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Unformatted text preview: Contracts Outlines Chapter 1 INTRODUCTION I. MEANING OF &quot;CONTRACT&quot; A. Definition: A &quot;contract&quot; is an agreement that the law will enforce. R2K 1 : a promise or set of promises for the breach of which the law gives a remedy, or the performance of which the law in some way recognizes as a duty. 1. Written v. oral contracts: Although the word &quot;contract&quot; often refers to a written document, a writing is not always necessary to create a contract. An agreement may be binding on both parties even though it is oral. Some contracts, however, must be in writing under the Statute of Frauds. II. SOURCES OF CONTRACT LAW A. The UCC: Contract law is essentially common law, i.e. judge-made, not statutory. However, in every state but Louisiana, sales of goods are governed by a statute, Article 2 of the Uniform Commercial Code. 1. Common-law: If the UCC is silent on a particular question, the common law of the state will control. See UCC 1-103 1-103. Supplementary General Principles of Law Applicable. Unless displaced by the particular provisions of this Act, the principles of law &amp; equity, including the law merchant &amp; the law relative to capacity, principal &amp; agent, estoppel, fraud, misrepresentation, duress, coercion, mistake, Bankruptcy, or other validating/invalidating cause shall supp. its provisions. 1 Chapter 2 OFFER AND ACCEPTANCE I. INTENT TO CONTRACT A. Objective theory of contracts: Contract law follows the objective theory of contracts . That is, a partys intent is deemed to be what a reasonable person in the position of the other party would think that the first partys objective manifestation of intent meant. For instance, in deciding whether A intended to make an offer to B , the issue is whether A s conduct reasonably indicated to one in B s position that A was making an offer. [10 - 11] Example: A says to B , &quot;Ill sell you my house for $1,000.&quot; If one in B s position would reasonably have believed that A was serious, A will be held to have made an enforceable offer, even if subjectively A was only joking. B. Legal enforceability: The parties intention regarding whether a contract is to be legally enforceable will normally be effective. Thus if both parties intend and desire that their &quot;agreement&quot; not be legally enforceable, it will not be. Conversely, if both desire that it be legally enforceable, it will be even if the parties mistakenly believe that it is not. [11 - 12] Example: Both parties would like to be bound by their oral understanding, but mistakenly believe that an oral contract cannot be enforceable. This arrangement will be enforceable, assuming that it does not fall within the Statute of Frauds. 1. Presumptions: Where the evidence is ambiguous about whether the parties intended to be bound, the court will follow these rules: (1) In a &quot;business&quot; context, the court will presume that the parties intended their agreement to be legally enforceable; (2) but in a social or domestic situation, the presumption will be that legal relations were...
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This note was uploaded on 04/01/2008 for the course LAW 520 taught by Professor Frier during the Spring '08 term at University of Michigan.
- Spring '08