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Unformatted text preview: Business Law and the Regulation of Business Regulation
Chapter 9: Introduction to Contracts Chapter By Richard A. Mann & Barry S. Roberts Topics Covered in this Chapter Topics
A. Development of the Law of A. Contracts Contracts B. Definition of a Contract C. Requirements of a Contract D. Classification of Contracts D. E. Promissory Estoppel E. F. Quasi Contracts Law of Contracts Law
Definition of Contract – a binding agreement that the courts will enforce. agreement s Common Law – most contracts are governed primarily by State common law, including contracts involving employment, services, insurance, real property (land and anything attached to it), patents, and copyrights. it),
s Law Governing Contracts Law
Yes Specific provision of UCC applicable?
No Yes Sale of goods?
No UCC governs General contract law governs Uniform Commercial Code Uniform
Article 2 of the UCC governs the sales Article of goods. of s Sale – the transfer of title from seller to buyer. buyer. s Goods – tangible personal property (personal property is all property other than an interest in land). than
s Requirements of a Contract
s s s s Mutual Assent – the parties to a contract must manifest by words or conduct that they have agreed to enter into a contract. to Consideration – each party to a contract must intentionally exchange a legal benefit or incur a legal detriment as an inducement to the other party to make a return exchange. to Legality of Object – the purpose of a contract must not be criminal, tortious, or otherwise against public policy. public Capacity – the parties to a contract must have contractual capacity. contractual Validity of Agreements Validity
Mutual Assent? Yes
Consideration? No No No No Void Yes
Free from Invalidating Conduct? Void or Voidable Yes
Subject Matter Legal? Yes No No Yes Unenforceable Statutes of Frauds Satisfied? Valid Contract Classification of Contracts
s Express and Implied Contracts
– Express Contract – an agreement that is Express stated in words, either orally or in writing. stated – Implied in Fact Contract – a contract in Implied which the agreement of the parties is inferred from their conduct. inferred s Bilateral and Unilateral Contracts
– Bilateral Contract – a contract in which Bilateral both parties exchange promises. both – Unilateral Contract – a contract in which Unilateral only one party makes a promise. only Classification of Contracts
s Valid, Void, Voidable, and Valid, Unenforceable Contracts Unenforceable
– Valid Contract – one that meets all of the Valid requirements of a binding contract. requirements – Void Contract – no contract at all; without Void legal effect. legal – Voidable Contract – a contract capable of Voidable being made void. being – Unenforceable Contract – a contract for Unenforceable the breach of which the law provides no remedy. remedy. Classification of Contracts
s Executed and Executory Contracts
– Executed Contract – a contract that has Executed been fully performed by all of the parties. been – Executory Contract – a contract that has Executory yet to be fully performed. yet s Formal and Informal Contracts
– Formal Contract – an agreement that is Formal legally binding because of its particular form or mode of expression. form – Informal Contracts – all contracts other Informal than formal contracts. than Contractual and Noncontractual Promises Promises
Noncontractual promises (nonenforceable) Contractual promises (enforceable) Enforceable noncontractual promises Promissory Estoppel
s s Definition – a doctrine enforcing some Definition
noncontractual promises. noncontractual Requirements – a promise made under Requirements
circumstances that should lead the promisor reasonably to expect that the promise would induce the promisee to take definite and substantial action, and the promisee does take such action. take s Remedy – a court will enforce the promise Remedy
to the extent necessary to avoid injustice. to Quasi Contracts
s contract that is imposed to avoid injustice. contract s Requirements – a court will impose a Requirements quasi contract when (1)the plaintiff confers a benefit upon the defendant, (2)the defendant knows or appreciates the benefit, and (3)the defendant's retention of the benefit is inequitable. inequitable. s Remedy – the plaintiff recovers the Remedy reasonable value of the benefit she conferred upon the defendant. upon Definition – an obligation not based on Definition Contracts, Promissory Estoppel, and Quasi Contracts and
Contract Type of Promise Contractual Promissory Estoppel Noncontractual Quasi Contract None Void Unenforceable Invalidated Requirements Remedies All of the essentials of a contract Equitable Compensatory Reliance Restitution Detrimental and justifiable Benefit conferred and reliance knowingly accepted Promise enforced to the extent necessary to avoid injustice Reasonable value of benefit conferred ...
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