-Definition of Contract:
R2-A contract is a promise or a set of promises for the breach of which the law gives a remedy
UCC-Contract means the total legal obligation which results from the parties agreement as affected by this Act and any other applicable rules of law.
Offer and Acceptance
Consideration or Its Equivalent
Sometimes a Writing (not always)
Enforcing Promises: Bases of Legal Obligation
-The Intention to Be Bound: The Objective Theory of Contracts
Objective Theory of Contracts: By which one is ordinarily bound or not bound, not by her “secret intention” to that effect, but by the reasonable interpretation of her words and actions.
*Subjective intent does not matter
Ex. Thus if one party makes an offer in jest, and the other party reasonably believes that she is serious, and seriously accepts the offer, the contract will be binding.
Ray v. Eurice
Rule of Law: A party is bound to a signed contract which he has read with the capacity to understand it, not to the contract that the party thought they signed, absent fraud, duress, and mutual mistake.
-Enforcing Exchange Transactions: The Doctrine of Consideration
-Benefit/Detriment and Bargained for Exchange Tests
Two tests to determine consideration (the first is no longer used)
You must either have a benefit to the promisor or a detriment to the promise
Bargain for Exchange-
The promisor made his promise in exchange for the promisee’s giving of value or circumscribing of liberty.
Promise was bargained for if:
it was sought by A in exchange for A’s promise
B gave the promise in exchange for A’s promise
*Consideration is not normally an issue in business transactions.
*Did the promiso
not a sham promise.
Plowman v. Indian Refining Co.
Past services are not sufficient consideration to support the enforceability of a contract to provide continuing payments to former employees.
Distinguish between: Consideration v. Mere Condition
3 things to know from this case:
1. Past employment is not consideration
2. Past consideration is not consideration
3. Moral obligation is not generally consideration
-Protection of Promissee Reliance: The Doctrine of Promissory Estoppel
-Promissory Estoppel: Family Promises
Elements for promissory estoppel:
promise made by the promisor
reliance is reasonable
binding if justice requires