Contracts I Bullet Point
I. General
A. Defined
1) Contractual Agreement
a) Between two or more persons
b) Common understanding about something to be done by both in the future
c) With legal effect
d) Society’s mechanism for protecting future performance
2) Elements In Transaction May Be A Contract
a) Agreement in Fact
b) Agreement as Written
c) Set of rights and duties created by 1 and 2
3) Executory – will be performed
4) Executed – already performed
B. Sources of Contract Law
1) Statutes – State (UCC,SOF); Federal (FAA); Treaties (GATT, CISG)
2) Judicial Opinions
3) Secondary Authority – Restatements; Legal Commentary; Scholarly Writing
II. Classical System of Contract Law
A. Mutual Assent
1) Absent fraud, duress or mutual mistake, one having the capacity to understand a written document who reads it signs it, or without reading it or having it read to him, signs it, is bound by his signature in law
2) Test – what a reasonable person in the position of the parties would have perceived (Restatements) [Ray v. William G. Eurice and Bros. Inc.]
a) Relational History? [Lucy v. Zehmer]
b) Inappropriate Dealings? [Park 100 Investors, Inc. v. Kates]
B. Consideration
v Restatements § 71 (Consideration):
§ Bargained for return promise or performance
§ Promises or performances by both parties were sought for in exchange
§ Performance:
o Act other than a promise
o Forbearance
o Creation, Modification, or Destruction of a legal relation
§ Return promise or performance can be given to someone else than promisor and
§ Promise may be given by someone else than promisee
1) Purpose – distinguish between enforceable and unenforceable promises
2) Requirements [Hamer v. Sidway]
a) Legal Detriment – give up something of value or circumscribe your liberty
b) Bargain – promises made “in exchange”
c) Mutuality of Consideration
3) Functions
A. Promissory Estoppel/Reliance
v Restatements § 90 (Reliance/Promissory Estoppel):[Greiner v. Greiner]
§ Promise
§ Reasonably expect to induce action or forbearance
§ Binding if injustice (detrimental reliance) can only be avoided by enforcement
§ Remedy limited as justice requires
1) Detrimental reliance does not have to be economic (monetary) [Vastoler]
B. Restitution (Liability for Benefits Received)
v Restatements § 86 (Promise for Benefit Received/Restitution):[Webb v. McGowin]
§ Promise recognizing benefit previously received by the promisor from the promisee
§ Binding as necessary to prevent injustice
§ Promise not binding under subsection (1):
o If gratuitous or other reasons not UE
o To the extent value is disproportionate to the benefit
