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25 Cards in this Set

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  • Back
Where does most of the black letter law in contracts come from?
(a) Most of the “black letter law” discussed in the contracts courses are found in the Uniform Commercial Code (UCC) or The Restatement of Contracts, published by the American Law Institute.
What is the Restatemetn of contracts. Which edition are we on now and what does it do?
(a) We are on the second now. The Restatements are not statutory law; they are simply attempts to restate the common law of Cases in a rule like form. Although no binding on the courts, they are persuasive authority
What is the UCC?
(a) The UCC is a model code adopted in one form or another by all the states.
What is caselaw and how does it affect the law of contracts?
(a) The law of contracts as developed through caselaw reflects the tensions between: (i) Individual freedom to negotiate terms and enter binding contracts and (ii) The public interst in varios types of social control.
what are some examples of the interational law of Contracts?
(i) UNIDROIT Principles of Internationl Commercial Contracts (ii) Convention for the International Sale of Goods (CISG)
Define: Promise
(a) A promise is an assurance that one will do or refrain from doing a specified thing. The Restatement 2nd requires the manifestation of intent to be made so as to justify the other party in understanding that a commitment has been made as to what will or will not be done in the future. Promises enforceable by law are called contracts.
Define: Promisor
(a) The person who makes the promise
Define: Promisee
(a) The person to whom the promise is addressed
Define: Beneficiary
(a) When performance of a promise will benefit someone other than the promise, that person is called the beneficiary
Define: Consideration
(a) Benefit received by the promisor OR a detriment incurred by the promise.
Define: Express Contract
(a) May be ORAL or WRITTEN (b) Consists of an OFFER, ACCEPTANCE, and BARGAINED FOR CONSIDERATION (c) May be BILATERAL OR UNILATERAL. (i) Bilateral: seller delivers goods to the paying buyer (ii) Unilateral: Dog owner offers a reward for the return of her dog. Someone may return the dog without promising to do so.
Define: Implied in fact contracts
(a) One ARISING AS A MATTER OF REASON AND JUSTICE FROM THE ACTS, CONDUCT OR CIRCUMSTANCES SURROUNDING A TRANSACTION (b) NO formal or explicit WRITINGS (c) Terms of the contract are INFERRED (d) Ex: where person renders services to another at the other’s request but without an expressed agreement as to the compensation to be paid therefore.
Define: Implied in law or quasi contracts
(a) An obligation imposed upon a person out of fairness and equity regardless of her intent to be bound. (b) Can be enforced in spite of an agreement between the parties.
What are some forms of remedies?
(a) Normally monetary compensation (b) There are other remedies such as specific performance though
Define: Expectation Damages
(i) May be recovered if by reasons of the breach he is worse off than he would have been if the promise had been performed. (ii) Goal: place the promise in the position he would have been in had the promise been performed.
Define: Reliance Damages
(i) May be recovered if by reason of the breach he is worse off than he would have been if the promise had not been made. (ii) Goal: place the promiseee back in the position he would have been if the promise had not been made (iii) Typical measure of such damages: out of pocket costs incurred in reliance on the promise and opportunity costs, such as the cost of substitute performance.
Define: Restitution Damages
(i) May be recovered when a promise has conferred a benefit on the promisor who then breaches(ii) Recovery: the reasonable value of the benefit conferred’
What is consideration?
(1) Consideration is used in contract law as the inducement to a contract. (2) It is a benefit received by the promisor or a detriment incurred by the promise. It arises in an agreed-for exchange and may consist of an act, a forbearance to act, or a mere promise to act. (3) In every case, the parties must have BARGAINED for something of LEGAL VALUE for there to be a legally sufficient consideration and thus a binding contract.
What is the Rationale for enforcement of promises?
(a) In order for arrangements between parties to pursue private ventures with each other, they must have confidence in performing only with some assurance that the other party will likewise perform. (b) This assurance is given through the bargain element of a promise
What is a DONATIVE promise?
(a) A donative promise is a promise to make a gift. (b) If no bargain is involved (the person does it out of affection or charity without requiring a promise in return), it is not enforceable. (c) Because there is no bargain element, the likely injury that would result from the breach of a donative promise is relatively slight.
(1) “because you’ve done for me” case (2) Held: A voluntary promise of a gift to be made in the future, given without consideration to the promisor, cannot be enforced by the promise. (3) It would only be a gift. The aunt received nothing from P that could be characterized as consideration. (4) Courts do not feel bound to keep a person who attempts to get something for nothing.
How does a SEAL affect the element of form?
(1) At common law, any promise under seal, even a donative promise, was legally enforceable. (2) Today most states have statutorily abolished the effect of a seal. However a seal still raises a presumption that there is a valid consideration.
How do the courts determine Adequacy of consideration?
(1) Even when there is some consideration, the courts may determine that the consideration is insufficient to make the contract enforceable.
(1) “out of love for my wife’s promise, you pay me one cent and I will pay you my wife’s promises to you”. (2) Held: A court may determine that the consideration recited by the parties is legally insufficient to make a contract enforceable. (3) The general rule of not looking into consideration does not apply to an agreement to exchange money, which has a fixed value.
When are OPTION CONTRACTS and GUARANTIES (promises to be surety for performance of a contractual obligation) generally enforceable?
(1) They are generally enforceable so long as they are in writing, signed by the offeror or promisor, and recite a purported consideration.