Contracts- Law 12

contracts

Contract law is

1. A formal relationship

2. voluntarily entered into

3. mutually agreed upon

Main Questions:

1. Is there a contract?

2. If the contact is breached, what is the remedy?

Valid contracts need:

1. Offer

2. Acceptance

3. Consideration

4. Capacity to contract

5. Certainty

Offer

a proposal to enter into an agreement

Acceptance

accepting the offer to enter into an agreement

Consideration

something of value must be exchanged

Capacity to contract

a person must be a certain age and of sound mind to enter into an agreement

Certainty

Contract is clear; all parties are certain of what they’re agreeing to

Can contracts be oral or written?

Yes

Broken contracts are called

A breach of contract

Remedies- Expectation Interest

The goal of the court is to put the innocent party in the position they would be in if the contract had been performed.

Eg: you mow a lawn and don’t get paid; you’re entitled to whatever money was agreed on

Remedies- Reliance Interest

The goal of the court is to put the innocent party in the position they would be in if the contract hadn’t been performed.

Eg: you spend $X getting ready for an event, you’re entitled to $X

Remedies- Specific Performance

The court can order the transfer of the actual item exchanged in the contract.

Eg: a contract for a sale of a rare artwork. You don’t want the equivalent value, you want the art itself.

Remedies- Injunction

The court can order the defendant to do something, or not do something

Eg: order a defendant not to open a competing business, where there was a valid non-compete clause in the contract

Mitigation of Damages

The plaintiff has the duty to mitigate (aka make as small as possible) their damages

Illegality

Contracts contrary to public policy are not enforceable

Duress (illegality)

contracts entered into because you are afraid of bodily harm are unenforceable

Undue influence (illegality)

where 2 parties enter contract and there is a power difference in the relationship

Illegality Case Studies

• Non- competition clause (lyons v. multari)

• Surrogacy contracts (Baby M)

• NDA’s (whistleblower and sexual assault)

Contract case studies

• Emoji texting contract

• ScarJo and disney