Contracts Outline WEINSTEIN OVERVIEW Contract: R2d, §1 “a promise or a 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.” Contains at least one promise. Enforceable in law; oral agreement almost always sufficient. What Makes an Agreement = K? K formed by exchange of communications, in which transaction proposed by one party is accepted by other. 1) Exchange relationship - each party gives up something to get something from other 2) Created by agreement - voluntary consent = fundamental Both parties exercise free will, intend to make contract/consent to enter 3) Contains at least one promise - commit to do something or refrain from doing something in future 4) Recognized as enforceable in law - gives right to employ power of state, through courts, to enforce them Sources of Contract Law Common Law: even if rule originates as statute, once court called on to interpret + decide matter concerning the statute, becomes part of state’s common law. R2d: persuasive, secondary authority + highly influential; not a statute Uniform Commercial Code: statute adopted by legislatures of 49 states; binding law; separate articles for each specific type of commercial transaction – 2 = governs contracts for sale of goods, whether seller is merchant or not; some provisions treat merchants differently, BUT not requirement one has to be merchant to fall w/n code. UCC 2-104 defines merchant as one who “deals in goods of the kind or otherwise by his occupation holds himself out as having knowledge or skill peculiar to practices or goods involved in the transaction.” Ex: sell car to friend, dispute arises matter decided according to UCC Transaction involves sale of goods (car) Ex : construction K, employment agreement, sale of land = covered by common law, not UCC Some cases involve both goods + services = hybrid cases Some courts apply Art. 2 to only to sale of goods Majority apply Art. 2 only if predominant purpose of whole transaction was sale of goods If sale of goods not predominant purpose, Art. 2 doesn’t apply at all. Classifying Contracts 1) Enforceable K: breach entitles the non-breaching party to damages, either legal or equitable 2) Void contract: results in no legal obligation on part of promisor - K formed; voidable if one or more parties has power to avoid their legal obligations imposed 3) Unenforceable contract: may be valid, but court will not enforce - Many reasons: agreement satisfies all requirements for K, but lacks signed writing to satisfy statute of frauds - Public policy -- offends public interest b/c improper conduct in bargaining process or re: subject-matter in K Express K – formed when parties manifest their agreement explicitly by words Implied-in-fact K – agreement manifested by conduct, indicates mutual assent Bilateral v. Unilateral Contracts Bilateral : both parties made promises to be performed @ later date (most bilateral) - Offeror’s promise is in offer, offeree makes return promise in acceptance (whatever procedure appropriate) - Ex
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