· Restatement (Second) of Contracts
o §§ 1, 2, 4
· Uniform Commercial Code
o §§ 1-201(3)&(11), § 2-102, §2-105
Contract: A promise [agreement §1-201(3)] that is legally enforceable – including both words and conduct (meaning, it can be oral or written).
· §1-201(3) “Agreement” means the bargain of the parties in fact as found in their language or by implication from other circumstances including course of dealing or usage of trade or course of performance as provided in this Act (section 1-205 and 2-208). Whether an agreement has legal consequences is determined by the provisions of this Act, if applicable; otherwise by the law of contracts (Section 1-103)
· §1-201(11) “Contract” means the total legal obligations which results from the parties’ agreement as affected by this Act and any other applicable rules of law.
The Restatement ~ Meanings Defined
· Rstm’t 2d §1 “Contract Defined” – A contract is a promise or a set of promises for the breach of which the law gives remedy, or the performance of which the law in some way recognizes as a duty.
· Rstm’t 2d §2 “Promise; Promisor; Promisee; Beneficiary”
o (1) A promise is a menifestation 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.
o (2) The person manifesting the intention is the promisor.
o (3) The person to whom the manifestation is addressed is the promisee.
o (4) Where performance will benefit a person other than the promisee, that person is a beneficiary.
· Rstm’t 2d §4 “How a Promise May Be Made”
o A promise may be stated in words either oral or written, or may be inferred wholly or partly from conduct.
Where does contract law fit into the legal picture?
· Ownership of property includes the right to use and consume the thing owned, but in many cases it will be more to the advantage of the owner to transfer, or “convey,” the right of ownership to some other person in exchange for something else of value.
· The law of contracts is our society’s legal mechanism for protecting the expectations that arise from the making of agreements for the future exchange of various types of performance, such as the conveyance of property, the performance of services, and the payment of money “executory contracts”.
Scope of UCC
· §2-102 – Unless the context otherwise requires, this Article applies to transaction in goods; it does not apply to any transaction which although in the form of an unconditional contract to sell or present sale is intended to operate only as a security transaction nor does this Article impair or repeal any statute relating sales to consumers, farmers or other specified classes of buyers.
UCC §2-105 Definitions: Transferability; Goods; Future Goods; Lot; Commercial Unit
· (1) Goods mean all things (including specially manufactured goods) which are movable at the time of identification to the contract for sale other than the money in which the price is to be paid, investment securities (Article 8) and things in action. “Goods” also includes the unborn young of animal and growing crops and other identified things attached to realty as described in the section on goods to be served from realty (Section 2-107).
· (2) Goods must be both existing and identified before any interest in them can pass. Goods which are not both existing and identified are “future” goods. A purported present sale of future goods or of any interest therein operates as a contract to sell.
· (3) There may be a sale of part interest in existing identified goods.
· (4) An undivided share in an identified bulk of fungible goods is sufficiently identified to be sold although the quality of the bulk is not determined. Any agreed portion of such a bulk or any quantity thereof agreed upon by number, weight or other measure may to the extent of the seller’s interest in the bulk be sold to the buyer who then becomes an owner in common.
· (5) Lot means a parcel or a single article which is the subject matter if a separate sale or delivery, whether or not it is sufficient to perform the contract.
· (6) Commercial Unit means such a unit of goods as by commercial usage is a single whole for purposes of sale and division of which materially impairs its character or value on the market or in use. A commercial unit may be a single article, or a set of article
· What if a case cannot be decided on the basis of precedent alone?
o This happens when to precedent exists or because the applicability of precedent to the case at hand is unclear. In these cases courts turn to “policy” to resolve the case. Policy may be regarded generally as any societal goal that will be furthered by a particular decision. This may be economic, political, societal, or moral.
The Uniform Commercial Code
· The UCC is such a statute. Although all of contract law is, in a sense, commercial, the UCC is not applicable to all contracts. It covers only certain specific types of commercial transaction. Each type of transaction is provided for in a separate article of the UCC. In the contracts course, we are concerned with only one of the types of transactions covered by the UCC – sale of goods, governed by UCC article 2.
· One of its goals is to codify well-established rules, but it is equally concerned with clarifying and modernizing the law. Therefore, while the UCC has built on principles formulated under the common law and its predecessor statutes, it has also sought reform outdated or unsatisfactory laws and to bring the legal rules into line with contemporary practice.
· Began in the 1940s. In the 1960s, a wave of consumer protection statutes at both the federal and state levels modified traditional contract principles
· It does not govern all commercial transactions. Nevertheless, it has become the major statute with general importance to all phases of contract law.
· The Code has its origins in the late nineteenth century, when rapid industrialization and the growth of a national commercial economy first highlighted the expense, inconvenience, and uncertainty occasioned by differences between the states in matters of commercial law.