Contracts Outline - INTRO What is a contract? An agreement...

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Unformatted text preview: INTRO What is a contract? An agreement that has legal effect: A promise to do something for which a breach gives remedy R§1: A contract is a promise or a set of promises for the breach of which the law gives remedy , or the performance of which the law in some way recognizes as a duty Our 4 Main Questions – The Big Picture: 1) Has a contract been formed? 2) What is the meaning of the contract? (i.e. what are the terms?) 3) Was there a breach of contract? 4) What is the remedy? THEORY OF CONTRACT FORMATION K=MMA + C R§17(1): The formation of a contract requires a bargain in which there is a manifestation of mutual assent to the exchange and a consideration. MMA / Intention To Be Bound A manifestation of mutual assent by the parties to an informal contract is essential to its formation and the acts by which such assent is manifested, must be done with the intent to do those acts, but neither mental assent to the promises in the contract nor real or apparent intent that the promises shall be legally binding, is essential- objective! R§ 21: Intention to Be Legally Bound Neither real nor apparent intention that a promise be legally binding is essential to the formation of a contract, but a manifestation of intention that a promise shall not affect legal relations may prevent the formation of a contract. R§22 Mode of Assent: Offer and Acceptance (1) The manifestation of mutual assent to and exchange ordinarily takes the form of an offer or proposal by one party followed by an acceptance by the other party. Essential to formation of K: the law looks for a sufficient expression of commitment to perform- Ray v. Eurice 1) MMA (signature, handshake, nod, verbal (“I promise” and “I accept”)) a. Can be defined as: Outward expression of a commitment to perform 2) Intention to Be Bound to do those acts (not just a joke) a. Intent to assent (by nod, handshake, etc.)- Simply put: there must be an act to agree and there must be intent to agree as well- No one can trick or coerce you into doing the act- You do not need a mental assent to form contract i.e. shaking someone’s hand to agree even though, in your mind, you know you’re going to screw them The law does not care about your inward thoughts; it cares about your outward actions True interpretation of an offer or acceptance is not what the party making it thought it meant or intended it to mean, but what a reasonable person in the position of the parties would thought it meant = Objective-What could be taken into consideration? Age? Intelligence? ◊ ultimately, this is up to the court to decide Consider the Objective Theory of Contract Formation : we can refer to a common standard of understanding-promotes economic progress b/c people know that there is a common understanding of their arrangements-encourages people to keep their promises: pacta sunt servanda – “agreements must be kept”-The Subjective Theory of Contract Formation encourages parties to lie about their thoughts -However, defaulting party could therefore always say, “I didn’t...
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This note was uploaded on 09/21/2009 for the course LAW All taught by Professor All during the Fall '09 term at University of the West.

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Contracts Outline - INTRO What is a contract? An agreement...

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