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Contracts
South Texas College of Law Houston
Worley, John J.

What is a contract?

An oral or written agreement between two or more persons
An exchange relationship

Expressed – manifested by words
Implied in fact – manifested by conduct
Implied in law – quasi-contract not a true contract but it can be enforced by the court to avoid an injustice

At least one promise
Enforceability

Moral Obligation alone will not support a contract

Examples

Promise between husband and wife to not have children
Cohen an obligation to an informant to keep anonymity

What makes a contract

Mutual Assent

oObjective Theory
1. Offer
2. Acceptance
o Validation Device
o Consideration

Enforcement of contracts

Specific performance – will enforce exactly what the contract states
Expectation damages – puts the promisee where he would have been if the promise would have been enforced plus any cost accrued.
Direct damages – the actual loss
Consequential damages – the losses beyond the contract that resulted from the breach
Incidental damages – the effects of the breach i.e. transportation

Mental Suffering

Emotional distress damages are not recoverable in a breach of contract action (This is a torts issue). Keltner The important thing is that mental anguish should only be connected with bodily injury and not stand alone.

Article 2 of the UCC

Covers only the sale of goods
Applies to any party and is not limited to only merchants though sometimes there are special provisions for merchants.
A good is a tangible thing that is moveable.

Real estate is not covered
Services are not covered
Distribution of goods is covered (regarded as sale of goods)

Pass stated that the contract was not for the sale of goods but was for the sale of services and it is not covered under the UCC
Graveman Test – looks at the portion of the transaction upon which the complaint is based
Predominant factor test – looks at the transaction as a whole to determine if it is a sale of goods or s

obligations.

Offer

The manifestation of willingness to enter into a bargain, so made as to justify another person in understanding that his assent to that bargain is invited and will conclude it.
Has to be communicated to a person
Cannot take effect until it is communicated to the offeree
The offer must indicate a desire to enter into a contract
The offeror is the master of the offer
It must be directed at some person or group of person, it cannot just be to the general public
The offer must invite acceptance
And a contract will arise without any further approval, the only thing that is lacking after an offer is an acceptance.
Offeror expects to be committed upon acceptance.

If the proposal reverses to the proponent the final to say in whether to be bound is not an offer but a preliminary communication (negotiation). Fairmount