Contracts Outline
INTRODUCTION
I. Restatement Second of Contracts: A contract is a promise or set of promises for the breach of which the law gives a remedy, or the performance of which the law in some way recognizes a duty.
II. Uniform Commercial Code: Contract means the total legal obligation which results form the parties’ agreements as affected by this act and any other applicable rules of law.
A. Promise: An undertaking, however expressed, either that something shall happen or that something shall not happen, in the future.
1. Sanctity of Contract: Throughout English Common Law, making a promise was a solemn act and breaking a promise was a sin or an unethical act in the eyes of the church.
2. Hannah Arendt: The power to promise is like the power to forgive. Forgiveness provides a remedy for a painful past and promises provide a remedy for an uncertain future.
3. Illusory Promise: It seems like a promise, but it’s not legally enforceable.
B. Implied in Law Contracts (Quasi Contract): A legal fiction to establish an obligation where the parties actually gave no consideration, for the purpose of justice. Designed to prevent unjust enrichment. Consent or intent is not required. A contract made by the court.
1. Essential elements:
a. benefit conferred upon D by P
b. appreciation by D of benefit
c. acceptance and retention of benefit by D such that it would be
d. inequitable to retain the benefit without paying for it
e. P must not be acting as a volunteer in conferring the benefit
C. Implied in Fact Contracts: An agreement or intent to promise not expressly written or spoken.
1. Consent is implied by:
a. actions
b. conduct
c. circumstances
· Bailey v. West: (RI S.Ct., 1969) P voluntarily maintained a horse whose ownership was in dispute. P acted as a volunteer without consulting D about payment for maintaining the horse, so P could not expect remuneration.
· Holding: D is not liable to P.
· Rule: Volunteering to do an act doesn’t constitute consideration.
THE BASES FOR PROMISSORY LIABILITY
I. 4 types of enforceable contracts where something is added to the promise to make it legally binding.
A. promise + consideration
B. promise + antecedent benefit
C. promise + unbargained-for reliance
D. promise + form
II. Bargain + Consideration = Contract
A. Bargain Requirement
1. Restatement Second sec. 72: Consideration
a. To constitute consideration, performance or a return promise must be bargained for:
i. a performance or return promise is bargained for if it is sought by the promisor in exchange for his promise and is given by the promisee in exchange for that promise.
b. The performance may consist of:
i. an act o
detriment to him or actual benefit to the promisor.
· Thomas v. Thomas: (Queen’s Bench, 1842, p.67) Widow’s deceased husband said on his deathbed that he wanted his wife to have his house. His executors wanted to heed his wishes, even though the promise wasn’t in writing, so they gave her a house. To make sure there was consideration, they charged her $1/yr to live there and made the provision that she would have to keep the house in good repair. After one executor died, the other tried to throw her out.
· Holding: There is consideration, so there is a contract.
· Rule: Motive is not sufficient consideration for a contract.
· Relevant Points
1. The motive of the executors to heed the deceased’s wishes wasn’t adequate consideration, but the nominal payment and the promise to keep the house in good repair was consideration.
2. Nominal Consideration: Under Rest. 1st of Contracts, nominal consideration is held as sufficient. Under Rest. 2nd, nominal consideration is held to be unbargained-for.
3. An oral request doesn’t counteract a will in writing.
Sufficiency of Exchange
