BU BLS 111 - Chapter 9- Introduction To Contracts

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ContractsDeal with promises and damages if promises are brokenNot all promises are enforceableBreach of promise would purpose a remedy. Unlike tort law/criminal law, contract law is not imposable (except for Affordable Care Act)Voluntary agreements for mutual benefitsContracts facilitate the planning necessary in modern societyEvolution of Contract LawDates back to Common Law tradition in England several hundred years agoCommon law was very technical, precise, rule-oriented. Contained a lot of elements of contracts. Reflected laissez-faire economy that was prevalent in the dayFreedom of contract- idea that contracts enforced because they are products of free wills of the creatorsCourt’s role is not to re-write contracts. Just to interpret and enforce themTrend is going towards broader, more flexible standards as opposed to rules in terms of contracts (Interventionist approach). Hands-off approach. Concepts like good faith, justice began to emergeRequirements of a contractNegotiation, Agreement, Voluntary, Consideration, Capacity (legal ability to enter a contract AKA not a minor or mentally incompetent judged by court), Legality,Gratuitous promise (I’ll give you $10,000 for nothing) not enforceableOral Contracts are permissible, do not need to be writtenStandardized form contracts- contracts that are pre-printed by one party and presented to other party for signingFrequently terms are non-negotiableBasic elements of contractOffer and acceptance of that offerConsideration to support each party’s promiseContract is between parties who have capacity to contractObjective and performance of contract must be legalTypes of ContractsUnilateral QuestionOne-Sided agreement whereby one makes a promise to do or refrain from doing something in return for a performanceIn English: If you do X, Y, and/or Z, you will be entitled to some benefitExample: if you buy 10 coffees, 11th one is freeBilateral QuestionTwo Parties I’ll pay you $5,000 if you lease me a kiosk in the mallValid Contract- meets all legal requirements for bindingEnforceableUnenforceableValid but unenforceable because violates some law such as statute of limitationsVoidable- in which one or more of parties have legal right to cancel their obligations under the contractReasons one would cancel: fraud, duress, mental illness, misleading when entering contractExample: sell jaguar and find out it has a Hyundai engine in it after the sale would constitute fraudVoidAgreements that create no legal obligations and for which no remedy will be givenEx: Imposing a “hit” on somebodyExpress contract- terms between parties are explicitly (oral or in writing) statesImplied Contract- when the surrounding facts and circumstances indicate that an agreement has been reached, an implied contract has been createdExecutedWhen all of parties have fully performed their contractual dutiesExecutory- before such duties have been fulfilledSources of Contract LawCommon Law Of ContractsContracts for the sale of real estate, services, intangibles such as stocks or bondsUniform Commercial CodeMore likely to find a contract existed than the common law of contractsSales of goodsLooks at intentMore concerned with practical realities (what do people do in the real world) interpret contracts based on reasonablenessJudged by looking at customs of merchants in particular industry. If client’s acting within those customs courts will take that into consideration2 states may interpret it differentlygone a long way towards establishing uniformityrequires that parties must observeHybrid contract- Services common law, goods article 2Unconscionable ContractsSo unfair that it’d be unfair to enforceMerchants- held to higher standardConsidered merchant if you have, or pretend to have, some knowledge about what you’re sellingQuasi-contractRepresents an obligation imposed by law to avoid injusticeUnjust enrichment dude’s painting your house and you let him do it even though it’s supposed to be your neighbor’s house then you refuse to pay him b/c you don’t have a contractProbably wouldn’t have to pay full contract price, just what’s reasonably acceptablePromissory EstoppelOne person may rely on a promise made by another even though the promise and surrounding circumstances aren’t sufficient to justify the conclusion that a contract has been created because one or more of the required elements is missingMake a promise but don’t enforce it and other party commits certain actions based on you enforcing your promiseEx: job offer across country. Move your family out to Cali relying on promise of new job. When you get there, the job isn’t there.Two parts to a contractOffer and Acceptance agreeing to same agreement at the same timeOffer is the first stepOfferor person making the offerOfferee person receiving the offerThree Parts of an offerObjective indication of intent to enter contractJudged by objective standards, that is, what his words, actions and circumstances signify about his intentSpecificity and definition of termsA proposal that fails to state specifically what the offeror is willing to do and what he asks in return for his performance is unlikely to be considered an offerCommunication of the offereeOfferor must be the one to explicitly state offer to offeree (person receiving offer)Under UCC, requirements are less than requirements under common law.UCC contract can be created in any matter good enough to prove an existence of contract . makes it possible for contract to be performed even if there are certain gapsGap filling provision allows courts to apply reasonable termsCommon law more strict definition of contract. Needs what/when/how/etc.Special Offer Problem AreasAdvertisementsIn general, advertisements do not constitute offers. They are considered invitations to offerExceptions : clothing store offered to sell fur coat for $1. First come first serve. Man comes first, they say no b/c he’s a man. Court rules that…If it’s very specific and requires actions to purchase certain goods, it can constitute an offerAnother exception: “we have 5 bmw’s for 30,000 each”RewardsGenerally treated as offers for unilateral contractsSome courts say that person completing task must know about reward beforehand, some don’tAuctionsGenerally treated as making invitations to offerAcceptance only occurs when auctioneer sells to the highest bidderBidsSoliciting bids from people to perform a task. Soliciting is considered

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BU BLS 111 - Chapter 9- Introduction To Contracts

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