Contracts Outline

 
 
Dessin—Contracts
University of Akron
Fall2014
 
 
A promise or set of promises for the breach of which the law gives remedy, or the performance of which the law in some way recognizes as a duty.
A totality of the legal rights and duties that arise from an agreement between two or more parties.
Chosen Obligations
·         Parties are generally free to structure a contract as desired.
·         When parties don’t provide for a particular circumstance, contract law imposes a default, or fills in gaps,
o    Some aspects of contracts cannot be maneuvered around.
·         Product of agreements, promises, or other voluntary undertakings.
·         Agreement consists of
o    Offer
§  “The manifestation of a willingness to enter into a bargain” which justifies another person in understanding that his assent can conclude the bargain. In other words, an offer is something that creates the power of acceptance.”
§  Examples:
·         A newspaper seller stands on the corner with a stack of newspapers and hands them to people who pay the posted price.
§  Inward thoughts
o    Acceptance
§  Manifestation of assent to the terms thereof made by the offeree in a manner invited or required by the offer.
·         Example:
o    A says to B, “I’ll sell you my house for $100,00 if you give me a check right now for $10,000 and promise to pay the rest within 30 days.”
§  This is an offer.
o    If B says “Here is my $10,000 check, and I’ll have the balance to you next week,” this is an acceptance.
o    After the acceptance occurs, the parties have an enforceable contract. (Assuming the writing requirement is met per the Statute of Frauds)
o    Consideration
·         May be Bilateral or Unilateral
o    Bilateral- A promise by one party is exchanged for a promise by the other party
o    Unilateral- A promised offer exchanged for a performance or act.
§  The offeree does not make a promise, but instead simply acts.
3 Types of K
·         Express
o    Formed by language, either oral or written.
§  Examples:
·         A written contract, an exchange of emails, or a face-to-face oral agreement.
·         Implied in Fact
o    Manifestations of assent other than oral or written language.
o    Gathered by implication or proper deduction from the conduct of the parties, language used, or things done by them, or other pertinent circumstances attending the transaction.
o    Requires mutual assent (intent to contract) and consideration.
§  Treated in all other respects like an express contract.
o    Example
§  The most common implied-in-fact K obligation is the duty to pay “reasonable value” of services rendered or of goods delivered where price is not discussed by the parties in advance.
o    Example:
§  Homeowner hires a plumber to fix a leak, but because of the urgency of his service, the parties do not discuss the price of the work performed. Upon completion of the work, Homeowner has an implied-in-fact obligation to pay the plumber the reasonable value of the services rendered.
§  A goes to a restaurant, sits down and orders from the menu. A eats his meal, and although A and the manager or business owner never made an express contract, actions of the parties implied a contract that imposes duties. (Duty to pay for benefit conferred)
·         Implied in Law (Quasi) (remedy to Unjust Enrichment)
o    When a party confers a measurable benefit to another, has acted without gratuitous intent, and allowing the other to keep the benefit without cost is unfair.
o    Examples:
§  Emergency services are typically quasi-contracts.
·         A surgeon who performs emergency surgery on an unconscious patient.
§  Where contractual benefits have been conferred by mistake, i.e., a merchant who mistakenly delivers goods to the wrong party may create an implied-in-law obligation on the benefiting party.
§  A third frequent quasi-contractual situation is where contractual benefits have been conferred via an unenforceable i.e., a would be buyer of real property who makes improvements on the land before closing and whose oral contract turns out to be unenforceable under the Statute of Frauds may create an implied-in-law obligation.
·         Quantum Meruit is a means of enforcing both implied-in-fact and implied-in-law contractual obligations.
 
UCC Article 2 (When enacted by a state legislature)
 
Governs all contracts for sale of goods.
 
Sale
·         Any transactions in which the seller transfers title of goods to the buyer.
o    Leases, bailments, and any other types of types of transactions that involve goods are not considered sales.
Goods
·         Movable, tangible items.
o    Examples of movable goods are ball bearings, Hummers, processed foods and produce, the Mona Lisa, clothing, carpeting, furniture, and everything on the shelves of Wal-Mart.
o    The UCC also specifically defines the following as goods: growing crops, unborn animals, and “identified things attached to realty” such as uncut timber or tobacco.
·         Intangibles (e. g., the “goodwill” of a business), currency, stock, bonds and other securities, the assignment of a legal claim, real property, services (e.g., construction and repair projects, landscaping, dry cleaning) are not goods.
If a K involves sale of goods and non-goods (ex. services), the applicable law will depend on the predominant factor.
·         In hybrid cases, which involve both the sale of goods and a services contract, the question arises as to which source of contract law should apply.
o    Majority rule is that the