Chapter%207 - Chapter 7 Basic Contract Law David Baumer...

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09/26/11 Chapter 7: Basic Contract Law David Baumer, Spring 2003
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09/26/11 Contract Law Contracts evolved from the common law Each state has its own common law precedents Dissatisfaction with differences across state led to the Uniform Commercial Code (UCC) UCC has been adopted by all 50 states and will be discussed next chapter Currently we are dealing with another watershed event: E-commerce Lawyers and legislators are scrambling to provide a universally accepted contract law of E-commerce
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09/26/11 Contract Law A contract is: A promise or set of promises, the breach of which the courts will provide a remedy for When the two parties agree to a contract, it creates a legally recognized duty to perform Not all agreements are recognized as legally binding A promise to make a gift is not binding
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09/26/11 Elements of a Contract Valid contracts possess the following: An agreement between the parties: an offer and acceptance Consideration --each party must do something that they were not previously obligated to do Both parties have capacity to contract Formation and performance of the contract are legal and not against public policy
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09/26/11 Contractual Nomenclature Valid, void, voidable and unenforceable A valid contract is one recognized as binding in law A void contract is not recognized at all such as a gambling contract In a voidable contract one of the parties can not perform without liability--a victim of fraud A contract is unenforceable if there are no legally enforceable remedies--an oral real estate agreement In a bilateral contract, both parties exchange promises In a unilateral contract a promise is made for performance--e.g., reward contracts
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09/26/11 Types of Contracts Executory and executed A executory promise is a promise for future performance If the contract has been executed, both parties have performed Express and Implied An express contract can be written or oral In an express contract the duties of the parties are clearly elucidated An implied contract is implied by conduct After receiving treatment from a doctor, you will be asked to make arrangements for payment
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09/26/11 Quasi Contracts The plaintiff is suing for quantum meruit (the fair market value of her services) The plaintiff performed valuable services The defendant knowingly received these services The plaintiff expected to get paid if the services were used by the def. The def. was unjustly enriched Quasi contract has been used by writers who claim movies were made based on ideas they told directors- Coming to America Quasi contract is sometimes used by small firms to try to salvage an inadvertent or bungled knowledge transfer to a larger firm
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09/26/11 Elements of a Contract Agreement Offer and Acceptance The offeror must have intent to make an offer Intent is judged under an objective standard --What would a reasonable person believe under the circumstances?
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