 Promise is a declaration that something will
or will not happen in the future.
 What is a Contract?
 Contract is an agreement (based on a promise)
that can be enforced in court.
 What law governs?
 Service contracts - common law of contracts.
 Sale and lease contracts - Uniform Commercial
§1: Function of Contract Law
 Designed to provide stability and
predictability, as well as certainty, for both,
buyers and sellers in the marketplace.
 Necessary to ensure compliance with a
promise or to entitle the innocent party to
some form of relief.
§2: Definition of a Contract
 A contract is a:
 Promise or set of promises,
 For breach of which,
 The law provides a remedy, or
 The performance of which the law in some way
recognizes as a duty.
 Objective Theory of Contacts. Circumstances
to determine intent of parties.
§3: Elements of a Contract
 Agreement (Offer and Acceptance).
 Contractual Capacity.
 Genuineness of assent.
§4: Types of Contracts
 Bilateral v. Unilateral.
 Bilateral - Offeree must only promise to perform
(“promise for a promise”).
 Unilateral - Offeree can accept the offer only by
completing the contract performance (“promise
for an act”).
 Irrevocable: Offer cannot be revoked once
performance has begun.
Types of Contracts
 Express v. Implied In Fact.
 Express: Words (oral or written).
 Implied In Fact: Conduct creates and
defines the terms of the contract.
 PL furnished good or service
 PL expected to be paid
 DEF had chance to reject and did not.
 Case 9.1: Homer v. Burman (2001).
Types of Contracts 
 Quasi Contracts - Implied in law.
 Fictional contracts created by courts.
 Imposed on parties for the interest of fairness and
 Equitable remedies.
 Quantum Meruit.
 Case 9.2: Industrial Lift v. Mitsubishi (1982).
Types of Contracts 
 Formal v. Informal.
 Executed v. Executory.
 Executed - A contract that has been fully
performed on both sides.
 Executory - A contract that has not been fully
performed on either side.
 Elements: Agreement, consideration, contractual
capacity, and legality.
 No contract.
 Voidable (unenforceable).
 Valid contract can be avoided or rescinded.
§5: Interpretation of Contracts
 Plain Meaning Rule: Courts give terms their obvious
 Ambiguous Terms. If terms are ambiguous, court
will attempt to interpret ambiguous contract terms in
a reasonable, lawful, effective manner.
 Contracts are interpreted as a whole.
 Terms negotiated separately given greater weight.
 Ordinary, common meaning given.
Interpretation of Contracts
 Ambiguous Terms (cont’d)
 Specific wording given greater weight than general
 Written or typewritten given greater weight than
 Ambiguous terms interpreted against the drafter.
 Trade usage, prior dealing, course of performance to
allowed to clarify.
 Case 9.3: Dispatch Automation v. Richards