· Red=Basis for Enforcing Promises
· Dark Blue=The bargaining Process
· Teal=The Requirement of a Writing for Enforceability
· Dark Green=Policing the Bargain
· Green: Timmons Words
· Black=Mastering Contracts
1. BASIS FOR ENFORCING PROMISES
i. A contract is a promise or set of promises for the breach of which the law gives a remedy, or the performance of which the law in some way recognizes as a duty. Restatement (Second) of Contracts, sec. 1.
1. Thus, “contract” means an enforceable promise.
2. Lawyers worry about whether a statement is a promise, rather than, say, a prediction or a statement of opinion.
3. They worry about whether a promise has the qualities necessary to make it enforceable.
4. They do not worry about whether an exchange should be called a contract.
5. A promise does not have to be in writing in order to be a contract unless it falls under the “Statute of Frauds,” discussed below.
b. Applicable Law.
State common law applies to contracts.
1. Transactions in goods contracts are controlled by Article 2 of the Uniform Commercial Code (“UCC”).
i. The UCC is a statute that has been enacted in every state except Louisiana.
ii. The rules are thus uniform–this is one of the main reason for the statute’s development and enactment–but may be interpreted differently from state to state.
2. Where Article 2 does not have a rule to cover an issue?
i. The common law applies. UCC § 1-103.
ii. The “comments” to each section of the Code are quite important. They are often more clearly written than the sections themselves.
· However, they are not part of the enacted UCC, serving as legislative history.
1. United Nations Convention on Contracts for the International Sale of Goods (CISG) is a multilateral treaty.
2. It applies to sales of goods between parties whose places of business are in different countries, both of which have ratified the treaty.
c. Types of Contracts.
i. Contracts are frequently described as
2. implied, or
i. NOTE *: Only the first two are actually contracts, and they only differ in the manner in which they are formed.
ii. Express Contract.
1. Express contracts are formed by language, oral or written.
iii. Implied Contract.
1. Formed by manners of assent other than oral or written language, i.e., by conduct.
Example. I go on
One in which neither party has yet performed.
Sometimes this is called “wholly executory.”
An executory promise is a promise that has not yet been performed.
Promisors and Promisees.
The party making a promise is the promisor,
Party receiving a promise is the promisee.
NOTE: In a bilateral contract, each party is both a promisor and a promisee.
Arbitration is a private dispute resolution hearing, which is usually faster and cheaper than drawn out costly litigation.
Sometimes Arbitrators may grant remedies that are not normally granted by the courts, through some states prohibit them from awarding punitive damages.