ch13 - Intro to Contracts BL.docx - Overview of Contract...

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Overview of Contract Law - Contract law reflects what promises/commitments our society believer should be legally binding (or forced) - Examples: - A promise to take your friend to lunch does not constitute a contract as gratuitous in nature (i.e. No quid pro quo) - Cannot have a lawsuit on this, because its a gift - A commitment to a car loan constitutes a contract (i.e. quid pro quo was exchange of lump sum for periodic payments at specific interest rate) - Contract v. promise (all contractual agreements are promises, but not all promises are contractual agreements) - Promise: - a person's declaration that he will perform or refrain from performing some present or future act - Promisor (obligor): the person making the promise - Promisee (obligee): the person to whom the promisor makes the promise to - Contract - An agreement between two or more competent parties - For valuable consideration - To perform or refrain from performing some present of future act - Contract law reflects what justifications our society will accept for the breaking a contractual commitment - Examples: - Being an “impulse buyer” is not justification for not paying a contractually due payment on a credit card. - Being a minor (i.e. under 18 years of age) constitutes a legal justification for not seeing a contractual obligation through. - Contract law reflects what kinds of promises are considered to be legally void as against public policy. - Example: - Tommy Sombrano contracts with Henry the Hitman to “whack” (kill) a local politician. (needs to have legality of purpose) - If Henry the Hitman gets paid but thereafter does not kill the politician as agreed Tommy Sombrano will not be able to enforce the agreement as it is against public policy. - Function of Contract Law - Provides stability and predictability for commerce/business (so a business can function) - Contract law is needed to - - Ensure compliance with a contractual commitments - Provide the non-breaching party relief when a contract is breached. - Business relationships are often created through contracts. Examples - - Employment contract & covenant not to compete - Covenant not to compete restricts what an employee may do after leaving company; where, when, and with whom they may thereafter work. - Business contracts needed to protect trade secrets - Contract -
- offeror : the person proposing an agreement - Offeree: the person to whom the offeror proposed the agreement to - Most legally enforceable contracts can be made orally or in writing - Some contracts must be in writing per the Statute of Frauds (discussed in ch18) - Example of contractual breach - - Student A enters into a legally binding agreement (i.e. contract) to purchase Student B’s textbook for $10 - Student A tenders $10 to Student B - Rather than tendering the textbook to Student A, Student B burns the textbook out frustration from studying - Student A has contractual remedy at law for Student B’s breach - Breach of Contract - - Contract disputes arise when there is a contractual promise of future performance and the promise is broken -

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