TO INTRODUCTION CONTRACTS
Why is it important to study the law of contracts? Why is it important to have rules regarding contracts?
Where do the rules come from? Common Law Statutes - primarily state Uniform Commercial Code
What is it? Purposes
Applicability of UCC Article 2 Applies to Sales of Goods Sale Transfer of title (ownership interest) for a price Goods moveable, tangible, personal property
Determining which rules apply
Sale of Goods? Yes No
Specific UCC Provision Applicable? No
UCC Governs Yes
Another Statute Applicable? No Yes
Statute Governs
Common Law Rule Governs
Contracts Involving Both Goods and Services Issue UCC Article 2 or other rule? Gravamen test Looks at portion of contract that claim is about Predominant purpose test what is the predominant purpose of the contract?
UCC 2-104 - Definition of a Merchant Merchant means a person who deals in goods of the kind or otherwise by his occupation holds himself out as having knowledge or skill peculiar to the practices or goods involved in the transaction or to whom such knowledge or skill may be attributed by his employment of an agent or broker or other intermediary who by his occupation holds himself out as having such knowledge or skill.
Definition of a Merchant (cont.)
Case illustrations By occupation
Marine construction co. buying steel sheets Transit Authority selling old trolleys for scrap
Employment of another
Cattle ranchers hire auctioneer as agent Packaging co to assemble bird feeders using from seed middleman who knows everything about bird seed
Other General Contract Terms
Contract Promise or set of promises that the law will enforce Promise manifestation of intent to act or refrain from acting in a specific manner Promisor Promisee one to whom promise is made Breach - Any failure to properly perform contract
Essential Elements of a Contract Mutual Assent Consideration Legality of Object and Performance Capacity
Other doctrines under which a court may give a remedy even though not all requirements of a contract are met
Promissory Estoppel
Gratuitous promise
i.e., not given in exchange for something of value, so consideration is missing
Detrimental reliance on promise
i.e., promisor should reasonably expect promise to induce substantial act or forbearance promisee takes substantial action or forbearance in reliance on promise Injustice can only be avoided by enforcing promise (New York requires circumstances that are unconscionable, i.e., that shock the conscience)
Quasi contract (contract implied in law) As if contract existed No contract because no promise or promise not enforceable One party unjustly enriched at the expense of the other
Quasi Contract (cont.) Requires
Benefit conferred on defendant Knowledge or appreciation of benefit by defendant Circumstances would make it inequitable to permit defendant to retain benefit without paying for it
Remedies
Quantum meruit as much as he deserves Reasonable value of services For court to determine