Ch.9 Contracts

Definition of a contract

A legally enforceable set of promises.

Primary purpose of contracts

To provide certainty, predictability, and facilitate the exchange of goods and services.

Two main sources of contract law

Common law and the Uniform Commercial Code (UCC).

Scope of UCC Article 2

Applies to all contracts for the sale of goods (tangible, movable personal property).

Definition of a merchant under the UCC

One who regularly deals in the goods being sold or possesses special knowledge of them.

CISG applicability

Applies exclusively to commercial, merchant-to-merchant international sales of goods.

Promissory estoppel

Enforces good faith promises to prevent injustice and avoid detrimental reliance without a formal contract.

Requirements for promissory estoppel

A foreseeable, significant reliance on a promise where injustice would result without enforcement.

Quasi contract

A legal fiction created by courts to prevent unjust enrichment when no valid contract exists.

Breach of implied contract

An obligation created by law based on party conduct and relationships without a written agreement.

Is there a contract? Is there a valid…

offer, acceptance, consideration

if there is a valid contract.. Is the contract enforceable? Conract is not enforceable if it is..

voidable due to lack of capacity and voluntarily consent, void bc contract is illegal, and its unenforceable under the statute of frauds

why have contracts?

protects small or weaker businesses and law function of facilitating planning (certainty of transactions)

the UCC promotes..

fair dealing and higher standards in marketplace behavior

real estate and services (intangible), bonds, stocks, fall under which contract law?

common law

if someone is constructing your home with bricks would it fall under UCC or Common law?

It would fall under common law bc the SERVICE is predominant (costs more) for the constructor to build your home than doing it with bricks

UCC article 2 focuses on…

reasonably practical rules

(UCC) courts focus on…

marketplace conduct and expectations

(UCC) some sections impose a higher standard on ___; but code applies to ____ and _____

merchants, merchants and non-merchants

forgetting to put a price on the delivery item is what? (under common law)

under common law it is a voidable contract since there was no definitiveness

forgetting to put a price on the delivery item is what? (under UCC)

what should the price be

CISG

international commercial sales of goods, applies only to merchants, mirror image rule, no writing needed

UCC

any sale of goods, applies to any party, sale og goods in excess of $500 requires a writing

valid contract

meets all legal rules for a contract, enforceable in court

• meets basic elements of a contract

• will not be enforced bc of another legal rule or condition

• statute of Frauds

unenforceable contract

void contract

cannot be enforced, illegal agreement (stealing a car)

unilateral contract

one party makes a promise, the other party acts, rewards (help me look for my dog)

bilateral contract

both parties make a promise and act, ex: customers order goods and promises to pay

executed contract

all parties have performed their duties

executory contract

contract has not been performed in full

expressed contract

can have implied terms, parties directly state their intentions, ex: paint my house for $500

trespass of chatell

intentionally interferes with another persons lawful property