Contracts – Denbeaux The casebook we will be using Problems in Contract Law: Cases and Materials Knapp, Crystal, and Prince, Aspen Publishers, 2007, PLUS SUPPLEMENT
Contract, not only an understanding of two people, but perhaps a document, an agreement that has “legal effect”, obligations that have some type of enforcement.
Agreement in fact of the two parties
Agreement as written of the two parties
The sets of rights and duties contained in parts I and II
Agreements and contracts are the means by which aspects of life can be combined together and used (Plant with workers, suppliers, customers, etc.)
Authority of Contract Law is derived from two aspects:
· Primary (prior judicial opinions aka common law, statues, ordinances,
· Secondary (anything that influences the courts, commentary of scholars and the American Law Institutes Restatements of the Law)
Judicial Opinion
· Employs “stare decisis”, adherence to past decision or “precedents”
· Helpful because people can expect rulings like ones that have happened
· Prevents rulings on prejudice, emotion, or other improper grounds
· Keeps status quo, both in positive and negative ways
· Precedents not binding unless same or higher courts, lowers may just be persuasive as to which way the judge should rule the case
· If not having a precedent, policy, for the whole good of society is used
Statutory Law
· 1677 law from English courts making a signature necessary for legal contracts, besides this, everything else is usually judge made.
· Even so the “statue of frauds” now takes the realm of common law more than statue law
· Some states codify common law into statues, ex: California
· The Uniform Commerical Code laid groundwork in the 1940s
· It and others began to unify state to state laws and principles to create cohesion and prevent differences in the law from place to place
· The UCC in part or all is adopted in every American State
· Although changed in times, and not in others, COURTS MUST DEFER TO ANY STATUE THAT APPLIES TO THEM LEGALLY
· This ensures that the legislature is the tenet of government that makes laws, so long as it is within the bounds of their constitutional authority
· Interpretation is often up for debate, some judges look at the legislative history to seek true meaning, and others refuse because only the words of the statute and not anything else have been enacted into the law.
The Restatements
· The American Law Institute (ALI) formed to gather accurate and authoritative summaries of the rules of common law in various fields.
· These “Restatements” were issued, the first and most successful in 1932, the Restatement of Contracts
· It resembles a statue in its form, with black letter usage, and general rules and “better rules” in cases of potential conflict. It also had commentary and illustrations, they are secondary law, however, courts have just cited them in certain decisions
· There are two versions now, the original more rigid and general, the second more complex and giving judges more flexibility in future situations
Legal Commentary
· No other secondary source is more influential after restatements than the articles books that evaluate and analyze the decisions in contracts
· The authors clarify the law and propose solutions to unresolved issues
· Williston and Corbin are two main contributors of commentary
· Williston though law was abstract rules that courts should use on a particular case, on a case by case level
International Commercial Law
· International transacation are more and more important in today’s world with globalization and inter-linked economies
· GATT (Global Agreement on Tariffs and Trade) led to the eventual formation of the World Trade Organization, which tries to lower tariffs and help to create clarity in rulings in the future
· The CISG (Convention on the International Sale of Goods) is like the UCC, it has the force of law because it is a treaty, however, it does not apply to consumer transactions, which the UCC does.
The Perspective of Contract Theory
· Realists, which said that all laws are policy making, and advance interests, were subjects to goals of the decision makers
· Formalists, like Williston, thought they were merely decision based on the rules that govern
· Economics is now coming into play, efficiency being the key motive, helping resources to be used at their most valuable and to reduce the cost of transactions in society
· Economic, Moralistic, and based on relationship preservation are all approaches to contract law that people take on.
As a Lawyer Perspective
luded in the signed contract were of the original three-page contract.
Procedural History (Process) Circuit court of Baltimore found for the Defendant, with no jury, the plaintiff has appealed
Issue (Main Legal Question) Though a contract was signed by both parties, does the defendant have a right not to obligate the contract because their intention was not the one written in the contract, but the one proposed earlier?
Rules of Law (Existing rules statues, etc.) In Williston’s Contracts, a unilateral mistake is “if a man acts negligently, and in such a way as to justify other supposing that the terms of the writing are assented to by him and the writing is accepted on that supposition, he will be bound both in by law and in equity.
Holding (Decision on Issue)
Absent fraud, duress, or influence, anything in a contract that you sign you are responsible in both law and in equity, no matter what your intentions are.
That the intention of the signer does not matter in creating a contract, it is what a reasonable person would have known when signing a contract, and a reasonable person would in the same circumstances, a reasonable person would have read the contract and attachments and will be bound to honor them.
The Court Order: Reversal of judgment, the plaintiff wins, and receives payment for costs of court proceedings of $5,993.40
Reasoning (How it Came to the Decision) Uses prior decisions and writing in that a contract has nothing to do with the intent, but rather the language. Also using what a reasonable person would assume in the language of the contract, even if “ignorant of the terms of the writing or of its proper interpretation
Questions: Comments and Speculations
Does the credibility of the parties have anything to do with this case?
Does the corporation status change anything about this case, even if it seems to be totally run by the brothers in question?
