Contract Law Overview

Contract Law

• A contract is a legally enforceable agreement between parties outlining their obligations and expectations.
• Breach of contract can result in legal consequences.
• Common law, UCC (Uniform Commercial Code), and e-commerce regulations are primary sources of contract law in the US.

Types of Contracts

• Bilateral: Both parties make promises.
• Example: Student promises to attend classes and university promises to provide education.
• Unilateral: One party gives a promise, the other fulfills an obligation.
• Example: Reward for finding a lost item.
• Express: Parties express their promises explicitly.
• Example: Real estate sales contract.
• Implied: Promises are inferred from the parties' actions.
• Example: Doctor's appointment.

Validity and Formation

• Valid: Contracts that meet all essential elements to be legally enforceable.
• Example: Student's contract with AUB.
• Void: Contracts with illegal elements that are unenforceable.
• Example: A promise to break the law (like murder).
• Voidable: Contracts that can be set aside by injured party (due to incapacity or fraud).
• Example: A contract with a minor or under duress.
• Formal: Requires specific legal procedures.
• Example: Real estate purchase (registration).
• Informal: No special procedures.
• Example: Friendly verbal agreement.
• Offer: Clear and definite proposal from one party to another.
• Example: Job offer email (must have essential parts to be valid).
• Acceptance: The offeree's agreement to the offer’s terms.
• Example: acceptance must mirror the offer's terms, according to mirror image rule.
• Consideration: Value exchanged between parties.
• Example: Cash for goods.
• Capacity: Legal ability to enter into a contract. Parties usually must be 18yrs of age and have mental capacity.
• Legality: Agreement is not in conflict with the law.
• Example: contract violating criminal law, is invalid.

Additional Contract Concepts

• Counteroffer: Rejection with a new offer proposing different terms.
• Consideration: Something of value exchanged between both parties (giving up something of value).
• Legal Capacity: The legal ability to enter into a contract (age, mental state).
• Legality: Contracts cannot be against the law.
• Statute of Frauds: Specific contracts (e.g. those in excess of a certain amount ) require a written agreement to be enforceable.
• Misrepresentation: False information about the contract, which is a legal invalidity for contract.
• Fraud: Intentional misrepresentation with the intent to deceive.
• Duress: Contract entered into due to coercion.
• Undue Influence: Contract influenced by close relationships or dominance (e.g. abusive relationship).
• Impossibility: Unforeseen circumstances prevent performance.
• Commercial Impracticability: Unexpected event makes contract performance extraordinarily difficult.
• Force Majeure: Unexpected events beyond party's control prevent performance (e.g. war).

Remedies for Non-Performance

• Compensatory Damages: Return the non-breaching party to their previous position.
• Incidental Damages: Costs directly related to the breach.
• Consequential Damages: Losses stemming from the breach.
• Liquidated Damages: Agreed-upon damages for breach in advance.

Third-Party Rights

• Third-Party Beneficiaries: Non-contracting parties who benefit.
• Assignment: Transfer of contractual rights.
• Delegation: Transfer of contractual duties.

Other Important Details

• Uniform Commercial Code (UCC): Governs sales contracts for goods.
• Equal Credit Opportunity Act (ECOA): Protects individuals from discrimination.
• Fair Credit Billing Act: Protects consumers regarding credit billing issues.
• Bankruptcy Abuse Prevention and Consumer Protection Act: Establishes rules for bankruptcy filings.
• Uniform Electronic Transactions Act (UETA): Recognizes electronic signatures,
• United Nations Convention on Contracts for the International Sale of Goods (CISG): Applies to international sales Contracts.