frauds

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STATUTE of FRAUDS requires certain ks to be in
writing or they are voidable

• Ks for sale of land or an interest in land
• Ks for sale of goods over 5000
• Ks not capable of being performed within one
  year
• Ks to be responsible for debt of others
• Marriage Ks (Settlement or Prenuptial)
• Modifications of written contracts

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Statute of Frauds require writing to include
all essential terms be signed by party against
whom enforcement is sought

• Essential Terms
• Parties
• Subject Matter
• Terms Conditions
• Consideration
• Signature of other party

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Defenses to Contract Actions

• lack of agreement
• no consideration
• statute of frauds
• illegality
• impossibility
• lack of capacity

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Defenses to Contract Actions

• justifiable breach
• contested term (objective, plain meaning,
  technical usage in industry)
• fraud
• unconscionable (no bargaining power//adhesion/dure
  ss)
• accord satisfaction
• laches/statute of limitation
• others possible depending on the facts

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Contract Remedies

• Money Damages
• Compensatory (does not include Atty.'s fees
  unless K provides)
• Liquidated (cant be a penalty
• Punitive (Rare)
• Equitable relief
• Specific Performance Recission Restitution

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Third Party Contracts

• Creditor Beneficiary (can enforce)
• Donee Beneficiary (can enforce)
• Incidental Beneficiary (cant enforce)

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• Assignment The transfer of a K right which
  ends the right in the transferor (assignor)
  creates it exclusively in the transferee (
  assignee). Transferee receives the same rights
  that the transferor had in the subject transfer
  and can enforce original K.

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• Delegation The appointment by the original
  promisor (delegator) on a K of a another person
  (delegatee) to perform the original promisors
  obligations pursuant to the original K.
• It is permissible so long as equivalent
  performance occurs