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Unformatted text preview: Contracts Outline I. Introduction to the Study of Contract Law Preliminary Survey of Subject and Sources • Contract: 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 • Promise: an undertaking, however expressed, either that something shall happen, or that something shall not happen, in the future. *common element in all K’s* • Bilateral: offeror makes a promise contained in the offer and the offeree makes a promise in return as acceptance. • Unilateral: Only one party makes a promise; the offeror makes the promise contained in the offer and the offerree renders some performance as acceptance • Executory K: not fully performed on both sides • Executed: performed “Implied in fact” • Basis: intent of parties • Would a reasonable person who observed the situation think there was an intent? • agreement is inferred in whole or in part from conduct; must still have discernible terms Quasi-contract (“K implied in law”) • Money claims for the redress of Unjust Enrichment • Liability may be found in the absence of any expression of assent by the party to be charged and may indeed be found in spite of the party’s contrary intention • Where a benefit has been received by defendant and it is inequitable for the defendant to retain it • maybe some form of mutual assent is needed though • “law will not imply a promise” • Restitution principle: a person who has been unjustly enriched at the expense of another is required to make restitution. • Elements o Must be benefit conferred o Benefit appreciated o Acceptance and retention of benefit • Theory: Freedom from contract; should not have to be forced to do something; autonomy principle; not thrusting obligations upon another. II. Theories of Promissory Liability (Barnett) • 5 theories of contractual obligation • 3 contract theories Moral justifications 1. Party Based Theories • focus on protecting one particular party to a transaction • Will Theory: protecting the promisor o Promisor has chosen to be bound therefore enforceable (freely assumed) o Problem: enforcement not justified w/o genuine commitment; promisor’s state of mind is subjective – could undermine agreements • Reliance Theory: protecting the promise o Reliance on a promise creates contractual obligation o We are liable for our assertive behavior when it creates foreseeable or justifiable reliance in others o Problem: in the end, have to ask “should this be enforced?” 2. Standard Based Theories • Evaluate the substance of contractual transaction to see if it conforms to a standard of evaluation • Efficiency Theory: maximizing social welfare; size of pie o Economic efficiency: maximization of social welfare o Problem: doesn’t differentiate b/t enforceable/unenforceable • Fairness Theory: are consequences fair o Is substance of transaction fair; objectively o Problem: still cannot distinguish b/t enforceability...
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- Spring '08