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Contracts
University of North Carolina School of Law
Davis, Adrienne M.B.

CONTRACTS

INTRO

A contract is an agreement the law will enforce.

In every state but LA, sales of goods are governed by article 2 of the UCC. *If the UCC is silent, common law controls. The UCC is highly pro-K because merchants frequently try to weasel out of deals due to market fluctuations.

K v public policy: statutory interpretation driven by public policy concerns. Shaheen v Knight:
o Failed sterility procedure resulted in birth.
o Issue: Were there damages?
§ Dr.’s defenses to whether there was an enforceable agreement:
§ Public policy should favor having children: “blessing rule”
§ No implied warranty of cure; however, “a doctor and his patient are at liberty to contract for a particular result.”
· *Most states require explicit warranties to be in writing. This is an exception to the general K rule.
§ No charge of negligence.
· Torts is fault-based liability. K-based claims do not rely on evidence of violating the applicable standard of care.
§ Dr. said his duty to his patient does not come from Ks, but rather from “public consideration.”

K v public policy
Baby M: Example of the tension between the values of sound public policy and freedom of K.
o Valid K
§ “The male gave his sperm; the female gave her egg in the preplanned effort to create a child – thus, a contract.”
§ The surrogate mother should have the right to renounce the surrogacy contract until the point of conception – exception for abortion.
§ Contract is valid under the laws of NJ.
§ In this case, the remedy should be a specific performance.
o Public policy
§ Ct is protecting the best interest of the child.
§ The contracted parents are likely to be good parents.

In re Baby M: Supreme Ct
o Holding: restores the “surrogate” as the mother of the child, but grants custody to father for reasons of the child’s best interest.
o K invalid:
§ K violates state statute prohibiting the purchase of adoptions
· Can’t use money for surrogacy
§ No termination of parental rights absent “a strong showing of abandonment or neglect.”
§ Surrender of custody is made to a private party, not an approved agency. Otherwise there can be no irrevocable consent to terminate parental rights.
o Public policy:
§ Permanent separation of child from a natural parent.
§ Rights of natural parents are equal.
§ No counseling or legal advice given to surrogate.
§ Surrogate “never makes a voluntary, informed decision” before birth.
§ K disregards best interest of child.
§ Slippery slope using money to obtain children.
§ Benefit of the rich at the expense of the poor.
o Relational K: anticipate on-going relationship between two legal parties

K FOR

s a value we reward.

Outline: Shift to objective standard of assent

In Embry, the question was not about the employer’s intent, but whether what the employer said would lead the reas man to make him think and offer had been extended AND whether in fact that was how this particular employee understood it.

In Texaco, the question was did Pennzoil and Getty have a K, and the ct would only include in ev public behavior of each side (could be known to reas offeree), no secret intent. This case helped us see how this affects litigation in terms of how can be called as witnesses and the kinds of questions that will be permitted on examination and the ev that will be permitted.

In Lucy, ct reinforced the objective, reas person standard. So the standard is a two prong: would the reas offeree perceive the communication/conduct/behavior as an offer (pg.302) AND the actual offeree did so perceive it (that is, did not have information to the contrary).

Same standard under UCC: “mutual assent.”

Objective K test
Embry v Hargadine (1907): Was he fired or rehired?