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Roscoe Pound
The noted legal
scholar Roscoe
Pound once said that
the social order rests
upon the stability and
predictability of
conduct, of which
keeping promises is a
large item.
COPYRIGHT 2006 West Legal Studies in Business, a part of The Thomson Corporation. Thomson,
the Star logo, and West Legal Studies in Business are trademarks used herein under license.
COPYRIGHT 2006 West Legal Studies in Business, a part of The Thomson Corporation. Thomson,
the Star logo, and West Legal Studies in Business are trademarks used herein under license.
A contract is a:
2: Elements of a Contract
Agreement (Offer and Acceptance). The offeror
must offer to enter into an agreement, and the
offeree must accept the terms of the offerors offer.
Consideration. Something of value given or
promised to convince a party to agree to the deal.
Contractual Capacity. Both parties must be legally
competent to enter into the agreement.
COPYRIGHT 2006 West Legal Studies in Business, a part of The Thomson Corporation. Thomson,
the Star logo, and West Legal Studies in Business are trademarks used herein under license.
Defense:
Legality. The contracts purpose must be to
accomplish some goal that is legal and not against
public policy.
Genuineness of assent. The apparent consent of both
parties must be genuine.
Form. The agreement must be in whatever form (e.g.,
written, under seal) the law requires.
COPYRIGHT 2006 West Legal Studies in Business, a part of The Thomson Corporation. Thomson,
the Star logo, and West Legal Studies in Business are trademarks used herein under license.
Parties to a Contract
General:
Promisor
(Obligor)
Promisee
(Obligee)
Examples:
Insurer
Carrier
Insured
Shipper
Tenant
(Lessee)
Vendor
Vendee
3: 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 (a promise for an act).
Irrevocable: Offer cannot be revoked once performance has
begun.
Once the offeree of a unilateral contract begins to perform, the
offeror loses the ability to revoke her offer (e.g., if X offered Y
$25 to mow Xs yard, on Y had substantially begun to perform,
X could not revoke her offer to pay Y for mowing her yard).
COPYRIGHT 2006 West Legal Studies in Business, a part of The Thomson Corporation. Thomson,
the Star logo, and West Legal Studies in Business are trademarks used herein under license.
COPYRIGHT 2006 West Legal Studies in Business, a part of The Thomson Corporation. Thomson,
the Star logo, and West Legal Studies in Business are trademarks used herein under license.
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Types of Contracts
Formal v. Informal.
Formal Contract: A contract that requires a special form or
method of formation (creation) in order to be enforceable. For
example:
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Types of Contracts
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.
Video: Bowfinger
http://www.youtube.com/watch?v=yVGlKrziG5E
-Does a contract exist?
-Bilateral or unilateral?
-Express or Implied-in-Fact?
-Formal or Informal?
COPYRIGHT 2006 West Legal Studies in Business, a part of The Thomson Corporation. Thomson,
the Star logo, and West Legal Studies in Business are trademarks used herein under license.
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Contract Enforceability
Valid.
Elements: Agreement, consideration, contractual
capacity, and legality.
Void.
No contract.
Voidable (unenforceable).
Valid contract can be avoided or rescinded.
COPYRIGHT 2006 West Legal Studies in Business, a part of The Thomson Corporation. Thomson,
the Star logo, and West Legal Studies in Business are trademarks used herein under license.
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4: Quasi-Contracts
Quasi Contract: A fictional contract imposed on parties by
a court in the interests of fairness and justice, typically to
(1) prevent the unjust enrichment of one party at the
expense of the other, and
(2) allow the party whose actions would otherwise
unjustly enrich the other party to recover in quantum
meruit.
Video: Drake Sued Over 'Marvin's Room' by ExGirlfriend?!
http://www.youtube.com/watch?v=eCH4Gbfzxr8
COPYRIGHT 2006 West Legal Studies in Business, a part of The Thomson Corporation. Thomson,
the Star logo, and West Legal Studies in Business are trademarks used herein under license.
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5: Interpretation of Contracts
Plain Meaning Rule: Courts give terms their obvious
or ordinary meaning.
Ambiguous Terms. If terms are ambiguous, court will
attempt to interpret ambiguous contract terms in a
reasonable, lawful, effective manner.
COPYRIGHT 2006 West Legal Studies in Business, a part of The Thomson Corporation. Thomson,
the Star logo, and West Legal Studies in Business are trademarks used herein under license.
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Interpretation of Contracts
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COPYRIGHT 2006 West Legal Studies in Business, a part of The Thomson Corporation. Thomson,
the Star logo, and West Legal Studies in Business are trademarks used herein under license.
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