Intro to Contracts

Quote of the Day

“the whole duty of government is to prevent crime and to preserve contracts” - Lord Melbourne, British Prime Minister

Elements of a Contract

• offer

• agreement

• consideration

• legality

• capacity

• consent

• writing

Offer

all contracts begin when a person or a company proposes a deal

Agreement

once a part receives an offer, he must respond to it in a certain way

Consideration

there has to be bargaining that leads to an exchange between the parties

Legality

the contract must be for a lawful purpose

Capacity

the parties must be adults of sound mind

Consent

Certain kinds of trickery and force can prevent the formation of a contract

Consent

certain kinds of trickery and force can prevent the formation of a contract

Writing

while verbal agreements often amount to contracts, some types of contracts must be in writing to be enforceable

Davis Vs. Mason

• Mason (Plaintiff)

  • surgeon/apothecary in Thetford (English)

• Davis (defendant)

  • would not set up competing establishment within 10 miles of Thetford

  • within 14 years

  • if done so Davis would pay 200 pounds

• Davis agreed

• Mason fires Davis for misconduct which Davis denied

• Davis set up practice within 10 miles of Thetford to which Mason sued

• Davis claimed he agreed but said the contract should be illegal as it is unreasonable

• courts agreed with plaintiff

Bilateral Contract

a promise made in exchange for another promise

Unilateral Contract

a binding agreement in which one party has made an offer that the other party can accept only by action, not words

Executory Contract

an agreement in which one or more parties have not yet fulfilled their obligations

Executed Contract

an agreement in which all parties have fulfilled their obligations

Valid Contract

one that satisfied all the law’s requirements

Unenforceable Agreement

occurs when the parties intend to for a valid bargain but a court declares that some rule of law prevents enforcing it

Voidable Contract

an agreement that may be terminated by one of the parties

Void agreement

a contract that neither party can enforce, because the bargain is illegal or one of the parties had no legal authority to make it

Express Contract

an agreement with all the important terms explicitly stated

Implied Contract

the words and conduct of the parties indicate they intended an agreement

Performance & Discharge

if a party fully accomplishes what the contract requires, his duties are discharged

Remedies

a court will award money or other relief to a party injured by a breach of contract

Fallsview Glatt Kosher Caterers, Inc. Vs. Rosenfeld

• Fallsview (Plaintiff)

  • organized programs at Kutcher’s Country Club

  • providing accommodations, food, and entertainment

  • sued Rosenfeld for failing to appear or pay $24,050 for 15 members of his family

• Rosenfeld (defendant)

  • moved to dismiss claim that agreement was never in writing and was over $500

  • over $500 contracts must only be enforced when in writing

• dismissal was denied

Promissory Estoppel

• non-contract contract

• the defendant made a promise that the plaintiff relied on

Need What to use Promissory Estoppel

• the defendant made a promise knowing that the plaintiff would likely rely on it

• the plaintiff did rely on the promise

• the only way to avoid injustice is to enforce the promise

Quasi-Contract

the defendant received a benefit from the plaintiff and retaining that benefit would be unfair

Need What to use Quasi-Contract

• the plaintiff gave some benefit to the defendant

• the plaintiff reasonable expected to be paid for the benefit and the defendant knew this

• the defendant would be unjustly enriched if he did not pay 

Quantum Meruit

“as much as he deserves” - the damages in a quasi-contract case

Harmon Vs. Delaware Harness Racing Commision

• Harmon (Plaintiff)

  • Delaware harness racing commission asked him to be a judge

  • they suspended him without pay claiming he improperly changed a judging sheet to favor a horse

  • Harmon asked John Wayne to ask them if they would give Harmon his job back if he was acquitted

  • they agreed so Harmon did not look for other jobs

  • when Harmon was acquitted they did not give him his job back so he sued

• Harmon won in trial court but lost in superior court but won in Supreme court of Delaware when he claimed promissory estoppel 

Common law

many contract lawsuits continue to be decided using common-law principles developed by courts

Uniform Commercial Code

UCC article 2 governs the sale of goods

Goods

• anything moveable, except for money, securities, and certain legal rights

• in a mixed contract, Article 2 governs only if the primary purpose was the sale of goods

Lund Vs. Lund

• Wendell Lund (plaintiff)

  • sued his parents Orville and Betty Lund (Defendant) together even though they were divorced

• Wendell claimed to help around the house and paid half the real estate

• during the divorce Orville bought out Betty’s half and stayed on the farm

• Betty moved to Arizona and Wendell got nothing

• Wendell wanted ownership interest of the farm

• Wendell asked for his father to give him ownership of the land and his mother to pay over $500,000

• when court disagreed Wendell appealed but only against his mother