BCOR 3000 1st Edition Lecture 10 Outline of Last Lecture i. Negligence Issuesii. Strict Liabilityiii. Online Defamationiv. What is a Contract?v. Contract Law Sourcesvi. Contract Freedomsvii. Lucy v. Zehmer Caseviii. Contract Basic RequisitionOutline of Current Lecture I. Contract PartiesII. Contract CharacteristicsIII. Bilateral vs. UnilateralIV. Examples of Bilateral and Unilateral ContractsV. The Importance of FORMVI. Classifications—Formal vs. InformalVII. Quasi ContractsVIII. Contract InterpretationIX. Oral ContractsCurrent LectureContract Parties (“ors” do it to “ees”)• Offeror: Makes the offer to the offereeThese notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute.• Offeree: One who receives an offer….and can then accept, reject, or ignore• In law, an “or” usually does something to an “ee”• E.g. offeror makes offer to offeree•Contract Characteristics• Bilateral v. Unilateral– Addresses how the contract is formed– What does offeror seek from offeree in order to FORM the contract?– FORM—with every contract there is action; Do I want the action to be the formation or do I want the promise to be the formation of the contract and take action later?– Affects when contract comes into existenceBilateral vs. Unilateral• Bilateral: Seeks a promise from the offeree and then an action (2 steps to FORM contract)– “If you’ll promise to repair my car, I’ll pay you $350.00.”– Comes into existence with an exchange of promises• Unilateral: Seeks action only (1 step to FORM contract)– “I don’t care if you do it or not, but if you shovel my driveway today, I’ll pay you $25.”– Comes into existence with an exchange of action, no promises.• Most business contracts are which?—Bilateral. B/c businesses do not want to wonder; business’ want certainty and decision.Unilateral Examples:• Rewards (Returning Fifi, your dog, if got lost)• Car dealership promotion (in ad)– “If the last 3 numbers of your SS# match the last three numbers of the VIN#, we’ll give you $100.”• What is this?—Unilateral Contract• Must the dealership pay you if you match the #s?—yes, they entered into a contract. Bilateral v. Unilateral: When a Contract is Formed• Bilateral: Contract is formed upon the return promise– Once formed, both obligated• Unilateral: Contract is not formed until the action is done– No obligation, till act is done– Once done, the offeror is obligated• When does difference matter??—it matters upon the return promise b/c the bind both people into a bilateral; only an action with unilateral binds a contractClassifications:• Formal v. Informal– Checks with “Pay to the order of” are formal; must be in a particular form– Informal: not required to be in any certain form; most contracts are done this way• Express: Created by words– Can be oral or written– Most are created this way• Implied in fact: Based on conduct and reasonable expectations; fact is based on ACTions– Restaurant– Ex: Asked if patron wanted a drink and said yes. Although you did not promise to pay you are still required to pay.– Self-serve gasoline– Ready-to-eat food at grocery storeOther Characteristics• Executed v. executory– Based on timing– Executory: anything left undone; executory until everything is done– Executed: every obligation has been performed• Void v. Voidable– Void: a void check is not a check– Voidable = Void + able• One can make it void• Specific circumstance where someone can choose to make a decision to make a contract void• Unenforceable Contract—the court says there is a contract but we won’t do anything• Void v. unenforceable—the main point is that the court won’t do anythingQuasi Contract• No contract, but the court implies one (i.e. treats situation as if there were a contract).• Aka “Implied in law” contract• Based on preventing “unjust enrichment.”• Ex: “Are you my gf?—No she is my quasi gf.”—a sort-a-kind-of contract that is still applied by courts• Ex: Ambulance—no in a formal contract but will still have to pay for the ride• Ex: Taking advantage of some else’s mistake—Best Buy drops off TV at wrong address. So you take it in your home and set it up. Get a call from best Buy that they made a mistake. Best Buy comes and gets it.—Not required to pay.• Ex: Server brings our wrong food item and you eat it anyways—must still pay for it.Contract Interpretation• A law question (judge decides)- Question of Fact v. Law?—If law Judge will decide.• Plain meaning rule- Starting point- Ex: Contract where company sells you a car; 4 wheels and 1 steering wheel• Specific terms qualify general terms- specific prevision (“cats are okay”) will trump the general prohibition against pets• Handwritten or typed controls over pre-printed- supposedly print out last year’s lease to renew—change dates—rent increases by hand written scratch out and re-write—this will trump the typed contract• Ambiguities against the drafter- If the contract is unclear—it will be decided in the favor of the person who did not write the contract- b/c unclear with off-raod and on-road capabilities in contract—dealership lsot• Words control over numbers- Words will control/win over numbers- mistakes are more promineant when writing numbers (ex: 50,000 versus 500,000)• Wordsadvance princ. Object- certain words are specific to certain things within a contractOral Contracts• Most oral contract are legally valid and enforceable• Oral contracts are hard to prove in court• It will be difficult to enforce• But, you can be dragged into court by the other party…will be hard to prove but can go to court.• Enforceable….but beware…• Generally, get it in writing.• Do not make the mistake that b/c it is not in writing that you cannot be