Contracts Outline

Manesh Contracts 2010
I. Contract Basics
Contract: A promise or set of promises for the breach of which the law gives as remedy or the performance of which the law in some way recognizes as a duty
What exactly is in a Contract?
1.     Exchange relationship must occur: A relationship exists in which the parties commit themselves to each other for a common enterprise.
2.     Agreement between two parties: Both parties, in the exercise of free will consent to enter it
3.     Contains at least one promise:
4.     Enforceable in law (typically governed by state law)
Why do courts want to enforce Contracts?
1.     Promotes economic exchange and efficiency
2.     Protects individuals and their promises
Common Law: law developed by judges through decisions, rather than through legislative statutes or executive branch action. A “common law system” is a legal system that gives great precedential weight to common law.
Restatement: Summarized or best common law of the US, this is not binding but secondary authority. Statutory law has greater authority
Uniform Commercial Code: uniform acts that have been promulgated with efforts to harmonize the law of sales and other commercial transactions in all 50 states within the United States of America
·         NOT law
·         Concerned with goods, moveable personal objects that aren’t money.
·         Recommendation of the laws that should be adopted
§  Efficiency of exchange
Objective / Reasonable Person Test: Would a reasonable person assent to that contract? Would a reasonable person in one party’s position know the assent of another party? Reasonableness is objective because it is too easy to repudiate contracts agreement (“Well I didn’t intend that contract!”)
·         Contracts wants people to be able to rely on contracts (goal of contracts)
·         Efficiency of exchange
Subjective Person Test: This might help sometimes, if it helps explains their outward actions. But we won’t look at subjective testimony if it’s completely incongruent with outward actions.
Objective Theory of Contracts: You must read guidelines to the contract you are signing…if you’re assenting to a contract, you are bound by the terms to the contract.
Court of Equity: a court that is authorized to apply principles of equity, as opposed to law.
·         Not precedent-setting
·         Not bound to law, but to “fairness”
Doctrinal Indeterminacy: is the idea that legal doctrine isn’t as clear as you think. There is wiggle room.
Specific Performance: is a request from the claimant for defendant to execute promise that was originally agreed upon. This is an equitable remedy, as opposed to damages (typically money), because the moving party would rather have the intrinsic value of the remedy executed then any sort of damages.
·         Court’s typically shy away from specific performance
o   Smacks of involuntary servitude
o   Burdensome on court to follow through
o   Economic efficiency
§  Breaching party gets wanted position, and non-breaching party gets good position.
 
 
 
 
 
 
 
 
 
 
 
 
 
II. Formation
 
Mutual Assent: refers to when there is a common understanding in the formation of the contract. A “meeting of the minds—demonstrated by their objective actions.” A subjective meeting of the minds is not necessary. Parties are bound by an objective manifestation of intent – the intent he manifested to the other.
·         No Mutual Assent = No Contract
Offer: (def. by Restatement) An objective manifestation of intent by the offeror to the offeree to be bound to the offeree without any further action of the offeror.
·         Would a reasonable person see the actions of the offeror as an offer? We ask three questions:
1.     Was there an intent to enter into the contract, and not just a mere invitation