Unit 1 CHAPTER 1 Nature of Law Definition of Law Functions of Law a rule of civil conduct prescribed by the supreme power in a state commanding what is right and prohibiting what is wrong to maintain stability in the social political and economic system through dispute resolution protection of property and the preservation of the state while simultaneously permitting ordered change Legal Sanctions means by which the law enforces the decisions of the courts Law and Morals different but overlapping law provides sanction morals do not Law and Justice separate and distinct concepts justice is the fair equitable and impartial treatment of competing interests with due regard for the common good Classification of Law Substantive Law law creating rights and duties rules for enforcing substantive law Procedural Law Public Law individuals Private Law Civil Law Criminal Law law dealing with the relationship between government and law governing the relationships among individuals and legal entities law dealing with rights and duties the violation of which constitutes a wrong against an individual or other legal entity law establishing duties which if violated constitutes a wrong against the entire community Sources of Law fundamental law of a government establishing its powers and Constitutional Law limitations Judicial Law Common Law Equity body of law developed by the courts that serves as precedent for determination of later controversies body of law based upon principles distinct from common law and providing remedies not available at law Legislative Law statutes adopted by legislative bodies Treaties agreements between or among independent nations laws issued by the President or by the governor of a State Executive Orders Administrative Law body of law created by administrative agencies to carry out their regulatory powers and duties CHAPTER 9 Requirements of a Contract 1 Mutual Assent agreement parties to a contract must manifest by words or conduct that they have agreed to enter into a contract usual method of showing mutual consent is by offer and acceptance 2 Consideration each party to a contract must intentionally exchange a legal benefit or incur a legal detriment as an inducement to the other party to make a return exchange 3 Legality of Object 4 Capacity the purpose of a contract must not be criminal tortious or otherwise against public policy the parties to a contract must have contractual capacity certain persons such as those adjudicated incompetent have no legal capacity to contract others such as minors incompetent persons and intoxicated persons have limited capacity to contract all others have full contractual capacity Classifications of Contracts Bilateral and Unilateral Bilateral Contract contract in which both parties exchange promises each party is both a promisor a person making a promise and a promisee the person to whom a promise is made Unilateral Contract a contract in which only one of the parties made a promise Executed and Executory it a completed contract Executed Contract a contract fully performed by all of the parties to Executory Contract a contract in which one or more promises by any party to the contract are as yet unperformed or where the contract is wholly unperformed by one or more of the parties a contract that has yet to be fully performed Express Implied and Quasi Express Contract a contract in which the parties have manifested their agreement by oral or written language or both Implied Contract a contract that is inferred from the parties conduct not from spoken or written words Quasi Contract an obligation not based on contract that is imposed to avoid injustice Valid Void Voidable and Unenforceable Valid Contract a contract that meets all of the requirements of a binding contract it is an enforceable promise or agreement Void Contract an agreement that does not meet all of the requirements of a binding contract not a contract it is merely a promise or agreement having no legal effect Voidable Contract a contract but because of the manner in which it was formed or a lack of capacity of a party to it the law permits one or more of the parties to avoid the legal duties the contract creates fraud contract capable of being made void Unenforceable Contract a contract that is neither void nor voidable contract under which neither party can recover a contract for which the breach of which the law provides no remedy Promissory Estoppel a doctrine enforcing some non contractual promises Chapter 10 Elements of an Offer Offer an indication of willingness to enter into a contract Elements are Communication offeree recipient of offer must have knowledge of the offer and the offer must be made by the offeror person making offer to the offeree Intent determined by an objective standard of what a reasonable offeree would have believed Preliminary Negotiations inquiries or general discussions of potential contract terms Reasonable Person Test Advertisements an invitation to customers and the public to make offers to him to buy the goods not an offer because do not contain a promise leave unexpressed many terms that would be necessary to the making of a contract Offers made in excitement or jest Auctions auctioneer at an auction sale does not make offers to sell the property that is being auctioned but invites offers to buy Definiteness offer s terms must be clear enough to provide a court with a basis for giving an appropriate remedy Reasonable Certainty the terms of a contract must be reasonably certain so as to provide a court with a basis for determining the existence of a breach and for giving an appropriate remedy Requirement and Output Contracts a buyer s agreement to purchase the entire output of a seller s factory for a stated period or a seller s agreement to supply a buyer with all his requirements for certain goods Certainty Under UCC the Code provides standards by which omitted terms may be determined provided the parties intended to enter into a binding contract Duration and Termination Ways in which an offer may be terminated Lapse of Time Revocation Rejection Counteroffer Death or incompetency of the offeror or offeree Destruction of subject matter to which the offer relates Subsequent illegality of the type of contract the offer proposes Lapse of Time offer remains open for the time period specified or if no time is stated for a reasonable period of time Operation of Law Offeree s Rejection the offeree manifests his unwillingness to accept