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Contracts
University of Florida School of Law
Davis, Jeffrey

CONTRACTS
Professor Davis
Fall 2006
 
Chapter 1 – Bases for Enforcing Promises
Section 1 – Meaning of Enforce
A.                  Governing Bodies of Contract Law
1.       Primarily state and case law
2.       Restatement- attempt to reconcile common law into easily useable form, not law anywhere
3.       U.C.C
                                                               i.      Recommends what people should do
                                                             ii.      Article 2 – ONLY apples to contracts for sale of goods
1.       adopted in all 50 states
2.       goods = tangible things you can put in your car and move
3.       software is problem
4.       Real estate not goods
4.       If goods, look to UCC. If not, look to Restatement
B.                   What is a Contract?
1.       A promise the law will enforce. So, some promises law doesn’t enforce.
2.       Prima Facie case
                                                               i.      Agreement where someone has made a promise
                                                             ii.      Basis for enforcing the promise (contract)
1.       consideration – one basis, way to distinguish between gratuitous and enforceable
2.       moral obligation with material benefit to promisor – MOMBP – enforceable to the extent necessary to prevent injustice
3.       Reliance
                                                           iii.      Capacity must be able to make one
                                                           iv.      Legality of Action
3.       Types
                                                               i.      Sale of Goods
                                                             ii.      Real Estate
                                                           iii.      Construction
                                                           iv.      Employment
                                                             v.      Family contracts
4.       Two Issues
                                                               i.      How does one enter a contract? Is it a contract?
                                                             ii.      What is the appropriate remedy? –
1.       Relief of promises to redress breach, not with punishment to compel performance
2.       Tries to protect promisee’s expectation to put promise in position in which it would have been had the promise been enforced
C.                  United States Naval Institute v. Charter Communications
1.       Naval owned published rights to Red October, licensed rights to Charter who was supposed to publish the paperback book on October 1st, shipped the book 2 weeks early
2.       Naval wanted all profits that Charter made from sale of book
3.       Court found that they should only receive the profits they would have made for the hard covers they would have sold had the paperbacks not been out, so only $7Ks
4.       Naval tried to sue for copyright infringement b/c wanted all profits, not possible b/c Charter had license, so merely a contract
5.       Lessons
                                                               i.      In contracts, no disgorgement.
                                                             ii.    

their mistakes can be egregious
4.       Generally settle breach of contract b/c fees can be ridiculous
5.       Arbitration – people will use b/c fees get so high
 
Section 2 – Consideration as Basis of Enforcement     
(A) Fundamentals of Consideration
A.                  Consideration
1.       Must be a good enough thing (GET)
a.NGET – not good enough thing
1.       Pre-existing duty
2.       Illusory promise
3.       Bad Faith Agreement of Forbearance to Assert an Invalid Claim
4.       Promise of Employment at Will
2.       Must be bargained for
3.       RST § 71
a.Must be bargained for
b.Bargained for if sought in exchange
c. Performance may consist of:
1.       an act other than a promise, or
2.       a forbearance, or
3.       the creation, modification, or destruction of a legal relation.
d.Performance may be given to promisor or some other person. May be given by promisee or someone else.
B.                   Hamer v. Sidway
1.       Uncle promised nephew $5Ks if nephew promised to refrain from drinking, swearing, etc. until 21 years old
2.       Was it bargained for? Was there consideration?
3.       YES, nephew made a forbearance to his detriment
4.       Something must be sought in exchange – uncle sought the forbearance
Gifts not enforceable – gratuitous promises