Rule of Law 101 Contract Law

What are the main holdings in the case of Henningsen v. Bloomfield Motors

1. Point is made that it is ok for buyers and sellers to qualify the warranty provisions. it is legal to say this replaces implied warranty etc. Person waves implied warranty, this is legitimate 2. What if the Buyer never read warranty? it doesn't matter if you don't read it but in this case the court ends up holding that the expressed warranty was unconscionable

Explain the doctrine of consideration

A contract is a bargain. It's an exchange of values. When each side gives up something of values. The values of the exchange is determined by the parties

Give an example of a contract typically covered by a statute of frauds.

A contract to pay someones else's debt A contract made in consideration of marriage A contract for the sale of an interest in land A contract that is not to be performed within one year of the time it is made A contract for the sale of goods for $500 or more

Warranty

A promise about a product made by either a manufacturer or a seller. A statement or agreement by a seller of property which is a part of the contract of sale. The truth of the statement is necessary to the validity of the contract.

contract is not enforced because of mistake

Both parties must have made a mistake as to a basic assumption on which the contract was based, and the mistake must have a material effect upon the agreed exchange. Sherwood v. Walker infertile cow for meat to be slandered. set price for infertile cow. the cow ended up being fertile. owner refused to sale cow. since they were both ignorant of the facts of the contract and did not locate the risk. the contract did not have to be enforced due to mutual mistake of the fact.

What is the objective theory of contract formation?

Contract formation is how the contract is formed. Objective theory of contract formation focuses on objective factors such as wors and conduct, rather then the promisor's actual state of mind. the purpose of this is to protect the reasonable expectations of the person to whom the promise directed

contracts are not enforced if they are entered into under duress

Duress occurs when one party is forced to enter into a contract that he would not have entered voluntarily. Blackmail, threats of physical harm, or threats of legal proceedings can all be forms of duress that will cause a court to find that a contract is not binding. Chandler v. Sanger ice man truck taken. and refused to give it back till he pays his money

How does a minimum wage law diminish the classical idea of freedom of contract

Freedom of contract states that you are free to enter into any agreement that you want to. The minimum wage law imposes public standards in privity contract.... it means that although you are free to enter into agreements with any employer. they have rules about their side of the contract public standards are being applied to private agreements

Give an example of a case in which a court refused to enforce an ADR clause. Why did it refuse?

Hill v. Gatway ordered computer

contracts are not enforced if they are entered into unconscionable

If a party was wrongly induced to enter into the contract or if the terms are grossly unfair to one party, the contract may not be enforced by the court. This usually occurs when one party is in a much stronger bargaining position than the other party. William v. Walker- Thomas Furniture Co.

Why does Feinman mean by saying that "contract law is a remedy of last resort"?

If problems do arise, persuading the other party, appealing to reasonable standards of behavior, or threatening economic sanctions are remedies much preferred to calling in lawyers and engaging in expensive litigations.

contract is not enforced because of impossibility

Impossibility of performance occurs when something happens after formation of the contract that makes performance of the contract by one of the parties impossible or impracticable. The circumstance creating the impossibility must not have been the fault of the party seeking to avoid his obligations under the contract. Taylor v. caldwell the owner of a music hall had agreed to rent it out to a local promoter for a series of concerts over four days. Between the time they made the agreement and the time scheduled for the performances, the music hall burned down. The promoter asked for damages because the owner of the hall couldn't make the music hall available for use on the days promised. The owner of the hall responded that he should be relieved of his contractual obligation because performance had become impossible; he could not make the music hall available when it no longer existed. the courts agreed because it was impossible for the music hall owner to preform his end, and they had not stated in the contract what would happen if the music hall burned down.

Why do we need contract law?

It provides a dispute resolution mechanism for exchange, and it demonstrates society's commitment to freedom and autonomy.

observation that the doctrines of implied warranty and unconscionability are limitations on freedom of contract.

Law that prohibits discrimination -you can't choose who you want to hire and whatever ground you wish - minmum wage law- limitations on freedom of contract - law: that requires people to be paid in money - limintations on contract - working conditions

examples of laws having this consequence

Lockner v. NY . New Yourk statute that limited number of hours people could work in bakery. supreme court dedared it unconstitutional because it undermined the worker freedom of contract, Held that bakers were able to make own decisions in their best interest

Does contract law include all types of contracts?

No, some agreements fall under special categories of law. like partnership law and labor law

What is meant by capacity to contract?

Someone must be of a certain age (usually 18), sound minds/judgement, and mental capable to enter into a contract.

What is a contract of adhesion?

Standardized agreement prepared by the dominat part to a transaction for that and many similar transactions, containing standard terms and usually presented to the other party on take it or leave it bass. insurance policies, credit cards agreements, etc

Schnell v. Nell

The court held that the consideration of one cent was not sufficient to render Schnell's promise enforceable. While inadequacy of consideration will not vitiate an agreement, that doctrine does not apply to a mere unequal exchange of money. The exchange would have been valid if the cent had been at item of indeterminate value because it was unique or different or sentimental.

How has objective theory of contract formation made contract law more like tort law?

The difference between contract law and tort law is that contract liability is assumed by the exercise of choice while tort liability is imposed by law even in the absence of contract,,, the objective theory of contract doesn't pay attention to the agreeing party' state of mind, which means that they enforce the contract even if they are not in positions where they are capable to entering a contract

contract is not enforced because of frustration of purpose

The party seeking relief must not have been at fault or have caused the frustration. Carrl v. Henry apartments rented out for carnation. parade go postponed. people did not want go through with these contracts.

What is supposed to be wrong with such adhesion contracts?

They allow a dominant part to impose its will when the contract terms are presented in such a way that they are unlikely to be read or understood at the time of contract and there is no opportunity for negotiation.

What are the warranties that are implied by law in sales contracts?

They must conform to the standards of the trade as applicable to the contract for sale. They must be fit for the purposes such goods are ordinarily used, even if the buyer ordered them for use otherwise. They must be uniform as to quality and quantity, within tolerances of the contract for sale. They must be packaged and labeled per the contract for sale. They must meet the specifications on the package labels, even if not so specified by the contract for sale.

What is a statute of frauds?

This objective is accomplished by prescribing that particular contracts not be enforced unless a written note or memorandum of agreement exists that is signed by the persons bound by the contract's terms or their authorized representatives

Identify the theoretical differences between tort and contract law

Under tort law the duties imposed are imposed by society. standards are implied whether you want them or not. regulated economy Under contracts the duties are self imposed, we decide to enter into it or not. freedom of contract. unregulated economy. free market

How does Hurley v. Eddingfield exemplify freedom of contract?

When the Hurley family sued Eddingfield for refusing to Burk's when she was in need of a physician. the court said he had not duty to come to Burks side. that is freedom from contract.

Explain the idea of freedom of contract

Will theory of contract encompasses freedom to contract and freedom from contract. Freedom to contract is the ability to enter into any kind of agreement that you want. In theory, your ability to enter into contracts is unrestrained by contract law. Freedom from contract is your ability to no enter into agreement unless you choose to do so.

Hamer v. Sidway

Yes. Judgment reversed. Valuable consideration may consist either in some right, interest, profit, or benefit accruing to one of the parties or some forbearance, detriment, loss, or responsibility given, suffered, or undertaken by the other party. Here, the court found that it is sufficient that P restricted his lawful freedom of action within certain prescribed limits upon the faith of D's agreement.

Oral Contract

an agreement made with spoken words and either no writing or only partially written.

What is "alternative dispute resolution"?

arbitration, it's a contract of adhesion (take it or leave it deal) saying that if there is a problem or disrupt that it will go to arbitration instead of the courts.

What are possible remedies for breach of contract?

expectations remedy a. courts enforce a non-performing party to carry out its bargain b. put the non-breaching party as good a positions as if the agreement had never been made Reliance remedies Have the breaching party compensate non- breaching party and put that person is as good as positions if that contract would have been carried out Securaty stove & mfc. co. v. Ama. Rwy. Express

When is specific performance of a contract available

historical reason money damages were the usual for the law courts. ordering someone to do something as a remedy was generally available only in equity courts 2.practical it would be difficult for the court to order someone to do something and then to determined whether he or she has complied 3. conceptual. monetary value.Contract law serves to protect people who rely on promises, but they can be adequately protected by giving them the monetary equivalent of the performance promised to them instead of the actual performance itself. Money damages are thought to be as good as performance because the injured party can use the money to procure a substitute on the market.

What are the so-called "moral consideration" cases

if one party gets the benefit of the contract before the contract is made, he cannot have a legal obligation to perform the terms of the agreement, because he already has the benefit. In this case, he has no legal obligation, but may feel he has a moral obligation. For example: a small-business owner comes across a car accident on the way to work. The owner renders first aid, and the injured person shows his gratitude by promising to give the owner $10,000 for his first aid. Because the owner's rendering of first aid happened prior to the injured person's promise, the injured person has no legal obligation to give anything to the business owner, but has a moral obligation.

Implied contract

in which the circumstances imply that parties have reached an agreement even though they have not done so expressly. For example, by going to a doctor for a physical, a patient agrees that he will pay a fair price for the service. If he refuses to pay after being examined, he has breached a contract implied in fact.

Written Contract

is a contract whose terms have been reduced to writing

Bilateral contract

is an agreement in which each of the parties to the contract makes a promise or promises to the other party. For example, in a contract for the sale of a home, the buyer promises to pay the seller £200,000 in exchange for the seller's promise to deliver title to the property.

express contract

is one in which the terms are expressed verbally, either orally or in writing.

unilateral contract

only one party to the contract makes a promise. A typical example is the reward contract: A promises to pay a reward to B if B finds A's dog. B is not obliged to find A's dog, but A is obliged to pay the reward to B if B finds the dog. In this example, the finding of the dog is a condition precedent to A's obligation to pay.

What are the elements of capacity to contract?

people who have a mental impairment; young people (minors); bankrupts; corporations (people acting on behalf of a company); and prisoners.

express warranties

whether spoken or written, and is basically a guarantee that the product will meet a certain level of quality and reliability. If the product fails in this regard, the manufacturer will fix or replace the product for no additional charge. Many such warranties are printed on a product's packaging or made available as an option.

implied warranties

which means it is guaranteed to work as claimed. For instance, a vacuum cleaner that does not create enough suction to clean an average floor is in breach of the implied warranty of merchantability. Federal law defines "merchantable" by the following criteria: