Chapter 9: Introduction to Contacts

Three Main Elements of a Contract

- offer - acceptance - consideration Offer and acceptance must manifest a "meeting of the minds": "mutuality of obligation" and "mutual capacity." They also need "legality" and "capacity"

Promissory Estoppel

An "equitable" (as opposed to "legal"). To avoid injustice, court enforces a promise that does not meet the definition of a "contract" but that the plaintiff has justifiably relied on to their detriment. Elements: - was the promise one that the promisor should reasonably have expected to induce action or forbearance? - did the promise induce such action or forbearance? - is enforcement of the promise necessary to avoid injustice?

Express Contract

An agreement that is stated in words either orally or in writing

Quasi Contract or Restitution

An obligation (equitable doctrine) not based upon a contract that is imposed by law to avoid injustice and to prevent one person from being unjustly enriched at another's expense; also called an implied in law contract. Ex. having a painter paint your house when they thought it was your neighbors house but you knowingly let them paint it

Uniform Commercial Code (UCC)

Article 2 of the UCC governs the sales of goods: Sales-- the transfer of title from seller to buyer Goods-- tangible personal property (personal property is all property other than an interest in land)

Contract

Binding agreement that the courts will enforce. It is a promise or a set of promises for breach of which the law gives a remedy, or the performance of which the law in some way recognizes that duty.

Voidable Contract

Contract capable of being made void. One person can get out of this contract if there is a problem. Doesn't mean this person chooses to get out. ex. fraud, misrepresentation.

Unenforceable Contract

Contract for the breach of which the law provides no remedy

Bilateral Contract

Contract in which both parties exchange promises.

Unilateral Contract

Contract in which only one party makes a promise. Accepted by taking an action (exchange of a promise for an action).

Implied in Fact Contract

Contract in which the agreement of the parties is inferred from their conduct. Not expressed in words or written, but clearly implied the terms of the contract. ex. when you go to an emergency room, a doctor assumes the person will pay

Mutual Assent

The parties to a contact must manifest by words or by conduct that they have agreed to enter into a contract

Quasi Contract or Restitution--Remedy

The plaintiff recovers the reasonable value of the benefit she conferred upon the defendant

Legality of Object

The purpose of contract must not be criminal, tortious, or otherwise against public policy

Promissory Estoppel--Remedy

A court will enforce the promise to the extent necessary to avoid injustice

Quasi Contract or Restitution--Requirements

A court will impose a quasi contract or restitution when: 1) the plaintiff confers a benefit upon the defendant 2) the defendant knows or appreciates the benefit, and 3) the defendants retention of the benefit is inequitable (unjust for that party to have that benefit)

Promissory Estoppel--Requirements

A promise is made under circumstances that should lead the promisor reasonably to expect that the promise would induce the promisee to take definite and substantial action, and the promisee does take such action

Void Contract

No contract at all; without legal effect

Valid Contract

One that meets all of the requirements of a binding contract

Common Law

Most contracts are primarily governed by state common law: - employment contracts - service contracts - insurance contracts - real property (land and anything attached to it) - patents and copyrights

Executed Contract

Contract that has been fully performed by all of the parties

Executory Contract

Contract that has yet to be fully performed

Consideration

Each party to a contract must intentionally exchange a legal benefit or incur a legal detriment as a inducement to the other party to make a return exchange

Breach

Failure to properly perform a contractual obligation

Capacity

Meaning that a person can make or enter into a contract. Categories considered: infancy, minors, intoxication, insanity