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Unformatted text preview: CONTRACTS OUTLINE Professor Summers I. Introduction A. The purpose of lawyers 1. To enable successful voluntary collaboration among private parties a. Fuller, pg. 5: “Here the lawyer functions, not as an expert in the rules of an existing government but as one who brings into existence a government for the regulation of the parties’ own relation.” 2. To prevent litigation a. From Fuller: “An important part of his task is to design a framework of collaboration that will function in such a way that litigation will not arise.” B. Useful definitions 1. theory of obligation- legal duties arise from a valid agreement with consideration; a contract 2. consideration- something of value received by a promisor from a promisee; bargained for exchange C. The Whites and the Benkowskis (WI 1967): “The Water Breach Case” Rule: Punitive damages are not available in actions for breach of K, if no tort was pleaded or proved. White should recover for loss of water and inconvenience. 1. In a contract, it is important to identify 3 things a. What moves from one party to the other 1. Whites give to Benkowskis $400 for new pump and larger tank, $3/month for water, and half of all necessary repairs and maintenance. 2. Benkowskis give the Whites water, and the use of the well and equipment. b. What risks are borne by each party 1. Benkowskis risk that inflation may reduce the value of the payments they receive, that the Whites may use more water then they anticipate, and that a drought or water shortage causes water prices to skyrocket. 2. The Whites risk the well drying out, meaning that they lose their $400 and investment and have to get water from some other place c. What contingencies the contract does and does not provide for 1. The issue of a drought is not mentioned in the contract, or the issue of inflation. However, the contract does specify what happens if the Benkowskis sell their house to another party. 2. Advantages of Jean Smith over Joe Artz a. With legal training she recognizes that the contract regulates a long-term relationship, rather than a single transaction, like buying a coat. (See discrete v. relational exchange, p.28). b. Realizes that the purpose of the contract is to protect against things that might go wrong, rather than things that will go right c. Realizes that the best time to address potential conflicts is before a dispute arises, rather than after. 1 d. Joe Artz purports to work for both sides. Jean Smith would only have represented one side, in accordance with the Model Rules of Professional Conduct (p.10) 1. A lawyer shall represent a client if the representation of that client will be directly adverse to another client, unless a. The lawyer reasonably believes the representation will not adversely affect the relationship with the other client; and b. Each client consents after consultation....
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