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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 Ks* 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 partys 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; promisors 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: doesnt 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