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Notes for Test 2

Notes for Test 2 - CHAPTER 9 INTRODUCTION TO CONTRACTS...

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CHAPTER 9 – INTRODUCTION TO CONTRACTS CONTRACT – binding agreement that the courts will enforce TWO SOURCES OF LAW: COMMON LAW (STATE) – governs contracts for services, employment, real estate, patents, copyrights, insurances, (anything except sale of goods) UCC ARTICLE 2 – governs contracts for sale of goods (tangible personal property) ELEMENTS: MUTUAL ASSENT – “meeting of the minds, ” an offer and acceptance CONSIDERATION – legal benefit or legal detriment LEGALITY – purpose of the contract is not criminal, tort, or against public policy CAPACITY – parties to contract must be able to understand that the document is a binding agreement and generally what it means (See Steinberg v. Chicago Medical School ) CLASSIFICATIONS OF CONTRACTS: BILATERAL – exchange of promises, one promise in return for another promise UNILATERAL – promise for an act, one party makes a promise and the other party performs the act to complete the contract EXPRESS – parties indicate agreement by words, orally or in writing IMPLIED – agreement inferred from conduct of parties (Example – getting hair cut, doctor’s appointment) FORMAL – legally binding because of its particular form, must be executed with certain formality (Example – negotiable instrument) INFORMAL – all other contracts whether oral or written that do not depend on formality to be legally valid EXECUTED – contract has been fully performed by the parties EXECUTORY – contract not yet fully performed VALID – meets all four requirements to be an enforceable contract VOID – no contract at all; no legal effect VOIDABLE – one party has the option to set aside the contract, such as minors, mentally incompetent, intoxicated; enforceable until that happens UNENFORCEABLE – contract that a court will not enforce, such as a contract that the law requires to be in writing and the parties only entered an oral contract PROMISSORY ESTOPPEL – also referred to as detrimental reliance; not a contract (missing element is frequently consideration); promise made that other party justifiably relied upon and acted to his detriment ; justice requires enforcement QUASI CONTRACT – contract imposed by law to avoid injustice or unjust enrichment; requires benefit conferred upon a defendant by a plaintiff; knowledge of the benefit, and acceptance or retention of the benefit (Example – agreement to work for fair share of profits; court ruled contract was ambiguous but made company pay plaintiff who had rendered services to avoid unjust enrichment)
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CHAPTER 10 – MUTUAL ASSENT OFFER : REQUIREMENTS: Serious objective intent – objective theory of contracts; how would a reasonable offeree interpret the offer; offers made in jest, anger or excitement usually not valid (Example – car would not start, you are late to class, it is raining, offer to sell to roommate for $5, offer not valid) Definite terms – must have reasonably certain and definite terms; UCC allows open terms and has rules to
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