Chapter 9 introduction to contracts The essence of a contract is that it is a legally enforceable promise or set of Contracting let us create a type of private law Contracts facilitate the planning that is necessary in a modern industrialized promises society Evolution of contract law First to use idea of contract Egyptians and Mesopotamians Common law courts of England has developed a variety of theories to justify enforcing a certain promise 19th century industrial revolution created the formal contract we now Standardized form contracts contracts that are pre printed by one party and presented to the other party for signing know Methods of contracting Written Oral Basic elements of a contract Offer Acceptance Consideration Capacity to contract Legal performance LAMBERT V BARRON Lambert and Barron were friends Lambert was a chairman and had experience in resolving contruction disputes Barron is a commercial construction contractor Barron was having trouble with his business Lambert flew to Farmerville to help barron Prior to Lambert s flight Barron s assistant sent him some info about the company and the problems they were having Before Lambert flew back to New Orleans he and Barron contracted for Lambert to provide consulting services for Barron Lambert told him he charged his lcients 3 100 per months and minimum term was 1 year In 2000 Lambert billed Barron for 34 000 balance owed on the alleged oral contract Barron only paid him 3 100 Lambert filed a suit against Barron for breach of contract Trial court dismissed Lambert s suit and he appealed According to Barron he never accepted the oral contract although sometimes silence is seen as agreement or consent Barron provided Lambert the documentation without any indication that his friend s review of the project would require compensation Affirmed in favor of Barron No contract was formed between the parties relationships was that of a friend helping a friend TYPES OF CONTRACTS Bilateral Both parties exchange promises and the contract is formed as soon as the promises are exchanged Promisor and Promisee Unilateral only one party makes a promise One sided agreement Ex frequent client cards Donald trump unilateral contract case was dropped orangutan Valid contract that meets all of the legal requirements for a binding contract Enforceable in law Unenforceable contract that meets the basic legal requirements for a contract but may not be enforceable because of some other legal rule Voidable contracts in which one or more of the parties have the legal right to cancel their obligations under the contract Injured party has the right to cancel the contract if the chooses Ex someone can cancel the contract if fraud mentally ill minors etc Void agreements that create no legal obligation and for which no remedy will be given in the event of a breach Bad contracts that violate the law or public policies Express the parties have directly stated the terms of their contract orally or in writing at the time the contract was formed Implied when the surrounding facts and circumstances indicate that an agreement has in fact been reached going to the doctor Executed a contract is executed when all of the parties have fully performed their contractual duties Executory a contract is executor until such duties have been performed 2 SOURCES OF LAW GOVERNING CONTRACTS 1 Article 2 of the Uniform Commercial Code statutory law in every state Article 2 only applies to contracts for the sale of goods Tangible movable property can vary from state to state 2 Common law of contract court made law that is in a constant state of evolution The code does not change all of the traditional contract rules Where no specific code rule exists traditional contract law rules apply to contracts for the sale of goods The courts have demonstrated a significant tendency to apply code contract concepts by analogy to some contracts that are not technically covered by article 2 The code is generally more flexible than the common law of contracts The code recognizes the concept of an unconscionable contract one that is fairly grossly unfair or one sided and it gives the courts broad discretionary powers to deal fairly with such contracts The code distinguishes between merchant and non merchants by holding merchants to a higher standard in some cases Restatement second of contracts attempts to reflect the significant changes that have occurred in contract law in the years following the birth of the first restatement Doesn t have the force of law NON CONTRACT OBLIGATIONS Quasi contract represents an obligation imposed by law to avoid injustice not a contractual obligation created by voluntary consent Painting house without contract because house looks similar wrong house can t sue for breach of contract PALESE V DELAWARE STATE LOTTERY OFFICE Palese bought five Delaware state lottery tickets He won the lottery but lost the ticket he only had the play slip with the Called the lottery office and they told them he had to wait a year before the winning numbers office could review his claim 11 months later the unclaimed price was transferred to the state s general He filed a lawsuit against Delaware state lottery office seeking to collect the Palese s complaint dismissed for failure to state a claim on which relief can fund lottery jackpot be granted Promissory estoppel idea that courts have developed to deal with the unfairness that would sometimes result from the strict application of traditional contract principles Chapter 10 Offer first step If you agree to these terms we have a contract Indication of intent of contract details Specificity on the terms of the contract price nature of the job to be perform etc Communication of the offer Meram V McDonald Meram s business card was selected to win a million dollars McDonald millionaire explain that he would give him 1 dollar per year for the next million years Meram sued him for breach of contract Unreasonable to believe it was a real deal Was it unreasonable because there was no known recipient to the offer McDonald lost the case Advertisements are generally not considered offers they are considered invitations to offers Exception if the advertisement is very specific and limits the number of oferees coat example PepsiCo jet teenager paid 700 000 sued PepsiCo for breach of contract Reward flyers are usually an offer for a unilateral contract It becomes a contract once the person performs returns the missing object if a person