LEGL 2700 (chpt 8 Hackleman)

Chapter 8- Contract Formation

What are Contracts?

promises that are enforceable with predictable consequences for performance failures

What does Contract Law enable?

private agreements to be legally enforceable

Contracts

-enable buyers and sellers to account for future risks or have confidence in exchanging valuables

-provides flexibility and precision in business dealings

What are the 2 sources of contract law?

legislation and common law

Legislation of Contract Law

includes uniform commercial code and contracts for goods

Common Law of Contract Law

includes judges' decisions and contracts for things other than goods

Classifications of Contracts

1. bilateral & unilateral contracts

2. express and implied-in-fact contracts

3. implied-in-law or quasi contracts

What are the terms for Contractual Enforcement?

-enforceable

-unenforceable

-valid

-void

-voidable

What are the terms for Contract Performance?

executed contract and executory contract

Executed Contract

parties have performed their promises

Executory Contract

parties have not yet performed their agreement

What are the requirements for an Enforceable Contract?

-offer

-acceptance

-consideration

-capacity

-legality

Offer

-a specific promise and a specific demand (offeree & offerore)

-Ex: "I'll give you $100 for the hotdog" and the other person then accepts

-will expire at a reasonable amount of time- termination

What occurs before acceptance?

-revocation: retracting

-rejection: offeree rejects offer

-counter offer: offeree makes counter offer, when the tables literally turn

-lapse of time- too much time has passed

-termination by operation of law

Acceptance of Offer

-needed for an offer

-must match the offer exactly-- "mirror image rule"

-bilateral contract

-don't change the terms

What happens when silence is not accepted?

offeree doesn't have to respond to an offer

Deposited Revocation/Acceptance Rule is also known as.....

mailbox rule

Deposited Revocation/Acceptance Rule

it's done, it's accepted

UCC 2207

states an expression of acceptance

What are the defenses to Contract Enforcement?

improper form and meeting of the minds

Capacity of Parties

minors and intoxicated or mentally incompetent persons

Minors

-cannot be legally bound to contractual promises with exceptions for necessaries of life

-these contracts are voidable at the election of the minor

Intoxicated or mentally incompetent persons

contracts are voidable depending on the person's capacity to understand the contract's nature and purpose

Lawful Purpose

-contracts that require commission of a crime or tort or violate accepted standards of behavior are void

-these contracts typically don't take action on such contracts

What does is mean when a "meeting of the minds" in lacking?

-fraud

-mistake (mutual mistake & unilateral mistake)

-duress

-undue influence

Oral Contracts

-generally as enforceable as written agreements

-informal

-everyday examples: buying fast food & vending machines

Statute of Frauds

-legal requirement that certain contracts be in writing

Examples of Business Contracts that are required in writing

-sale of an interest in land

-collateral promise to pay another's debt

-contracts that cannot be performed in a year

-sale of goods of $500 or more

-other contracts based on state statutes

What are the exceptions to the writing requirement?

-part performance

-judicial admission

-rules involving goods

Consideration

for each promise (trips people up)

Steps for Consideration

-figure out if incentive exists

-receipt of a legal suffering or legal detriment

-must be bargained for

-form of money usually

-promise to do something you can't do

-refrain to do something

Cord and Satisfaction

reaching a compromise

Prior Consideration

-NO consideration

-performance made before discussing agreement doesn't count

Preexisting Consideration

-you can't use it as consideration if you were already supposed to do it

UCC Exception

-sale of goods

-ex: product becomes more expensive to produce, so price goes up

Promise to give a gift

not binging as a contract because no bargain or consideration supports the promise