Contracts Outline
Enforcement of Promises
1) Contract
a) A promise or group of promises that the law will enforce.
2) Restatements
a) Suggested rules of law made by the American Law Institute.
b) First restatements in contracts in 1932
c) Second were in 1979.
d) Not law, but suggestions from prestigious people
3) Uniform Commercial Codes
a) UCC§ 2-102 says that article 2 only applies to “transactions in goods”
i) If both goods and contracts, then look to predominate nature. Sometimes just apply article 2 to the good portion.
b) All state must follow similar laws to UCC except Louisiana
4) Goods
a) Movable objects except for money and securities (UCC§ 2-105(1))
b) Growing crops, minerals and structures can be goods if the seller separates them from the property
5) Merchant
a) Someone who deals in the kind of goods involved in the contract, or who holds himself out as having special knowledge about the business practices or type of goods involved in the transaction. (UCC§ 2-104(1))
6) Article 2 of the UCC
a) Applies to both merchants and non-merchants.
b) Covers both present sale of good and for contracts for future sale (UCC§ 2-106)
c) Official comments are not law, but may help show intent
7) United Nations Convention of Contracts for the International Sale of Goods
a) Went into effect in US in 1988
b) Covers sale of goods when the parties are in different countries which have ratified.
c) US courts are bound
d) Parties can opt out
8) Expressed Contract
a) Expressed in words, either written or oral
9) Implied-in-fact Contract
a) A contract which the promise of one or both parties is inferred from conduct rather than expressed words.
b) Ex. haircut
10) Quasi-contracts (implied in the law)
a) Unjust enrichment
11) Default rules—statutory or common law rules that parties are free to change.
12) Mandatory rules—rule of contract law that cannot be changed.
13) Executory promise—a promise that has not been performed yet.
14) Consideration—something that the
Enforcement Based on Consideration
Consideration
1) Something that the promisor bargains for from the promisee in exchange for making the promise and that the promise gives to the promisor in order to induce the promisor to make the promise.
2) The fact that a promise is bargained for is generally sufficient to make it enforceable.
3) To be an enforceable contract there must be
a) A moral obligation is generally not sufficient consideration for an express promise. (Mills, sea voyage)
b) The law will only give a promise validity if the promisor gains something or promisee loses something as a result of the promise. (Mills)
c) A benefit conferred before a promise is made can hardly be said to have been given in “exchange” for the promise. (Mills)
6) Modern approach allowing enforcement
a) Where the promisor receives a material benefit, and the promisee suffers a material detriment, then moral obligation is sufficient consideration to support a promise. (Webb, saves boss)
b) In Webb, the promise was given by the person who received the benefit unlike Mills
7) If there was a previous legal contract and the statute runs but D makes a new promise, then the new contract would be enforceable.
8) A promise made in recognition of a benefit previously received by the promisor from the promisee is binding to the extent necessary to prevent injustice.
