Contract Law

Explain the following terms as applied to contracts: unilateral and bilateral; express and implied; oral and written

----Unilateral: 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. ---Bilateral: 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 ----expresss: is one in which the terms are expressed verbally, either orally or in writing. ------Implied: 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 resturant for a meal, a customer agrees that he will pay a fair price for the service. If he refuses to pay after being served, he has breached a contract implied in fact. ---- Oral: an agreement made with spoken words and either no writing or only partially written. ----- Written: is a contract whose terms have been reduced to writing

When is specific performance of a contract available? Why is it not often available? (pp.207-8)

1.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 determine 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 . Not Available: The principle that money damages are an adequate substitute for performance rests on a particular view of the role of contract in society.

What is "alternative dispute resolution"? What are the benefits of ADR supposed to be? Does it (always) work out as expected?

ADR is put in the contract that means the party entering agrees to go to arbitration, not court, unless an issue should come about. -The benefit for the companies are that it costs them less in the long run because most arbitrators are supposed to side in favor of the companies. -Benefit for consumer is that it makes the product cheaper.

What is a contract of adhesion? What is supposed to be wrong with such contracts?

Contract drafted by a party in a position of power, giving the weaker party no choice. Terms are unlikely to be read or understood at the time of contract; there is no opportunity for negotiation.

Sometimes contracts are not enforced if they are entered into under duress, or if they are "unconscionable". Give examples

Duress is only used in circumstances where the party is given no choice but to contract. Duress example: (Post v. Jones). 2 whaling vessels come across distressed vessel; offered to save vessel if they would sell their cargo. Unconciousability: one party has limited choices and poor bargaining position and a deal seems grossly unfair. Unconsciousability example - (Williams versus Walker Furniture Store) court rules that Williams lacked "meaningful choice" in entering the contract because of her economic circumstances and the legalese of the terms and whether the resulting deal was "unreasonably favorable" to the store.

What are possible remedies for breach of contract? What is the essential difference between damages based on expectation and damages based on reliance? Give examples

Expectations remedy a. Force party to carry out their party of contract (specific performance) b. puts non breaching party in position as contract was never carried out. Reliance remedies a. Position as if agreement had never been made (money damages) b. puts non breaching party in as good position as contract was never carried out

20. How does a minimum wage law diminish the classical idea of freedom of contract? What are some other examples of laws having this consequence?

Freedom of contract states that you are free to enter into any agreement that you want to. The minimum wage law makes public standards in privity contract. Example: Lockner v. NY . New York statute that limited number of hours people could work in bakery. supreme court declared it unconstitutional because it undermined the worker freedom of contract, Held that bakers were able to make own decisions in their best interest

How does the doctrine of privity of contract apply to implied warranties: see Hammond and Henningsen

Henningsen vs. Bloomfield Motors- The court held that implied warranty is not clocked by privity of contract... when a manufacturer puts a new automobile on the market and promotes its purchase by the public, an implied warranty is that it is suitable use for the customer. Hammond- The court held that there was an implied warranty that extends to anyone legitimately using the product, not just the person who bought it.

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

Hill v. Gateway (Plaintiff purchased a computer from Defendant by placing an order over the phone. Defendant included a list of terms that become part of the contract if the purchaser does not return the computer within thirty days. The terms were not read to Plaintiff over the phone. The list of terms sent to Plaintiff included an arbitration provision. ) Court finds that even though Plaintiff did not read the terms, Plaintiff accepted the terms by not returning the computer within thirty days

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

INTEFERES WITH FREEDOM OF CHOICE -employment discrimination - minmum wage law/hour - people to be paid in money - working conditions

1. Why do we need contract law? Why does Feinman mean by saying that "contract law is a remedy of law resort"? (see Feinman p.184)

It puts people in position for future business decisions. Typically people will solve without going to court; last resort.

Does contract law include all types of contracts? (p. 182)

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

What is a statute of frauds? (pp. 192-4) Give an example of a contract typically covered by a statute of frauds

Requirement that certian contracts be memorialized in writing to be enforcable. • 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

Identify the theoretical differences between tort and contract law

TORT LAW the duties imposed are imposed by society. Gov't regulations. CONTRACTS LAW the duties are self-imposed, we decide to enter into it or not. freedom of contract. free market.

What is the Uniform Commercial Code? (p.188) Why does it exist?

The UCC is a general commercial statute that controls areas of contract law such as the sale of goods and leases of personal property. It was drafted to make commercial law the same across the country, so that it is easier to do business around the nation.

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

When a manufacturer puts a new automobile on the market and promotes its purchase by the public, an implied warranty is that it is suitable use for the customer. xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxAbsence of agency between the manufacturer and the dealer who makes the ultimate sale is irrevelant

Explain the idea of freedom of contract (p. 185). How does Hurley v. Eddingfield exemplify this?

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. 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

What were the outcomes regarding consideration in Schnell v. Nell and in Hamer v. Sidway?

• (Schnell)The court held that the consideration of one cent was not enough to make Schnell's promise enforceable. While inadequacy of consideration will not destroy 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. • Hammer v. Sidway- Forbearance can constitute adequate consideration sufficient to form a valid and enforceable contract.

Explain the doctrine of consideration. (p. 196)

• 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

What is the objective theory of contract formation? (p.191) How has this made contract law more like tort law?

• Contract formation is how the contract is formed. Objective theory of contract formation prohibits the enforcement of contracts that appear to be too good to be true. • They enforce the contract even if they are not in positions where they are capable to entering a contract.

Contracts are not enforceable if there is mistake, impossibility, or frustration. Explain and give an example of each

• Mistake- if a mistake is made by one of parties and is caught early. EX: a contractor makes an arithmetical error in figuring the cost of the materials needed at $ 1,000 instead of $11,000. Contractor submitted the bid for much less than was actually needed, the owner accepted. The contractor will be allowed out of the bid because a mistake was made and caught early. • Impossibility- if you cannot do something, cannot be held liable. 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 4 days. Before the concerts could take place, the hall burned down. The promoter sued for damages because the owner couldn't make the hall available. The owner held that he should be let out of the contract because he couldn't uphold his part of the contract since the hall no longer existed. • Frustration- the purpose of entering into a contract has been frustrated. King of England scheduled a coronation but then fell ill and had to postpone it. People had rented rooms in anticipation of the procession for much higher prices than normally, they sought to be executed from their contracts. Courts granted an excuse in this circumstance

What is the "preexisting duty rule"? (p. 197) Give an example

• Preexisting duty rule- when the performance of a legal duty is classified as consideration. Ex. Hammer v. Sidway

What is meant by capacity to contract? What are the elements of capacity to contract? (p. 194)

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

What is a warranty? What are express and implied warranties? What are the warranties that are implied by law in sales contracts?

• Warranty- A promise to support quality of product; written or oral. • Express warranty- can be written or oral; guarantee that the product will meet a certain level of quality and reliability. • implied warranty- circumstance where the parties involved have reached an agreement without expressing so. a. Implied warranty of Merchantability -- applies to businesses. the goods must reasonably conform to an ordinary buyer's expectations. b. Fitness of Purpose -- applies to any seller. seller warranties that the product will be fit for the buyer's specific use

What is a jury waiver? How does it contrast with compulsory arbitration? What are the benefits supposed to be?

•Jury waiver is simply waiving your right to a jury trial and arrangement to be heard my a judge. Unlike arbitration, this is public record and the judges have to follow the law. Benefit: 1. it costs less to go through court system instead of paying arbitrator. 2. Judges rule more in favor of companies, where juries award the consumers.