Contracts I
Fall 2006
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)
Contracts are all about promises—a contract is a legally enforceable promise.
Promise—Promises are manifestations of intention that imply commitment to some course of action in the future.
UCC defines contracts as agreements.
Sources of law: case law, U.C.C.
The Uniform Commercial Codeà. As a pronouncement of the legislature, the UCC binds courts
Article 2 deals with contracts for the sale of goods (only part applicable to this course)
Why do we enforce promises?
Exchange is good because in the aggregate it increases economic growth.
-Allows for party autonomy.
Types of Contracts (categorized according to the types of promises)
Express Contract: agreement between two parties expressed in words.
2. Implied-in-Fact Contract: contract in which the agreement is manifested by the parties’ conduct. The conduct of the parties indicates that the parties have an agreement. Depends on the intent of the parties. See Bailey v. West…no express contract so court looks to see if there was an implied K
Objective intent is considered in this type of contract. What a reasonable person in the circumstances understand the behavior to be.
3. Implied-in-Law Contract (Quasi-Contract): is not really a contract at all. In a quasi-contract there is no agreement. The law imposes a contract (a legal fiction) on the parties in order to avoidinjustice.
Elements of a Quasi-Kà
(1) benefit conferred on the ∆ by the ∏.
(2) Appreciation or excuse for not telling (medical)
(3) Retention of the benefit in circumstances where it would be unjust for the defendant not to pay.[1]
The purpose of implied-in-law contracts is to prevent unjust enrichment. Nothing to do with benefit, detriment, or bargain.
Excuse for changed circumstances
The fact that circumstances changed does not give an excuse to get out of a contract. In some circumstances courts will excuse parties if their performance becomes more difficult for unforeseen events.
Pacta sunt servandaà agreements must be observed.
Remedies [2] As a general matter contract law does not contemplate specific performance as a remedy.
Contract law divides the kind of damages into three categories…
1) Expectation Measure: Using the expectation measure a court will attempt to put the injured party in as good a position had the contract been performed as expected. Injured party is given the benefit of the bargain.
2) Relianc
romise to give me your casebook).
In both contracts there is an exchange. To have a bargain, you must have an exchange.
Elements of Consideration
Consideration requires a bargained exchange in which each party incurs a legal detriment.
Bargained for Exchange
Consideration is a bargained-for performance or return promise which is given by the promisee in exchange for the promisor’s promise. Consideration need not be furnished by or to the parties themselves as long as it is part of the bargained exchange.
Even if the promissor’s promise induced performance or a return promise by the promisee, if such inducement was not sought by the promisor, there is no bargained exchange. In such circumstances, the promise is merely an unenforceable gift. See Kirksey v. Kirksey
[1] Bailey v. West disproves all three forms of contracts. No contract for Bailey to take care of the horse. [2] The injured party will typically choose the measure that he is seeking. The one that gives the most money—usually the expectation measure.