1. Contract Defined
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 a duty.
2. Promise; Promisor; Promisee; Beneficiary
1) A promise is a manifestation of intention to act or refrain from acting in a specified way, so made as to justify a promisee in understanding that a commitment has been made.
2) The person manifesting the intention is the promisor.
3) The person to whom the manifestation is addressee is the promisee.
4) Where performance will benefit a person other than the promisee, that person is a beneficiary.
3. Agreement Defined; Bargain Defined
An agreement is a manifestation of mutual assent on the part of two or more persons. A bargain is an agreement to exchange promises or to exchange a promise for a performance or to exchange performances.
4. How a Promise May Be Made
A promise may be stated in words either oral or written, or may be inferred wholly or partly from conduct.
344. Purposes of Remedies
Judicial remedies under the rules stated in this restatement serve to protect one or more of the following interests of the promisee:
40. His “expectation interest,” which is his interest in having the benefit of his bargain by being put in as good a position as he would have been had the contract been performed,
41. His “reliance interest,” which is his interest in being reimbursed for loss caused by reliance on the contract by being put in as good a postion as he would have been in had the contract not been made, or
42. His “restitution interest,” which is his interest in having restored to him any benefit that he had conferred on the other party.
345. Judicial Remedies Available
The judicial remedies available for the protection of the interests stated in 344 include a judgment or order:
42. Awarding a sum of money due under the contract or as damages,
43. Requiring specific performance of a contract or enjoining its non-performance,
44. Requiring restoration of a specific thing to prevent unjust enrichment,
45. Awarding a sum of money to prevent unjust enrichment,
46. Declaring the rights of parties, and
47. Enforcing an arbitration award.
346. Availability of Damages
63. The injured party has a right to damages for any breach by a party against whom the contract is enforceable unless the claim for damages has been suspended or discharged.
64. If the breach caused no loss or if the amount of the loss is not proved under the rules stated in this Chapter, a small sum fixed without regard to the amount of loss will be awarded as nominal damages.
a. Can be total breach or partial breach
b. Money is the most common remedy for breach, but others are available
c. There are breaches of contract that cause no loss
i. Injured party will still receive a small judgment for nominal damages
ii. Beneficiaries are also able to enforce contracts, but are usually limited to nominal damages
347. Measure of Damages in General
Subject to the limitations stated in Chapters 350-353, the injured party has a right to damages based on his expectation interest as measured by:
1) The lo
e in two types of cases.
359. Effect of Adequacy of Damages
Specific performance or an injunction will not be ordered if damages would be adequate to protect the expectation interest of the injured party.
The adequacy of the damage remedy for failure to render one part of the performance due does not preclude specific performance or injunction as to the contract as a whole.
Specific performance or an injunction will not be refused merely because there is a remedy for breach other than damages, but such a remedy may be considered in exercising discretion under the rule stated in 357.
370. Requirement That Benefit Be Conferred
A party is entitled to restitution under the rules stated in this Restatement only to the extent that he has conferred a benefit on the other party by way of part performance or reliance.
See US Naval Institute v. Charter Communications, Inc.; Sullivan v. O’Connor
16. Intoxicated Persons
A person incurs only voidable contractual duties by entering into a transaction if the other party has reason to know that by reason of intoxication:
he is unable to understand in a reasonable manner the nature and consequences of the transaction
he is unable to act in a reasonable manner in relation to the transaction