Week 4 Business Law Notes

contract

legally enforceable promise or set of promises

freedom of contract

the idea that contracts should be enforced because they are the products of the free wills of their creators, who should within broad limits, be free to determine the extent of their obligations

offer

a proposal by one person to another that is intended to create legal relations on acceptance by the person to whom it is made

acceptance

the actual or implied receipt and retention of that which is tendered or offered

consideration

in contract law, a basic requirement for an enforceable agreement under traditional contract principles defined in this text as legal value, bargained for and given in exchange for an act or promise. In corporation law, cash or property contributed to a corporation in exchange for shares, or a promise to contribute such cash or property.

legal

according to the principles of law, according to the method required by statute; by means of judicial proceedings; not equitable

unilateral contracts

a contract formed by an offer or a promise on one side for an act to be done on the other, and a doing of the act by the other by way of acceptance of the offer or promise, that is, a contract wherein the only acceptance of the offer that is necessary is the performance of the act

bilateral contracts

a contract in which the promise of one of the parties forms the consideration for the promise of the other

valid contracts

contract that meets all of the legal requirements for a binding contract

• must be ““ to be enforced in court

unenforceable contract

contract that meets the basic legal requirements for a contract but ma not be enforceable because of some legal rule

voidable contract

contract where those in which harmed parties have the legal right to cancel their obligations under the contract

void contract

contracts where agreements that create no legal obligations and for which no remedy will be given

express contract

contract where parties have directly stated the terms of their contract orally or in writing at the time the contract was formed

implied contract

contract where the surrounding facts and circumstances indicate that an agreement has in fact been reached

executed contract

contract where all of the parties have fully performed their contractual duties

executory contract

contract where the duties of the contract haven’t been fully performed yet

Which two bodies of law govern contracts?

• Article 2 of the Uniform Commercial Code

• common law of contracts

Article 2 expressly applies only to

contracts for the sale of goods

• goods are tangible, movable personal property

Common law of contracts applies to

• services

• real estate

• intangibles (stocks and bonds)

unconscionable

in contract law, a contract that is grossly unfair or one-sided; one that “shocks the conscience of the court”

merchant

under the Uniform Commercial Code, one who regularly deals in goods of the kind solid in the contract at issue, or holds himself out as having special knowledge or skill relevant to such goods, or who makes the sale through an agent who regularly deals in such goods or claims such knowledge or skill

noncontract obligations

circumstances that impose the duty on a person to pay for a loss or benefit despite the absence of the requirements for formation of a contract

quasi-contract

the doctrine by which courts imply, as a matter of law, a promise to pay the reasonable value of goods or services when the party receiving such goods or services has knowingly done so under circumstances that make it unfair to retain them without paying for them

promissory estoppel

an equitable doctrine that protects those who foreseeable and reasonably rely on the promises of others by enforcing such promises when enforcements is necessary to avoid injustice, even though one or more of the elements normally required for an enforceable agreement is absent

offer

a proposal by one person to another that is intended to create legal relations on acceptance by the person to whom it is made

offeror

the party who makes an offer

offeree

the party to whom an offer is made

option

a separate contract in which an offeror agrees not to revoke her offer for a stated period of time in exchange for some valuable consideration

firm offer

under the Uniform Commercial Code, a signed, written offer by a merchant containing assurances that it will be held open, and which it is not revocable for the time stated in the offer, or for a reasonable time if no such time is stated

to be a firm offer, an offer must

• be made by an offeror who is a merchant

• be contained in signed writing

• give assurances that the offer will be kept open

acceptance

the actual or implied receipt and retention of that which is tendered or offered