Contracts .ppt business law

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Contracts .ppt business law

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Contracts .ppt business law

  1. 1. 1 Contracts
  2. 2. 2 Introduction  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 Code (UCC).
  3. 3. 3 §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.
  4. 4. 4 §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.
  5. 5. 5 §3: Elements of a Contract  Agreement (Offer and Acceptance).  Consideration.  Contractual Capacity.  Defense:  Legality.  Genuineness of assent.  Form.
  6. 6. 6 §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.
  7. 7. 7 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. Requirements:  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).
  8. 8. 8 Types of Contracts [3]  Quasi Contracts - Implied in law.  Fictional contracts created by courts.  Imposed on parties for the interest of fairness and justice.  Equitable remedies.  Quantum Meruit.  Case 9.2: Industrial Lift v. Mitsubishi (1982).
  9. 9. 9 Types of Contracts [4]  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.
  10. 10. 10 Enforceability  Valid.  Elements: Agreement, consideration, contractual capacity, and legality.  Void.  No contract.  Voidable (unenforceable).  Valid contract can be avoided or rescinded.
  11. 11. 11 §5: Interpretation of Contracts  Plain Meaning Rule: Courts give terms their obvious meaning.  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.
  12. 12. 12 Interpretation of Contracts  Ambiguous Terms (cont’d)  Specific wording given greater weight than general language.  Written or typewritten given greater weight than preprinted.  Ambiguous terms interpreted against the drafter.  Trade usage, prior dealing, course of performance to allowed to clarify.  Case 9.3: Dispatch Automation v. Richards (2002).

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