CONTACTS I
CONTRACT LAW –Promises Enforced by the law are contracts
Contract Law (Purpose)
(1) Secure & Protect human economic interest
(2) Favors seller “haves”
(3) Not Buyers “have nots”
Caviat Emptor
-“Buyer Beware”
-If X makes a promise to Y, when, to what extent, and under what circumstances, will the law compel X to perform that promise or pay damages to Y for not doing so
TYPES OF CONTRACTS
1. Formal K
(1) Contracts Under Seal
(2) Recognizable Promise Made in Court (injunction)
(3) Negotiable Instrument
2. Express K
-Verbal
-A contract whose terms the parties have explicitly set out
-Made Verbally
(1) Written
(2) Oral
–Based solely on words
3. Implied K
-Conduct Based K
–Cannot find deal just on the words of the parties
(1) Implied-in-Fact
(2) Implied-in-Law
4. Quasi K
-Equitable Remedy
-(1) It is not contract law (different body of law)
-Rules of contract law have no application
-(2) It is about doing what is fair or what is right
5. Bilateral K & Unilateral K
-Bilateral K (95%)
-A K that results from an offer that is open as to how it can be accepted
-One requires that the o/e accept by promise
-Any time the offer does not require a specific method of acceptance
-Unilateral K (5%)
-A K that results from an offer that requires an act to fulfill K
-One requires that the o/e accept by an act or performance
-To much power on o/r
6. Executory K
-The deal has been not yet done
TYPES OF LAW
(1) UCC (Uniform Commercial Code)
-Statutes
(1) When do I do Article 2?
2 Key Words
1-Sale (transaction), 2-Goods (moveable personal property)
*Never will do UCC in any type of employment or service contract
*Never applies to real estate deals
*ONLY SALES OF PERSONAL PROPERTY
(2) Understand the relationship b/w Article 2 and Common Law Contracts
-They overlap
-Common law deal w/ a bunch of stuff that article 2 does not deal with
Regarding the BUYING & SELLING OF GOODS
-Mixed Deal
-Service and Goods involved in Deal?
(1) Apply Article 2 to the whole deal or to none of it
-All or nothing
(2) Decide which one is more important
-The service or the deal
-Example: Hire a man to paint your house, your purchase is of both a service and of paint
(2) Restatement of Contracts
-Revision of Contract Law by professionals
-A secondary source (treatise) of what the law is, and what it should be
-Courts are not obligated to follow the restatement
-NOT statutes/NOT law = Persuasive in Court
(3) Common Law
-Judge-based law
DICTUM
-Statement by the court not necessary for it’s decision. Not precedent.
DECIDE UCC OR COMMON LAW APPLIES (UCC = LIBERAL)
-UCC Applies if “goods” are being bought or sold
-“Goods” are something moveable (tangible) at the time of sale
-Will fill gaps/mistakes/indefiniteness
-Common Law Will Not
-Decide if the parties are merchants?
-Firm Offer?
-Offer under the UCC will not fail for indefiniteness b/c indefiniteness can be “gap filled” by code
-UCC 2-204
-Only need an Intent to Contract & the Ability (through court and UCC) to Form an Appropriate Remedy
-Offer without the UCC will fail for indefiniteness b/c indefiniteness cannot be “filled” without code
-If UCC does not apply – must use common law
-Statute Free = MIRROR IMAGE OF OFFER (others will fail)
UNIFORM COMMERCIAL CODE
2-204 – Formation in General (Indefiniteness)
(1) A contract for sale of goods can be done through conduct of both parties in any way sufficient to show agreement
(2) An agreement sufficient to constitute a contract for sale may be found even though the moment of its making is undetermined
(3) Even though on or more terms are left op
r delivery if:
(a) Nothing is said as to price, OR
(b) The price is left to be agreed by the parties and they fail to agree, OR
(c) The price is to be fixed in terms of some agreed market or other standard as set or recorded by a third person or agency it is not so set or recorded
(2) A price to be fixed by the seller or by the buyer means a price for him to fix in good faith
(3) When a price left to be fixed otherwise than by agreement of the parties fails to be fixed through fault of one party the other may at his option treat the contract as cancelled or himself fix a reasonable price
(4) Where, however, the parties intend not to be bound unless the price be fixed or agreed and it is not fixed or agreed there is no contract. In such a case the buyer must return any goods already received or if unable so to do must pay their reasonable value at the time of delivery and the seller must return any portion of the price paid on account
ELEMENTS OF A CONTRACT (COMMON LAW)
O + A + C + MISC = K
(1) Mutual Asset
-Offer and Acceptance
(2) Consideration
(3) Legal Capacity
(4) Absence of Statute or Rule (rule that voids transaction)
MUTUAL ASSENT (Common Law = Conservative)
OFFER & ACCEPTANCE
-If the o/r has clearly manifested a willingness to enter into a K in such a way that the other party, the o/e, knows that assent is all that is necessary to cement the deal
-Two parties must agree to the terms of the contract
-The meeting of the minds
(1) Offer (to accept by act, or by promise)
(2) Acceptance
OFFER (“O”)
-This is the first part to a contract
-It is an outward manifestation of intent to enter into contract
