Chapter 9 Contracts PDF

Development of the Law of Contracts Common Law most contracts are primarily governed by state common law, including contracts involving employment, services, insurance, real property (land and anything attached to it), patents, and copyrights The Uniform Commercial Code (UCC) Article 2 of the UCC...

Development of the Law of Contracts Common Law most contracts are primarily governed by state common law, including contracts involving employment, services, insurance, real property (land and anything attached to it), patents, and copyrights The Uniform Commercial Code (UCC) Article 2 of the UCC governs the sales of goods Sale  the transfer of title from seller to buyer Goods tangible personal property (personal property is all property other than an interest in land) Definition of a Contract Contract binding agreement that the courts will enforce Breach failure to perform a contractual obligation properly Requirements of a Contract Mutual Assent the parties to a contract must manifest by words or conduct that they have agreed to enter into a contract 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 Legality of Object the purpose of a contract must not be criminal, tortious, or otherwise against public policy Capacity the parties to a contract must have contractual capacity Classification of Contracts Express and Implied Contracts Implied in Fact Contract contract in which the agreement of the parties is inferred from their conduct Express Contract an agreement that is stated in words either orally or in writing Bilateral and Unilateral Contracts Bilateral Contract contract in which both parties exchange promises Unilateral Contract contract in which only one party makes a promise Valid, Void, Voidable, and Unenforceable Contracts Valid Contract one that meets all of the requirements of a binding contract Void Contract no contract at all; without legal effect Voidable Contract contract capable of being made void Unenforceable Contract contract for the breach of which the law provides no remedy Executed and Executory Contracts Executed Contract contract that has been fully performed by all of the parties Executory Contract contract that has yet to be fully performed Promissory Estoppel Definition a doctrine enforcing some noncontractual promises Requirements a promise made under circumstances that should lead the promisor reasonably to expect that the promise would induce the promisee to take definite and substantial action and the promisee does take such action Remedy a court will enforce the promise to the extent necessary to avoid injustice Quasi Contract or Restitution Definition an obligation not based upon a contract that is imposed by law to avoid injustice; also called an implied in law contract Requirements a court will impose a quasi contract or restitution when the plaintiff confers a benefit upon the defendant, the defendant knows or appreciates the benefit, and the defendant's retention of the benefit is inequitable Remedy the plaintiff recovers the reasonable value of the benefit she conferred upon the defendant Questions Owen telephones an order to Hillary's store for certain goods, which Hillary delivers to Owen. Nothing is said by either party about price or payment terms. What are the legal obligations of Owen and Hillary? Minth is the owner of the Hiawatha Supper Club, which he leased for two years to Piekarski. During the period of the lease, Piekarski contracted with Puttkammer for the resurfacing of the access and service areas of the supper club. Puttkammer performed the work satisfactorily. Minth knew about the contract and the performance of the work. The work, including labor and materials, had a reasonable value of \$2,540, but Puttkammer was never paid because Piekarski went bankrupt. Puttkammer brought an action against Minth to recover the amount owed to him by Piekarski. Will Puttkammer prevail? Explain. Jonathan writes to Willa, stating, "I'll pay you \$150 if you reseed my lawn." Willa reseeds Jonathan's lawn as requested. Has a contract been formed? If so, what kind? Explain. Calvin uses fraud to induce Maria to promise to pay money in return for goods he has delivered to her. Has a contract been formed? If so, what kind? What are the rights of Calvin and Maria? Anna is about to buy a house on a hill. Prior to the purchase, she obtains a promise from Betty, the owner of the adjacent property, that Betty will not build any structure that would block Anna's view. In reliance on this promise, Anna buys the house. Is Betty's promise binding? Why or why not?