Bases for Enforcing Promises
O + A + C = K
O = Offer
A = Acceptance
C = Consideration
K = Contract
Contract – a contract is a promise or a set of promises for the breach of which the law gives a remedy, or the performance of which the law in some way recognizes as a duty. There is an element of the future with a contract.
Three fundamental assumptions:
a. Relief of promises to redress breach, no punitive damages unless frot with emotion
b. Relief granted to the aggrieved promissee should protect expectation. Put promisee in position would have been had promise been performed.
c. Appropriate form of relief is substitutional not specific
Promise; Promisor; Promisee; Beneficiary- A promise is a manifestation of intention to act or reffain from acting in a specified way
Agreement: Manifestation of assent (we agree that the sky is blue, not a contract)
Bargain: agreement to exchange promises.
UCC- Uniform Comercial Code:
Deals with the sale of goods. Goods are moveable property. Contracts that deal with the sale of goods are the only type of contracts that the UCC covers.
a. Contract is defined a bit different in the UCC
b. UCC provides a warranty which can be used as the element of the future
Why enforce promises (contracts):
1. Reliance – a buyer or seller is going to act on reliance of a contract. A farmer may buy something knowing he has a contract with someone else to purchase his crop.
2. Commercial Reasons-
3. Creates order in society-
4. Moral basis-
Judgment v. Order
Judgment- gives you the right or entitles you to an award.
Order- this is where the court forces the other party to do something, to pay an award etc. if they do not comply, they may be found in contempt and can go to jail.
Section 1. The Meaning of “Enforce”
The law is concerned mainly with relief of promises to redress breach and not with punishment of promisors to compel performance.
A second assumption is that the relief granted to the aggrieved promise should generally protect the promisee’s expectation by attempting to put the promisee in the position in which he/she would have been had the promise been performed.
The Economics of Remedies
Remedies: Judgment for Expectation, not to be used for punishment
Breach of contractural duty is a tort for punative damages.
United States Naval Institute v. Charter Communications, Inc. and Berkley
United States Court of Appeals, Second Circuit, 1991. 936 F.2d 692
Overview: Naval (copyright
Notes from Sullivan v O’Connor:
1. Expectation Interest- the promisee’s injury consists in being worse off than if the promise had been performed. If awarded expectation you will be put in the position had the contract been kept.
2. Reliance Interest- The promisee’s injury consists of being worse off than if the promise had not been made. Can receive any money paid to third parties because you relied on the contract
3. Restitution Interest- The promise may have rendered some performance in return for the broken promise. Can receive any money to whom you paid because of the promise.
The law might protect this interest by putting the promisee, and promisor back in the position in which it would have been had the promise not been made or had the promise been kept.
Lost Opportunities as Reliance: It can be argued that Sullivan lost the opportunity to go to a competent doctor to have the work done. Such speculation is rare for a court to take account of.