2004 Fall Contracts Outline – Cardi
I. Obligation Arising From an Agreement w/ Consideration – Leading Theory
Contract w/ consideration – if parties agree to do something and that agreement is supported w/ consideration then the promises in agreement are enforceable
To determine whether there is a contract you must first decide what the parties’ intents were!!!
A. Agreement – Mutual Assent
1. An act other than a promise – Bargained for exchange i.e. A wants his barn painted and tells B he’ll pay for him to paint barn. B never agrees to it, but he does paint the barn. B’s act of painting barn is a way to consideration even though he never agreed.
2. Forbearance – act of tolerating or abstaining from an act – refraining from enforcing right, obligation, or debt
a) Corbin on Contracts, section 140 at 595. ‘Forbearance is sufficient if there is any reasonable ground for the claimant’s belief that it is just to try to enforce claim. In ‘good faith.’
b) The invalidity of his claim did not rule him out of his claim from asserting his forbearance of consideration.
c) Reliance – dependence or trust by a person, esp. when combined with action based on that dependence or trust – reliance on the expectation that the promise would be fulfilled
(1) Creating, modification or destruction of a legal relation
3. A return promise
D. Legal Purpose – (a gambling bet would be negated from legal purpose because it’s illegal)
E. Writing – agreement is in writing – no general rule that contracts must be in writing – statutes of fraud which require certain kinds of contracts to be in writing
F. Other points
1. Generally courts will not enforce gifts. Won’t enforce casually given promises. If there is consideration, the promise is less likely to make upon impulse. If the promise had been received at a prior time by such an expense by the promisee, it is just to enforce it
2. Where there is an exclusive right by at least one of the parties, then agreement should be implied that each party will perform if they need to act in order to receive profits.
a) § 1-203 – every contract or duty within this act imposes an obligation of good faith in its performance or enforcement
b) § 2-3
t the time the contract was made.
II. The FOUR GOLDENS! To determine whether there is a contract –
1. In the absence of a specific quantity, the defendant had no obligation to use the plaintiff’s services, and thus the defendant had a right to terminate their business relationship.
D. Delivery Date
III. Obligation Arising from Justified Reliance – PROMISSORY ESTOPPEL Promissory estoppel (reliance theory) – case arose “in equity.”
A. One promises in which
C. With a definite character
D. Does create forbearance
E. If injustice can be avoided only by enforcement of promise.
IV. Promissory estoppel
A. Promisor promises Promisee
B. Knowing that promisee might reasonably change her position in reliance on the promise
C. To detriment
Promisee does reasonably change position