Contracts I- Outline
è Definition of a contract: An agreement between two or more parties creating obligations that enforceable or otherwise recognizable at law. When entered into a contract it is recognized by law that it is a duty and if the duty is breached the law gives a remedy. “A legally enforceable promise”.
è Elements of a contract: Offer + Acceptance + Consideration.
è Types of contract:
– Quasi contracts: contracts implied by law to avoid unjust enrichment.
è Contracts formed by mutual assent:
– Expressed contract: an agreement expressed orally or in writing.
– Implied in fact contract:
§ Assent is inferred based on the situation (conduct, language, context, etc.)
è Contracts formed by mutual assent can be either:
– Bilateral contract: Promise for promise. OR
– Unilateral contract: Promise for performance.
Chapter 1: Introduction to Contract Law:
A. The study of contract Law: Classical contract law treats an agreement as the product of discrete voluntary communicative acts and emphasizes the bargain for exchange as the basis for contractual obligations.
o Two key assumptions in contract Law:
1. Promises are a voluntary choice: The idea is that people can and should make their own choices. Freedom of contract vs. Freedom from contract (we don’t want people to enter a contract involuntarily).
2. Market Exchange: Contract law can be seen as setting out the rules of game for the market economy.
è H.J. Coolidge v. Pau’aiki and kea: (Hawaiian Case)
Facts: two immigrant workers signed an employment contract, fled the plantation and employer sues for breach.
Rule: In order for a contract to be enforceable there must a mutuality of obligation between parties.
B. Three principles of a contract: Bargain, reliance and restitution.
o An agreement to exchange promises or to exchange a promise for a performance or to exchange performances. For example, “I promise to do this, if you do this”.
o “A deal is a deal”
o Unlike a gift, it is more of a selfish action, because there is an expectation that there will be something in return. It includes the central belief that an agreement to exchange one thing for another gives rise to mutual obligations.
§ Rationale for why deals are obligatory:
i. Both sides are committed. When you get something you should have to give something in return
ii. The other person will count on the deal and spend money or make commitments because he or she believes the deal will be fulfilled
iii. Deal making is the way people make a living – and so the promises made in this context are particularly serious and therefore obligatory
iv. Commercial exchange is crucial to our economy, and if people do not live up to their deals, business people will be unable to plan for the future, people won’t be willing to make deals, businesses will shut down, people will be unemployed, etc…
Deals and the fulfillment of deals are cruci
rave claims that her performance was cancelled due to her political views.
§ Rule: Damages are awarded to an aggrieved party when there is a breach of contract. For instance, compensatory damages put the plaintiff in the same position they would have been had the contract been performed.
2. Reliance: Trust, responsibility, and injury
o Reliance: Confidence or belief, which causes a person to act to his detriment on the promises, acts, or representations of another.
§ Values trust and seeks to protect those who rely on others, it focuses that one who causes harm should be accountable for it.
§ Flows from an indication of trust.
§ In order to determine if there is reliance look at the nature of the relationship between the parties.
§ Central principle – People do rely upon each other in many situations and that such reliance often is morally and politically valuable.
§ “Estoppel in Pais” (equitable estoppel) – promise can be enforced even if there is no bargain if that reliance on the promise puts you in a worse position.
Promissory Estoppel (Restatement) – A promise which the promisor should reasonably expect to induce action or forbearance on the part of the promisee or a