Introduction to

Contracts
Chapter 10
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Quote of the Day
The whole duty of government is to
prevent crime and to preserve
contracts.
Lord Melbourne,
British Prime Minister
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The Purpose of a Contract
Contracts exist to make business
matters more predictable.
J udicial Activism vs. J udicial
Restraint
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Approaching Contract law
Which promises will the law enforce?
When can a breach of contract be
pursued legally?
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Elements of a Contract
Agreement
Consideration
Legality
Capacity
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Contracts
Definition
A promise that the law will enforce.
Development of Contract Law
Common law once required all contracts
to be in writing, with a seal affixed.
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Types of Contracts
(or Agreements)
Bilateral vs. Unilateral
Express vs. Implied
Executory vs. Executed
Valid vs. Unenforceable vs. Voidable vs. Void
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Types of Contracts
(or Agreements)
Bilateral and Unilateral Contracts
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Types of Contracts (contd)
Express and Implied Contracts
Express: the two parties to the contract
explicitly state all of the important terms
of their agreement.
Implied: the words and conduct of the
parties indicate that the parties
intended to make an agreement.
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Implied Contracts
They can be difficult to understand
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Types of Contracts (contd)
Executory and Executed Contracts
Executory: when one or more parties has
not fulfilled its obligations under the
contract.
Executed: when all parties to the
contract have fulfilled their obligations
under the contract.
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Types of Contracts (contd)
Valid
Unenforceable
Voidable
Void Agreements
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DeMasse v ITT Corporation
Roger DeMasse and five others had
been hourly employees at-will at ITT
Corporation
Did ITT have the right to unilaterally
change the layoff policy?
Who should the judgment be for?
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Remedies Created by
J udicial Activism
Even when there is no contract, a
plaintiff may use promissory
estoppel to enforce the defendants
promise.
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Even when there is no contract, a court
may use quasi-contract to compensate a
plaintiff who can show that:
The damages awarded are called quantum
meruit, meaning that the plaintiff gets as
much as he deserved.
Remedies Created by
J udicial Activism (contd)
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Fall-Back Remedies
For cases in which the plaintiff cannot
prove a valid contract
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Sources of Contract Law
Common Law
Uniform Commercial Code
UCC Article 2 governs the sale of goods.
Goods means anything moveable, except
for money, securities, and certain legal rights.
In a mixed contract, Article 2 governs only if
the primary purpose was the sale of goods.
Restatement (Second) of Contracts
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Fallsview Glatt Kosher Caterers,
Inc.
v. Rosenfeld
Was the agreement one for the sale of
goods, requiring a writing, or for
services, enforceable with no writing?

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If you understand the contract
issues that courts scrutinize, the
agreement you draft is likelier to
be enforced. You thus achieve
greater control over your affairs --
the very purpose of a contract.
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THE END
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