Chapter 11

What is the role of contract law?

Contract law governs the formation and enforcement of promises. It distinguishes between promises that create moral obligations and those that are legally binding. It also identifies which excuses society accepts for breaking promises and what promises are contrary to public policy.

What is the difference between an offeror and an offeree?

• Offeror: The person making the offer.

• Offeree: The person to whom the offer is made

What are the two main sources of contract law?

1. Common law: Governs contracts unless modified by statutory law.

2. Uniform Commercial Code (UCC): Governs contracts related to the sale or lease of goods.

What is the primary function of contract law in the marketplace?

Contract law ensures stability, predictability, and certainty for both buyers and sellers. It provides enforceable promises, helping to avoid disputes and allowing for long-term planning, which is essential for a market economy.

What is the definition of a contract according to the document?

is an agreement that can be enforced in court. It involves at least two parties who agree to perform or refrain from performing some act now or in the future

What are the elements of a valid contract?

1. Agreement: Involves an offer and an acceptance.

2. Consideration: Something of value must be exchanged between the parties.

3. Contractual capacity: Both parties must have the legal capacity to enter into the contract.

4. Legality: The contract must have a legal purpose.

What does "consideration" mean in contract law?

refers to something of value that is exchanged between the parties to convince someone to enter into the contract. It can be money, services, or a promise to do or not do something.

What is the objective theory of contracts?

determines the intent of the parties based on what a reasonable person would understand from their words, actions, and circumstances, rather than what the parties subjectively intended.

What is a quasi-contract and when is it used?

an obligation imposed by a court to prevent unjust enrichment. It is used when one party unfairly benefits at the expense of another, even if no formal contract exists.

What defenses can affect the enforceability of a contract?

1. Voluntary consent: The consent of both parties must be voluntary. If the contract is formed due to fraud, undue influence, mistake, or duress, it may not be enforceable.

2. Form: The contract must be in the correct form (some contracts must be in writing to be enforceable).

What is the distinction between a promise and a contract?

_____ is an assurance by one party to do or not do something.
______ is a legally binding agreement, which includes promises that create enforceable obligations under the law.

What does "contractual capacity" mean?

refers to the legal ability of a party to enter into a contract. Both parties must be mentally competent, of legal age, and not under duress or undue influence to have the capacity to form a valid contract.

What is an illusory promise?

is a vague or non-specific promise that courts will not enforce. It appears to be an agreement but does not actually obligate the promisor to do anything.

A quasi-contract is an obligation imposed by a court to prevent unjust enrichment. It is used when one party unfairly benefits at the expense of another

even if no formal contract exists.