Contracts- Schmitz- 2004-Anonymous

Contracts- Schmitz- 2004-Anonymous - - Sources: o Article 2...

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- Sources: o Article 2 of UCC- Sale of Goods- ‘goods’ defined by UCC § 2-105- UCC applied when: 1) movable at time of contract 2) predominant purpose 3) claim is about quality of the goods o Restatement (Second of Contracts)- generalizations of common law o Common Law- cases- real-estate - Pre-dominant Purpose Test (more about service or the product)- if in doubt analyze under both - Contract: - Contract = offer + acceptance + consideration (or consideration substitutes) Contract v. Gifts (gratuitous assignment): - contracts generally require consideration but gifts do not - For gifts, Restatement § 332: o gratuitous assignment is irrevocable if it is: a. in writing(either signed or under seal) or b. is accompanied by writing (accepted as evidence of right reserved) o gratuitous assignment is revocable ad right of assignee terminated by: a. assigner’s death, b. assignor’s incapacity c. subsequent assignment by the assignor, d. notification from assignor received by assignee - Cash v. Bernard- Π sued the secretary of his company when she said that she will forward his insurance application for him even though that had nothing to do with the company- she offered to do it for him- but did not- court: no consideration because no bargain for exchange and it was a gratuitous verbal expression Consideration - Consideration: - Common law = there has to be consideration for the contract to be enforceable - What is Consideration? 3 approaches: i. Benefit/detriment approach: - Common law: California Civil Code: § 1605. ‘Any benefit conferred, or agreed to be conferred, upon the promisor, by any other person, to which the promisor is not lawfully entitled, or any prejudice suffered, or agreed to be suffered, by such person, other than such as he is at the time of consent lawfully bound suffer, as an inducement to the promisor, is a good consideration for a promise. - Not a sufficient approach- 1) overbroad definition: under this a promise to make a gift that imposes a condition (detriment) on the receiver of the gift (promise) would fit the definition, but conditional gifts are held to lack consideration, and also 2) law has special meaning for words ‘benefit’ and ‘detriment’ 1
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- Hamer v. Sidway – uncle promised to pay nephew $5000 if he refrained from drinking etc., till he turned 21- one can argue that is was beneficial for him to do so but he incurred a LEGAL DETRIMENT because he gave up his legal right to do this. ii. ‘Bargain Approach’: - Bargain Theory of Consideration - Bargain for exchange = act/forbearance/detriment/benefit/or return promise + inducement - Restatement § 71: 1) performance or return promise must be bargained for 2) performance or return promise is bargained for if: a. it is sought by promisor in exchange for promise, and b. it is given by promisee in exchange for that promise 3) performance = 1) act other than promise, or 2) forbearance, or 3) creation, modification, destruction of legal relation - ‘Inducement’ o consideration induces making of promise + promise induces furnishing of consideration
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Contracts- Schmitz- 2004-Anonymous - - Sources: o Article 2...

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