Chapter 13- Introduction to Contracts

How does the UCC define a contract?

"the total legal obligation which results from the parties agreement as affected by the Uniform Commercial Code (UCC) or any other applicable rules of law"

Quasi-contract

(implied-in-law contract) imposed in certain cases to avoid unjust enrichment, even if all elements of contract formation not satisfied

Contracts may be classified in several ways, depending on the manner in which they are:

1. Created 2. Expressed 3. Performed

What are the FIVE elements of an enforceable contract?

1. Offer and Acceptance with Mutual Agreement 2. Consideration 3. Competent Parties 4. Legality of Purpose 5. Proper Form

What are the different kinds of contracts?

1. Oral/ Written Contract 2. Express/Implied Contract 3. Formal/ Simple Contract 4. Entire/Divisible Contract

What are the cases to study in Chapter 13?

1. RE ZAPPOS.COM., CUSTOMER DATE SECURITY BREACH LITIGATION 2. PACHE V. AVIATION VOLUNTEER FIRE CO. 3. RISENFELD & CO. V. THE NETWORK GROUP INC.

Contracts may be created to bind:

1. The sale of merchandise or services 2. Employment 3. The transfer of ownership of land (real property) or personal property such as a car

What are the three types of contracts used to determine enforceability?

1. Valid 2. Void 3. Voidable

Bilateral Contracts

A promise in exchange for a promise. Example: When Shannon promises to pay Gary 1000 in exchange for his promise to paint her car on July 1st they have a bilateral contract.

Unilateral Contracts

A promise in exchange for a requested action.

Entire Contract

Also known as an Indivisible Contract, it has two or more parts. Each part is dependent on the others for satisfactory performance. Such a contract must be completely performed.

Formal Contract

Also referred to as a specialty contract, it is a written contract under seal. The seal may consist of simply the word Seal or L.S. (locus sigilli), a scroll, a wafer, or an impression on the paper.

Waht are the Sources of Contract Law?

Article 2 of the UCC and Common Law

What is the status of an active contract?

At any particular time, a contract may be awaiting the first act of the parties to execute its terms, in the process of completion, or completed.

_________ as an element of a contract refers to what each party gets in exchange for his or her promise under the contract.

Consideration

Which of the following falls under Article 2 of the Uniform Commercial Code (UUC)?

Contract for the sale of a good

Consideration

Each party to a contract must promise to give up something. The exchange of promises (where each party gives the other something of value) is called consideration.

While interpreting contracts, which of the following rules applies?

If numerals and numbers written out in words conflict, the written words prevail.

An agreement that imposes only a social or moral obligation is _______________.

NOT a contract and CANNOT be legally enforced

Restatement (Second) of Contracts

Not binding law: if a court is trying to decide the outcomes of the case they might go here to decide what to do and what decision to make Note: is highly regarded but NOT binding

Oral Contract

Not in writing or signed by the parties, but it is a real contract created entirely by the conversation of the parties.

The _________ states that we base the existence of a contract on the parties' outward manifestations of intent and we base its interpretation on how a reasonable person would interpret it.

Objective Theory of Contracts

A key feature of a voidable contract is that:

One or both parties have the ability to either withdraw from or enforce the contract.

Express Contract

One that specifically expresses the terms on the contract.

________ are best described as contractual obligations imposed by the courts in order to prevent one party from being unjustly enriched at the expense of another.

Quasi-contracts

Written Contract

Reduced to writing on a permanent service. A written contract can be simply a handwritten note or any other memorandum containing the terms of the agreement, as long as it is signed by the party or parties who wish to be bound by the agreement

Proper Form

Requirements for contracts are known as proper form. Contracts must not only be in writing but also follow a prescribed form, such as containing the signatures of the parties.

Legality of Purpose

The intent of the contract must not violate the law. The courts will not enforce a contract that violates the law.

Competent Parties

The parties to a contract must be competent and capable of understanding what they are doing. (Example: legal age, mentally stable)

Implied Contract

The terms and actions of the parties dictate and implied contract

Contract

a legally enforceable agreement that is created when two or more competent parties agree to perform, or to avoid performing, certain acts that they have a legal right to do and that meet certain legal requirements.

A contract may be revised or edited as long as both parties __________.

agree

A(n) _________ is defined as a promise or set of promises for the breach of which the law gives a remedy or the performance of which the law in some way recognizes a duty.

contract

An agreement that imposes a legal obligation is a(n)_____________.

enforceable contract

A(n) __________ is best described as a contract that arises not from words but from the conduct of the parties.

implied Contract

A void contract is:

in effect not a contract at all; either its object is illegal or it has some defect so serious that it is not a contract.

Article 2 of the UCC

is relevant to contract law but only applies to transactions in goods or other tangible personal property

Executed Contract

oIf all the terms of the agreement have been fully performed by both parties, it is an executed contract. oIt is more a record of an agreement that has been completed by all the parties.

Tangible Personal Property

personal property that can be moved ex. vehicle, kitchen table, computer

A bond used as bail in a criminal case is an example of a ____________.

recognizance

Valid Contract

•A majority of the contracts entered into business transactions are of this type. Example: an Italian restaurant owner agrees in writing to have a custom made sign erected outside of the building.

Void Contract

•An agreement that lacks one or more of the essential elements of a contract us a void contract. •It cannot be enforced and is not a true contract.

Voidable Contract

•An agreement that may be rejected by one of the parties (for a legally acceptable reason) is a voidable contract. •Such a contract is valid and enforceable unless and until it is rejected by the party who has the right to withdraw.

Offer and Acceptance with Mutual Agreement

•An offer is made by one party and accepted by another part-and they enter into a contract •The parties must have a clear understanding of what they are undertaking and the contract must show mutual agreement

Executory Contract

•It is a contract where a future act or obligation remains to be performed under its terms. •A contract is completely executory if no part of it has been performed. •It is partly executory if some arts have been performed and some have yet to be performed.

Simple Contract

It is an informal contract made without a seal (even though the contract may be extremely complex and may involve huge amounts of money).

Divisible Contract

It is made up of two or more parts, and each part is independent of the others.

K

the legal abbreviation for contract

Common Law

the source of contract law regarding the sale of fixed assets, services, or tangibles.