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Intro To Contracts


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Board overview of the common law of contract given to students in the University of Onsabrück's foreign law program.

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Intro To Contracts

  1. 1. Common Law of Contract An Introduction to Common Law Of Contract
  2. 2. Contract Elements The essential elements of a contract are: <ul><li>An oral or written agreement
  3. 3. The involvement of two or more persons
  4. 4. An exchange relationship
  5. 5. At least one promise
  6. 6. Enforceability </li></ul>
  7. 7. An Oral or Written Agreement <ul><li>Voluntary and consensual relationship. </li><ul><li>As opposed to other relationships created by law </li></ul><li>What is a legally sufficient Agreement? </li><ul><li>Object test </li></ul><li>Volition – does it have to be totally voluntary? </li></ul>
  8. 8. An Exchange Relationship <ul><li>Relationships can vary in length of time
  9. 9. Essential purpose is an exchange
  10. 10. Reciprocal relationship
  11. 11. Tangible things and/or intangible rights.
  12. 12. basic formula = bargain reached leading to exchange for betterment of both parties. </li></ul>
  13. 13. Promise <ul><li>Must have at least one outstanding promise.
  14. 14. No promises = nothing to enforce = no K
  15. 15. Promise = undertaking to act or refrain from acting in a specified way at some future time. </li><ul><li>This can be expressed or implied </li></ul></ul>
  16. 16. Bilateral vs. Unilateral <ul><li>Only need one promise for K to exist. </li><ul><li>But what about “reciprocal relationship”? </li></ul><li>Unilateral = at instant of contracting, one party completes performance & all that remains is promise of the other.
  17. 17. Bilateral = both parties have outstanding promises when contract is formed. </li></ul>
  18. 18. Instantaneous Exchange <ul><li>No Contract! </li></ul>
  19. 19. Promissory Exchange: Bilateral Contract
  20. 20. Unilateral Contract
  21. 21. To Sum Up <ul><li>Valid K must have at least one outstanding promise.
  22. 22. The promise can be expressed or implied.
  23. 23. NOTE – today a truly instantaneous exchange is rare. </li><ul><li>What about when I sold my cars in St. Louis? </li></ul></ul>
  24. 24. Legal Recognition of Enforceability <ul><li>Goal of contract law is to ensure the promise is upheld.
  25. 25. Contracts are an act of private law making.
  26. 26. Role of the Court: </li><ul><li>Determine whether there is a contract.
  27. 27. Resolve disputes over the terms/breach.
  28. 28. Enforce the promise by giving a remedy. </li></ul></ul>
  29. 29. Enforceability Example <ul><li>Eddy's promises to give Rocky the kayak tomorrow in exchange for $400.
  30. 30. The next day Rocky arrives with $400 but Eddy has changed his mind. He won't hand over the kayak.
  31. 31. If Rocky sued Eddy, what is the remedy? </li></ul>
  32. 32. Analyzing Contracts <ul><li>Formation
  33. 33. Interpretation
  34. 34. Performance
  35. 35. Defenses
  36. 36. Remedies </li></ul>
  37. 37. Formation <ul><li>Three Requirements </li><ul><li>Offer
  38. 38. Acceptance
  39. 39. Consideration </li></ul><li>NOTE – writing can be a formal requirement, but only if required by statute.
  40. 40. Questions concerning whether something is an offer or acceptance are dealt with using an objective test. </li></ul>
  41. 41. The Basic Model without revocation Contract formed on terms of offer No Contract K on terms of counteroffer No Contract and so on = rejection + new offer
  42. 42. Interpretation <ul><li>Formation issues – objective test
  43. 43. Meaning of terms or missing terms </li><ul><li>Plain Meaning Rule
  44. 44. Trade Practices
  45. 45. Trade Custom </li></ul></ul>
  46. 46. Performance and Breach <ul><li>Main Issue </li><ul><li>Conditions
  47. 47. Order of performance
  48. 48. What amounts to breach </li></ul></ul>
  49. 49. Defenses <ul><li>Mistake </li><ul><li>Mutual, Unilateral </li></ul><li>Changed Circumstances </li><ul><li>Impossibility, Impracticability, Frustration of Purpose, Reformation </li></ul><li>Lack of Capacity: age, mental
  50. 50. Duress, Undue Influence
  51. 51. Misrepresentation </li><ul><li>Fraudulent, Negligent, Innocent </li></ul><li>Unconscionability
  52. 52. Illegality </li></ul>
  53. 53. Remedies <ul><li>Damages
  54. 54. Equitable Relief </li><ul><li>Injunctions, Specific Performance, Restitution, Rescission </li></ul></ul>
  55. 55. U.S. Contract Law An Overview of Common Law & UCC Principles
  56. 56. Sources of Law <ul><li>Common Law </li><ul><li>origin of contract law is judge made law. </li></ul></ul><ul><li>Uniform Commercial Code </li><ul><li>every state has adopted some form of the UCC
  57. 57. applies to “commercial contracts” such as the sale of goods. </li></ul></ul><ul><li>Consumer Protection Laws </li><ul><li>regulates transactions with consumers and places additional requirements on contracts </li></ul></ul>
  58. 58. When to Use UCC? <ul><li>Article 2 applies to the Sale of Goods </li><ul><li>Not services
  59. 59. Not real property
  60. 60. If mixture, Court will look to see what the “predominate purpose” is. </li></ul><li>Distinguishes between “merchants” and “consumers” </li><ul><li>Merchant = business professional
  61. 61. Consumer = casual or inexperienced seller or buyer </li></ul></ul>
  62. 62. What does the UCC Cover? <ul><li>Formation
  63. 63. Interpretation & Obligations
  64. 64. Performance
  65. 65. Breach, Repudiation and Excuses
  66. 66. Remedies </li></ul>