B-Law ch.9

what are the elements of a contract?

1. Agreement: to have an enforceable contract there must be an agreement between the parties. This requires an offer by the offeror and an acceptance of the offer by the offeree. There must be a mutual assent by both parties. 2. Consideration: A promise must be supported by a bargained-for consideration that is legally sufficient. Money, personal property, real property, provision of services, and the like qualify as consideration. 3. Contractual capacity: the parties to a contract must have contractual capacity for the contract to be enforceable against them. Contracts cannot be forced against parties who lacked contractual capacity when they entered into the contracts. 4. Lawful object: The object of the contract must be lawful. Most contracts have a lawful object. However, contracts that have an illegal object are void and cannot be enforced

what are the two major provisions of the UCC?

1. Article 2 (sales): prescribes a set of uniform rules for the creation and enforcement of contracts for the sale of goods. These contracts are often referred to as sales contracts. ex: the sale of equipment, automobiles, computers, clothing, and such involve sales contracts subject to Article 2 of the UCC 2. Article 2A (leases): prescribes a set of uniform rules for the creation and enforcement of contracts for the lease of goods. These contracts are referred to as lease contracts. ex: leases of automobiles, aircraft, and other leases involving goods are subject to Article 2A of the UCC ***both are informal contracts

what are the defenses to the enforcement of a contract?

1. Genuineness of assent: the consent of the parties to create a contract must be genuine. If the consent is obtained by a duress, undue influence, or fraud, there is no real consent. 2. Writing and form: the law requires that certain contracts be in writing or in certain form. Failure of such a contract to be in writing or in proper form may be raised against the enforcement of the contract.

the restatement of law of contracts

A compilation of model contract law principles drafted by legal scholars. The restatement is NOT a law. However, lawyers and judges often refer to it for guidance in contract disputes because of its stature.

objective theory of contracts

A theory stating that the intent to contract is judged by the reasonable person standard and not by the subjective intent of the parties. Ex: the statement "I will buy your building for $2 million" is a valid offer because it indicates the offeror's present intent to contract. Ex: a statement such as "Are you interested in selling your building for $2 million?" is not an offer. It is an invitation to make an offer or an invitation to negotiate offers that are made in jest, anger, or undue excitement do not include the necessary objective intent Ex: The owner of company A has lunch with the owner of company B. In the course of conversation, company A's owner exclaims in frustration, "For $200 i'd sell the whole computer division!". An offer such as that cannot result in a valid contract

ex of bilateral contract:

Mary, the owner of a chic dress shop, says to peter, a painter "If you promise to paint my store by July 1, I will pay you $3,000." Peter says "I promise to do so". A bilateral contract was created at the moment Peter promised to paint the dress shop (a promise for a promise). If peter fails to paint the shop, Mary can sue him and recover whatever damages result from his breach of contract. Similarly, Peter can sue Mary if she refuses to pay him after he has performed as a promise

ex of unilateral contract:

Mary, the owner of a chic dress shop, says to peter, a painter, "If you promise to paint my store by July 1, I will pay you $3,000". This offer creates a unilateral contract. The offer can only be accepted by the painters performance of the requested act. If peter does not paint the shop by July 1, there has been no acceptance, and Mary cannot sure peter for damages. If Peter paints the shop by July 1, Mary owes Peter $3,000. If Mary refuses to pay, he can sure her to collect payment.

uniform commercial code (UCC)

a comprehensive statutory scheme that includes laws that cover aspects of commercial transactions. This is another major source of contract law. The UCC was first drafted by the National Conference of Commissioners on Uniform State laws in 1952. Its goal is to create a uniform system of commercial law among the 50 states.

e-contract

a contract that is formed electronically. Most of the new cyber space economy is based on this contract, as well as e-licenses.

Uniform Computer Information Transactions Act (UCITA)

a model act that establishes uniform legal rules for the formation and enforcement of electronic contracts & licenses.

contract

an agreement that is enforceable by a court of law or equity. Contracts are voluntarily entered into by parties. The terms of a contract become private law between the parties. Most contracts are formed without the aid of the court system. Most contracts are legally enforceable, unless it is an illegal contract.

classifications of contracts: bilateral &unilateral contracts

bilateral contract: a contract entered into by way of exchange of promises of the parties; "a promise for a promise". This exchange of promises creates an enforceable contract. No act or performance is necessary to create a bilateral contract. unilateral contract: a contract in which the offeror's offer can be accepted only by the performance of an act by the offeree; a :promise for an act"

what are the sources of contract law?

common law of contracts, uniform commercial code (UCC), and the restatement of the law contracts

common law of contracts

contracts law developed primarily by state courts. This is a major source of contract law.

classifications of contracts: formal and informal contracts

formal contract: a contract that requires a special form or method of creation. The restatement of contracts identifies the following types of formal contracts: -negotiable instruments: which includes checks drafts, notes, and certificates of deposit, and special forms of contracts recognized by the UCC. They require a special forms and their

incomplete or impartial performance:

generally, an offer to create a unilateral contract can be revoked by the offeror any time prior to the offoree's performance of the requested act. However, the offer cannot be revoked if the offeree has begun or has substantially completed performance ex: suppose Alan Matthews tells Sherry Levine that he will pay her $5,000 if she finishes the Boston Marathon. Alan cannot revoke the offer once Sherry starts running the marathon.

who are the parties to a contract?

offeror and offeree ex: Ross makes an offer to Elizabeth to sell his automobile to her for $10,000. In this case, Ross if the offeror, and Elizabeth is the offeree

offeree

the party to whom an offer to enter into a contract is made

offeror

the party who makes a offer to enter into the contract.

E-commerce

the sale and lease of goods and services and other property and the licensing of software over the internet or by other electronic means.