1. Contracts in General
a. General Definition: A contract is a promise or set of promises, for breach of which the law gives remedy, or the performance of which the law in some way recognizes as a duty.
b. Law Governing Contract: Generally Contracts is common law.
i. However, contracts for the sale of goods (i.e. things that are moveable) are governed by special rules found in Article 2 of the Uniform Commercial Code (U.C.C.). The common law still applies to contracts for the sale of goods, but any rules in the U.C.C. that conflict with the common law, replace the common law.
c. Types of Contract
i. Express Contract: express contract are formed by language, written or oral.
ii. Implied Contract: implied contracts are formed by manifestation of assent other than oral or written language, i.e., by conduct.
iii. Quasi-Contract: are not contracts at all. They are constructed by courts to avoid unjust enrichment by permitting the plaintiff to bring actions in restitution to recover the amount of the benefit conferred on the defendant. Their only relationship to genuine contracts is historical.
d. Types of Contracts as to Acceptance:
i. Bilateral Contracts (exchange of mutual promises): the traditional bilateral contract is one in which there is a an exchange of mutual promises (promise for promise) in which each party is both a promisor and a promisee.
1. Today most contracts are considered bilateral and they can be accepted in any reasonable way UNLESS the offeror clearly states that the promise should be accepted by performance or when there is an offer to the public.
ii. Unilateral Contract (Acceptance by Performance): the traditional unilateral contract is one in which the offer requested performance rather than a promise.
e. Validity of Contract:
i. Void Contract: totally without a legal effect from the beginning. (ex. Contract to commit a crime).
ii. Voidable Contract: where one or both parties may elect to avoid. (ex. A minor or mentally ill).
iii. Uneforceable Contract: an agreement that is otherwise valid but that may not be enforceable due to various defenses such as a statute of limitation or statue of frauds.
2. What Promises are Enforced
a. An introduction to Consideration
i. Contract: a promise for which the breach of which the law gives remedy.
ii. Contract Law
1. Decides on when a contract can be enforced and how it can be enforced.
2. The question of what promises should be enforced is a social question.
iii. Why would the State want to enforce promises?
1. To keep the peace.
2. To stop people form trying to enforce promises the
1. Where the thing to which is argued for consideration occurred before the promise. Generally Past Consideration is no Consideration.
a. Mill v. Wyman: ct found that the promise was based on “past consideration” and therefore not enforceable.
i. TA: controlled by the rule that gift promises are not consideration and therefore judgment entered for D.
b. Webb v. McGowin: Ct. found that the material benefits to the D, constituted consideration for the promise the party made to P.
i. TA: an exception to the rule of gift promises and past consideration. “Hard cases makes bad Law”.
ii. Moral Consideration
1. These will only be considered when there is proof that the promisor has received a material benefit.
iii. Pre-existing Duty Rule
This is the rule where performance of a legal duty already owed is not consideration. And threatening to withhold that legally owed duty is not consideration.